In late 1986 Jobs sent out a proposal to venture capital firms

Perot to the Rescue

In late 1986 Jobs sent out a proposal to venture capital firms offering a 10% stake in NeXT for $3 million. That put a

valuation on the entire company of $30 million, a number that Jobs had pulled out of thin air.

NeXT computer would be shipped in just eighteen months. It was already clear that this date was impossible, but he blew off a

suggestion from one engineer that they be realistic and plan on shipping in 1988. “If we do that,

the world isn’t standing still, the technology window passes us by, and all the work we’ve done we have to throw down the toilet,” he argued.

Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge Jobs, did so. “Reality

distortion has motivational value, and I think that’s fine,” she said as Jobs stood at a whiteboard. “However,

when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.” Jobs

didn’t agree: “I think we have to drive a stake in the ground somewhere, and I think if we miss this window, then our

credibility starts to erode.” What he did not say, even though it was suspected by all, was that if their targets slipped they might run out of money. Jobs had

pledged $7 million of his own funds, but at their current burn rate that would run out in eighteen months if they didn’t start getting some revenue from shipped products.

Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his list of maxims with “The

honeymoon is over.” By the time of the third retreat, in Sonoma in September 1986, the timetable

was gone, and it

looked as though the

company would hit

a financial wall.

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Perot to the RescueIn late 1986 Jobs sent out a proposal to

Perot to the RescueIn late 1986 Jobs sent out a proposal to venture capital firms offering a 10% stake in NeXT for $3 million. That put a valuation on the entire company of $30 million, a number that Jobs had pulled out of thin air.

Less than $7 million had gone into the company thus far, and there was little to show for it other than a neat logo and some snazzy offices. It had no revenue or products, nor any on the horizon. Not surprisingly, the venture capitalists all passed on the offer to invest.

In order to translate the NeXT logo into the look of real products, Jobs needed an industrial designer he trusted. He talked

to a few possibilities, but none of them impressed him as much as the wild Bavarian he had imported to

Apple: Hartmut Esslinger, whose frogdesign had set up shop in Silicon Valley and who, thanks to Jobs, had a lucrative contract with Apple. Getting

IBM to permit Paul Rand to do work for NeXT was a small miracle willed into

existence by Jobs’s belief that reality can be distorted. But that was a snap

compared to the likelihood that he could convince Apple to permit Esslinger to work for NeXT.

This did not keep Jobs from trying. At the beginning of November 1985, just five weeks after Apple filed suit against him,

Jobs wrote to Eisenstat and asked for a dispensation. “I spoke with Hartmut Esslinger this weekend and he

suggested I write you a note expressing why I wish to work with him and frogdesign on the new products for

NeXT,” he said. Astonishingly, Jobs’s argument was that he did not know what Apple had in the works, but Esslinger did.

“NeXT has no knowledge as to the current or future directions of Apple’s

product designs, nor do other design firms we might deal with, so it is possible to inadvertently design similar looking

products. It is in both Apple’s and NeXT’s best interest to rely on Hartmut’s professionalism to make sure this does

not occur.” Eisenstat recalled being flabbergasted by Jobs’s audacity,

and he replied curtly. “I have previously expressed my concern on behalf of Apple that you are engaged in a business course

which involves your utilization of Apple’s confidential business information,” he wrote. “Your letter does not alleviate my concern in any way. In fact it heightens my

concern because it states that you have ‘no knowledge as to the current or future directions of Apple’s product designs,’ a

statement which is not true.” What made the request all the more astonishing to Eisenstat was that it was Jobs who, just a year earlier,

had forced frogdesign to

abandon its work on

Wozniak’s remote

control device.

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And from this time he was very generally styled the

When the banquet was concluded, Liu Bei thanked the Emperor and went out of the Palace. And from this time he was very generally styled the “Imperial Uncle.”

When Cao Cao returned to his palace, Xun Yu and his fellow advisers went in to see him.

  Xun Yu said, “It is no advantage to you, Illustrious Sir, that the Emperor recognizes Liu Bei as an uncle.”

  “Liu Bei may be recognized as uncle, but he is under my orders since I control the decrees of the Throne. He will be all the more ready to obey. Beside I will keep him here under the pretense of having him near his sovereign, and he will be entirely in my hands. I have nothing to fear. The man I fear is Yang Biao, who is a relative of the two Yuan brothers. Should Yang Biao conspire with them, he is an enemy within and might do much harm. He will have to be removed.”

  Hence Cao Cao sent a secret emissary to say that Imperial Guardian Yang Biao was intriguing with Yuan Shu, and on this charge Yang Biao was arrested and imprisoned. And his death would have been compassed had his enemy dared.

  But just then the Governor of Beihai, Kong Rong, was at the capital, and he remonstrated with Cao Cao, saying, “Yang Biao comes from a family famed for virtue for at least four generations. You cannot trump up so foolish a charge as that against him.”

  “It is the wish of His Majesty!” retorted Cao Cao.

  “If the child Emperor Cheng of Zhou Dynasty had put Duke Chao to death, could the people have believed Duke Zhou, the Regent Marshal, had nothing to do with it?”

  So Cao Cao had to relinquish the attempt, but he took away Yang Biao’s offices and banished him to his family estate in the country.

Court Counselor Zhao Yan, an opponent of the Prime Minister,

sent up a memorial impeaching Cao Cao for having removed a minister of state from office without a decree.

Cao Cao’s reply to this was the arrest of Zhao Yan and his execution,

a bold stroke which terrified the bulk of officers and reduced them to silence.

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From Jobs’s perspective, he had been honest.The five were

From Jobs’s perspective, he had been honest. The five were not division managers or members of Sculley’s top team. They had all felt diminished, in fact, by the company’s new organization. But from Sculley’s perspective,

these were important players; Page was an Apple Fellow, and Lewin was a key to the higher education market. In addition, they knew about the plans for Big

Mac; even though it had been shelved, this was still proprietary information. Nevertheless Sculley was sanguine. Instead of pushing the point, he asked Jobs to remain on the board. Jobs replied that he would think about it.

When Jobs gave a talk to Stanford business students, he heard good things about Sculley, who had spoken to the class earlier. So he told Roche he would be happy to meet him.

Sculley’s background was very different from Jobs’s. His mother was an Upper East Side Manhattan matron who wore white gloves when she went out, and his father was a proper Wall Street lawyer. Sculley was sent off to St.

Mark’s School, then got his undergraduate degree from Brown and a business degree from Wharton. He had risen through the ranks at PepsiCo as an innovative marketer and advertiser, with little passion for product development or information technology.

Sculley flew to Los Angeles to spend Christmas with his two teenage children from a previous marriage. He took them to visit a computer store, where he was struck by how poorly the products were marketed. When his kids asked

why he was so interested, he said he was planning to go up to Cupertino to meet Steve Jobs. They were totally blown away. They had grown up among movie stars, but to them Jobs was a true celebrity.

It made Sculley take

more seriously the

prospect of being

hired as his boss.

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Jobs had considered just mailing in his letter of resignation,

Jobs had considered just mailing in his letter of resignation, but Susan Barnes convinced him that this would be too contemptuous. Instead he drove it to Markkula’s house, where he also found Al Eisenstat. There was a tense

conversation for about fifteen minutes; then Barnes, who had been waiting outside, came to the door to retrieve him before he said anything he would regret. He left behind the letter, which he had composed on a Macintosh and printed on the new LaserWriter:

Heights home. Jobs had not mentioned the new company he was forming, so Rock felt betrayed when he heard about it from Sculley. “He came to the board and lied to us,” Rock growled later. “He told us he was thinking of

forming a company when in fact he had already formed it. He said he was going to take a few middle-level people. It turned out to be five senior people.” Markkula, in his subdued way, was also offended. “He took some top executives he had secretly lined up before he left. That’s not the way you do things. It was ungentlemanly.”

later, after the Macintosh came out, Jobs again reiterated that lesson from his father: “When you’re a carpenter making a beautiful chest of drawers, you’re not going to use a piece of plywood on the back, even though it faces the wall

and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.”

From Mike Markkula he had learned the importance of packaging and presentation. People do judge a book by its cover, so for the box of the Macintosh, Jobs chose a full-color design and kept trying to make it look qinpad

better. “He got the guys to redo it fifty times,” recalled Alain Rossmann, a member of the Mac team who married Joanna Hoffman. “It was going to be thrown in the trash as soon as the consumer opened it, but he was obsessed

by how it looked.” To Rossmann, this showed a lack of balance; money was being spent on expensive packaging while they were trying to save money on the memory chips. But for

When the design was finally locked in, Jobs called the Macintosh team together for a ceremony. “Real artists sign their work,” he said. So he got out a sheet of drafting paper and a Sharpie pen and had all of them sign their names. The signatures were engraved inside each Macintosh. No one would ever see shlf1314

them, but the members of the team knew that their signatures were inside, just as they knew that the circuit board was laid out as elegantly as possible. Jobs called them each up by name, one at a time. Burrell Smith went first.qinpad

Jobs waited until last, after all forty-five of the others. He found a place right in the center of the sheet and signed his name in lowercase letters with a grand flair. Then he toasted them with champagne. “With moments like this, he got us seeing our work as art,” said Atkinson.shlf1314

 

Jobs, each detail

was essential

to making the

Macintosh amazing.

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Oyama drafted a preliminary design and had a plaster model

Oyama drafted a preliminary design and had a plaster model made. The Mac team gathered around for the unveiling and expressed their thoughts. Hertzfeld called it “cute.” Others also seemed satisfied. Then Jobs let loose a blistering burst of criticism. “It’s way too boxy, it’s got to be more

curvaceous. The radius of the first chamfer needs to be bigger, and I don’t like the size of the bevel.” With his new fluency in industrial design lingo, Jobs was referring to the angular or curved edge connecting the sides of the computer. But then he gave a resounding compliment. “It’s a start,” he said.

by Canon to build the machine he wanted. “It was the Canon Cat, and it was a total flop,” Atkinson said. “Nobody wanted it. When Steve turned the Mac into a compact version of the Lisa, it made it into a computing platform instead of a consumer electronic device.”1

He is a dreadful manager. . . . I have always liked Steve, but I have found it impossible to work for him. . . . Jobs

regularly misses appointments. This is so well-known as to be almost a running joke. . . . He acts without thinking and

with bad judgment. . . . He does not give credit where due. . . . Very often, when told of a new idea, he will immediately attack it and say that it is worthless or

even stupid, and tell you that it was a waste of time to work on it. This alone is bad management, but if the idea is a good one he will soon be telling people about it as though it was his own.

That afternoon Scott called in Jobs and Raskin for a showdown in front of Markkula. Jobs started crying. He and Raskin agreed on only one thing: Neither

could work for the other one. On the Lisa project, Scott had sided with Couch. This time he decided it was best to let Jobs win. After all, the Mac was a minor

development project housed in a distant building that could keep Jobs occupied away from the main campus. Raskin was told to take a leave of absence. “They

wanted to humor me and give me something to do, which was fine,” Jobs recalled. “It was like going

garage for me.

back to the

team and

I was in control.”

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Jobs’s triumph was soon complete. A few weeks after winning

Jobs’s triumph was soon complete. A few weeks after winning his power struggle with Raskin to run the Mac division, he helped push out Mike Scott as Apple’s president. Scotty had become more and more erratic, alternately bullying and nurturing. He finally lost most of his support among the

employees when he surprised them by imposing a round of layoffs that he handled with atypical ruthlessness. In addition, he had begun to suffer a variety of afflictions, ranging from eye infections to narcolepsy. When Scott

was on vacation in Hawaii, Markkula called together the top managers to ask if he should be replaced. Most of them, including Jobs and John Couch, said yes. So Markkula took over as an interim and rather passive president, and Jobs found that he now had full rein to do what he wanted with the Mac division.

a long-distance call to go through without extra charges. The article revealed that other tones that

served to route calls could be found in an issue of the Bell System Technical Journal, which AT&T

immediately began asking libraries to pull from their shelves.

As soon as Jobs got the call from Wozniak that Sunday afternoon, he knew they would have to get

 

their hands on the technical journal right away. “Woz picked me up a few minutes later, and we went

to the library at SLAC [the Stanford Linear Accelerator Center] to see if we could find it,” Jobs recounted.

It was Sunday and the library was closed, but they knew how to get in through a door that was rarely locked.

“I remember that we were furiously digging through the stacks, and it was Woz who finally found the journal

with all the frequencies. It was like, holy shit, and we opened it and there it was. We kept saying to ourselves,

‘It’s real. Holy shit, it’s real.’ It was all laid out—the tones, the frequencies.”

Wozniak went to Sunnyvale Electronics before it closed that evening and bought the parts to make

an analog tone generator. Jobs had built a frequency counter when he was part of the HP Explorers

Club, and they used it to calibrate the desired tones. With a dial, they could replicate and tape-record

the sounds specified in the article. By midnight they were ready to test it. Unfortunately the oscillators

they used were not quite stable enough to replicate the right chirps to fool the phone company.

“We could see the instability using Steve’s frequency counter,” recalled Wozniak, “and we just

couldn’t make it work. I had to leave for Berkeley

the next morning, so we

decided I would work

on building a digital

version once I got there.”

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Jobs decided to move back to his parents’ home

In February 1974, after eighteen months of hanging around Reed,

Jobs decided to move back to his parents’ home in Los Altos and look

for a job. It was not a difficult search. At peak times during the 1970s,

 

the classified section of the San Jose Mercury carried up to sixty pages

of technology help-wanted ads. One of those caught Jobs’s eye.

“Have fun, make money,” it said. That day Jobs walked into the lobby

 

of the video game manufacturer Atari and told the personnel director,

who was startled by his unkempt hair and attire, that he

wouldn’t leave until they gave him a job.

Atari’s founder was a burly entrepreneur named Nolan Bushnell,

who was a charismatic visionary with a nice touch of showmanship

in him—in other words, another role model waiting to be emulated.

After he became famous, he liked driving around in a Rolls, smoking dope,

and holding staff meetings in a hot tub. As Friedland had done and as Jobs

would learn to do, he was able to turn charm into a cunning force, to cajole

and intimidate and distort reality with the power of his personality.

His chief engineer was Al Alcorn, beefy and jovial and a bit more grounded,

the house grown-up trying to implement the vision and curb the enthusiasms

of Bushnell. Their big hit thus far was a video game called Pong, in which two

players tried to volley a blip on a screen with two movable lines that acted as

paddles. (If you’re under thirty, ask your parents.)

When Jobs arrived in the Atari lobby wearing sandals and demanding a job,

Alcorn was the one who was summoned. “I was told, ‘We’ve got a hippie

kid in the lobby.

He says he’s not going to leave until

we hire him. Should we call

the cops or let him in?’

I said bring him on in!”

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Jobs thus became one of the first fifty employees at Atari

Jobs thus became one of the first fifty employees at Atari,

working as a technician for $5 an hour. “In retrospect,

it was weird to hire a dropout from Reed,” Alcorn recalled.

 

“But I saw something in him. He was very intelligent, enthusiastic,

excited about tech.” Alcorn assigned him to work with a straitlaced

engineer named Don Lang. The next day Lang complained,

 

“This guy’s a goddamn hippie with b.o. Why did you do this to me?

And he’s impossible to deal with.” Jobs clung to the belief that his fruit-heavy

vegetarian diet would prevent not just mucus but also body odor,

even if he didn’t use deodorant or shower regularly. It was a flawed theory.

Lang and others wanted to let Jobs go, but Bushnell worked out a solution.

“The smell and behavior wasn’t an issue with me,” he said. “Steve was prickly,

but I kind of liked him. So I asked him to go on the night shift. It was a way

to save him.” Jobs would come in after Lang and others had left and work through most

of the night. Even thus isolated, he became known for his brashness.

On those occasions when he happened to interact with others, he was prone

to informing them that they were “dumb shits.” In retrospect, he stands

by that judgment. “The only reason I shone was that everyone else was so bad,” Jobs recalled.

Despite his arrogance (or perhaps because of it) he was able to charm Atari’s boss.

“He was more philosophical than the other people I worked with,” Bushnell recalled.

“We used to discuss free will versus determinism. I tended to believe that things

were much more determined, that we were programmed. If we had perfect information,

we could predict people’s actions. Steve felt the opposite.” That outlook accorded

with his faith in the power of the will to bend reality.

Jobs helped improve some of the games by pushing the chips to produce fun designs,

and Bushnell’s inspiring willingness to play by his own rules rubbed off on him.

In addition, he intuitively appreciated the simplicity of Atari’s games. They came

with no manual and needed to be uncomplicated enough that a stoned freshman could

figure them out. The only

instructions for Atari’s Star

Trek game were “1. Insert

quarter. 2. Avoid Klingons.”

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The first conflict was over Raskin’s devotion to the

The first conflict was over Raskin’s devotion to the underpowered Motorola 6809 microprocessor. Once again it was a clash between Raskin’s desire to keep the Mac’s price under $1,000 and Jobs’s determination to build an

insanely great machine. So Jobs began pushing for the Mac to switch to the more powerful Motorola 68000, which is what the Lisa was using. Just before Christmas 1980,

 

sick, a really high fever. I dropped from 160 pounds to 120 in about a week.”

Once he got healthy enough to move, he decided that he needed to get out

of Delhi. So he headed to the town of Haridwar, in western India near the

source of the Ganges, which was having a festival known as the Kumbh Mela.

More than ten million people poured into a town that usually contained fewer

than 100,000 residents. “There were holy men all around. Tents with this teacher

and that teacher. There were people riding elephants, you name it. I was there

for a few days, but I decided that I needed to get out of there too.”

He went by train and bus to a village near Nainital in the foothills of the Himalayas.

That was where Neem Karoli Baba lived, or had lived. By the time Jobs got there,

he was no longer alive, at least in the same incarnation. Jobs rented a room with a

mattress on the floor from a family who helped him recuperate by feeding him

vegetarian meals. “There was a copy there of Autobiography of a Yogi in English that

a previous traveler had left, and I read it several times because there was not a lot to do,

and I walked around from village to village and recovered from my dysentery.”

Among those who were part of the community there was Larry Brilliant, an

epidemiologist who was working to eradicate smallpox and who

later ran Google’s

philanthropic arm and the Skoll

Foundation. He became

Jobs’s lifelong friend.

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