The Jobs family
Steve Jobs was born on February 24, 1955, in the city of San Francisco. His biological mother was an unwed graduate student named Joanne Simpson, and his biological father was a political science or mathematics professor, a native Syrian named Abdulfattah John Jandali.
Being born out of wedlock in the puritan America of the 1950s, the baby was put up for adoption. Joanne had a college education, and she insisted that the future parents of her boy be just as well educated. Unfortunately, the candidates, Paul and Clara Jobs, did not meet her expectations: they were a lower-middle class couple that had settled in the Bay Area after the war. Paul was a machinist from the Midwest who had not even graduated from high school. In the end, Joanne agreed to have her baby adopted by them, under the firm condition that they later send him to college.
Paul and Clara called their son Steven Paul. While Steve was still a toddler, the couple moved to the Santa Clara county, later to be known as Silicon Valley. They adopted another baby, a girl called Patti, three years later in 1958.
Steve was quite a turbulent child. He really didn’t care about school for some time — until he reached the 4th grade, and had Imogene “Teddy” Hill as a teacher.
She was one of the saints of my life. She taught an advanced fourth grade class, and it took her about a month to get hip to my situation. She bribed me into learning.
She did bribe him, with candy and $5 bills from her own money. He quickly became hooked — so much so that he skipped the 5th grade and went straight to middle school, namely Crittenden Middle School. It was in a poor area. Most kids did not work much there, they were rather fond of bullying other kids, such as the young Steve. One day he came home and declared that if he wasn’t transferred to another school, he would stop going to school altogether. He was 11. Paul and Clara complied, and the Jobses moved to the cozier city of Los Altos, so that Steve could go to Cupertino Junior High. This proved to be decisive for Steve’s future.
As Steve was growing up in Los Altos, he became increasingly curious about the world of electronics that filled his neighbors’ garages. His own father introduced him to Heathkits, which fascinated him:
Computerworld/Smithsonian Interview, 20 Apr 1995
When Steve arrived in Homestead High School, he enrolled in a popular electronics class. McCollum later recalled of one time when his pupil Steve called up Bill Hewlett himself, co-founder of HP, to get spare parts for his homework, and even a summer job at HP’s factory. Steve’s entrepreneurial skills showed up early in his life indeed.
At Homestead, Steve befriended Bill Fernandez, a neighbor who shared his interests in electronics. It was Bill who first introduced him to another computer whiz kid, an older guy named Stephen Wozniak, or — as everybody used to call him — Woz. Steve and Woz met in 1969, when they were respectively 14 and 19. At the time, Woz was building a little computer board with Bill Fernandez that they called “the Cream Soda Computer”. Woz showed it to Steve, who seemed quite interested.
Woz and Steve later engaged in several pranks together, including putting a huge middle finger on one of the high school’s building.
It was also at Homestead that Steve met Chris-Ann Brennan, his first steady girlfriend, with whom he stayed for several years.
A couple of years later, Woz and Steve started their first entrepreneurial venture. It was 1972, and on US campuses, there was a lot of talk about “phone phreaks.” They were early computer hackers that managed to build “blue boxes” — little devices that fooled AT&T’s long-distance switching equipment, and allowed you to make phone calls for free.
Woz read about them in an article which he showed to Steve. They both tried to build one, and to their surprise, it worked! It was Steve who came up with the idea of selling them; he and Woz would go from room to room in Berkeley’s dorms, where Woz was a student, and sell them to interested students. However, this business was illegal and the two of them stopped after they almost got caught by the police.
The following year, Steve finished high school and reached college age. He decided to go to the fancy Reed College, a private liberal arts college up in Oregon. However, the tuition for Reed was so expensive that Paul and Clara could hardly afford it. Yet they were bound by the promise they’d make to their son’s biological mother, so they spent almost their entire life’s savings on their son’s higher education.
Steve only officially stayed for a couple of months at Reed. He dropped out before Christmas. However, that allowed him to “drop in” on classes he was not supposed to attend.
It was at Reed that Steve started experimenting with Eastern mysticism. He delved into weird books and came to believe that if he ate only fruits, for example, he would eliminate all mucus and not need to shower anymore. He also started his habit of fasting for long periods of time (he would still do so ten years later, when he was a multi-millionaire). He occasionally used LSD, and became something of a laggard hippie. One of his best friends at Reed was Dan Kottke, who shared his interests in such philosophies.
The following year, in 1974, Steve desperately needed money, so he got a job at Atari. Atari was arguably the first video game company: it was created by Nolan Bushnell in 1972, and one of its first employees was Al Acorn, the inventor of Pong. Steve was hired although he would often call his co-workers names and smell pretty bad. That’s why he was soon moved to the night shift.
Young Steve Jobs looked up to Atari’s founder Nolan Bushnell. He was impressed by this iconoclastic man who made a lot of money by building pinball machines. He was clearly an inspiration for him to start Apple.
While he was at Atari, Steve asked his boss to fund a trip to India for him. Atari did pay his trip up to Germany, where he had to work on fixing some Atari machines. Then Steve was joined by his hippie friend from Reed, Dan Kottke, and they went to India in search for enlightenment. They came back pretty disappointed, especially after they met a famous guru, Kairolie Baba, who, unlike what they expected, was a con man.
We weren’t going to find a place where we could go for a month to be enlightened. It was one of the first times that I started to realize that maybe Thomas Edison did a lot more to improve the world than Karl Marx and Neem Kairolie Baba put together.
quoted in Michael Moritz’s The Little Kingdom
When Steve came back, he resumed his job at Atari. One of his pastimes back then included primal scream therapy sessions at the Los Altos Zen Center, where he befriended Governor Jerry Brown and his guru Kobun Chino. He also spent several weeks with his girlfriend Chris-Ann and Dan Kottke in a hippie commune in Oregon, the All-One Farm. Here they would cultivate apples and for some time, Steve would eat only that — when he wasn’t fasting, that is.
The Apple I
While Steve had been away in India or Oregon, his geek friend Woz had been hired by Hewlett-Packard. To him, it was a dream job: a company full of passionate engineers just like him, where he could work on products for other engineers. However, in his spare time, he had cultivated his interest in designing computer circuits, and had joined a computer hobbyists association called the Homebrew Computer Club.
The emergence of personal computing
Computers existed for a long time before Apple was started. For example, arguably one of the first full-blown US computers ever built was ENIAC, in 1946. By the 1970s, the majority of large corporations were already equipped with computers. But those were usually huge mainframes in giant computer rooms, built and maintained by industry behemoth IBM.
Personal computing was based on a radically different approach. It claimed that computers could be used by mere mortals, private individuals instead of institutions. It was a revolutionary idea, and it’s no surprise it emerged in the Bay Area in the 1970s, after the hippie revolution and at the heartland of the electronics industry.
It all started in 1974, when Mountain View-based Intel introduced the world’s first microprocessor, the 8080. All sorts of hobbyists started to get interested in how to use this powerful yet relatively cheap new piece of technology. A huge leap forward was made when a man named Ed Roberts launched the Altair, out of Albuberque, New Mexico. It was a computer kit based on the 8080, which people could assemble by themselves, a lot like the Heathkits Steve Jobs worked on in his childhood.
The Altair was basically a box that could flash lights on and off. It didn’t do much until Bill Gates and Paul Allen, who had just founded a new company called Microsoft, wrote a BASIC interpreter for it in 1975. The word spread around all over the country in those personal computing circles (which mostly consisted of engineers, radio amateurs and other types of nerds). The Homebrew Computer Club, which operated from Stanford’s Linear Accelerator Center auditorium, was one of those groups. Hobbysits would go there to show off their latest machine or program they had worked on.
Woz was impressed by the Altair (and by Microsoft’s BASIC interpreter), but he knew from his almost life-long experience in circuit design that he could do a much better job. So he started work on his own computer — which he decided to base on another microprocessor, MOS’s Technology 502. This was his new goal in life. While keeping his job at HP, he worked very hard at this computer board, and came up with an impressive result; a powerful computer (for the time) which worked with a keyboard and screen, not one that flashed lights — and all with amazingly few chips.
Woz showed his computer design to his friend Steve Jobs. Steve was impressed. He did not know much about engineering, but he could see there was a demand for having a computer to write software for, a computer for software hobbyists. He was especially excited to see that a lot of the qualified engineers at Homebrew were talking about Woz’s computer with admiration. So he suggested to sell it to them. He and Woz would assemble the computers themselves and sell the whole board at Homebrew meetings.
“Our own company”
Steve had a good argument. We were in his car and he said — and I can remember him saying this like it was yesterday: “Well, even if we lose money, we’ll have a company. For once in our lives, we’ll have a company.” That convinced me. And I was excited to think about us like that. To be two best friends starting a company.
Steve Wozniak in iWoz
To get the necessary $1,000 to start building the first boards, Steve sold his Volkswagen van, and Woz his HP 65 calculator. They thought about how to call the new company, and couldn’t come up with a good name, until one day, Steve said that they would call it Apple if they didn’t find anything better. And they didn’t — so Apple Computer was born.
The two friends sought help, and they got it from one of Steve’s colleagues from Atari, Ron Wayne. Wayne basically wrote the necessary paperwork to start a corporation and drew the company’s first logo. As a result, he got 10% of the company’s shares, while Steve and Woz split the rest (45% each).
Another problem was that Woz was still working for HP, and under the terms of his contract, all his work belonged to the corporation. The Apple computer was technically HP property. But Woz showed it to his bosses and they simply didn’t care about it. Woz was disappointed as his goal was to work for HP his whole life. He would have been delighted if HP had done a personal computer based on his design. It wasn’t Steve Jobs’ intention though.
Apple Computer’s first order was from a Homebrew member called Paul Terrel. He was starting a new computer store called the Byte Shop, in Mountain View, and understood just like Steve that there was a demand for such fully-built computers. He ordered 50 of them, at $500 a piece. That was $25,000! It was a huge starting point for the young company, and got Steve and Woz very excited. They started putting together the parts in the Jobses’s garage, with help from Steve’s sister Patti and his friend from Reed, Dan Kottke. They paid them $1 a board. The parts for the Apple cost $220, while the computer was sold to Terrel for $500, who would usually put it in wooden boxes.
Steve and Woz also started selling the computer on their own. They agreed on the retail price of $666.66 (note that his price was based on a simple calculation — a 33% margin — and had nothing to do with the Satanic number of course). They showed it to the Homebrew folks in March 1976, but the response wasn’t that enthusiastic. So they went elsewhere, going from store to store and trying to sell them. They sold a couple hundreds this way.
This was the start of Apple Computer. Steve and Woz had bought the other co-founder Ron Wayne out for $800, and incorporated the company on April 1, 1976.
Apple’s early days
The day he finished work on his first computer, Woz started working on an improved design, the future Apple II. The Apple II was based on the Apple I’s design, but in many ways it was a huge breakthrough.
First, it ran a lot faster with half as many chips. It also was the first computer that could produce color, with any color TV you would plug it into. It could handle high-resolution graphics and sound, and had a BASIC interpreter built-in. In short, it was the first computer that anybody who knew the BASIC programming language could use: it had what it took to launch the personal computing revolution.
The prototype for the Apple II was almost ready when Steve and Woz partook in the Personal Computer Festival, held in Atlantic City in the summer of 1976. But it was not ready enough to be shown to the public. Steve and his friend Dan Kottke were trying to sell the Apple I from their Apple Computer booth, while Woz was working on finishing the Apple II. The visitors were not impressed by the Apple I, a board sold by these two amateur bearded young men, while MITS, which sold the Altair, had a huge booth with music, dancers and business suits. Steve learned a lot that day.
After the Apple II was finished, Steve went looking for investors. He talked to several venture capitalists, who were already legions in the Valley. The first to show up was Don Valentine. He turned Steve and Woz down, but he did give them a hand by passing them the name of another potential investor, Mike Markkula. Mike was a former Intel employee who had made millions and retired early. He was 34 when he met with Woz and Steve, and he bought into their vision. He was also quite aware of the potential returns on his investment:
We’re going to be a Fortune 500 company in two years. This is the start of an industry. It happens once a decade.
Mike Markkula to Steve and Woz, quoted in iWoz
Mike drew up a business plan. He wanted to put in $250,000 to build 1,000 machines. This was a huge number by the young men’s standards. Woz was also told that for this to happen, he had to leave HP. At first he refused, since he was a huge admirer of HP and planned to work there his whole life. But Steve lobbied him hard into it, and in the end Woz relented.
Mike Markkula also insisted that Apple advertise for its new computer. He called up one of his friends, Regis McKenna, who was one of the most renowned advertisers in the Valley. While they worked with Steve Jobs on Apple’s first ads, an art director called Rob Janoff designed a new logo for the company. The only thing Steve asked him was: “Don’t make it cute.” He was the one who came up with the bitten apple (so that it wouldn’t look like a tomato), as well as the striped colors — to emphasize the Apple II’s ability to display color.
Rod Holt, a friend of Steve Jobs’, was hired to build a switching power supply and design a mold for the Apple II’s plastic case. Mike Markkula later also hired a fourth guy, Mike Scott, to run the startup, whose first offices were moved to Stevens Creek Boulevard in Cupertino.
The West Coast Computer Faire
The new company got ready to show off their product at the West Coast Computer Faire, a conference held in San Francisco in April 1977. It was only a prototype, but the plastic case definitely made the Apple II look like a professional product. Steve negotiated a prime spot for Apple’s booth, and took precious advice from both Mike Markkula and Regis McKenna. That’s why he bought his first suit for the occasion.
My recollection is we stole the show.
Steve Jobs in Triumph of the Nerds
Apple Computer received 300 orders for the Apple II on the show alone, twice as much as the total number of Apple I’s ever sold! But this was just the beginning.
Success and failures
The personal computing revolution
In many ways, the Apple II was both the start and the symbol of the personal computer revolution of the early 1980s. Although there were many competing personal computers on the market — such as the Commodore PET or Radio Schack’s TRS-80 — the Apple II clearly set itself apart very early on, and soon embodied the personal computer in the public consciousness. It was all over the media, and its sales skyrocketed throughout 1978, 1979 and 1980.
It was not only about the Apple II’s appealing design, its integrated keyboard, or its ability to plug into any TV to display color graphics or play sounds. Its built-in BASIC interpreter was also critical to its success, as it made the writing of compatible software very easy. Woz used it himself to write the first program to ever run on the machine, a game called Breakout. The eight expansion slots in Apple II made a difference, too. Woz decided to implement them against Steve Jobs’ will, and this proved a wise move, as they allowed for all kinds of new features and software to be added to the machine. One of those features was Disk II, a floppy disk drive Apple started shipping in early 1978. It made the sharing and installing of new software very easy — soon the supply of Apple II software was thriving.
But probably the most important push toward the Apple II’s success was not from Apple. It was a piece of software called VisiCalc — the first spreadsheet ever brought to market. VisiCalc worked only on the Apple II, and it was a revolution in itself. Millions of accountants, small businesses, or even private individuals that cared about their money, could now do in minutes calculations that would have taken them weeks to perform by hand. They rushed out to computer stores and bought Apple IIs en masse, making Apple one of the most profitable companies of its day. Only four years after it was started in a garage, the company was well on its way to fulfill Mike Markkula’s vision of belonging to the Fortune 500 elite of corporate America.
Preparing for the future
Apple Computer was growing at an incredibly fast rate. The numbers were mind-blowing: from 2,500 Apple IIs sold in 1977, 8,000 were sold in 1978, and up to 35,000 in 1979. Remember there was no market for personal computers before! The company earned $47 million in revenues in fiscal year 1979, making Steve Jobs a millionaire on paper (he owned $7 million worth of private stock). The company’s board of directors, including its new members such as Arthur Rock and Don Valentine, began to discuss taking Apple public.
Meanwhile, the engineers in Cupertino started working on Apple’s future. Several projects came into being in those early years. First, in late 1978, there was the Apple III, which was supposed to build on Apple II’s legacy. Woz did not partake in the project and was critical of it early on. There was also an obscure project called Macintosh, headed by computer scientist Jef Raskin. He started to assemble a small team to work on a computer “as easy to use as a toaster”, that he named after his favorite apple.
Steve Jobs was not involved in any of those projects. He had another one in mind, called Lisa. And he hadn’t picked that name without a reason… Indeed, in 1978, while he was dating an employee of McKenna’s PR agency, Steve’s ex-girlfriend from high school Chris-Ann Brennan reappeared claiming she was bearing his baby. Steve denied the fatherhood, although everybody in his entourage knew he was the father. The baby girl was named Lisa… there was a lot of perplexity around Steve’s behavior, especially since he had suffered greatly from having been abandoned himself. He was going to do the same to his own daughter! Yet, at the very same time, he used the girl’s name for a project code name.
Project Lisa took a dramatic turn in late 1979, after Steve’s visit to Xerox PARC.
What is Xerox PARC?
The Xerox Palo Alto Research Center, often dubbed Xerox PARC, was started in the early 1970s by the Xerox corporation. Based on the East Coast, the manufacturer of copy machines felt that its core business was threatened by the emerging computer revolution, with its promise of a paperless office. In a very smart move, they set up a research center in Stanford Research Park, and hired talented computer scientists, many from the leading university, to invent the office of tomorrow.
In 1979, when Steve Jobs toured PARC, the researchers had already pioneered several technologies that would revolutionize computing forever. They had a network of computer working together using Ethernet. They had developed object-oriented programming, a new way to write software much more effectively. They were working on the laser printer. But most of all, they had built the world’s first computer to use a graphical user interface (GUI), the Alto. The Xerox Alto had a strange device called a mouse, that you could use to move a cursor around the screen. You could open files and folders, copy and paste content inside them. It was simply a breakthrough.
The Xerox PARC did not keep its technology hidden from outsiders. Informed circles knew about the center’s advances, especially at Stanford and in the Valley as a whole. Everybody pretty much sensed that this technology would have a huge impact on the industry — everybody but Xerox themselves. The conservative management on the East Coast never grasped the extent of what their researchers in California had come up with. They simply dismissed it as futile.
The Lisa team was briefed about Xerox PARC’s technologies by insiders, including Jef Raskin, the manager of the Macintosh project. Steve negotiated a deal with Xerox to be given a complete tour of the facilities. Here’s how he described his experience later:
Within ten minutes, it was obvious to me that all computers would work like this someday.
Steve Jobs in Triumph of the Nerds
Several researchers and engineers were lured away from PARC by Apple, such as Larry Tesler and Bruce Horn, to develop a GUI for Lisa. The biggest challenge was to design an actual product, not a fancy prototype too expensive to build. After all, one of the reasons Xerox dismissed the Alto was its astronomical price tag: $20,000! That was twenty times as much as the Apple II.
The biggest IPO since Ford
In 1980, Apple Computer was preparing to go public. This move had several major implications for Steve Jobs, both professionally and personally.
First, the board was concerned about the potential bad publicity around Steve’s handling of his daughter Lisa. They insisted that he settled the case with Chris-Ann before the end of the year, as the IPO was scheduled for December 1980. Reluctantly, he agreed to reimburse the country’s welfare the money they had spent on the mother of his daughter, i.e. $20,000.
There was also a large re-organization at the top of the company. The Apple III, which came out in the spring of 1980, had turned out a disaster on the marketplace. It was flawed and thousands of early models had to be returned to the company, whose only revenues still came from sales of Apple II. The next project, Lisa, became even more critical to the company’s future. As a result, Apple Computer was re-organized into three new departments: Accessories, Professional Office Systems (which included Lisa), and Personal Computer Systems (Apple II and Apple III). Steve expected to head the POS division, but the board chose the milder and more experienced John Couch. Steve was named chairman of the board instead.
This choice was mostly a public relations scheme in anticipation of the IPO. The company started advertising in the mass media, notably the Wall Street Journal, spreading the legend of the technical genius Steve Wozniak, and his friend marketing genius and visionary Steve Jobs starting a revolution from their garage. There were full-page advertisements with pictures of Steve Jobs and the Apple II, in which he was quoted as saying that the personal computer was a new kind of bicycle — a bicycle for the mind.
Steve’s personality was transformed during that period. He was increasingly recognized as a national icon, a symbol for the country’s new entrepreneurial wave. He was starting to realize his dream of changing the world. His hippie days seemed long gone: he gave up the beard and the mustache, stopped going to the Los Altos Zen Center, and occasionally wore suits.
Finally, on December 12 1980, Apple went public. Even though the country was in the middle of a recession, the operation was a huge success beyond anyone’s expectations. It was the biggest public offering in American history since the Ford Motor Company in 1956! After the IPO, Steve Jobs was worth $217.5 million, $210 million more than the day before.
The bozo explosion
However, Steve was still the same inside. He was a tough manager, and a lot of engineers refused to work with him. Apple’s executives were well aware of the problem, and it’s one of the reasons they named John Couch to run the Lisa project, not Steve.
In particular, Steve had very tense relations with Apple’s CEO Mike Scott. Remember Scott was hired by Mike Markkula in 1977 to run the company. But as you will soon see, Scott was perhaps as temperamental as Jobs, if not more.
Indeed, there was a shared concern in Cupertino about the quality of the company’s recent hires. The organization had been growing so fast that many people in its workforce obviously did not qualify for their jobs. In a very Steve Jobs fashion, the phenomenon was commonly referred to as “the bozo explosion.” Mike Scott, nicknamed Scotty, decided it was time to take action. On February 25 1981, a day that would go down in Apple’s history as “Black Wednesday”, he fired half of the Apple II team, without even consulting the board — this was not a way to manage a publicly traded company! The board gathered and decided it was time for Apple to get rid of Scotty. Mike Markkula took his job while the company started looking for a new CEO.
The departure of Scotty, one of Steve Jobs’ strongest opponents, gave him more freedom at Apple. It wasn’t long after that that the young chairman of the board took over the smallest project in the POS division, Jef Raskin’s Macintosh. Remember Jef was an older Apple engineer, a very bright, soft-spoken character, who never had much sympathy for Jobs. He had even written a note to Mike Scott to explain why he could not possibly work with Steve (read it in Steve at work). But the board was willing to sacrifice him to have Steve Jobs let the Lisa project in peace — so they let him go, and installed Steve as new head of the Mac team.
The reasons Lisa was such a strategic product for Apple came from the new face of the PC market. Indeed, in August 1981, the whole industry was shaken by the introduction of the IBM PC. Big Blue was the leader in computing, and had been for several decades — but its only products were mainframes. As they watched the growing success of Apple Computer and the new market, IBM decided it was time to get personal. The IBM PC was inferior to the Apple II in many ways, but the fact it was from IBM was critical in itself. It made it OK for corporate America to start using PCs: after all, every information systems manager knew “you couldn’t be fired for buying an IBM.” Apple’s position as the market leader was clearly threatened — and its only viable product was still the four year-old Apple II. After the failure of Apple III, Lisa looked like the only possible salvation for the fruit company.
To be continued..