I Am John Galt (5 page)

To introduce the Apple II, Markkula spent $5,000 for a flashy booth and front-door position at the West Coast Computer Faire in 1977. Jobs's custom plastic cases arrived at the last minute with cosmetic flaws and no time to reship, so he put together a crew to sand, scrape, and paint them the night before. On opening day, people crowded the booth unable to believe these small, sleek boxes could be responsible for the color images displayed on the big TV monitor. Jobs had to routinely throw back the booth draping to prove there was no secret mainframe hidden from view. Curious engineers asked to pop the hood and were amazed by Woz's cutting-edge design that fit an unprecedented 62 chips on a compact motherboard that looked as sleek as its function. Soon they had 300 orders.

Poisoned Apple

The next few years were tough on Jobs. The business grew under the professional leadership he himself had recruited, but despite his founder's status, Markkula and Scott marginalized the youthful Jobs, leaving him with little true authority and the belittling title of vice president of research and development. Longing for a project he could put his imprint on, he envisioned a brand-new computing paradigm, having been inspired by a trip to the secretive Xerox Palo Alto Research Center (PARC).

In exchange for allowing Xerox to buy 100,000 shares of pre–initial public offering (IPO) Apple, Xerox agreed to open the kimono on some advanced computer research it was conducting. What Jobs saw at PARC changed the face and culture of computing forever. Among the developments were a fully functional prototype computer called the Xerox Star sporting a graphical user interface (GUI), with overlapping “windows,” pictorial icons representing programs or commands, a pointing device for user input—now known as the familiar “mouse”—and a fast, silent laser printer that beautifully rendered on paper what you could see on the screen. While these innovations are commonplace today, in the late 1970s era of command-line prompts, green-screen monitors, complicated keyboard-based hexadecimal machine code inputs, and rattling impact printers, PARC's technology was breathtaking. Yet within the bureaucracy of Xerox, precisely nothing was being done to develop its commercial potential. Jobs immediately grasped the possibilities and set to work revolutionizing the personal computer he himself had just invented a few scant years earlier.

The idea was to include every advanced technology and feature he could think of in a compact form that would be so revolutionary it “would put a dent in the universe.”
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Jobs's brainchild would be known as Lisa, named after the daughter he fathered with a past girlfriend. But the professional computer scientists now filling the ranks at Apple balked at his hubris. Markkula and Scott would soon reorganize the company, pulling Jobs from the Lisa project and handing it over to a cabal of uninspired engineers under even less inspiring leadership. As consolation, Jobs would be given the strictly symbolic title of chairman of the board. Eventually, the Lisa would become an overpriced disaster—the product of design by a mediocre collective, not Jobs's individual vision. It would leave Jobs with an even greater appreciation of what he did best: inspiring—and infuriating—small groups of extraordinarily talented individuals to create astoundingly original products under seemingly impossible and uncompromising terms.

Despite Lisa's false start, by 1980 Apple Computer was on a tear. The biggest kid on the PC block, Apple had sold over 250,000 personal computers since 1977. With over 1,000 employees and facilities across the globe, it continued moving nearly 20,000 computers per month and would rack up $300 million in annual sales that fiscal year alone. At a typical hardware cost of $2,500 (or over $6,000 in today's dollars) Apple computers cost twice as much as competitive offerings from Commodore and Tandy, yet eclipsed their sales volume handily (IBM hadn't even entered the PC market yet). It is a testament to Jobs's insistence on usability and sleek design that Apple had tens of thousands of users willingly paying for a premium brand.
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It was a precursor to the business model Apple would employ with the iPod, iPhone, and iPad.

Apple Computer Corporation went public on December 12, 1980, selling 5 million shares at $22 each, raising $110 million for the company. The offering was oversubscribed even though it wasn't available in 20 states, including the normally IPO-friendly Massachusetts, because the stock was deemed “too risky” by government regulators.
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At the end of the first trading day, Apple had a market capitalization of over $1.5 billion. The 25-year-old Jobs held over $200 million.

In early 1981, still sidelined, Steve was casting about for a new idea when he remembered an experimental project envisioned by a computer scientist named Jef Raskin who was working on the fringes of Apple. His concept was to make an all-in-one self-contained computer that presented itself to the customer as an appliance, like a toaster. No add-on components would be required, and the machine would instantly boot up without any arcane commands or cumbersome software to load. He dubbed it the Macintosh.

Jobs had originally blackballed Raskin's idea back when Jobs was still leading the Lisa team, viewing it as a conflict with his own project. Now, a project to call his own that would compete with and beat the Lisa was just what he was looking for. According to biographers Jeffrey Young and William Simon,

Steve no longer had to subjugate his outlaw spirit to the corporate process, rewarded with little but his unceremonious booting off the Lisa project; here was the kind of dedication he understood, the kind he loved. These were crusaders like himself who thrived on the impossible. Steve would inspire this little-noticed team in a corner of a forgotten building. He would show them all—Scotty, Markkula, the whole company, the entire world—that he could lead them to produce a remarkable computer. . . . He set off with guns blazing to make the Macintosh the world's next groundbreaking computer.
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It was an internal struggle to reassert himself at Apple, but Jobs also saw it as a race to beat IBM and preserve a place for creative innovation in PCs in the face of an oncoming corporate behemoth. He drove his team with high demands, but also with whimsy and irreverence, carving out their own separate office space for the best talent, instilling a desire for hard work and long hours that would establish each member as part of an elite club that he often referred to as his “pirates.”

By this time, Scott—whom Jobs had recruited as Apple's president—had worn out his welcome and then some. His abrasive personality did him no favors among the creative technical teams, and after ordering a brutal series of layoffs in an event known as “Black Wednesday,” his days at Apple were numbered. Markkula returned from vacation and asked for Scott's resignation. The board spent months searching for a replacement.

It was not to be Jobs. He felt he was capable of running the company, but he was the only one who thought so. If the board wouldn't let him run the company, at least he could find someone he could work with. John Sculley of PepsiCo seemed like an inspired choice. While considered a technological lightweight, he knew about running a consumer products company and could help support Apple Computer's efforts to position itself as a name-brand product instead of a hobbyist's box of components. Jobs met with Sculley in New York in March 1983 and posed the now legendary query: “Are you going to sell sugar water the rest of your life when you could be doing something really important?” Sculley joined Apple as CEO shortly thereafter.

While Jobs and his pirates were feverishly working to make their Macintosh user-friendly and aesthetically pleasing, Bill Gates and his brilliant but pedantic programmers at Microsoft, working on IBM's competing operating system, concentrated on power and technical fine points. According to Sculley, “The legendary statement about Microsoft, which is mostly true, is that they get it right the third time. Microsoft's philosophy is to get it out there and fix it later. Steve would never do that. He doesn't get anything out there until it is perfected.”
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And perfected it was, or as near as Jobs could make it, after a series of delays from the initial time line.

To promote the Macintosh launch, Jobs commissioned film director Ridley Scott of
Alien
and
Blade Runner
fame to create an ad to run during the 1984 Super Bowl. It would be a million-dollar bet, significant if not unprecedented in the early 1980s—and it would prove to be one of the most famous and enduring TV ads in history. It depicted a stark Orwellian future filled with drab marching clones brainwashed by a black-and-white projection on a vast screen of “Big Brother” espousing a collectivist ideology. A blonde female athlete bursts through the crowd in vibrant color chased by a jackbooted Gestapo squad, only to hurl a flying hammer into the screen, shattering the collectivist image in a burst of individualist light. The tagline: “On January 24th, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like ‘1984.'”

The ad was brilliant. It was unlike anything anyone had seen before. And the Apple board hated it. It was as if Jobs had become Howard Roark himself in the scene from
The Fountainhead
in which he sits in front of the architectural committee of a bank discussing his design for its new headquarters building. It was just too “stark,” too “radical.” It wouldn't “please the public.” In Jobs's case, perhaps the board objected to the commercial precisely for what Ayn Rand would have loved about it: its portrayal of the victory of the individual versus the collective. Indeed, for Jobs this is what the personal computer was all about: the empowerment of the individual user.

The board ordered Jobs to sell back the advertising time, but it was too late. The ad ran only once, on January 22, 1984, but it was so unique, so stunningly original—just so cool—that stations across the country replayed it on the evening news, generating the first instance of the “viral” buzz, as well as the Super Bowl ad frenzy now commonly sought by advertisers. It was a fundamental innovation in the way mass marketing was done—not just for computers, but for everything—and it was Jobs who did it.

Macintosh sales were brisk in early 1984, but slowed down later in the year. By the time of its first anniversary in 1985, 275,000 Macs had been purchased—an impressive number, but still short of Jobs's 500,000 forecast, and not enough to meet critical revenue goals. Part of the problem was that there were few third-party software programs available for the machine, and the ones that did exist had difficulty running on the Mac's scant 128K of memory. Jobs's vision, it seems, was ahead of the technological capabilities of the day.

Internal friction erupted within the company as financial stresses increased. Jobs was chairman of the board above CEO Sculley, while simultaneously working under him as head of the Macintosh division. It was a dysfunctional structure that a weak-kneed, conformist board would ignore until it was too late.

For his part, Jobs felt he could run the company himself and, as its co-founder, railed against his powerful vision being overruled and stymied by a stodgy collectivist bureaucracy. In turn, Sculley came to liken Jobs to Russian revolutionary Leon Trotsky. In
Odyssey
, his memoir of this period, he called Jobs “a zealot, his vision so pure that he couldn't accommodate that vision to the imperfections of the world.”
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“Apple was supposed to become a wonderful consumer products company,” Sculley wrote. “This was a lunatic plan. High tech could not be designed and sold as a consumer product.”
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As it would turn out, Sculley was dead wrong.

Soon an outright power struggle emerged, with various camps simultaneously trying to shift blame and secure their position. Marketing chief Mike Murray circulated a memo to the executive team under the heading “DO NOT CIRCULATE, COPY, OR SHARE,” lambasting Steve for “espousing vision . . . at the clear expense of corporate survival.” Then in April, early investor and taciturn board member Arthur Rock sensed weakness and instigated a boardroom coup. Citing poor financial performance, Rock, who was more interested in funding social causes than Jobs's brand of youthful dreams, challenged CEO Sculley to take decisive action. Feeling the noose around his own neck, Sculley sacrificed Jobs, removing him as head of the Macintosh division. The ensuing reorganization consolidated operations and left Jobs conspicuously absent from the organization chart. Sculley refused to acknowledge Jobs or even mention his name at the company-wide meeting to announce the new structure.

In September 1985, relieved of his daily responsibilities at Apple, Jobs tendered his resignation from the board. “The company's recent reorganization left me with no work to do and no access even to regular management reports,” he wrote. “I am but 30 and want still to contribute and achieve.”
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In the same spirit as Rand's greatest hero, John Galt, Jobs led a strike of the mind against Apple, hiring away some of its top talent to join him in a new independent venture. The board was furious and contemplated legal action in a petty attempt at restricting Jobs from competing with them at their own game. But Jobs's mind would not be enslaved.

The press at the time presaged the coming decade of Apple's struggles without Jobs and the brains that Jobs took with him when he left. A
New York Times
article in September 1985 predicted, “Apple, while having a solid management, still might miss Mr. Jobs. The company is weak in top engineering talent to guide product development. Moreover, more traditional managers like Mr. Sculley have often proved no more adept at running technology companies than the original entrepreneurs. Some analysts and former employees are worried that Apple is losing its spark and becoming stodgy, a process some refer to as ‘Scullification.'” They would prove to be dead right.