Inside Steve's Brain

PORTFOLIO
Published by the Penguin Group

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Penguin Books Ltd, Registered Offices:
80 Strand, London WC2R 0RL, England
First published in 2008 by Portfolio,
a member of Penguin Group (USA) Inc.

Copyright © Leander Kahney, 2008

All rights reserved
Library of Congress Cataloging-in-Publication Data
Kahney, Leander.
Inside Steve’s brain / Leander Kahney.
p. cm.
Includes bibliographical references and index.

eISBN : 978-1-4406-3257-0

1. Jobs, Steven, 1955- 2. Apple Computer, Inc.—Management.
3. Computer industry—United States. I. Title.
HD9696.2.U62J636 2008
338.761004’092—dc22 2007049270

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"Apple has some tremendous assets, but I believe without some attention, the company could, could, could—I’m searching for the right word—could, could die.”

Steve Jobs gives almost as much thought to the cardboard boxes his gadgets come in as the products themselves. This is not for reasons of taste or elegance—though that’s part of it. To Jobs, the act of pulling a product from its box is an important part of the user experience, and like everything else he does, it’s very carefully thought out.

Jobs sees product packaging as a helpful way to introduce new, unfamiliar technology to consumers. Take the original Mac, which shipped in 1984. Nobody at the time had seen anything like it. It was controlled by this weird pointing thing—a mouse—not a keyboard like other early PCs. To familiarize new users with the mouse, Jobs made sure it was packaged separately in its own compartment. Forcing the user to unpack the mouse—to pick it up and plug it in—would make it a little less alien when they had to use it for the first time. In the years since, Jobs has carefully designed this “unpacking routine” for each and every Apple product. The iMac packaging was designed to make it obvious how to get the machine on the Internet, and included a polystyrene insert specially designed to double as a prop for the slim instruction manual.

As well as the packaging, Jobs controls every other aspect of the customer experience—from the TV ads that stimulate desire for Apple’s products, to the museum-like retail stores where customers buy them; from the easy-to-use software that runs the iPhone, to the online iTunes music store that fills it with songs and videos.

Jobs is a control freak extraordinaire. He’s also a perfectionist, an elitist, and a taskmaster to employees. By most accounts, Jobs is a borderline loony. He is portrayed as a basket case who fires people in elevators, manipulates partners, and takes credit for others’ achievements.
¹
Recent biographies paint an unflattering portrait of a sociopath motivated by the basest desires— to control, to abuse, to dominate. Most books about Jobs are depressing reads. They’re dismissive, little more than catalogs of tantrums and abuse. No wonder he’s called them “hatchet jobs.” Where’s the genius?

Clearly he’s doing something right. Jobs pulled Apple from the brink of bankruptcy, and in ten years he’s made the company bigger and healthier than it’s ever been. He’s tripled Apple’s annual sales, doubled the Mac’s market share, and increased Apple’s stock 1,300 percent. Apple is making more money and shipping more computers than ever before, thanks to a string of hit products—and one giant blockbuster.

Introduced in October 2001, the iPod transformed Apple. And just as Apple has been transformed from a struggling also-ran into a global powerhouse, so has the iPod been transformed from an expensive geek luxury into a diverse and important product category. Jobs quickly turned the iPod from an expensive, Mac-only music player that many people dismissed into a global, multibillion-dollar industry that supports hundreds of accessory companies and supporting players.

Quickly and ruthlessly, Jobs updated the iPod with ever newer and better models, adding an online store, Windows compatibility, and then video. The result: more than 100 million sold by April 2007, which accounts for just under half of Apple’s ballooning revenues. The iPhone, an iPod that makes phone calls and surfs the Net, looks set to become another monster hit. Launched in June 2006, the iPhone is already radically transforming the massive cell phone business, which pundits are saying has already divided into two eras: pre-iPhone and post-iPhone.

Consider a few numbers. At the time of this writing (November 2007) Apple had sold a whopping 100 million iPods, and is on track to ship more than 200 million iPods by the end of 2008 and 300 million by the close of 2009. Some analysts think the iPod could sell 500 million units before the market is saturated. All of which would make the iPod a contender for the biggest consumer electronics hit of all time. The current record holder, Sony’s Walkman, sold 350 million units during its fifteen-year reign in the 1980s and early 1990s.

Apple has a Microsoft-like monopoly on the MP3 player market. In the United States, the iPod has nearly 90 percent market share: nine out of ten of all music players sold is an iPod.
²
Three quarters of all 2007 model year cars have iPod connectivity. Not MP3 connectivity, iPod connectivity. Apple has distributed 600 million copies of its iTunes jukebox software, and the iTunes online store has sold three billion songs. “We’re pretty amazed at this,” said Jobs at a press event in August 2007, where he cited these numbers. The iTunes music store sells five million songs a day—80 percent of all digital music sold online. It’s the third largest music retailer in the United States, just behind Wal-Mart and Best Buy. By the time you read this, these numbers will probably have doubled. The iPod has become an unstoppable juggernaut that not even Microsoft can compete with.

And then there’s Pixar. In 1995, Jobs’s private little movie studio made the first fully computer-animated movie,
Toy Story
. It was the first in a string of blockbusters that were released once a year, every year, regular and dependable as clockwork. Disney bought Pixar in 2006 for a whopping $7.4 billion. Most important, it made Jobs Disney’s largest individual shareholder and the most important nerd in Hollywood. “He is the Henry J. Kaiser or Walt Disney of this era,”
³
said Kevin Starr, a culture historian and the California state librarian.

What a remarkable career Jobs has had. He’s making an immense impact on computers, on culture, and, naturally, on Apple. Oh, and he’s a self-made billionaire, one of the richest men in the world. “Within this class of computers we call personals he may have been, and continues to be, the most influential innovator,” says Gordon Bell, the legendary computer scientist and a preeminent computer historian.
⁴

But Jobs should have disappeared years ago—in 1985, to be precise—when he was forced out of Apple after a failed power struggle to run the company.

Born in San Francisco in February 1955 to a pair of unmarried graduate students, Steve was put up for adoption within a week of his birth. He was adopted by Paul and Clara Jobs, a blue-collar couple who soon after moved to Mountain View, California, a rural town full of fruit orchards that didn’t stay rural very long—Silicon Valley grew up around it.

At school, Steven Paul Jobs, named after his adoptive father, a machinist, was a borderline delinquent. He says his fourth-grade teacher saved him as a student by bribing him with money and candy. “I would absolutely have ended up in jail,” he said. A neighbor down the street introduced him to the wonders of electronics, giving him Heathkits (hobbyist electronics kits), which taught him about the inner workings of products. Even complex things like TVs were no longer enigmatic. “These things were not mysteries anymore,” he said. “[It] became much more clear that they were the results of human creation, not these magical things.”
⁵

Jobs’s birth parents had made attending college a condition of his adoption, but he dropped out of Reed College in Oregon after the first semester, although he continued to unofficially attend classes in subjects that interested him, like calligraphy. Penniless, he recycled Coke bottles, slept on friends’ floors, and ate for free at the local Hare Krishna temple. He experimented with an all-apple diet, which he thought might allow him to stop bathing. It didn’t.

Jobs returned to California and briefly took a job at Atari, one of the first games companies, to save money for a trip to India. He soon quit and headed out with a childhood friend in search of enlightenment.

On his return he started hanging around with another friend, Steve Wozniak, an electronics genius who’d built his own personal computer for fun but had little interest in selling it. Jobs had different ideas. Together they cofounded Apple Computer Inc. in Jobs’s bedroom and soon they were assembling computers by hand in his parents’ garage with some teenage friends. To fund their business, Jobs sold his Volkswagen microbus. Wozniak sold his calculator. Jobs was twenty-one; Wozniak, twenty-six.

Catching the tail of the early PC revolution, Apple took off like a rocket. It went public in 1980 with the biggest public offering since Ford Motor Company in 1956, making instant multimillionaires of those employees with stock options. In 1983, Apple entered the Fortune 500 at number 411, the fastest ascent of any company in business history. “I was worth about over a million dollars when I was twenty-three and over ten million dollars when I was twenty-four and over a hundred million dollars when I was twenty-five, and it wasn’t that important because I never did it for the money,” Jobs said.