The two spent many hours in the basement of McKenna’s ranchstyle Sunnyvale home, talking about Steve’s goals for Apple and its wondrous Apple II. Their conversations ranged widely, over design, marketing, product development, and strategy, and how these were intertwined in a healthy business. McKenna was expert at framing a company’s development in a narrative Steve could relate to. “We talked about how your financials are your best marketing tools,” says McKenna. “To get people to sit up and pay notice, especially in the computer business, you need to be a successful financial company.”
McKenna was absorbed and engaged by Steve. “He was very pleasant and enjoyable, and had a lot of depth intellectually. He could talk about a wide range of subjects. We could have real trivial conversations, and then we could talk about Apple and the business. I remember him once asking me if I thought Apple would ever be bigger than Intel. The answer, of course, is that Intel was a component manufacturer, and usually the equipment manufacturers get much bigger in revenue.”
McKenna and Jobs connected on so many levels that Regis got to know Steve as well as anyone during those early years. It helped that he didn’t tolerate any of Steve’s more obnoxious behavior. “He did have that quick, reactive temper, but I never had him shout at me; I never had him upset with me. Did we disagree? Yeah. Did we argue? Yes. But we also got along really, really well,” he remembers. “I had an assistant who told me that Steve called up wanting something, and had yelled and yelled at her, using a lot of four-letter words. Next time I saw Steve, I told him, ‘Hey, don’t ever do that again.’ She said the next time he came to the office, he walked in and said he was really embarrassed and apologized. I was trained in the semiconductor industry under Charlie Sporck and Don Valentine and those guys. If you weren’t strong, they’d just gobble you up. So it didn’t bother me to say, ‘Hey, Steve, shut up.’ He didn’t dominate you to be mean. But when people acted as minions, he let them be minions.”
McKenna and his team worked with Steve to craft a marketing pitch designed to make the Apple II stand out as the friendly computer for more than just computer geeks. The headline of the first promotional brochure McKenna created for the machine asserted, “Simplicity is the ultimate sophistication.” It was a concept that went against every industry trend, since most of the existing manufacturers, including Commodore and MITS and Vector Graphic, advertised in the hobbyist rags with endless gray type that alerted obsessive geeks to this or that great new feature. Friendly marketing would distinguish Apple from its competitors for decades.
McKenna also helped Steve understand the value of presenting this image across every platform the company touched. Early on, he convinced Steve that since there was nothing remotely quaint about Apple’s computers, the company would need an unmistakably modern visual identity, rather than Ronald Wayne’s archaic etching, which was more appropriate for a Berkeley head shop than a company that hoped to lead a global revolution in computing. The replacement was the now-famous apple with the bite taken out and five exuberant rainbow stripes—each fitting perfectly atop the other, as Steve insisted. It seemed sharp and modern, and seemed to promise that computing from Apple would be something much more fun and easy than those mainframes from IBM, with its sober, stratified, white initials against a deep blue palette—almost like a pin-striped suit laid sideways. As Steve explained at the time: “Our whole company is founded on the principle that there is something very different that happens with one person, one computer. It’s very different than having ten people to one computer. What we’re trying to do is remove the barrier of having to learn how to use a computer.”
Like McKenna, Steve had the gift of being able to explain profoundly complicated technology in simple, clear, and even rhapsodic terms. McKenna and Jobs knew this was a profound asset for Apple, especially given the company’s other nondescript leaders. There’s a long and wonderful extemporaneous quote from a New Yorker piece in late 1977 that offers rich proof of Steve’s fully formed verbal mastery. Written at a time when the average reader knew so little about computers that a writer could delight in titillating terminology like “naked computer” and get away with obvious puns using the words “byte” and “Apple,” the magazine’s reporter encountered Steve manning the Apple Computer booth at a computer fair. “I wish we’d had these personal machines when I was growing up,” Jobs tells him, before continuing on for a total of 224 words:
“People have been hearing all sorts of things about computers during the past ten years through the media. Supposedly computers have been controlling various aspects of their lives. Yet, in spite of that, most adults have no idea what a computer really is, or what it can or can’t do. Now, for the first time, people can actually buy a computer for the price of a good stereo, interact with it, and find out all about it. It’s analogous to taking apart 1955 Chevys. Or consider the camera. There are thousands of people across the country taking photography courses. They’ll never be professional photographers. They just want to understand what the photographic process is all about. Same with computers. We started a little personal-computer manufacturing company in a garage in Los Altos in 1976. Now we’re the largest personal-computer company in the world. We make what we think of as the Rolls-Royce of personal computers. It’s a domesticated computer. People expect blinking lights, but what they find is that it looks like a portable typewriter, which, connected to a suitable readout screen, is able to display in color. There’s a feedback it gives to people who use it, and the enthusiasm of the users is tremendous. We’re always asked what it can do, and it can do a lot of things, but in my opinion the real thing it is doing right now is to teach people how to program the computer.”
Before moving on to a booth where a bunch of kids were playing a computer game called Space Voyager, the reporter asks if Steve “would mind telling us his age. ‘Twenty-two,’ Mr. Jobs said.”
Speaking off-the-cuff to a passing journalist from a decidedly nontechie publication, Steve finds so many ways to demystify for the average person the insanely geeky device that he and Woz had created. He understands their fundamental fear that computers may take over too much of modern life (a fear he would capitalize on repeatedly, most notably in the Orwellian imagery of Apple’s famous “1984” commercial). He sympathizes with their ignorance. He offers several analogies to comforting examples they will understand: Chevys, typewriters, cameras. Indeed, he makes using a computer seem no more complicated than taking a photograph, going so far as to call the Apple II “domesticated.” And yet he elevates both his company and its computer into something aspirational. He links this machine made a few months ago by some disheveled California misfits to Rolls-Royce, the seventy-three-year-old paragon of sophisticated industrial manufacturing and elite consumer taste. He even calls Apple a world leader, an absolutely unprovable claim that rockets the little company into the same league as IBM and DEC and Burroughs, which were then the industry’s giants. He was an extraordinary extemporaneous speaker, and McKenna helped him wield that tool to great effect.
TWO KEY IMPROVEMENTS to the Apple II sent its sales skyward. First, the company incorporated a floppy disk drive that made loading software much easier. Then, in 1979, VisiCalc became the very first massive software hit. VisiCalc was a relatively simple financial modeling spreadsheet, and its existence suddenly gave nongeeks a concrete reason to own a computer, as they realized how much time they could save handling accounting chores, managing inventory lists, and trying out business scenarios. Suddenly Apple enjoyed an unprecedented, meteoric rise. It manufactured computers that cost more than $1,300 a pop, so when unit sales quickly ramped up into the tens of thousands per month, Apple became the electronic equivalent of a gusher. Sales rose from $7.8 million in 1978 to $47 million in 1979 and all the way up to $117.9 million in 1980, the year of its initial public offering (IPO, in Wall Street parlance). No other company had ever grown that fast. The mainstream media began to take note, with publications like Esquire, Time, and BusinessWeek starting seri
ous coverage. Inc. went so far as to put Jobs on its cover, with the hosanna of a headline “This Man Has Changed Business Forever.”
But the rosy picture obscured the many problems within Apple, problems that were inherent in the company’s motley mix of leaders.
Each of Steve’s informal outside mentors had been able to cleverly exploit his own idiosyncratic talents in a corporate setting. Edwin Land was a pioneer whose inventions were dismissed, and yet he’d created a great company by dint of pure stubbornness. Robert Noyce was charismatic and forward-thinking and had only been able to start Intel after leaving the shadow of the most imposing figure in semiconductor history, William Shockley. The systems that Andy Grove put in place were more complex and rigorous than anything Mike Scott had ever seen, and yet Grove had also been able to make his company one of the most creative places in Silicon Valley. And Regis McKenna became so adept at deftly navigating the constant shifts and tremors of Silicon Valley culture that he would wind up writing several books explaining how others could do the same. These were well-rounded, complicated, deep, and fascinating men. They were comfortable with change, and they lived where Steve wanted to live himself—at the intersection of technology and something that was more like the liberal arts. They were people who played the corporate game by rules of their own devising.
It’s impossible to say what would have happened next if Steve had had someone like these men as his boss at Apple. Maybe they would have been able to channel his bundle of contradictions to good purpose. But you don’t get to replay the experiment. What he had instead was Scotty and Markkula. And they, it would now become clear, could not control him. They could barely even channel his creative energy toward useful purposes. The encounter between young Steve Jobs and the broad, real world around him was about to become something more like a slow-motion collision. It would cost him friends, it would cost him his job, and it would leave him without the company he had created.
Chapter 3
Breakthrough and Breakdown
Every cliché is built on some truth. The cliché that Steve Jobs was half genius, half asshole is based largely on his actions during the nine years that constituted his first tenure at Apple. This is when his highs would shine most famously, and when his lows were reprehensible. It was the period when he most sought the limelight, and when he was most out of control. He developed followers and he created enemies. This is when his bundle of contradictory qualities unraveled, leaving him, and his company, at loose ends. These years provide a baseline for the rest of his career.
Steve’s personal life, which had been chaotic in the scattered, sloppy way of most twenty-somethings—especially those throwing themselves at a career without regard for sleep, social life, or family—spun out of control in 1978, when he denied the paternity of his own child. Chrisann Brennan, who had been his girlfriend for some time, gave birth to their daughter, Lisa, in May 1978. She was born in Oregon, at Robert Friedland’s orchard, and three days after her birth Steve flew north to be with her and Chrisann. But for months afterward, Steve denied he was Lisa’s father and refused to pay child support. He even resisted when a court-ordered paternity test established the likelihood that he was the father at 94.4 percent; it was as if the mere fact of his denial would negate the proof. When he finally starting paying child support of $385 a month, he continued to protest that he might well not be Lisa’s father. He saw her rarely, letting Chrisann raise Lisa on her own in a small house in Menlo Park.
It would take years for Steve to bring Lisa into his life in any significant way, and later he would repeatedly express deep regret over his behavior. He knew he had made a terrible mistake. The event obviously crossed the line of what anyone would consider acceptable behavior. Lisa has spoken about the distance she felt from her father, and the confusion and instability she felt as a child. Chrisann has spoken and written about this, too, creating a picture, albeit one-sided, of a careless, indifferent, and cruel lover and father. When people debate whether Steve was a “good” or “bad” man, this is the strongest indictment against him. He was twenty-three years old when Lisa’s birth presented him with a clarion call to accept adult responsibility. He rejected the call as fully as he rejected her.
Colleagues he worked with closely knew about Lisa, and heard Steve deny his paternity and complain about being pursued by Chrisann. Arthur Rock would later describe Steve’s behavior as “delusional.” Especially for someone as unsentimental as Rock, Steve’s behavior tied in to a pattern of irresponsibility that was developing at Apple. Whether working with his ostensible superiors, such as Rock, or making decisions that widely affected subordinates, Steve could seem indifferent to the impact of his choices. He conveyed a lack of empathy.
This behavior only worsened in the year after Steve’s visit to the Garden of Allah, when Apple made a big splash by going public. Several years later, Jobs told Susan Barnes, a financial manager at Apple and at NeXT, that December 12, 1980—the date of Apple’s IPO—was the most important day of his career, because only then was he sure that the folks who had driven Apple’s early success would make serious money. But Steve had specifically excluded people like Bill Fernandez and Daniel Kottke, an engineer whom he’d met at Reed, from the options bonanza, even though they had been instrumental in getting Apple started during that summer of 1976 in his parents’ garage. Jobs had a bureaucratic rationalization for doing so: they were hourly employees, and therefore not guaranteed the “founder’s stock” that helped make three hundred longtime salaried employees millionaires. But Steve’s lack of generosity was reflective of something that was starting to seem part of a broader character trait.
“He had this incredible bandwidth,” explains Lee Clow, the ChiatDay ad director who would become Steve’s close friend after working on the famous “1984” television ad, “but he devoted almost all of it to work.” Prioritizing things in this way, especially as an immature young man, made most people in his life replaceable. Fernandez and Kottke, for example, had been important to Steve three years earlier, but to Steve’s way of thinking they had not kept up. They were not key contributors to Apple, and therefore to Steve’s life, anymore. The bigger priority was to reward the people who were improving Apple at present. It was a cold evaluation by a young man whose work life was exploding into something much bigger than he had ever anticipated. But his logic carried an emotional cost the young man didn’t even consider. Kottke and Fernandez and others like them felt snubbed and unappreciated. Steve’s behavior isolated him within the company. He had little sense at this point of how important it can be to have true allies in a corporate setting. It was a blind spot that would catch up to him eventually.
After the IPO, Steve was worth $256 million. That widely publicized number, along with the fancy cars that started appearing in the Apple parking lot and the talk of country homes and expensive vacations, contributed to a sense within the company that the offering had created a set of winners and losers. Apple, which had grown from a handful of people in 1977 to 2,900 employees by the summer of 1981, was riven in more ways than one. In the fall of 1980, its head count had doubled in just three months. Apple “old-timers” took to calling that short stretch of time “the bozo period,” and scorned the newbies.
Steve was rarely showy about his newfound wealth, but he widened the rifts in the company in other solipsistic ways. Broadly speaking, Apple employees were focused either on supporting and milking the revenue from the Apple II or on exploring new products. The Apple II was the breadwinner driving the company’s growth. The work going on around it was the classic, incremental work of improving and deepening the usefulness of a product so that it would be successful for years. Apple II staffers built an extensive retail sales channel of hundreds of resellers; worked with the emerging world of software developers to ensure that they had the necessary tools to write more interesting software that would attract even more buyers; and labored on follow-up machines, like the Apple IIe and the Apple II GS. Their work paid off: t
he Apple II, in its various models, was a remarkably resilient product, selling nearly six million units before it was finally discontinued in 1993. For a decade, the company would depend on Woz’s reliable old Apple II to fuel its soaring growth. Indeed, it wasn’t until 1988 that Macintosh revenues at long last exceeded those from Apple II sales.
It didn’t take long for Steve, whose official job was to head up product development, to simply stop caring about the Apple II. He felt, in his bones, as he liked to say, that Apple would need a great new product, that the industry was moving at such a rapid pace that the company would be fatally wounded if all it had to offer were slightly improved versions of the Apple II. He made his feelings very clear, and suggested that any engineer or marketer worth his salt would be drawn to working on the creation of the next breakthrough product with him. While Steve’s narrow attitude slighted scores of the company’s hardware and software designers, it was especially insulting to Woz, who eventually chose to nurse along the Apple II rather than join the Mac team. “Some Apple II engineers were being treated like they didn’t exist,” Woz would later say. As the company grew, he and Steve couldn’t help but grow apart.
In a broad way, Steve was correct in thinking that Apple needed a significant new offering, and soon. The best recipe for maintaining steadily rising revenues in the computer hardware business is to have a breakthrough product ready just when your last breakthrough is reaching the peak of its own success. Markkula, Scotty, and the board all agreed that the company urgently needed a new model, ideally one better tailored to the needs of office workers. IBM, which had been the sleeping elephant of the industry, had reportedly started studying the possibility of building its own personal computer. (The device would eventually make it to market in the summer of 1981.) So in 1978 the Apple board gave Steve the budget and the engineering talent to go ahead and start developing a successor to the Apple II.
Becoming Steve Jobs Page 7
