Return to the Little Kingdom

by Michael Moritz

  Others came of their own accord. Wendell Sander, a shy engineer-cum-sleuth at Fairchild, had become intrigued by Apple after adding some memory chips of his own design to the Apple I. He wrote a Star Trek program to amuse his children, demonstrated it to Jobs while Apple was still in the garage, and eventually, after thirteen years with Fairchild, decided to let his passion guide his star. “If they had folded I could have got a job the next day. There wasn’t much personal risk apart from the chance of getting a bruised ego. My career would not have vanished.” Jim Martindale, a colleague of Jobs’s at Atari, was hired to look after production while Don Bruener, a high-school pal of Randy Wigginton’s, became a part-time technician. Jobs’s college friend Dan Kottke graduated from college and became Apple’s twelfth employee, and Elmer Baum started working in the final assembly area. Scarcely anybody considered that the decision to join Apple was risky. Instead they all seemed to feel that the greatest risk was to stay put and do nothing.

  As the newcomers arrived, through the late spring and summer of 1977, they found themselves in a small business that had bound itself to some visible public promises. An advertisement in the February 16, 1977, issue of the Homebrew newsletter promised delivery of the Apple II no later than April 30, 1977. Markkula had also decided that Apple could save itself a lot of bother by offering Apple I owners a choice between a full refund or replacement with an Apple II. The arrival of age, or at least what passed for age in Silicon Valley, brought a sense of rigor to Apple. Blending experience with exuberance proved to be a troublesome task, but it was also a fortunate combination. Experience helped temper impulse and instill a sense of discipline while innocence inevitably questioned convention and authority.

  Wozniak, Jobs, Holt, Markkula, and Scott were all alert to technical matters and tended to understand the size and implications of electrical problems that cropped up. But they also had serious differences and had to work through the clashes that occurred between men whom a Hollywood screenwriter might have labeled The Hobbyist, The Rejector, The Fixer, The Pacifier, and The Enforcer. At the outset, they shared none of the experience that comes from surviving mistakes and weathering trouble. Holt felt, “There wasn’t much trust at all. The question was not of trusting each other’s honesty but each other’s judgment. You might score seventy percent all round. It was a business not a family affair.”

  Almost from the start Scott and Jobs irritated each other. Scott, in his curious position as corporate caretaker and the guardian of Apple’s internal affairs, became Jobs’s first encounter with an unbending authority. Before Scott’s arrival Jobs had done anything he wanted. After Scott became president, Jobs found his boundaries were prescribed. The pair approached life from different angles. Scott thought experience was more valuable than native wit while Jobs was convinced that most problems could be solved with a proper application of intelligence. Scott admired Jobs’s optimism, his exuberance and energy and gradually learned to appreciate his sense of style. But he also decided, “Jobs cannot run anything. He doesn’t know how to manage people. After you get something started he causes lots of waves. He likes to fly around like a hummingbird at ninety miles per hour. He needs to be sat on.” Scott squelched Jobs at every turn and one of the earliest mechanical chores provoked a clash. Scott handed out official employee numbers to go along with some laminated-plastic security badges. Since, in Scott’s mind, the computer gave birth to the business he assigned Wozniak number one, Jobs number two, Markkula number three, Fernandez number four, Holt number five, and Wigginton number six, reserved number seven for himself, and gave Espinosa number eight. Everybody, apart from Jobs, was satisfied with the order.

  “Am I number one?” he asked Scott.

  “No. Woz is number one. You’re number two.”

  “I want to be number one,” Jobs insisted. “Can I be number zero? Woz can be number one. I want to be number zero.”

  Number Zero and Number Seven also found much to differ about in the diurnal flow. Wigginton watched from the sidelines. “Jobs had strong ideas about the way things should be done, and Scotty had the right way, which didn’t happen to be Jobs’s and there was the inevitable fight.” They differed over the way materials should be moved from one section to another, how the desks should be positioned, and what color laboratory benches should be ordered. Jobs wanted white because he felt it would be better for the technicians and engineers. Scott wanted gray because he knew those benches would be cheaper and easier to get. Gary Martin, the accountant, watched another spat shortly after he joined Apple. “They got into a roaring argument over who should sign some purchase orders. Jobs said, I got here quicker than you. I’ll sign them.’ Then Scotty said, I’ve got to sign them,’ and then he threatened to quit.”

  In the quieter moments following Scott’s arrival Jobs looked after purchasing and some of the fixtures and continued to press for quality. When an IBM salesman delivered a blue Selectric typewriter instead of the neutral color he had specified, Jobs erupted. When the phone company failed to install the ivory-colored telephones Jobs had ordered, he complained until they were changed. As he arranged delivery schedules and payment terms, Jobs humiliated a lot of suppliers. Gary Martin watched. “He was very obnoxious to them. He had to get the lowest price they had. He’d call them on the phone and say, That’s not good enough. You better sharpen your pencil.’ We were all asking. ‘How can you treat another human being like that?’”

  Elsewhere a natural division occurred between the older engineers with experience of some of the headaches of manufacturing and the younger ones who were eager to get a prototype running and content to leave the duller polishing and finishing to others. One programmer recalled, “There wasn’t any sense of fear. Anybody could call anybody an asshole. It wasn’t assumed we were doing the right thing. We had to prove we were doing the right thing.” Wozniak never had much of a reputation for finishing the last part of anything. For him and some of his younger accomplices the difference between a prototype dangling cords and trailing wires and a completed machine verged on the academic. Anyone worth his salt, they argued, would obviously be capable of fixing a computer that was a little bit flaky.

  Holt, on the other hand, was like a mother hen, pecking and scratching until he was convinced everything worked and he knew what it would cost to build. It was Holt who insisted everything be “up to spec.” It was Holt who accompanied Jobs to Atari to find some modulators, little devices that connected a computer to a television set. It was Holt who clipped an oscilloscope to the computer to check the signals running from the microprocessor to the memory chips and the cassette recorder. It was Holt who insisted, after Wozniak had dreamed up some new approach, that he explain, demonstrate, and draw diagrams of the design. Holt said, “I hardly ever trusted Woz’s judgment.” Holt also discovered the way to Wozniak’s heart. “The only real trick to get Woz working on something was to become his audience or get him an audience.”

  Meanwhile, Markkula and Scott had exerted his own pressure on the engineers and programmers. When the young programmers were more interested in cobbling together short demonstration programs to illustrate the power of the computer, Markkula insisted that they start work on programs people could use. To show the depth of his concern, Markkula did much of the tedious work on a program that would let people balance their checkbooks. He also brought a quieter style. When Wozniak was compiling a scoring system for Breakout and wanted to include BULLSHIT as a comment for low scores, Markkula persuaded him that there was a call for something more refined. When the first computers were ready to ship, Scott forced the youngsters to tack together an abbreviated version of BASIC so that Apple could start to ship machines accompanied by a computer language.

  Scott had similarly unsentimental ideas about both production and finance. He had a strong dislike for automated manufacturing and expensive test machinery. He was also determined that outsiders should help pay for Apple’s growth and that they should suffer the discomforts of swings in business. H
is ideas about the growth of the company were the equivalent of Wozniak’s ideas about the chips in a computer. Both were talking about productivity. Scott wanted to design a company that did the most amount of work with the least number of workers. “Our business,” he said, “was designing, educating, and marketing. I thought that Apple should do the least amount of work that it could and that it should let everyone else grow faster. Let the subcontractors have the problems.” Scott had an undying commitment to letting outside manufacturers make anything that Apple couldn’t produce more cheaply. He also felt that a fast-growing business had no time to master some of the rudimentary skills needed to produce reliable components. It was easier, for example, to expand the quality tests for printed circuit boards stuffed by outside suppliers than to contemplate expanding the work force and mastering all the techniques needed for production of decent boards.

  So for help with board stuffing Scott relied partly on Hildy Licht, a Los Altos mother and the wife of one of Wozniak’s acquaintances from the Homebrew Club. Licht operated a cottage industry. Parts were delivered to her home and she distributed them to hand-picked assemblers scattered around the neighborhood, tested the finished work, and returned it to Apple in the back of her brown Plymouth station wagon. She was flexible, could make revisions on boards, and offered overnight service. Scott also turned for help to a larger company that specialized in turning out larger quantities of printed circuit boards. Both were the sort of services designed to relieve small companies of time-consuming chores.

  Scott also kept a close eye on Apple’s cashbox. He arranged for Bank of America to provide a payroll system to relieve Apple of the chores of withholding tax, deducting Social Security payments, and issuing paychecks. Along with Gary Martin, who acted as his fiscal fist, Scott monitored the most expensive components like the 16K memory chips. The pair arranged to buy the chips on forty-five days’ credit and the keyboards on sixty days’ credit. Meanwhile, they tried to collect money from customers within thirty days of all sales. Martin paid close attention. “My job was to collect money from customers before we paid our vendors. We kept our customers on a very short leash.” Martin, who had once worked for a freight company that went bankrupt after turning its accounts receivables from fact to fiction, also tended to veer toward the conservative. His natural impulses and the need to give Apple a respectable seal helped him select auditors from one of the country’s largest accounting firms. Like other accountants in Silicon Valley, the people from Arthur Young offered a discount on the cost of their first year’s work. Apple and its accountants also took full advantage of Uncle Sam. By deciding to end Apple’s first fiscal year on September 30, 1977, they effectively received a fifteen-month interest-free loan from the government for the tax owed in the final calendar quarter, which was always the consumer industry’s largest quarter.

  Wigginton watched Apple’s president at work and decided “Scott’s motto was let’s make some money. Let’s get something out the door.” Scott didn’t mind getting his hands dirty. He would happily muck about in the manufacturing area helping pack computers into shipping cases. After the computers were packed, he often took them in the back of his car to the local UPS office. When cassettes had to be duplicated, Scott operated the tape recorders. Whenever production outran orders, Scott stacked piles of printed circuit boards behind Markkula’s desk to make his point.

  When it became clear that Jobs’s plan to ship a polished manual with the computers would cause a long delay, Scott started to assemble his own. All along he had favored distributing plain data sheets, so Apple’s first manual contained listings of codes and instructions for hooking up the computer. It was copied by a duplicating service in a local shopping mall. The instructions were then slipped between report covers purchased at McWhirter’s stationery store in Cupertino and packed with the computer. Some months later Scott cobbled together a slightly more elaborate manual which Sherry Livingston typed. Wozniak recalled, “We just decided to include as much as we could because we didn’t have much.” Devotees who couldn’t find the answer in either manual and made inquiries were sent a bulky package of routines and listings known as The Wozpack, which sprang from Wozniak’s insistence that the sort of information he had been sent when he investigated minicomputers should be available to Apple owners. The rush to ship was evident in the opaque explanation that accompanied a demonstration Star Trek program. It contained the single line of instruction cOO. FFR. LOAD. RUN.

  Gradually, as 1977 progressed, a sense of community began to develop. It was certainly helped by the fear that acted as a strong social glue when, five months after the formal introduction of the Apple II, the business came close to folding. The subcontractor who had turned out unsatisfactory cases for the West Coast Computer Faire continued to do so. Part of the fault lay with Jobs’s decision to rely on soft tooling, but most of the trouble was caused by the men who manufactured the cases and who were, in Holt’s acerbic view, “a bunch of plumbers.” The lids continued to sag and the lid from one case wouldn’t fit another. The paint refused to stick.

  In September 1977 the main tooling broke, and customers who had placed orders were beginning to get impatient. Apple was within inches of earning a reputation for being unable to meet its commitments. Dozens of printed circuit boards started to pile up, suppliers demanded normal payment, and Apple’s thin cushion of cash was running low. Without tools Apple would have been stuck without any revenue for about three months. There were a few rumors that Apple would close and Holt even delayed hiring Cliff and Dick Huston, a fraternal combination of engineer and programmer, until he was certain that Apple would be able to issue paychecks. “It was life and death for us,” Scott recalled. “We’d have had a good product and not been able to ship it.” Jobs scurried off to a Tempress firm in the Pacific Northwest that specialized in producing molds for clients like Hewlett-Packard. He explained Apple’s predicament to Bob Reutimann, a Tempress vice-president, who recalled, “I thought to myself ‘Does he know what the heck he’s doing?’ I was a little afraid of going ahead with the project. I thought, ‘Here comes another guy with big ideas.’” Jobs’s exuberance paid off as did his offer of a bonus of $1,000 for every week that the new mold was brought in ahead of schedule. The new tooling was delivered toward the end of 1977.

  As Apple’s founders and managers made fumbles and learned to sense each other’s weaknesses, they gradually built a mutual trust. The trust was derived from a sense of their colleagues’ frailties as much as from their complementary strengths. Markkula’s early sales forecasts were quickly shown to be pessimistic, but it also became clear that he wouldn’t scuttle back into retirement. Jobs’s choice of technique for the manufacture of the case, Wozniak’s unwillingness to finish a design, Scott’s refusal to fret about aesthetics, and Holt’s habit of nitpicking all revealed private weaknesses.

  The mixture of pedigrees came to the fore in discussions over important details like the system used for numbering parts in engineering. They all had their own ideas for a system which, if poorly designed, could cause horrible complications. Scott observed, “When you’re working on big topics which you don’t know all the answers to, it’s easy to switch to something else really teeny that everyone can get their teeth into.” Jobs, for example, dreamed up his own phonetic system in which an item like a 632 Phillips head screw would be labeled “PH 632.” It was a charming notion but didn’t have the flexibility to cope with oddities like different lengths and distinctions between black-oxide, nylon, and stainless-steel screws.

  Jerry Mannock, the case designer, suggested adopting a system like the one used at Hewlett-Packard. Somebody else wanted to copy Atari’s procedures. Others wanted parts to be numbered from the outside of the computer toward the inside. A few considered it more natural to work from the inside toward the outside. Finally Holt wrote a five-page paper detailing a formula based on seven digits which divided parts into categories like nuts, washers, and custom semiconductors. It became the object
of religious attachment. “If there wasn’t an engineering print and a specification associated with a part number, then it wasn’t an engineering part number. Then they could go to hell.”

  They began to tolerate quirks and idiosyncrasies and solved some of the small pieces of mechanical confusion. After telephone callers kept asking for Mike—not making clear whether they wanted to speak to Markkula or Scott—the former kept his name while the latter became known as Scotty. When a cranky line printer broke down they all knew who guarded the jar of Vaseline that was used to grease the roller. They all learned to endure Holt’s chain-smoking and Bill Fernandez’s piping bird whistles and occasional departures for Bahai holidays. They worked around Jobs’s temperamental car and his complaints that Apple’s first Christmas party couldn’t be catered with vegetarian food. Scott was also delighted to learn about Jobs’s personal cure for relieving fatigue: massaging his feet in the flush of a toilet bowl.

  The fishbowl existence brought immediate gratification. Most of the employees tended to hear or see what was going on. When somebody strolled in off Stevens Creek Boulevard and counted out $1,200 for a new computer, Apple’s teenagers could scarcely believe their eyes. Sherry Livingston felt that it was like “a big octopus. Everybody did a bit of everything. I didn’t feel as though there were presidents and vice-presidents. I felt as though we were all peers.” Workdays often started before 8 A.M. and lasted until late into the evening, with breaks for sandwiches. Many of the two dozen or so employees worked part, or all, of weekends. Gary Martin, for example, dropped by over the weekends to sift through the mail for checks. Don Bruener, who helped troubleshoot the printed circuit boards, enjoyed the unpredictable nature of the work. “Each day there was something different to do. Since everything was new there were no real routines.” When a demonstration program was completed or some quirk in the computer had been pinned down, the entire entourage would inspect the progress. Wigginton recalled, “There would be a big brouhaha and everybody would get excited.” Scott, who took special delight in the absence of a formal bureaucracy, explained, “There was no time for paperwork. We were so busy running just trying to keep up.” Apple’s anonymity also tended to strengthen ties and provoked blushes for the likes of Don Bruener. “I told my friends I worked at this little company called Apple and they laughed.”