Walter Isaacson Great Innovators e-book boxed set

by Walter Isaacson

  Jobs went to the Apple store in Palo Alto shortly before noon on April 5, the day the iPad went on sale. Daniel Kottke—his acid-dropping soul mate from Reed and the early days at Apple, who no longer harbored a grudge for not getting founders’ stock options—made a point of being there. “It had been fifteen years, and I wanted to see him again,” Kottke recounted. “I grabbed him and told him I was going to use the iPad for my song lyrics. He was in a great mood and we had a nice chat after all these years.” Powell and their youngest child, Eve, watched from a corner of the store.

  Wozniak, who had once been a proponent of making hardware and software as open as possible, continued to revise that opinion. As he often did, he stayed up all night with the enthusiasts waiting in line for the store to open. This time he was at San Jose’s Valley Fair Mall, riding a Segway. A reporter asked him about the closed nature of Apple’s ecosystem. “Apple gets you into their playpen and keeps you there, but there are some advantages to that,” he replied. “I like open systems, but I’m a hacker. But most people want things that are easy to use. Steve’s genius is that he knows how to make things simple, and that sometimes requires controlling everything.”

  The question “What’s on your iPad?” replaced “What’s on your iPod?” Even President Obama’s staffers, who embraced the iPad as a mark of their tech hipness, played the game. Economic Advisor Larry Summers had the Bloomberg financial information app, Scrabble, and The Federalist Papers. Chief of Staff Rahm Emanuel had a slew of newspapers, Communications Advisor Bill Burton had Vanity Fair and one entire season of the television series Lost, and Political Director David Axelrod had Major League Baseball and NPR.

  Jobs was stirred by a story, which he forwarded to me, by Michael Noer on Forbes.com. Noer was reading a science fiction novel on his iPad while staying at a dairy farm in a rural area north of Bogotá, Colombia, when a poor six-year-old boy who cleaned the stables came up to him. Curious, Noer handed him the device. With no instruction, and never having seen a computer before, the boy started using it intuitively. He began swiping the screen, launching apps, playing a pinball game. “Steve Jobs has designed a powerful computer that an illiterate six-year-old can use without instruction,” Noer wrote. “If that isn’t magical, I don’t know what is.”

  In less than a month Apple sold one million iPads. That was twice as fast as it took the iPhone to reach that mark. By March 2011, nine months after its release, fifteen million had been sold. By some measures it became the most successful consumer product launch in history.

  Advertising

  Jobs was not happy with the original ads for the iPad. As usual, he threw himself into the marketing, working with James Vincent and Duncan Milner at the ad agency (now called TBWA/Media Arts Lab), with Lee Clow advising from a semiretired perch. The commercial they first produced was a gentle scene of a guy in faded jeans and sweatshirt reclining in a chair, looking at email, a photo album, the New York Times, books, and video on an iPad propped on his lap. There were no words, just the background beat of “There Goes My Love” by the Blue Van. “After he approved it, Steve decided he hated it,” Vincent recalled. “He thought it looked like a Pottery Barn commercial.” Jobs later told me:

  It had been easy to explain what the iPod was—a thousand songs in your pocket—which allowed us to move quickly to the iconic silhouette ads. But it was hard to explain what an iPad was. We didn’t want to show it as a computer, and yet we didn’t want to make it so soft that it looked like a cute TV. The first set of ads showed we didn’t know what we were doing. They had a cashmere and Hush Puppies feel to them.

  James Vincent had not taken a break in months. So when the iPad finally went on sale and the ads started airing, he drove with his family to the Coachella Music Festival in Palm Springs, which featured some of his favorite bands, including Muse, Faith No More, and Devo. Soon after he arrived, Jobs called. “Your commercials suck,” he said. “The iPad is revolutionizing the world, and we need something big. You’ve given me small shit.”

  “Well, what do you want?” Vincent shot back. “You’ve not been able to tell me what you want.”

  “I don’t know,” Jobs said. “You have to bring me something new. Nothing you’ve shown me is even close.”

  Vincent argued back and suddenly Jobs went ballistic. “He just started screaming at me,” Vincent recalled. Vincent could be volatile himself, and the volleys escalated.

  When Vincent shouted, “You’ve got to tell me what you want,” Jobs shot back, “You’ve got to show me some stuff, and I’ll know it when I see it.”

  “Oh, great, let me write that on my brief for my creative people: I’ll know it when I see it.”

  Vincent got so frustrated that he slammed his fist into the wall of the house he was renting and put a large dent in it. When he finally went outside to his family, sitting by the pool, they looked at him nervously. “Are you okay?” his wife finally asked.

  It took Vincent and his team two weeks to come up with an array of new options, and he asked to present them at Jobs’s house rather than the office, hoping that it would be a more relaxed environment. Laying storyboards on the coffee table, he and Milner offered twelve approaches. One was inspirational and stirring. Another tried humor, with Michael Cera, the comic actor, wandering through a fake house making funny comments about the way people could use iPads. Others featured the iPad with celebrities, or set starkly on a white background, or starring in a little sitcom, or in a straightforward product demonstration.

  After mulling over the options, Jobs realized what he wanted. Not humor, nor a celebrity, nor a demo. “It’s got to make a statement,” he said. “It needs to be a manifesto. This is big.” He had announced that the iPad would change the world, and he wanted a campaign that reinforced that declaration. Other companies would come out with copycat tablets in a year or so, he said, and he wanted people to remember that the iPad was the real thing. “We need ads that stand up and declare what we have done.”

  He abruptly got out of his chair, looking a bit weak but smiling. “I’ve got to go have a massage now,” he said. “Get to work.”

  So Vincent and Milner, along with the copywriter Eric Grunbaum, began crafting what they dubbed “The Manifesto.” It would be fast-paced, with vibrant pictures and a thumping beat, and it would proclaim that the iPad was revolutionary. The music they chose was Karen O’s pounding refrain from the Yeah Yeah Yeahs’” Gold Lion.” As the iPad was shown doing magical things, a strong voice declared, “iPad is thin. iPad is beautiful. . . . It’s crazy powerful. It’s magical. . . . It’s video, photos. More books than you could read in a lifetime. It’s already a revolution, and it’s only just begun.”

  Once the Manifesto ads had run their course, the team again tried something softer, shot as day-in-the-life documentaries by the young filmmaker Jessica Sanders. Jobs liked them—for a little while. Then he turned against them for the same reason he had reacted against the original Pottery Barn–style ads. “Dammit,” he shouted, “they look like a Visa commercial, typical ad agency stuff.”

  He had been asking for ads that were different and new, but eventually he realized he did not want to stray from what he considered the Apple voice. For him, that voice had a distinctive set of qualities: simple, declarative, clean. “We went down that lifestyle path, and it seemed to be growing on Steve, and suddenly he said, ‘I hate that stuff, it’s not Apple,’” recalled Lee Clow. “He told us to get back to the Apple voice. It’s a very simple, honest voice.” And so they went back to a clean white background, with just a close-up showing off all the things that “iPad is . . .” and could do.

  Apps

  The iPad commercials were not about the device, but about what you could do with it. Indeed its success came not just from the beauty of the hardware but from the applications, known as apps, that allowed you to indulge in all sorts of delightful activities. There were thousands—and soon hundreds of thousands—of apps that you could download for free or for a few dollar
s. You could sling angry birds with the swipe of your finger, track your stocks, watch movies, read books and magazines, catch up on the news, play games, and waste glorious amounts of time. Once again the integration of the hardware, software, and store made it easy. But the apps also allowed the platform to be sort of open, in a very controlled way, to outside developers who wanted to create software and content for it—open, that is, like a carefully curated and gated community garden.

  The apps phenomenon began with the iPhone. When it first came out in early 2007, there were no apps you could buy from outside developers, and Jobs initially resisted allowing them. He didn’t want outsiders to create applications for the iPhone that could mess it up, infect it with viruses, or pollute its integrity.

  Board member Art Levinson was among those pushing to allow iPhone apps. “I called him a half dozen times to lobby for the potential of the apps,” he recalled. If Apple didn’t allow them, indeed encourage them, another smartphone maker would, giving itself a competitive advantage. Apple’s marketing chief Phil Schiller agreed. “I couldn’t imagine that we would create something as powerful as the iPhone and not empower developers to make lots of apps,” he recalled. “I knew customers would love them.” From the outside, the venture capitalist John Doerr argued that permitting apps would spawn a profusion of new entrepreneurs who would create new services.

  Jobs at first quashed the discussion, partly because he felt his team did not have the bandwidth to figure out all of the complexities that would be involved in policing third-party app developers. He wanted focus. “So he didn’t want to talk about it,” said Schiller. But as soon as the iPhone was launched, he was willing to hear the debate. “Every time the conversation happened, Steve seemed a little more open,” said Levinson. There were freewheeling discussions at four board meetings.

  Jobs soon figured out that there was a way to have the best of both worlds. He would permit outsiders to write apps, but they would have to meet strict standards, be tested and approved by Apple, and be sold only through the iTunes Store. It was a way to reap the advantage of empowering thousands of software developers while retaining enough control to protect the integrity of the iPhone and the simplicity of the customer experience. “It was an absolutely magical solution that hit the sweet spot,” said Levinson. “It gave us the benefits of openness while retaining end-to-end control.”

  The App Store for the iPhone opened on iTunes in July 2008; the billionth download came nine months later. By the time the iPad went on sale in April 2010, there were 185,000 available iPhone apps. Most could also be used on the iPad, although they didn’t take advantage of the bigger screen size. But in less than five months, developers had written twenty-five thousand new apps that were specifically configured for the iPad. By July 2011 there were 500,000 apps for both devices, and there had been more than fifteen billion downloads of them.

  The App Store created a new industry overnight. In dorm rooms and garages and at major media companies, entrepreneurs invented new apps. John Doerr’s venture capital firm created an iFund of $200 million to offer equity financing for the best ideas. Magazines and newspapers that had been giving away their content for free saw one last chance to put the genie of that dubious business model back into the bottle. Innovative publishers created new magazines, books, and learning materials just for the iPad. For example, the high-end publishing house Callaway, which had produced books ranging from Madonna’s Sex to Miss Spider’s Tea Party, decided to “burn the boats” and give up print altogether to focus on publishing books as interactive apps. By June 2011 Apple had paid out $2.5 billion to app developers.

  The iPad and other app-based digital devices heralded a fundamental shift in the digital world. Back in the 1980s, going online usually meant dialing into a service like AOL, CompuServe, or Prodigy that charged fees for access to a carefully curated walled garden filled with content plus some exit gates that allowed braver users access to the Internet at large. The second phase, beginning in the early 1990s, was the advent of browsers that allowed everyone to freely surf the Internet using the hypertext transfer protocols of the World Wide Web, which linked billions of sites. Search engines arose so that people could easily find the websites they wanted. The release of the iPad portended a new model. Apps resembled the walled gardens of old. The creators could charge fees and offer more functions to the users who downloaded them. But the rise of apps also meant that the openness and linked nature of the web were sacrificed. Apps were not as easily linked or searchable. Because the iPad allowed the use of both apps and web browsing, it was not at war with the web model. But it did offer an alternative, for both the consumers and the creators of content.

  Publishing and Journalism

  With the iPod, Jobs had transformed the music business. With the iPad and its App Store, he began to transform all media, from publishing to journalism to television and movies.

  Books were an obvious target, since Amazon’s Kindle had shown there was an appetite for electronic books. So Apple created an iBooks Store, which sold electronic books the way the iTunes Store sold songs. There was, however, a slight difference in the business model. For the iTunes Store, Jobs had insisted that all songs be sold at one inexpensive price, initially 99 cents. Amazon’s Jeff Bezos had tried to take a similar approach with ebooks, insisting on selling them for at most $9.99. Jobs came in and offered publishers what he had refused to offer record companies: They could set any price they wanted for their wares in the iBooks Store, and Apple would take 30%. Initially that meant prices were higher than on Amazon. Why would people pay Apple more? “That won’t be the case,” Jobs answered, when Walt Mossberg asked him that question at the iPad launch event. “The price will be the same.” He was right.

  The day after the iPad launch, Jobs described to me his thinking on books:

  Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that—they thought it would trash their ability to sell hardcover books at $28. So before Apple even got on the scene, some booksellers were starting to withhold books from Amazon. So we told the publishers, “We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.” But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too. So they went to Amazon and said, “You’re going to sign an agency contract or we’re not going to give you the books.”

  Jobs acknowledged that he was trying to have it both ways when it came to music and books. He had refused to offer the music companies the agency model and allow them to set their own prices. Why? Because he didn’t have to. But with books he did. “We were not the first people in the books business,” he said. “Given the situation that existed, what was best for us was to do this akido move and end up with the agency model. And we pulled it off.”

  Right after the iPad launch event, Jobs traveled to New York in February 2010 to meet with executives in the journalism business. In two days he saw Rupert Murdoch, his son James, and the management of their Wall Street Journal; Arthur Sulzberger Jr. and the top executives at the New York Times; and executives at Time, Fortune, and other Time Inc. magazines. “I would love to help quality journalism,” he later said. “We can’t depend on bloggers for our news. We need real reporting and editorial oversight more than ever. So I’d love to find a way to help people create digital products where they actually can make money.” Since he had gotten people to pay for music, he hoped he could do the same for journalism.

  Publishers, however, turned out to be leery of his lifeline. It meant that they would have to give 30% of their revenue to Apple, but that wasn’t the biggest problem. More important, the publishers feared that, under his system, they would no longer have a direct relationship with their subscribers; they wouldn’t have their email address and credit card number so they could bill them, communicate with
them, and market new products to them. Instead Apple would own the customers, bill them, and have their information in its own database. And because of its privacy policy, Apple would not share this information unless a customer gave explicit permission to do so.

  Jobs was particularly interested in striking a deal with the New York Times, which he felt was a great newspaper in danger of declining because it had not figured out how to charge for digital content. “One of my personal projects this year, I’ve decided, is to try to help—whether they want it or not—the Times,” he told me early in 2010. “I think it’s important to the country for them to figure it out.”

  During his New York trip, he went to dinner with fifty top Times executives in the cellar private dining room at Pranna, an Asian restaurant. (He ordered a mango smoothie and a plain vegan pasta, neither of which was on the menu.) There he showed off the iPad and explained how important it was to find a modest price point for digital content that consumers would accept. He drew a chart of possible prices and volume. How many readers would they have if the Times were free? They already knew the answer to that extreme on the chart, because they were giving it away for free on the web already and had about twenty million regular visitors. And if they made it really expensive? They had data on that too; they charged print subscribers more than $300 a year and had about a million of them. “You should go after the midpoint, which is about ten million digital subscribers,” he told them. “And that means your digital subs should be very cheap and simple, one click and $5 a month at most.”