Warren also became the personality driving another important early platform for the growing population of computer junkies, Dr. Dobb’s Journal of Computer Calisthenics and Orthodontia: Running Light without Overbyte. The mouthy and fanciful publication grew out of a special three-part edition of PCC that reprinted the stripped-down software code that Albrecht and Stanford computer scientist Dennis Allison had developed for the kids to program computers at their Menlo Park storefront. “It was being put together on a sorta spare-time basis by the PCC mob,” Warren explained to his readers in the second issue, which came out at the beginning of 1976. “Once we became aware of the information gap that we are now focusing on filling, it took a coupla weeks or more to gather together a staff and organize a full-scale magazine production effort.” Warren was no coder, nor was he the next Henry Luce, but as editor of Dr. Dobb’s he helped fill the gap between increased availability of computers and a lack of off-the-shelf software to go with it.10
Then there were retailers, who’d popped up on the scene as distributors of Altair kits, and quickly morphed into far more. Paul Terrell started the Byte Shop in Mountain View at the end of 1975, disregarding the advice of friends who thought he’d never find customers. When sixteen people showed up one day for a seminar at the store on “Introduction to Computers,” Terrell realized that computer courses needed to be a regular feature at the Byte Shop. How-to classes translated into sales, which were so brisk that Terrell opened a second location four months later, and had sixty stores nationwide by the end of 1977. Three other chains had grown up, as well as hundreds of independent outfits with names like Computer Shack and Kentucky Fried Computer (whose owner had to change the name after a cease-and-desist order from the fast-food giant). Retail stores became informal marketplaces, just like the computer clubs. “Ten percent of the people that come in,” Terrell said, “are there to sell me, not to buy. They represent themselves and what they offer is a better widget, designed in their back bedroom or garage.”11
CALIFORNIA’S NEW AGE
Homebrewing was a national phenomenon, but only in Northern California was there such a robust combination of things happening to give the new movement momentum and velocity. The Valley had its silicon capitalists of the semiconductor and computer hardware industries as well as its distinctive club of venture investors on the hunt for the next big thing. Certainly, the chipmakers had many other things on their minds in 1975 and 1976. Their big customers were the old-school mainframe and minicomputer makers as well as the car companies, watch manufacturers, and other kinds of companies putting microchips in all sorts of consumer products. The general slowdown in the U.S. economy had forced layoffs and downsizing as well as more overseas deals with Japan. Plus, the semiconductor guys made “computers on a chip.” They didn’t make actual computers.
Yet in the small and cozy world that ran along the spine of El Camino Real, most of the Homebrew hackers had personal and professional connections with the Silicon Valley establishment. A good portion of those at the first Homebrew meeting had day jobs at high-tech companies like HP and Intel; many others worked at Stanford. By the time the club moved over to a big auditorium, more employees from local companies started showing up to hear the buzz firsthand. Some of them were dispirited by rounds of layoffs and stagnant stock options, and were thinking about jumping into their own entrepreneurial ventures. Some were simply curious to see what all the fuss was about.
While many of the top people at the chip companies remained skeptical, it was clear to some further down the chain of command that a new market was poised to emerge. Intel engineer Albert Yu (one of the increasingly common foreign-born faces among the Silicon Valley semiconductor crowd) didn’t need to come to a Homebrew meeting to sense that microprocessors were going to end up in more than traffic signals and car alternators. “Where was it going to go?” he thought. “It’s going to go into the home. So home computers were going to come and be in the millions.” Yu persuaded two of his Intel colleagues to jump ship and join him in starting a home computer company called Video Brain.12
Another Intel type who began poking his head into Homebrew meetings was John Doerr. A St. Louis native and Rice engineering graduate who’d followed the breadcrumbs dropped by Burt McMurtry and come out to the Valley, Doerr was marketing the 8080, the chip powering the Altair. As he studied up on the emerging personal-computer ecosystem, Doerr sensed that Intel’s microprocessor market might become even larger than his bosses dared to imagine. By 1980, he had made the jump across Sand Hill Road to join the emerging VC powerhouse Kleiner, Perkins, Caulfield, and Byers. There, he’d later shepherd some of the biggest deals in Valley history.13
The microcomputing phenomenon gained velocity from broader political and cultural forces. Five months before the first Homebrew meeting, California voters elected thirty-six-year-old Jerry Brown as the state’s new governor. The son of Pat Brown, the liberal icon who’d presided over California’s expansive postwar boom before he was vanquished by conservative Ronald Reagan in 1966, the younger Brown won mostly on name recognition and the anti-Republican mood in the aftermath of Watergate. He quickly distinguished himself by his national ambitions (his run for the 1976 Democratic nomination commenced almost instantaneously) and by his blending of countercultural ideas with pragmatic fiscal conservatism.
Brown’s job description was state-level; his vision was cosmic. He retreated regularly to a Bay Area Zen center. He befriended and sought the advice of Stewart Brand, with whom he shared a taste for the theatrical as well as a belief in the power of technology to change the world for the better. “What we are proposing in California is something different than the cowboy ethic, where people ride into town and wreck it and move on,” proclaimed the governor whom Sacramento pundits liked to call “The Free Spirit.” At the same time, Brown distanced himself from his liberal father by clamping down on public spending, especially on social services. “Limits impose restraints,” he said, “but also create possibilities.”14
High-tech enterprises fit into Brown’s worldview of a society where business and government were efficient and future-minded, but still had a heart and a soul. In the late summer of 1977, as Americans lined up at movie theaters by the millions to see another Northern California–made blockbuster, Star Wars, Brown proclaimed a statewide “Space Day” to celebrate technological achievement. While his techno-futurist proposals later earned Brown the derisive nickname of “Governor Moonbeam,” they reinforced California’s reputation as the place where new ideas—and new movements—began.
New industries too. The countercultural values that seeded feminist bookshops and health food co-ops a decade earlier already were spawning a new generation of baby boomer–led companies that sought to do good and make money at the same time. In the words of SRI psychologists Duane Elgin and Arnold Mitchell, whose research on market “psychographics” later had a big influence on how Valley companies positioned their products, more and more Americans were choosing lives of “voluntary simplicity . . . living in a way that is outwardly simple and inwardly rich.” These consumers still wanted to buy things, Elgin and Mitchell observed, but the price tag mattered less than the perception that a product reflected their social values.15
Although social idealism and technological passion drove Homebrewers like Moore and French, the explosion of clubs and newsletters and trade shows and stores and microchip-industry interest and California futurism showed the techno-hippie faithful that personal computing wasn’t just a new movement. It was a new market. In short order, the hobbyists in garages morphed into entrepreneurs.
CHAPTER 11
Unforgettable
MITS had been completely unprepared for its success. The machine Ed Roberts had showcased on the cover of Popular Electronics in January 1975 was an empty box, not a functioning computer. When the Altair orders started flooding in, all he had on hand were a few prototypes. The little company could barely keep its head above water in
delivering the basic kits—never mind being able to fulfill orders for plug-in boards and peripherals that it had originally promised to Altair customers. But the add-ons weren’t bells and whistles; they were essential to making the Altair a functioning machine.
Hobbyists seized the opportunity. Bob Marsh and Gary Ingram, two college friends of Lee Felsenstein’s, started up a company shortly after the first Homebrew meeting. Called Processor Technology, or Proc Tech, it built plug-in memory and input-output (I/O) boards. They set up shop in Marsh’s Berkeley garage, carving out a corner for Felsenstein to work as an in-house repairman for temperamental Altairs while designing boards and other products. The business took off. As New Jersey enthusiast Sol Libes put it, Processor Technology “made the Altair a real computer rather than just a toy.”1
In another garage a few miles away in the East Bay town of San Leandro, engineer-hobbyist Bill Millard was determined to go one better. He wasn’t just going to build add-ons for Altairs, he’d build and sell an entire 8080-powered microcomputer. Called IMSAI, the company’s kits cost $100 more than the ones from MITS, but they proved much more reliable and powerful. Millard’s computers soon started outselling the Altair. Meanwhile, other little Homebrew-inspired companies with far-out names (Cromemco, Xitan, PolyMorphic) sprouted across the Bay Area. Many started by selling Altairs and peripherals, but often moved into the business of building whole new microcomputers altogether.2
With the blessing of Popular Electronics editor Les Solomon, who promised a cover story, Felsenstein joined with the Proc Tech team to commercialize the Tom Swift Terminal. Despite the pains they took not to tread on Altair’s toes—the unit was designed as an “intelligent terminal” rather than a computer—the effort ultimately produced an important Altair competitor, the Sol. In another first, the Sol included BASIC software as well as hardware. The user base had grown beyond people who could simply consult Dr. Dobb’s to program their machine. As an indication of how large Popular Electronics still loomed on the early personal-computer scene, they named it in honor of Les Solomon.3
Across America, start-ups bubbled up nearly anyplace where there were lots of engineers and active hobbyist chatter. Specialist publications, retailers, and trade shows spread the word to true believers and new converts. California’s governor was going on Zen retreats and Star Wars was breaking box office records. It was the right time to deliver a message about technology as something enlightening, emancipating, and fun.
The entrepreneurial pool expanded to include more-unlikely computer moguls, like Lore Harp and Carole Ely, two stay-at-home wives of electrical engineers in Southern California. They had been toying with starting a travel agency, but when Harp’s tinkering husband developed a memory board, they jumped on the microcomputing bandwagon. In the Bicentennial summer of 1976, the two pooled $6,000 and set up production facilities in the Harps’ suburban home. The company they named Vector Graphic managed to ship 4,000 units in twelve months, and their initial investment turned into over $400,000 in revenue. By the summer of 1977, they were producing an elegantly designed system that they pitched as “the perfect microcomputer.” The design showed what a computer could become when designed by nonspecialists. In contrast to the fussy proliferation of switches and lights on the Altair, the Vector 1 had only two simple buttons on its front.
Five years later, Vector Graphic had annual sales of $25 million. While standing out as female founders in a nearly all-male industry, Harp and Ely were like many other new tech entrepreneurs in that their wild professional success came at a steep personal cost. Both split from their husbands within a few years of Vector’s founding. “I was running away from a marriage,” said Carole Ely, “into a company.”4
The original microcomputer generation didn’t necessarily go into business expecting to make millions. Lee Felsenstein made about $10 or $12 per unit on the computers he designed for Proc Tech, which he reckoned “added up to a nice chunk of change.” Hackers like him initially were just interested in making the Altair work, and in swapping parts and sharing know-how in the same way they’d been doing for years at the PCC and elsewhere.
But very soon the computer users weren’t only the hackers anymore. By 1977, Jim Warren estimated that there were 50,000 personal computers in use. He might have been exaggerating, but not by a lot. That market translated into money, attracting people who had business smarts as well as engineering talent. The companies that came out of Homebrew and the other clubs usually involved an odd couple like Gordon French and Fred Moore: tech-obsessed hacker paired with entrepreneurial visionary. Of the motley dozens of early start-ups, however, the few that scaled up into million-dollar ventures also involved people like Lore Harp and Carole Ely: people who understood how to run a company, and how to sell the high-tech dream to customers who’d never taken apart a radio set or subscribed to Popular Electronics.
RISE OF THE STEVES
This of course became the secret of Apple Computer Co., the most legendary Homebrew product of them all. The company wasn’t all that different from the dozens that sprouted from computer-club soil in 1975 and 1976. But it pulled away from the pack because, very early on, it bridged the hacker world of “The O” and storefront computer labs with the Silicon Valley ecosystem of the Wagon Wheel and Sand Hill Road. While baking countercultural credentials into its corporate positioning from the start, Apple was the first personal-computer company to join the silicon capitalists.
At the beginning, Steve Wozniak was just another hacker in Gordon French’s damp garage, standing out a bit because he was a few shades more tech-obsessed. The gregarious twenty-five-year-old had a lifetime immersion in the electronics world of the Valley, as his father had been a Lockheed engineer. While other grade-school boys were building crystal radio sets, Woz was messing around with transistors. Designing computers became a preoccupation in high school and through college. When he saw the Altair at Homebrew, he was entranced, but he didn’t have the money for a kit. Instead, he set out to build one of his own.
The result was the Apple I, a simple wooden box that looked like it came out of a tenth-grade shop class, encasing a circuit board of supremely elegant design. The machine got its power from a $20 microprocessor from Pennsylvania-based MOS Technology instead of the dearly expensive Intel 8080, making it an intriguing demonstration of hacker ingenuity and price performance. Although everyone else at Homebrew seemed to be going into business, Woz wasn’t interested in selling his gadget. He built it because it was cool.
His friend Steve Jobs had to convince him otherwise. Jobs was five years younger than Wozniak, but they already had partnered in a couple of moneymaking ventures—first that blue-box phone phreaking enterprise at Berkeley, then a gig writing a new game for Atari, where Steve Jobs worked at the time. Jobs had helped Woz craft the Apple I (“we liberated some parts from Hewlett-Packard and Atari” to make it, he later boasted). After seeing how the Homebrew crowd responded, he sensed that this circuit board in a wooden box could be the start of something much greater.5
The kid of working-class parents in neighboring Cupertino, Steve Jobs exhibited supreme self-confidence and relentless focus from the start. He was a child of the Valley, but of an even newer generation. At age twelve, he’d run out of parts for an electronics project. So he cold-called HP, requested to be put through to Bill Hewlett, and proceeded to ask the tech titan if he had any parts to spare. He got them, and Hewlett offered the cocky middle-school kid a summer job.
As Doug Engelbart was putting on the mother of all demos and prototyping the first computer mouse, Jobs was a floppy-haired regular of the Homestead High School Computer Club. While Xerox was establishing PARC and developing graphical user interfaces, Jobs was phone phreaking and fixing broken stereos for his classmates. In appearance and worldview, he was miles away from the clean-cut engineers who’d peopled the electronics industry for decades. By the time Homebrew started up, he’d dropped out of college, traveled around Indi
a, and picked up such unusual hygiene and dietary habits that Atari gladly agreed to give him the night shift so that his funk wouldn’t disturb others.
Jobs was a hacker, but not on the order of Steve Wozniak. Instead, his edge came from his tenacity, and his remarkable ability to explain the transformational power of computers to others. As Regis McKenna later observed, “Woz was fortunate to hook up with an evangelist.”6
On April Fools’ Day, 1976, the two Steves and a third partner, Ron Wayne, started Apple Computer Co. The first logo, designed by Wayne, had the retro-hippie design beloved by techie newsletters like the PCC and Dr. Dobb’s. It featured Isaac Newton sitting under a tree, surrounded by words uttered not by Newton, but by William Wordsworth: “A mind forever voyaging through strange seas of thought—alone.” The inaugural sales flyer was similarly loopy, with a typo in the first sentence.7
Jobs persuaded Paul Terrell at the Byte Shop to buy fifty units of the Apple I, which Terrell agreed to do under one condition: no kits. The machines needed to be fully assembled. In a move that Apple’s marketers later made sure to burnish into company legend, Jobs sold his VW microbus and Woz sold two HP calculators to finance the start-up costs. After months of frenetic sixty-hour weeks, Apple ultimately produced and distributed 200 Apple Is. Not all of them were sold. Woz, still the ambivalent capitalist, gave one away to Liza Loop for her LO*OP Center up in Cotati.8
By that point, the Steves had a new Apple product line in the works that would rival the still-in-development Sol: a fully assembled computer, with terminal, keyboard, and BASIC software included. They called it the Apple II. In order to reach a market beyond the hobbyists, it was obvious that Jobs needed to go beyond the Homebrew wading pool for advice on how to scale up the business. (Ron Wayne, alarmed by the intensity of Jobs’s ambition, had left. Jobs bought out his 10 percent stake for $2,300.)
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