you are here: Column Archives > In History > American as Apple Pie

American as Apple Pie

How Apple Computers was almost run into the ground by Steve Jobs and his successors.

Entrepreneurs are second only to professional athletes when defining the modern American role model. We are all fascinated by the American dream -- when a man or woman achieves professional and financial success by their own wits and hard work, instead of just blowing daddy's money and being photographed running drunk and naked through the fountains in Rome.

But behind many modern idols lies a dubious past. The cream doesn't always rise to the top -- sometimes it's more like the skin on a bowl of queso. Star football players or the new multi-millionaire CEO of a just-IPO'd startup are just as likely as the rest of us to be idiots, rogues and scoundrels. They're not even cool enough to be Han Solo-type scoundrels -- more like Steve Martin and Michael Caine scoundrels. Do we think less of Microsoft because Bill Gates lied when he told Big Blue he had an OS ready for their new computer, the IBM PC, and then ran off and bought an early version of DOS for fifty thousand dollars? No -- most Americans don't care, because MS-DOS was wildly successful, and now Gates is rich enough to buy Canada.[1]

The Wizard of Woz Gets the Jobs Done

Another fellow you probably wouldn't have let your teenage daughter go out with is Steve Jobs, the current CEO of Pixar and Apple Computer. The success of Apple Computer is heralded as an example of good-ol' American hard work and know-how. Steve Jobs is a man recognized for his ability to let everyone know just how important he is. He was the subject of a made-for-TNT movie called "Pirates of Silicon Valley,"[2] featuring Anthony Michael Hall (from Weird Science) as Bill Gates and that cute doctor from ER[3] playing Steve Jobs. In the movie we learn that technical ability and business savvy come second to knowing how to exploit every situation and relationship for the most personal gain.

Apple was a geek company before geeks were cool. Steve Jobs and Steve Wozniak founded the company in Job's parents' garage after selling their Volkswagen van and programmable calculator for startup capital. They definitely fit the geek archetype -- Jobs was a whiny, scrawny kid that would get beaten up in junior high, and Woz was the obsessed genius who barely passed his classes after spending nights hunched over a workbench with a soldering iron. Their history together began years before Apple, when a mutual acquaintance introduced the two electronics enthusiasts. Jobs immediately recognized Wozniak's gifts, and would develop the use and abuse of his friend into an art that would earn him millions of dollars.

Woz was definitely the more technically inclined of the two, and had been busy designing circuit boards using an absolute minimum number of components, which reduced the price of the finished boards. His elegant designs were often put together with scavenged chips, which Jobs found digging through trash at warehouses and flea markets. Although he had moments of brilliance, Jobs had the attention span of a six year old,[4] and left the technological innovations to his driven partner. This didn't stop him from claiming credit for Woz's genius:

For his part, Jobs would say years later, "[Woz] was the only person I met who knew more about electronics than me." This, of course, was utter [BS], said at a time when Jobs was feeling under assault and had the reality distorter at full throttle. The fact was that there were probably a half dozen men and boys on Steve Jobs' block who knew more about electronics than he did.[5]

Boys Will Be Boys

Both men dropped out of college, and their paths crossed occasionally as Jobs experimented with drugs and Woz hacked on computer kits. They were fascinated with a blue box[6] that Woz built, which they used to make free long distance calls and explore the phone company's network. Woz even placed a call to the Vatican and convinced the Pope's secretary he was Henry Kissinger.

Woz accepted a job at Hewlett-Packard, while Jobs lied his way into a position at Atari. Jobs hid his echnical shortcomings with his used-car salesman charisma, once claiming he could submit a working demo for a new game in four days. Of course, he talked his friend Woz, who had already been sucked into the video game craze, into helping him, and agreed to split the bonus if Atari bought the design. Woz worked for four days straight, with Jobs cheerleading him along. The game was released as Breakout and was incredibly successful. True to his word, Jobs thanked his friend and gave him half of the $700 bonus -- never admitting that he had actually received $7000 for Woz's game design.

Woz was a talented hardware engineer who also had the ability to code software. He had written BASIC for a new microprocessor calls the MOS Technology 6502, and built a circuit board to run it. Jobs and Woz shopped the board around, and received an order for fifty boards, which they sold for $500 each. On April Fool's Day, 1976, the pair formed Apple Computer in Jobs' garage. There are several legends about the origin of the Apple name -- some say that it was a reference to the Beatles' Apple Records (Jobs was a fan), other claim it was a nod to when Jobs experimented with an all fruit diet.

One Bad Apple Spoils the Bunch

Apple's success barely kept pace with Jobs' ego. Woz quickly followed up the Apple I circuit board with the Apple II, the first personal computer. Introduced at the West Coast Computer Faire in April 1978, Apple sales grew to $300 million in less than five years. Jobs was now a multimillionaire, and he acted like one by demeaning his competition as well as his employees:

Bill Curley, a middle-aged Apple marketing manager then, remembers this incident from his very first week on the job at Apple: "I was at a meeting with Jobs and several other managers, and he was in shorts, running shoes, and no socks. He's disagreeing with a guy, so he kicks off his shoes and puts his bare feet on the table. He framed the guy's face with his feet.[7]

In 1979 Jobs toured the Xerox Corporation's Palo Alto Research Center (PARC) and was struck by their development of a graphical user interface (GUI). He ran back to Apple to incorporate the technology into a new computer called the Lisa, which he had named after his daughter. The Lisa failed, as it was too expensive to produce, but this didn't stop Jobs -- he simply looted another engineer's work to champion as his pet project.

Jef Raskin had been working on computer with similar features to the Lisa, but that would only cost $1000. He had named this system the Macintosh after the apples from New York. Jobs sequestered a group of engineers in another building to work on the Macintosh. He even flew a skull and crossbones flag over the building, like a little boy building a fort in his backyard.

Jobs lavished gifts on his band of pirates, including "at-the-desk massages, coolers stocked with freshly squeezed orange juice, and first-class plane seats on flights of more than two hours." The Macintosh was the sexy new technology, but the workhorse Apple II was still paying the bills. Jobs had created a rift in the company by pampering his elite, and it boiled over one night at a local bar:

"The Mac guys were screaming, 'We're the future!' The Apple II guys were screaming, 'We're the money!' Then there was a geek brawl. Pocket protectors and pens were flying."[8]

If You Can't Beat 'Em... Quit

By 1983, the expansion of the company and the growing discord convinced the board to bring in an experienced CEO. They picked John Scully from Pepsi, who quickly fell under Jobs' spell. The Dynamic Duo combined Steve's Californian charm and John's business savvy, and they introduced the Macintosh with the famous 1984 commercial during the Super Bowl.

But Jobs' moment in the sun was about to fade. Everyone loved the Mac, but no one bought one. There was little software available for the system when it was released, and it didn't have enough memory or a hard drive to store and run large applications. "Apple was in trouble, and it was time for an adult to take charge." Scully wanted to promote Jobs to chairman, a symbolic post where he wouldn't be able to do any more damage. Jobs pleaded with Scully to reconsider, while at the same time going behind his back and trying to have Scully removed from the company. The inevitable showdown occurred at the next board meeting and Scully was left standing. Jobs gathered up his toys and a few engineers, and went to start a new computer company called NeXT.

Apple's problems were just beginning and Scully, along with his successors, would Jobs' eventual return look like the Second Coming. A new CEO is not necessarily a good CEO, and Apple's Board continued to find that being wealthy and inept are not mutuaually exclusive. Come back to find out why it's a miracle that Apple still exists to make that iMac you're reading this on.

Footnotes

  1. Why anyone would actually want Canada is anybody's guess.
  2. Which the author has yet to see, because he is too lazy to program the VCR.
  3. Noah Wyle, not George Clooney. We here at History House will refer to Clooney as the "sexy" or "hunky" doctor.
  4. Had he been born twenty years later, Jobs would have been a Ritalin kid for sure.
  5. Malone, pp 26-27
  6. A blue box is an electronic device that generates tones at specific frequencies, which fool a pay phone into believing coins have been deposited. Definitely a geeky way to spend a Saturday night while all the other college students were getting high and/or getting lucky.
  7. Carlton, p 12
  8. Carlton, p 14

Bibliography

  1. Jim Carlton. Apple: The Inside Story of Intrigue, Egomania, and Business Blunders. Harper Business, 1997.
  2. Michael S. Malone. Infinite Loop: How the World's Most Insanely Great Computer Company Went Insane. Doubleday, 1999.

 
Discuss this article in our forums

1996-2007 History House Inc.
All Rights Reserved.