• HELLO and welcome to How to Take Over the World. This is Ben Wilson. Today we’re going to be talking about Steve Jobs. Steve is a really interesting case. I think in many ways, he is the face of greatness in our time. If you go to a list of most admired CEOs of the 21^st century or of all time, he almost always appears, and usually at the very top of the list. When you ask Silicon Valley entrepreneurs for their greatest inspirations, his name pops up all the time. And that’s understandable. He helped introduce the world to some of the most important technologies of all time, including the Personal Computer and the smart phone. He helped create some of the most iconic consumer products ever, including the Apple I & II, the Macintosh, the iMac, the iPod, the iPhone, the iPad, the iTunes Music Store, and App store. He founded the most valuable company of all time. His estate is worth $19 billion. Two of the companies he owned and is most known for, Pixar and Apple, are two of the most iconic brands in America. There have been dozens of books written about him, a handful of movies, and countless articles and profiles. If you’re going to talk about how to take over the world, you have to talk about Steve Jobs. His vision and mindset are everywhere around us, from the ubiquitous use of touchscreen smartphones to the way entrepreneurs obsess over making physically beautiful products. His minimalist design aesthetic is the standard for technology forward companies. In many ways, we are living in Steve Jobs world. 
• But in my experience, trying to emulate Steve Jobs is a dangerous game. Bill Gates joked that if you wrote a book about Steve Jobs’ management style, it should be called “Don’t try this at home.” And I agree! Steve broke all the rules. That includes the stupid rules, yes, but it also includes the good rules about management and life that you should probably follow. He dropped out of college without a good job lined up. Early in his career he was an overbearing and often abusive boss. He wasn’t a great programmer or engineer. He was known for his temper and for lashing out and yelling in these massive tantrums. He could drive people to near nervous breakdowns. He could be a complete jerk. He insulted people all the time. He rarely listened to others and always thought he knew best. And some people think that he succeeded because of these things. I take the opposite view. I think he legitimately had huge weaknesses and glaring flaws. Remember, he founded two companies and was majority owner of one other. He was kicked out of one, and the other two failed at their original purpose. 
• But he succeeded magnificently because the management and entrepreneurial techniques and strategies he used were SO powerful, that they made up for these drawbacks. And therein actually lies the power of Steve Jobs’ life. Not that he had no weaknesses but that his strengths were so powerful that they could outweigh his huge, flaring flaws. But unfortunately, a lot of people have trouble disaggregating his strengths from his weaknesses. Bill Gates said “Don’t try this at home” for a reason. It makes me think of a Silicon Valley company that did biotech. And the founder was this supposed Steve Jobs acolyte. She professed admiration for him, she wore a black turtle-neck like him. And at first it looked like she really was his spiritual successor. Her company was the next big thing. Her shares in it made her the youngest self-made female billionaire of all time. But it all came crashing down around her. The company was exposed for fraud and she lost it all. And looking at her life, I could tell how she thought she was copying Steve Jobs. But she had learned all the wrong lessons. She had copied his weaknesses thinking they were his strengths. So with this episode I feel like I’m giving you the one ring from Lord of the Rings. The lessons here are extremely powerful. But exercise caution.
• Three little notes before we get started. First, there is a ton to learn and analyze, so this is a multi-part episode.
• Second, my sources: I used a number of different resources, but the two I leaned on the most by far are Walter Isaacson’s biography, Steve Jobs, and the book Becoming Steve Jobs: The Evolution of a Reckless Upstart into a Visionary Leader by Brent Schlender and Rick Tetzeli.
• Last thing is a mild content warning. There are some quotes I use that contain strong language. And that’s it, okay let’s go!

• Birth & Childhood

• Steve was born in 1955 in Wisconsin. His biological mother was a Wisconsin girl and his biological father was a Syrian immigrant studying in the United States. Neither of their parents were happy about the match so they decided to give him up for adoption. Their one requirement was that he be placed with parents who were college graduates.
• Paul and Clara Jobs were not college graduates. Paul was a mechanic and Clara was a stay-at-home mom. The adoption almost didn’t go through when Steve’s biological mother, Joanne, found this out, but the Jobs promised to send him to college and the adoption went through.
• Steve had a good childhood. Paul and Clara had a stable and loving marriage. They raised him in the southern bay area, in the Santa Clara Valley, or the area that is now known as Silicon Valley.
• They were good parents, although once they started to realize how smart he was, they were very deferential to him. He was almost never punished as a child. Even when he got in trouble at school his dad would tell the teachers that it was their fault for not keeping Steve occupied and interested in their lessons.

• Bay Area

• It was an interesting time to be growing up in Silicon Valley. The first round of Silicon Valley companies had already seen success: Hewlett Packard, Varian, Shockley semiconductors, and others. These were different from current Silicon Valley companies: They were big hardware manufacturers, often working with big corporate and government contracts. Even so, these companies made the bay area the hub for electronics and computing. And people could already tell that electronics and computing were the future. For those living and working in Silicon Valley at the time, the possibilities seemed endless. The future was being written, and they were going to be the authors.
• I don’t think Steve Jobs could have become Steve Jobs if he had grown up anywhere else. Here’s what he said about growing up where he did “You had all these military companies on the cutting edge. It was mysterious and high-tech and made living here very exciting” Not only was it an exciting area, but an exciting time period. He grew up during the 60s and 70s. It was a time when people were encouraged to question authority and think for themselves. The culture Steve Jobs grew up in lent itself to innovation and change.

• Persuasion

• And Steve Jobs comes onto this scene, and if there’s one attribute that he has and is known for from the very beginning, it’s his ability to persuade and manipulate. As Schlender and Tetzeli put in Becoming Steve Jobs quote “Steve innately understood from an early age that the right words and stories could help him win the attention he needed to get what he wanted.”
• There’s a story I like from one of his elementary school teachers. There’s a picture of his class on Hawaiian shirt day. You were supposed to wear a Hawaiian shirt to school. And in the picture from that day, there’s one kid who is not wearing a Hawaiian shirt. And it’s not Steve. He was, in fact, the one who had forgotten to wear a Hawaiian shirt that day, but he had literally talked the shirt off another kid’s back.
• With this Tom Sawyer-esque ability to persuade other people to do things, he becomes quite the little prankster. There are some pretty good stories.
• Like the time he put up posters for a fake bring your pet to school day. All these kids see them and don’t know they’re fake, so they show up to school with their pets and none of the teachers know what’s going on and it creates complete pandemonium at the school.
• Despite his impish behavior, Steve was undeniably bright. School administrators thought maybe he should skip two grades. His parents sensibly thought that would be too hard on him socially so he just skipped fifth grade. 

• Humanities & Technology

• From the beginning he was someone who stood at the intersection of the humanities and technology. He really like English and writing. He was a big fan of Plato, Shakespeare, and Melville. But he also was interested in electronics. He joined this thing called the Explorer’s Club and would put together electronics kits and things like that. This is something we’ll explore later, because it was really instrumental to his success. But Steve was always a student of both the hard sciences as well as art and humanities.

• Precocious

• Another thing that defined Steve early on was his ability to focus intensely. When he got it in his head that he wanted to do something, he had this other-worldly ability to focus like a laser beam and get it done. This sort of laser-focused tunnel vision meant he didn’t see boundaries or obstacles, or sometimes social expectations that he was breaking. Steve joined something called the Explorers Club, and kids in the Explorers Club would make these projects, and for one of his projects Steve needed a part but he couldn’t find it. He found out that Hewlett Packard made it, so he just picked up the phone and called the CEO. Steve Jobs said quote “Back then, people didn’t have unlisted numbers. So I looked up Bill Hewlett in Palo Alto and called him at home. And he answered and chatted with me for twenty minutes. He got me the parts, but he also got me a job in the plant.”
• Later he would do the same thing in an electronics class in high school but it was a little sketchier. He needed a part for a project so he just collect-called the manufacturer in Detroit, and told them he was designing a new product and wanted to test out the part, and they sent it to him right away for free.
• Again, his intense focus made Steve a master at getting things done. He never really saw or understood the things that you’re kind of just not supposed to do. And so he’d just do them. I guess you’re not supposed to just call up the CEO of a Fortune 500 company out of the blue at home, as a high-schooler, but Steve either didn’t see or know that, or didn’t care.

• Woz

• In high school a mutual friend introduces Jobs to a guy by the name of Steve Wozniak. He was called Woz for short. Woz is 5 years older than Steve and he’s an unbelievably brilliant engineer. He’s kind of the opposite of Steve Jobs. He’s an engineer’s engineer. He believes that engineering is sort of the ultimate human pursuit because, as an engineer, you make things. You make a better world. And Woz is kind of shy. He loves to engineer, he does not love to persuade or manipulate people. He doesn’t want to manage or tell people what to do. They are both geniuses, but Steve Jobs is a natural leader and Steve Wozniak is whatever the opposite of that is. Despite their differences, Jobs and Woz become good friends as they bond over electronics and music. They hunt down Bob Dylan tapes and do pranks with their electronics knowhow.
• To give you an example of the pranks they would pull: Woz invented basically a TV scrambler. You could point it at any TV, press a button, and it would cause the TV to go fuzzy. The best thing about it was it could be used from far away. Woz and Steve would go to windows of college dorms and do this and watch people’s reactions as their TV stopped working. And they would try to get people to do weird stuff. So for example as soon as they touched the TV they would unscramble it. And then scramble it again if that person took their hand off the TV so that soon they’re watching TV with their hand on the TV because they think it’s the only way to get it to work. The way Steve Jobs told it later, they would have people hopping around on one foot to try to get their TV to work. It’s just another example of Steve getting satisfaction from some form of manipulation. It is at its core a form of persuasion. He’s altering people’s behavior by using technology, which obviously foreshadows his career.
• Most interestingly, they invent something called the Blue Box. The Blue Box started as a prank, but it became Steve Jobs’ first enterprise. It basically hacked long distance calls. For my younger listeners, phones were very different back then. Long distance calls, calls to a different state or country were expensive. And the way calls were actually made was through a series of sounds that the buttons made when you dialed. Most people just assumed it was actually pushing the buttons that connected you to the right number but it wasn’t, it was the sounds the buttons made. So someone smart figured out that if you were able to mimic these sounds, you could get a payphone to make long-distance calls for free. Steve and Woz found out about a whistle that could kind of do this but it doesn’t work great. Woz thinks about it and thinks there has to be some way to do this digitally to make it more reliable and so he goes into his lab and he is able to engineer a device to do exactly that! You put this little electronic device to the phone and press the buttons and it will make a long-distance call for free for you. So they assemble this device in a little blue box. Steve Jobs comes up with the idea to make it a product market and sell it. Quoting now from the Isaacson biography:
• “It was then that they reached an important milestone, one that would establish a pattern in their partnerships: Jobs came up with the idea that the Blue Box could be more than merely a hobby; they could build and sell them. “I got together the rest of the components, like the casing and power supply and keypads, and figured out how we could price it,” Jobs said, foreshadowing roles he would play when they founded Apple. The finished product was about the size of two decks of playing cards. The parts cost about $40, and Jobs decided they should sell it for $150.” End quote. That’s some pretty good markup.
• Well they’re pretty successful with it, selling it to college students. They go into college dorms and say “Hey, is George here?” and when the students say “No. There’s no Gary here.” they say, “Oh, we’re looking for this guy George. He’s trying to buy this Blue Box from us. It makes long distance calls…” and they sell them on it. This works really well until one day someone pulls a gun on them and they decide, this is too sketchy, and they stop selling the Blue Box. I mean they’re tricking phone companies into free calls. Technically it’s illegal so it’s not like they could make a great business out of it. They have a great run, but after a few months they stop selling the blue box.

• The small things are the big things

• I think this story is illustrative because it shows how much the small things are the big things. Spoiler alert: The story of the Blue Box is basically how Apple is founded. I mean it’s crazy how much this portends how Jobs’ career will go. Persuading someone else to use their technology and turn it into a true consumer product. The clever branding and sales. The big markup. It’s all there.
• And what I see too often is people trying to jump straight to Apple without ever trying their Blue Box. So many people try to write a novel, and you ask them, “Okay, have you ever written a short story?” and the answer is no. The best way to figure out what you will be successful at, is to see what you’ve been successful at in the past, and then try to replicate it on a larger and larger scale. So, as I mentioned, with writing, start with a short story. If it’s a business, start with something small and simple and see if you can make it profitable. No one tries to be a professional baseball player without dominating their little league first. So dominate your little league first. Find your Blue Box first. It’ll point you in the right direction for success.

• Manipulation

• Also during this time period, you see Steve Jobs for the first time deliberately cultivating a personal brand and honing his persuasion skills. Natural ability is great, but you have to focus on and study persuasion if you want to be a master, and that’s what he starts to do here.
• From the Isaacson biography: “He learned to stare at people without blinking, and he perfected long silences punctuated by staccato bursts of fast talking. This odd mix of intensity and aloofness, combined with his shoulder-length hair and scraggly beard, gave him the aura of a crazed shaman. He oscillated between charismatic and creepy.” Close quote.
• He was cultivating a personal brand and figuring out how to get people to bend to his will. Yeah, his brand is kind of creepy and odd to start with, but he is really able to capture and hold people’s attention with it. 
• There’s quote that I think helps illustrate this, it’s from a guy who comes onto the scene later, named Jon Sculley, he said “Steve’s look of contempt is unyielding. It’s like an X-ray boring inside your bones, down to where you’re soft and destructibly mortal.”
• His use of looks, silences, and conversational ticks and tricks to bend people to his will starts now, way back in high school.

• Reed College

• Well Steve graduates from high school and his parents really wanted him to go to college. They made this promise to his biological parents that he would go to college and they want to live up to it. The only problem is he doesn’t really want to. His parents hardly ever tried to tell him what to do but this was important to them so they really lean hard on him for this one. And so he passive aggressively chooses Reed College in Oregon. Why? Well, it’s a very nice Liberal Arts college but at the time it was literally one of the most expensive colleges in the country. It was an act of defiance by Steve. But his parents agreed to pay and they pony up the money & send him to Reed College.

• Rebellious

• At Reed, Steve is a total counter-cultural rebel and hippy. He experiments a lot with psychedelics, especially LSD. He often goes to hippy communes and picks apples. He starts doing bizarre diets that he would intermittently do throughout his life. He would do things like only eat apples, or only eat certain vegetables, and he would do this for weeks at a time. And that’s partially because anything Steve Jobs decided to do, he did 110%. At this point he’s a committed vegan, and he reads something that makes him believe that the only reason we need to shower, is because we eat meat. He thinks if you don’t eat meat, your sweat won’t smell bad, and so, logically, since he doesn’t eat meat he doesn’t need to shower. And everyone tells him he smells bad but he’s Steve Jobs so he convinces himself that everyone else is crazy, not him, so he almost never showers or bathes. He’s a real crazy hippy type at this point in his life.
• Well college was never going to work out well for Steve Jobs. He hated authority and being told what to do. Like most great men and women he had a craving to be in charge and uh, if you’ve ever been a Freshman in college you know that you’re not exactly in charge. There’s this story that Woz comes to visit him at Reed and Steve grabs his schedule and goes “They are making me take all these courses!” and Woz just replies “Yes, that’s what they do in college.” So Steve Jobs drops out after just a semester. He hangs out and drops in on classes that he’s actually interested in for about a year after that, but pretty soon he decides he’s wasting his parents’ money and decides to move back home to California and move in with his parents.

• Move back home & Atari

• Once he moves back home he’s looking for a job and he sees a listing for a job at Atari. Atari was one of the very first video game makers. They created Pong and other games like that. The job ad said “Have fun, make money”. And Steve decides that’s the job he wants. So he goes about getting the job in a very Steve Jobs way. I’m quoting now from the Isaacson biography:
• “That day Jobs walked into the lobby of the video game manufacturer Atari and told the personnel director, who was startled by his unkempt hair and attire, that he wouldn’t leave until they gave him a job.”
• “When Jobs arrived in the Atari lobby wearing sandals and demanding a job, (Chief engineer Al) Alcorn was the one summoned.” Al described the experience this way, quote: “I was told, ‘We’ve got a hippie kid in the lobby. He says he’s not going to leave until we hire him. Should we call the cops or let him in?’ I said bring him on in!””
• And they hire him that day. Steve is kind of a good employee at Atari. He’s good at designing games in a simple and cool way. The head guys at Atari really like him. But the average workers hate him because he’s prickly and arrogant, he yells at people all the time, and smells terrible because he’s still not showering.
• And despite the fact that Steve is doing well at Atari, he’s still basically an insane hippy at heart. One of his old friends from Reed College, Bob Friedland, convinces Steve that he needs to go to India to find himself spiritually. Here’s how Al Alcorn, the head engineer at Atari, described what happened next.
• “He comes in and stares at me and declares, ‘I’m going to find my guru,’ and I say, ‘No shit, that’s super. Write me!’” It tells you something about the spirit of the era that when Steve quits his job to go find his guru, his boss’s response is basically “good luck!” Steve also wants him to help pay for the trip to India. That’s a step too far, but they work out an arrangement where Steve will go to Munich to help with problems they were having with their European Atari machines. The idea being it will be cheaper to get to India from Germany than from the USA. So Alcorn sends him off saying, ‘say hi to your guru for me’”

• Tribe of Maniacs

• This is a good moment to reflect on how much Steve Jobs was a product of his era. Think about it. Steve is a low-level employee at Atari at this point. He says he’s going to quit his job and go to India, and they not only don’t get mad, they’re supportive of it. They send him to Germany to help. The culture he grew up in was very instrumental to his development. But it wasn’t just the culture. His friend who convinced him to go to India is a guy named Robert Friedland. When I was doing research for this I looked up Bob Friedland, and he is the founder of Ivanhoe mines, a giant mining company in Asia. He’s a billionaire. And I thought to myself, man, what are the chances that Steve Jobs would be friends with another billionaire in college? It just seems like such a freak coincidence. Then you start thinking about who else is in his inner circle: He’s friends with Steve Wozniak, one of the smartest computer engineers of all time. He is friendly with Bill Hewlett, the CEO of Hewlett Packard and Al Alcorn the chief engineer at Atari. And he would go on to become friends with Oracle founder Larry Ellison, & Intel founder Andy Grove, and have a personal relationship with Bill Gates. And there’s just no way this is a coincidence.
• I started thinking about all the other successful people I know, and their friend groups. The first thing that came to mind, oddly enough, was Isaac Newton who was friends with Voltaire and John Locke. But there are tons of examples like this.
• Think about Gertrude Stein. She was this artist, a writer, and she had a salon in Paris in the 1920s and 1930s. And here are the people who hung out in her salon: Pablo Picasso, Henri Matisse, Ernest Hemingway, F. Scott Fitzgerald, and Ezra Pound, among others.
• Or think of the Inklings. This was a gathering of writers in Oxford who had a number of extremely famous authors in it, some of the most famous authors of the 20^th century, most notably JRR Tolkien, author of the Lord of the Rings, and CS Lewis, writer of the Chronicles of Narnia.
• And at this time, Steve Jobs was developing his own inner circle of geniuses. I think he was doing it subconsciously, certainly if it was intentional I’ve never heard him talk about it. There’s no way any of them would been so successful without this tribe of people who were also doing similar things: Innovating, pushing boundaries, trying new things. And anyone who has enormous has success has a group of people like this. I call it their tribe of maniacs.
• Geniuses and innovators don’t appear out of nowhere or create their success all on their own. They come from groups and from cultures. You need the right people and the right culture.
• Steve Jobs, summed up the culture of the time that was so important pretty well, I think, he said “When I went to school, it was right after the sixties and before this general wave of practical purposefulness had set in. Now students aren’t even thinking in idealistic terms, or at least nowhere near as much. The idealistic wind of the sixties is still at our backs, though, and most of the people I know who are my age have that ingrained in them forever.” Steve Jobs was able to be Steve Jobs because of the friends he had, and the spirit of the times.
• A mistake I see a lot of people make, is they think they’re going to lock themselves in their bedroom and work furiously until they have programmed the next Facebook, or written the next great American novel, or invented some great product, or whatever the case may be. But if you look at history that basically never happens. You have to somehow be friends with the other great entrepreneurs or writers or musicians or whatever you’re going for, of your age.
• You have to find your tribe of maniacs. And if you can’t find it then you have to create it. That is one of the key elements of success. So go find your tribe of maniacs and if you can’t find it, then move to New York or LA or DC or London or wherever that tribe is. And if you still can’t find it then make it. Don’t go it alone. It doesn’t work. Okay back to the life of Steve Jobs:

• India

• Well Steve goes to Germany for Atari. The Germans hate him. They’re these very proper businessmen in suits, and he doesn’t wear shoes, he’s got long hair, and he smells terrible. He fixes the problem that the German distributors of Atari were having but they hated him. So they call Al Alcorn to complain. His response is hilarious. Quote ‘I said, Did he solve the problem? And they said ‘yeah.’ I said, ‘If you got any more problems, you just call me, I got more guys just like him!’ They said, ‘No, no we’ll take care of it next time’”
• So having done his work, Steve heads from Germany to India. Unfortunately, the guru he was looking for dies a week before he gets there. But he’s there for seven months, going to religious festivals, hanging out in monasteries, and just generally doing the stuff that you assume an American spiritual seeker in India would do. He doesn’t find enlightenment, it doesn’t mark a huge change in his life. But it does subtly change his perspective. It makes him more attuned to the issues of the world and gives him a grounding in eastern philosophy that he would carry with him throughout his entire life.

• Obsessive

• The India trip brings up an aspect of Steve’s personality that I’ve already touched on briefly, but he was totally obsessive. People talk about balance and having balance in your life. You know the balanced person. They always drink 8 glasses of water, they do yoga every morning, always make sure to spend time with their friends. Keep a stable job. The balanced way for Steve Jobs to approach spirituality would probably be to buy a book on meditation practices and read a little bit every morning. But there was no one less balanced than Steve Jobs. It was a part of his insane ability to focus. When he was focused in on something he was totally obsessed with it. The kind of person who obsesses over spiritual enlightenment enough to go to India for seven months is the type of person who would be obsessed enough to do what he did in technology and business. 

• Apple

• Well when Steve finally gets back from India, he goes back to Atari’s offices. And this being the bay area in the 70s, they’re glad to see him, they say welcome back, and give him his job back right away.
• In the mean time, you remember Woz? That brilliant engineer who helped Steve design the Blue Box? Well he’s about to change the world. Woz had joined his own tribe of maniacs, he had started going to something called the homebrew computer club. At the time, computers were these massive mainframes that were the size of a building and were only owned by the government or humongous corporations. And this club is a group of Bay Area tinkerers, engineers, and nerds who are interested in making their own computers. Home computers. Woz is especially interested in personal computing and terminals. And what does that mean? Terminals, well…
• And what does that mean? Terminals. Well at this point in time, personal computers were still using punchcards and flashing lights to give you results in binary code. So what we think of as a personal computer, you know a screen where you type in some keys and words appear, did not exist at the time. Home computers were not life changing productivity machines, they were glorified calculators that, more often than not, you had to understand binary code in order to operate. Well Woz is trying really hard to figure out how to make his computer work with a TV screen so that you could actually see what’s happening. Well one day he finally figures it out. Here’s Woz in his own words, quote “I typed a few keys on the keyboard and I was shocked! The letters were displayed on the screen. It was the first time in history anyone had typed a character on a keyboard and seen it show up on their own computer’s screen right in front of them.”
• Woz’s initial inclination is to give this away to the Homebrew Computer Club. Tell the guys how he did it in a spirit of openness and collaboration and let them use the design. But he tells his good ‘ol buddy Steve Jobs about the idea, and Jobs convinces Woz that they should start a company, turn these into actual products and sell them at a healthy markup just like the blue box. And at first Woz doesn’t want to do it, remember he’s not a business man. He doesn’t like business. But here you see just what a master of persuasion Steve Jobs is. He knows EXACTLY what buttons to push in order to get Woz to do what he wants. 
• Steve tells him, quote “Even if we lose our money, we’ll have a company. For once in our lives, we’ll have a company.” Woz said about that time, quote: “I was excited to think about us like that. To be two best friends starting a company. Wow. I knew right then that I’d do it. How could I not?” So Steve has him 100% convinced, and even excited for something that he previously did not want to do at all, and they start a company. They bandied around a few ideas for names but Steve Jobs comes up with Apple. They start it in the Jobs’ parents’ garage. Paul Jobs moves out his vintage cars to make room. And in some ways Steve is just a classic small businessman. He runs Apple the way you imagine that, like, a Middle Eastern fruit vendor world would operate a company. He’s got his Mom and Dad working for him for free. He’s got old girlfriends coming over working minimum wage helping them solder microchips. One of the things Steve is great at is getting computer parts for cheap. He’s out there haggling with manufacturers and wholesalers over pennies for their computer parts. He’s unbelievably resourceful and a great negotiator and a great motivator.
• Woz wants to sell these Apple computers for what it costs to build them but Steve wants to sell them with a healthy markup. And of course, Jobs prevails. They sell them for $666 dollars. You can only manufacture so many computers out of your parents’ garage but they do manage to manufacture and sell a couple hundred. Enough to turn a profit. This was the Apple 1. And it’s the best personal computer of the time. It’s only problem is it looks scruffy. It comes in a wooden box and it doesn’t come with all the necessary accessories like a power supply, cables, and such. It’s revolutionary, but at the same time it’s basically still for hobbyists.
• Other people, many of them in the homebrew computing club, have been working on personal computers. So the Apple 1 isn’t the only thing out there. They go to a computer convention, and Steve Jobs sees the competition. Most of the other computers were better looking than the wooden Apple 1. At least they were more professional looking. But they were metal and clunky. It’s then that Steve realizes he wants to create something friendly and approachable. He wants to create the first consumer computer that’s targeted to normal people. So he and Woz set about creating the Apple II.

• Apple 2

• Steve Jobs in the appliance aisles at Macy’s when he was struck by the design of, of all things, a Cuisinart food processor and so he decides that he wants a sleek case made of light molded plastic, just like a Cuisinart. He realizes that will make it seem like it belongs in the home, like it’s approachable and understandable. Of course this turns out to be a genius insight, one that will pay off handsomely.
• At the same time as they’re designing the Apple II, they’re setting about to form a real company. Up until this point they’re still operating out of Steve’s garage. And Steve realizes he doesn’t have the background or experience to do this so he starts associating himself with and going after people who would be able to run a company.
• One of his first steps in doing this, is he wants an experienced publicity guy to get them some press. He had seen an Intel ad and he loved it so he wanted to meet the guy behind it. He asks around and finds out it was done by a guy named Regis McKenna. He’s this big shot publicist whose business card simply reads “Regis McKenna, himself”. But Regis was a big deal and didn’t have time for these hippy kids making computers in their garage. So Steve calls his office and he gets one of McKenna’s associates and he brushes him off. So, darn. Steve can’t actually get the best publicist in Silicon Valley. What do you do, go for the second best publicist? A normal person might, but not Steve Jobs. He calls back almost every single day for a couple weeks until he finally gets patched through to Regis McKenna. Eventually, Steve convinces Regis to take them on as a client.
• Regis gets them a new logo (the one you know of the apple with the bite taken out) and does some great branding work. He also connects them with the money guys and executives who can help them get off the ground in other areas like manufacturing and operations. 
• They also hire a CEO, a guy by the name of Michael Scott. (Yes, like The Office). And a big part of his job is to manage Steve Jobs. At this point Steve is turning into a petulant brat. He screams at lower-level employees. He frequently devolves into shouting and/or crying. He has temper outbursts. He thinks he’s above the rules and will show up late to meetings. They’re definitely not going to get rid of him because they recognize that he’s brilliant, but he has to be managed.

• Company & philosophy

• They also had made a major marketing hire. McKenna had referred Jobs and Woz to a potential investor named Don Valentine. He meets Woz and Jobs with their unkempt looks and Jobs smelling terrible. Afterwards he calls McKenna to ask quote “Why did you send me these renegades from the human race.” By the way it is definitely a goal of mine to be called a renegade from the human race before I die. But this Valentine guy refers them to an important marketing specialist named Mike Markkula. He would end up having a huge influence on Steve Jobs. You can see it in the three point marketing philosophy Markkula comes up with for Apple. I’ll read from the original document where he outlines the three points of the philosophy: “Empathy. We will truly understand their needs better than any other company.” “Focus. In order to do a good job of those things that we decide to do, we must eliminate all of the unimportant opportunities.” “Impute. People DO judge a book by its cover. We may have the best product, the highest quality, the most useful software, etc.; if we present them in a slipshod manner, they will be perceived as slipshod; if we present them in a creative, professional manner, we will impute the desired qualities.” Empathy. Focus. Impute. Impute is kind of an awkward word to use but fine, we’ll use it. What he means by impute is extend the message of your product to every facet of the way you present it.
• And Steve Jobs really internalized this. You can see this philosophy shining through in some of the things he did later. He later said “When you open the box of an iPhone or iPad, we want the tactile experience to set the tone for how you perceive the product. Mike taught me that.” Steve’s success can basically be summed up as his ability to execute on this marketing philosophy. He empathized with the customer, truly understood what they wanted on an intuitive level. Then he focused all his energy and effort on making the best product and eliminated all distractions. Then he presented and marketed the product in a beautiful way that created a whole brand experience. He learned this early on. And it’s one of the major keys. If you can do those three things, you’ll be able to create value and be successful. Empathize. Focus. Impute.
• And those principles certainly paid off for Apple when it came to the launch of the Apple II. The first launch event is at the West Coast Computer Faire. Jobs pays a bunch of money for a prime spot at the fair. It seemed totally ridiculous for a tiny company of their size but Steve Jobs knew early on the importance of creating buzz, especially at the launch of a new product. But when they get there and are setting up, there’s a problem: When the Apple II’s arrive, they’ve been dinged up a little bit in transit and have some minor blemishes. And Steve was a total perfectionist. So what does he do? He gets a couple employees and they sit up all night polishing the cases the night before the event.
• The launch of the Apple 2 ended up being a huge success. It does generate a ton of buzz. And not just buzz, it generates tons of sales as well. It would eventually sell millions of units, in its various models. It was basically the first mass-market personal computer and it not only was financially successful for Apple, it basically launched the industry of personal computing.
• After the launch of the Apple II, Apple was a real company, they move out of the garage and into an office, and they start hiring real employees.

• Focus

• By the way I know I haven’t talked a lot about his personal life. But it’s worth mentioning that around this time he has a child with a girlfriend, Chrisann Brennan. She names the girl Lisa. And at first, Steve will not admit paternity. He claims she’s not his daughter and therefore is completely absent from her life. Well she sues him for child support and they do a paternity test and yep, it’s his daughter. And yet, at first, he still just barely recognizes her as his daughter. He doesn’t hate her or mistreat her, it’s just like she doesn’t exist. It’s pretty horrible. And weirdly, somewhat horrifyingly, I think this kind of behavior connects to one of his greatest strengths, which is his ability to focus.
• If you listened to my episode on Napoleon, you might remember his description of opening and shutting drawers in his mind. He compared his mind to a vast cupboard. And when he wanted to think about something, he opened that drawer and when he was done, he closed the drawer and thought about something else. He was able to completely compartmentalize his mind. Well Steve is able to do something similar, from the Isaacson biography quote: “When Jobs did not want to deal with a distraction, he sometimes just ignored it, as if he could will it out of existence. At times he was able to distort reality not just for others but even for himself.” Steve basically closes the Lisa drawer in his mind, and it’s like he doesn’t even have a daughter.
• Well, after a few years, Steve does start taking responsibility and tries to repair his relationship with Lisa. They would have a tumultuous relationship, she could be as strong-willed as her father, but he was a father to her and eventually she came to live with him often. Also, this is the time when he starts growing up in other ways, too. He edges away from his insane diets and stops dropping LSD. His primary identity is shifting from a hippy/spiritualist to that of an entrepreneur.

• Xerox

• Well the Apple II is great but it is ultimately Woz’s creation. Steve designed it, but Woz build the circuit board and the internals. It’s his baby. Now Steve wants something to call his own. So he starts a project for a new computer. And what he decides to call it is just jaw-dropping. He calls it the Lisa. Now this is at the time when he’s still denying that he’s Lisa’s father. As Walter Isaacson put it “The name Jobs chose would have caused even the most jaded psychiatrist to do a double take.” He claims it stands for Local Integrated Software Architecture. Which is totally meaningless. 
• He starts building the Lisa but after a while he starts to realize that this it’s not going to be all that revolutionary. It’s really just an upgraded Apple II. So he’s looking around for something new, something innovative and big. There’s an employee at Apple named Jef Raskin and this guy wants to design an inexpensive, simple computer for the masses with a Graphical User Interface. Remember Woz’s big innovation was to make a computer that you could type on and see the result on a screen. But everything is still text based. There is no such thing as a computer mouse or icons or any of that. You have to type into the computer to control it. Which means you basically have to understand computer code on some level. At least very basic commands. But this guy Jef Raskin had heard about the Graphical User Interface. It’s what you think of as a computer interface today. It has a mouse and windows you can open and close and icons and the whole thing. It’s being developed down the road at Xerox’s research center in Silicon Valley. Xerox was considered a big tech company at the time. Now you probably think of them as just a manufacturer of copiers and printers, but there was a time when they were very innovative. At this point in time, they’re no longer super innovative, they’re a mature technology company. But they were considered really well positioned to compete in the coming personal computer industry. And Xerox is not doing anything with this Graphical User Interface technology yet. The headquarters of Xerox is out on the east coast, and the executives at Xerox know that this research lab has developed this but they don’t realize how revolutionary it is. But this guy at Apple, Jef Raskin, has heard about the GUI and he wants to check it out and use it.
• So Apple and Xerox come to a deal where Xerox gets to invest in Apple, you know they’re this hot new startup that everyone wants to invest in, so Apple says okay you can invest and get $1 million worth of shares if you show us this Graphical User Interface you’re working on. And the Xerox executives, not knowing how valuable this technology is, agree to this deal. They say sure have a look. Knock yourself out.
• Now the executives at Xerox may not have realized how valuable this technology was, but the researchers who actually came up with it did. They were not happy about having to show this technology to Apple. So Steve Jobs shows up at Xerox’s research lab with a few of his engineers and the Xerox guys are kind of trying to put them off. They just keep showing them a word-processing application. Kind of, Oh, isn’t this cute. And Steve Jobs really shines here. He’s going ballistic. He keeps yelling “Let’s stop this bullshit!” He wants to see the real thing: The operating system and its programming language. So the Xerox folks huddle privately and decide to show him just a little bit more. They’ll show off an “unclassified” version that isn’t the full thing. They think that will impress Steve and throw him off the trail and they won’t have to actually show him and his team how the operating system works. Well wrong. They show the unclassified version, but he talks to his engineers and asks them if this is it and they say we don’t think so, we don’t think this is the whole thing. So Steve just starts going ballistic and screaming at the Xerox engineers again. There’s this stand-off, they really don’t want to show him the real thing no matter how much he screams, so he calls up the Xerox executives on the East Coast and yells at them, basically saying “I thought we had a deal but you guys aren’t showing me anything. This is bullshit.”
• And this works. A call immediately comes back from corporate headquarters in Connecticut decreeing that Jobs and his group should be shown everything. The head Xerox engineer storms out in a rage. He knows what they’re giving away and he’s absolutely livid about it.
• Well when Xerox finally shows them the whole thing, Steve is not subtle about what’s happening. He and his engineers are just soaking up everything. Jobs is jumping around and waving his arms. One of the main Xerox engineers later recalled, quote “He was hopping around so much I don’t know how he actually saw most of the demo, but he did because he kept asking questions. He was the exclamation point for every step I showed.” Jobs kept shouting “You’re sitting on a gold mine. I can’t believe Xerox is not taking advantage of this.”
• And Steve Jobs later said about the incident, “It was like a veil being lifted from my eyes. I could see what the future of computing was destined to be.”
• When the Xerox PARC meeting ended after more than two hours, Jobs drove back to the office, speeding in his convertible and yelling “This is it! We’ve got to do it!”

• Macintosh

• This technology starts out getting implemented in the Lisa, but then Steve with his insane management techniques and erratic personality, gets kicked off the Lisa team. His behavior has gotten even more belligerent, the engineers are constantly offended by how much he insults them, and there’s also a philosophical disagreement. The engineers want to build the Lisa for business customers, the segment of the market most likely to actually buy the machine, while Steve really wants to build a Lisa for the people. For the home and the average consumer. Well the CEO agrees that Steve is out of control and thinks a computer for business customers will probably be more successful financially so he removes Steve as head of the Lisa team. Steve isn’t actually too upset about this. Remember he was already starting to realize that the Lisa was too much of an upgrade. He didn’t think it was revolutionary enough. So he’s looking around for a team where he can implement this GUI technology and he finds a small project called the Macintosh. So Steve takes over that project.
• He wants it to be the first true mass-market computer. He’s obsessed with it being friendly and approachable. And Steve is really the pioneer of this idea. It didn’t even make sense to most of the engineers. One of the designers said quote “Even though Steve didn’t draw any of the lines, his ideas and inspiration made the design what it is. To be honest, we didn’t know what it meant for a computer to be ‘friendly’ until Steve told us.”
• Steve had this vision of what a computer should be. And it was way past what anyone had envisioned up until then. He later said “Great art stretches taste, it doesn’t follow taste” and he certainly worked according to that principle.
• When someone asked him what market research he did on the Macintosh he responded “Did Alexander Graham Bell do any market research before he invented the telephone?”
• Working on the Macintosh, one thing he does is hire one of the head engineers from Xerox who had been working on the GUI. He tells him, and I kid you not this is a quote. “Everything you’ve ever done in your life is shit. So why don’t you come work for me?” And he did! Steve could motivate by pushing people. This is one of those areas where I think Bill Gates would say “Don’t try this at home.” Some people might read this and say, okay, I’m going to be rude and extremely blunt with people. It worked for Steve Jobs! But his rudeness wasn’t the asset here. His asset was his passion for product and his willingness to be honest. The rudeness was a liability, but his strengths were such that he could overcome it.
• Anyway, Steve doesn’t stop with Xerox. He also starts raiding the top engineers at Apple to come work on his Macintosh project. There’s a great engineer named Andy Hertzfeld. Steve comes over to his cubicle and says “Hey, you’re working on the Macintosh now.” I’ll read now from the Isaacson biography what happens next. Quote “Hertzfeld replied that he needed a couple more days to finish the Apple II product he was in the middle of. “What’s more important than working on the Macintosh?” Jobs demanded. Hertzfeld explained that he needed to get his Apple II DOS program in good enough shape to hand it over to someone. “You’re just wasting your time with that!” Jobs replied. “Who cares about the Apple II? The Apple II will be dead in a few years. The Macintosh is the future of Apple, and you’re going to start on it now!” With that, Jobs yanked out the power cord to Hertzfeld’s Apple II, causing the code he was working on to vanish. “Come with me,” Jobs said. “I’m going to take you to your new desk.” Jobs drove Hertzfeld, computer and all, in his silver Mercedes to the Macintosh offices. “Here’s your new desk,” he said, “Welcome to the Mac team!”
• As you may have gathered, Steve Jobs is obsessive with the Mac team. He gets all the best people and he pushes them extremely hard. He’s able to persuade them to not only work hard, but reach levels of genius and hard work that they didn’t even know they possessed. One way he is able to do that is with what his team eventually came to call his reality distortion field.

• Reality distortion field

• And what is the “Reality Distortion Field?” It’s this thing where reality gets bent when you’re with Steve Jobs. Team members would describe how, when they were with Steve, he could get them to believe these impossible things. Things like we can develop this completely new product in only six weeks. And they would totally believe it, they were totally in. And then they leave and an hour later they begin to think “What was I thinking? Isaacson described it this way “When members of the Mac team got ensnared in his reality distortion field, they were almost hypnotized. “He reminded me of Rasputin,” said Debi Coleman. “He laser-beamed in on you and didn’t blink. It didn’t matter if he was serving purple Kool-Aid. You drank it.” But she believed that the reality distortion field was empowering: It enabled Jobs to inspire his team to change the course of computer history with a fraction of the resources of Xerox or IBM. “It was a self-fulfilling distortion,” she claimed. “You did the impossible, because you didn’t realize it was impossible.”
• Andy Hertzfeld described it like this “Steve has a reality distortion field. In his presence, reality is malleable. He can convince anyone of practically anything. It wears off when he’s not around, but it makes it hard to have realistic schedules.”
• Tribble “It was dangerous to get caught in Steve’s distortion field, but it was what led him to actually be able to change reality.”
• Wozniak: “His reality distortion is when he has an illogical vision of the future, such as telling me that I could design the Breakout game in just a few days. You realize that it can’t be true, but he somehow makes it true.”
• So it’s this amazing tool. Somehow, by creating this field he is able to convince people of the impossible and then get them to actually DO the impossible. But, it’s a double-edged sword because the truth is you can only distort reality so much and when you try to distort it further, it can have negative consequences. Joanna Hoffman, a key early Apple employee, phrased it this way: “Reality distortion has motivational value, and I think that’s fine, however, when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.”
• There’s this great story of the Macintosh team. It’s the end of the development cycle, the computer is basically done. But the software team is not quite ready to ship all of their software. They have been absolutely killing themselves, working long hours to get everything ready and right. But they’re not quite going to make it. They’re going to be a couple weeks late. And they call up Steve, who is out on the east coast for the roll-out, to let him know it’s going to be just a little late. Here’s what happened:
• “The software manager calmly explained the situation to Jobs, while Hertzfeld and the others huddled around the speakerphone holding their breath. All they needed was an extra two weeks. The initial shipments to the dealers could have a version of the software labeled “demo,” and these could be replaced as soon as the new code was finished at the end of the month. There was a pause. Jobs did not get angry; instead he spoke in cold somber tones. He told them they were really great. So great, in fact, that he knew they could get this done. “There’s no way we’re slipping!” he declared. There was a collective gasp in the Bandley building work space. “You guys have been working on this stuff for months now, another couple weeks isn’t going to make that much of a difference. You may as well get it over with. I’m going to ship the code a week from Monday, with your names on it.”
• And it worked. They worked non-stop for the next two weeks, but they got the Macintosh software ready to ship on time.
• So again, Reality Distortion Field: Double-edged sword. In fact it has its own narrative arc. It starts as something very effective when he just sort of does it as instinct, early on in his career. But then he becomes aware of it and thinks he can literally make anyone do anything just by using the Reality Distortion Field and it really becomes a symbol of his failure. But he matures and upon his return to Apple he’s able to use the reality distortion field in a mature way, realizing that you can bend reality to your will to a huge extent, but on some level everyone is, in fact, beholden to reality.

• Ability to motivate

• And how was able to create this reality distortion field? Well there were a few different techniques he used. One was, as we saw in some of the previous stories, sheer force of will. Other times it was his inability or unwillingness to see obstacles. Another technique was to help people see the bigger picture. There’s a fantastic example of this in the Isaacson biography. Quote:
• “One day Jobs came into the cubicle of Larry Kenyon, an engineer who was working on the Macintosh operating system, and complained that it was taking too long to boot up. Kenyon started to explain, but Jobs cut him off. “If it could save a person’s life, would you find a way to shave ten seconds off the boot time?” he asked. Kenyon allowed that he probably could. Jobs went to a whiteboard and showed that if there were five million people using the Mac, and it took ten seconds extra to turn it on every day, that added up to three hundred million or so hours per year that people would save, which was the equivalent of at least one hundred lifetimes saved per year. “Larry was suitably impressed, and a few weeks later he came back and it booted up twenty-eight seconds faster,” Atkinson recalled. “Steve had a way of motivating by looking at the bigger picture.”
• Listen to one other time he got his team to see the big picture: Midway through the Macintosh development, the case is finished, they know what it’s going to look like. And so he tells his team “True artists sign their art.” So he has them sign the inside of the case where no one will see it but it’s there. Every Mac is going to ship with their signatures on it. Atkinson, one of the engineers, said quote “With moments like this, he got us seeing our work as art.” 

• Extreme Position

• Another tool he used was taking an extreme position. Everything was either the best thing ever or it totally sucked. Usually it totally sucked.
• Why did he do this? Well for one thing, it forced him to actually find the weak spots in new ideas. For another, it forced people to have really great ideas. If you know someone is going to attack your idea as totally sucking, you’re not going to even bring it to him until you know it’s actually an awesome idea and you can defend it.And if it was an awesome idea, and you did defend it, Steve would respect you and change his opinion. Sometimes immediately.
• There was even an award for the person who stood up to Steve Jobs the most. And Steve encouraged the award. He was still going to tell you your stuff sucked, but he liked it when you stood up to him and stood up for your idea.
• And this inspires strength and passion in people who work for him. One of the biggest problems managers have is getting people to care and that is not something Steve Jobs ever struggled with. Listen to this story from Joanna Hoffman. She made some sales projections and Steve changed her projections in a way that she hated and she thought was totally wrong. And when she saw the projections, she was furious. She describes the experience quote “As I’m climbing the stairs, I told his assistant I am going to take a knife and stab it into his heart.” The corporate counsel comes running out to restrain her so she doesn’t actually murder him but then she recounts quote “But Steve heard me out and backed down.” So yes, there’s this crazy conflict, but I know, I look back on my management experience, and I would love to have an employee who cared so much about her work that she threatened to stab me in the heart over it. It sounds crazy but it’s true. Apathy is one of the biggest problems you will face as a manager. But Steve Jobs was able to inspire that kind of extreme passion all the time in his employees. And one of the main ways he does that is by staking out these extreme positions and forcing people to defend their work.

• Products are everything

• And therein lies the paradox of what it meant to work for Steve Jobs. It could be extremely grating and draining. And yet many people look back on working with him fondly because he was able to get their best work out of him. As Debi Coleman said, quote “He would shout at a meeting, ‘You asshole, you never do anything right.’ It was like an hourly occurrence. Yet I consider myself the absolute luckiest person in the world to have worked with him.”
• And one thing to point out is Steve did all of this because he actually cared about the product and getting it right. This wasn’t some giant ego trip. For the most part, it was focused in the right direction. There’s a story that illustrates this with the calculator application that was going to ship with the Macintosh. The engineer working on it, his name was Espinosa. And he shares the first iteration of the calculator with Steve. And here’s what happens, quote:
• “”Well, it’s a start,” Jobs said, “but basically, it stinks. The background color is too dark, some lines are the wrong thickness, and the buttons are too big.” Espinosa kept refining it in response to Jobs’s critiques, day after day, but with each iteration came new criticisms. So finally one afternoon, when Jobs came by, Espinosa unveiled his solution: “The Steve Jobs Roll Your Own Calculator Construction Set.” It allowed the user to tweak and personalize the look of the calculator by changing the thickness of the lines, the size of the buttons, the shading, the background, and other attributes. Instead of just laughing, Jobs plunged in and started to play around with the look to suit his tastes. After about ten minutes he got it the way he liked. His design, not surprisingly, was the one that shipped on the Mac and remained the standard for fifteen years.”
• Steve isn’t just trolling Espinosa with his criticism of the calculator in order to have control over him. He doesn’t just laugh off or get mad about this calculator construction set. Steve really cares about the way the calculator looks so when given the opportunity, he DOES design it himself. As Steve Jobs later said “Products are everything. You should never start a company with the goal of getting rich. Your goal should be making something you believe in.”

• 1984 ad

• Well they finish the Macintosh and now they have to market it. Steve has this ad agency that he loves, Chiat Day. And they come up with this advertisement. It’s the late fall/early winter of 1983 and so 1984 is about to begin. You may heard of the famous George Orwell novel, 1984. It’s a dystopian novel about a tyrannical government. It was written in 1949 so 1984 was way in the future when he was writing it. And in the novel it’s the year 1984 and big brother is in charge and everyone lives under a terribly tyrannical surveillance state. Well Steve’s ad agency, Chiat Day, comes up with an advertisement for the Macintosh based around the idea of the novel 1984. The ad shows all these automaton workers with shaved heads dressed in grey marching around and watching a giant screen where there’s a video of this big brother tyrannical figure is giving a big speech. And a woman comes running in dressed in orange and white and throws a hammer and shatters the screen where big brother is speaking. Then the commercial says simply “On January 24^th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like “1984”. And that’s it. If you haven’t seen it, go check it out. Just search on YouTube for the apple 1984 ad. It’s supposed to be shown during that year’s superbowl. Steve loves it. He thinks it’s revolutionary and captures the spirit of Apple and Macintosh. He and the ad agency show it to Apple’s CEO and the Apple board and they HATE IT. It’s not too hard to see why. It doesn’t show the product. It doesn’t even say what the product is. It doesn’t say why you should buy it. It makes no effort to actually sell the product. And so from a traditional advertising and sales perspective it seems like it will be a disaster. The first time they show it at a board meeting, Apple’s CEO, Jon Sculley, asks, ”Who wants to move to find a new agency?” Most of the board members hate it so much, they thought it was the worst commercial they had ever seen. Sculley asks Chiat/Day to sell off the two commercials spots. But despite the Apple Board’s protestations, Chiat Day still believe it’s great, so they lie and say they can’t sell off the 60 second time slot so they’ll just have to run it.
• It runs during the superbowl and is a total hit. Creates an unbelievable sensation. It’s the first time that a television commercial becomes a major news story. Think about it, you’re usually paying good money to have people run your advertisement. And yet networks and news stations are running the ad for free. And they’re talking about it. It’s genius. By causing a huge stir it creates tons of free advertising. People are trying to watch your advertisement. And while it doesn’t introduce or sell the product, by giving Apple a foot in the door of public attention, it allows them to do that later because people are paying attention now. They’re asking what is this thing. They want to know more. So in the end, Steve’s commercial that was so hated by the board was selected by both TV Guide and Advertising Age as the greatest commercial of all time.

• Sidelined & kicked out at Apple

• So through this commercial and through a spectacular launch event, Steve is able to create a ton of buzz for the Macintosh and it comes out and sells like crazy. It’s the hot new thing and everyone wants one. It’s got this revolutionary graphical user interface. It looks different from any computer before it. It’s the first mass-market personal computer that was really designed from start to finish for regular people to use in their homes. But Steve Jobs had not done a perfect job of designing the thing. His penchant for perfectionism had betrayed him. It was too expensive for the average consumer. He insisted that it be silent and not have fans, so it often over-heated. It doesn’t have enough ports for all the accessories people want to use. And so after the initial burst of enthusiasm, sales slow way down. Soon they’re only hitting 10% of their projected sales. And things start to get uncomfortable for Steve in Apple. As sales slow down he blames everyone except for himself, often launching into vicious tirades and entertaining outlandish conspiracy theories of people trying to undermine him at Apple.
• Steve Jobs was great at introducing amazing, revolutionary products. But when he wasn’t doing that, he could get cabin fever. And that’s what happens now.
• Steve has made a lot of enemies. He’s pushed people really hard. He is ruthless in terms of firing people. One thing he’s crazy about is he only wants what he calls “A Players” at Apple so anyone who he doesn’t think is amazing, he wants fired immediately.
• So Steve has this complicated role at Apple. He’s a revolutionary. He’s inspiring. He’s been instrumental in introducing every revolutionary product they’ve ever had. He’s also a jerk. Frequently throws tantrums. He’s made a lot of enemies. He’s way too much of a perfectionist. Generates a ton of turnover by firing people. And so a lot of people want to see him gone. One of his key employees wrote a scathing report that’s worth reading in full. Here it is. Quote
• “He is a dreadful manager… I have always liked Steve, but I have found it impossible to work for him… Jobs regularly misses appointments. This is so well-known as to be almost a running joke… He acts without thinking and with bad judgment… He does not give credit where due… Very often, when told of a new idea, he will immediately attack it and say that it is worthless or even stupid, and tell you that it was a waste of time to work on it. This alone is bad management, but if the idea is a good one he will soon be telling people about it as though it was his own.”
• You might put up with this kind of behavior if someone is performing really well, but if they’re not performing, that’s a death sentence. And Steve Jobs was not getting results. In his advertising for the Macintosh, Steve had submarined the Lisa, basically saying that the Lisa was old news right as it was coming out. And the Macintosh isn’t selling well because of its problems. It would only sell well in later, more practical iterations. 
• As Steve gets sidelined more and more it becomes apparent that conflict is inevitable. Eventually, he gets relegated to a role so small that he can’t take it anymore. There is a big showdown at Apple between him and the CEO, John Sculley. The Apple Board chooses Sculley. And Steve gets kicked out of Apple.
• In retrospect, firing Steve Jobs seems like a huge mistake. We now know him as a huge success story. You wouldn’t want to get rid of a guy like that. And without Steve Jobs, Apple steadily declines and goes to the verge of bankruptcy until it’s brought back to relevance and eventually to previously unimaginable heights by the return of Steve Jobs. But maybe firing him wasn’t such a mistake. At the time it seemed completely necessary. He was out of control. And most importantly, he wasn’t the manager or businessman he would be when he returned a decade later. And he never would have become the great businessman and manager he did if not for his time in the wilderness, away from Apple.

• NeXT

• So Steve has been kicked out of Apple, what does he decide to do next? He’s a millionaire. He never has to work again if he doesn’t want to. He’s famous. He’s got a lot of options in front of him. He does two things. He starts an education-market-oriented computer company called NeXT and he buys a little-known computer company that produces hardware and software for 3D animation called Pixar.
• NeXT was his opportunity to indulge his every whim, good and bad. He’s been chomping at the bit, thinking he can do everything better than anyone. He thinks he has all the greatest ideas. Well now is his chance to find out for sure and prove it. And as you might imagine, it’s a fascinating, beautiful, perfect, disaster.
• The original idea of NeXT was to design a research computer for universities and go after the education market. And everything had to be beautiful for Steve Jobs. He’s obsessed with design, and the first thing he wants, before he starts thinking about software or hardware, is an amazing logo. And he wants the best of the best to design his logo. So he goes after this guy called Paul Rand. Rand had already done logos for Esquire, IBM, ABC, UPS, and others and was considered by many to be the guru of logos. Second to none. The very best. The problem was he was under contract with IBM as a designer. And obviously most sane people would say “Oh well. C’est la vie. He’s working for a competitor. There’s no way he could come work for my startup” But not Steve Jobs. He just picks up the phone and calls IBM’s CEO. The CEO is out of town but he’s so persistent that he finally gets through to their vice chairman, Paul Rizzo. After two days of insistent calling, Rizzo decided it wasn’t worth the headache to keep dealing with Jobs and just basically said fine you can have him. So Steve is able to get what he wants by a combination of single-minded focus, his belief that reality can be distorted to match his will, and persistence.
• Paul Rand designs a logo for NeXT and Steve loves it.
• Despite his ejection from Apple, Steve still has a bunch of cache in the industry. So he’s able to hire some really, really smart people to help him work on the NeXT computer.
• And then Steve Jobs and his team disappear for a few years. Originally he says he can have the NeXT computer ready in 18 months. It’s WAY longer than that. This is one of those times where his reality distortion field fails him. But the public is fascinated to see what he comes up with next. And when he announces an event to announce the NeXT computer there is a ton of hype.
• It’s a masterfully executed event. Thousands of people show up and they’re waiting for hours in order to get in. Jobs gets on stage and welcomes everyone and tells them they’re about to witness an event “that occurs only once or twice in a decade – a time when a new architecture is rolled out that is going to change the face of computing.” On stage is a table, and something is clearly on the table, covered by a black tablecloth. And at a climactic moment, Steve takes off the table cloth and reveals the NeXT computer. It’s a beautiful computer. A perfect black square with exact 90° angles. And as he introduces it, he’s able to make it sound completely revolutionary. It’s the first computer to be able to play music, something we take for granted nowadays. It has this great, intuitive operating system that is easy to use yet powerful. He shows off digital books, claiming that the NeXT computer is the biggest deal in book technology since the printing press. He calls it incredible and the best thing we could have imagined. For the grand finale he has Yo-Yo Ma, the greatest cellist of all time, come onto the stage and play a duet with the computer. And this is amazing because, remember, no one has heard a computer play music before. People go wild for it. The audience is in, like, an incoherent frenzy. But remember, it’s not for people. You know, regular consumers. It’s supposed to be for universities. And frankly universities don’t care about having a beautiful perfect black box. And they don’t care about playing music from their computer. They want really powerful computers for their research labs and they want them cheap. Well the NeXT computer is the opposite of cheap. It’s over $10,000 for a normal setup. And that’s not going to appeal to normal consumers or universities. And the thing barely sells at all. It’s a success in the popular imagination but it’s a disaster in terms of sales. It’s also delivered more than two years later than Jobs said it would be. Also no one develops for it because no one is buying it! In a very Jobs-ian way, it is both beautiful and impractical. You remember the three things that were the Apple marketing mantra: Empathy. Focus. Impute. Well Steve had incredible empathy, just an unbelievable understanding of the average consumer. But because he refused to do market research he was terrible at having empathy and designing products for markets that he himself did not fall into. And that included the university market. He thought he could just make the most insanely great machine ever, spare no expense, jack up the price, and the universities would pay. That turns out to not be the case at all. And as that becomes clear, NeXT falls on severe financial troubles, and appears to be on the edge of collapsing.
• The one good thing that does come out of it is the NeXT computer has an amazing operating system. His chief software guy, Avi Tevanian leads the software team and the result is spectacular. Responsive, beautiful, user-friendly. It’s great. No one actually uses it, but it’s objectively speaking an unbelievably great operating system. And this will be important to the story later.
• But let’s also take some time to talk about the other company he owned at the time: Pixar.

• Hard Times at Pixar

• We all know Pixar as an animation studio. But that is not at all what they were when Steve Jobs purchased them. They were actually the 3D animation technology division of Lucasfilm, the film production studio owned by Star Wars creator George Lucas. George Lucas was going through a divorce and needed some cash, so he decides to sell Pixar.
• So Steve buys them, but he buys them as a technology company. The thinking is they could create a computer and some applications that would be useful in creating and manipulating 3D images. So Steve basically thinks he’s buying a computer company. And for the first ten or so years he owns them, that’s what they are. He has all these high-minded ideas about how every consumer is going to want to have a computer dedicated to creating and rendering 3D images. But of course that’s crazy. And they’re not very successful. In fact they’re so unsuccessful that eventually they have to give up on their hardware division and stop selling computers. A normal person probably would have given up on them at some point. But Steve, who bought the company for $10 million ends up pouring $50 million into the company to keep it afloat. Why doesn’t Steve give up on them? Well there are a couple potential explanations. One, the reason he gives, is that he really believed in this team of people at Pixar. And I’m sure there is a lot of truth to that. He really did believe in and trust the Pixar guys. He basically gave them free reign to work independently of him, something that his employees at Apple and NeXT never got. But I think there was also another side to it, too. He had been fired from Apple. NeXT was doing very poorly and looked like it was about to fail at any moment, and he just couldn’t afford another loss. So he was going to stick with Pixar no matter what. He was going to the grave with them if necessary.

• Summary

• And that’s where we’re going to end this episode, story-wise. Steve has been exiled from Apple. NeXT is failing, Pixar is failing. Apple, even though he’s not there, is failing. Steve Jobs is basically a broke, irrelevant, has-been. So let’s take stock really quickly of how we got here.
• Steve is able to achieve some phenomenal success early in his career. The Apple I is a triumph that gets his company and career launched and the Apple II is a huge success that sells like crazy and makes Apple and Steve Jobs worth a lot of money.
• What propelled him to this success?
• First and foremost is his knack for persuasion. He is able to persuade people to give him what he wants, work harder, think of new ideas, and do things they didn’t think they were capable of. What are some of his persuasion techniques?
• First is focus. He sees past and through normal everyday obstacles. He put his mind to something and focused all his energy and thoughts on it and he did not let up until it was done. Think of him calling and calling IBM until he was able to get them to give up Paul Rand, the logo designer. Or doing the same thing with Regis McKenna, calling him until he agreed to be their publicist.
• The second is helping people see the bigger picture. He was a master at changing perspective. Think of Woz, who did not want to start Apple initially, until Jobs puts it in the frame of an adventure. They were two best friends, and they would have their own company. Or the engineer who he got to cut down on the Mac boot-up time by calculating the amount of time it would save people.
• Lastly he used the power of taking an extreme position. Everything was the greatest thing ever, or it totally sucked. It was total shit. People he worked with were geniuses or they were bozos. This forced people to be better, produce better thinking and products, in order to meet his standards. They knew that pretty good would never be good enough.
• Besides persuasion, what else propelled Steve Jobs? Well one other key was his tribe. He managed to surround himself with geniuses, rebels, entrepreneurs, and people who could help him succeed. Part of this was luck, he was born at a time when Silicon Valley was exploding with new ideas and was abuzz with the energy of invention. He also grew up in the 60s and 70s when there was a spirit of idealism and free-thinking. But the other part was intentionally forming relationships. Woz he stumbled into but he was smart enough to stay friends with him. But Regis McKenna was someone who helped him tremendously and he managed to befriend him by calling his office until the guy finally agreed to meet him. The motley friend group that Steve Jobs cultivated, his tribe of maniacs, was an indispensable element of his success.
• The last thing to keep in mind about his success is his embodiment of the Apple marketing philosophy. Remember the three components: Empathy. Focus. Impute. He was a master of empathy. He totally understood consumer demands, even better than consumers did. He knew what people wanted before they did! Focus we have already touched on. He focused intensely on meeting those needs once he had perceived them. And he imputed his solution into an entire brand identity.

• Why the Fall

• Having said all that, let’s talk a little bit about why he had such a precipitous fall from grace. I think it can be summed up this way: Steve Jobs’ leadership techniques made him powerful, but not invincible. And he forgot that.
• Let’s start with his boorish behavior. Why was he so belligerent? And why was it a problem? A lot of times it worked in his favor, he was able to motivate people with his negativity. Well remember earlier I said it was always focused on product. He acted this way because he actually wanted to make the product better. But I think at a certain point the fame and notoriety started to go to his head. At a certain point he got hooked on a feeling, and he was yelling at people just because it felt good to him. Being rude is, in some cases, an acceptable byproduct, but it is always a horrible goal.
• He also made business mistakes. He was unbelievably good at anticipating people’s product needs, but with a couple exceptions. First, at this point in his career he basically refused to acknowledge people’s price needs. He would take everything else into consideration and create an amazing product, but he basically refused to make price concessions. Second, if he didn’t fall into the market, he was not good at understanding people who were different from himself. Especially at this point in time, he thought that he was a genius, he understood everything, and if people didn’t see things the way he did, eventually they would come around.
• To sort of sum it up: He really started to drink his own kool-aid. All his business endeavors had been very successful, and in large part it’s by following his own intuition. So he basically shut down his critical thinking faculties. He thought, okay, everything I touch turns to gold. So I don’t have to think about it. I can just do what feels good and it will turn out amazing. But then he’s turning off his critical thinking. It’s a paradox but often times achieving success will cause people to abandon the very thing that gave them success, and that’s what happens here. You’ve got to stay on your toes, always be self-evaluating for mistakes and errors. That’s something that’s not happening here. He never second guesses himself.
• We’re going to wrap up the first episode right there. Tune into episode 2 to see how Steve Jobs turns it all around and becomes one of the greatest business successes of all time.

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