STEVE JOBS: OUT FOR REVENGE
By Phil Patton
Published: August 06, 1989
STEVE JOBS, SHIRT SLEEVES rolled up to his elbows, long hair over his
collar, sits like a virtuoso at the keyboard of his new computer. Behind him,
projected onto a huge screen, computer images -silvery letters and symbols -
expand and shrink, leap and pop about as Jobs puts the machine through its
paces. An audience of 200 business people watches as he demonstrates how, in
seconds, the computer can find a reference buried in the complete works of
Shakespeare or create a model of a bouncing molecule. Speakers boom out a
message by way of the voice-mail system, and then broadcast a snatch of Bach -
''synthesized,'' Jobs boasts, ''from pure mathematics.''
He has named this computer NeXT. ''What we want,'' he tells the audience,
''is to create the next computing revolution. We want to push the envelope.''
The name NeXT stakes his claim to the newest standard in the industry -a PC
with unprecedented power and versatility and an innovative programming system -
but it is also an undisguised reference to curiosity about the next chapter in
the story of Steve Jobs.
In l976, at the age of 21, Steven Paul Jobs co-founded Apple Computers with
Stephen G. Wozniak, five years his senior, whom Jobs had known since he was a
sophomore at Homestead High School, in California's
Silicon Valley. Within five years, Apple had
become a billion-dollar company. Then in 1985 Jobs was forced out - by John
Sculley, whom Jobs himself had hired two years before to be the company's chief
executive. Ever since, working in almost total secrecy, Jobs had been preparing
a comeback. Now, at age 34, no longer the boy wonder of the computer industry,
he was starting over.
IN SILICON VALLEY, A COMPUTER IS CALLED A ''box,''
a sign that the guts may be less important than the skin. The guts of Jobs's
new machine are housed in a ribbed black magnesium cube. Keyboard and monitor
are separate, connected by cables, the 17-inch screen dramatically cantilevered
over a swooping support. ''Computers,'' Jobs likes to say, ''are the metaphor
of our time. They should share a certain higher esthetic.''
Not that what is inside the NeXT box is unimportant: a new optical memory
system that uses a laser to store and read up to 250 volumes' worth of
information on a single disk, a sound system of CD quality, a powerful array of
sophisticated processing chips, and innovative software.
''What other computer can you sit down to,'' he says, referring to the
''Digital Librarian'' feature of the NeXT machine, ''and blast through the
complete works of William Shakespeare in just a couple of seconds?''
Although it looks like a personal computer, the NeXT machine is much more
powerful than any PC on the market. It has the capabilities of computers known
as workstations, previously used mostly by engineers and scientists. Like most
workstations, it employs Unix, an aging but powerful basic software system. But
at $10,000 it costs much less than most workstations of comparable power.
Business has traditionally eschewed the Unix system, and it still accounts
for just 9 percent of the computer market today. But, thanks in part to NeXT,
Unix is expected to more than double its share in the next five years. Jobs has
encased its complexities in a new variation of the software, a ''user shell''
that will make it, he says, ''usable by mere mortals.'' Called NeXTStep, the
software employs a Tinker Toy approach that allows novices as well as experts
to combine pre-existing sections of instructions, or ''objects,'' to create the
programs they need - an innovative technique known in the industry as
''object-oriented programming.''
What may be most revolutionary about NeXT, however, is not its technology
but the fact that it is the first computer to be sold primarily on the strength
of mystique.
Critics and champions alike - and Jobs has plenty of each - agree that he
has always been at his best as a salesman and evangelist for the computer.
Joanna Hoffman, who worked with Jobs at Apple and at NeXT, says, ''In some
ways, Steve gets philosophical the way the Greeks did. He always wants the
best. He has these esthetic notions of perfect shapes and perfect sounds. It is
almost Platonic.''
Jobs's obsession with detail, with appearance, is part of his legend. When a
small imperfection showed up on the first samples of the computer's cases, he
flew to Chicago
to work with the die maker. At NeXT's automated factory in Fremont, Calif.,
he had the machines repeatedly repainted to achieve the uniform gray he wanted.
Colleagues may use words like Platonic to describe his esthetic but for Jobs
the technology is ''neat'' and ''whizzy'' - as opposed to ''bozo'' and
brain-damaged. He has never claimed to be an in- (Continued on Page 52) ventor
- creating computers, he has said, is a ''collective art.'' It was his partner
Steve Wozniak who worked wonders to pack performance into the few chips of the
Apple II. Steve Jobs was the front man.
''This is still a business of personalities,'' says Esther Dyson, a
respected observer of the computer world. ''Perceptions are important, but
there has to be some fundamental value underneath.''
Dyson compares Jobs's efforts to achieve credibility for NeXT to that of the
party host who gets one prestigious guest to come by promising the presence of
another. ''It is a confidence game in the old sense of the word 'confidence,'
'' she says.
''Steve's an impresario,'' says Jeffrey S. Young, whose ''Steve Jobs: The
Journey Is the Reward'' was recently reissued in paperback. ''He goes out and
finds new technologies like they were rock'n'roll bands.''
T HESE DAYS STEVE JOBS wears suits as dark and elegantly designed as his new
computer. When I first met him, at Apple seven years ago, he had on a worn
tweed sports coat, jeans and hiking boots. His talk was full of the cosmic
significance of his ''insanely great'' computers. ''At Apple,'' he said then,
''we want to make computers that will change the world. We want to put a ding
in the universe.''
Computers were still ungainly machines with banks of flashing lights; Jobs's
ambition was the personal computer, small machines for home or office use. It
was an ambition born of the 60's counterculture. Jobs had sampled LSD, traveled
to India
and found a guru, lived on a communal fruit farm and studied Zen before he
founded Apple.
Computer buffs routinely refer to Jobs as a ''folk hero.'' Hollywood has optioned a film about his life.
But he also has a reputation as a difficult and sometimes egotistical boss.
Apple employees nicknamed him ''the reality distortion principle.'' He made
obstacles look like challenges, but he also made foolhardiness look like
courage. He would dismiss a new idea and then come back a week later
championing it as his own, now repackaged as ''this neat idea I had.'' He
consistently overestimated demand for the Macintosh - once by more than 90
percent - and just as consistently convinced his team he was right.
Jobs's management failures were compounded by design failures: the Macintosh
was not compatible with other computers, nor could it be used with hard disks
or letter-quality printers. Jobs vetoed a hard-disk drive for the Macintosh
because it offended his sense of esthetics: the fan necessary to cool the disk
drive made too much noise. Letter-quality printers he perceived as old-fashioned,
when compared to the laser printers Apple had in the works.
This uncompromising vision, defiant and dramatic, served Apple well when the
personal-computer industry was young, but as PCs became more common the need
for communication between different machines became vital. Alan C. Kay, the
computer scientist who developed many of the technologies on which the
Macintosh and NeXT are based, once described the Macintosh, with its clean
lines and crisp screen, as a model of Jobs's mind: ''If you look at it from the
front, it's fantastic. If you look at it from the back, it stinks. Steve
doesn't think systems at all . . . about connectivity, about the ability to
link up to a larger world.''
By the end of 1984, Apple was in decline, its stock price depressed. In the
second quarter of 1985, for the first time in its existence, Apple declared a
(Continued on Page 56) loss. At the same time, Sculley pushed Jobs out. Many
think he saved Apple -and the Macintosh - from Jobs. It was only after Sculley
ordered the Mac's memory increased, a second disk drive added and the machine
''opened up'' to additional equipment that it began to enjoy its major success.
After he was ousted, Jobs spent a summer traveling and thinking disconnectedly
about what he would do next. By September, he had formulated a comeback
strategy. The two biggest customers for computers are businesses and schools.
I.B.M. and I.B.M.-compatible equipment dominated the former, but Apple was
pre-eminent in the educa-ational market. Jobs knew that he was still regarded
as a prophet on campus. OVER A LONG LUNCH AT A PALO Alto coffee shop with the
Stanford professor Paul Berg, a Nobel laureate and DNA expert, Jobs began to
understand the need for more powerful, less expensive and easier-to-use
computers to do genetic research and other scientific projects. Picking Berg's
brain gave Jobs something like a rallying cry: he would give every student the
theoretical equivalent of a DNA wetlab, put a model of a linear accelerator on
every desk; he would deliver the power of a workstation in a PC.
That summer, Jobs began selling his Apple stock, which was worth more than
$100 million. He hired half-a-dozen key employees from the Macintosh team -
provoking a time-consuming lawsuit by Apple - and invested $7 million in his
new company.
Long before Jobs tackled the engineering problems of his new computer, he
was at work on esthetic ones. Characteristically, he decided to design his
company's logo before anything else.
Four designers gave it a try before Jobs became convinced he had to have the
grand old man of the business, then 72-year-old Paul Rand, who had created the
logos for Westinghouse, ABC television, and, most significantly, for I.B.M.
In the old days, I.B.M. had been the enemy, the symbol of big government,
big business, perhaps even Big Brother. Apple salesmen were given T-shirts
bearing the legend ''Bluebusters,'' for Big Blue, I.B.M.'s nickname in the
industry, taken from its blue logo. Rand said
he had been under contract to I.B.M. for more than three decades and could not
work for Jobs without I.B.M.'s permission. To the surprise of both Jobs and Rand, permission was granted. It was the beginning of a
relationship vital to NeXT.
Rand flew out to Palo Alto,
where Jobs briefed him, sharing his vision of a device in the shape of a cube -
a crisp alternative to the table-top slabs or standing towers that he derided
as ''big, hot boxes.'' Before he left the office, Rand
had the basic idea. It took him just a couple of weeks to bring the logo to
completion.
After dinner at Jobs's sprawling stucco house in Woodside, the hill town
where the Silicon Valley's most successful entrepreneurs live, Rand handed Jobs a book outlining his proposal for the
logo.
The book traced the logic behind the logo's design, suggesting possible
alternatives en route. Rand watched Jobs's
face as he read, his smile growing as each possible logo was suggested page by
page and then discarded in favor of the next. On the last page was Rand's final design - a black cube set at exactly 28
degrees from level, with the company's name broken in half, on two lines. When
Jobs saw it, he was so pleased that stood up and embraced the somewhat startled
Rand.
To Silicon Valley, it seemed like
(Continued on Page 58) classic Jobs: he had just spent $100,000 for a logo for
a product that didn't yet exist.
TO TURN THE LOGO INTO THREE dimensions, Jobs, after several false starts,
turned to an industrial designer he had used at Apple, Hartmut Esslinger, whose
firm, called frogdesign, had designed products for Sony, General Electric and
Kodak. Again Jobs had to get a rival's permission - this time Sculley's -
before hiring the person he wanted; Sculley gave his assent only after
Esslinger made a personal plea. It took the designer a weekend to come up with
the dramatic cube and theatrical monitor.
Meanwhile, the NeXT team was at work making a computer to go into the box.
The work went slowly. Jobs pushed employees almost as hard as he had at
Apple; 90-hour weeks were common. Some of the old behavior resurfaced. When Jobs
first looked at software produced by a British firm called IXI, he dismissed it
out of hand. A few weeks later, NeXT signed a deal with the company. The work
was less chaotic than it had been at Apple, recalls Joanna Hoffman, but the
pressure was the same. He was ''still the same energetic guy: it's him against
the world.''
By the end of 1986, the computer was far from ready. The valley buzzed with
talk that Jobs needed venture capital. Whether or not he was looking for money
- Jobs denies it - money found him.
In February 1987, after seeing Jobs on a PBS show, ''The Entrepreneurs,''
the Texas
computer innovator H. Ross Perot invested $20 million in NeXT, for which he
received ownership of 16.7 percent of the company and a seat on its board of
directors. Important as the money was to NeXT, Perot's involvement was most
significant as a symbolic connection to an older, mainstream tradition of
American entrepreneurship. And he was a great defender of Steve Jobs, whom he
compared to Thomas Edison and Henry Ford. At around the same time, both
Stanford and the Carnegie
Mellon University
put in smaller amounts.
Even so, NeXT did not introduce the product in the spring of 1987, as it had
planned, nor the following fall, when the company went on record as saying that
the machine would be introduced by the end of the 1987-88 academic year. In
June 1988, the introduction was delayed again.
The price of the machine was simultaneously creeping up, from the $3,000
Jobs had originally announced, before the machine was designed, to, finally,
$10,000. As the date of its arrival kept slipping, the ''window of
opportunity'' before NeXT's competitors would field rival machines was closing.
The jokes began: the name NeXT should be changed to Eventually. Someone at
Apple created a button bearing a mock version of the logo. It read: NeVER.
ALTHOUGH VARIOUS ACCOUNTS have him angry and embarrassed at the delay, Jobs
insists he never worried. ''We knew that something magical was happening,'' he
says, ''and it was just a matter of wrestling it to the ground.''
The secrecy continued, and it guided the marketing as well as the
engineering. NeXT created an advisory board - ultimately consisting of 24
professionals involved with the computer programs at their institutions - who
made suggestions for the machine's features. Working under promises of
nondisclosure, the members traveled periodically to Palo Alto, shrouded in an air of mystery. To
their curious colleagues, they could say nothing.
Then, in the spring of l988, I.B.M. called. After getting permission to use
Paul Rand, Jobs had had no other contact with I.B.M. In June 1987, he met John
F. Akers, I.B.M.'s chief executive, at a social occasion - the 70th birthday
party for the Washington Post owner Katharine Graham. Malcolm Forbes made the
introduction.
The meeting paved the way for a call, some months later, from one of Akers's
deputies, proposing a cooperative venture between the two companies. I.B.M.
needed the kind of software system for its workstations that Jobs was
developing for NeXT. The NeXTStep interface, which aims to make creating
software as easy as the Macintosh made using it, will give NeXT something none
of its competitors have: do-it-yourself programming for the amateur. In one
early demonstration, a physics professor took just a few hours to create a map
of changes in the earth's magnetic field over millions of years.
When I.B.M. called to discuss licensing the NeXTStep software, Jobs had not
completely lost his suspicion of Big Blue. There would be no deal, he told I.B.M.
executives in Armonk, N.Y., unless it was quick and simple.
I.B.M.'s understanding of quick and simple was a 125-page contract, delivered
by an executive to Palo Alto
a few days later. Jobs dropped it on the table without reading it. ''You didn't
get it,'' he said, and walked out of the room.
Within hours, a senior I.B.M. executive was on the phone. ''You write the
contract and send it to us,'' he said. In a few days, a much smaller contract
went to I.B.M. and the deal - for a figure industry analysts estimate at more
than $10 million - was completed.
When Jobs finally presented the NeXT computer, last October, the news
coverage was overwhelmingly favorable. Almost obscured was the fact that the
machines he was showing were prototypes, with a finished product not likely to
be available for months and basic software still incomplete. But perhaps
nothing about the machine was quite as surprising as the announcement of the
I.B.M. deal. For Apple veterans who had followed Jobs to NeXT, it seemed almost
a betrayal. But as one industry analyst commented at the time, ''The I.B.M.
alliance catapults NeXT into a position as an industry leader.''
DESPITE THE BACKING of Perot and now I.B.M., progress on NeXT still went
slowly. By March of this year, only about a thousand test models had been
shipped, with only the basic software they came packaged with.
Sales projections were low - only 10,000 units in 1989, by the most
optimistic independent estimates. (NeXT doesn't make its own projections
public.) This would account for only a few weeks' production in the expensive
robot-run factory Jobs had built in Fremont, where each computer circuit board
was to be assembled ''untouched by human hands,'' in just 20 minutes.
Perhaps more important, programmers could not afford to develop more
sophisticated programs for a computer with this small a distribution. NeXT had
announced that such major software firms as Lotus were working on programs, but
until production reached a certain volume, the work would probably not be a
high priority. The industry was buzzing with questions about where Jobs and
NeXT were going.
Then, in March, Jobs signed an agreement with Businessland, the nation's
largest retailer of personal computers. Businessland would distribute his
machine to the general public. The idea of targeting universities was abruptly
dropped. Businessland's CEO, David A. Norman, promised to take $100 million
worth of NeXT equipment - at wholesale -in the first year and predicted that he
would sell more than that. Experts saw sales of a quarter of a million machines
a year by 1992.
Jobs had one more rabbit to pull out of his hat. In June, he announced that
Canon, the Japanese firm that developed the optical disk in the NeXT computer,
had bought 16.7 percent of the company, giving Canon the same share as Perot
owned, for $100 million. The Canon connection meant financing for development
of a second-generation machine, gave NeXT a Japanese distributor and, once
again, provided a crucial boost to the company's credibility. If the value of
the shares Canon bought is used as a yardstick, NeXT is theoretically worth
$600 million. The $12 million Jobs has contributed to the company over the
years is now worth $300 million.
IN THE END, DESPITE the succession of deals, Steve Jobs is relying on the
sheer elegance and drama of the NeXT computer to make it a success.
''This machine,'' says one analyst, ''is for the executive who has to have
the prettiest secretary and the fastest car.'' NeXT has been called ''the BMW''
of computers, and in fact Jobs has hired BMW's advertising firm.
So sharp is NeXT's resolution that even hardened and skeptical observers of
the computer industry were taken with the stunning, sharp images, designed to a
high level of sophistication. The ''icons,'' symbols for programs and
functions, are animated cartoons, not just silhouettes, like the international
road signs in earlier graphical interfaces. The symbol for deleting a file is a
''black hole,'' a swirling whirlpool shape and cosmic witticism.
But there are dissenting voices. NeXT is not a breakthrough but simply a
packaging of technologies, some say. Bill Gates of Microsoft, the most
important figure in the world of software, who before the I.B.M. deal had
called NeXT the most beautiful computer he had ever seen, emerged to blast it.
It was nothing innovative -merely an assemblage of off-the-shelf technology.
Gates has his own ax to grind: sales of Microsoft's software for I.B.M.
machines could suffer if I.B.M. aggressively supports NeXTStep. Gates also
doubted that NeXT would ever become commercially viable. Many others agree with
Gates's assessments.
It is not a criticism that bothers Jobs.
''We spent a lot of time rummaging through laboratories,'' Jobs
acknowledges. They were looking for the best new technologies. The sum of the
parts, Jobs's defenders say, is greater than the whole. Even though he wishes
Jobs has gone further technologically, Alan Kay asserts that ''the NeXT machine
will push others to innovate.'' Whether NeXT succeeds or fails in establishing
itself as a practical industry standard like the I.B.M.-PC or Apple Macintosh,
it has already become a standard of excellance - an esthetic model to aspire
to.
FOR NOW, NeXT IS STILL A small player in a world of big ones. If it weren't
for Jobs's reputation, one industry analyst says, NeXT would be just another
start-up company. I.B.M., Digital Equipment and others are introducing new
machines that, like NeXT, bridge the gap between PCs and workstations. Sun
Microsystems has nicknamed its new Sparcstation computer a ''NeXT killer.''
The question, says Jonathan W. Seybold, publisher of a leading newsletter on
desktop publishing, is whether NeXT can grow into a billion-dollar company
without the crises even the best-run start-ups in Silicon
Valley have faced. ''So far,'' says Seybold, ''I've been impressed
with the way they listen, and the quality of the decision making.''
Now that the creation of Jobs's new machine is finished, he will be managing
instead of developing, and that is where he got into trouble at Apple. NeXT
machines at last are in retail stores, where people can see and touch them. And
Steve Jobs, having made his connections, will now have to get along with his
allies. He will have to depend on others to create the programs to fill his
black box. NeXT is now able to boast that some 80 firms are writing programs
for the machine. ''Emotionally, programmers wanted to develop for NeXT,'' says
Seybold. The Businessland deal, he says, gave them ''rational justification.''
When Alan Kay looks at the NeXT box, he sees something new about Jobs. It
is, he says, a machine that reflects not just Steve Jobs but ''a whole team
behind him,'' and an ability to connect with other computers. Says Kay: ''Steve
has finally discovered networking.''
By contrast to the Macintosh, a look at the back of the NeXT computer shows
all sorts of connectors, neatly arranged. They represent what may be Jobs's
solution to resolving his conflicting needs: an esthetic of connections.
