Inside Steve's Brain (2 page)

Wozniak was the hardware genius, the chip-head engineer, but Jobs understood the whole package. Thanks to Jobs’s ideas about design and advertising, the Apple II became the first successful mass-market computer for ordinary consumers—and turned Apple into the Microsoft of the early eighties. Bored, Jobs moved on to the Mac, the first commercial implementation of the revolutionary graphical user interface developed in computer research labs. Jobs didn’t invent the graphical user interface that is used on almost every computer today, including millions of Bill Gates’s Windows machines, but he brought it to the masses. This has been Jobs’s stated goal from the very beginning: to create easy-to-use technology for the widest possible audience.

In 1985, Jobs was effectively kicked out of Apple for being unproductive and uncontrollable. After a failed power struggle with then-CEO John Sculley, Jobs quit before he could be fired. With dreams of revenge, he founded NeXT with the purpose of selling advanced computers to schools and putting Apple out of business. He also picked up a struggling computer graphics company for $10 million from
Star Wars
director George Lucas, who needed cash for a divorce. Renamed Pixar, Jobs propped up the struggling company for a decade with $60 million of his own money, only to see it eventually produce a string of blockbusters and turn into Hollywood’s premiere animation studio.

NeXT, on the other hand, never took off. In eight years it sold only 50,000 computers and had to exit the hardware business, concentrating on selling software to niche customers like the CIA. This is where Jobs could have disappeared from public life. With NeXT failing, Jobs might have written his memoirs or become a venture capitalist like many before him. But in hindsight, NeXT was a stunning success. NeXT’s software was the impetus for Jobs’s return to Apple, and it became the foundation of several key Apple technologies, especially Apple’s highly regarded and influential Mac OS X.

Jobs’s return to the company in 1996—the first time he set foot on the Cupertino campus in eleven years—has turned out to be the greatest comeback in business history. “Apple is engaged in probably the most remarkable second act ever seen in technology,” Eric Schmidt, Google’s chief executive, told
Time
magazine. “Its resurgence is simply phenomenal and extremely impressive.”
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Jobs has made one savvy move after another. The iPod is a smash and the iPhone looks like one, too. Even the Mac, once written off as an expensive toy for a niche audience, is staging a roaring comeback. The Mac, like Apple itself, is now thoroughly mainstream. In ten years Jobs has hardly made a single misstep, except one big one: he overlooked Napster and the digital music revolution in 2000. When customers wanted CD burners, Apple was making iMacs with DVD drives and promoting them as video editing machines. “I felt like a dope,” he told
Fortune
magazine.
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Of course, it’s not all been savvy planning. Jobs has been lucky. Early one morning in 2004, a scan revealed a cancerous tumor on his pancreas: a death sentence. Pancreatic cancer is a sure and quick killer. “My doctor advised me to go home and get my affairs in order, which is doctor’s code for prepare to die,” Jobs said. “It means to try to tell your kids everything you thought you’d have the next ten years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.” But later that evening, a biopsy revealed that the tumor was an extremely rare form of cancer that is treatable with surgery. Jobs had the operation.
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Now in his early fifties, Jobs lives quietly, privately, with his wife and four kids in a large, unostentatious house in suburban Palo Alto. A Buddhist and a pescadarian (a vegetarian who eats fish), he often walks barefoot to the local Whole Foods for fruit or a smoothie. He works a lot, taking the occasional vacation in Hawaii. He draws $1 in salary from Apple but is getting rich (and ever richer) from share options—the same options that almost got him into trouble with the SEC—and he flies in a personal $90 million Gulfstream V jet granted to him by Apple’s board.

These days, Jobs is in the zone. Apple is firing on all cylinders, but its business model is thirty years out of date. Apple is an anomaly in an industry that long ago standardized on Microsoft. Apple should have gone to the big swap meet in the sky, like Osborne, Amiga, and a hundred other early computer companies that stuck to their own proprietary technology. But for the first time in a couple of decades, Apple is in a position to become a big, powerful, commercial presence— opening up new markets that are potentially much bigger than the computer industry it pioneered in the 1970s. There’s a new frontier in technology: digital entertainment and communication.

The workplace was long ago revolutionized by computers, and Microsoft owns it. There’s no way Apple is going to wrest control. But the home is a different matter. Entertainment and communication are going digital. People are communicating by cell phone, instant message, and e-mail, while music and movies are increasingly delivered online. Jobs is in a good position to sweep up. All the traits, all the instincts that made him a bad fit for the business world are perfect for the world of consumer devices. The obsession with industrial design, the mastery of advertising, and insistence on crafting seamless user experiences are key when selling high-tech to the masses.

Apple has become the perfect vehicle to realize Jobs’s long-held dreams: developing easy-to-use technology for individuals. He’s made—and remade—Apple in his own image. “Apple is Steve Jobs wth ten thousand lives,” Guy Kawasaki, Apple’s former chief evangelist, told me.
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Few corporations are such close mirror images of their founders. “Apple had always reflected the best and worst of Steve’s character,” said Gil Amelio, the CEO that Jobs replaced. “[Former CEOs] John Sculley, Michael Spindler, and I kept the place going but did not significantly alter the identity of the company. Though I have a lot to be angry about in my relationship with Steve Jobs, I recognize that much about the Apple I loved is tuned to his personality.”
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Jobs runs Apple with a unique blend of uncompromising artistry and superb business chops. He’s more of an artist than a businessman, but has the brilliant ability to capitalize on his creations. In some ways he’s like Edwin Land, the scientist-industrialist who invented the Polaroid instant camera. Land is one of Jobs’s heroes. Land made business decisions based on what was right as a scientist and as a supporter of civil and feminist rights, rather than a hardheaded businessman. Jobs also has in himself a bit of Henry Ford, another hero. Ford was a technology democratizer whose mass-production techniques brought automobiles to the masses. There’s a streak of a modern-day Medici, a patron of the arts whose sponsorship of Jonathan Ive has ushered in a Renaissance for industrial design.

Jobs has taken his interests and personality traits—obsessiveness, narcissism, perfectionism—and turned them into the hallmarks of his career.

He’s an elitist who thinks most people are bozos. But he makes gadgets so easy to use that a bozo can master them.

He’s a mercurial obsessive with a filthy temper who has forged a string of productive partnerships with creative, world-class collaborators: Steve Wozniak, Jonathan Ive, and Pixar director John Lasseter.

He’s a cultural elitist who makes animated movies for kids; an aesthete and anti-materialist who pumps mass-market products out of Asian factories. He promotes them with an unrivaled mastery of the crassest medium, advertising.

He’s an autocrat who has remade a big, dysfunctional corporation into a tight, disciplined ship that executes on his demanding product schedules.

Jobs has used his natural gifts and talents to remake Apple. He has fused high technology with design, branding, and fashion. Apple is less like a nerdy computer company than a brand-driven multinational like Nike or Sony: a unique blend of technology, design, and marketing.

His desire to craft complete customer experiences ensures Apple controls the hardware, the software, online services, and everything else. But it produces products that work seamlessly together and infrequently break down (even Microsoft, the epitome of the opposite approach, the open licensing model, is adopting the same modus operandi when selling Xbox game consoles and Zune music players to consumers).

Jobs’s charm and charisma produce the best product introductions in the industry, a unique blend of theater and infomercial. His magnetic personality has also enabled him to negotiate superb contracts with Disney, the record labels, and AT&T—no pussycats when it comes to making deals. Disney gave him total creative freedom and a huge cut of profits at Pixar. The music labels helped turn the iTunes music store from an experiment into a threat. And AT&T signed up for the iPhone without even laying eyes on a prototype.

But where some see control freakery, others see a desire to craft a seamless, end-to-end user experience. Instead of perfectionism, there’s the pursuit of excellence. And instead of screaming abuse, there’s the passion to make a dent in the universe.

Here’s someone who has turned his personality traits into a business philosophy.

Here’s how he does it.

“I’m looking for a fixer-upper with a solid foundation. Am willing to tear down walls, build bridges, and light fires. I have great experience, lots of energy, a bit of that ‘vision thing’ and I’m not afraid to start from the beginning.”

One bright July morning in 1997, Steve Jobs returned to the company he had cofounded twenty years before in his bedroom.

Apple was in a death spiral. The company was six months from bankruptcy. In just a couple of years, Apple had declined from one of the biggest computer companies in the world to an also-ran. It was bleeding cash and market share. No one was buying its computers, the stock was in the toilet, and the press was predicting its imminent passing.

Apple’s top staff were summoned to an early-morning meeting at company HQ. In shuffled the then-current CEO, Gilbert Amelio, who’d been in charge for about eighteen months. He had patched up the company but had failed to re-ignite its inventive soul. “It’s time for me to go,” he said, and quietly left the room. Before anyone could react, Steve Jobs entered the room, looking like a bum. He was wearing shorts and sneakers and several days’ worth of stubble. He plonked himself into a chair and slowly started to spin. “Tell me what’s wrong with this place,” he said. Before anyone could reply, he burst out: “It’s the products. The products SUCK! There’s no sex in them anymore.”
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Apple’s fall was quick and dramatic. In 1994, Apple commanded nearly 10 percent of the worldwide multibillion-dollar market for personal computers. It was the second biggest computer manufacturer in the world after the giant IBM.
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In 1995, Apple shipped the most computers it had ever sold—4.7 million Macs worldwide—but it wanted more. It wanted to be like Microsoft. It licensed the Macintosh operating system to several computer makers, including Power Computing, Motorola, Umax, and others. Apple’s management reasoned that these “clone” machines would grow the overall Mac market. But it didn’t work. The Mac market remained relatively flat, and the clone makers simply took sales away from Apple.

In the first quarter of 1996, Apple reported a loss of $69 million and laid off 1,300 staff. In February, the board fired CEO Michael Spindler and appointed in his place Gil Amelio, a veteran of the chip industry with a reputation as a turnaround artist. But in the eighteen months that Amelio was on the job, he proved ineffectual and unpopular. Apple lost $1.6 billion, its market share plummeted from 10 percent to 3 percent, and the stock collapsed. Amelio laid off thousands of workers, but he was raking in about $7 million in salary and benefits, and was sitting on $26 million in stock, according to the
New York Times
. He lavishly refurbished Apple’s executive offices and, it was soon revealed, negotiated a golden parachute worth about $7 million. The
New York Times
called Amelio’s Apple a "kleptocracy.”
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But Amelio did several things right. He canceled a raft of money-losing projects and products, and trimmed the company to stem the losses. Most important, he bought Jobs’s company, NeXT, hoping that its modern and robust operating system could replace the Macintosh operating system, which was becoming very creaky and old.

The NeXT purchase came about by accident. Amelio was interested in buying the BeOS, a fledgling operating system built by a former Apple executive, Jean Louis Gassée. But while they were haggling, Garret L. Rice, a NeXT salesman, called Apple out of the blue, suggesting they take a look. Apple’s engineers hadn’t even considered NeXT.

His interest piqued, Amelio asked Jobs to pitch the NeXT operating system.

In December 1996, Jobs gave Amelio an impressive demonstration of NeXT. Unlike the BeOS, NeXT was finished. Jobs had customers, developers, and hardware partners. NeXT also had a full suite of advanced and very highly regarded programming tools, which made it very easy for other companies to write software for it. “His people had spent a lot of time thinking about key issues like networking and the world of the internet—much more so than anything else around. Better than anything Apple had done, better than NT, and potentially better than what Sun had,” Amelio wrote.
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During negotiations, Jobs was very low key. He didn’t oversell. It was “a refreshingly honest approach, especially for Steve Jobs,” Amelio said.
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“I was relieved he wasn’t coming on like a high-speed train. There were places in the presentation to think and question and discuss.”