Return to the Little Kingdom (30 page)

Scott had similarly unsentimental ideas about both production and finance. He had a strong dislike for automated manufacturing and expensive test machinery. He was also determined that outsiders should help pay for Apple’s growth and that they should suffer the discomforts of swings in business. His ideas about the growth of the company were the equivalent of Wozniak’s ideas about the chips in a computer. Both were talking about productivity. Scott wanted to design a company that did the most amount of work with the least number of workers. “Our business,” he said, “was designing, educating, and marketing. I thought that Apple should do the least amount of work that it could and that it should let everyone else grow faster. Let the subcontractors have the problems.” Scott had an undying commitment to letting outside manufacturers make anything that Apple couldn’t produce more cheaply. He also felt that a fast-growing business had no time to master some of the rudimentary skills needed to produce reliable components. It was easier, for example, to expand the quality tests for printed circuit boards stuffed by outside suppliers than to contemplate expanding the work force and mastering all the techniques needed for production of decent boards.

So for help with board stuffing Scott relied partly on Hildy Licht, a Los Altos mother and the wife of one of Wozniak’s acquaintances from the Homebrew Club. Licht operated a cottage industry. Parts were delivered to her home and she distributed them to hand-picked assemblers scattered around the neighborhood, tested the finished work, and returned it to Apple in the back of her brown Plymouth station wagon. She was flexible, could make revisions on boards, and offered overnight service. Scott also turned for help to a larger company that specialized in turning out larger quantities of printed circuit boards. Both were the sort of services designed to relieve small companies of time-consuming chores.

Scott also kept a close eye on Apple’s cashbox. He arranged for Bank of America to provide a payroll system to relieve Apple of the chores of withholding tax, deducting Social Security payments, and issuing paychecks. Along with Gary Martin, who acted as his fiscal fist, Scott monitored the most expensive components like the 16K memory chips. The pair arranged to buy the chips on forty-five days’ credit and the keyboards on sixty days’ credit. Meanwhile, they tried to collect money from customers within thirty days of all sales. Martin paid close attention. “My job was to collect money from customers before we paid our vendors. We kept our customers on a very short leash.” Martin, who had once worked for a freight company that went bankrupt after turning its accounts receivables from fact to fiction, also tended to veer toward the conservative. His natural impulses and the need to give Apple a respectable seal helped him select auditors from one of the country’s largest accounting firms. Like other accountants in Silicon Valley, the people from Arthur Young offered a discount on the cost of their first year’s work. Apple and its accountants also took full advantage of Uncle Sam. By deciding to end Apple’s first fiscal year on September 30, 1977, they effectively received a fifteen-month interest-free loan from the government for the tax owed in the final calendar quarter, which was always the consumer industry’s largest quarter.

Wigginton watched Apple’s president at work and decided “Scott’s motto was let’s make some money. Let’s get something out the door.” Scott didn’t mind getting his hands dirty. He would happily muck about in the manufacturing area helping pack computers into shipping cases. After the computers were packed, he often took them in the back of his car to the local UPS office. When cassettes had to be duplicated, Scott operated the tape recorders. Whenever production outran orders, Scott stacked piles of printed circuit boards behind Markkula’s desk to make his point.

When it became clear that Jobs’s plan to ship a polished manual with the computers would cause a long delay, Scott started to assemble his own. All along he had favored distributing plain data sheets, so Apple’s first manual contained listings of codes and instructions for hooking up the computer. It was copied by a duplicating service in a local shopping mall. The instructions were then slipped between report covers purchased at McWhirter’s stationery store in Cupertino and packed with the computer. Some months later Scott cobbled together a slightly more elaborate manual which Sherry Livingston typed. Wozniak recalled, “We just decided to include as much as we could because we didn’t have much.” Devotees who couldn’t find the answer in either manual and made inquiries were sent a bulky package of routines and listings known as The Wozpack, which sprang from Wozniak’s insistence that the sort of information he had been sent when he investigated minicomputers should be available to Apple owners. The rush to ship was evident in the opaque explanation that accompanied a demonstration
Star Trek
program. It contained the single line of instruction cOO. FFR. LOAD. RUN.

 

Gradually, as 1977 progressed, a sense of community began to develop. It was certainly helped by the fear that acted as a strong social glue when, five months after the formal introduction of the Apple II, the business came close to folding. The subcontractor who had turned out unsatisfactory cases for the West Coast Computer Faire continued to do so. Part of the fault lay with Jobs’s decision to rely on soft tooling, but most of the trouble was caused by the men who manufactured the cases and who were, in Holt’s acerbic view, “a bunch of plumbers.” The lids continued to sag and the lid from one case wouldn’t fit another. The paint refused to stick.

In September 1977 the main tooling broke, and customers who had placed orders were beginning to get impatient. Apple was within inches of earning a reputation for being unable to meet its commitments. Dozens of printed circuit boards started to pile up, suppliers demanded normal payment, and Apple’s thin cushion of cash was running low. Without tools Apple would have been stuck without any revenue for about three months. There were a few rumors that Apple would close and Holt even delayed hiring Cliff and Dick Huston, a fraternal combination of engineer and programmer, until he was certain that Apple would be able to issue paychecks. “It was life and death for us,” Scott recalled. “We’d have had a good product and not been able to ship it.” Jobs scurried off to a Tempress firm in the Pacific Northwest that specialized in producing molds for clients like Hewlett-Packard. He explained Apple’s predicament to Bob Reutimann, a Tempress vice-president, who recalled, “I thought to myself ‘Does he know what the heck he’s doing?’ I was a little afraid of going ahead with the project. I thought, ‘Here comes another guy with big ideas.’” Jobs’s exuberance paid off as did his offer of a bonus of $1,000 for every week that the new mold was brought in ahead of schedule. The new tooling was delivered toward the end of 1977.

As Apple’s founders and managers made fumbles and learned to sense each other’s weaknesses, they gradually built a mutual trust. The trust was derived from a sense of their colleagues’ frailties as much as from their complementary strengths. Markkula’s early sales forecasts were quickly shown to be pessimistic, but it also became clear that he wouldn’t scuttle back into retirement. Jobs’s choice of technique for the manufacture of the case, Wozniak’s unwillingness to finish a design, Scott’s refusal to fret about aesthetics, and Holt’s habit of nitpicking all revealed private weaknesses.

The mixture of pedigrees came to the fore in discussions over important details like the system used for numbering parts in engineering. They all had their own ideas for a system which, if poorly designed, could cause horrible complications. Scott observed, “When you’re working on big topics which you don’t know all the answers to, it’s easy to switch to something else really teeny that everyone can get their teeth into.” Jobs, for example, dreamed up his own phonetic system in which an item like a 632 Phillips head screw would be labeled “PH 632.” It was a charming notion but didn’t have the flexibility to cope with oddities like different lengths and distinctions between black-oxide, nylon, and stainless-steel screws.

Jerry Mannock, the case designer, suggested adopting a system like the one used at Hewlett-Packard. Somebody else wanted to copy Atari’s procedures. Others wanted parts to be numbered from the outside of the computer toward the inside. A few considered it more natural to work from the inside toward the outside. Finally Holt wrote a five-page paper detailing a formula based on seven digits which divided parts into categories like nuts, washers, and custom semiconductors. It became the object of religious attachment. “If there wasn’t an engineering print and a specification associated with a part number, then it wasn’t an engineering part number. Then they could go to hell.”

They began to tolerate quirks and idiosyncrasies and solved some of the small pieces of mechanical confusion. After telephone callers kept asking for Mike—not making clear whether they wanted to speak to Markkula or Scott—the former kept his name while the latter became known as Scotty. When a cranky line printer broke down they all knew who guarded the jar of Vaseline that was used to grease the roller. They all learned to endure Holt’s chain-smoking and Bill Fernandez’s piping bird whistles and occasional departures for Bahai holidays. They worked around Jobs’s temperamental car and his complaints that Apple’s first Christmas party couldn’t be catered with vegetarian food. Scott was also delighted to learn about Jobs’s personal cure for relieving fatigue: massaging his feet in the flush of a toilet bowl.

 

The fishbowl existence brought immediate gratification. Most of the employees tended to hear or see what was going on. When somebody strolled in off Stevens Creek Boulevard and counted out $1,200 for a new computer, Apple’s teenagers could scarcely believe their eyes. Sherry Livingston felt that it was like “a big octopus. Everybody did a bit of everything. I didn’t feel as though there were presidents and vice-presidents. I felt as though we were all peers.” Workdays often started before 8 A.M. and lasted until late into the evening, with breaks for sandwiches. Many of the two dozen or so employees worked part, or all, of weekends. Gary Martin, for example, dropped by over the weekends to sift through the mail for checks. Don Bruener, who helped troubleshoot the printed circuit boards, enjoyed the unpredictable nature of the work. “Each day there was something different to do. Since everything was new there were no real routines.” When a demonstration program was completed or some quirk in the computer had been pinned down, the entire entourage would inspect the progress. Wigginton recalled, “There would be a big brouhaha and everybody would get excited.” Scott, who took special delight in the absence of a formal bureaucracy, explained, “There was no time for paperwork. We were so busy running just trying to keep up.” Apple’s anonymity also tended to strengthen ties and provoked blushes for the likes of Don Bruener. “I told my friends I worked at this little company called Apple and they laughed.”

There were also the amusing peculiarities of regular visitors. One of the most frequent callers was John Draper who had emerged from a minimum-security prison in Lompoc, California, after being convicted for phone phreaking. At Apple he soon arrived at a casual arrangement with Wozniak to design a printed circuit board that could be plugged into one of the slots of the Apple and turn the computer into a grand, automatic telephone dialer. It was nicknamed The Charlie Board, was capable of producing dial tones, and could be left overnight to scan banks of toll-free telephone numbers and match them with customer code numbers. The codes could then be used to charge calls. The results of these laborious tests were typed out on a printer. Wozniak thought “it would have been one of the great products of all time” and programmed an Apple to remorselessly dial a friend’s house. Though Wozniak helped modify the design, Markkula, Scott, and Jobs didn’t want anything to do with Draper who concluded, “They were chickenshit and paranoid about having me on the premises.” There was good reason. Draper took an Apple and a plug-in board to Pennsylvania and was arrested. He eventually pleaded guilty to stealing over $50,000 worth of telephone calls and was jailed again.

The utilitarian setting formed a backdrop for a business that filled some emotional need for many of the employees. For the teenagers, the computer held the main allure. Wigginton, who spent most of his time working on software with Wozniak, kept the nocturnal hours of a youthful engineer. He worked between 3 A.M. and 7 A.M., disappeared for school and a sleep, and returned to Apple late in the evening. “My parents weren’t super-crazy about it but they were starting to split up. Apple definitely replaced my family.” When he graduated from high school a year early, in June 1977, almost the entire company took the afternoon off to attend his graduation and present him with a fifty-dollar gift voucher.

Chris Espinosa, meanwhile, started to cut Homestead classes and graduated with a grade-point average barely adequate for entrance to a decent university. He abandoned his paper-delivery route, which paid one cent a paper, in favor of three-dollar-an-hour part-time work at Apple. After one of his first all-night sessions working on some software with Wozniak, his mother (who herself later joined Apple) forbade him to work for a while. Espinosa soon returned, helping Markkula demonstrate the computer at nearby stores and deciding that when he needed a new pair of spectacles, they would be rimless like Markkula’s.

 

For Wozniak and Jobs, Apple also was a refuge from private turmoil. Wozniak, who was either working on his computer in the office or on another at home, saw little of his wife. The pair went through a couple of trial separations and Wozniak took to sleeping on a couch at the office. Eventually talk of separation turned to talk of a permanent split, and Wozniak, for whom divorce was a miserable blot, found himself unable to work until he resolved some critical matters. “I didn’t want my wife to have stock. I just wanted to buy it out.” He turned for guidance to Markkula, who steered him toward a lawyer who drew up a separation agreement giving Wozniak’s wife of seventeen months 15 percent of his Apple stock. Alice felt ostracized. “Steve was told not to bring me to Mike Markkula’s home in case they discussed company business.”