The Pirates Abandon ShipUpon his return from Europe in August 1985, while he was casting about for what to do next, Jobs called the Stanford biochemist Paul Berg to discuss the advances that were being made in gene splicing and recombinant DNA. Berg
described how difficult it was to do experiments in a biology lab, where it could take weeks to nurture an experiment and get a result. “Why don’t you simulate them on a computer?” Jobs asked. Berg replied that computers with such capacities were too expensive for university labs. “Suddenly, he was
excited about the possibilities,” Berg recalled. “He had it in his mind to start a new company. He was young and rich, and had to find something to do with the rest of his life.”
Jobs had already been canvassing academics to ask what their workstation needs were. It was something he had been interested in since 1983, when he had visited the computer science department at Brown to show off the
Macintosh, only to be told that it would take a far more powerful machine to do anything useful in a university lab. The dream of academic researchers was to have a workstation that was both powerful and personal. As head of the
Macintosh division, Jobs had launched a project to build such a machine, which was dubbed the Big Mac. It would have a UNIX operating system but with the friendly Macintosh interface. But after Jobs was ousted from the
Macintosh division, his replacement, Jean-Louis Gassée, canceled the Big Mac.
When that happened, Jobs got a distressed call from Rich Page, who had been engineering the Big Mac’s chip set. It was the latest in a series of
conversations that Jobs was having with disgruntled Apple employees urging him to start a new company and rescue them. Plans to do so began to jell over Labor Day weekend, when Jobs spoke to Bud Tribble, the original Macintosh
software chief, and floated the idea of starting a company to build a powerful but personal workstation. He also enlisted two other Macintosh division employees who had been talking about leaving,
That left one key vacancy on the team: a person who could market the new product to universities. The obvious candidate was Dan’l Lewin, who at Apple had organized a consortium of universities to buy Macintosh computers in bulk. Besides missing two letters in his first name, Lewin had the chiseled
good looks of Clark Kent and a Princetonian’s polish. He and Jobs shared a bond: Lewin had written a Princeton thesis on Bob Dylan and charismatic leadership, and Jobs knew something about both of those topics.
and the controller
As would become his standard practice, Jobs offered to provide “exclusive” interviews to anointed publications in return for their promising to put the story on the cover. This time he went one “exclusive” too far, though it didn’t
really hurt. He agreed to a request from Business Week’s Katie Hafner for exclusive access to him before the launch, but he also made a similar deal with Newsweek and then with Fortune. What he didn’t consider was that one
of Fortune’s top editors, Susan Fraker, was married to Newsweek’s editor Maynard Parker. At the Fortune story conference, when they were talking excitedly about their exclusive, Fraker mentioned that she happened to know
that Newsweek had also been promised an exclusive, and it would be coming out a few days before Fortune. So Jobs ended up that week on only two magazine covers. Newsweek used the cover line “Mr. Chips” and showed him
leaning on a beautiful NeXT, which it proclaimed to be “the most exciting machine in years.” Business Week showed him looking angelic in a dark suit, fingertips pressed together like a preacher or professor. But Hafner pointedly
reported on the manipulation that surrounded her exclusive. “NeXT carefully parceled out interviews with its staff and suppliers, monitoring them with a censor’s eye,” she wrote. “That strategy worked, but at a price: Such
maneuvering—self-serving and relentless—displayed the side of Steve Jobs that so hurt him at Apple. The trait that most stands out is Jobs’s need to control events.”
When the hype died down, the reaction to the NeXT computer was muted, especially since it was not yet commercially available. Bill Joy, the brilliant and wry chief scientist at rival Sun Microsystems, called it “the first Yuppie
workstation,” which was not an unalloyed compliment. Bill Gates, as might be expected, continued to be publicly dismissive. “Frankly, I’m disappointed,” he told the Wall Street Journal. “Back in 1981, we were truly excited by the
Macintosh when Steve showed it to us, because when you put it side-by-side with another computer, it was unlike anything anybody had ever seen before.” The NeXT machine was not like that. “In the grand scope of things,
most of these features are truly trivial.” He said that Microsoft would continue its plans not to write software for the NeXT. Right after the announcement event, Gates wrote a parody email to his staff. “All reality has
been completely suspended,” it began. Looking back at it, Gates laughs that it may have been “the best email I ever wrote.”
When the NeXT computer finally went on sale in mid-1989, the factory was primed to churn out ten thousand units a month. As it turned out, sales were about four hundred a month. The beautiful factory robots, so nicely
mostly idle, and
NeXT continued to
All of the good cheer served to sugarcoat, or distract attention from, the bad news. When it came time to announce the price of the new machine, Jobs did what he would often do in product demonstrations: reel off the features,
describe them as being “worth thousands and thousands of dollars,” and get the audience to imagine how expensive it really should be. Then he announced what he hoped would seem like a low price: “We’re going to be
charging higher education a single price of $6,500.” From the faithful, there was scattered applause. But his panel of academic advisors had long pushed to keep the price to between $2,000 and $3,000, and they thought that Jobs
had promised to do so. Some of them were appalled. This was especially true once they discovered that the optional printer would cost another $2,000, and the slowness of the optical disk would make the purchase of a $2,500 external hard disk advisable.
There was another disappointment that he tried to downplay: “Early next year, we will have our 0.9 release, which is for software developers and aggressive end users.” There was a bit of nervous laughter. What he was
saying was that the real release of the machine and its software, known as the 1.0 release, would not actually be happening in early 1989. In fact he didn’t set a hard date. He merely suggested it would be sometime in the second
quarter of that year. At the first NeXT retreat back in late 1985, he had refused to budge, despite Joanna Hoffman’s pushback, from his commitment to have the machine finished in early 1987. Now it was clear it would be more than two years later.qinpad
The event ended on a more upbeat note, literally. Jobs brought onstage a violinist from the San Francisco Symphony who played Bach’s A Minor Violin Concerto in a duet with the NeXT computer onstage. People erupted in
jubilant applause. The price and the delayed release were forgotten in the frenzy. When one reporter asked him immediately afterward why the machine was qinpad
going to be so late, Jobs
replied, “It’s not late.
It’s five years ahead
of its time.”
One of Jobs’s management philosophies was that it is crucial, every now and then, to roll the dice and “bet the company” on some new idea or technology. At the NeXT launch, he boasted of an example that, as it turned out, would
not be a wise gamble: having a high-capacity (but slow) optical read/write disk and no floppy disk as a backup. “Two years ago we made a decision,” he said. “We saw some new technology and we made a decision to risk our company.”
Then he turned to a feature that would prove more prescient. “What we’ve done is made the first real digital books,” he said, noting the inclusion of the Oxford edition of Shakespeare and other tomes. “There has not been an
advancement in the state of the art of printed book technology since Gutenberg.”
At times he could be amusingly aware of his own foibles, and he used the electronic book demonstration to poke fun at himself. “A word that’s sometimes used to describe me is ‘mercurial,’” he said, then paused. The
audience laughed knowingly, especially those in the front rows, which were filled with NeXT employees and former members of the Macintosh team. Then he pulled up the word in the computer’s dictionary and read the first
definition: “Of or relating to, or born under the planet Mercury.” Scrolling down, he said, “I think the third one is the one they mean: ‘Characterized by unpredictable changeableness of mood.’” There was a bit more laughter. “If
we scroll down the thesaurus, though, we see that the antonym is ‘saturnine.’ Well what’s that? By simply double-clicking on it, we immediately look that up in the dictionary, and here it is: ‘Cold and steady in moods. Slow to act or
change. Of a gloomy or surly disposition.’” A little smile came across his face as he waited for the ripple of laughter. “Well,” he concluded, “I don’t think ‘mercurial’ is so bad after all.” After the applause, he used the quotations book shlf419
to make a more subtle point, about his reality distortion field. The quote he chose was from Lewis Carroll’s Through the Looking Glass. After Alice laments that no matter how hard she tries she can’t believe impossible things,
the White Queen retorts, “Why, sometimes I’ve believed as many as six impossible things beforeshlf419
from the front rows,
there was a roar
of knowing laughter.
But Gates was brutal to Jobs, just as Jobs could be to others. “This machine is crap,” he said. “The optical disk has too low latency, the fucking case is too expensive. This thing is ridiculous.” He decided then, and reaffirmed on each
subsequent visit, that it made no sense for Microsoft to divert resources from other projects to develop applications for NeXT. Worse yet, he repeatedly
said so publicly, which made others less likely to spend time developing for NeXT. “Develop for it? I’ll piss on it,” he told InfoWorld.
When they happened to meet in the hallway at a conference, Jobs started berating Gates for his refusal to do software for NeXT. “When you get a market, I will consider it,” Gates replied. Jobs got angry. “It was a screaming
battle, right in front of everybody,” recalled Adele Goldberg, the Xerox PARC engineer. Jobs insisted that NeXT was the next wave of computing. Gates, as he often did, got more expressionless as Jobs got more heated. He finally just shook his head and walked away.
Beneath their personal rivalry—and occasional grudging respect—was their basic philosophical difference. Jobs believed in an end-to-end integration of hardware and software, which led him to build a machine that was not
compatible with others. Gates believed in, and profited from, a world in which different companies made machines that were compatible with one another; their hardware ran a standard operating system (Microsoft’s Windows) and
could all use the same software apps (such as Microsoft’s Word and Excel). “His product comes with an interesting feature called incompatibility,” Gates told the Washington Post. “It doesn’t run any of the existing software. It’s a super-nice computer. I don’t think if I
went out to design
computer I would have
done as well as he did.”
At a forum in Cambridge, Massachusetts, in 1989, Jobs and Gates appeared sequentially, laying out their competing worldviews. Jobs spoke about how new waves come along in the computer industry every few years. Macintosh
had launched a revolutionary new approach with the graphical interface; now NeXT was doing it with object-oriented programming tied to a powerful new machine based on an optical disk. Every major software vendor realized they
had to be part of this new wave, he said, “except Microsoft.” When Gates came up, he reiterated his belief that Jobs’s end-to-end control of the software and the hardware was destined for failure, just as Apple had failed in competing against the Microsoft Windows standard. “The hardware market and the
software market are separate,” he said. When asked about the great design that could come from Jobs’s approach, Gates gestured to the NeXT prototype that was still sitting onstage and sneered, “If you want black, I’ll get you a can of paint.”
Jobs came up with a brilliant jujitsu maneuver against Gates, one that could have changed the balance of power in the computer industry forever. It required Jobs to do two things that were against his nature: licensing out his
software to another hardware maker and getting into bed with IBM. He had a pragmatic streak, albeit a tiny one, so he was able to overcome his reluctance. But his heart was never fully in it, which is why the alliance would turn out to be short-lived.
It began at a party, a truly memorable one, for the seventieth birthday of the Washington Post publisher Katharine Graham in June 1987 in Washington. Six hundred guests attended, including President Ronald Reagan. Jobs flew in
from California and IBM’s chairman John Akers from New York. It was the first time they had met. Jobs took the opportunity to bad-mouth Microsoft and attempt to wean IBM from using its Windows operating system. “I couldn’t resist telling him I thought IBM was taking a giant gamble betting its entire software strategy on
Microsoft, because I didn’
t think its software
was very good,”
To Jobs’s delight, Akers replied, “How would you like to help us?” Within a few weeks Jobs showed up at IBM’s Armonk, New York, headquarters with his software engineer Bud Tribble. They put on a demo of NeXT, which impressed
the IBM engineers. Of particular significance was NeXTSTEP, the machine’s object-oriented operating system. “NeXTSTEP took care of a lot of trivial
That was too much for Jobs, at least for the time being. He cut off the clone discussions. And he began to cool toward IBM. The chill became reciprocal. When
the person who made the deal at IBM moved on, Jobs went to Armonk to meet his replacement, Jim Cannavino. They cleared the room and talked
one-on-one. Jobs demanded more money to keep the relationship going and to license newer versions of NeXTSTEP to IBM. Cannavino made no commitments,
and he subsequently stopped returning Jobs’s phone calls. The deal lapsed. NeXT got a bit of money for a licensing fee, but it never got the chance to change the world.
programming chores that slow down the software development process,” said Andrew Heller, the general manager of
IBM’s workstation unit, who was so impressed by Jobs that he named his newborn son Steve.
The negotiations lasted into 1988, with Jobs becoming prickly over tiny details. He would stalk out of meetings over
disagreements about colors or design, only to be calmed down by Tribble or Lewin. He didn’t seem to know
which frightened him more, IBM or Microsoft. In April Perot decided to play host for a mediating session at his Dallas
headquarters, and a deal was struck: IBM would license the current version of the NeXTSTEP software, and if the
managers liked it, they would use it on some of their workstations. IBM sent to Palo Alto a 125-page contract. Jobs tossed it down without reading it. “You
don’t get it,” he said as he walked out of the room. He demanded a simpler contract of only a few pages, which he got within a week.
Jobs wanted to keep the arrangement secret from Bill Gates until the big unveiling of the NeXT computer, scheduled for October. But IBM insisted on
being forthcoming. Gates was furious. He realized this could wean IBM off its dependence on Microsoft operating systems. “NeXTSTEP isn’t compatible with anything,” he raged to IBM executives.
At first Jobs seemed to have pulled off Gates’s worst nightmare. Other computer makers that were beholden to Microsoft’s
operating systems, most notably Compaq and Dell, came to ask Jobs for the right to clone NeXT and license NeXTSTEP. There were even
offers to pay a lot more
if NeXT would get
out of the hardware
No detail was too small. Jobs went over the invitation list and even the lunch menu (mineral water, croissants, cream cheese, bean sprouts). He picked out a video projection company and paid it $60,000 for help. And he hired the
postmodernist theater producer George Coates to stage the show. Coates and Jobs decided, not surprisingly, on an austere and radically simple stage look. The unveiling of the black perfect cube would occur on a starkly minimalist
stage setting with a black background, a table covered by a black cloth, a black veil draped over the computer, and a simple vase of flowers. Because
neither the hardware nor the operating system was actually ready, Jobs was urged to do a simulation. But he refused. Knowing it would be like walking a tightrope without a net, he decided to do the demonstration live.
them on television, he said, “I was finishing their sentences for them.” It was a line eerily similar to one Sculley had often used. Perot called Jobs the next day and offered, “If you ever need an investor, call me.”
Jobs did indeed need one, badly. But he was careful not to show it. He waited a week before calling back. Perot sent some of his analysts to size up NeXT, but Jobs took care to deal directly with Perot. One of his great regrets in life,
Perot later said, was that he had not bought Microsoft, or a large stake in it, when a very young Bill Gates had come to visit him in Dallas in 1979. By the time Perot called Jobs, Microsoft had just gone public with a $1 billion
valuation. Perot had missed out on the opportunity to make a lot of money and have a fun adventure. He was eager not to make that mistake again.
Jobs made an offer to Perot that was three times more costly than had quietly been offered to venture capitalists a few months earlier. For $20 million,
Perot would get 16% of the equity in the company, after Jobs put in another $5 million. That meant the company would be valued at about $126 million. But money was not a major consideration for Perot. After a meeting with
Jobs, he declared that he was in. “I pick the jockeys, and the jockeys pick the horses and ride them,
” he told Jobs. “
You guys are the
ones I’m betting on,
so you figure it out.”
Jobs wanted to bundle useful content with the machine, so Michael Hawley, one of the engineers, developed a digital dictionary. He learned that a friend of his at Oxford University Press had been involved in the typesetting of a new edition of Shakespeare’s works. That meant that there was probably a
computer tape he could get his hands on and, if so, incorporate it into the NeXT’s memory. “So I called up Steve, and he said that would be awesome, and we flew over to Oxford together.” On a beautiful spring day in 1986, they met in the publishing house’s grand building in the heart of
Joe Nocera, then writing for Esquire, captured Jobs’s intensity at a NeXT staff meeting:
It’s not quite right to say that he is sitting through this staff meeting, because Jobs doesn’t sit through much of anything; one of the ways he dominates is through sheer movement. One moment he’s kneeling in his chair; the next
minute he’s slouching in it; the next he has leaped out of his chair entirely and is scribbling on the blackboard directly behind him. He is full of mannerisms. He bites his nails. He stares with unnerving earnestness at whoever is
speaking. His hands, which are slightly and inexplicably yellow, are in constant motion.
What particularly struck Nocera was Jobs’s “almost willful lack of tact.” It was more than just an inability to hide his opinions when others said something he thought dumb; it was a conscious readiness, even a perverse eagerness, to put
people down, humiliate them, show he was smarter. When Dan’l Lewin handed out an organization chart, for example, Jobs rolled his eyes. “These charts are bullshit,” he interjected. Yet his moods still swung wildly, as at Apple. A finance person came into the meeting and Jobs lavished praise on him for a
“really, really great job on this”;
the previous day
Jobs had told him,
“This deal is crap.”
He also insisted on building his own fully automated and futuristic factory, just as he had for the Macintosh; he had not been chastened by that experience. This time too he made the same mistakes, only more excessively. Machines and robots were painted and repainted as he compulsively revised
his color scheme. The walls were museum white, as they had been at the Macintosh factory, and there were $20,000 black leather chairs and a custom-made staircase, just as in the corporate headquarters. He insisted
that the machinery on the 165-foot assembly line be configured to move the circuit boards from right to left as they got built, so that the process would look better to visitors who watched from the viewing gallery. Empty circuit
boards were fed in at one end and twenty minutes later, untouched by humans, came out the other end as completed boards. The process followed the Japanese principle known as kanban, in which each machine performs its task only when the next machine is ready to receive another part.
that the NeXT machine “not use an operating system compatible with the Macintosh,” though it could be argued that Apple would have been better served by insisting on just the opposite.
After the settlement Jobs continued to court Esslinger until the designer decided to wind down his contract with Apple. That allowed frogdesign to work with NeXT at the end of 1986. Esslinger insisted on having free rein, just
as Paul Rand had. “Sometimes you have to use a big stick with Steve,” he said. Like Rand, Esslinger was an artist, so Jobs was willing to grant him indulgences he denied other mortals.
Jobs decreed that the computer should be an absolutely perfect cube, with each side exactly a foot long and every angle precisely 90 degrees. He liked cubes. They had gravitas but also the slight whiff of a toy. But the NeXT cube was a Jobsian example of design desires trumping engineering
considerations. The circuit boards, which fitted nicely into the traditional pizza-box shape, had to be reconfigured and stacked in order to nestle into a cube.
Even worse, the perfection of the cube made it hard to manufacture. Most parts that are cast in molds have angles that are slightly greater than pure 90 degrees, so that it’s easier to get them out of the mold (just as it is easier to get a cake out of a pan that has angles slightly greater than 90 degrees). But
Esslinger dictated, and Jobs enthusiastically agreed, that there would be no such “draft angles” that would ruin the purity and perfection of the cube. So the sides had to be produced separately, using molds that cost $650,000, at a
specialty machine shop in Chicago. Jobs’s passion for perfection was out of control. When he noticed a tiny line in the chassis caused by the molds, something that any other computer maker would accept as unavoidable, he
flew to Chicago and convinced the die caster to start over and do it perfectly. “Not a lot of die casters expect a celebrity to fly in,” noted one of the engineers. Jobs also had the company buy a $150,000 sanding machine to remove all lines where the mold faces met and insisted that the
magnesium case be a matte
black, which made
it more susceptible
to showing blemishes.