THE REALITY DISTORTION FIELD 4 page

cushions on the floor rather than sofas and chairs. Sculley smiled and mistakenly thought that it

was similar to his own “frantic and Spartan life in a cluttered New York City apartment” early in

his own career.

Jobs confided in Sculley that he believed he would die young, and therefore he needed to

accomplish things quickly so that he would make his mark on Silicon Valley history. “We all have

a short period of time on this earth,” he told the Sculleys as they sat around the table that morning.

“We probably only have the opportunity to do a few things really great and do them well. None of

us has any idea how long we’re going to be here, nor do I, but my feeling is I’ve got to accomplish

a lot of these things while I’m young.”

Jobs and Sculley would talk dozens of times a day in the early

months of their relationship. “Steve and I became soul mates, near constant companions,”

Sculley said. “We tended to speak in half sentences and phrases.” Jobs flattered Sculley. When he

dropped by to hash something out, he would say something like “You’re the only one who will

understand.” They would tell each other repeatedly, indeed so often that it should have been

worrying, how happy they were to be with each other and working in tandem. And at every

opportunity Sculley would find similarities with Jobs and point them out:

We could complete each other’s sentences because we were on the same wavelength. Steve would rouse

me from sleep at 2 a.m. with a phone call to chat about an idea that suddenly crossed his mind. “Hi! It’s

me,” he’d harmlessly say to the dazed listener, totally unaware of the time. I curiously had done the

same in my Pepsi days. Steve would rip apart a presentation he had to give the next morning, throwing

out slides and text. So had I as I struggled to turn public speaking into an important management tool

during my early days at Pepsi. As a young executive, I was always impatient to get things done and

often felt I could do them better myself. So did Steve. Sometimes I felt as if I was watching Steve

playing me in a movie. The similarities were uncanny, and they were behind the amazing symbiosis we

developed.

This was self-delusion, and it was a recipe for disaster. Jobs began to sense it early on. “We had

different ways of looking at the world, different views on people, different values,” Jobs recalled.

“I began to realize this a few months after he arrived. He didn’t learn things very quickly, and the

people he wanted to promote were usually bozos.”

Yet Jobs knew that he could manipulate Sculley by encouraging his belief that they were so

alike. And the more he manipulated Sculley, the more contemptuous of him he became. Canny

observers in the Mac group, such as Joanna Hoffman, soon realized what was happening and

knew that it would make the inevitable breakup more explosive. “Steve made Sculley feel like he

was exceptional,” she said. “Sculley had never felt that. Sculley became infatuated, because Steve

projected on him a whole bunch of attributes that he didn’t really have. When it became clear that

Sculley didn’t match all of these projections, Steve’s distortion of reality had created an explosive

situation.”

The ardor eventually began to cool on Sculley’s side as well. Part of his weakness in trying to

manage a dysfunctional company was his desire to please other people, one of many traits that he

did not share with Jobs. He was a polite person; this caused him to recoil at Jobs’s rudeness to

their fellow workers. “We would go to the Mac building at eleven at night,” he recalled, “and they

would bring him code to show. In some cases he wouldn’t even look at it. He would just take it

and throw it back at them. I’d say, ‘How can you turn it down?’ And he would say, ‘I know they

can do better.’” Sculley tried to coach him. “You’ve got to learn to hold things back,” he told him

at one point. Jobs would agree, but it was not in his nature to filter his feelings through a gauze.

Sculley began to believe that Jobs’s mercurial personality and erratic treatment of people were

rooted deep in his psychological makeup, perhaps the reflection of a mild bipolarity. There were

big mood swings; sometimes he would be ecstatic, at other times he was depressed. At times he

would launch into brutal tirades without warning, and Sculley would have to calm him down.

“Twenty minutes later, I would get another call and be told to come over because Steve is losing it

again,” he said.

Their first substantive disagreement was over how to price the Macintosh. It had been

conceived as a $1,000 machine, but Jobs’s design changes had pushed up the cost so that the plan

was to sell it at $1,995. However, when Jobs and Sculley began making plans for a huge launch

and marketing push, Sculley decided that they needed to charge $500 more. To him, the marketing

costs were like any other production cost and needed to be factored into the price. Jobs resisted,

furiously. “It will destroy everything we stand for,” he said. “I want to make this a revolution, not

an effort to squeeze out profits.” Sculley said it was a simple choice: He could have the $1,995

price or he could have the marketing budget for a big launch, but not both.

“You’re not going to like this,” Jobs told Hertzfeld and the other engineers, “but Sculley is

insisting that we charge $2,495 for the Mac instead of $1,995.” Indeed the engineers were

horrified. Hertzfeld pointed out that they were designing the Mac for people like themselves, and

overpricing it would be a “betrayal” of what they stood for.

So Jobs promised them, “Don’t worry, I’m not going to let him get away with it!” But in the

end, Sculley prevailed. Even twenty-five years later Jobs seethed when recalling the decision: “It’s

the main reason the Macintosh sales slowed and Microsoft got to dominate the market.” The

decision made him feel that he was losing control of his product and company, and this was as

dangerous as making a tiger feel cornered.

CHAPTER FIFTEEN

THE LAUNCH

A Dent in the Universe

The “1984” ad

Real Artists Ship

The high point of the October 1983 Apple sales conference in Hawaii was a skit based on a TV

show called The Dating Game. Jobs played emcee, and his three contestants, whom he had

convinced to fly to Hawaii, were Bill Gates and two other software executives, Mitch Kapor and

Fred Gibbons. As the show’s jingly theme song played, the three took their stools. Gates, looking

like a high school sophomore, got wild applause from the 750 Apple salesmen when he said,

“During 1984, Microsoft expects to get half of its revenues from software for the Macintosh.”

Jobs, clean-shaven and bouncy, gave a toothy smile and asked if he thought that the Macintosh’s

new operating system would become one of the industry’s new standards. Gates answered, “To

create a new standard takes not just making something that’s a little bit different, it takes

something that’s really new and captures people’s imagination. And the Macintosh, of all the

machines I’ve ever seen, is the only one that meets that standard.”

But even as Gates was speaking, Microsoft was edging away from being primarily a

collaborator with Apple to being more of a competitor. It would continue to make application

software, like Microsoft Word, for Apple, but a rapidly increasing share of its revenue would

come from the operating system it had written for the IBM personal computer. The year before,

279,000 Apple IIs were sold, compared to 240,000 IBM PCs and its clones. But the figures for

1983 were coming in starkly different: 420,000 Apple IIs versus 1.3 million IBMs and its clones.

And both the Apple III and the Lisa were dead in the water.

Just when the Apple sales force was arriving in Hawaii, this shift was hammered home on the

cover of Business Week. Its headline: “Personal Computers: And the Winner Is . . . IBM.” The

story inside detailed the rise of the IBM PC. “The battle for market supremacy is already over,”

the magazine declared. “In a stunning blitz, IBM has taken more than 26% of the market in two

years, and is expected to account for half the world market by 1985. An additional 25% of the

market will be turning out IBM-compatible machines.”

That put all the more pressure on the Macintosh, due out in January 1984, three months away,

to save the day against IBM. At the sales conference Jobs decided to play the showdown to the

hilt. He took the stage and chronicled all the missteps made by IBM since 1958, and then in

ominous tones described how it was now trying to take over the market for personal computers:

“Will Big Blue dominate the entire computer industry? The entire information age? Was George

Orwell right about 1984?” At that moment a screen came down from the ceiling and showed a

preview of an upcoming sixty-second television ad for the Macintosh. In a few months it was

destined to make

advertising history, but in the meantime it served its purpose of rallying Apple’s demoralized

sales force. Jobs had always been able to draw energy by imagining himself as a rebel pitted

against the forces of darkness. Now he was able to energize his troops with the same vision.

There was one more hurdle: Hertzfeld and the other wizards had to finish writing the code for

the Macintosh. It was due to start shipping on Monday, January 16. One week before that, the

engineers concluded they could not make that deadline.

Jobs was at the Grand Hyatt in Manhattan, preparing for the press previews, so a Sunday

morning conference call was scheduled. 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.”

“Well, we’ve got to finish it,” Steve Capps said. And so they did. Once again, Jobs’s reality

distortion field pushed them to do what they had thought impossible. On Friday Randy Wigginton

brought in a huge bag of chocolate-covered espresso beans for the final three all-nighters. When

Jobs arrived at work at 8:30 a.m. that Monday, he found Hertzfeld sprawled nearly comatose on

the couch. They talked for a few minutes about a remaining tiny glitch, and Jobs decreed that it

wasn’t a problem. Hertzfeld dragged himself to his blue Volkswagen Rabbit (license plate:

MACWIZ) and drove home to bed. A short while later Apple’s Fremont factory began to roll out

boxes emblazoned with the colorful line drawings of the Macintosh. Real artists ship, Jobs had

declared, and now the Macintosh team had.

The “1984” Ad

In the spring of 1983, when Jobs had begun to plan for the Macintosh launch, he asked for a

commercial that was as revolutionary and astonishing as the product they had created. “I want

something that will stop people in their tracks,” he said. “I want a thunderclap.” The task fell to

the Chiat/Day advertising agency, which had acquired the Apple account when it bought the

advertising side of Regis McKenna’s business. The person put in charge was a lanky beach bum

with a bushy beard, wild hair, goofy grin, and twinkling eyes named Lee Clow, who was the

creative director of the agency’s office in the Venice Beach section of Los Angeles. Clow was

savvy and fun, in a laid-back yet focused way, and he forged a bond with Jobs that would last

three decades.

Clow and two of his team, the copywriter Steve Hayden and the art director Brent Thomas, had

been toying with a tagline that played off the George Orwell novel: “Why 1984 won’t be like

1984.” Jobs loved it, and asked them to develop it for the Macintosh launch. So they put together a

storyboard for a sixty-second ad that would look like a scene from a sci-fi movie. It featured a

rebellious young woman outrunning the Orwellian thought police and throwing a sledgehammer

into a screen showing a mind-controlling speech by Big Brother.

The concept captured the zeitgeist of the personal computer revolution. Many young people,

especially those in the counterculture, had viewed computers as instruments that could be used by

Orwellian governments and giant corporations to sap individuality. But by the end of the 1970s,

they were also being seen as potential tools for personal empowerment. The ad cast Macintosh as

a warrior for the latter cause—a cool, rebellious, and heroic company that was the only thing

standing in the way of the big evil corporation’s plan for world domination and total mind control.

Jobs liked that. Indeed the concept for the ad had a special resonance for him. He fancied

himself a rebel, and he liked to associate himself with the values of the ragtag band of hackers and

pirates he recruited to the Macintosh group. Even though he had left the apple commune in

Oregon to start the Apple corporation, he still wanted to be viewed as a denizen of the

counterculture rather than the corporate culture.

But he also realized, deep inside, that he had increasingly abandoned the hacker spirit. Some

might even accuse him of selling out. When Wozniak held true to the Homebrew ethic by sharing

his design for the Apple I for free, it was Jobs who insisted that they sell the boards instead. He

was also the one who, despite Wozniak’s reluctance, wanted to turn Apple into a corporation and

not freely distribute stock options to the friends who had been in the garage with them. Now he

was about to launch the Macintosh, a machine that violated many of the principles of the hacker’s

code: It was overpriced; it would have no slots, which meant that hobbyists could not plug in their

own expansion cards or jack into the motherboard to add their own new functions; and it took

special tools just to open the plastic case. It was a closed and controlled system, like something

designed by Big Brother rather than by a hacker.

So the “1984” ad was a way of reaffirming, to himself and to the world, his desired self-image.

The heroine, with a drawing of a Macintosh emblazoned on her pure white tank top, was a

renegade out to foil the establishment. By hiring Ridley Scott, fresh off the success of Blade

Runner, as the director, Jobs could attach himself and Apple to the cyberpunk ethos of the time.

With the ad, Apple could identify itself with the rebels and hackers who thought differently, and

Jobs could reclaim his right to identify with them as well.

Sculley was initially skeptical when he saw the storyboards, but Jobs insisted that they needed

something revolutionary. He was able to get an unprecedented budget of $750,000 just to film the

ad, which they planned to premiere during the Super Bowl. Ridley Scott made it in London using

dozens of real skinheads among the enthralled masses listening to Big Brother on the screen. A

female discus thrower was chosen to play the heroine. Using a cold industrial setting dominated

by metallic gray hues, Scott evoked the dystopian aura of Blade Runner. Just at the moment when

Big Brother announces “We shall prevail!” the heroine’s hammer smashes the screen and it

vaporizes in a flash of light and smoke.

When Jobs previewed the ad for the Apple sales force at the meeting in Hawaii, they were

thrilled. So he screened it for the board at its December 1983 meeting. When the lights came back

on in the boardroom, everyone was mute. Philip Schlein, the CEO of Macy’s California, had his

head on the table. Mike Markkula stared silently; at first it seemed he was overwhelmed by the

power of the ad. Then he spoke: “Who wants to move to find a new agency?” Sculley recalled,

“Most of them thought it was the worst commercial they had ever seen.” Sculley himself got cold

feet. He asked Chiat/Day to sell off the two commercial spots—one sixty seconds, the other

thirty—that they had purchased.

Jobs was beside himself. One evening Wozniak, who had been floating into and out of Apple

for the previous two years, wandered into the Macintosh building. Jobs grabbed him and said,

“Come over here and look at this.” He pulled out a VCR and played the ad. “I was astounded,”

Woz recalled. “I thought it was the most incredible thing.” When Jobs said the board had decided

not to run it during the Super Bowl, Wozniak asked what the cost of the time slot was. Jobs told

him $800,000. With his usual impulsive goodness, Wozniak immediately offered, “Well, I’ll pay

half if you will.”

He ended up not needing to. The agency was able to sell off the thirty-second time slot, but in

an act of passive defiance it didn’t sell the longer one. “We told them that we couldn’t sell the

sixty-second slot, though in truth we didn’t try,” recalled Lee Clow. Sculley, perhaps to avoid a

showdown with either the board or Jobs, decided to let Bill Campbell, the head of marketing,

figure out what to do. Campbell, a former football coach, decided to throw the long bomb. “I think

we ought to go for it,” he told his team.

Early in the third quarter of Super Bowl XVIII, the dominant Raiders scored a touchdown

against the Redskins and, instead of an instant replay, television screens across the nation went

black for an ominous two full seconds. Then an eerie black-and-white image of drones marching

to spooky music began to fill the screen. More than ninety-six million people watched an ad that

was unlike any they’d seen before. At its end, as the drones watched in horror the vaporizing of

Big Brother, an announcer calmly intoned, “On January 24th,

Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like ‘1984.’”

It was a sensation. That evening all three networks and fifty local stations aired news stories

about the ad, giving it a viral life unprecedented in the pre–YouTube era. It would eventually be

selected by both TV Guide and Advertising Age as the greatest commercial of all time.

Publicity Blast

Over the years Steve Jobs would become the grand master of product launches. In the case of the

Macintosh, the astonishing Ridley Scott ad was just one of the ingredients. Another part of the

recipe was media coverage. Jobs found ways to ignite blasts of publicity that were so powerful the

frenzy would feed on itself, like a chain reaction. It was a phenomenon that he would be able to

replicate whenever there was a big product launch, from the Macintosh in 1984 to the iPad in

2010. Like a conjurer, he could pull the trick off over and over again, even after journalists had

seen it happen a dozen times and knew how it was done. Some of the moves he had learned from

Regis McKenna, who was a pro at cultivating and stroking prideful reporters. But Jobs had his

own intuitive sense of how to stoke the excitement, manipulate the competitive instincts of

journalists, and trade exclusive access for lavish treatment.

In December 1983 he took his elfin engineering wizards, Andy Hertzfeld and Burrell Smith, to

New York to visit Newsweek to pitch a story on “the kids who created the Mac.” After giving a

demo of the Macintosh, they were taken upstairs to meet Katharine Graham, the legendary

proprietor, who had an insatiable interest in whatever was new. Afterward the magazine sent its

technology columnist and a photographer to spend time in Palo Alto with Hertzfeld and Smith.

The result was a flattering and smart four-page profile of the two of them, with pictures that made

them look like cherubim of a new age. The article quoted Smith saying what he wanted to do next:

“I want to build the computer of the 90’s. Only I want to do it tomorrow.” The article also

described the mix of volatility and charisma displayed by his boss: “Jobs sometimes defends his

ideas with highly vocal displays of temper that aren’t always bluster; rumor has it that he has

threatened to fire employees for insisting that his computers should have cursor keys, a feature

that Jobs considers obsolete. But when he is on his best behavior, Jobs is a curious blend of charm

and impatience, oscillating between shrewd reserve and his favorite expression of enthusiasm:

‘Insanely great.’”

The technology writer Steven Levy, who was then working for Rolling Stone, came to

interview Jobs, who urged him to convince the magazine’s publisher to put the Macintosh team on

the cover of the magazine. “The chances of Jann Wenner agreeing to displace Sting in favor of a

bunch of computer nerds were approximately one in a googolplex,” Levy thought, correctly. Jobs

took Levy to a pizza joint and pressed the case: Rolling Stone was “on the ropes, running crummy

articles, looking desperately for new topics and new audiences. The Mac could be its salvation!”

Levy pushed back. Rolling Stone was actually good, he said, and he asked Jobs if he had read it

recently. Jobs said that he had, an article about MTV that was “a piece of shit.” Levy replied that

he had written that article. Jobs, to his credit, didn’t back away from the assessment. Instead he

turned philosophical as he talked about the Macintosh. We are constantly benefiting from

advances that went before us and taking things that people before us developed, he said. “It’s a

wonderful, ecstatic feeling to create something that puts it back in the pool of human experience

and knowledge.”

Levy’s story didn’t make it to the cover. But in the future, every major product launch that Jobs

was involved in—at NeXT, at Pixar, and years later when he returned to Apple—would end up on

the cover of either Time, Newsweek, or Business Week.

January 24, 1984

On the morning that he and his teammates completed the software for the Macintosh, Andy

Hertzfeld had gone home exhausted and expected to stay in bed for at least a day. But that

afternoon, after only six hours of sleep, he drove back to the office. He wanted to check in to see if

there had been any problems, and most of his colleagues had done the same. They were lounging

around, dazed but excited, when Jobs walked in. “Hey, pick yourselves up off the floor, you’re not

done yet!” he announced. “We need a demo for the intro!” His plan was to dramatically unveil the

Macintosh in front of a large audience and have it show off some of its features to the inspirational

theme from Chariots of Fire. “It needs to be done by the weekend, to be ready for the rehearsals,”

he added. They all groaned, Hertzfeld recalled, “but as we talked we realized that it would be fun

to cook up something impressive.”

The launch event was scheduled for the Apple annual stockholders’ meeting on January 24—

eight days away—at the Flint Auditorium of De Anza Community College. The television ad and

the frenzy of press preview stories were the first two components in what would become the Steve

Jobs playbook for making the introduction of a new product seem like an epochal moment in

world history. The third component was the public unveiling of the product itself, amid fanfare

and flourishes, in front of an audience of adoring faithful mixed with journalists who were primed

to be swept up in the excitement.

Hertzfeld pulled off the remarkable feat of writing a music player in two days so that the

computer could play the Chariots of Fire theme. But when Jobs heard it, he judged it lousy, so

they decided to use a recording instead. At the same time, Jobs was thrilled with a speech

generator that turned text into spoken words with a charming electronic accent, and he decided to

make it part of the demo. “I want the Macintosh to be the first computer to introduce itself!” he

insisted.

At the rehearsal the night before the launch, nothing was working well. Jobs hated the way the

animation scrolled across the Macintosh screen, and he kept ordering tweaks. He also was

dissatisfied with the stage lighting, and he directed Sculley to move from seat to seat to give his

opinion as various adjustments were made. Sculley had never thought much about variations of

stage lighting and gave the type of tentative answers a patient might give an eye doctor when

asked which lens made the letters clearer. The rehearsals and changes went on for five hours, well

into the night. “He was driving people insane, getting

mad at the stagehands for every glitch in the presentation,” Sculley recalled. “I thought there

was no way we were going to get it done for the show the next morning.”

Most of all, Jobs fretted about his presentation. Sculley fancied himself a good writer, so he

suggested changes in Jobs’s script. Jobs recalled being slightly annoyed, but their relationship was

still in the phase when he was lathering on flattery and stroking Sculley’s ego. “I think of you just

like Woz and Markkula,” he told Sculley. “You’re like one of the founders of the company. They

founded the company, but you and I are founding the future.” Sculley lapped it up.

The next morning the 2,600-seat auditorium was mobbed. Jobs arrived in a double-breasted

blue blazer, a starched white shirt, and a pale green bow tie. “This is the most important moment

in my entire life,” he told Sculley as they waited backstage for the program to begin. “I’m really

nervous. You’re probably the only person who knows how I feel about this.” Sculley grasped his

hand, held it for a moment, and whispered “Good luck.”

As chairman of the company, Jobs went onstage first to start the shareholders’ meeting. He did

so with his own form of an invocation. “I’d like to open the meeting,” he said, “with a twenty-year

-old poem by Dylan—that’s Bob Dylan.” He broke into a little smile, then looked down to read

from the second verse of “The Times They Are a-Changin’.” His voice was high-pitched as he

raced through the ten lines, ending with “For the loser now / Will be later to win / For the times

they are a-changin’.” That song was the anthem that kept the multimillionaire board chairman in

touch with his counterculture self-image. He had a bootleg copy of his favorite version, which was

from the live concert Dylan performed, with Joan Baez, on Halloween 1964 at Lincoln Center’s

Philharmonic Hall.

Sculley came onstage to report on the company’s earnings, and the audience started to become

restless as he droned on. Finally, he ended with a personal note. “The most important thing that

has happened to me in the last nine months at Apple has been a chance to develop a friendship

with Steve Jobs,” he said. “For me, the rapport we have developed means an awful lot.”

The lights dimmed as Jobs reappeared onstage and launched into a

dramatic version of the battle cry he had delivered at the Hawaii sales conference. “It is 1958,”

he began. “IBM passes up a chance to buy a young fledgling company that has invented a new

technology called xerography. Two years later, Xerox was born, and IBM has been kicking

themselves ever since.” The crowd laughed. Hertzfeld had heard versions of the speech both in

Hawaii and elsewhere, but he was struck by how this time it was pulsing with more passion. After

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