THE REALITY DISTORTION FIELD 9 page

brilliant; one never knew which way he might go. But with a legendary designer such as Rand, the

chances were that Jobs would embrace the proposal. He stared at the final spread, looked up at

Rand, and then hugged him. They had one minor disagreement: Rand had used a dark yellow for

the “e” in the logo, and Jobs wanted him to change it to a brighter and more traditional yellow.

Rand banged his fist on the table and declared, “I’ve been doing this for fifty years, and I know

what I’m doing.” Jobs relented.

The company had not only a new logo, but a new name. No longer was it Next. It was NeXT.

Others might not have understood the need to obsess over a logo, much less pay $100,000 for one.

But for Jobs it meant that NeXT was starting life with a world-class feel and identity, even if it

hadn’t yet designed its first product. As Markkula had taught him, a great company must be able

to impute its values from the first impression it makes.

As a bonus, Rand agreed to design a personal calling card for Jobs. He came up with a colorful

type treatment, which Jobs liked, but they ended up having a lengthy and heated disagreement

about the placement of the period after the “P” in Steven P. Jobs. Rand had placed the period to

the right of the “P.”, as it would appear if set in lead type.

Steve preferred the period to be nudged to the left, under the curve of the “P.”, as is possible

with digital typography. “It was a fairly large argument about something relatively small,” Susan

Kare recalled. On this one Jobs prevailed.

In order to translate the NeXT logo into the look of real products, Jobs needed an industrial

designer he trusted. He talked to a few possibilities, but none of them impressed him as much as

the wild Bavarian he had imported to Apple: Hartmut Esslinger, whose frogdesign had set up shop

in Silicon Valley and who, thanks to Jobs, had a lucrative contract with Apple. Getting IBM to

permit Paul Rand to do work for NeXT was a small miracle willed into existence by Jobs’s belief

that reality can be distorted. But that was a snap compared to the likelihood that he could convince

Apple to permit Esslinger to work for NeXT.

This did not keep Jobs from trying. At the beginning of November 1985, just five weeks after

Apple filed suit against him, Jobs wrote to Eisenstat and asked for a dispensation. “I spoke with

Hartmut Esslinger this weekend and he suggested I write you a note expressing why I wish to

work with him and frogdesign on the new products for NeXT,” he said. Astonishingly, Jobs’s

argument was that he did not know what Apple had in the works, but Esslinger did. “NeXT has no

knowledge as to the current or future directions of Apple’s product designs, nor do other design

firms we might deal with, so it is possible to inadvertently design similar looking products. It is in

both Apple’s and NeXT’s best interest to rely on Hartmut’s professionalism to make sure this does

not occur.” Eisenstat recalled being flabbergasted by Jobs’s audacity, and he replied curtly. “I

have previously expressed my concern on behalf of Apple that you are engaged in a business

course which involves your utilization of Apple’s confidential business information,” he wrote.

“Your letter does not alleviate my concern in any way. In fact it heightens my concern because it

states that you have ‘no knowledge as to the current or future directions of Apple’s product

designs,’ a statement which is not true.” What made the request all the more astonishing to

Eisenstat was that it was Jobs who, just a year earlier, had forced frogdesign to abandon its work

on Wozniak’s remote control device.

Jobs realized that in order to work with Esslinger (and for a variety of other reasons), it would

be necessary to resolve the lawsuit that

Apple had filed. Fortunately Sculley was willing. In January 1986 they reached an out-of-court

agreement involving no financial damages. In return for Apple’s dropping its suit, NeXT agreed to

a variety of restrictions: Its product would be marketed as a high-end workstation, it would be sold

directly to colleges and universities, and it would not ship before March 1987. Apple also insisted

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.

Jobs had always indulged his obsession that the unseen parts of a product should be crafted as

beautifully as its façade, just as his father had taught him when they were building a fence. This

too he took to extremes when he found himself unfettered at NeXT. He made sure that the screws

inside the machine had expensive plating. He even insisted that the matte black finish be coated

onto the inside of the cube’s case, even though only repairmen would see it.

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.”

One of NeXT’s first ten employees was an interior designer for the company’s first

headquarters, in Palo Alto. Even though Jobs had leased a building that was new and nicely

designed, he had it completely gutted and rebuilt. Walls were replaced by glass, the carpets were

replaced by light hardwood flooring. The process was repeated

when NeXT moved to a bigger space in Redwood City in 1989. Even though the building was

brand-new, Jobs insisted that the elevators be moved so that the entrance lobby would be more

dramatic. As a centerpiece, Jobs commissioned I. M. Pei to design a grand staircase that seemed to

float in the air. The contractor said it couldn’t be built. Jobs said it could, and it was. Years later

Jobs would make such staircases a feature at Apple’s signature stores.

The Computer

During the early months of NeXT, Jobs and Dan’l Lewin went on the road, often accompanied by

a few colleagues, to visit campuses and solicit opinions. At Harvard they met with Mitch Kapor,

the chairman of Lotus software, over dinner at Harvest restaurant. When Kapor began slathering

butter on his bread, Jobs asked him, “Have you ever heard of serum cholesterol?” Kapor

responded, “I’ll make you a deal. You stay away from commenting on my dietary habits, and I

will stay away from the subject of your personality.” It was meant humorously, but as Kapor later

commented, “Human relationships were not his strong suit.” Lotus agreed to write a spreadsheet

program for the NeXT operating system.

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 Oxford, where Jobs made an offer of $2,000 plus 74 cents for every

computer sold in order to have the rights to Oxford’s edition of Shakespeare. “It will be all gravy

to you,” he argued. “You will be ahead of the parade. It’s never been done before.” They agreed in

principle and then went out to play skittles over beer at a nearby pub where Lord Byron used to

drink. By the time it launched, the NeXT would also include a dictionary, a thesaurus, and the

Oxford Dictionary of Quotations, making it one of the pioneers of the concept of searchable

electronic books.

Instead of using off-the-shelf chips for the NeXT, Jobs had his engineers design custom ones

that integrated a variety of functions on one chip. That would have been hard enough, but Jobs

made it almost impossible by continually revising the functions he wanted it to do. After a year it

became clear that this would be a major source of delay.

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.

Jobs had not tempered his way of dealing with employees. “He applied charm or public

humiliation in a way that in most cases proved to be pretty effective,” Tribble recalled. But

sometimes it wasn’t. One engineer, David Paulsen, put in ninety-hour weeks for the first ten

months at NeXT. He quit when “Steve walked in one Friday afternoon and told us how

unimpressed he was with what we were doing.” When Business Week asked him why he treated

employees so harshly, Jobs said it made the company better. “Part of my responsibility is to be a

yardstick of quality. Some people aren’t used to an environment where excellence is expected.”

But he still had his spirit and charisma. There were plenty of field trips, visits by akido masters,

and off-site retreats. And he still exuded the pirate flag spunkiness. When Apple

fired Chiat/Day, the ad firm that had done the “1984” ad and taken out the newspaper ad saying

“Welcome IBM—seriously,” Jobs took out a full-page ad in the Wall Street Journal proclaiming,

“Congratulations Chiat/Day—Seriously . . . Because I can guarantee you: there is life after

Apple.”

Perhaps the greatest similarity to his days at Apple was that Jobs brought with him his reality

distortion field. It was on display at the company’s first retreat at Pebble Beach in late 1985. There

Jobs pronounced that the first NeXT computer would be shipped in just eighteen months. It was

already clear that this date was impossible, but he blew off a suggestion from one engineer that

they be realistic and plan on shipping in 1988. “If we do that, the world isn’t standing still, the

technology window passes us by, and all the work we’ve done we have to throw down the toilet,”

he argued.

Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge

Jobs, did so. “Reality distortion has motivational value, and I think that’s fine,” she said as Jobs

stood at a whiteboard. “However, when it comes to setting a date in a way that affects the design

of the product, then we get into real deep shit.” Jobs didn’t agree: “I think we have to drive a stake

in the ground somewhere, and I think if we miss this window, then our credibility starts to erode.”

What he did not say, even though it was suspected by all, was that if their targets slipped they

might run out of money. Jobs had pledged $7 million of his own funds, but at their current burn

rate that would run out in eighteen months if they didn’t start getting some revenue from shipped

products.

Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his

list of maxims with “The honeymoon is over.” By the time of the third retreat, in Sonoma in

September 1986, the timetable was gone, and it looked as though the company would hit a

financial wall.

Perot to the Rescue

In late 1986 Jobs sent out a proposal to venture capital firms offering a 10% stake in NeXT for $3

million. That put a valuation on the entire company of $30 million, a number that Jobs had pulled

out of thin air. Less than $7 million had gone into the company thus far, and there was little to

show for it other than a neat logo and some snazzy offices. It had no revenue or products, nor any

on the horizon. Not surprisingly, the venture capitalists all passed on the offer to invest.

There was, however, one cowboy who was dazzled. Ross Perot, the bantam Texan who had

founded Electronic Data Systems, then sold it to General Motors for $2.4 billion, happened to

watch a PBS documentary, The Entrepreneurs, which had a segment on Jobs and NeXT in

November 1986. He instantly identified with Jobs and his gang, so much so that, as he watched

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.”

Perot brought to NeXT something that was almost as valuable as his $20 million lifeline: He

was a quotable, spirited cheerleader for the company, who could lend it an air of credibility among

grown-ups. “In terms of a startup company, it’s one that carries the least risk of any I’ve seen in

25 years in the computer industry,” he told the New York Times. “We’ve had some sophisticated

people see the hardware—it blew them away. Steve and his whole NeXT team are the darnedest

bunch of perfectionists I’ve ever seen.”

Perot also traveled in rarefied social and business circles that complemented Jobs’s own. He

took Jobs to a black-tie dinner dance in San Francisco that Gordon and Ann Getty gave for King

Juan Carlos I of Spain. When the king asked Perot whom he should meet, Perot immediately

produced Jobs. They were soon engaged in what Perot later described as “electric conversation,”

with Jobs animatedly describing the next wave in computing. At the end the king scribbled a note

and handed it to Jobs. “What happened?” Perot asked. Jobs answered, “I sold him a computer.”

These and other stories were incorporated into the mythologized story of Jobs that Perot told

wherever he went. At a briefing at the National Press Club in Washington, he spun Jobs’s life

story into a Texas-size yarn about a young man

so poor he couldn’t afford to go to college, working in his garage at night, playing with computer chips,

which was his hobby, and his dad—who looks like a character out of a Norman Rockwell painting—

comes in one day and said, “Steve, either make something you can sell or go get a job.” Sixty days later,

in a wooden box that his dad made for him, the first Apple computer was created. And this high school

graduate literally changed the world.

The one phrase that was true was the one about Paul Jobs’s looking like someone in a Rockwell

painting. And perhaps the last phrase, the one about Jobs changing the world. Certainly Perot

believed that. Like Sculley, he saw himself in Jobs. “Steve’s like me,” Perot told the Washington

Post’s David Remnick. “We’re weird in the same way. We’re soul mates.”

Gates and NeXT

Bill Gates was not a soul mate. Jobs had convinced him to produce software applications for the

Macintosh, which had turned out to be hugely profitable for Microsoft. But Gates was one person

who was resistant to Jobs’s reality distortion field, and as a result he decided not to create software

tailored for the NeXT platform. Gates went to California to get periodic demonstrations, but each

time he came away unimpressed. “The Macintosh was truly unique, but I personally don’t

understand what is so unique about Steve’s new computer,” he told Fortune.

Part of the problem was that the rival titans were congenitally unable to be deferential to each

other. When Gates made his first visit to NeXT’s Palo Alto headquarters, in the summer of 1987,

Jobs kept him waiting for a half hour in the lobby, even though Gates could see through the glass

walls that Jobs was walking around having casual conversations. “I’d gone down to NeXT and I

had the Odwalla, the most expensive carrot juice, and I’d never seen tech offices so lavish,” Gates

recalled, shaking his head with just a hint of a smile. “And Steve comes a half hour late to the

meeting.”

Jobs’s sales pitch, according to Gates, was simple. “We did the Mac together,” Jobs said. “How

did that work for you? Very well. Now, we’re going to do this together and this is going to be

great.”

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 an incompatible

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.”

IBM

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,” Jobs recalled.

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 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 business altogether.

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.

The Launch, October 1988

Jobs had perfected the art of turning product launches into theatrical productions, and for the

world premiere of the NeXT computer—on October 12, 1988, in San Francisco’s Symphony

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