THE REALITY DISTORTION FIELD 8 page

Like a Rolling Stone

Jobs slipped quietly into the back row of the auditorium to listen to Sculley explain to the troops

the new order of battle. There were a lot of sideways glances, but few people acknowledged him

and none came over to provide public displays of affection. He stared without blinking at Sculley,

who would remember “Steve’s look of contempt” years later. “It’s unyielding,” Sculley recalled,

“like an X-ray boring inside your bones, down to where you’re soft and destructibly mortal.” For a

moment, standing onstage while pretending not to notice Jobs, Sculley thought back to a friendly

trip they had taken a year earlier to Cambridge, Massachusetts, to visit Jobs’s hero, Edwin Land.

He had been dethroned from the company he created, Polaroid, and Jobs had said to Sculley in

disgust, “All he did was blow a lousy few million and they took his company away from him.”

Now, Sculley reflected, he was taking Jobs’s company away from him.

As Sculley went over the organizational chart, he introduced Gassée as the new head of a

combined Macintosh and Apple II product group. On the chart was a small box labeled

“chairman” with no lines connecting to it, not to Sculley or to anyone else. Sculley briefly noted

that in that role, Jobs would play the part of “global visionary.” But he didn’t acknowledge Jobs’s

presence. There was a smattering of awkward applause.

Jobs stayed home for the next few days, blinds drawn, his answering machine on, seeing only

his girlfriend, Tina Redse. For hours on end he sat there playing his Bob Dylan tapes, especially

“The Times They Are a-Changin.’” He had recited the second verse the day he unveiled the

Macintosh to the Apple shareholders sixteen months earlier. That verse ended nicely: “For the

loser now / Will be later to win. . . .”

A rescue squad from his former Macintosh posse arrived to dispel the gloom on Sunday night,

led by Andy Hertzfeld and Bill Atkinson. Jobs took a while to answer their knock, and then he led

them to a room next to the kitchen that was one of the few places with any furniture. With Redse’s

help, he served some vegetarian food he had ordered. “So what really happened?” Hertzfeld

asked. “Is it really as bad as it looks?”

“No, it’s worse.” Jobs grimaced. “It’s much worse than you can imagine.” He blamed Sculley

for betraying him, and said that Apple would not be able to manage without him. His role as

chairman, he complained, was completely ceremonial. He was being ejected from his Bandley 3

office to a small and almost empty building he nicknamed “Siberia.” Hertzfeld turned the topic to

happier days, and they began to reminisce about the past.

Earlier that week, Dylan had released a new album, Empire Burlesque, and Hertzfeld brought a

copy that they played on Jobs’s high-tech turntable. The most notable track, “When the Night

Comes

Falling from the Sky,” with its apocalyptic message, seemed appropriate for the evening, but

Jobs didn’t like it. It sounded almost disco, and he gloomily argued that Dylan had been going

downhill since Blood on the Tracks. So Hertzfeld moved the needle to the last song on the album,

“Dark Eyes,” which was a simple acoustic number featuring Dylan alone on guitar and harmonica.

It was slow and mournful and, Hertzfeld hoped, would remind Jobs of the earlier Dylan tracks he

so loved. But Jobs didn’t like that song either and had no desire to hear the rest of the album.

Jobs’s overwrought reaction was understandable. Sculley had once been a father figure to him.

So had Mike Markkula. So had Arthur Rock. That week all three had abandoned him. “It gets

back to the deep feeling of being rejected at an early age,” his friend and lawyer George Riley

later said. “It’s a deep part of his own mythology, and it defines to himself who he is.” Jobs

recalled years later, “I felt like I’d been punched, the air knocked out of me and I couldn’t

breathe.”

Losing the support of Arthur Rock was especially painful. “Arthur had been like a father to

me,” Jobs said. “He took me under his wing.” Rock had taught him about opera, and he and his

wife, Toni, had been his hosts in San Francisco and Aspen. “I remember driving into San

Francisco one time, and I said to him, ‘God, that Bank of America building is ugly,’ and he said,

‘No, it’s the best,’ and he proceeded to lecture me, and he was right of course.” Years later Jobs’s

eyes welled with tears as he recounted the story: “He chose Sculley over me. That really threw me

for a loop. I never thought he would abandon me.”

Making matters worse was that his beloved company was now in the hands of a man he

considered a bozo. “The board felt that I couldn’t run a company, and that was their decision to

make,” he said. “But they made one mistake. They should have separated the decision of what to

do with me and what to do with Sculley. They should have fired Sculley, even if they didn’t think

I was ready to run Apple.” Even as his personal gloom slowly lifted, his anger at Sculley, his

feeling of betrayal, deepened.

The situation worsened when Sculley told a group of analysts that he considered Jobs irrelevant

to the company, despite his title as chairman. “From an operations standpoint, there is no role

either today or

in the future for Steve Jobs,” he said. “I don’t know what he’ll do.” The blunt comment

shocked the group, and a gasp went through the auditorium.

Perhaps getting away to Europe would help, Jobs thought. So in June he went to Paris, where

he spoke at an Apple event and went to a dinner honoring Vice President George H. W. Bush.

From there he went to Italy, where he drove the hills of Tuscany with Redse and bought a bike so

he could spend time riding by himself. In Florence he soaked in the architecture of the city and the

texture of the building materials. Particularly memorable were the paving stones, which came

from Il Casone quarry near the Tuscan town of Firenzuola. They were a calming bluish gray.

Twenty years later he would decide that the floors of most major Apple stores would be made of

this sandstone.

The Apple II was just going on sale in Russia, so Jobs headed off to Moscow, where he met up

with Al Eisenstat. Because there was a problem getting Washington’s approval for some of the

required export licenses, they visited the commercial attaché at the American embassy in Moscow,

Mike Merwin. He warned them that there were strict laws against sharing technology with the

Soviets. Jobs was annoyed. At the Paris trade show, Vice President Bush had encouraged him to

get computers into Russia in order to “foment revolution from below.” Over dinner at a Georgian

restaurant that specialized in shish kebab, Jobs continued his rant. “How could you suggest this

violates American law when it so obviously benefits our interests?” he asked Merwin. “By putting

Macs in the hands of Russians, they could print all their newspapers.”

Jobs also showed his feisty side in Moscow by insisting on talking about Trotsky, the

charismatic revolutionary who fell out of favor and was ordered assassinated by Stalin. At one

point the KGB agent assigned to him suggested he tone down his fervor. “You don’t want to talk

about Trotsky,” he said. “Our historians have studied the situation, and we don’t believe he’s a

great man anymore.” That didn’t help. When they got to the state university in Moscow to speak

to computer students, Jobs began his speech by praising Trotsky. He was a revolutionary Jobs

could identify with.

Jobs and Eisenstat attended the July Fourth party at the American

embassy, and in his thank-you letter to Ambassador Arthur Hartman, Eisenstat noted that Jobs

planned to pursue Apple’s ventures in Russia more vigorously in the coming year. “We are

tentatively planning on returning to Moscow in September.” For a moment it looked as if Sculley’

s hope that Jobs would turn into a “global visionary” for the company might come to pass. But it

was not to be. Something much different was in store for September.

CHAPTER EIGHTEEN

NeXT

Prometheus Unbound

The Pirates Abandon Ship

Upon 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, the engineer George Crow and the controller Susan Barnes.

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.

Lewin’s university consortium had been a godsend to the Macintosh group, but he had become

frustrated after Jobs left and Bill Campbell had reorganized marketing in a way that reduced the

role of direct sales to universities. He had been meaning to call Jobs when, that

Labor Day weekend, Jobs called first. He drove to Jobs’s unfurnished mansion, and they

walked the grounds while discussing the possibility of creating a new company. Lewin was

excited, but not ready to commit. He was going to Austin with Campbell the following week, and

he wanted to wait until then to decide. Upon his return, he gave his answer: He was in. The news

came just in time for the September 13 Apple board meeting.

Although Jobs was still nominally the board’s chairman, he had not been to any meetings since

he lost power. He called Sculley, said he was going to attend, and asked that an item be added to

the end of the agenda for a “chairman’s report.” He didn’t say what it was about, and Sculley

assumed it would be a criticism of the latest reorganization. Instead, when his turn came to speak,

Jobs described to the board his plans to start a new company. “I’ve been thinking a lot, and it’s

time for me to get on with my life,” he began. “It’s obvious that I’ve got to do something. I’m

thirty years old.” Then he referred to some prepared notes to describe his plan to create a computer

for the higher education market. The new company would not be competitive with Apple, he

promised, and he would take with him only a handful of non-key personnel. He offered to resign

as chairman of Apple, but he expressed hope that they could work together. Perhaps Apple would

want to buy the distribution rights to his product, he suggested, or license Macintosh software to

it.

Mike Markkula rankled at the possibility that Jobs would hire anyone from Apple. “Why would

you take anyone at all?” he asked.

“Don’t get upset,” Jobs assured him and the rest of the board. “These are very low-level people

that you won’t miss, and they will be leaving anyway.”

The board initially seemed disposed to wish Jobs well in his venture. After a private discussion,

the directors even proposed that Apple take a 10% stake in the new company and that Jobs remain

on the board.

That night Jobs and his five renegades met again at his house for dinner. He was in favor of

taking the Apple investment, but the others convinced him it was unwise. They also agreed that it

would be best

if they resigned all at once, right away. Then they could make a clean break.

So Jobs wrote a formal letter telling Sculley the names of the five who would be leaving, signed

it in his spidery lowercase signature, and drove to Apple the next morning to hand it to him before

his 7:30 staff meeting.

“Steve, these are not low-level people,” Sculley said.

“Well, these people were going to resign anyway,” Jobs replied. “They are going to be handing

in their resignations by nine this morning.”

From Jobs’s perspective, he had been honest. The five were not division managers or members

of Sculley’s top team. They had all felt diminished, in fact, by the company’s new organization.

But from Sculley’s perspective, these were important players; Page was an Apple Fellow, and

Lewin was a key to the higher education market. In addition, they knew about the plans for Big

Mac; even though it had been shelved, this was still proprietary information. Nevertheless Sculley

was sanguine. Instead of pushing the point, he asked Jobs to remain on the board. Jobs replied that

he would think about it.

But when Sculley walked into his 7:30 staff meeting and told his top lieutenants who was

leaving, there was an uproar. Most of them felt that Jobs had breached his duties as chairman and

displayed stunning disloyalty to the company. “We should expose him for the fraud that he is so

that people here stop regarding him as a messiah,” Campbell shouted, according to Sculley.

Campbell admitted that, although he later became a great Jobs defender and supportive board

member, he was ballistic that morning. “I was fucking furious, especially about him taking Dan’l

Lewin,” he recalled. “Dan’l had built the relationships with the universities. He was always

muttering about how hard it was to work with Steve, and then he left.” Campbell was so angry that

he walked out of the meeting to call Lewin at home. When his wife said he was in the shower,

Campbell said, “I’ll wait.” A few minutes later, when she said he was still in the shower,

Campbell again said, “I’ll wait.” When Lewin finally came on the phone, Campbell asked him if it

was true. Lewin acknowledged it was. Campbell hung up without saying another word.

After hearing the fury of his senior staff, Sculley surveyed the members of the board. They

likewise felt that Jobs had misled them with his pledge that he would not raid important

employees. Arthur Rock was especially angry. Even though he had sided with Sculley during the

Memorial Day showdown, he had been able to repair his paternal relationship with Jobs. Just the

week before, he had invited Jobs to bring his girlfriend up to San Francisco so that he and his wife

could meet her, and the four had a nice dinner in Rock’s Pacific Heights home. Jobs had not

mentioned the new company he was forming, so Rock felt betrayed when he heard about it from

Sculley. “He came to the board and lied to us,” Rock growled later. “He told us he was thinking of

forming a company when in fact he had already formed it. He said he was going to take a few

middle-level people. It turned out to be five senior people.” Markkula, in his subdued way, was

also offended. “He took some top executives he had secretly lined up before he left. That’s not the

way you do things. It was ungentlemanly.”

Over the weekend both the board and the executive staff convinced Sculley that Apple would

have to declare war on its cofounder. Markkula issued a formal statement accusing Jobs of acting

“in direct contradiction to his statements that he wouldn’t recruit any key Apple personnel for his

company.” He added ominously, “We are evaluating what possible actions should be taken.”

Campbell was quoted in the Wall Street Journal as saying he “was stunned and shocked” by Jobs’

s behavior.

Jobs had left his meeting with Sculley thinking that things might proceed smoothly, so he had

kept quiet. But after reading the newspapers, he felt that he had to respond. He phoned a few

favored reporters and invited them to his home for private briefings the next day. Then he called

Andy Cunningham, who had handled his publicity at Regis McKenna. “I went over to his

unfurnished mansiony place in Woodside,” she recalled, “and I found him huddled in the kitchen

with his five colleagues and a few reporters hanging outside on the lawn.” Jobs told her that he

was going to do a full-fledged press conference and started spewing some of the derogatory things

he was going to say. Cunningham was appalled. “This is going to reflect badly on you,” she told

him. Finally he backed down. He decided that he would give the

reporters a copy of the resignation letter and limit any on-the-record comments to a few bland

statements.

Jobs had considered just mailing in his letter of resignation, but Susan Barnes convinced him

that this would be too contemptuous. Instead he drove it to Markkula’s house, where he also found

Al Eisenstat. There was a tense conversation for about fifteen minutes; then Barnes, who had been

waiting outside, came to the door to retrieve him before he said anything he would regret. He left

behind the letter, which he had composed on a Macintosh and printed on the new LaserWriter:

September 17, 1985

Dear Mike:

This morning’s papers carried suggestions that Apple is considering removing me as Chairman. I

don’t know the source of these reports but they are both misleading to the public and unfair to me.

You will recall that at last Thursday’s Board meeting I stated I had decided to start a new venture

and I tendered my resignation as Chairman.

The Board declined to accept my resignation and asked me to defer it for a week. I agreed to do so in

light of the encouragement the Board offered with regard to the proposed new venture and the

indications that Apple would invest in it. On Friday, after I told John Sculley who would be joining me,

he confirmed Apple’s willingness to discuss areas of possible collaboration between Apple and my new

venture.

Subsequently the Company appears to be adopting a hostile posture toward me and the new venture.

Accordingly, I must insist upon the immediate acceptance of my resignation. . . .

As you know, the company’s recent reorganization left me with no work to do and no access even to

regular management reports. I am but 30 and want still to contribute and achieve.

After what we have accomplished together, I would wish our parting to be both amicable and

dignified.

Yours sincerely, steven p. jobs

When a guy from the facilities team went to Jobs’s office to pack up his belongings, he saw a

picture frame on the floor. It contained a photograph of Jobs and Sculley in warm conversation,

with an inscription from seven months earlier: “Here’s to Great Ideas, Great Experiences, and a

Great Friendship! John.” The glass frame was shattered. Jobs had hurled it across the room before

leaving. From that day, he never spoke to Sculley again.

Apple’s stock went up a full point, or almost 7%, when Jobs’s resignation was announced. “East

Coast stockholders always worried about California flakes running the company,” explained the

editor of a tech stock newsletter. “Now with both Wozniak and Jobs out, those shareholders are

relieved.” But Nolan Bushnell, the Atari founder who had been an amused mentor ten years

earlier, told Time that Jobs would be badly missed. “Where is Apple’s inspiration going to come

from? Is Apple going to have all the romance of a new brand of Pepsi?”

After a few days of failed efforts to reach a settlement with Jobs, Sculley and the Apple board

decided to sue him “for breaches of fiduciary obligations.” The suit spelled out his alleged

transgressions:

Notwithstanding his fiduciary obligations to Apple, Jobs, while serving as the Chairman of Apple’s

Board of Directors and an officer of Apple and pretending loyalty to the interests of Apple . . .

(a) secretly planned the formation of an enterprise to compete with Apple;

(b) secretly schemed that his competing enterprise would wrongfully take advantage of and utilize

Apple’s plan to design, develop and market the Next Generation Product . . .

(c) secretly lured away key employees of Apple.

At the time, Jobs owned 6.5 million shares of Apple stock, 11% of the company, worth more

than $100 million. He began to sell his shares, and within five months had dumped them all,

retaining only one share so he could attend shareholder meetings if he wanted. He was furious,

and that was reflected in his passion to start what was, no matter how he spun it, a rival company.

“He was angry at Apple,”

said Joanna Hoffman, who briefly went to work for the new company. “Aiming at the

educational market, where Apple was strong, was simply Steve being vengeful. He was doing it

for revenge.”

Jobs, of course, didn’t see it that way. “I haven’t got any sort of odd chip on my shoulder,” he

told Newsweek. Once again he invited his favorite reporters over to his Woodside home, and this

time he did not have Andy Cunningham there urging him to be circumspect. He dismissed the

allegation that he had improperly lured the five colleagues from Apple. “These people all called

me,” he told the gaggle of journalists who were milling around in his unfurnished living room.

“They were thinking of leaving the company. Apple has a way of neglecting people.”

He decided to cooperate with a Newsweek cover in order to get his version of the story out, and

the interview he gave was revealing. “What I’m best at doing is finding a group of talented people

and making things with them,” he told the magazine. He said that he would always harbor

affection for Apple. “I’ll always remember Apple like any man remembers the first woman he’s

fallen in love with.” But he was also willing to fight with its management if need be. “When

someone calls you a thief in public, you have to respond.” Apple’s threat to sue him was

outrageous. It was also sad. It showed that Apple was no longer a confident, rebellious company.

“It’s hard to think that a $2 billion company with 4,300 employees couldn’t compete with six

people in blue jeans.”

To try to counter Jobs’s spin, Sculley called Wozniak and urged him to speak out. “Steve can

be an insulting and hurtful guy,” he told Time that week. He revealed that Jobs had asked him to

join his new firm—it would have been a sly way to land another blow against Apple’s current

management—but he wanted no part of such games and had not returned Jobs’s phone call. To the

San Francisco Chronicle, he recounted how Jobs had blocked frogdesign from working on his

remote control under the pretense that it might compete with Apple products. “I look forward to a

great product and I wish him success, but his integrity I cannot trust,” Wozniak said.

To Be on Your Own

“The best thing ever to happen to Steve is when we fired him, told him to get lost,” Arthur Rock

later said. The theory, shared by many, is that the tough love made him wiser and more mature.

But it’s not that simple. At the company he founded after being ousted from Apple, Jobs was able

to indulge all of his instincts, both good and bad. He was unbound. The result was a series of

spectacular products that were dazzling market flops. This was the true learning experience. What

prepared him for the great success he would have in Act III was not his ouster from his Act I at

Apple but his brilliant failures in Act II.

The first instinct that he indulged was his passion for design. The name he chose for his new

company was rather straightforward: Next. In order to make it more distinctive, he decided he

needed a world-class logo. So he courted the dean of corporate logos, Paul Rand. At seventy-one,

the Brooklyn-born graphic designer had already created some of the best-known logos in business,

including those of Esquire, IBM, Westinghouse, ABC, and UPS. He was under contract to IBM,

and his supervisors there said that it would obviously be a conflict for him to create a logo for

another computer company. So Jobs picked up the phone and called IBM’s CEO, John Akers.

Akers was out of town, but Jobs was so persistent that he was finally put through to Vice

Chairman Paul Rizzo. After two days, Rizzo concluded that it was futile to resist Jobs, and he

gave permission for Rand to do the work.

Rand flew out to Palo Alto and spent time walking with Jobs and listening to his vision. The

computer would be a cube, Jobs pronounced. He loved that shape. It was perfect and simple. So

Rand decided that the logo should be a cube as well, one that was tilted at a 28° angle. When Jobs

asked for a number of options to consider, Rand declared that he did not create different options

for clients. “I will solve your problem, and you will pay me,” he told Jobs. “You can use what I

produce, or not, but I will not do options, and either way you will pay me.”

Jobs admired that kind of thinking, so he made what was quite a gamble. The company would

pay an astonishing $100,000 flat fee to get one design. “There was a clarity in our relationship,”

Jobs said. “He had a purity as an artist, but he was astute at solving business problems. He had a

tough exterior, and had perfected the image of a curmudgeon, but he was a teddy bear inside.” It

was one of Jobs’s highest praises: purity as an artist.

It took Rand just two weeks. He flew back to deliver the result to Jobs at his Woodside house.

First they had dinner, then Rand handed him an elegant and vibrant booklet that described his

thought process. On the final spread, Rand presented the logo he had chosen. “In its design, color

arrangement, and orientation, the logo is a study in contrasts,” his booklet proclaimed. “Tipped at

a jaunty angle, it brims with the informality, friendliness, and spontaneity of a Christmas seal and

the authority of a rubber stamp.” The word “next” was split into two lines to fill the square face of

the cube, with only the “e” in lowercase. That letter stood out, Rand’s booklet explained, to

connote “education, excellence . . . e = mc2.”

It was often hard to predict how Jobs would react to a presentation. He could label it shitty or

Date: 2015-12-17; view: 561