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But Gates was brutal to Jobs, just as Jobs could be to others.

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.”

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At a forum in Cambridge, Massachusetts, in 1989,

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.

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To Jobs’s delight, Akers replied, “How would you like to help us?”

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

business altogether.

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No detail was too small. Jobs went over the invitation list

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.”

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Jobs wanted to bundle useful content with the machine,

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.”

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He also insisted on building his own fully automated and futuristic

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.

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Perot to the RescueIn late 1986 Jobs sent out a proposal to

Perot to the RescueIn 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.

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.

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As a bonus, Rand agreed to design a personal calling

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.

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.”

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It took Rand just two weeks. He flew back to deliver the result

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.”

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.”

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.

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

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,

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.

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

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

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.

venture. Accordingly,

I must insist upon the

immediate acceptance

of my resignation. . . .

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