Steve Jobs Excerpts
2010 D8 Conference
(Recorded June 2010. Steve would pass away on October 5, 2011. This was his last interview.)
It doesn’t matter very much. It’s not what’s important. It’s not what makes you come to work in the morning. It’s not why any of our customers buy our products. It’s good for us to keep that in mind. Remember what we’re doing and why we doing it.
I asked them, “Why are you still here?” And a lot of them had this this little phrase. They said, “cause I bleed in six colors.” Which was the old six-color Apple logo. And that was code for, “because I love what this place stands for–or at least stood for—and that just made all of us want to work that much harder to have it survive and have those values survive and bring it back.
Apple is a company that doesn’t have the most resources of everybody in the world, and the way we’ve succeeded is by choosing what horses to ride really carefully.
Things are packages of emphasis… Some things are emphasized in a product, some things are not done as well in a product, some things are chosen not to be done at all in a product, and so different people make different choices. And if the market tells us we making the wrong choices we listen to the market. We’re just people running this company. We’re trying to make great products for people, and we have at least the courage of our convictions to say we don’t think this is part of what makes a great product, we going to leave it out. […] We’re going to take the heat, because we want to make the best product in the world for customers.
We are about making better products. And what I love about the consumer market that I always hated about the enterprise market, is that: we come up with a product, we try to tell everybody about it and every person votes for themselves. They go yes or no. And if enough of them say yes, we get to come to work tomorrow. You know that’s how it works. It’s really simple. Whereas with the enterprise market, it’s not so simple. The people that use the products don’t decide for themselves, the people that make those decisions sometimes are confused. We love just trying to make the best products in the world for people. And having them tell us by how they vote with their wallets whether we’re on track or not.
2008 exclusive interview with Fortune
On the birth of the iPhone
We all had cellphones. We just hated them, they were so awful to use. The software was terrible. The hardware wasn’t very good. We talked to our friends, and they all hated their cellphones too. Everybody seemed to hate their phones. And we saw that these things really could become much more powerful and interesting to license. It’s a huge market. I mean a billion phones get shipped every year, and that’s almost an order of magnitude greater than the number of music players. It’s four times the number of PCs that ship every year.
It was a great challenge. Let’s make a great phone that we fall in love with. And we’ve got the technology. We’ve got the miniaturization from the iPod. We’ve got the sophisticated operating system from Mac. Nobody had ever thought about putting operating systems as sophisticated as OS X inside a phone, so that was a real question. We had a big debate inside the company whether we could do that or not. And that was one where I had to adjudicate it and just say, ‘We’re going to do it. Let’s try.’ The smartest software guys were saying they can do it, so let’s give them a shot. And they did.
On Apple’s connection with the consumer
We did iTunes because we all love music. We made what we thought was the best jukebox in iTunes. Then we all wanted to carry our whole music libraries around with us. The team worked really hard. And the reason that they worked so hard is because we all wanted one. You know? I mean, the first few hundred customers were us.
It’s not about pop culture, and it’s not about fooling people, and it’s not about convincing people that they want something they don’t. We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That’s what we get paid to do.
So you can’t go out and ask people, you know, what the next big [thing.] There’s a great quote by Henry Ford, right? He said, “If I’d have asked my customers what they wanted, they would have told me “A faster horse.”
On choosing strategy
We do no market research. We don’t hire consultants. The only consultants I’ve ever hired in my 10 years is one firm to analyze Gateway’s retail strategy so I would not make some of the same mistakes they made [when launching Apple’s retail stores]. But we never hire consultants, per se. We just want to make great products.
When we created the iTunes Music Store, we did that because we thought it would be great to be able to buy music electronically, not because we had plans to redefine the music industry. I mean, it just seemed like writing on the wall, that eventually all music would be distributed electronically. That seemed obvious because why have the cost? The music industry has huge returns. Why have all this [overhead] when you can just send electrons around easily?
On what drives Apple employees
We don’t get a chance to do that many things, and every one should be really excellent. Because this is our life. Life is brief, and then you die, you know? So this is what we’ve chosen to do with our life. We could be sitting in a monastery somewhere in Japan. We could be out sailing. Some of the [executive team] could be playing golf. They could be running other companies. And we’ve all chosen to do this with our lives. So it better be damn good. It better be worth it. And we think it is.
On why people want to work at Apple
The reason is, is because you can’t do what you can do at Apple anywhere else. The engineering is long gone in most PC companies. In the consumer electronics companies, they don’t understand the software parts of it. And so you really can’t make the products that you can make at Apple anywhere else right now. Apple’s the only company that has everything under one roof.
There’s no other company that could make a MacBook Air and the reason is that not only do we control the hardware, but we control the operating system. And it is the intimate interaction between the operating system and the hardware that allows us to do that. There is no intimate interaction between Windows and a Dell notebook.
Our DNA is as a consumer company – for that individual customer who’s voting thumbs up or thumbs down. That’s who we think about. And we think that our job is to take responsibility for the complete user experience. And if it’s not up to par, it’s our fault, plain and simply.
On whether Apple could live without him
We’ve got really capable people at Apple. I made Tim [Cook] COO and gave him the Mac division and he’s done brilliantly. I mean, some people say, ‘Oh, God, if [Jobs] got run over by a bus, Apple would be in trouble.’ And, you know, I think it wouldn’t be a party, but there are really capable people at Apple. And the board would have some good choices about who to pick as CEO. My job is to make the whole executive team good enough to be successors, so that’s what I try to do.
On his demanding reputation
My job is to not be easy on people. My job is to make them better. My job is to pull things together from different parts of the company and clear the ways and get the resources for the key projects. And to take these great people we have and to push them and make them even better, coming up with more aggressive visions of how it could be.
On Apple’s focus
Apple is a $30 billion company, yet we’ve got less than 30 major products. I don’t know if that’s ever been done before. Certainly the great consumer electronics companies of the past had thousands of products. We tend to focus much more. People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.
I’m actually as proud of many of the things we haven’t done as the things we have done. The clearest example was when we were pressured for years to do a PDA, and I realized one day that 90% of the people who use a PDA only take information out of it on the road. They don’t put information into it. Pretty soon cellphones are going to do that, so the PDA market’s going to get reduced to a fraction of its current size, and it won’t really be sustainable. So we decided not to get into it. If we had gotten into it, we wouldn’t have had the resources to do the iPod. We probably wouldn’t have seen it coming.
On his management style
We’ve got 25,000 people at Apple. About 10,000 of them are in the stores. And my job is to work with sort of the top 100 people, that’s what I do. That doesn’t mean they’re all vice presidents. Some of them are just key individual contributors. So when a good idea comes, you know, part of my job is to move it around, just see what different people think, get people talking about it, argue with people about it, get ideas moving among that group of 100 people, get different people together to explore different aspects of it quietly, and, you know - just explore things.
On finding talent
When I hire somebody really senior, competence is the ante. They have to be really smart. But the real issue for me is, Are they going to fall in love with Apple? Because if they fall in love with Apple, everything else will take care of itself. They’ll want to do what’s best for Apple, not what’s best for them, what’s best for Steve, or anybody else.
Recruiting is hard. It’s just finding the needles in the haystack. We do it ourselves and we spend a lot of time at it. I’ve participated in the hiring of maybe 5,000-plus people in my life. So I take it very seriously. You can’t know enough in a one-hour interview. So, in the end, it’s ultimately based on your gut. How do I feel about this person? What are they like when they’re challenged? Why are they here? I ask everybody that: ‘Why are you here?’ The answers themselves are not what you’re looking for. It’s the meta-data.”
On the benefits of owning an operating system
That allows us to innovate at a much faster rate than if we had to wait for Microsoft, like Dell and HP and everybody else does. Because Microsoft has their own timetable, for probably good reasons. I mean Vista took what – seven or eight years? It’s hard to get your new feature that you need for your new hardware if it has to wait eight years. So we can set our own priorities and look at things in a more holistic way from the point of view of the customer. It also means that we can take it and we can make a version of it to fit in the iPhone and the iPod. And, you know, we certainly couldn’t do that if we didn’t own it.
On his marathon Monday meetings
When you hire really good people you have to give them a piece of the business and let them run with it. That doesn’t mean I don’t get to kibitz a lot. But the reason you’re hiring them is because you’re going to give them the reins. I want [them] making as good or better decisions than I would. So the way to do that is to have them know everything, not just in their part of the business, but in every part of the business.
So what we do every Monday is we review the whole business. We look at what we sold the week before. We look at every single product under development, products we’re having trouble with, products where the demand is larger than we can make. All the stuff in development, we review. And we do it every single week. I put out an agenda – 80% is the same as it was the last week, and we just walk down it every single week.
We don’t have a lot of process at Apple, but that’s one of the few things we do just to all stay on the same page.
On dealing with roadblocks
At Pixar when we were making Toy Story, there came a time when we were forced to admit that the story wasn’t great. It just wasn’t great. We stopped production for five months…. We paid them all to twiddle their thumbs while the team perfected the story into what became Toy Story. And if they hadn’t had the courage to stop, there would have never been a Toy Story the way it is, and there probably would have never been a Pixar.
We called that the ‘story crisis,’ and we never expected to have another one. But you know what? There’s been one on every film. We don’t stop production for five months. We’ve gotten a little smarter about it. But there always seems to come a moment where it’s just not working, and it’s so easy to fool yourself - to convince yourself that it is when you know in your heart that it isn’t.
Well, you know what? It’s been that way with [almost] every major project at Apple, too…. Take the iPhone. We had a different enclosure design for this iPhone until way too close to the introduction to ever change it. And I came in one Monday morning, I said, ‘I just don’t love this. I can’t convince myself to fall in love with this. And this is the most important product we’ve ever done.’
And we pushed the reset button. We went through all of the zillions of models we’d made and ideas we’d had. And we ended up creating what you see here as the iPhone, which is dramatically better. It was hell because we had to go to the team and say, ‘All this work you’ve [done] for the last year, we’re going to have to throw it away and start over, and we’re going to have to work twice as hard now because we don’t have enough time.’ And you know what everybody said? ‘Sign us up.’
That happens more than you think, because this is not just engineering and science. There is art, too. Sometimes when you’re in the middle of one of these crises, you’re not sure you’re going to make it to the other end. But we’ve always made it, and so we have a certain degree of confidence, although sometimes you wonder. I think the key thing is that we’re not all terrified at the same time. I mean, we do put our heart and soul into these things.
On the iPod tipping point
It was difficult for a while because for various reasons the Mac had not been accepted by a lot of people, who went with Windows. And we were just working really hard, and our market share wasn’t going up. It makes you wonder sometimes whether you’re wrong. Maybe our stuff isn’t better, although we thought it was. Or maybe people don’t care, which is even more depressing.
It turns out with the iPod we kind of got out from that operating-system glass ceiling and it was great because [it showed that] Apple innovation, Apple engineering, Apple design did matter. The iPod captured 70% market share. I cannot tell you how important that was after so many years of laboring and seeing a 4% to 5% market share on the Mac. To see something like that happen with the iPod was a great shot in the arm for everybody.
On what they did next
We made more. We worked harder. We said: ‘This is great. Let’s do more.’ I mean, the Mac market share is going up every single quarter. We’re growing four times faster than the industry. People are starting to pay a little more attention. We’ve helped it along. We put Intel processors in and we can run PC apps alongside Mac apps. We helped it along. But I think a lot of it is people have finally started to realize that they don’t have to put up with Windows - that there is an alternative. I think nobody really thought about it that way before.
On launching the Apple store
It was very simple. The Mac faithful will drive to a destination, right? They’ll drive somewhere special just to do that. But people who own Windows - we want to convert them to Mac. They will not drive somewhere special. They don’t think they want a Mac. They will not take the risk of a 20-minute drive in case they don’t like it.
But if we put our store in a mall or on a street that they’re walking by, and we reduce that risk from a 20-minute drive to 20 footsteps, then they’re more likely to go in because there’s really no risk. So we decided to put our stores in high-traffic locations. And it works.
On catching tech’s next wave
Things happen fairly slowly, you know. They do. These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely it actually unfolds fairly slowly. It takes years.
One of our biggest insights [years ago] was that we didn’t want to get into any business where we didn’t own or control the primary technology because you’ll get your head handed to you.
We realized that almost all - maybe all - of future consumer electronics, the primary technology was going to be software. And we were pretty good at software. We could do the operating system software. We could write applications on the Mac or even PC, like iTunes. We could write the software in the device, like you might put in an iPod or an iPhone or something. And we could write the back-end software that runs on a cloud, like iTunes.
So we could write all these different kinds of software and make it work seamlessly. And you ask yourself, What other companies can do that? It’s a pretty short list. The reason that we were very excited about the phone, beyond that fact that we all hated our phones, was that we didn’t see anyone else who could make that kind of contribution. None of the handset manufacturers really are strong in software.
On failing, so far, with Apple TV
Here’s how I look at it. Everybody’s tried to make a great product for the living room. Microsoft’s tried, we’ve tried – everybody’s tried. And everybody’s failed. We failed, so far.
So there’s a whole bunch of people that have tried, and every single one of them’s failed, including us. And that’s why I call it a hobby. It’s not a business yet, it’s a hobby.
We’ve come out with our second try – ‘Apple TV, Take 2’ is what we call it internally. We realized that the first product we did was about helping you view the content of whatever you had in iTunes on your Mac or PC, and wirelessly sending it to your widescreen TV.
Well, it turns out that’s not what people really wanted to do. I mean, yeah, it’s nice to see your photos up on the big screen. That’s frosting on the cake, but it’s not the cake. What everybody really wanted, it turned out, was movies.
So we began the process of talking to Hollywood studios and were able to get all the major studios to license their movies for rental. And we only have about 600 movies so far ingested on iTunes, but we’ll have thousands later this year. We lowered the price to $229. And we’ll see how it does. Will this resonate and be something that you just can’t live without and love? We’ll see. I think it’s got a shot.
On managing through the economic downturn
We’ve had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place – the last thing we were going to do is lay them off. And we were going to keep funding. In fact we were going to up our R&D budget so that we would be ahead of our competitors when the downturn was over. And that’s exactly what we did. And it worked. And that’s exactly what we’ll do this time.
One more question, I think we’re going to call it a day. Yes ma’am. pointing to audience
Interviewer: I’m Molly Wood from CNN, I have a question actually about market share, which is sort of what we’re getting at. There has been a suggestion that, because of pricing and design, Apple tends to appeal to kind of a smaller elite rather than that sort of mass customer base and so I guess once and for all: is it your goal to overtake the PC in market share?
I tell you what our goal is. Our goal is to make the best personal computers in the world and to make products we are proud to sell and would recommend to our family and friends and we want to do that at the lowest price as we can. But I have to tell you, there’s some stuff in our industry that we wouldn’t be proud to ship, that we wouldn’t be proud to recommend to our family and friends, and we can’t do it. We just can’t ship junk. There are thresholds that we can’t cross because of who we are, but we want to make the best personal computers in the industry. And there is a very significant slice of the industry that wants that too. And what you’ll find is our products are usually not premium priced. You go and price out our competitors products, and you add the features that you have to add to make them useful, and you’ll find in some cases they are more expensive than our products. The difference is we don’t offer stripped-down lousy products.
You know. We just don’t offer categories of products like that. But if you move those aside, and compare us with our competitors, I think we compare pretty favorably. And a lot of people have been doing that, and saying that, now for the last 18 months.
Raw interview footage from 1990
(Context, he would be fired from Apple in 1991)
Interviewer: What is it about this machine, why is this machine so interesting? Why has it been so influential?
I’ll give you my point of view on it. I remember reading a magazine article, long time ago, when I was 12 years old maybe, In i think was Scientific American, I’m not sure, and the article proposed to measure the efficiency of locomotion for lots of species on planet earth. To see which species was the most efficient at getting from point A to point B. And they measured the kilocalories that each one expended. So, they ranked them all and I remember that the Condor won. The Condor was the most efficient at getting from point A to point B. And humankind, the crown of creation, came in with a rather unimpressive showing about a third of the way down the list. So, that didn’t look so great.
But, let me do this over again cause I can say it better.
I remember reading an article when I was about 12 years old, I think it might have been Scientific American, where they measured the efficiency of locomotion for all these species on planet Earth–how many kilocalories did they expand to get from point A to point B. And the Condor won–came into the top of the list, surpassed everything else. And humans came in about a third of the way down the list. Which was not such a great showing for the crown of creation. But somebody there had the imagination to test the efficiency of a human riding a bicycle. Human riding a bicycle blew away the Condor–all the way off the top of the list. And it made a really big impression on me. That we humans are tool builders and that we can fashion tools that amplify these inherent abilities that we have to spectacular magnitudes. So, for me, a computer has always been by bicycle of the mind. Something that takes us far beyond our inherent abilities. And I think we’re just at the early stages of this tool–very early stages. And we’ve come only a very short distance and it’s still in its formation, but already we’ve seen enormous changes, I think that’s nothing compared to what’s coming in the next hundred years.
Interviewer: In program six we’re going to look at some of the past predictions of why people have been so wrong about the future. And one of the notions is is that today’s vision of a standalone computer is just as limited as those past visions of it being only a number cruncher. What’s the difference, philosophically, between a network machine and a standalone machine?
Let me answer that question a slightly different way. If you look at why the majority of people have bought these things so far, there have been two real explosions that have propelled the industry forward. The first one really happened in 1977, and it was the spreadsheet. I remember when Dan Fylstra, who ran the company that marketed the first spreadsheet, walked into my office at Apple one day and pulled out this disk from his vest pocket and said “I have this incredible new program. I call it a visual calculator.” And it became VisiCalc. And that’s what really drove, propelled the Apple ii to the success it achieved more than any other single event. And with the invention of Lotus 123, and I think it was nineteen eighty-two, that’s what really propelled the IBM PC to the level of success that it achieved. So that was the first explosion, was the spreadsheet. The second major explosion has been desktop publishing.
Interviewer: Excuse me, we just lost a light.
When is this gonna be broadcast, next year sometime?
Interviewer: (unintelligible sounds, I’ll try to make out what the interviewer said) Co-production the BBC. One part is going to be interesting landscape in this we’re going to dramatize the future well we guess our futures because we’ve got a dramatic budget in England.Whatever our guess is, is gonna be wrong, but at least we want to give people a vision of where things are heading.
So can I just start of with the second one?
Right. The second really big explosion in our industry has been desktop publishing–happened in nineteen eighty-five with the Macintosh and the LaserWriter printer. And at that point people could start to do on their desktops things that only typesetters and Printers could do prior to that. And that’s been a very big revolution in publishing. And those are really, those two explosions have been the only two real major revolutions which have caused a lot of people to buy these things and use them. The third one is starting to happen now. And the third one is: let’s do for human to human communication what spreadsheets did for financial planning, and what public desktop publishing did for publishing. Let’s revolutionize it using these desktop devices. And we’re already starting to see the signs of that.
As an example in an organization we’re starting to see that as business conditions change faster and faster with each year, we cannot change our management hierarchical organization very fast relative to the changing business conditions. We can’t have somebody working for a new boss every week. We also can’t change our geographic organization very fast, matter of fact even slower than the management one, we can’t be moving people around the country every week. But we can change an electronic organization snaps like that. And what’s starting to happen is we start to link these computers together with sophisticated networks and great user interfaces, we’re starting to be able to create clusters of people working on a common task in literally in 15 minutes worth of setup. And these 15 people can work together extremely efficiently no matter where they are geographically and no matter who they work for hierarchically. And these organizations can live for as long as they’re needed and then vanish. And we’re finding we can reorganize our companies electronically very rapidly. And that’s the only type of organization that can begin to keep pace with the changing business conditions. And I believe that this collaborative model has existed in higher education for a long time. But we’re starting to see it applied into the commercial world as well. And this is going to be the third major revolution that these desktop computers provide is revolutionizing human to human communication and group work.
We call it interpersonal computing. In the 1980s we did personal computing. And now we’re going to extend that as we network these things to interpersonal computing.
Interviewer: What was the image of the computer in the mid-1960s, or whenever you first saw one, and where we are now, how did the PC enact that change?
I saw my first computer when I was 12. And it was at NASA, we had a local NASA center nearby, and it was a terminal which was connected to a big computer somewhere, and I got a time-sharing account on it. And I was fascinated by this thing. And I saw my second computer a few years later, which was really the first desktop computer ever made. It was made by Hewlett-Packard, it’s called the 90100A and it ran a language called BASIC. And it was very large, it had a very small cathode ray tube on it for display. And I got a chance to play with one of those, maybe in 1968, or 1969. And spent every spare moment I had trying to write programs for it. I was so fascinated by this.
And so I was probably fairly lucky. My introduction to computers very rapidly moved from a terminal to within maybe 12 months or so actually seeing probably the first desktop computer ever really produced. And so my point of view never really changed from from being able to get my arms around it, even though my arms probably didn’t quite fit around.
(Footage cuts, resumes ~21m)
Interviewer: How have personal computers changed the landscape of computers? I mean back then it was centralized power, was in a mainframe, now we have three times as much power at the fringe than we have in the center or five times as much power. How did the PC change the world?
Though the analogy is nowhere perfect, and certainly one needs to factor out the environmental concerns of the analogy as well, there is a lot to be said for comparing it to going from trains, from passenger trains, to automobiles. And the advent of the automobile gave us a personal freedom of transportation in the same way the advent of the computer gave us the ability to start to use computers without having to convince other people that we needed to use computers. And the biggest effect of the personal computer revolution has been to allow millions and millions of people to experience computers themselves decades before they ever would have in the old paradigm. And to allow them to participate in the making of choices and controlling their own destiny using these tools. But it has created problems. And the largest problems are that, now that we have all these very powerful tools, we’re still islands. And we’re still not really connecting these people using these powerful tools together. And that’s really been the challenge of the last few years and the next several years: is how to connect these things back together so that we can rebuild a fabric of these things, rather than just individual points of light if you will. And get the benefit of both the passenger train and the automobile.
Interviewer: What’s the vision behind the NeXT machine? We’ve already covered this a little bit.
Yeah. Everything that we’ve done in our, well… long pause
Everything I’ve done with computers in my life has been along pretty much a single vector. And NeXT is just one more point on that same vector. In this case, what we observed was that the computing power we could give to an individual was an order of magnitude more than the PCs were giving. In the sense that people want to do many things at once, and you really need true multitasking. We really did want to start to network these things together in very sophisticated networks. So the technology to build that in became available. And most important, we saw a way to build a software system that was about 10 times as powerful than any PC and where some new software could be created in a fourth of the time. So we spent four years with fifty to a hundred of the best software people we could find building this new software system. And it’s turned out beautifully.
Interviewer: What’s the vision behind NeXT?
It’s not so much different than everything I’ve ever done in my life with computers. Starting with the Apple ii, and Macintosh, and now NeXT. Which is if you believe that these are the most incredible tools we’ve ever built, which I do, then the more powerful tool we can give to people the more they can do with it. And in this case we found a way to do two or three things that were real breakthroughs. Number one was to put a much more powerful computer in front of people for about the same price as a PC. The second was to integrate that networking into the computer so we can begin to make this next revolution with interpersonal computing. And the pcs so far have not been able to do that very well. And the third thing, and maybe the most important, was to create a whole new software architecture from the ground up that lets us build these new types of applications and lets us build them in twenty five percent of the time that it normally takes to do on a PC.
So we spent four years with 50 to 100 the best software people that I know creating a whole new software platform from the ground up. And the way our industry works is that you create this platform software first, and then you go out you get people to write new applications on top of it. Well the the height that these new applications can soar is is enabled or limited by the platform software. And there’s only been three systems that have ever been successful in the whole history of desktop computing. That was the Apple ii’s platform software, of which there wasn’t too much. The IBM PC, and Macintosh/
So, we’re attempting to create the fourth platform software standard and hopefully will succeed because it will allow these applications to be written which far far exceed in capacity what can be done in today’s machines.
Interviewer: What happens when you have a network that allows the relative minorities in a whole different area come together? How does it change the democracy?
I don’t know. But, what I have seen, is I’ve seen interpersonal computing happening at our own company. Maybe the best way to put it is. I remember when the first spreadsheet came out, I saw it fly through Apple as well as other companies. And when we when we invented desktop publishing, of course, it influenced Apple first. And I’ve seen the same thing happened with interpersonal computing here at NeXT
We decided to put a NeXT machine on every employee’s desktop about 18 months ago and connecting with you know the very high speed networking that’s built in and I’ve seen the revolution here with my own eyes. And it’s actually larger than the first two. Let me give you some examples. If we want to if we’re going to be doing a special project,let’s say with a company, and let’s say the company’s called–what’s your?
WGBH. We’re going to be doing a special project with WGBH. And what we’ll do is, we’ll create a special mailbox, “WGHB.” And we’ll put 20 people on it that are going to be helping on this project. Now these 20 people will be from all over our company–from marketing, from sales, from engineering, some from manufacturing, maybe some from our Boston office, so they can be close by and if one sends a message to this mailbox they’ll all get it like snaps that. Instantly. And if one sends a reply, they’ll copy the whole mailbox on it so the rest of the team members get to read the intellectual content going back and forth. And everyone in this mailbox will probably get around 30 mail messages a day. And they’ll spend about 20 minutes, 30 minutes reading these and answering these per day. And it’ll be like a beehive. Now, this project is very important for our company, and I want to make sure it’s getting off right. So, I’ll put my own name on this mailbox and I’ll see these 30 mail messages fly by. All of the disagreements and the arguments and the thoughts and the decisions–and I can just let it fly by and read it. I can do some background coaching with a few people if I think they’re a little off track. I can get right on the network and kibbutz if I’d like. And after a month or so, when I know that it’s going well, I can take my name off. And so not only is this a way to organize–violating all management and geographic boundaries–it’s also a way to manage where one can see, again the thoughts and disagreements and decisions of a company fly by a manager in a way that they never could before. And we have seen it reduce the number of meetings we have at least by 50%. We’ve seen it get far more managers and individual contributors involved in decisions than they ever were before. We think the quality of the decisions is a lot higher and we have seen a window for management to look into the process of this organism we call our company in a way that has never before been possible
I’m part of this electronically connected community that’s going to provide us wonderful new capabilities and communications abilities. But we still always want to be able to disconnect that network spigot, take it off and take our standalone computer somewhere, let’s say home. Now what’s going to happen rapidly, is with radio links and with fiber optics to the home, you’re going to be able to hook your computer up to your network at home. But there’s always going to be that cabin in the middle of nowhere that I want to go for a two-week vacation where I want my computer. And if it doesn’t work in a completely standalone way, I’m going to be not happy. So we have to provide a fluid way for these things to kind of doc into the other load network but also undock and allow me as an individual to carry my computer up in the Yosemite backpacking and where there’s you know no radio links and no fiber optic.
into the network and find out what happened when I left, and share some of my thoughts, maybe with some other folks. So we’re working on that. That’s our goal for the next five years, is that seamless transition between the standalone computer and the computer is part of this network community.
Interviewer: It also keeps away the Orwellian aspects of always being hooked into the net.
Right. That’s right. Now I actually think what’s an interesting paradox is: it is the network which is ultimately going to define and create the home computer market. Not keeping our recipes on these things or something like we thought in 1975. Being a part of that Network and not being able to stay away from it while you’re at home will drive people to get to computers in every house just like we have a telephone in every house.
Interviewer: But computers then, it won’t be just computers they’ll be radios and stereos and TV’s.
No, I think there’ll be just computers. Just like your phone isn’t your television set. Just like your toaster isn’t your radio. I think there’ll be computers and they’ll have many of the capabilities of these other devices. Multimedia, the ability to integrate sound and video in with the computer is absolutely coming. But a lot of people have mistaken it as the end rather than the means. We see multimedia as more more of a means. In other words, people aren’t going to buy a computer for multimedia, they’re going to buy it for training, or they’re going to buy it for interpersonal communication. And in that communication, in addition to text, they’re going to want voice, they’re going to want potentially, I might want to send you a video clip, but the real market is to help us communicate better, or to help us train somebody. And we need to not lose sight of that.
Interviewer: Going on. I want to get your thoughts on the user interface stuff and I’d like to look at the transition of Xerox to Apple. What was your the image of Xerox PARC, and what was it like when you first went in there?
Well, Xerox PARC was a research lab set up by Xerox when they were making a lot of profits in the copier days. And they were doing some computer science research which was basically an extension of some stuff started by a guy named Doug Engelbart when he was at SRI. Doug had invented the mouse, and invented the bitmap display, and some Xerox folks, that I believe hired away from Doug or split off from Doug, somehow and got to Xerox, were continuing along in these in this vein. And I first went over there in 1979. And I saw what they were doing with the larger screens, proportionally spaced text, and the mouse. And it was just instantly obvious to anyone that this was the way things should be. And so I remember coming back to Apple thinking, “Our future has just changed. This is where we have to go.”
The problem was that Xerox had never made a commercial computer. This group of people at Xerox was was more concerned with looking out 15 years than they were looking out 15 months and trying to make a product that somebody could use. So there were a lot of issues that they hadn’t solved, like menus, other things like that. And at Apple what we had to do is to do two things. One was complete the research, which really was only about fifty percent complete. And the second was to find a way to implement it at a low enough cost where people would buy it. And that was really our challenge.
Interviewer: What did you succeed in doing with the Mac?
Well, the macintosh is. you remember when it came out, we called it, “the computer for the rest of us.” And what that meant was that while experts could use some of the computers that were already out, most people didn’t want that, again the computer was was not an end in itself, it was a means to an end. And so most people didn’t want to learn how to use the computer, they just wanted to use it. And the Macintosh was supposed to be the computer for people who just wanted to use a computer without having to learn how to use one and spend six months.
Now, it turned out that the the paradox was that: to make a computer easier to use, you needed a more powerful computer in the first place because you were going to burn a lot of the cycles on making it easy to use. And so this computer that we easy to use, was actually more powerful and could do more things than the less easy to use computer. And it took people a few years to figure that out about the Macintosh. But I think I think people did.
Interviewer: Actually, there’s a funny joke that we were clowning around one day and, one of our group is an IBM person, and so I was saying, you know, some little girl walks up and sees a prompt and goes to her daddy and says “this is broken, where’s my desktop?” You know. And we’ve adopted this new metaphor. How has that changed the look of computers?
Well I think, I think the Macintosh was created by a group of people who felt that there wasn’t a strict division between sort of science and art. Or in other words that mathematics is really a liberal art if you look at it from a slightly different point of view. And why can’t we interject typography into computers? Why can’t we have computers talking to us in English language? And looking back five years later this seems like a trivial observation, but at the time it was cataclysmic and its consequences and the battles that were fought to push this point of view out the door were very large.
Interviewer: The balance between thinking and doing, I mean one of the things within the semiconductors was you had risk takers. Bob Noise you know learned to hang glide at age 40. These people like laying their butts on the line. How important was that in the early days? I mean we’re going back to 75.
Well, again, after seeing… my entire life’s been spent only in one industry, which is this one. But I’ve been in it for now for about 15 years and I’ve seen a lot of people make a lot of things. I’ve seen a lot of people fail a lot of things. And my my point of view on this, or my observation is that: the doers are the major thinkers. The people that really create the things that change this industry are both the thinker and doer in one person. And if we really go back and we examine you know, did Leonardo have a guy off to the side that was thinking five years out in the future what he would paint or the technology he would use to paint it? Of course not. Leonardo was the artist but he also mixed all his own paints. He also was a fairly good chemist, knew about pigments, knew about human anatomy. And combining all of those skills together–the art, and the science. The thinking and the doing–was what resulted in the exceptional result. And there is no difference in our industry. The people who have really made the contributions have been the thinkers and the doers.
A lot of people of course, it’s very easy to take credit for the thinking. The doing is more concrete. But it’s very easy for somebody to say, “Oh, I thought of this three years ago.” But, usually when you dig a little deeper, you find that the people that really did it, were also the people that really work through the hard intellectual problems as well.
Interviewer: What’s it going to take to make computers accessible to the rest of the public? I don’t know what the statistics are, but 20 million people on computers? What’s it going to take to get it to 100 million?
Well, probably death is the best invention of life. Because it means there’s a constant turnover. And so if you want to make a change in our society the best place to do it is in the educational system. So that you’re there there are now generations of people that have come out of school who computers are second nature to them. And the people in our society that that at this point still have have not embraced these things are getting older and as that cycle, that wheel of birth and death turns, just like driving, people that don’t drive are very rare, and another generation or two people that don’t use computers will be pretty rare.
It’s a harsh way of saying it, but it’s very true.
Interviewer: Focusing now on that third program where we’ve gone from semiconductors and the vision is IBM is this big machine, UNIVAC, big large machine and we take the line through of integrated circuit microprocessor. I’ve actually got some great stuff from Ted Hof about,you know, it’s a light bulb, you know, “it burns out, you replace it.” Then we lead up into the beginnings of the personal computer. So what were you doing at the time and how did that get started?
Actually you know, it wasn’t Intel that first figured out that the microprocessor was a computer. They designed these things to be used in calculators. And they thought the reason that the microprocessor came about, was they thought if they could design a slightly programmable one, the next customer that walked in the door, that one is a slightly different calculator, they could just spend a few months rather than a few years designing a new piece of silicon. But I think the thought of making a computer never really occurred to them. And it was the hobbyists that thought about making a computer that thought about making a computer out of these things. It was this it was the computer hobbyist community that first did that. And I don’t think Intel quite understood that for a few years.
But again, the first thing that happened was these people came together and formed a club. The Homebrew Computer Club at Stanford–was the first one in the country. And it was a beehive of all of these people who were interested in these small little computers. People that might have been ham radio operators people, that might you know worked with large computers, were all gathered together to share, discuss their latest little projects. It was very exciting. And there was not a month that would go by where some breakthrough didn’t happen. And then the first magazine came along, which was Byte magazine, to communicate on a national scale with all these hobbyists. So it was a very, very, exciting dynamic time.
Interviewer: What did you think when you saw the Apple i?
What did I think when I saw the Apple I?
Interviewer: Yeah when I first saw that Woz was building that board.
Well, it didn’t quite work that way actually. What happened was, was that Woz and I had known each other since I was about 12 or 13 years old. And we built our first project together was we built these little blue boxes to make free telephone calls. And we had the best blue box in the world. It was this all digital little blue box–I don’t think it works anymore. But we had we had a fun time doing that. So when it came to building a computer together Woz focused mostly, Woz was the brilliant hardware engineer and focused on the core design of the computer. And I was worrying about which parts we ought to use and how we were going to build these things and how it sort of a somebody that wasn’t the Woz was going to manage to buy all the extra parts you still needed to buy and plug this thing together. Because you still needed to buy your own keyboard, and your own display, and your own power supply. And so you needed to be pretty much of a hardware hobbyist.
Now we made the very important decision was to not offer our computer as a kit. Even though you needed to buy these extra parts, the main computer board itself came fully assembled. We were the first company in the world to do that. Everybody else was offering their little computers as a kit. And what that meant was, was there was maybe an order of magnitude more people who could actually buy our computer and use it than if they had to build it themselves. And the Apple II was actually the first computer to come fully assembled. Where you didn’t have to do anything. And the reason there was it was our observation that for every hardware hobbyist, someone who could either build the kit themselves or at least find these five or ten extra parts that they needed, there were a thousand potential software hobbyists. And if they didn’t have to do anything with the hardware except use it–at that time that meant write their own programs. Still there was a much larger group of people that could take advantage of this. So we wanted to reach them. And that was the the real breakthrough in the Apple II.
Interviewer: To contrast if you will the Atlantic City fair with the West Coast computer.
Well, the Atlantic City computer show was the first–I’m about to sneeze actually.
The first face-to-face gathering of personal computer hobbyists from all around the country was the show put on Atlantic City in 1976. And it was in the basement of some dingy hotel. And it just happened to be about 300 degrees outside, so the basement was like a steam bath, and it was impossible to be down there for longer than a half an hour without being completely drenched. And nevertheless there were a few hundred hobbyists completely drenched walking around for hours. And we had a little tiny booth–there was the tablecloth over a hotel table, and Woz and I and a friend or two of ours went there and we had our few Apple I’s there and a little poster we’d made and that was really our first computer show in the world. A year later, I think maybe maybe even nine months later, there was the first West Coast computer fair. Which was a much more professional operation by in comparison with Atlantic City, but still very, very, hobby oriented compared with what goes on today. And that was in San Francisco and there were maybe a hundred companies showing their wares and it was attended by maybe a thousand people. Which was a lot for our industry at that time.
Interviewer: Thirteen thousand
Thirteen! thirteen thousand? Wow. Really, thirteen thousand people, that’s a lot.
Interviewer: Jim Warren told me that.
That’s a lot, I’d be surprised at that, but maybe he knows better than I do.
Interviewer: Call it half that, six thousand.
Thousands of people. And that’s when we introduced the Apple II. And I think the Apple II is probably the hit of the show at that time.
Interviewer: In between you went and found McKenna and Marla.
Well, we found Regis by–I used to like Intel’s advertising so I called him up one day and I said, “who does your advertising?” They said well Regis McKenna? And I said, “what’s a Regis McKenna?” They said no, it’s a person and gave me his phone number. And I called Regis up and he told us to go away about four or five times, but eventually he agreed to help us out. And then Mike Markkula I found from a venture capitalist actually told me that I should go talk to Mike Markkula.
Now we hooked up with Mike just around the time we introduced the Apple II, maybe a month before. But the Apple II was was pretty much designed and ready to go and then Mike came on board. And things really started to take off.
Interviewer: How important was a disk drive in the development of Apple?
Disk drive was crucial. One of the things that people forget when they think about about Apple, and the Apple II in particular, was that that we were the first company to come out with a reliable, inexpensive floppy disk drive. And we had a low-cost floppy disk drive that really worked about two to three years before any of our competitors. And that was an incredibly important reason why the Apple II was successful. Matter of fact, there were a few others. The Apple II could hold up to 48 kilobytes of memory–which today doesn’t seem like much but at that time was maybe three times as much as its competitors. And that’s why VisiCalc was written for the Apple II–it was the only computer that could hold it. And so if VisiCalc had been written for some other computer, you’d be interviewing somebody else right now. And it was because of that design decision, and other design decisions like it, that the Apple II really beat its competition.
Interviewer: How did the Apple II change the world of computing?
Well, the Apple II was the world’s first successful personal computer. And really defined the personal computers we know it today. So I think it changed the world a lot from that point of view.
Interviewer: One of the thesis is that, well let me turn this question way. How important is market research? How much did you rely on it in the early days?
Well, you know I think in the early days it was very easy because you would go to a Homebrew Computer Club meeting and there was your whole market. And so you could find out what they thought–you show them your product and see what they thought, because the products were much simpler then, within a few months you could change it all around and come back show and show them a new one.
But, as the market got more sophisticated it was less easy to do that. And the problem is that market research can tell you tell you what your customers think of something you show them. Or it can tell you what your customers want as an incremental improvement on what you have. But very rarely can your customers predict something that they don’t even quite know they want yet. As an example no market research could have led to the development of the Macintosh, or the personal computer in the first place. So there are these sort of non-incremental jumps that need to take place. Where it’s very difficult for market research to really contribute much in the early phases of the thinking about how to you know what those should be.
However, once you have made that jump, possibly before the products on the market or even after, is a great time to go check your instincts with the marketplace and verify that you’re on the right track. And usually when you show people something they’ll say, “oh my god, this is fantastic,” or you know give you some feedback along those lines.
Interviewer: How has the personal computer changed society? I am not sure why I keep asking this again. I mean how have we fundamentally changed the way we do our daily business, our daily lives. How has it affected that?
I’m not the right person to ask.
Ask Alan Kay.
Interviewer: Okay, um. We have just about covered. The only other thought I have is when you were getting started out, I read somewhere that you had no intention of building a company. That you were just out to do stuff for yourselves. If you can give me, I don’t know the question to ask to get that, but.
Well at the time we started Apple, Woz was working for Hewlett-Packard, I was working for Atari actually for Nolan Bushnell, designing video games. And we went to Atari and showed him our early prototypes and we went to HP. And we encouraged each company to hire the other one and let us do this for them and we got turned down in both places. Probably for good reasons. But we started a company because it was the only alternative left. Not because we wanted to.
Interviewer: When did you ever think that that is was really gonna happen, this was gonna go from just an interesting idea to–
Oh it didn’t take very long. It happened for me when I saw people that could never possibly design a computer, could never possibly build a hardware kit, could never possibly assemble their own keyboards and monitors, could never even write their own software, using these things. Then you knew something very big was going to happen. When we got into that stage, where we were high enough on the food chain if you will, that a lot of people could use these things. And they were really liking it.
Interviewer: What’s the the goal of the NeXT factory? Why is it so automated? Why is that necessary?
One could go on for a long time about how the US has forgotten about manufacturing. Which has certainly been true, but we’re starting to wake up. And we’re finding is, is that time to market is very important, and quality is very important. And the way we can make tremendous increase in quality and reductions in time to market is through automation. So the automation isn’t there to lower the cost although it does do that. It’s really there to increase the quality and decrease the time it takes us to get our new product, as an example, to market which is very important in a technology-based marketplace. So we happen to be the lowest cost producer in the world already at NeXT of our class of products. We also happen to be one of the highest quality producers of our type of product in the world. And we think for a company to survive, much less prosper in the 90s, that these are going to be very very important things to be world class at.
We’re not competing at the Homebrew Computer Society anymore. We’re competing with Europe Inc., and Japan Inc., and IBM Inc., and in order to do that we really have to be world-class manufacturers.
Interviewer: What do computer networks offer education?
Well you know education has been on computer networks for longer than almost anyone else. The Department of Defense has an office called DARPA, and they funded a thing called ARPANET many many years ago to try to build a command and control network for military purposes. And they did a very brilliant thing after they got a prototype working, they gave it to the university community in America and said, “bang on this for a while and see if it works and help us make it better.” And after a few years of the university community doing that, they created a separate version for military purposes but they left the educational version going. And that has tied together the research community of the United States now for about a decade, and is vital to the functioning of higher education in this country. So higher education has actually led the way, that’s why we started off focusing exclusively on higher education because where else could you find 5,000 people on a network but Carnegie Mellon University as an example.
So higher education has been five years ahead of business in using computers in some of these powerful new ways, which we’re going to see now ripple into business in the first half of the 90s. It’s pretty exciting.
Interviewer: How about lower education?
So far computer use in K through 12 has been primarily Apple ii’s and I wish, I wish that they’ve been upgrading too Macintosh’s faster than they have been, but I think that that’s slowly happening. And IBM is getting in there as well. The primary purpose of computing in K through 12 has been just computer literacy. And there’s been a bottleneck because there hasn’t been enough sophisticated courseware written. And that’s a problem for our society in general amongst all the other problems with our K through 12 education system, one could talk about that for a few days.
Interviewer: Easily, easily.
Where you down in Austin to see bob?
Interviewer: Yeah and I was gonna go speak with Jack Kilby, unfortunately he’s in the hospital. […] Going back to the Mac, in meeting the deadline for the Mac, how crazy did it get? And you’d already said that you were going to have this big splash of the Super Bowl.
Actually, we wanted to get the Mac out a year before we did. So, we had internal deadlines that we were not able to meet. But by the time we set, by the time we bought the spots for the super bowl and things like that I mean it was basically in the bag. It’s not that we didn’t work 24 hours a day for the last six months to get it out, but we were on the bomb run at that time.
Interviewer: I love this thing that you did which is have everybody sign the cases, that was great. Why did you do that?
Because the people that worked on it consider themselves, and I certainly consider them, artists. These are the people that under different circumstances would be painters and poets, but because of that time that we live, in this new medium has appeared in which to express oneself to one’s fellow species. And that’s a medium of computing. And so a lot of people that would have been artists and scientists have gone into this field to express their feeling. And so it seemed like the right thing to do.
Interviewer: What was it like when you announced at the shareholders meeting?
Oh wow. It was uh. I got the first few rows had all the people that worked on the Mac, about a hundred people, under 50 people that really made it happen were all seated in the first few rows and when it was introduced after we went through it all and how the computers speak to people itself and things like that, the whole auditorium of about 2,500 people gave it a standing ovation, and the whole first few rows of Mac folks were all just crying. All of us, were just–I was biting my tongue very hard because I had a little bit more to do. But it was a very, very emotional moment, because it was no longer ours from that day forward. It was no longer ours. We couldn’t change it. If we had a good idea the following day, it was too late. It belonged to the world at that point in time.
Interviewer: (has been flipping through papers)
I should probably get going.
Interviewer: Yeah, yeah. I’m just thinking a couple, let’s do the kickers then.
Closes eyes and whispers the kickers…
Interviewer: Ok these are 15 seconds at the beginning of the show to grab people’s attention. So program three we were going from semiconductors to the the growth and the establishment of the computer industry. So what did you accomplish, what did you set out to do and what did you do?
Well, I think maybe something different along the lines of what you want is… You know, the semi-conductor people didn’t know what they had in the microprocessor for two or three years. It was the computer hobbyists that really got the idea to make this into a computer rather than a calculator.
Interviewer: Were you out to build a company or change the world?
When we started Apple, we were out to build computers for our friends. That was all, no idea of a company.
Interviewer: How important is a user interface in the design of computer?
Well, the whole idea of the Macintosh was a computer for people who want to use a computer rather than learn how to use a computer.
Interviewer: One way we’ve been playing with is “it’s not how it does it, but what it” Don’t know if that’s any good. There’s “I don’t care how it does it anymore, I just want it to do what I want it to do.”
Right, there is a quote in an interview that was done with me in Playboy a while ago. I gave a Macintosh to a young kid one time–was actually Sean Lennon at his birthday, and he had a great quote. He said, “everyone else,” and I guess I said this actually. “The older people all want to know how it does what it does, but the young people just want to know what it can do.
Interviewer: Okay, wrap that up into–(incomprehensible stammers)—how about this. Where are we in the evolution of the user interface and where are we going?
Is that a short one?
Interviewer: I don’t know that there is a short one.
This whole discussion about user interface is just strange to me because to me it’s just sort of a natural thing that had to happen, did happen, and it’s happened. It’s kind of like automatic transmissions.
Interviewer: In the history series though, there is an evolutionary line, so that’s why we’re following that line. I mean a lot of people don’t have about Doug Engelbart.
Interviewer: Um, okay, networking. Why is networking important and why is it future?
Well, in the 90s we’re going to revolutionize human to human communication using these desktop computers in the same way that spreadsheets revolutionized financial modeling and the desktop publishing revolutionized publishing.
Okay good. Thanks.
Interviewer: Anything we haven’t covered?
No. I gotta go.
Interviewer: This is great, thank you very much.
Steve Jobs on Apple’s Vision
Scientific American, I think it was, did a study in the early 70s on the efficiency of locomotion. Was what they did was for all different species of things on the plants, birds, and cats, and dogs, and fish, and man, goats and stuff, they measured how much energy does it take for a goat to get from here to there. Kilocalories per kilometer or something, I don’t know what they measured in. And they ranked them. They published the list. And the Condor won, the Condor took the least amount of energy to get from here to there. And man’s… didn’t do so well, came in with a rather unimpressive showing about a third of the way down the list. But fortunately, someone at Scientific American was insightful enough to test the man with a bicycle. And man with a bicycle won. Twice as good as the Condor–all the way off the list. And what it showed was that man is a tool maker–has the ability to make a tool to amplify an inherent ability that he has. And that’s exactly what we’re doing here. It’s exactly what we’re doing here.
We’re not making bicycles to be ridden between Palo Alto and San Francisco, okay. We’re making bicycles, and yes certain bicycles have certain generic attributes, like in general ten speeds are better at riding in the mountains than one speeds and other things like that, but in general what we’re doing is we’re building tools that amplify human ability. Just like the, you could say that the Industrial Revolution was basically an amplification of a human ability–sweat. Right, we amplified sweat. Fractional horsepower, motors, etc., etc. What we’re working towards now is the ability to amplify another human ability. And we’re just starting to get glimmerings.
What Apple is going to try to do over the next three or four years is to further that goal. And the key area we’re focusing on is the following: right now if you buy a computer system and you want to solve one of your problems, we immediately throw a big problem right in the middle of you and your problem. Which is learning how to use the computer, right. Substantial problem to overcome. Once you overcome that, it’s a phenomenal tool, but there is a barrier of having to overcome that problem. What we trying to do, and I think there’s a reasonable chance that Apple is going to make a real contribution to solving this problem in the next 36 months, is to remove that barrier so that someone can buy a computer system that knows nothing about it and directly attack their problem without learning how to program the computer. And the reason I think that Apple’s got a chance of solving that problem versus a lot of other computer companies that we all know of that are much, much larger than we are now–although we’re catching up–is that our whole company, our whole philosophical base, is founded on one principle. And that one principle is that there’s something very special and very historically different that takes place when you have one computer and one person. Very different than if you have 10 people in one computer. The rest of the stuff will take care of its self. The rest of the stuff will take care of its self.
Raw news interview July 1991
(For context, he was fired from Apple in May, 1985 and founded NeXT in June, 1985)
The whole premise for Apple’s existence is to come up with better products, highly differentiated better products, that then the third-party software developers can develop new and exciting and different applications on that they can’t develop on other types of personal computers. And if Apple gives that away by giving away their future system software then I’m not sure that the market needs Apple. So my whole question in this is what is Apple’s differentiation if this is successful? And if it’s not successful, what is apple’s innovation which is going to propel it through the 90s like Macintosh did through the 80s? I’m not sure.
I’m sure that they’re a bunch of bright people there and I’m sure they have some some good ideas—they stopped sending me their management reports a while ago so chuckles.
Interviewer: Well we’ve already covered some of the things that that we can do with pcs today that we didn’t do, but if we’re to look ahead what do you think that we’re going to be doing with personal computers and I mean from that you know your machines here are somewhere between a workstation and a personal computer. What do you think that we’ll be able to do with this field called personal computing, where you are in control that we that we can’t do today?
Well what’s happening right now with our industry is it’s bifurcating all current generation personal computers all IBM pcs, most of the current Macintoshes are all gonna go portable. They’re all gonna be smaller, all portable, within two-three years. Everything will be portable. And yet customers are also demanding at the same time more power. And more power falls into three or four areas. People want large color screens that they can put photographs on–ask anyone in in the upper part of desktop publishing as an example. People want motion video. People want to be networked with very high speed networking–at least ethernet speeds–and people want to be sending all of this rich media around the network.
Unfortunately this second class of product cannot be made portable so what I see is I see our industry bifurcating where the current generation of products are going to be portable and the next generation of products, these very powerful highly network color machines, are going to be desktop machines. And that’s where I think we’re going.
Now, what is going to be the new breakthrough that causes the next spurt of growth in our industry, just like spreadsheets did in the early 80s, desktop publishing did in the late 80s? And again I come back to interpersonal computing, I think personal computing which we we mastered in the 80s, its mission was to improve individual productivity and at best creativity. And with over 50 million personal computers shipped in the 80s, it worked. The next thing for the 90s though needs to be more. Improving individual productivity isn’t enough anymore. The real competitive advantage in the 90s is going to come from improving group productivity and collaboration. Improving group productivity. And that is going to be achieved through interpersonal computing–using the same desktop tool that revolutionized analysis and planning with spreadsheets that revolutionize publishing with desktop publishing–using those same tools to revolutionize human to human communication, collaboration, and group productivity. And I think that is going to be the third revolution of the desktop computer in the first half of the 90s.
Interviewer: You a fan of lotus notes?
I think we’re about three or four years ahead of that kind of thing with NeXT now, that’s why a lot of people are buying our stuff. We have something that’s pretty remarkable. Lotus notes is okay, but it starts off with a pc so you have a lot of inherent limitations.
Interviewer: Did you have any idea early on, say early 70s, even late 70s early 80s, that the pc was going to have such a dramatic impact on the entire structure of the computer industry?
Again, what’s hard to remember is that by 1979, when we were at Apple, we were already shipping more unit more computers measured in units than IBM was. Remember ibm was only shipping big mainframes and a few attempts at minicomputers. We were already shipping more computers in unit volume in 1979 than IBM was.
So the thought occurred to us certainly by then that this was going to have a staggering effect because of the unit volume.
Interviewer: If we’re to come back to you in five years for the 15th anniversary of the pc, what among the companies that are out there now do you think may well go away, and and which amongst them that are somewhere in the in the also rand pack do you think may be running up front, besides NeXT?
Let me correct, I think a mistaken impression that you articulated. I don’t think this is the 10th anniversary of the pc, I think it’s the 15th anniversary of the pc, or maybe the 14th, because the first modern pc as we know it appeared in 1977–and it was the Apple ii. And the Apple ii sold five or six million units until it was retired. And IBM entered the pc business with their products, which turned out to have a very large effect, but nonetheless the course had already been plotted in 1981. So I think it’s the 10th anniversary of IBM’s entrance into the pc market.
Five years from now, uh, let me answer a broader question than that and I’ll come back to that one okay. At the risk of wasting some of your video tape.
Interviewer: That’s all right the tape is cheap.
There is a constant tension in our industry between standards and innovation. And I think it’s a healthy tension. Standards are very good because they give everybody a baseline, they give everybody a low-cost economic vehicle. But, left to themselves, people that usually are the standard bearers don’t have any incentive to move forward. And ultimately customers lose. And that’s the role of the companies that innovate. Companies that innovate, use as many of the standards as they can, but then leap up from them and try to to provide new opportunities through innovation with certain amount of risk associated because they’re not part of the standard. And some of them succeed very wildly–Macintosh as an example was a real step, it was a real revolution versus just an evolution. As where most of things in the pc world have been evolutionary. 286, the 386, the 486. And it’s this tension between the evolution and the revolution that I think keeps our industry moving forward we’ve seen seven years after Macintosh, finally the IBM world is getting some of the graphical user interface that was available in 1984 with the Macintosh.
So this this evolution/revolution tension I think is extremely important to keep on going in the future. And the the revolutionaries that manage to establish a critical mass, get up to a certain size before the evolutionary people catch up, they survive and prosper. Those that don’t get absorbed into the evolutionary path. And with that perspective, when i look at what is happening now, unfortunately I see a lot more status quo in the next five years than I see real evolution.
I don’t see much coming from things like the Apple-IBM relationship–I see more of the same coming from Apple over the next five years. I see more of the same coming from IBM in small evolutionary steps–286s to 386s to 486s to 586s, but nothing really different. Spreadsheets will run a little faster, but nothing really different.
I system 7, system 8, system 9 coming from Apple, but fundamentally nothing really different. And I wish I saw more. But i think it’s going to be up to some of the other companies like NeXT and others to provide that revolution in the next five years, which you know five, six, seven years from now the standard bearers can catch up to–just like we saw the pc world catch up to Macintosh seven years later
Interviewer: Let me ask you something that may not mean I saw the Xerox star system over a decade ago, i guess it was, you know with with document context architecture. Why hasn’t the personal computer developed along those lines until really the go operating system–where you can touch and essentially be doing the spreadsheet in one document, touch, and then you’re doing graphics in the same document without having to open new applications and so on.
Interviewer continues: I mean I know that the power wasn’t there initially, but now it is.
Well I guess I take exception to a lot of your contentions. The star didn’t actually do that, quite. The star actually opens separate applications.
The industry’s wrestling right now with compound document architecture. And go made a sort of very simple attempt at it, but unfortunately one that I think will not be robust enough for for real life use and it’s a very difficult problem.
It’s actually more of a user interface problem I think than anything else. It’s very difficult because, as an example, when you use a spreadsheet there’s a lot of paraphernalia that goes with the spreadsheet. Maybe a little bar so you can type in things and a few buttons. And when you use a drawing program maybe there’s a palette of things that sometimes is even glued right onto the document so how do you handle the context switches from a user interface point of view when you move around through these various sort of objects in your document? Nobody’s yet figured that out. The underpinning technology is very easy to hack up now and give a demo of–but to really do it right, you’ll see some things next year.
And star also didn’t really solve the the general problem. Remember that all the applications on star were written by Xerox.
Interviewer: Oh I know, I didn’t want to get into the whole question of what they did wrong in that.
The point I’m trying to make is: it’s very easy to do something when you write all the applications. Because then every application can know about every other one. And in general a company turns out five or six applications and they all know about each other and you can give a great demo with these apps. But the real key is to come up with an underlying structure that’ll let third parties who never talk to each other have these capabilities within their apps. And no one’s yet done that–no one has yet done that well. And I think you’ll you’ll see some of that next year.
Interviewer: One of the pieces that we’re doing is is going to be about as much as we ever get into things like personalities. So let me just ask you: looking back from from the day that you guys came up with the notion for Apple one, how much has your life changed and how has it changed?
Well for me, that’s a really big subject, because my whole adult life has been spent building personal computers. We started Apple when I was 20 years old. And I’m now an old man of the industry at 36. So, I’ve been doing this for about 16 years, and it’s been my whole adult life, so the history of my vocation and my avocations, and you know my growing up, are all the same. And it’s very hard to separate one from the other. You see what I’m getting at?
Interviewer: Is there anything that we haven’t touched on in the course of running through all this stuff that you’d like to get to either in terms of the narrow issues or the broad brush strokes?
Well I think there’s two interesting issues that you could touch upon. One is, of course, the American versus Japanese issue. And the second is that some people think our industry is very mature and they think there’s going to be rapid consolidation and very few companies left over and it’s pretty much very predictable from here on out. That point of view I do not share at all.
I think we’re about one inch down a road that’s many miles long and that every time there’s major technological innovation there’s a tremendous opportunity for new players for a reorganization of the industry to occur. And I think that there is certainly as much opportunity for innovation in the next five years as any five-year period I’ve ever seen in our industry. I think there’s just as much opportunity for new companies to come along, for new approaches to be taken, and for customers to get much better computers five years from now than they have today.
So I’m pretty optimistic, and I think we all need to remember that we’re just in the infancy of this revolution and it will continue to occur throughout our lifetimes and I hope and I work with a group of people that all work very hard to make sure that the rate of innovation doesn’t slow down and that that most of that innovation continues to come out of the United States of America.
Interviewer: All right you have a take on the U.S. / Japanese
Well. Yeah I do, um. As we look at the types of computers we’re building today and projected in the next few years, a disturbing fact is that even though most of the computers are assembled here in the United States, a significantly large number of the dollars that one pays for the components of those computers–to build those computers–flows overseas. The most expensive part of many computers is the display, whether it be a color cathode ray tube, or whether it be a flat panel display, and almost all of those dollars flow to japan. The second most expensive component in most computers is the dynamic memory, and again most of those dollars flow to Japan. The third most expensive component is the hard disk drives, and most of those dollars flow to U.S. companies even though the disk drives are mostly built in Singapore. And one of the things I think we need to keep our eye on the ball of is to manage those most expensive components back to America and I think that that’s going to take some real effort, especially in the display in the dram area. It’s going to take some effort because those are capital intensive products–the factories to build the displays or dram are now costing a half a billion dollars to a billion dollars a piece–and the engineering required is also something that one doesn’t build up overnight. But it’s I think essential that we don’t we don’t continue to be hollowed out as an industry, where even though the assembly of the final products–the printing of the manuals, the bow on the shipping carton–gets tied here in the U.S., most of the dollars don’t get sent across the shores.
Interviewer: You’re in a very fortunate position because you’re you are privately held, and you you don’t have to worry about the quarter to quarter problems that some of your publicly traded brethren right have to worry about. How much of what you’re talking about is a result not so much of the advances being made by the Japanese but by the impediments that exist in the American capital structure in terms of investment disincentives for long-term capital holdings, in terms of the quarterly outlook of the wall street analysts and so on?
Well, I don’t really buy that argument. And let me give you some reasons why. If i’m going to build a factory, and it’s going to cost a hundred million dollars, that factory doesn’t get written off the minute I build it. That factory is an asset on my books, just like cash in the bank is–it gets depreciated over many, many, many, years.
So that decision to build that factory doesn’t really affect my earnings statement, it affects my balance sheet because I take 100 million of cash and put it into a 100 million dollar factory, but it doesn’t affect my earnings. And shouldn’t affect what Wall Street views are my prospects or or my results. And I think that the real problem is not been with Wall Street, it’s been with the management of our industry it’s been with people not being willing to take responsibility for the underlying component technologies and thinking that we could give that responsibility to others and survive in just a successful of a fashion–which is not true. Industry after industry has shown us that that’s not true. So, we have to have more accountability for our raw technologies and not just assume that we can be the final packager at the end, because ultimately the providers of those components don’t need the final packager at the end. Ultimately they can go directly to the consumer and they have relationships with the consumer already, as Sony does and others in Japan
Interviewer: Sony, the builder of the next Mac portable?
Ask John Scully.
Interviewer: I’m going to.
So, saying it’s Wall Street is too easy. We’ve got Apple, we’ve got IBM, and many other companies with hundreds of millions, if not billions of dollars, in the bank in cash. Raising the capital is not the problem and Wall Street is not the problem. The problem is that in many cases the management of our companies is not from an engineering or manufacturing background anymore. And may not appreciate the dependence we have on these underlying technologies. Where if you go to Japan, the people running these companies are engineers, or they’re from the manufacturing backgrounds, and they very much appreciate
Interviewer: Is that why U.S. memories failed?
Interviewer: That was the the
Yeah, I know.
Interviewer: Um, alright, I think that pretty much covers
Good? Thanks. stands up