In late 1986 Jobs sent out a proposal to venture capital firms

Perot to the Rescue

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

valuation on the entire company of $30 million, a number that Jobs had pulled out of thin air.

NeXT computer would be shipped in just eighteen months. It was already clear that this date was impossible, but he blew off a

suggestion from one engineer that they be realistic and plan on shipping in 1988. “If we do that,

the world isn’t standing still, the technology window passes us by, and all the work we’ve done we have to throw down the toilet,” he argued.

Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge Jobs, did so. “Reality

distortion has motivational value, and I think that’s fine,” she said as Jobs stood at a whiteboard. “However,

when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.” Jobs

didn’t agree: “I think we have to drive a stake in the ground somewhere, and I think if we miss this window, then our

credibility starts to erode.” What he did not say, even though it was suspected by all, was that if their targets slipped they might run out of money. Jobs had

pledged $7 million of his own funds, but at their current burn rate that would run out in eighteen months if they didn’t start getting some revenue from shipped products.

Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his list of maxims with “The

honeymoon is over.” By the time of the third retreat, in Sonoma in September 1986, the timetable

was gone, and it

looked as though the

company would hit

a financial wall.

Perot brought to NeXT something that was almost as valuable

Perot brought to NeXT something that was almost as valuable as his $20 million lifeline: He was a quotable, spirited cheerleader for the company, who could lend it an air of credibility among grown-ups. “In terms of a startup

company, it’s one that carries the least risk of any I’ve seen in 25 years in the computer industry,” he told the New York Times. “We’ve had some

sophisticated people see the hardware—it blew them away. Steve and his whole NeXT team are the darnedest bunch of perfectionists I’ve ever seen.”

Perot also traveled in rarefied social and business circles that complemented Jobs’s own. He took Jobs to a black-tie dinner dance in San Francisco that

Gordon and Ann Getty gave for King Juan Carlos I of Spain. When the king asked Perot whom he should meet, Perot immediately produced Jobs. They

were soon engaged in what Perot later described as “electric conversation,” with Jobs animatedly describing the next wave in computing. At the end the

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

These and other stories were incorporated into the mythologized story of Jobs that Perot told wherever he went. At a briefing at the National Press Club

in Washington, he spun Jobs’s life story into a Texas-size yarn about a young man

so poor he couldn’t afford to go to college, working in his garage at night, playing with computer chips, which was his hobby, and his dad—who looks

like a character out of a Norman Rockwell painting—comes in one day and said, “Steve, either make something you can sell or go get a job.” Sixty days

later, in a wooden box that his dad made for him, the first Apple

computer was created.

And this high school

graduate literally

changed the world.

“It will be all gravy to you,” he argued. “You will be ahead of

“It will be all gravy to you,” he argued. “You will be ahead of the parade. It’s never been done before.” They agreed in principle and then went out to play skittles over beer at a nearby pub where Lord Byron used to drink. By the

time it launched, the NeXT would also include a dictionary, a thesaurus, and the Oxford Dictionary of Quotations, making it one of the pioneers of the concept of searchable electronic books.

Instead of using off-the-shelf chips for the NeXT, Jobs had his engineers design custom ones that integrated a variety of functions on one chip. That would have been hard enough, but Jobs made it almost impossible by

continually revising the functions he wanted it to do. After a year it became clear that this would be a major source of delay.

He also insisted on building his own fully automated and futuristic factory, just as he had for the Macintosh; he had not been chastened by that experience. This time too he made the same mistakes, only more excessively.

Machines and robots were painted and repainted as he compulsively revised his color scheme. The walls were museum white, as they had been at the Macintosh factory, and there were $20,000 black leather chairs and a

custom-made staircase, just as in the corporate headquarters. He insisted that the machinery on the 165-foot assembly line be configured to move the circuit boards from right to left as they got built, so that the process would

look better to visitors who watched from the viewing gallery. Empty circuit boards were fed in at one end and twenty minutes later, untouched by humans, came out the other end as completed boards. The process followed

the Japanese principle known as kanban, in which each machine performs its task only when the next machine is ready to receive another part.

Jobs had not tempered his way of dealing with employees. “He applied charm or public humiliation in a way that in most cases proved to be pretty effective,” Tribble recalled. But sometimes it wasn’t. One engineer, David

Paulsen, put in ninety-hour weeks for the first ten months at NeXT. He quit when “Steve walked in one Friday afternoon and told us how unimpressed he was with what we were doing.” When Business Week asked him why he treated

employees so harshly, Jobs said it made the company better. “Part of my responsibility is to be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” But he still had his spirit and

charisma. There were plenty of field trips, visits by akido masters, and off-site retreats. And he still exuded the pirate flag spunkiness. When Apple fired Chiat/Day, the ad firm that had done the “1984” ad and taken out the

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


Seriously . . . Because

I can guarantee you:

there is life after Apple.”

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

One of NeXT’s first ten employees was an interior designer for the company’s first headquarters, in Palo Alto. Even though Jobs had leased a building that was new and nicely designed, he had it completely gutted and rebuilt. Walls

were replaced by glass, the carpets were replaced by light hardwood flooring. The process was repeated when NeXT moved to a bigger space in Redwood City in 1989. Even though the building was brand-new, Jobs insisted that the

elevators be moved so that the entrance lobby would be more dramatic. As a centerpiece, Jobs commissioned I. M. Pei to design a grand staircase that seemed to float in the air. The contractor said it couldn’t be built. Jobs said it

could, and it was. Years later Jobs would make such staircases a feature at Apple’s signature stores.

The Computer

During the early months of NeXT, Jobs and Dan’l Lewin went on the road, often accompanied by a few colleagues, to visit campuses and solicit opinions. At Harvard they met with Mitch Kapor, the chairman of Lotus software, over dinner at Harvest restaurant. When Kapor began slathering

butter on his bread, Jobs asked him, “Have you ever heard of serum cholesterol?” Kapor responded, “I’ll make you a deal. You stay away from commenting on my dietary habits, and I will stay away from the subject of

your personality.” It was meant humorously, but as Kapor later commented, “Human relationships were not his strong suit.” Lotus agreed to write a spreadsheet program for the NeXT operating system.

Jobs wanted to bundle useful content with the machine, so Michael Hawley, one of the engineers, developed a digital dictionary. He learned that a friend of his at Oxford University Press had been involved in the typesetting of a new

edition of Shakespeare’s works. That meant that there was probably a computer tape he could get his hands on and, if so, incorporate it into the NeXT’s memory. “So I called up Steve, and he said that would be awesome,

and we flew over to Oxford together.” On a beautiful spring day in 1986, they met in the publishing house’s grand building in the heart of Oxford, where Jobs made an offer of $2,000 plus 74 cents for every computer

sold in order

to have the rights to

Oxford’s edition

of Shakespeare.

Jobs had always indulged his obsession that the unseen parts

Jobs had always indulged his obsession that the unseen parts of a product should be crafted as beautifully as its fa?ade, just as his father had taught him when they were building a fence. This too he took to extremes when he found

himself unfettered at NeXT. He made sure that the screws inside the machine had expensive plating. He even insisted that the matte black finish be coated onto the inside of the cube’s case, even though only repairmen would see it.

Joe Nocera, then writing for Esquire, captured Jobs’s intensity at a NeXT staff meeting:

It’s not quite right to say that he is sitting through this staff meeting, because Jobs doesn’t sit through much of anything; one of the ways he dominates is through sheer movement. One moment he’s kneeling in his chair; the next

minute he’s slouching in it; the next he has leaped out of his chair entirely and is scribbling on the blackboard directly behind him. He is full of mannerisms. He bites his nails. He stares with unnerving earnestness at whoever is

speaking. His hands, which are slightly and inexplicably yellow, are in constant motion.

What particularly struck Nocera was Jobs’s “almost willful lack of tact.” It was more than just an inability to hide his opinions when others said something he thought dumb; it was a conscious readiness, even a perverse eagerness, to put

people down, humiliate them, show he was smarter. When Dan’l Lewin handed out an organization chart, for example, Jobs rolled his eyes. “These charts are

bullshit,” he interjected. Yet his moods still swung wildly, as at Apple. A finance person came into the meeting and Jobs lavished praise on him for a “really, really

great job on this”;

the previous day

Jobs had told him,

“This deal is crap.”

In order to translate the NeXT logo into the look of real products

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.shlf419

Jobs realized that in order to work with Esslinger (and for a variety of other reasons), it would be necessary to resolve the lawsuit that Apple had filed.

Fortunately Sculley was willing. In January 1986 they reached an out-of-

court agreement involving no financial damages. In return for Apple’s dropping its suit, NeXT agreed to a variety of restrictions: Its product would be

marketed as a high-end workstation, it would be sold directly to colleges shlf419

and universities, and it would not ship before March 1987. Apple also insisted that the NeXT machine “not use an operating system compatible with the Macintosh,” though it could be argued that Apple shlf419


would have been

better served by

insisting on just

the opposite.

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.”

It was often hard to predict how Jobs would react to a presentation. He could label it shitty or brilliant; one never knew which way he might go. But with a legendary designer such as Rand, the chances were that Jobs would embrace

the proposal. He stared at the final spread, looked up at Rand, and then hugged him. They had one minor disagreement: Rand had used a dark yellow for the “e” in the logo, and Jobs wanted him to change it to a brighter and

more traditional yellow. Rand banged his fist on the table and declared, “I’ve been doing this for fifty years, and I know what I’m doing.” Jobs relented.

The company had not only a new logo, but a new name. No longer was it Next. It was NeXT. Others might not have understood the need to obsess over a logo, much less pay $100,000 for one. But for Jobs it meant that NeXT was

starting life with a world-class feel and identity, even if it hadn’t yet designed its first product. As Markkula had taught him, a great company must be able to impute its values from the first impression it makes.

As a bonus, Rand agreed to design a personal calling card for Jobs. He came up with a colorful type treatment, which Jobs liked, but they ended up having a lengthy and heated disagreement about the placement of the period after

the “P” in Steven P. Jobs. Rand had placed the period to the right of the “P.”, as it would appear if set in lead type. Steve preferred the period to be nudged to the left, under the curve of the “P.”, as is possible with digital typography. “It was a fairly large argument about something

relatively small,”

Susan Kare

recalled. On this one

Jobs prevailed.

To Be on Your OwnThe first instinct that he indulged was

To Be on Your OwnThe 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-qinpad

class logo. So he courted the dean of corporate logos, Paul Rand. At seventy-one, the Brooklyn-born graphic designer had already created some of the best-known logos in business, including those of Esquire, IBM, Westinghouse,

ABC, and UPS. He was under contract to IBM, and his supervisors there said that it would obviously be a conflict for him to create a logo for another computer company. So Jobs picked up the phone and called IBM’s CEO, John

Akers. Akers was out of town, but Jobs was so persistent that he was finally put through to Vice Chairman Paul Rizzo. After two days, Rizzo concluded that it was futile to resist Jobs, and he gave permission for Rand to do the work.

Rand flew out to Palo Alto and spent time walking with Jobs and listening to his vision. The computer would be a cube, Jobs pronounced. He loved that shape. It was perfect and simple. So Rand decided that the logo should be a

cube as well, one that was tilted at a 28° angle. When Jobs asked for a number of options to consider, Rand declared that he did not create different options for clients. “I will solve your problem, and you will pay me,” he told Jobs.

“You can use what I produce, or not, but I will not do options, and either way you will pay me.”

Jobs admired that kind of thinking, so he made what was quite a gamble. The company would pay an astonishing $100,000 flat fee to get one design. “There was a clarity in our relationship,” Jobs said. “He had a purity as an

artist, but he was astute at solving business problems. He had a tough exterior, and had perfected the image of a curmudgeon, but he was a

teddy bear inside.”

It was one of Jobs’s

highest praises:

purity as an artist.

After the settlement Jobs continued to court Esslinger until

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.

September 17, 1985Dear Mike:This morning’s papers carried

September 17, 1985Dear Mike:This morning’s papers carried suggestions that Apple is considering removing me as Chairman. I don’t know the source of these reports but they are both misleading to the public and unfair to me.

You will recall that at last Thursday’s Board meeting I stated I had decided to start a new venture and I tendered my resignation as Chairman.

“The best thing ever to happen to Steve is when we fired him, told him to get lost,” Arthur Rock later said. The theory, shared by many, is that the tough love made him wiser and more mature. But it’s not that simple. At the

company he founded after being ousted from Apple, Jobs was able to indulge all of his instincts, both good and bad. He was unbound. The result was a series of spectacular products that were dazzling market flops. This was the

true learning experience. What prepared him for the great success he would have in Act III was not his ouster from his Act I at Apple but his brilliant failures in Act II.

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

encouragement the Board offered with regard to the proposed new venture and the indications that Apple would

invest in it. On Friday, after I told John Sculley who would be joining me, he confirmed Apple’s willingness to discuss areas of possible collaboration between Apple and my new venture.

Subsequently the Company appears to be adopting a hostile posture toward me and the new venture. Accordingly, I must insist upon the immediate acceptance of my resignation. . . .

As you know, the company’s recent reorganization left me with no work to do and no access even to regular management reports. I am but 30 and want still to contribute and achieve.

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

Yours sincerely, steven p. jobs

When a guy from the facilities team went to Jobs’s office to pack up his belongings, he saw a picture frame on the floor. It

contained a photograph of Jobs and Sculley in warm conversation, with an inscription from seven months earlier: “Here’s to Great Ideas, Great Experiences, and a Great

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

before leaving.

From that day,

he never spoke to

Sculley again.