Valuetainment - Episode 339： The Madness of Steve Jobs Told by Steve Wozniak

00:00:00.320 30 seconds. One time for the underdog.

00:00:04.360 Ignition sequence start.

00:00:07.000 Let me see you put them up. Reach the sky, touch the stars up above.

00:00:11.120 Cause it's one time for the underdog.

00:00:15.060 One time for the underdog.

00:00:17.300 I am Patrick Bedevit, your host of Aletainment, and in this interview, I'm sitting down with Steve Wozniak,

00:00:22.100 former founder of Apple, and he shares stories about Steve Jobs,

00:00:25.360 how they almost went out of business, and how one founder at the beginning decided to walk away,

00:00:29.260 and what that possibly ended up costing him.

00:00:31.720 So thank you for joining us.

00:00:33.480 Wow, it's incredible.

00:00:35.400 It's been fun. Did you have fun last night with us, by the way?

00:00:38.400 Had a lot of fun. I didn't realize that the alarm clock in my room had got set four hours advanced.

00:00:44.160 So I woke up real early this morning.

00:00:47.540 So I heard, you know, a lot of times when, you know, you bring somebody in.

00:00:51.860 But hey, let me say, though, listening to you speak and the speaker we had,

00:00:55.920 and the whole event and the awards,

00:00:57.300 I have been to a lot of galas and award events for companies.

00:00:59.960 I have never been to one as good as that.

00:01:04.520 I was, and watching you, I mean, I'm just totally sold.

00:01:08.100 Because, you know, what you have to do, you're talking about,

00:01:10.100 it's that drive and wanting to do something to make a difference,

00:01:12.820 and you really bring that out in everyone, yourself, so.

00:01:15.360 Absolutely.

00:01:15.640 So why don't we start off all the way to the back on how the whole thing got started.

00:01:22.020 I mean, why don't you just tell us how the story on how it got started from the idea to it being where it's at now.

00:01:25.820 Sure.

00:01:26.080 Yeah, I grew up so advanced in electronics and computers that I couldn't afford anything,

00:01:31.980 had no money, but I could design any computer there was in the world in just a couple of days.

00:01:37.460 And I just did it for fun.

00:01:38.920 It was a hobby.

00:01:39.540 And I wanted my own computer.

00:01:41.120 I told my dad at one point,

00:01:43.080 someday I'm going to have this particular computer of my own.

00:01:46.520 And he said, how are you going to do that?

00:01:48.060 It costs as much as a house.

00:01:50.080 And I was sort of stunned because I was young.

00:01:51.800 And I said, well, I'll live in an apartment.

00:01:55.100 So I would rather have a computer of my own that I can just write programs on,

00:01:59.620 even if it's just to play a game, just to solve a chess problem.

00:02:03.740 And eventually what happened was I had a lot of luck doing some extremely exotic design things.

00:02:10.700 I got into the early stages of arcade games, designing games like Breakout for Atari.

00:02:15.300 And I just did that on the side.

00:02:16.620 And I was working for Hewlett Packard, designing the hottest gadget product in the world,

00:02:20.120 the HP scientific calculators changed the world.

00:02:23.640 Within about five years, there were no more slide rules sold.

00:02:26.000 Every engineer, every scientist had to have one of these HP calculators.

00:02:29.900 And I got to design them.

00:02:31.860 I had no college degree, but they interviewed me.

00:02:34.380 And I knew so much about it all that they hired me anyway.

00:02:37.840 And while I was doing that, I was designing all sorts of little projects,

00:02:40.680 the video games and terminals that I could talk to computers across the country.

00:02:44.460 And finally, I realized the formula, the day had come when you could buy low enough cost memory chips,

00:02:51.940 low enough microprocessors that did enough.

00:02:54.180 I figured out in my head the formula to building an affordable computer.

00:02:58.240 And I said, wow, this is what I've wanted for, you know, 10 years.

00:03:02.100 I've got it.

00:03:02.860 I'm here.

00:03:04.040 And so how did that lead to you and Steve?

00:03:06.760 I guess the question would be, how did you guys?

00:03:08.060 Steve was a very good friend.

00:03:09.360 Five years before Apple even, we met because I had designed one computer

00:03:13.660 and some executive gave me some chips to build.

00:03:15.860 And I was building it at a friend's house and the friend introduced me to Steve.

00:03:18.720 He said, both of you guys know digital electronics.

00:03:21.580 So Steve came over and described projects he did at Hewlett Packard,

00:03:24.300 building frequency counters that had displays of digits,

00:03:27.320 counting, you know, frequencies of things like guitar chords or whatever.

00:03:30.940 And I told him what I had done, all my experience,

00:03:35.900 and I was sort of like the top young designer you could ever run into in the times.

00:03:40.020 And Steve was, he was a leader.

00:03:41.980 He was always trying to be one of those special few people in the world,

00:03:45.060 the few that take the steps forward and, you know, like, you know, a Newton.

00:03:48.800 He spoke of Newton and Shakespeare and things like that.

00:03:52.540 And I know that he really wanted to be one of those people,

00:03:54.380 but he wanted to find formulas to find a company and sell things.

00:03:58.220 So every time I designed something really cute,

00:04:00.040 Steve would come by and say, I know how we can sell it.

00:04:02.480 So we were always a partnership selling my little projects.

00:04:05.560 So, so, but the whole thing got started.

00:04:07.200 I read this story about how you guys had this project underground,

00:04:11.100 telephone, long distance minute.

00:04:13.380 What was that all about?

00:04:14.880 Telephone, long distance.

00:04:16.060 Um, when I, yeah, my, my third year of college at Berkeley,

00:04:19.160 I, um, I read an article that I thought was just the most amazing fiction story ever

00:04:24.080 about these clever engineers that were smarter than the engineers in the phone company.

00:04:28.020 And they could turn the, they could set up their own little networks

00:04:30.800 and, and find the bugs of the system and help Ma Bell correct them. 0.98

00:04:34.280 And, and it was kind of honorable the way I read it.

00:04:36.800 And Steve and I, I, I, I called Steve up halfway through the article

00:04:41.040 and started reading it to him.

00:04:42.400 And I said, there's something wrong.

00:04:43.920 This article sounds too real, like real people,

00:04:46.900 like real frequencies they're telling us about.

00:04:49.400 We went down to a scientific, um, library that day.

00:04:53.160 I was going to start classes at college the next day.

00:04:55.220 We went down to Stanford linear accelerator center.

00:04:57.840 And in those days it was the high end physics research place of the world.

00:05:01.780 Smart people always leave doors unlocked.

00:05:04.120 That's one thing I found.

00:05:05.280 So we would drive in and we'd always find a door unlocked to get into the main building.

00:05:09.440 They had a library.

00:05:10.600 They had computer books.

00:05:11.680 They had technical things.

00:05:13.120 And we verified that this article was true.

00:05:14.880 You could put tones into an American telephone

00:05:16.940 and dial calls for free anywhere in the world.

00:05:19.260 You've got to be kidding.

00:05:19.920 No, the system had that big of a flaw.

00:05:22.180 So I was amazed.

00:05:23.280 This is like, it's so amazing to know this.

00:05:25.760 Nobody knows it.

00:05:26.840 And I can show it off now.

00:05:28.120 I can actually build a device and demonstrate it and show it off.

00:05:30.880 So to me, it was more as a comedian and, and, and, you know,

00:05:34.320 and bringing people's attention to this weird phenomena.

00:05:37.540 So, um, so I designed this little box that would do it.

00:05:39.960 And Steve said, Oh, let's sell it.

00:05:42.280 Okay.

00:05:42.660 And we sold it.

00:05:43.360 We both sold it in the dorms to people.

00:05:47.460 And for a year, for a year, for a year, I thought I was kind of, you know,

00:05:51.420 boy, my own phone calls, I would pay for them.

00:05:53.520 I wouldn't use it to save money, but I liked exploring the network

00:05:57.000 and being able to convince a Tokyo operator that I was a New York operator

00:06:00.060 and get her to put it over to London and around the world.

00:06:02.580 And I'd call one phone and speak in one phone and come up the other one a second later.

00:06:06.480 It was very weird back then.

00:06:07.320 This is what I heard.

00:06:08.220 This is a story I heard.

00:06:09.520 I don't know, I heard you were a prankster.

00:06:11.780 You know, a lot of times you hear stories and you think people are so serious

00:06:14.360 to build something this week.

00:06:15.860 You got to be serious all the time.

00:06:17.560 And I heard with that machine, you actually called the Pope.

00:06:21.120 Yeah, I called, I called Italy inward.

00:06:23.400 I asked for Rome inward.

00:06:24.380 I got to the Vatican and they said it was 5.30 in the morning.

00:06:27.220 I said I was Henry Kissinger.

00:06:29.300 And, and then, so they said, well, it's 5.30 in the morning.

00:06:32.460 Call back, you know, later.

00:06:33.560 And I called back at 6.30 in the morning, their time.

00:06:35.900 And I used a little bit of an accent to sound a little like Henry Kissinger at the summit

00:06:40.540 with Nixon in Moscow.

00:06:42.860 And, and the bishop that answered said, I just spoke to Henry Kissinger.

00:06:46.960 Busted.

00:06:47.360 Well, I guess, I guess one of the things you see with all the great ones is they push

00:06:53.900 the envelope.

00:06:54.900 And when you look at it, when you and Steve worked together, it almost seemed like a perfect

00:06:58.480 partnership because of different strengths that you had.

00:07:00.320 Well, Steve was sort of like the leader.

00:07:02.280 He's always looking for ways to turn things into a product or a company, make some money.

00:07:07.280 And if you have a good enough product and make enough money, you can make a better product

00:07:10.260 with that money and go up, go up the ladder.

00:07:12.500 And that was his approach.

00:07:14.180 And I was a good leader has to spot the talented resources, the best people to do the different

00:07:19.740 jobs and the right products, the right direction to go.

00:07:22.700 So he was the direction setter and he just knew that I was the best at what I did.

00:07:26.520 So I was that part of the formula.

00:07:28.520 And I designed all the early Apple computers from scratch.

00:07:32.100 You know, normally you go to college and you learn hardware or you learn software.

00:07:35.340 You're one or the other.

00:07:36.500 I did it all.

00:07:37.320 I did the whole hardware.

00:07:38.360 I wrote the computer programming languages.

00:07:40.300 I did every single bit of the whole computer.

00:07:43.020 That's unbelievable.

00:07:43.880 But I did it not for a company.

00:07:45.880 I did it because I wanted it myself.

00:07:47.700 If you can convince somebody to want something inside for their own personal reason, they

00:07:52.720 really see something that they want to do and they really feel it in their heart.

00:07:56.760 That's when you get a lot more done than any.

00:07:59.340 You can't motivate people with a high enough salary to do what you'll do when it's for your

00:08:03.300 own self or to show off even.

00:08:06.120 Isn't that amazing?

00:08:06.640 I guess the question becomes this.

00:08:08.360 To become successful in any field.

00:08:11.460 Do you have to know everything and everything about it?

00:08:14.720 Or is it kind of like you've got to put a good team together?

00:08:19.280 Wow.

00:08:20.080 You do need some backgrounds of, let's call it, education training.

00:08:24.520 You do need those elements.

00:08:25.920 But a person who knows how to take the little elements and build on them and formulate, write

00:08:31.280 the book of how you actually put them into play.

00:08:33.940 A person who comes up with the ability to write the book, I think is better than someone

00:08:37.980 who knows how to do it from past experience.

00:08:40.080 Because everything I did at Apple that was an A plus job and that took us places, I had

00:08:45.720 two things in my favor.

00:08:47.000 A, I had no money.

00:08:48.360 That meant I had to figure out ways to do things very inexpensively.

00:08:51.740 I had to get a lot out for the least in.

00:08:54.180 And B, and I was very good at that.

00:08:56.320 And B, I'd never done them before.

00:08:58.460 Every single Apple project, computers, hard disks, everything, I had never designed those

00:09:04.280 things ever in my life.

00:09:05.760 I hadn't had no training in them, but I was so good at taking the little parts, like

00:09:09.900 pieces of wood, to build a building that I could architect something that was perfect

00:09:16.100 and really better than people that were used to doing it would do.

00:09:19.200 That's unbelievable.

00:09:20.040 Yeah.

00:09:20.260 If I had had experience, I would have designed things with 50 chips instead of eight chips.

00:09:24.580 Traditionally.

00:09:25.200 Yeah.

00:09:25.440 That's interesting you say that.

00:09:26.780 What did Ronald Reagan recognize you for?

00:09:28.900 I think it was in 1986 or 87?

00:09:31.680 The first National Medal of Technology was created in 1986, I think.

00:09:37.620 And yeah, the president, Ronald Reagan, gave the awards to me and Steve Jobs.

00:09:41.660 We're in the first set of recipients.

00:09:44.300 Because Apple was, you know, really doing a lot of good for the world then and the economy.

00:09:48.460 That always helps a president. 0.99

00:09:50.140 But yeah, Ronald Reagan was one of the early presidents.

00:09:52.300 They all speak out.

00:09:53.380 We got to have more emphasis on technology, on innovation.

00:09:57.960 And to me, I thought, wow, they're going to have more math classes and science classes

00:10:01.200 in schools.

00:10:02.220 It's never happened.

00:10:04.100 So there's a lot of talk everywhere, but it's very hard.

00:10:07.880 It'll get translated into a couple little projects that are nowhere near what you ever

00:10:11.200 hear of.

00:10:12.300 Intelligence in our schools is defined as always having the same answer as everyone else.

00:10:17.060 You go home, you watch the same news show, you come back and talk about current events,

00:10:20.560 you all say the same thing.

00:10:22.500 And not one person says, no, that doesn't make sense to me.

00:10:25.040 Not one person is really taught to think for themselves, or that's called not intelligence.

00:10:30.200 We're taught how to calculate.

00:10:32.000 When two canoes will meet on a river, the river's flowing five miles an hour.

00:10:36.260 You know, and we never, we should teach kids to raise their hand and say, no, that wouldn't

00:10:40.500 work.

00:10:40.820 Because you can't predict the water will be exactly five miles an hour.

00:10:43.780 There's going to be wind.

00:10:44.840 And, you know, why don't we, you know, think about these things.

00:10:48.360 Be skeptical a bit.

00:10:49.400 We don't really teach that way.

00:10:50.500 We just teach, come up with the same answer that everyone else would.

00:10:54.480 Well, then you're just one in a billion.

00:10:56.300 But isn't that kind of controversial?

00:10:57.620 That's like being a follower instead of a leader.

00:10:59.580 You go to, you know.

00:11:00.200 Isn't that kind of controversial, though?

00:11:02.580 Isn't that kind of controversial to do the opposite of what everybody else has done?

00:11:05.980 Well, I think, well, some schools, like Montessori schools, get around, you know, do some

00:11:09.740 better job at that.

00:11:11.280 But, you know, we, just our whole system of schools is, is unfortunately very bad because

00:11:16.260 it's based on money.

00:11:17.140 And money, and especially in a democracy, you've got a problem.

00:11:21.000 Schools all are funded by the government.

00:11:23.340 They're all funded by the government.

00:11:24.900 And government has slices of pie that go into different sectors, usually according to how

00:11:30.060 much money there is there or how many votes.

00:11:33.340 Well, the funny thing is, for schools, kids don't get a vote.

00:11:38.140 What that translates to is a family of five gets no more say than a family of two.

00:11:42.740 And the family of two doesn't want to spend money on schools.

00:11:45.100 And the family of five does.

00:11:46.220 So you've got this controversy where you're constantly outvoted by the masses.

00:11:51.140 You didn't really, the kids don't get counted as a, as a, as a vote in the, you know, determining

00:11:55.140 how much money schools are worth and need.

00:11:57.440 So schools are always going to be short of money.

00:11:59.240 Short of money, it means you have to have a large class and everybody doing the same

00:12:02.800 thing.

00:12:03.020 And there's no, you can't have any randomness.

00:12:06.480 Well, you know, and I think randomness and even a little misbehavior is really essential

00:12:09.920 to creative people.

00:12:11.600 Well, Steve, I was a kid that had a 4.0 GPA.

00:12:14.400 I followed the system, the rules to the T, everything I did perfectly.

00:12:17.920 Obviously, I'm being sarcastic with you.

00:12:21.640 I had a 1.8 GPA.

00:12:23.160 I filled most of my classes except math.

00:12:24.980 I love math.

00:12:25.640 That was it.

00:12:26.000 I mean, I could listen to that stuff all day long, but let's change gears.

00:12:29.280 I got a question for you about this.

00:12:30.900 So Steve Jobs, was Steve Jobs an expert?

00:12:34.720 I mean, an expert in designing the Apple I, the Apple II, the computers?

00:12:40.560 Was he an expert in that area?

00:12:42.900 Steve understood it and he knew how to listen to which people were telling the best stories.

00:12:47.980 He couldn't quite design things.

00:12:50.280 He wasn't quite an engineer level, but he was close to it because of his understanding

00:12:54.240 of electronics.

00:12:54.900 So he wasn't an engineer.

00:12:56.620 He couldn't, I don't think he ever wrote a program, software.

00:13:00.500 So, no, but he understood the value of them.

00:13:04.000 But at first, it was just mainly what could sell.

00:13:06.860 He could compare to other devices and he knew what would sell.

00:13:09.360 He had worked selling in surplus stores where all these little extra electronic parts came

00:13:13.720 and he would know how to buy some switches for six cents that he could sell to somebody

00:13:16.920 for six bucks.

00:13:18.580 So was he more a salesman or more a technology guy?

00:13:21.340 Was he more a salesman or a technology guy?

00:13:23.400 He was a good mix.

00:13:25.040 You know what?

00:13:25.340 When you have a guy at the top, he's got to be good at sales.

00:13:28.060 Sales is where your income comes from.

00:13:29.800 But he should also be able to, if you've got a guy at the top of a company that understands

00:13:34.500 the technology and can talk to the engineers and not be totally lost and just say, you

00:13:40.400 do what you're doing.

00:13:41.420 I trust you.

00:13:42.380 Yeah, that's good.

00:13:43.000 And he was sort of, he had a good understanding of it, which helped.

00:13:47.060 I mean, although, although really the story of Apple is a little misunderstood because

00:13:52.620 it's like Steve and I did it ourselves and we really, with the Apple II computer, we got

00:13:58.220 funding.

00:13:59.340 A guy funded us, an angel, and he joined us and he had made his money working in marketing

00:14:04.420 at Intel and as an engineer before and he was a mentor.

00:14:08.160 He was kind of young, but he was wealthy and he owned as much of Apple as Steve and I

00:14:12.740 did, same amount of stock.

00:14:14.200 Mike Markle is his name.

00:14:15.860 And he ran our marketing, but he was our mentor.

00:14:18.080 He told us how we would organize the company, what Steve's roles would be, what my role would

00:14:22.940 be.

00:14:24.020 So he was really more responsible for Apple's success than anyone.

00:14:27.320 But he kind of lays out of the picture because Steve and I came from nothing.

00:14:31.300 We had no savings accounts.

00:14:32.560 We had no relatives or friends that could loan us money.

00:14:34.520 We had, we just had this drive.

00:14:37.300 We wanted to build this computer, wanted to find a way to sell it.

00:14:40.380 And, you know, and for a while we were getting the parts on 30 days credit with no money.

00:14:45.040 And we'd build the computers in 10 days and sell them for cash at the store.

00:14:48.180 So that was, that was how we ran for, you know, a good year with the Apple One computer.

00:14:53.920 The interesting thing.

00:14:54.360 Because we had nothing ourselves.

00:14:55.740 The interesting thing I read in Accident a Millionaire about you is you had a full-time

00:15:00.140 job when you started Apple.

00:15:01.700 So you were part-time with Apple and you had a full-time job while building an Apple company.

00:15:06.180 That's right.

00:15:06.780 I worked for Hewlett Packard.

00:15:08.000 I loved Hewlett Packard.

00:15:09.440 I had determined in my life I didn't want to be a high up run other people's lives person.

00:15:14.240 I didn't want to get in to be political.

00:15:16.260 I didn't want to be a manager.

00:15:17.640 I was going to be an engineer for life.

00:15:19.340 And the greatest engineering company in the country was Hewlett Packard.

00:15:23.240 Everyone was building products that other engineers used.

00:15:26.400 I mean, that was my life forever.

00:15:27.880 I would never leave Hewlett Packard.

00:15:29.300 So I made sure when we came up with the Apple computers and Steve suggested starting a company.

00:15:34.240 Oh, I tried to talk Hewlett Packard into doing it.

00:15:37.480 Five times they turned me down.

00:15:39.600 Five times they turned me down?

00:15:40.760 Five times.

00:15:41.260 The first time I spoke of the idea of a little machine for $800.

00:15:44.500 You could type your programs in and see them on your home TV.

00:15:47.720 And they turned it down for some good reasons.

00:15:49.980 Hewlett Packard couldn't have built the product the right way.

00:15:52.740 When your company culture establishes your product has to be very boring and engineer strictness about it.

00:16:00.180 You know, you can't use normal things that normal people have, like a normal cassette tape recorder to store programs.

00:16:06.300 So they really would have done the project all wrong.

00:16:08.780 And eventually they did.

00:16:10.060 Then when we got the order for completely, we were going to sell little PC boards for $40 each at first.

00:16:16.000 Then when we got the order to sell them with all the parts in, whoa, we're selling every one for $500.

00:16:21.440 I got scared so I went to Hewlett Packard's legal department.

00:16:24.680 And I had them research what we were going to do.

00:16:26.900 Or send it around to every Hewlett Packard division.

00:16:29.180 And they all turned it down.

00:16:32.300 All turned them down.

00:16:33.280 They all turned it down.

00:16:34.240 And then when we started a project in our lab at Hewlett Packard, right on my floor of the building, I went over and I said, I really, calculators aren't my life.

00:16:43.240 Computers are.

00:16:44.020 I want to be on this computer project you're doing.

00:16:46.320 They started a computer project.

00:16:47.880 A little microprocessor just like I had used.

00:16:50.020 A bunch of dynamic memory like I had come to use.

00:16:52.580 They had five guys writing a basic language and I had just written one myself.

00:16:56.380 So I'd done it all.

00:16:57.240 And I said, I'll do any menial job.

00:16:59.600 I'll do a printer interface, a little dinky job.

00:17:02.160 But I want to be on this project.

00:17:03.680 And they turned me down.

00:17:05.460 I read a story that Atari almost bought you or Commodore for $100,000 and offered a $20,000 salary for you and Steve.

00:17:14.280 Is that accurate?

00:17:15.240 That's totally inaccurate.

00:17:16.840 Okay.

00:17:17.240 The real truth is Steve and I went into Commodore first.

00:17:20.840 We walked in.

00:17:21.440 We had the Apple II design but we had no money.

00:17:24.060 Now you've got a computer that you know is hot and you can sell a thousand of.

00:17:27.380 And we didn't give it away.

00:17:28.520 I gave away the Apple I public domain.

00:17:31.020 No copyright, no nothing.

00:17:32.560 The Apple II was too valuable for that.

00:17:34.860 And we took it into Commodore and we're sitting there and they said, well, what do you want?

00:17:38.160 And Steve says, well, we'd like, you know, a few hundred thousand dollars.

00:17:41.480 And I shut up.

00:17:42.560 My salary was $25,000 at the time.

00:17:45.600 And he says, and we'd like to, you know, have stock and we'd like to have a position running the whole thing.

00:17:51.500 And I was just, how can you ask for so much?

00:17:55.740 That's just like, you're asking for the world.

00:17:58.220 And Commodore turned us down.

00:18:00.080 They had a guy that joined them that had come to our garage.

00:18:02.840 I demonstrated the Apple II.

00:18:04.720 And he went to Commodore and said, people don't want color.

00:18:07.420 They don't need graphics.

00:18:08.460 They don't need all these fancy things.

00:18:09.760 They just want cheapness.

00:18:11.220 Isn't that amazing?

00:18:12.280 And the funny thing is, their machine was actually more expensive than ours because it didn't use your home TV.

00:18:16.980 Your home TV is free for output.

00:18:20.100 So Commodore went their own way and lucky for us, Atari loved us and they loved the product,

00:18:27.540 but they were about to come out with the first home pawn game ever.

00:18:30.980 They were going to make millions of dollars off this.

00:18:33.500 And they had their hands full.

00:18:35.040 You don't want to divert from the one big project to try to do something new.

00:18:39.160 But eventually, of course, Atari also got into these home computers.

00:18:44.760 So that's how Steve and I, we went on a long course to try to get the money.

00:18:48.620 We went to venture capitalists and they said, you guys are too, you know, we're in our young 20s.

00:18:52.600 We didn't speak business talk.

00:18:54.020 We'd never had business experience, never taken a business course.

00:18:57.720 And then we wound up with the angel, Mike Markle.

00:19:00.960 And that was a big thing once that took place.

00:19:02.680 He saw, he saw, he saw and believed that this product was going to be one of those categories that was going to be successful

00:19:08.580 and pop up in so many homes and be one of those huge startups that grows to a billion dollars in five years back in those days' money.

00:19:16.500 How many doubters did you guys have?

00:19:18.360 People that doubted that this will never happen.

00:19:20.640 How many what? Doubters?

00:19:22.440 Many doubters.

00:19:23.360 At first, before Steve joined, he was up in Oregon.

00:19:26.140 I was going to a club, a computer club, and people were starting to talk about the revolution that was going to come.

00:19:31.340 They hadn't found the formula to build the right computer yet that could sell to the non-techies. 0.95

00:19:36.400 But, boy, we were just so gung-ho about how we were going to revolutionize education and communication

00:19:41.500 and calculating the finances for companies and everything.

00:19:46.340 And I forgot what the question was.

00:19:52.540 I think I asked them.

00:19:53.920 What did I ask of you guys?

00:19:55.640 Doubters.

00:19:58.460 Doubters.

00:19:58.800 Okay, so the big computer companies, the big computer companies, like digital equipment, the mini computer companies,

00:20:04.140 all kept saying, oh, it's going to go away, it's going to be a little hobbyist thing,

00:20:07.780 it's not going to be important money-wise, it's not.

00:20:10.660 So we had, there were a lot of official high-level doubters.

00:20:14.420 But eventually, and the analysts were not really predicting it was going to be a big market

00:20:19.500 until just about when we started with the Apple II.

00:20:22.140 The analysts were about to finally concede this home computer market was going to be big.

00:20:26.060 So the first day Apple gets started, first Apple gets started, how was that all about?

00:20:30.940 How did that whole dream get started, the first day?

00:20:33.760 Well, the first day, I mean, I had this computer that I was giving away all the designs for freely.

00:20:39.600 Freely giving it away.

00:20:40.360 Yeah, Steve Jobs just said, came back from Oregon and saw it, and he said, wow, let's, you know,

00:20:45.760 we should sell these PC boards, build them for $20, sell it for $40.

00:20:51.220 And didn't know if we'd, we'd have to come up with a few hundred bucks each, and that was tough.

00:20:55.880 I had to sell the most valuable thing I owned, my Hewlett Packard 65 calculator.

00:21:00.460 Sold it for 500 bucks, and I only got 250, the guy never showed up again.

00:21:03.960 But, so we put a few hundred bucks in to make this PC board, and then we got a little bit bigger interest.

00:21:11.640 There's the owner of the local store, I'd been looking over my shoulder at the computer club.

00:21:15.380 I would just type on a keyboard, little board with a bunch of little, you know,

00:21:19.400 accountable number of $1 chips, and this thing is actually running software and programs,

00:21:25.020 and so he decided he wanted to buy the complete things all built.

00:21:28.280 And we didn't quite supply the Apple one completely built.

00:21:32.260 We didn't have time to get cases and power supplies done.

00:21:35.620 That was the Apple II. That was later.

00:21:38.280 And when the Apple II came along, yes, Steve and I both looked at each other.

00:21:41.440 It was the day that I had come up with this little idea in my head when I was in a dreamy state.

00:21:46.060 You know when you lose sleep, how you get a little creative thinking?

00:21:49.980 I was down at Atari, and we had a job.

00:21:52.260 Steve came to me, he said, you have to design this project in four days.

00:21:55.700 And back then, a game, an arcade game, was not a program.

00:21:59.860 It was not software, and it would take six months.

00:22:02.840 So I had to do it in four days.

00:22:04.820 Wow, I was great.

00:22:05.920 I said, I don't know if I can do this.

00:22:08.000 We stayed up without sleep for four days and nights.

00:22:11.060 We both got mononucleosis, the sleeping sickness, and delivered it.

00:22:15.540 But while my head was sort of half awake and half asleep,

00:22:18.600 I saw this thing on the factory floor of Atari.

00:22:20.820 All the games were black and white TVs.

00:22:22.440 This one game, it was going back and forth, changing color.

00:22:25.700 And my eyes couldn't quite focus.

00:22:27.060 I was so tired.

00:22:28.200 It's weird.

00:22:28.920 It was like hypnotic.

00:22:30.120 It was like you're at a light show at a concert.

00:22:32.380 And they had little Mylar coverings on the TV, red, green, blue, yellow.

00:22:37.060 And it made it look color.

00:22:38.320 So I went back to a lab bed.

00:22:39.760 Steve was wiring up my design on one side of the lab,

00:22:42.920 and I'm on the other side thinking, color television.

00:22:46.420 I remember how the frequencies go from high school electronics.

00:22:49.180 What if I, and then I came up with this little method of taking a little one chip, digital,

00:22:54.320 putting ones and zeros in it, cycling around, one, zero, one, zero, one, zero, up, down, up, down, up, down.

00:23:00.280 I could make it look like color TV.

00:23:02.260 Would it work?

00:23:03.340 It doesn't, it's not the formulas.

00:23:04.940 They have all this complicated calculus and hundreds of parts and thousand dollars to generate color,

00:23:10.340 you know, on, you know, in TV stations.

00:23:12.600 Would this little idea with a $1 chip work?

00:23:15.700 And the day that I actually built it, the first Apple II prototype,

00:23:19.160 and I could type something in the memory, and a blue dot pops up on the screen of the TV.

00:23:23.380 I type something else in the memory, a yellow dot pops up.

00:23:25.780 I called Steve Jobs over, and, you know, that was a eureka moment.

00:23:28.740 We were shaking.

00:23:30.000 This is so big.

00:23:32.140 This is, you know, all the colored games are now going to be on computers.

00:23:35.940 Everything is going to be.

00:23:36.780 So that all started with you, the color.

00:23:38.760 Oh, yeah.

00:23:39.440 Yeah.

00:23:39.780 Oh, yeah, yeah.

00:23:40.240 That was a really incredible.

00:23:41.720 That was probably my best patent.

00:23:44.480 That's kind of amazing.

00:23:45.740 Yeah.

00:23:48.700 Bringing color to the world.

00:23:50.480 You're not in Kansas anymore.

00:23:51.760 That's why we chose a six-color logo for our first logo from Apple.

00:23:55.140 We were the ones that brought color because nobody would have ever expected color on an affordable computer,

00:24:00.580 much less the graphics that we had.

00:24:02.400 We even had pixels, so you could almost have photographs on a screen.

00:24:06.360 No, it was so far ahead of its time that everybody else was going to have to sit back

00:24:10.720 and figure out ways to do it.

00:24:12.380 IBM did, on the PCs, did a horrible, horrible attempt at color.

00:24:16.900 They just said your letters can be a certain color and their background can be a color,

00:24:20.480 but we really didn't, they didn't really do graphics pure like we did.

00:24:23.660 How close were you guys, both of you, of quitting at one point where it got tough,

00:24:28.880 where you said this may just not work out, we should just give it up and quit and sell off?

00:24:34.960 We never went through that phase at Apple.

00:24:37.120 No.

00:24:37.380 We were just, we were in a new revolutionary product area.

00:24:40.580 All the press of the world was, yes, home computers are going to come,

00:24:44.560 because they kind of didn't leave it and didn't know what it was,

00:24:46.940 but there was nobody really saying in the press, oh, this is a horrible idea,

00:24:51.380 because largely it didn't look like it was going to be big money.

00:24:54.500 So there was no reason for the big companies to poo-poo it in the press.

00:24:58.480 So really it was getting just gung-ho.

00:25:00.560 I mean, it was, we thought we were on top of a revolution,

00:25:03.420 and we knew that at Apple we were the leaders.

00:25:04.940 So everybody we hired in those early years, young people, old people,

00:25:09.100 we hired competent people in every department.

00:25:11.460 If we hadn't done that, we wouldn't be here.

00:25:13.620 But we just, everybody felt that we were just leading the whole new world,

00:25:18.280 and things were going to go up and up and up forever,

00:25:20.420 and nobody left the company for years, a few years, until we went public.

00:25:26.100 So it was, it was really, we didn't have, oh, my gosh, let's pack it up and quit.

00:25:30.800 There were times, there was a time when it came time to actually take the money.

00:25:35.520 And I don't want to be part of the, I don't want to be big money.

00:25:39.040 I really don't.

00:25:40.140 And I didn't want to run companies and tell other people what to do.

00:25:44.440 And I was so kind of a nice, too much of a nice guy,

00:25:47.880 that I would probably get kicked out real quickly.

00:25:50.720 So I, you know, I wanted to design computers.

00:25:53.040 So there was a condition.

00:25:55.160 I had to leave Hewlett-Packard, and I loved that company, and I'm so loyal.

00:25:59.540 And I didn't want to leave, I said, why do I have to leave Hewlett-Packard?

00:26:02.000 In one year, I've designed two computers, I've written a basic,

00:26:05.280 I've done all these cassette tape interfaces and other interfaces for printers and things.

00:26:10.160 I've done all that on the side.

00:26:11.560 Why don't I just keep working on the side?

00:26:13.380 And the investor said I had to leave Hewlett-Packard, and I went on the ultimatum day,

00:26:17.740 I went to his cabana, and I said, no, I'm not going to start Apple.

00:26:21.180 I want to design computers, but I'll do that on my own time.

00:26:24.000 And Steve Jobs went into a frenzy, and he got all my friends and relatives to start calling me.

00:26:27.980 And finally, one very, very trusted friend convinced me that I could start Apple,

00:26:32.700 and I could stay an engineer, and just do it to make money.

00:26:35.980 And I said, that's fine.

00:26:38.420 Isn't that amazing?

00:26:39.260 Yeah, nothing wrong with making money off what you do.

00:26:40.940 Now, was the motive initially of money, or was it to revolutionize an industry for you guys?

00:26:46.160 It was more to revolutionize an industry, but money is partly the way to do it.

00:26:51.960 You have to have success in the products to be able to build another higher-level product

00:26:56.300 to take you further and further out.

00:26:58.760 And I know Steve Jobs was very scared.

00:27:01.820 Right away, big company names, like you were talking last night, IBM.

00:27:05.540 Oh, my God, they're going to kill us.

00:27:07.680 And our marketing guy, Mike Markley, said, no, no, no, no, no.

00:27:10.440 Even at a big company, it boils down to a small group.

00:27:13.200 And we're a small group, and we've got a lead.

00:27:15.140 And if we think as well as they, if we have as smart a people as they have,

00:27:18.640 we'll do the job, and that will keep your market share.

00:27:22.300 So it sounds like he played a big role in a company.

00:27:24.940 Oh, absolutely.

00:27:26.160 Huge role.

00:27:26.880 And he basically, from day one, said Apple should be a marketing-driven company.

00:27:31.140 You should understand your customers' needs, and the pricing of products,

00:27:34.580 and competitive products, and that's how you decide what you're going to do.

00:27:38.160 And then engineering more follows directions.

00:27:40.460 Where I was coming from, Hewlett Packard, where it was an engineering-driven company,

00:27:43.280 engineers at every phase of the management, from the founders on down.

00:27:47.860 And we're building products for engineers, so we were the market.

00:27:50.640 We could understand what made sense in our products.

00:27:53.600 And ideas for the next product that would, you know, turn the company,

00:27:56.880 Hewlett Packard around for 10 years, might come from a low-level engineer.

00:28:00.160 Wow.

00:28:02.200 So how much does courage play a role in starting a company and getting part of something,

00:28:09.400 going against the bigger guys?

00:28:10.520 How big of a role does courage play?

00:28:14.420 Wow.

00:28:14.960 I think it's like going on Dancing with the Stars.

00:28:16.460 You don't know if you can do it, and you're afraid to fail.

00:28:25.900 But I'll tell you, that drives you to work harder and try harder than you've ever done in your life.

00:28:30.640 You do have to be competent, and you have to seem competent.

00:28:33.340 That's important.

00:28:34.360 You have to appear competent.

00:28:37.020 As far as, we didn't take really great risks.

00:28:39.480 I mean, I sold my calculator.

00:28:40.840 It was my most valuable thing.

00:28:42.140 But I sold it for $500, in theory.

00:28:45.740 And I knew that the next month, we were coming out with the HP 67, a better one.

00:28:49.820 And my employee price would be $370.

00:28:52.220 So it didn't take a financial risk.

00:28:54.840 Yeah, finally, leaving Hewlett Packard, going out on my own.

00:28:57.580 It was a big risk, but it was a risk with a real strong belief that the product was good.

00:29:02.900 So when we see the company from outside, and we see Apple, and we're using our iPhone, our iPad,

00:29:07.940 you know, all this stuff that we use.

00:29:10.180 When you first got started with the Apple, what was the work ethic like?

00:29:13.880 I mean, how did you guys work with the hours and the sacrifices?

00:29:17.360 How did that take part in this taking place?

00:29:19.740 At first, we had really no such thing as hours.

00:29:22.460 I mean, pretty much everybody was in full daytimes.

00:29:25.680 Of course, when you're a programmer or an engineer, sometimes you don't have something fixed at 5 p.m., 6 p.m., 8 p.m., midnight, 2 a.m.

00:29:33.220 You go home very tired.

00:29:34.440 Maybe you get it fixed.

00:29:35.300 Maybe you don't.

00:29:36.340 That's just the life of an engineer.

00:29:37.680 My whole life, ever, even when I was just a young student and loved electronics and nothing else,

00:29:42.580 I'd stay up as late as I could when something was close to being done.

00:29:46.540 That's what drives you, especially software.

00:29:48.940 So we just had kind of one room, much smaller than this, and about five desks at first,

00:29:53.780 and then seven.

00:29:54.320 Everybody could see everybody.

00:29:55.840 And we got another little tiny office because we hired a guy that the other people didn't like too much.

00:30:01.040 So to get him out of their way, I loved him.

00:30:05.300 He was the guy known as Captain Crunch with the blue boxes that called all over the world.

00:30:10.640 Had him develop a great phone board that could make a phone call in the early days of modems.

00:30:15.940 It could make a phone call on your phone line.

00:30:17.560 It was before modems, really, or before modems that we know today that can dial.

00:30:22.160 It would dial a call and listen.

00:30:24.040 Is it busy?

00:30:24.940 Is it answering?

00:30:25.700 It could listen to the tones and tell like a human could.

00:30:28.660 And that wasn't going to happen in modems for another 12 years.

00:30:31.720 This thing was way ahead of its time.

00:30:33.540 So it could dial, it could send out tones, and it could listen to tones.

00:30:37.420 And he set it up.

00:30:38.300 He wrote programs where it would dial 5,000 calls a day trying to crack some codes.

00:30:45.720 Successfully.

00:30:46.960 So work ethic, there's no hours.

00:30:49.180 When you're starting a gig, there's no such thing as you're working 9 to 5, this and this.

00:30:52.240 And you're working your tail off to start the company off.

00:30:55.180 No.

00:30:55.540 Any, yeah.

00:30:56.280 Any, any, you know, entrepreneurship, because I've been around so many.

00:30:59.340 I love young people that are like we were, like Steve and I.

00:31:02.640 Starting their own little business, and they've got their ideas and hang around them.

00:31:05.200 And to go, I mean, you always see it, though.

00:31:08.820 They're usually young people.

00:31:10.100 Look at the people who started Apple.

00:31:11.320 Look at the people who started Google and Facebook.

00:31:13.840 Very young people just out of college, you know.

00:31:15.940 And there's infinite time in the world.

00:31:18.100 If you're really motivated to do something, you don't have all the obligations of family and expenses

00:31:23.360 and things that take a lot of your, you know, make it harder to come up with that time.

00:31:27.580 Here's a different.

00:31:28.300 That does make a huge difference.

00:31:30.880 You could never add up the amount of hours we would put into these projects.

00:31:34.180 Here's a question about entrepreneurship.

00:31:36.140 You see, one thing I see is, you know, there are very commonalities, similarities between

00:31:42.260 people who went in different fields.

00:31:44.120 What basic principles would you say that is common in order to want to become successful

00:31:48.600 as an entrepreneur?

00:31:50.080 What could you say to the guys here that are here for the first time?

00:31:52.460 Maybe saying, if you want to make it as an entrepreneur, this is what you need to do.

00:31:55.660 These days, entrepreneurship is taught as courses in all the colleges.

00:31:58.580 And usually, it's a business level course.

00:32:01.620 So you've got all these business guys that, oh my gosh, if I write some ideas down on paper,

00:32:05.840 that's how you go about it, starting a company.

00:32:08.460 And my principle is, no.

00:32:11.320 So many people in Silicon Valley got used to write ideas down on paper and then try to get

00:32:15.200 some money, try to get some money, try to get some money.

00:32:17.040 Like, we can just buy the engineering for it.

00:32:19.020 No, I like the type of entrepreneurship that has actually created working models.

00:32:22.680 Here is an example of something that works the way we want it, and we've built it, and

00:32:27.400 we've got the talented technical people that know how to do it.

00:32:32.440 And I think it should get to that phase.

00:32:34.960 So the entrepreneurship, it's a combination of the business and the technical doers, the

00:32:41.280 technology people.

00:32:42.460 So competence, work ethic, business combined together.

00:32:46.300 Yep.

00:32:46.740 But you've got to have somebody, at least in the company, that has incredible drive,

00:32:50.740 that just, you know, absolutely determined that, you know, you're on to something big

00:32:54.320 and we've got to keep moving to get there.

00:32:56.160 And just about everybody in Apple was that way.

00:32:58.500 Just about everybody in Apple was that way.

00:32:59.980 Yeah, we believe we were really, really getting, going a long ways, making a lot of money in

00:33:04.740 a very short time.

00:33:06.040 It's a big attraction.

00:33:08.500 Wow.

00:33:09.040 So what did you see yesterday when you saw, you know, you're seeing the whole thing taking

00:33:13.460 place, people coming up on stage, going crazy, guys wearing his spandex, football jerseys,

00:33:18.020 all this other stuff.

00:33:18.740 I mean, you know, what did you think yesterday, similarities to how Apple was with the fire

00:33:24.000 with us in this industry?

00:33:29.280 You're ahead.

00:33:30.420 PHP's ahead.

00:33:31.520 I have to say.

00:33:37.880 When we started Apple, we were a lot more subtle with, we didn't have award ceremonies for

00:33:43.380 quite a while.

00:33:44.160 And, you know, recognizing the people's accomplishments.

00:33:47.620 There weren't very many of us, you know.

00:33:49.400 There weren't very many engineers.

00:33:50.500 For a while, I was the one engineer.

00:33:52.440 So there wasn't a place to recognize accomplishments.

00:33:56.880 I guess your name could pop up on a patent was the best, the most it would be.

00:34:00.380 No, I liked that.

00:34:01.400 I was smiling heavily all through that thing last night.

00:34:04.460 Because they had, I was in the back so people could take pictures and I wouldn't be blocking

00:34:07.840 the way.

00:34:09.800 So, no, but I, it was really, yeah, it was really good to see.

00:34:13.420 I really hope that everybody out there is a real come-through star.

00:34:16.780 And, you know, I think you've got to believe in yourself.

00:34:19.480 You've got to believe that you've got the talent inside.

00:34:21.280 And then you've got to actually present that.

00:34:23.860 You've got to believe it, not just pretend it.

00:34:27.020 So, you mentioned one thing.

00:34:29.020 You said we recruited people to come on board that all were good at what they did.

00:34:33.800 So, recruiting was very critical for the success of Apple.

00:34:37.120 We did some recruiting.

00:34:38.440 We lucked out by having a few good people around us to begin with.

00:34:41.220 Our funder was incredible at marketing.

00:34:43.680 Whereas all these other little hobbyish companies didn't have anybody, you know, his caliber

00:34:48.500 at all.

00:34:49.500 And, you know, my excellence in engineering was well known.

00:34:53.280 But then when we hired people, we looked around.

00:34:55.040 We needed a guy that runs the operations.

00:34:57.620 He's the guy that when things aren't getting done and need a little attention, he gets on

00:35:01.060 their backs and makes the phone calls, makes sure they get busy so that parts of the company

00:35:05.320 don't hold up.

00:35:06.160 Mike Scott was our president from the day we started until the day we went public.

00:35:10.000 You never hear his name, but he was, it was an incredible experience.

00:35:14.840 We hired very good salespeople and accountants right from the start.

00:35:20.140 We had quality people in the company, not just a whole bunch of kids.

00:35:25.080 That's good.

00:35:25.700 That's exciting when you hear that because, you know, at the end of the day, you're putting

00:35:28.460 a team together.

00:35:29.520 And when I read this story about Apple, it seems like people played their roles.

00:35:33.820 Everybody took responsibility in playing their roles.

00:35:36.020 Yeah, all the various disciplines were well, had good people behind them.

00:35:40.000 And then I looked back after just a couple of years, why is Apple going so well?

00:35:44.280 And all these other companies, every single other one that started in our little homebrew

00:35:47.560 computer club faded away.

00:35:49.660 Why?

00:35:49.980 What was the difference?

00:35:50.900 And really, we had the good people in all the different categories you need.

00:35:55.920 That was probably the main thing for a startup.

00:35:59.000 Absolutely.

00:35:59.500 That's great to know.

00:36:00.180 You know, I watched one of your interviews in 1984, and you were at your home.

00:36:06.280 You had your three dogs with you.

00:36:07.720 And in this interview, you said this.

00:36:10.340 You said, perhaps once a decade, a very large market, new market, comes from zero up to billions

00:36:18.100 of dollars within a few years.

00:36:19.840 A new group of people come out.

00:36:22.140 Right?

00:36:22.380 You said this in an interview.

00:36:23.320 So, when these groups come out, what are some of the commonalities these groups have

00:36:28.160 in common that go from zero to a billion dollars?

00:36:30.900 I'm not talking about the groups of people as much as I am about the industry.

00:36:34.600 A new industry gets formed, and it might be, you know, color television, and something

00:36:39.020 comes along.

00:36:39.940 You know, personal computers came along really with Apple.

00:36:42.680 And when that whole market, the whole market expands so great, that's when companies can

00:36:46.520 become, join the big leagues in a very short number of years.

00:36:50.440 Did you guys initially think you were going to become the big leagues and become this

00:36:54.460 $203, $30 billion company?

00:36:56.600 I mean, powerhouse worldwide.

00:36:58.060 Was that something that you knew this was going to happen, or was it vision you casted

00:37:02.160 saying, let's see if this is going to take place?

00:37:04.180 Well, if you asked us a question back then, are you going to be $30 billion in 2010?

00:37:08.980 You know, I think I would just invoke exponential laws and say, of course we will, because money

00:37:16.200 will deflate.

00:37:16.760 You know, there's a lot of different ways to come up with that.

00:37:20.860 But we truly believed within five years we would be huge, that there would be computers

00:37:24.960 in every house, that we were going to be one of those companies that doesn't go away,

00:37:28.760 doesn't get consumed by others.

00:37:30.780 We were very individualistic and proud of what we'd done.

00:37:34.080 And boy, now I realize how lucky, how rare that is.

00:37:39.500 Yeah, an awful lot of good companies start out and they seem to have all the right pieces

00:37:44.320 and formulas and still drop off.

00:37:46.460 And it's hard to say why.

00:37:48.820 You know, it's even hard to say why MySpace and Facebook.

00:37:52.920 It sure is.

00:37:53.860 You know, you look at the stories of computer.

00:37:57.420 In the book, Accidental Millionaire, it talks about how computers back in early 1900s, the

00:38:01.880 one that was designed, the number they said is 40 tons, roughly.

00:38:05.320 And when they turned it on in Philadelphia, the lights in the entire city went down when

00:38:11.360 it would turn on this computer.

00:38:13.040 To go from a computer that's 40 tons to come and make a PC, that's doing the impossible.

00:38:19.520 You've got to be a little bit crazy to think you're going to do something like that.

00:38:24.060 A little bit, that's true.

00:38:26.500 But the world was going down to where the computers were getting smaller and smaller,

00:38:31.280 using less and less power, doing much more work.

00:38:34.580 But due to advances in technology, the vacuum tubes of the old days took a lot of power.

00:38:40.160 I've got a watch with vacuum tubes in it.

00:38:43.000 And they run on 140 volts.

00:38:43.840 Can we have the camera zoom in on this, by the way?

00:38:45.880 Can we have the, you guys got to see this.

00:38:47.980 Let's have the camera zoom in on this watch.

00:38:50.300 Yeah.

00:38:50.640 When I turn my wrist, it displays hours and minutes.

00:38:53.380 The little three volt batteries boosted up to 140 volts to run those vacuum tubes called

00:38:58.360 Nixie tubes, which are the display.

00:39:01.600 And so in the old days, things were high power.

00:39:04.580 The televisions got hot.

00:39:05.920 You know, you took the tubes down to the grocery store when they burned out.

00:39:09.240 I mean, that was part of our life.

00:39:11.000 Then transistors came along.

00:39:12.480 Silicon Valley was one of the big hearts of transistors.

00:39:15.560 And we had little transistor radios that ran on a small battery.

00:39:18.660 And they could run for a week on it.

00:39:20.520 And then we had chips.

00:39:22.260 And now with chips, you could build larger and larger projects.

00:39:25.840 At first, the military could, you know, make spaceships way less.

00:39:29.840 But eventually, you could build computers out of chips.

00:39:32.520 And then the chips got better and better.

00:39:33.940 And eventually, an entire computer was on one chip.

00:39:36.560 And all you had to do was design I.O. stuff around it.

00:39:39.660 So everything got shrunk and shrunk and shrunk.

00:39:42.240 And today, we have the iPhone.

00:39:44.560 And it's obviously a million times the computer and a millionth the power.

00:39:47.320 It's unbelievable.

00:39:47.840 Yeah, it is unbelievable.

00:39:51.400 But some of those steps along that way could have delayed things if they hadn't happened.

00:39:58.160 So starting Apple, I think, was one of the good steps that really took the world quicker

00:40:03.020 by spotting little formulas of how to make things at a certain cost.

00:40:07.420 I think that's always the heart of it.

00:40:09.540 It's, you know, if you have the better price, you win.

00:40:12.960 What I got from what you just said right now is the fact that, you know,

00:40:16.300 doing the impossible, yes, somebody's going to do it.

00:40:18.740 Because somebody's going to come out there and make something bigger and better anyway.

00:40:21.760 That's what it's meant to be.

00:40:23.040 You know, what does the future hold in technology?

00:40:26.220 What do you think about the future?

00:40:27.240 I mean, we have iPods, iPhones, iPads.

00:40:30.800 What is the future hold with technology?

00:40:32.380 The way we communicate with computers is called input and output.

00:40:36.940 Okay.

00:40:37.240 And it used to be just a big old typewriter and it would type back to you, a teletype machine.

00:40:42.420 And then it went to the Apple style with just a keyboard and a video screen that could display things.

00:40:47.700 And then we got graphics, a better output style.

00:40:50.280 A picture can sometimes tell the mind something much more quickly.

00:40:54.100 You know, a picture's worth a thousand words.

00:40:56.260 And it allowed us to then drag things.

00:40:59.520 We got the mouse.

00:41:00.660 But the mouse is remote control.

00:41:02.140 When I want to move something on a table, I use my hand.

00:41:04.840 The mouse was a remote control still.

00:41:06.940 It was a little more human, but a little not perfectly there.

00:41:10.640 We tried to make the computer world seem more and more like human paradigms.

00:41:15.200 I have a screen on a computer.

00:41:16.980 We started calling it a desktop because everyone has a desktop.

00:41:20.480 It's familiar.

00:41:21.380 We were trying to make these computers friendly to the person that's afraid of computers, afraid of the word.

00:41:27.020 And these days, now we've got the touchscreens.

00:41:30.060 I just love it.

00:41:30.840 I love even my iPod Nano watch.

00:41:32.620 Just swiping along instead of pressing buttons.

00:41:35.280 It's just much more comfortable the way you use these things.

00:41:39.160 And I don't know why.

00:41:40.220 The body actually, when it feels good about something, I prefer it.

00:41:43.980 Sure, somebody can type things on their BlackBerry whatever and do it just as fast.

00:41:48.220 But I don't know.

00:41:49.760 There's a thing that you like.

00:41:51.380 You enjoy the way it works.

00:41:53.060 Now, what I enjoy the most these days, though, is on all my smartphones, both iPhones and Androids,

00:41:58.880 I enjoy where I can speak commands into them because I don't have to think.

00:42:02.640 I don't have to think.

00:42:03.400 How do I do this?

00:42:04.640 Where is this little program?

00:42:05.800 What do I click to put it into a certain mode?

00:42:09.020 And then what do I click to put in some data?

00:42:10.760 I don't have to do that.

00:42:12.040 I just speak to it.

00:42:13.000 I'll speak to it, you know, call Janet Mobile, or I'll speak, you know, navigate to Ruth's

00:42:18.820 Chris Steakhouse in Las Vegas, or make a reservation for Ruth's Chris Steakhouse on the Apple.

00:42:24.700 I love using the Siri Assistant.

00:42:26.980 Make a reservation for six people at Ruth's Chris Steakhouse in Las Vegas at 8 p.m. Tuesday night.

00:42:32.860 And it does it all.

00:42:33.740 And I just have to press one little confirm button.

00:42:35.720 It's all done on the web.

00:42:36.620 And so this world is getting more and more to the speech recognition being better and better.

00:42:43.280 You know, what's the largest lake in California?

00:42:45.120 And I get the answer.

00:42:46.080 I didn't have to go into Google and type things with my finger or my keyboard.

00:42:50.340 I really love doing that.

00:42:51.860 What's your thought?

00:42:52.120 So I think eventually we're going to be speaking almost everything to a phone.

00:42:56.320 And, you know, maybe every single program that you, Apple app that you'd like to use on your phone will include its own little speech dictionaries.

00:43:05.100 So you'll just have to say the name of an app and then tell it what to do in its own dictionary so that the same phrase doesn't have to be, you don't have to memorize a billion phrases.

00:43:15.620 You've got infinite things that it can do.

00:43:17.840 I don't want to get into that.

00:43:19.200 We had a language at Apple that worked that way called AppleScript.

00:43:22.020 What's your thoughts on social media?

00:43:23.580 Twitter, Facebook?

00:43:24.420 What do you think about when you see, you know, Facebooks, Twitters, YouTube?

00:43:28.580 I'm a poor person to ask about those sort of things.

00:43:32.460 I mean, I think they're obviously so important and you get a lot of value out of them.

00:43:36.960 I get a lot of value out of Facebook and Twitter.

00:43:38.940 I just don't have time to use them because I'm so hung up in so much email.

00:43:42.880 And then I've got, I now have probably 2,000 Facebook friends that I don't even know.

00:43:46.880 But they asked me politely.

00:43:48.420 They said something nice about me and I said, okay, they're an Apple fan.

00:43:52.960 Okay.

00:43:54.040 And I've got 2,000 fans that I don't really know.

00:43:56.560 So now I get a new social media and it says, do you want to link it to your Facebook friends?

00:44:01.160 Oh my God.

00:44:01.960 So all of a sudden I'm going to have 2,000 people I don't know on this new one too?

00:44:05.400 No.

00:44:05.980 So I have to, I have to leave those links out.

00:44:07.880 And those links are very important for normal people to be able to link all of your social worlds to each other and include them.

00:44:14.920 Like I might go on to just something that sends birthday cards.

00:44:17.480 Do you want to get, you don't want to link it to your Facebook?

00:44:19.820 No, I don't.

00:44:21.100 I don't, you know, it's too huge.

00:44:23.520 So I have to, I have to avoid those things a bit.

00:44:25.820 And at first it caused me to think, well, they weren't really doing anything new that we didn't have before.

00:44:30.420 We had web pages, we had email, we had interactions online, we had a lot of chat methods.

00:44:39.360 So, you know, what is it?

00:44:40.280 It's just sort of a nice holding place.

00:44:42.380 If you think back, 15, 20 years, AOL.

00:44:45.700 AOL, when it started, it was Macintosh only.

00:44:48.020 But AOL was the first one that brought graphics to this kind of a world.

00:44:50.760 But you were in your own little private world with your friends, your people, your buddies, and your little chat rooms.

00:44:58.380 And it was a very similar environment back then, which is probably why it was so successful in its day.

00:45:05.020 Let's switch gears and let's talk about Ron Wayne.

00:45:08.460 Yeah, I read an article in LA Times when you guys got started.

00:45:12.520 And initially, because, you know, you were younger in your 20s, the industry may not take you seriously.

00:45:17.260 So you bought somebody who was Ron Wayne experience, I think he was an Atari guy, and you made him a 10% owner initially.

00:45:24.860 And you were 45, Steve was 45.

00:45:27.860 And 12 days later, Ron comes back, and he sells off his 10% saying, I want to sell it back to you for $800.

00:45:35.900 That 10% today would be worth $22 billion if he was still there.

00:45:40.500 What happened with Ron Wayne?

00:45:42.060 What was that story about?

00:45:42.980 I don't remember if 12 days is right, but Steve came to me at one point, and he said, okay, I finally, Hewlett-Packard had turned me down.

00:45:51.440 And we're going to start this company to make these little $20 PC boards and sell them for $40.

00:45:56.640 And he came to me and he said, look, there's this guy, he kind of respected Ron's thinking.

00:46:01.480 Ron was one of these arch conservatives reading all the conservative books of the time, you know.

00:46:06.420 I don't know how today he'd be considered a wacko, but it makes him sound very authoritative.

00:46:12.560 And he had so much experience in companies and having stock in some companies and getting screwed by the executives and knowing how these things work.

00:46:19.080 And he attracted Steve Jobs.

00:46:20.680 So Steve said, well, let's hire, we can hire him, and he will, he'll do a manual for us.

00:46:25.780 He's good at doing manuals.

00:46:26.840 He sat down to typewriter and typed out our partnership agreement, all the legal phrases and words, and, I mean, I don't know how a person knows how to do that.

00:46:38.060 He was incredibly talented.

00:46:39.760 He drew the sketch, an etching by hand of Newton under the apple tree for our first, the cover of our first Apple I manual.

00:46:47.400 And he was great.

00:46:49.300 I know he was with us more than 12 days, though.

00:46:51.100 And so Steve's proposed that Ron would have 10%, so that if Steve and I disagreed about something, Ron could resolve it.

00:46:59.300 And I met Ron and was, wow, so impressed.

00:47:01.320 He knew all these different things, and he referred me to a bunch of books, and when I got home, they were kind of trash to me.

00:47:06.500 None dare call it treason and that kind of stuff.

00:47:09.520 But I really respected his ability to think and to resolve things the right way.

00:47:14.880 So that was his purpose, and then what happened was we got this order out of thin air to build computer boards with parts on them and sell them for $500 each, a $50,000 order.

00:47:26.680 And like I said, my salary, $25,000.

00:47:29.080 This was scary stuff because now we're in big business, and I don't want to make Hewlett Packard think I'm, you know, doing something behind their backs.

00:47:35.060 Well, what happened was we'd get the parts on 30 days credit, build them in 10 days, as I said, deliver them to the store.

00:47:43.520 And Ron Wayne figured out that what if something goes bad and we don't get paid, then who owes the money on the parts?

00:47:50.720 Well, it turns out that Steve Jobs had zero bank account.

00:47:54.520 You know, I had zero bank account.

00:47:56.380 No savings account, no nothing.

00:47:58.200 None of us had any wealthy friends.

00:48:00.360 So Ron Wayne, all of his money would be at stake.

00:48:02.780 So he was taking 100% of the financial risk for 10% of the company, and it was too flaky, and he sold out.

00:48:10.220 You know, he didn't have a vision that was a big picture, but it was so early with just the Apple I.

00:48:15.640 It was hard to see where Apple would go.

00:48:17.480 The Apple II really changed the story, and that came about three months later.

00:48:22.280 So it takes a little bit of...

00:48:23.620 But I think Ron was with us for a few months.

00:48:25.800 He was with you for a few months.

00:48:26.980 Yeah.

00:48:27.400 So what was his reason for quitting outside of that?

00:48:30.160 Did he have outside influence that said, these guys may get sued, these guys may be out of business, these guys may have this?

00:48:34.800 I never heard a reason for Ron quitting.

00:48:36.740 Steve just told me he wanted to sell out.

00:48:39.360 And he walked away from it.

00:48:40.740 So I'm guessing his reasoning would have been good, and he walked away from it, yeah, and very happily.

00:48:49.640 Is he an Apple fan?

00:48:51.080 I guess that would be a question.

00:48:52.560 Every time he looks at Apple, that's $22 billion right there.

00:48:56.280 I actually talk to him now and then, and he's a little bit on the poor side, so he can't always afford Apple stuff.

00:49:02.880 Yeah.

00:49:04.280 That's actually what it said in the article.

00:49:06.380 Yeah.

00:49:06.720 It said in the article, he now collects stamps and sells coins to supplement his Social Security income.

00:49:13.000 And, you know, you hear a story like that.

00:49:14.540 Yeah.

00:49:14.620 You feel bad because, you know, the opportunity was so, but that's so common in other industries as well.

00:49:19.240 People hear a story.

00:49:20.200 They come and they want to be part of it.

00:49:22.000 Last minute, they get afraid, and they want to walk away from it.

00:49:24.840 Well, let's talk about this last thing because I know we only got a few minutes here.

00:49:27.640 Let's wrap it up.

00:49:28.340 When did you know, Steve, that you were there with the big boys?

00:49:34.260 You were there where your competitors started saying, okay, you've got to be careful with Apple.

00:49:39.240 When did that happen where you guys kind of said, okay, I think we're getting there?

00:49:43.000 Well, what happened was the first killer app, a spreadsheet came out.

00:49:46.400 And then a spreadsheet made this computer so valuable to any small businessman.

00:49:50.540 Calculate all your income and expenses month by month by month.

00:49:52.880 Make a change and see the bottom line months later.

00:49:55.180 That, all of a sudden, the sales shot up ten times.

00:49:59.160 We went into, you know, heavy overdrive to ramp up.

00:50:01.660 And within about a year of that, we had the floppy disk come in.

00:50:05.600 Now we've been in business two years, and we were just selling so much.

00:50:11.220 Our stock wasn't on the market or anything, but its value was pretty huge.

00:50:16.300 Steve came to me one day, and he said,

00:50:17.940 you realize that our stock is worth more than our parents have made in their life.

00:50:21.960 And that was still a very early day.

00:50:24.180 And, you know, a year later we went public, and that was a huge, a huge thing.

00:50:28.700 So, you know, pretty much you know it by the money, you know, how big you are.

00:50:33.360 But, of course, we were just, but nobody ever said there was a, for many, many, many years,

00:50:38.020 you know, there was a better computer in that class than the Apple II.

00:50:40.680 And you used to need the Apple II computer, right?

00:50:45.100 I'm glad you brought that up, because I was surprised.

00:50:47.820 We actually have an Apple II computer.

00:50:49.940 We can have it come up here, you guys.

00:50:51.480 If we can bring that Apple II computer up here.

00:50:53.960 It was an Apple II computer, which was designed by you.

00:51:08.840 Oh, yes.

00:51:10.480 Yeah, very familiar.

00:51:11.720 And our first Apple II computer, let me tell you an important part about Steve Jobs.

00:51:15.260 When we designed it, I did all the computer stuff, all the hardware, all the software.

00:51:21.800 And Steve knew a guy that made motorcycle seats out of a foam process in Palo Alto.

00:51:27.480 And this guy could make some cases for us.

00:51:30.540 So Steve actually worked with an artist to draw some case designs up and came up with the general design of the case.

00:51:37.240 Kind of like a typewriter.

00:51:38.420 Very nice case.

00:51:39.360 Very efficient and thought out.

00:51:42.160 Well thought out the way it works.

00:51:43.320 So our first cases didn't have these little grooves here.

00:51:48.600 So that's how you can tell the very earliest ones.

00:51:51.360 But that guy could only make us like 12 a day.

00:51:54.200 You know, we're begging him.

00:51:55.140 We're sending an engineer over every day to his house to try to get 20 of them.

00:51:59.520 And we had to send off and make real plastics overseas.

00:52:03.540 We finally got that.

00:52:05.200 It saved the company.

00:52:06.600 So please put this in perspective.

00:52:08.820 This computer's power compared to today's computer.

00:52:11.720 Probably one millionth.

00:52:14.840 One million.

00:52:16.260 Yeah, this one.

00:52:17.140 This one has, for example, it originally came with 4K bytes of memory.

00:52:21.700 Now 4 gigabytes is considered small.

00:52:23.760 A million times more.

00:52:25.600 The speed of this one was one million.

00:52:28.940 And the speed of today's is several billion.

00:52:32.560 So that's thousands of times more.

00:52:34.860 The speed, call it maybe 10,000 times more.

00:52:37.520 Yeah, so.

00:52:38.740 But it did the job.

00:52:40.060 And it did it well and fun.

00:52:42.360 And did just what it was supposed to.

00:52:44.000 And everyone who had one loved it.

00:52:45.900 When did this first come out?

00:52:48.680 1977.

00:52:50.680 We put this out.

00:52:51.540 I designed it in 76.

00:52:52.400 In 77.

00:52:53.400 Yeah.

00:52:54.040 In that amazing.

00:52:54.440 77.

00:52:55.080 And it was so far ahead of its time.

00:52:58.720 But the best of all is I built in a lot of game stuff.

00:53:01.260 And tell people, computers should be fun.

00:53:03.120 You should have a fun element in your work.

00:53:04.900 I watched that video last night.

00:53:06.380 I mean, that's really, you've got to have the people, you know, laughing and smiling.

00:53:10.000 As they do their job and talking to each other.

00:53:12.700 Absolutely.

00:53:13.060 So, we can put this up here.

00:53:19.120 So, question about competitors.

00:53:23.080 When you first got started, how did the competition look at Apple?

00:53:27.520 Did they take you seriously your first year?

00:53:30.040 Did they laugh at you?

00:53:31.740 Did they spread rumors?

00:53:33.480 Was there a lot of propagandas?

00:53:35.120 I mean, what happened when you first got started?

00:53:37.260 How did they look at you?

00:53:38.200 The Apple I was, you know, I developed that and gave it away at the computer club.

00:53:44.760 And it was selling pretty well.

00:53:47.680 And it was really the best little complete computer for the price you could buy.

00:53:52.420 But one company in our club, looking over my shoulder, they had the formula.

00:53:56.920 So, they built their next computer with a keyboard and a little video display.

00:54:01.300 It was called the processor technology saw.

00:54:03.340 It became the hot seller using the Intel chips, which I didn't use.

00:54:08.200 And because they were too expensive for me.

00:54:10.160 So, it became the hot seller selling up to a thousand a month for a brief period.

00:54:14.600 And then we had the Apple II, which we knew was ten times the computer.

00:54:17.720 That was color.

00:54:18.500 That was graphics.

00:54:19.300 It was games.

00:54:20.040 It was really everything.

00:54:22.000 And we knew we had the hot one.

00:54:24.040 So, we knew we'd sell a thousand a month of it.

00:54:26.520 And we really have no competition for quite a while.

00:54:30.720 It was probably one to two years.

00:54:33.020 Yeah, we had a couple of early competition products.

00:54:36.400 But like I said, they were just cheap by comparison.

00:54:38.700 They didn't have color.

00:54:39.460 They didn't have graphics.

00:54:40.740 They were limited.

00:54:41.820 Their memory, you couldn't expand it.

00:54:43.540 I built this thing the way computer people build computers.

00:54:46.020 You could increase the memory.

00:54:47.360 If you don't have enough, you could add more.

00:54:49.180 If you think of a device like a floppy disk, you can add a card connected to a floppy disk.

00:54:53.900 So, they weren't expandable.

00:54:55.980 And what happened was when that program, the spreadsheet came out, VisiCalc, this is the only one of those computers, the three of them that existed, that had enough memory to run it.

00:55:05.760 So, they had to write it for this computer only.

00:55:09.000 So, basically, everybody else had to go back to the drawing board and make computers that could add floppy disks and things and could add more memory.

00:55:17.380 So, that was a big lead for us.

00:55:19.520 It was just an accident, too.

00:55:21.100 We hadn't really thought, this is how, this is, we're going to make sure that we don't, you know, have to, you know, that we're well ahead of the competition because of this.

00:55:28.240 We just lucked out.

00:55:30.880 That's so interesting.

00:55:31.860 Yeah.

00:55:32.120 But then later on, later on competition, once Apple's were really selling, IBM was the first major competition.

00:55:37.940 And when they got into it, they had this huge marketing arm that went into every big organization in the world and selling big mainframe computers.

00:55:45.360 But it was easy for anybody to buy an IBM.

00:55:47.600 You'd never get fired for buying an IBM.

00:55:50.220 So, they had, when they came out with their PC, it was very easy to get huge, huge sales.

00:55:55.160 And eventually, it took a few years, but eventually, they surpassed the Apple II in sales.

00:56:02.400 That's exciting.

00:56:03.180 So, you know, to wrap it up here, we only have two minutes and something seconds here.

00:56:07.480 The people that got started initially with Apple, that did their parts, that played their roles, all of that stuff.

00:56:13.980 So, you know, with the success of Apple, how many people, I mean, how many people ended up becoming financially independent simply because of Apple when they got started the first couple years?

00:56:21.740 Hard to say.

00:56:22.660 Hard to say.

00:56:22.820 I think a lot more become financially independent now because if you get a high-up executive job in a big company, your salaries now are gung high.

00:56:30.780 But when we were a startup, well, there were five of us that really ran the company for the first three years.

00:56:35.820 And we pretty much had, you know, almost all the stock.

00:56:40.320 So, when we went public, that was what I didn't feel right about.

00:56:43.640 I felt that everybody who'd been around us was a part of helping.

00:56:46.380 I came from Hewlett Packard, and they had profit sharing.

00:56:49.280 Every quarter, a certain amount of the profit was given to the employees as stock because you as an employee should feel like an owner of your company.

00:56:55.800 And I felt that so strongly, so I gave away a lot of my own stock to almost everybody in the company in marketing and engineering jobs, a certain level of job.

00:57:05.160 And then I gave huge amounts to a few key people, young people that were in high school that helped enthuse me and, you know, helped write code with me in the early days.

00:57:13.440 Wouldn't have gotten to where I got to without them.

00:57:15.880 And I felt they deserved a part of it, too.

00:57:17.720 They shouldn't be treated like they aren't worth anything.

00:57:21.760 Awesome message.

00:57:23.320 Commercial 1984.

00:57:24.480 Super Bowl.

00:57:25.820 You know which one I'm talking about.

00:57:27.300 What was the stock?

00:57:28.120 I mean, I look at that commercial.

00:57:28.960 I get fired up when I watch that commercial.

00:57:31.000 Yeah.

00:57:31.160 Tell us a little about that commercial.

00:57:32.520 I'd had a plane crash.

00:57:34.000 I'd gone back to college to get my degree.

00:57:36.340 And Steve Jobs, I was over one day, and Steve Jobs called me over to the McIntosh building and said, you've got to see this.

00:57:41.420 Puts a big pneumatic tape in the player and keys it up.

00:57:44.200 And it goes through that 1984 commercial, and I've got to assume that almost everybody's seen it, where the young track lady with a red outfit throws an anvil in it.

00:57:53.820 There's a big screen on the television saying everybody has to think the same, kind of like the IBM world.

00:58:00.040 Everybody has to have the identical thought.

00:58:01.940 Contrary thoughts will not be tolerated.

00:58:04.080 And she throws it, and it explodes, and everybody's just gasping.

00:58:07.160 They say, a new world is coming.

00:58:09.140 Oh, my God.

00:58:10.500 That was the most incredible thing I'd ever seen.

00:58:12.400 The most incredible piece of science fiction.

00:58:14.500 And to describe a company, Ridley Scott had done it.

00:58:17.520 And I said, oh, we're going to show this at the Super Bowl.

00:58:20.020 And Steve said, no, the board voted against it.

00:58:22.740 I said, why?

00:58:24.060 And he said, well, they had some problems with the meaning, and I didn't get that.

00:58:28.500 And he said, and it would cost $800,000.

00:58:31.240 I said, well, by then, Steve and I were worth a bit, you know, maybe a couple million each.

00:58:36.220 And I said, I'll pay half of it if you'll pay half, you know, and we can still show it.

00:58:41.000 And we should, because this is us.

00:58:42.980 And I was so naive, I thought that's how things got done.

00:58:45.500 But eventually, it did get shown that the agency that developed that commercial, they deliberately didn't sell off their Super Bowl time.

00:58:56.480 They kept saying, we can't get rid of it.

00:58:57.920 We haven't been able to unload it.

00:58:59.040 But they were really making sure it didn't go.

00:59:01.920 And so we showed the commercial, and that was very lucky.

00:59:04.380 It was, you know, still rated the best commercial ever.

00:59:07.380 Hands down.

00:59:08.720 Taking over a traditional industry, which is exactly what we want to do with PHP.

00:59:13.520 Steve, thank you for joining us here and coming on and spending some time with us.

00:59:17.980 Honored to be part of it.

00:59:19.340 Absolutely.

00:59:20.160 Thanks, everybody, for listening.

00:59:21.540 And by the way, if you haven't already subscribed to Valuetainment on iTunes, please do so.

00:59:26.140 Give us a five-star.

00:59:27.540 Write a review if you haven't already.

00:59:29.040 And if you have any questions for me that you may have, you can always find me on Snapchat, Instagram, Facebook, or YouTube.

00:59:35.080 Just search my name, Patrick MidDavid.

00:59:36.820 And I actually do respond back when you snap me or send me a message on Instagram.

00:59:41.820 With that being said, have a great day today.

00:59:43.720 Take care, everybody.

00:59:44.440 Bye-bye.

Valuetainment - July 11, 2019

Episode 339： The Madness of Steve Jobs Told by Steve Wozniak

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