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CHAPTER EIGHTEEN NeXT
Prometheus Unbound



The Pirates Abandon Ship

Upon his return from Europe in August 1985, while he was casting about for what to do next, Jobs called the Stanford biochemist Paul Berg to discuss the advances that were being made in gene splicing and recombinant DNA. Berg described how difficult it was to do experiments in a biology lab, where it could take weeks to nurture an experiment and get a result. “Why don’t you simulate them on a computer?” Jobs asked. Berg replied that computers with such capacities were too expensive for university labs. “Suddenly, he was excited about the possibilities,” Berg recalled. “He had it in his mind to start a new company. He was young and rich, and had to find something to do with the rest of his life.”

Jobs had already been canvassing academics to ask what their workstation needs were. It was something he had been interested in since 1983, when he had visited the computer science department at Brown to show off the Macintosh, only to be told that it would take a far more powerful machine to do anything useful in a university lab. The dream of academic researchers was to have a workstation that was both powerful and personal. As head of the Macintosh division, Jobs had launched a project to build such a machine, which was dubbed the Big Mac. It would have a UNIX operating system but with the friendly Macintosh interface. But after Jobs was ousted from the Macintosh division, his replacement, Jean-Louis Gassée, canceled the Big Mac.

When that happened, Jobs got a distressed call from Rich Page, who had been engineering the Big Mac’s chip set. It was the latest in a series of conversations that Jobs was having with disgruntled Apple employees urging him to start a new company and rescue them. Plans to do so began to jell over Labor Day weekend, when Jobs spoke to Bud Tribble, the original Macintosh software chief, and floated the idea of starting a company to build a powerful but personal workstation. He also enlisted two other Macintosh division employees who had been talking about leaving, the engineer George Crow and the controller Susan Barnes.

That left one key vacancy on the team: a person who could market the new product to universities. The obvious candidate was Dan’l Lewin, who at Apple had organized a consortium of universities to buy Macintosh computers in bulk. Besides missing two letters in his first name, Lewin had the chiseled good looks of Clark Kent and a Princetonian’s polish. He and Jobs shared a bond: Lewin had written a Princeton thesis on Bob Dylan and charismatic leadership, and Jobs knew something about both of those topics.

Lewin’s university consortium had been a godsend to the Macintosh group, but he had become frustrated after Jobs left and Bill Campbell had reorganized marketing in a way that reduced the role of direct sales to universities. He had been meaning to call Jobs when, that Labor Day weekend, Jobs called first. He drove to Jobs’s unfurnished mansion, and they walked the grounds while discussing the possibility of creating a new company. Lewin was excited, but not ready to commit. He was going to Austin with Campbell the following week, and he wanted to wait until then to decide. Upon his return, he gave his answer: He was in. The news came just in time for the September 13 Apple board meeting.

Although Jobs was still nominally the board’s chairman, he had not been to any meetings since he lost power. He called Sculley, said he was going to attend, and asked that an item be added to the end of the agenda for a “chairman’s report.” He didn’t say what it was about, and Sculley assumed it would be a criticism of the latest reorganization. Instead, when his turn came to speak, Jobs described to the board his plans to start a new company. “I’ve been thinking a lot, and it’s time for me to get on with my life,” he began. “It’s obvious that I’ve got to do something. I’m thirty years old.” Then he referred to some prepared notes to describe his plan to create a computer for the higher education market. The new company would not be competitive with Apple, he promised, and he would take with him only a handful of non-key personnel. He offered to resign as chairman of Apple, but he expressed hope that they could work together. Perhaps Apple would want to buy the distribution rights to his product, he suggested, or license Macintosh software to it.

Mike Markkula rankled at the possibility that Jobs would hire anyone from Apple. “Why would you take anyone at all?” he asked.

“Don’t get upset,” Jobs assured him and the rest of the board. “These are very low-level people that you won’t miss, and they will be leaving anyway.”

The board initially seemed disposed to wish Jobs well in his venture. After a private discussion, the directors even proposed that Apple take a 10% stake in the new company and that Jobs remain on the board.

That night Jobs and his five renegades met again at his house for dinner. He was in favor of taking the Apple investment, but the others convinced him it was unwise. They also agreed that it would be best if they resigned all at once, right away. Then they could make a clean break.

So Jobs wrote a formal letter telling Sculley the names of the five who would be leaving, signed it in his spidery lowercase signature, and drove to Apple the next morning to hand it to him before his 7:30 staff meeting.

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

“Well, these people were going to resign anyway,” Jobs replied. “They are going to be handing in their resignations by nine this morning.”

From Jobs’s perspective, he had been honest. The five were not division managers or members of Sculley’s top team. They had all felt diminished, in fact, by the company’s new organization. But from Sculley’s perspective, these were important players; Page was an Apple Fellow, and Lewin was a key to the higher education market. In addition, they knew about the plans for Big Mac; even though it had been shelved, this was still proprietary information. Nevertheless Sculley was sanguine. Instead of pushing the point, he asked Jobs to remain on the board. Jobs replied that he would think about it.

But when Sculley walked into his 7:30 staff meeting and told his top lieutenants who was leaving, there was an uproar. Most of them felt that Jobs had breached his duties as chairman and displayed stunning disloyalty to the company. “We should expose him for the fraud that he is so that people here stop regarding him as a messiah,” Campbell shouted, according to Sculley.

Campbell admitted that, although he later became a great Jobs defender and supportive board member, he was ballistic that morning. “I was fucking furious, especially about him taking Dan’l Lewin,” he recalled. “Dan’l had built the relationships with the universities. He was always muttering about how hard it was to work with Steve, and then he left.” Campbell was so angry that he walked out of the meeting to call Lewin at home. When his wife said he was in the shower, Campbell said, “I’ll wait.” A few minutes later, when she said he was still in the shower, Campbell again said, “I’ll wait.” When Lewin finally came on the phone, Campbell asked him if it was true. Lewin acknowledged it was. Campbell hung up without saying another word.

After hearing the fury of his senior staff, Sculley surveyed the members of the board. They likewise felt that Jobs had misled them with his pledge that he would not raid important employees. Arthur Rock was especially angry. Even though he had sided with Sculley during the Memorial Day showdown, he had been able to repair his paternal relationship with Jobs. Just the week before, he had invited Jobs to bring his girlfriend up to San Francisco so that he and his wife could meet her, and the four had a nice dinner in Rock’s Pacific Heights home. Jobs had not mentioned the new company he was forming, so Rock felt betrayed when he heard about it from Sculley. “He came to the board and lied to us,” Rock growled later. “He told us he was thinking of forming a company when in fact he had already formed it. He said he was going to take a few middle-level people. It turned out to be five senior people.” Markkula, in his subdued way, was also offended. “He took some top executives he had secretly lined up before he left. That’s not the way you do things. It was ungentlemanly.”

Over the weekend both the board and the executive staff convinced Sculley that Apple would have to declare war on its cofounder. Markkula issued a formal statement accusing Jobs of acting “in direct contradiction to his statements that he wouldn’t recruit any key Apple personnel for his company.” He added ominously, “We are evaluating what possible actions should be taken.” Campbell was quoted in the Wall Street Journal as saying he “was stunned and shocked” by Jobs’s behavior.

Jobs had left his meeting with Sculley thinking that things might proceed smoothly, so he had kept quiet. But after reading the newspapers, he felt that he had to respond. He phoned a few favored reporters and invited them to his home for private briefings the next day. Then he called Andy Cunningham, who had handled his publicity at Regis McKenna. “I went over to his unfurnished mansiony place in Woodside,” she recalled, “and I found him huddled in the kitchen with his five colleagues and a few reporters hanging outside on the lawn.” Jobs told her that he was going to do a full-fledged press conference and started spewing some of the derogatory things he was going to say. Cunningham was appalled. “This is going to reflect badly on you,” she told him. Finally he backed down. He decided that he would give the reporters a copy of the resignation letter and limit any on-the-record comments to a few bland statements.

Jobs had considered just mailing in his letter of resignation, but Susan Barnes convinced him that this would be too contemptuous. Instead he drove it to Markkula’s house, where he also found Al Eisenstat. There was a tense conversation for about fifteen minutes; then Barnes, who had been waiting outside, came to the door to retrieve him before he said anything he would regret. He left behind the letter, which he had composed on a Macintosh and printed on the new LaserWriter:

September 17, 1985

Dear Mike:

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

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

The Board declined to accept my resignation and asked me to defer it for a week. I agreed to do so in light of the encouragement the Board offered with regard to the proposed new venture and the indications that Apple would invest in it. On Friday, after I told John Sculley who would be joining me, he confirmed Apple’s willingness to discuss areas of possible collaboration between Apple and my new venture.

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

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

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

Yours sincerely, steven p. jobs



When a guy from the facilities team went to Jobs’s office to pack up his belongings, he saw a picture frame on the floor. It contained a photograph of Jobs and Sculley in warm conversation, with an inscription from seven months earlier: “Here’s to Great Ideas, Great Experiences, and a Great Friendship! John.” The glass frame was shattered. Jobs had hurled it across the room before leaving. From that day, he never spoke to Sculley again.

Apple’s stock went up a full point, or almost 7%, when Jobs’s resignation was announced. “East Coast stockholders always worried about California flakes running the company,” explained the editor of a tech stock newsletter. “Now with both Wozniak and Jobs out, those shareholders are relieved.” But Nolan Bushnell, the Atari founder who had been an amused mentor ten years earlier, told Time that Jobs would be badly missed. “Where is Apple’s inspiration going to come from? Is Apple going to have all the romance of a new brand of Pepsi?”

After a few days of failed efforts to reach a settlement with Jobs, Sculley and the Apple board decided to sue him “for breaches of fiduciary obligations.” The suit spelled out his alleged transgressions:

Notwithstanding his fiduciary obligations to Apple, Jobs, while serving as the Chairman of Apple’s Board of Directors and an officer of Apple and pretending loyalty to the interests of Apple . . .

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

(b) secretly schemed that his competing enterprise would wrongfully take advantage of and utilize Apple’s plan to design, develop and market the Next Generation Product . . .

(c) secretly lured away key employees of Apple.



At the time, Jobs owned 6.5 million shares of Apple stock, 11% of the company, worth more than $100 million. He began to sell his shares, and within five months had dumped them all, retaining only one share so he could attend shareholder meetings if he wanted. He was furious, and that was reflected in his passion to start what was, no matter how he spun it, a rival company. “He was angry at Apple,” said Joanna Hoffman, who briefly went to work for the new company. “Aiming at the educational market, where Apple was strong, was simply Steve being vengeful. He was doing it for revenge.”

Jobs, of course, didn’t see it that way. “I haven’t got any sort of odd chip on my shoulder,” he told Newsweek. Once again he invited his favorite reporters over to his Woodside home, and this time he did not have Andy Cunningham there urging him to be circumspect. He dismissed the allegation that he had improperly lured the five colleagues from Apple. “These people all called me,” he told the gaggle of journalists who were milling around in his unfurnished living room. “They were thinking of leaving the company. Apple has a way of neglecting people.”

He decided to cooperate with a Newsweek cover in order to get his version of the story out, and the interview he gave was revealing. “What I’m best at doing is finding a group of talented people and making things with them,” he told the magazine. He said that he would always harbor affection for Apple. “I’ll always remember Apple like any man remembers the first woman he’s fallen in love with.” But he was also willing to fight with its management if need be. “When someone calls you a thief in public, you have to respond.” Apple’s threat to sue him was outrageous. It was also sad. It showed that Apple was no longer a confident, rebellious company. “It’s hard to think that a $2 billion company with 4,300 employees couldn’t compete with six people in blue jeans.”

To try to counter Jobs’s spin, Sculley called Wozniak and urged him to speak out. “Steve can be an insulting and hurtful guy,” he told Time that week. He revealed that Jobs had asked him to join his new firm—it would have been a sly way to land another blow against Apple’s current management—but he wanted no part of such games and had not returned Jobs’s phone call. To the San Francisco Chronicle, he recounted how Jobs had blocked frogdesign from working on his remote control under the pretense that it might compete with Apple products. “I look forward to a great product and I wish him success, but his integrity I cannot trust,” Wozniak said.

To Be on Your Own

“The best thing ever to happen to Steve is when we fired him, told him to get lost,” Arthur Rock later said. The theory, shared by many, is that the tough love made him wiser and more mature. But it’s not that simple. At the company he founded after being ousted from Apple, Jobs was able to indulge all of his instincts, both good and bad. He was unbound. The result was a series of spectacular products that were dazzling market flops. This was the true learning experience. What prepared him for the great success he would have in Act III was not his ouster from his Act I at Apple but his brilliant failures in Act II.

The first instinct that he indulged was his passion for design. The name he chose for his new company was rather straightforward: Next. In order to make it more distinctive, he decided he needed a world-class logo. So he courted the dean of corporate logos, Paul Rand. At seventy-one, the Brooklyn-born graphic designer had already created some of the best-known logos in business, including those of Esquire, IBM, Westinghouse, ABC, and UPS. He was under contract to IBM, and his supervisors there said that it would obviously be a conflict for him to create a logo for another computer company. So Jobs picked up the phone and called IBM’s CEO, John Akers. Akers was out of town, but Jobs was so persistent that he was finally put through to Vice Chairman Paul Rizzo. After two days, Rizzo concluded that it was futile to resist Jobs, and he gave permission for Rand to do the work.

Rand flew out to Palo Alto and spent time walking with Jobs and listening to his vision. The computer would be a cube, Jobs pronounced. He loved that shape. It was perfect and simple. So Rand decided that the logo should be a cube as well, one that was tilted at a 28° angle. When Jobs asked for a number of options to consider, Rand declared that he did not create different options for clients. “I will solve your problem, and you will pay me,” he told Jobs. “You can use what I produce, or not, but I will not do options, and either way you will pay me.”

Jobs admired that kind of thinking, so he made what was quite a gamble. The company would pay an astonishing $100,000 flat fee to get one design. “There was a clarity in our relationship,” Jobs said. “He had a purity as an artist, but he was astute at solving business problems. He had a tough exterior, and had perfected the image of a curmudgeon, but he was a teddy bear inside.” It was one of Jobs’s highest praises: purity as an artist.

It took Rand just two weeks. He flew back to deliver the result to Jobs at his Woodside house. First they had dinner, then Rand handed him an elegant and vibrant booklet that described his thought process. On the final spread, Rand presented the logo he had chosen. “In its design, color arrangement, and orientation, the logo is a study in contrasts,” his booklet proclaimed. “Tipped at a jaunty angle, it brims with the informality, friendliness, and spontaneity of a Christmas seal and the authority of a rubber stamp.” The word “next” was split into two lines to fill the square face of the cube, with only the “e” in lowercase. That letter stood out, Rand’s booklet explained, to connote “education, excellence . . . e = mc2.”

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

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.

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 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 would have been better served by insisting on just the opposite.

After the settlement Jobs continued to court Esslinger until the designer decided to wind down his contract with Apple. That allowed frogdesign to work with NeXT at the end of 1986. Esslinger insisted on having free rein, just as Paul Rand had. “Sometimes you have to use a big stick with Steve,” he said. Like Rand, Esslinger was an artist, so Jobs was willing to grant him indulgences he denied other mortals.

Jobs decreed that the computer should be an absolutely perfect cube, with each side exactly a foot long and every angle precisely 90 degrees. He liked cubes. They had gravitas but also the slight whiff of a toy. But the NeXT cube was a Jobsian example of design desires trumping engineering considerations. The circuit boards, which fitted nicely into the traditional pizza-box shape, had to be reconfigured and stacked in order to nestle into a cube.

Even worse, the perfection of the cube made it hard to manufacture. Most parts that are cast in molds have angles that are slightly greater than pure 90 degrees, so that it’s easier to get them out of the mold (just as it is easier to get a cake out of a pan that has angles slightly greater than 90 degrees). But Esslinger dictated, and Jobs enthusiastically agreed, that there would be no such “draft angles” that would ruin the purity and perfection of the cube. So the sides had to be produced separately, using molds that cost $650,000, at a specialty machine shop in Chicago. Jobs’s passion for perfection was out of control. When he noticed a tiny line in the chassis caused by the molds, something that any other computer maker would accept as unavoidable, he flew to Chicago and convinced the die caster to start over and do it perfectly. “Not a lot of die casters expect a celebrity to fly in,” noted one of the engineers. Jobs also had the company buy a $150,000 sanding machine to remove all lines where the mold faces met and insisted that the magnesium case be a matte black, which made it more susceptible to showing blemishes.

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.”

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 ............
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