Sat, 20 June 2015
As we saw in the last part of the Steve Jobs biography, Steve had arrived at a crossroads in his life.
After his spectacular rise to the top with Apple, things had turned sour, and he was looking for something to reignite his passions and of course his fortunes.
He was still a very rich man, but for the first time in his life had the stigma of failure hanging over him. This was quite unfair in many regards, but as we see time and time again, the world likes nothing more than pushing a person to the top of the pile, and then delighting as they fall back to earth with the rest of us.
As the story goes, Steve Jobs had returned from one of his many business trips to Europe promoting the Apple II and met a very old friend of his, Nobel prize winner Paul Berg From Stanford University.
The two old friends discussed Bergs work, and it became clear to Steve Jobs that this could be the thing he was looking for. The reason to build a new company thereby restoring the Apple boards faith in him.
His friend told him about his work on DNA, and inquired whether the molecules could be simulated on computers. Steve told him No, but that didn't mean that it wasn't possible.
And those possibilities excited him greatly.
Instead of focusing in on the home computer market as he had previously, he would instead build a supercomputer for the higher education and scientific markets. He did his research as to the computer capabilities he would need, and became even more excited by what he discovered.
Steve Jobs, was reinventing the wheel and giving the world something that no one else could, and as we have already seen he was not short of ego, which is why there is no surprise that the idea appealed so much.
However, if Steve Jobs had gone further and researched whether the higher education and scientific markets would actually be interested in buying such a super computer, he might have had a very different reaction to the concept.
Hindsight as they say, is a wonderful thing.
He was still an employee at Apple, so enthusiastically informed the board of his idea. And on the 13th of September 1985 boldly described the vision he had for the computer, the company, and of course himself.
Everything went well at first, and the board sided with his enthusiasm, even willing to invest in the plans that Steve Jobs had presented to them. That enthusiasm however was short lived, when Jobs started detailing who he would take with him to the new company. This is when the board of Apple turned bitter.
He advised that he would go away with Bud Tribble, the first Mac programmer; George Crow, a key Mac hardware engineer; Rich Page, who had supervised almost all of Apples’ development; Dan’l Lewin, and Susan Barnes, an MBA in finance.
Steve Jobs had presented these people as “Low-level”, but it was clear to all that they were anything but. These employees were integral to the future progress of Apple Computers, and the board felt threatened. With no other option and determined to push ahead with his idea, Steve Jobs resigned from Apple.
Next Computers was born, and it did not start easily.
The minute it was created, the six co-founders found themselves sued by their former employer, Apple. The fruit company was accusing them of stealing their technology. As a result, for its first year or so of existence, the new company could not work on any product in particular, since there was a chance they would lose the trial and give all the technologies they had worked on back to Apple. This didn't phase Jobs at all, and in the meantime he set up to build the perfect company.
Building a new company from scratch needed huge investment which Steve Jobs for once had at his disposal. After his departure from Apple, Steve had sold almost all of his stock out of disgust. So by early 1986, he was sitting on more than $100 million. These were very different times from the earlier bootstrapping of Apple. He no longer needed to entice the investment of others to his new venture. This was going to be his baby. He was very much back in control.
Steve Jobs knew one thing and he did it better than most: When it came to recruiting he ensured that quality and integrity were at the top of his wishlist. He only recruited those individuals that were classed as extremely bright. Next even used to state that even their receptionist had a PHD, and one thing was certain, there was a buzz around silicon valley about this new start up. The hype was growing by the day, and Steve Jobs added more and more computer whizzkids, and extremely intelligent folk to the list of employees ready to create the next big thing in computing. Next appeared very much the place to be.
What made this remarkable was the company couldn't work on anything due to the dispute from Apple, and so were not making any income. The salaries, relocation, logo, equipment costs were all being paid out of Steve Jobs very deep pockets. Not bottomless by any stretch of the imagination, but being emptied at an astonishing rate.
Why did Steve Jobs do this? Was it to prove a point to his old employers, or was it to prove a point to the industry?
Whatever the reason it got him noticed and the word on the street was “look out he's on his way back!”
At the same time as this was all happening, the Star Wars legend George Lucas, came calling to enquire whether Steve's previous interest in his company, working within the motion picture industry was still alive. Steve Jobs had taken a huge interest in the work of the team at Pixar, and had even requested that the Apple board buy the company, but was refused.
But now with the value of the company being substantially less than he was once offered, he decided to take matters into his own hands and fork out for the computer animation team. Once again, whether this was a dig at his old work colleagues we don't know, but Steve Jobs paid £10,000,000 of his own money to buy Pixar as nothing more than an expensive hobby. His real passion was for the Next cube,the super computer that would change the industry, not for a group of budding artists trying to make splash in Hollywood.
It continued to be a very expensive hobby for many years, with him funding it solely something that he was reluctant to do with his bigger passion Next. He finally started to look for outside investors for that company.
Fortunately for Steve Jobs and Next, the Apple dispute fizzled out, and they could actually start getting to work. This occurred mainly by their lack of new creation. Holding back on working on anything new, appeared to be a very good decision
NeXT still didn’t have a business plan or concrete plans for its first product. Apple’s case was based on NeXT’s raiding of senior Macintosh executives and conspiring to use the confidential knowledge Jobs and the others had about upcoming Apple projects (like BigMac).
And that is where it faltered, Apple couldn't then pinpoint any specific trade secrets that NeXT had violated, because they hadn't. A week later, Apple came back with a list of twenty complaints but failed to demonstrate how NeXT had any plans against Apple.
The case proved to be a major embarrassment for Apple and just provided Next and of course Steve Jobs, with a great deal of free publicity: A true win win.
When we look back at Steve Jobs time working on The Next cube we can see quite clearly, two major flaws:
One was Steve's personal obsession with perfection. Everything from the typeface. to the casing had to be perfect. That perfection only made it a pain to build: from the perfect right angles to its materials to its color, it was extremely complicated — and therefore expensive — to put together.
In addition, Steve had made a point on also designing a “beautiful” board for the Cube. All the electronic components, which are usually on several different pieces of plastic, were melded on a single square board that the chairman Steve Jobs considered as beautiful as the case itself. However it was a strenuous problem for engineers to solve.
The costs escalated beyond anything that a school or higher education department could afford. Steve Jobs obsession with making it cutting edge and radically ahead of its time was to be its ultimate failure. He had built the technological equivalent of the Ipad thirty years too soon.
No matter which way they turned, Next and Steve Jobs hit a brick wall. And through all the twists and turns, delays caused the development of what had been cutting edge two years previously to no longer be seen as such. The competitors had quietly brought their cheaper and user friendly machines to market and had killed any escape route that Next had. Steve Jobs had fallen further from grace, and now was being seen as a liability instead of a maverick and technological genius.
Interestingly the forgotten hobby Pixar had started making some progress. Only small steps but enough for the people at Disney to take an interest.
In the early 90’s times were hard at Pixar, and the company had survived several threats by Steve Jobs to cut his losses and close the whole thing down. But for some reason or another, he still persisted with its vision.
Pixar failed nine times over by normal standards, but Steve didn’t want another failure to be placed on his resume, so he kept writing the checks. He would have sold the company to anybody in a moment, and in fact tried very very hard to do just that, but the bottom line was he wanted to cover his loss of $50 million.
In March 1991, he declared he would continue to keep funding it only if he were given back all of the employees’ stock shares. The scheme involved shutting the company down on paper, and creating a “new Pixar” where he was the sole owner. He also fired almost half the staff, keeping only the software programmers as well as Lasseter’s animation department — which was, by then, the only part of the company to bring cash in, thanks to its work in TV advertisement.
The hardware that the company had developed to enable others to create the same groundbreaking animation was classed as finished. Disney who had an investment in the company could never understand why they should be funding a system to teach others to animate. They controlled animation, and certainly wanted to keep it that way.
Nearly twenty odd years after starting the company, the team at Pixar were given a lifeline. After receiving a few awards, and even an Oscar for a short animated film, Disney gave them the greenlight to go for the big one…..a full length computer animated movie.
Steve Jobs negotiated a three movie contract with Disney, and arranged to keep 12.5% percent of ticket sales received. Little did he know, as he had limited experience in the movie industry, that he had made a very bad deal. But I suppose a bad deal is better than no deal, and after years of self funding the unit, he was about to see money at last come his way. Or so he thought.
Toy Story was put into development, and like all things in Steve's life, at that time, became a lot harder to get the product to the customer than he expected.
1993, was now upon us, and without doubt this was the year when everything that Steve Jobs had dreamt, worked on, and developed crumbled in front of him.
A year that many people couldn't have imagined happening ten years previously, when Jobs could do no wrong.
Whether Steve Jobs had dwelled on the same dark realisations we can only guess, but it was at an end. He was 38 years old and at his lowest point ever.
Next computers crashed around him.
It began in January 1992, when Steve Jobs made the decision to allow the advanced operating systems to be used in his competitor's machines. He had taken the view that the uniqueness of what he had created would need to be shared, if he had any chance of saving the company.
This was the first sign of the true failure to come for Steve, although many experts had the view that he should have done this from the very beginning. However Jobs was looking to create the system of all systems. The kind of processing speed that would leave all his competitors in the shade. Not to help them in their journeys also. The death warrant had been signed.
At the same time in an ironic retelling of a previous dot in Jobs life, things got even worse. COO Van Cuylenburg, who was hired by Steve Jobs, betrayed him in a cruel reminiscence of what had happened at Apple some seven years earlier.
Van Cuylenberg had phoned up NeXT’s competitor Sun, and asked its CEO Scott McNealy to buy NeXT and install him as manager of the new company getting rid of Jobs. Fortunately, McNealy had some sense of honor and told Steve about the outrage. Van Cuylenburg left, but Steve was completely devastated by everything that was going on around him.
How could this have happened?
How could all his hard work and investment end up in such a way?
How could it be that everyone of the company’s co-founders, except George Crow would abandon him.
He was Steve Jobs, the genius who had created an industry from nothing. A man who had lit up silicon valley and blazed a path across the world.
What had he done to deserve all this at once?
Next was finished, and in an even crueler twist of fate, his other venture Pixar was in serious trouble too. The lifeline that had been grabbed at when making the deal with Disney was slipping away from them. Disney's Katzenberg had seen what the company had created, and quite simply hated Woody, Buzz Lightyear and all the other characters which we now see as classics.
Together with the majority of Disney’s creative staff, he declared that the characters were unappealing jerks and the dialogues inappropriately cynical for a children’s movie (while he was the one who pushed for such characteristics early in development). Pixar was back to making TV commercials just so it could survive — but it was obvious it would disappear if the work did not start again.
Steve Jobs had reached the bottom of his career. He had lost faith in himself, and disappeared behind the closed doors of his home, spending most of his days at home, playing with his two-year-old son.
Was there anyway that Steve Jobs could fight back from such a low point?
Could he recoup his investment, his self esteem, and be allowed to create the legacy that he so craved?
That part of the story will only come on part four of the Steve Jobs Biography.