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What Steve Jobs learned in the wilderness

What Steve Jobs learned in the wilderness

By Randall Stross, New York Times | Updated: 7 June 2012 17:02 IST

Highlights

The saga of Steven P. Jobs is so well known that it has entered the nation’s mythology: he’s the prodigal who returned to Apple in 1997, righted a listing ship and built it into one of the most valuable companies in the world.

The saga of Steven P. Jobs is so well known that it has entered the nation's mythology: he's the prodigal who returned to Apple in 1997, righted a listing ship and built it into one of the most valuable companies in the world.

But the Jobs of the mid-1980s probably never could have made Apple what it is today if he hadn't embarked on a torment-filled business odyssey.

Lawrence J. Ellison, the chief executive of Oracle, overlooks this. In August, after the ouster of Mark V. Hurd as the chief executive of Hewlett-Packard, Mr. Ellison said in an e-mail to The New York Times that the H.P. board had made "the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."

Actually, the Apple co-founder wasn't fired. Mr. Jobs was relieved of operating responsibilities in a company reorganization in May 1985. But he was still the company's chairman. Apple was ailing: sales of the Macintosh, introduced the previous year, were falling well below expectations; inventory was piling up; and the company seemed headed for its first-ever loss. In September 1985, Mr. Jobs resigned from Apple to start a new computer company he called Next.

Suppose Mr. Jobs had not left in 1985. Suppose he had convinced the Apple board to oust his nemesis, John Sculley, then chief executive and president. Under Mr. Jobs's uninterrupted direction, would Apple have arrived at the pinnacle it has reached today, but 12 years earlier?

It's hard to see how anything like that would have transpired. The Steve Jobs who returned to Apple was a much more capable leader -- precisely because he had been badly banged up. He had spent 12 tumultuous, painful years failing to find a way to make the new company profitable.

"I am convinced that he would not have been as successful after his return at Apple if he hadn't gone through his wilderness experience at Next," said Tim Bajarin, president of Creative Strategies, a technology consulting company.

Mr. Jobs began Next -- which the company itself spelled as NeXT -- with the intention of building a high-powered computer expressly for customers in higher education, giving students and scholars what he called "a personal mainframe."

Advisers from universities told him that he should keep the price under $2,000. (The Mac was selling to colleges at a discounted price of only $1,000.) But the price of the Next machine when finally unveiled in 1988 was $6,500. On top of that, it was underpowered and the accompanying printer was an additional $2,000. When colleges and universities, not surprisingly, demurred, Mr. Jobs tried to sell to corporate customers by enlisting Businessland, then a big computer retailer, but the new price of $9,995 fared no better in that market.

Mr. Jobs's lieutenants tried to warn him away from certain disaster, but he was not receptive. In 1992-93, seven of nine Next vice presidents were shown the door or left on their own.

In this period, Mr. Jobs did not do much delegating. Almost every aspect of the machine -- including the finish on interior screws -- was his domain. The interior furnishings of Next's offices, a stunning design showplace, were Mr. Jobs's concern, too. While the company's strategy begged to be re-examined, Mr. Jobs attended to other matters. I spoke with many current and former Next employees for my 1993 book, "Steve Jobs and the NeXT Big Thing." According to one of them, while a delegation of visiting Businessland executives waited on the sidewalk, Mr. Jobs spent 20 minutes directing the landscaping crew on the exact placement of the sprinkler heads.

Next's computer hardware and software were filled with innovations that drew a small, but devoted, following. Mr. Jobs had created the first easy-to-use Unix machine, but the mainstream marketplace shrugged. He had already helped bring to market an easy-to-use machine, the Mac, so the Next couldn't differentiate itself enough -- and certainly not at the price the company charged.

After selling only 50,000 computers in seven years, he finally pulled the plug on manufacturing hardware, laid off more than half his 500 employees, and tried to make a go of selling Next's software. His company would end up serving as Apple's R.& D. laboratory. Apple acquired the company in 1997 and used Next's software as the basis for the new operating system, Mac OS X.

MR. JOBS had to get out of his system the idea that computing in the future would resemble computing in the past. In recent years, with the iPod, the iPhone and the iPad, he has worked on computing that does not take place in conventionally shaped computer boxes. He didn't invent the media player, the smartphone or the tablet, but he understood that no one else had yet come up with the equivalent of a Mac. So these offered ripe opportunities for him to bring his design talents to bear.

And he had always been able to attract great talent. What he hadn't learned before returning to Apple, however, was the necessity of retaining it. He has now done so. One of the unremarked aspects of Apple's recent story is the stability of the executive team -- no curb filled with dumped managers.

Kevin Compton, who was a senior executive at Businessland during the Next years, described Mr. Jobs after returning to Apple: "He's the same Steve in his passion for excellence, but a new Steve in his understanding of how to empower a large company to realize his vision." Mr. Jobs had learned from Next not to try to do everything himself, Mr. Compton said.

It took 12 dispiriting years, much bruising, and perspective gained from exile. If he had instead stayed at Apple, the transformation of Apple Computer into today's far larger Apple Inc. might never have happened.

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