#5 Steve Jobs

What I learned from reading Steve Jobs by Walter Isaacson. ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  Before we get into the book, as a reminder, this podcast is ad-free. Half of all these podcasts I do are released for free. The other half are for members only. Members are what make this podcast possible. So if you like what we're doing, if you like what I'm doing here, sign up to be a member. There's a link in the show notes available on your podcast player. And I thank you very much for your support. So let's go ahead and jump right into this book. And I want to start with a section that discusses what you could call the first Apple product. "The ultimate combination of pranks and electronics and the escapade that helped to create Apple was launched one Sunday afternoon when Wozniak read an article in Esquire that his mother

• 0:45David Senra?

  had left for him on the kitchen table. The story described how hackers and phone freakers had found ways to make long-distance calls for free by replicating the tones that routed signals on the AT&T network. Halfway through the article, I had to call my best friend Steve Jobs," Wozniak recalled. A hero of the piece was John Draper, a hacker known as Captain Crunch because he had discovered that the sound emitted by the toy whistle that came with the breakfast cereal was the same 2,600 Hz tone used by the phone network's call routing switches.

• 1:24David Senra?

  It could fool the system into allowing a long-distance call to go through without extra charges. The article revealed that the other tones that served to route calls could be found in an issue of the Bell System Technical Journal, which AT&T immediately began asking libraries to pull from their shelves. "Woz picked me up a few minutes later, and we went to the library at the Stanford Linear Accelerator Center to see if we could find it," Jobs recounted. "I remember that we were furiously digging through the stacks, and it was Woz who finally found the journal with all the frequencies. It was like, holy shit. And we opened it up, and there it was.

• 2:09David Senra?

  We kept saying to ourselves, 'It's real! Holy shit! It's real!'" It was all laid out, the tones and the frequencies.

• 2:20David Senra?

  No one had ever created a digital version of a blue box. The blue box is the device that phone freakers use to make these calls for free. No one had ever created a digital version of the blue box, but Woz was made for the challenge. Using diodes and transistors from Radio Shack, and with the help of a music student in his dorm who had perfect pitch, he got it built.

• 2:46David Senra?

  They attempted to call Wozniak's uncle in Los Angeles, but they got a wrong number. It didn't matter, their device had worked. "Hi, we're calling you for free, we're calling you for free!" Wozniak shouted. The person on the other end was confused and annoyed. Jobs chimed in, "We're calling from California, from California, with a blue box!" This probably baffled the man even more, since he was also in California.

• 3:14David Senra?

  It was then that they reached an important milestone, one that would establish a pattern in their partnership. Jobs came up with the idea that the blue box could be more than merely a hobby. They could build and sell them. "I got together the rest of the components, like the casing and power supply and keypads, and figured out how we could price it," Jobs said, foreshadowing roles he would play when they founded Apple. The finished product was about the size of two decks of playing cards. The parts cost about forty dollars, and Jobs decided they should sell it for a hundred and fifty dollars. They took the device to the college dorms and gave demonstrations by attaching it to a phone and a speaker.

• 3:56David Senra?

  While the potential customers watched, they would call the Ritz in London, or a dial-a-joke service in Australia. "We made a hundred or so blue boxes and sold almost all of them," Jobs recalled.

• 4:10David Senra?

  The fun doesn't last, though. This is a really interesting story. It's about a robbery that's about to happen. "The fun and profits came to an end at Sunnyvale Pizza Parlor. Jobs and Wozniak were about to drive to Berkeley with a blue box they had just finished making. Jobs needed money and was eager to sell, so he pitched the device to some guys at the next table. They were interested, so Jobs went to a phone booth and demonstrated it with a call to Chicago. The prospects said that they had to go to their car for money.

• 4:45David Senra?

  So we walk over to the car, Woz and me, and I've got the blue box in my hand. And the guy gets in, reaches under the seat, and he pulls out a gun, Jobs recounted. He had never been that close to a gun, and he was terrified. So he's pointing the gun right at my stomach, and he says, "Hand it over, brother." My mind raced. There was the car door here, and I thought maybe I could slam it onto his legs and we could run. But there was this high probability that he would shoot me. So I slowly handed it to him, very carefully. It was a weird sort of robbery. The guy who took the blue box actually gave Jobs a phone number and said he would try to pay for it if it worked.

• 5:27David Senra?

  When Jobs later called the number, the guy said he couldn't figure out how to use it. So Jobs, in his felicitous way, convinced the guy to meet him and Wozniak at a public place. But they end up deciding not to have another encounter with the gunman, even on the off-chance that they could get their $150.

• 5:49David Senra?

  "The partnership paved the way for what would be a bigger adventure together. If it hadn't been for the blue boxes, there wouldn't have been an apple," Jobs later reflected. "I'm 100% sure of that." Woz and I learned how to work together, and we gained the confidence that we could solve technical problems and actually put something into production. They had created a device with a little circuit board that could control billions of dollars' worth of infrastructure. You cannot believe how much confidence that gave us. Woz came to the same conclusion. It was probably a bad idea selling them, but it gave us a taste of what we could do with my engineering skills and his vision. The Blue Box Adventure established a template for a partnership that would soon be born.

• 6:34David Senra?

  Wozniak would be the gentle wizard coming up with a neat invention that he would then, that he would have been happy to just give away. And Jobs would figure out how to make it user-friendly, put it together in a package, market it, and make a few bucks.

• 6:51David Senra?

  So I think that's a good introduction into this book. So the book is about, almost 600 pages long. And half of it covers the beginning of Jobs' life, all the way up until his return to Apple in the late 90s. And then the second half is when Jobs finally is able to build Apple into what becomes the most valuable company in the world. So, obviously, this book takes 10, 15 hours to read. I'm not going to read the whole thing, but I am going to pick out a couple of things I found interesting, and things that I think you'll find interesting and you can learn from as well. I'm going to go in chronological order of the book.

• 7:32David Senra?

  But I am going to interject some random sentences and paragraphs having to do with Jobs' personality, which I was most fascinated by. And the book has all kinds of these little short stories, or even just a comment or two, about Steve Jobs the person. So the first one, I want to skip ahead a little bit. And this is, Steve Jobs is in college, at Reed College. He actually drops out because he doesn't like taking the required classes, but he stays on campus and takes classes that he's interested in, one of those being calligraphy. But this is a person that knew him at Reed, and it's describing Steve Jobs.

• 8:16David Senra?

  And he says, "He refused to accept automatically received truths, and he wanted to examine everything for himself."

• 8:28David Senra?

  Here's another part of Steve Jobs' personality that comes later in the book. "He had the attitude that he could do anything, and therefore, so can you."

• 8:43David Senra?

  So let's skip ahead a little bit and I want to talk about Apple's first sale and how that came to be. So Wozniak had built a small computer. Jobs realizes that they could sell it, there's a lot of interest. So this part is called "Apple's First Sale."

• 9:00David Senra?

  His name was Paul Terrell and in 1975, he had opened a computer store which he dubbed "The Byte Shop." Now, a year later, he had three stores and visions of building a national chain. Jobs was thrilled to give him a private demo. "Take a look at this," he said, "you're gonna like what you see." Terrell was impressed enough to hand Jobs and Woz his card. "Keep in touch," he said.

• 9:26David Senra?

  "I'm keeping in touch," Jobs announced the next day when he walked barefoot into The Byte Shop. He made the sale. Terrell agreed to order 50 computers, but there was a condition. He didn't want just 50 printed circuit boards for which customers would then have to buy all the chips and do the assembly. That might appeal to a few hardcore hobbyists, but not to most customers. Instead, he wanted the boards to be fully assembled. For that, he was willing to pay about $500 apiece, cash on delivery.

• 10:08David Senra?

  So that's not a bad first sale. I included that in here because it leads Jobs into a realization that he keeps with him his entire life. And that's his desire for end-to-end integration.

• 10:24David Senra?

  As Jobs walked the floor of the Personal Computer Festival, he came to the realization that Paul Terrell of The Byte Shop had been right. Personal computers should come in a complete package. The next Apple, he decided, needed to have a great case, a built-in keyboard, and be integrated end-to-end, from the power supply to the software. "My vision was to create this fully, the first fully packaged computer," he recalled. "We were no longer aiming for the handful of hobbyists who liked to assemble their own computers, who knew how to buy transformers and keyboards. For every one of them, there were a thousand people who would want the machine to be ready to run."

• 11:12David Senra?

  So that machine becomes the Apple II. And this is a realization that Jobs is having in the late 70s. And you're probably listening to this podcast on an iPhone. And you realize that that integrate, the end to end integration, never left him. The device you're holding in your hand or listening to is a complete demonstration of that. And the Apple II wound up being the first big success of Apple. Here's a little bit about that. "The Apple II would be marketed in various models for the next 16 years with close to 6 million sold. More than any other machine, it launched the personal computer industry." So the Apple II is a massive success.

• 11:53David Senra?

  It leads, it allows them, rather, to file for an IPO in just a few short years. And keep in mind, Steve Jobs and Wozniak, or Steve Jobs is in his early 20s at this time. He's one of the very few entrepreneurs that we cover on the show where their first business was a massive success. And we're going to get into a little bit about that right now. And also, what I found interesting was Steve Jobs' relation to money. "Apple went public the morning of December 12, 1980. By then, the bankers had priced the stock at $22 a share. It went to $29 the first day. Jobs had come into the office just in time to watch the opening trades.

• 12:35David Senra?

  At age 25, he was now worth $256 million." "Before and after he was rich, and indeed throughout a life that included being both broke and a billionaire, Steve Jobs' attitude towards wealth was complex. He was an anti-materialistic hippie who capitalized on the invention of a friend who wanted to give them away for free. And he was a Zen devotee who made a pilgrimage to India and then decided that his calling was to create a business. And yet somehow, these attitudes seemed to weave together rather than conflict. He had a great love for some material objects, especially those that were finely designed and crafted, such as Porsche and Mercedes cars."

• 13:22David Senra?

  Henkels knives and Braun appliances, BMW motorcycles and Ansel Adam Prince, Bang and Olufsen audio equipment. Yet the house he lived in, no matter how rich he became, tended not to be ostentatious and were furnished so simply that they would have put a shaker to a shame. Neither then nor later would he travel with an entourage, keep a personal staff, or even have security protection. He bought a nice car, but he always drove himself. When Markula, this is one of the first venture capitalists, or the first person to put money inside of Apple. When Markula asked Jobs to join him in buying a Learjet, he declined, though he eventually would demand of Apple a Gulfstream to use.

• 14:07David Senra?

  So that was after he came back to Apple about 20 years later from where we are in the story. Like his father, he could be flinty when bargaining with suppliers, but he didn't allow a craving for profits to take a precedence over his passion for building great products. Thirty years after Apple went public, he reflected on what it was like to come into money so suddenly. And this is Steve Jobs' direct quote right here. "I never worried about money. I grew up in a middle-class family, so I never thought I would starve. And I learned at Atari," he worked the night shift as an engineer at Atari before he started Apple, "and I learned at Atari that I could be an okay engineer, so I always knew that I could get by.

• 14:52David Senra?

  I was voluntarily poor when I was in college in India, and I lived a pretty simple life even when I was working. So I went from fairly poor, which was wonderful because I didn't have to worry about money, to being incredibly rich when I also didn't have to worry about money. I watched people at Apple who made a lot of money and felt they had to live differently. Some of them bought a Rolls-Royce and various houses, each with a house manager and then someone to manage the house managers. Their wives got plastic surgery and turned into these bizarre people. This was not how I wanted to live my life. It's crazy. I made a promise to myself that I'm not gonna let this money ruin my life."

• 15:41David Senra?

  So I want to jump ahead, this is another random tidbit about his personality. Despite his new fame and fortune, he still fancied himself a child of the counterculture. On a visit to a Stanford class, he took off his blazer and his shoes, perched on top of a table, and crossed his legs into a lotus position. The students asked questions such as when Apple's stock price would rise, which jobs brushed off. Instead, he spoke of his passion for future products, such as someday making a computer as small as a book. The iPad? When the business questions tapered off, Jobs turned the tables on the well-groomed students. "How many of you are virgins?" he asked. There were nervous giggles.

• 16:27David Senra?

  "How many of you have taken LSD?" More nervous laughter. And only one or two hands went up. Later Jobs would complain about the new generation of kids who seemed to him more materialistic and careerist than his own. Another direct quote: "When I went to school, it was right after the 60s and before this general wave of practical purposefulness had set in." He said, "Now students aren't even thinking in idealistic terms, or at least nowhere near as much." "His generation," he said, "was different." "The idealistic wind of the 60s is still at our backs, and most of the people I know who are my age have that ingrained in them forever."

• 17:11David Senra?

  Imagine being in that Stanford class and having somebody ask if you're a virgin or if you've taken LSD. LSD is mentioned throughout the book multiple times. Steve Jobs credits him taking LSD in his youth as one of the most important experiences he ever had, and he would encourage other people to do it as well. He was a very big fan of acid.

• 17:42David Senra?

  Okay, so I want to talk to you about something that you may be familiar with. And there's even an entire chapter in the book named after it. Steve Jobs had something people would call as the "reality distortion field." And so this part is just a description of what that means. This is a quote from somebody who used to work with him. "Steve has a reality distortion field. In his presence, reality is malleable. He can convince anyone of practically anything. It wears off when he's not around, but it makes it hard to have realistic schedules." Tribble, the guy that named it, recalled that he adopted the phrase

• 18:24David Senra?

  from an episode of Star Trek in which the aliens created their own new world through sheer mental force. He meant the phrase to be a compliment as well as a caution. It was dangerous to get caught in Steve's distortion field. But it was what led him to actually being able to change reality. So there's a lot of paradoxes of Steve Jobs, and that's one of them right there. "There was little that could shield you from the force. Amazingly, the reality's distortion force seemed to be effective even if you were acutely aware of it. We would often discuss potential techniques for grounding it, but after a while, most of us gave in, accepting it as a force of nature." And after reading and studying his life a little bit,

• 19:09David Senra?

  I think it's just the fact that he was extremely charismatic when he wanted to be. He was also really prickly, which is, there's a lot of examples of that in the book. But being extremely charismatic and an extremely good salesman would be a good description of what the reality distortion field actually is.

• 19:30David Senra?

  So the most interesting parts of this book, in addition to learning about Steve Jobs' personality and how he built businesses, was he had a lot of thoughts on product design. And as a fan of the products that Apple creates, I want to include some of those sections in here. So we'll touch on them a few times throughout the show, or this podcast. But this is the first one. And this is Steve Jobs on product design. "He repeatedly emphasized that Apple's products would be clean and simple. We will make them bright and pure and honest about being high-tech, rather than a heavy industrial look of black, black, black, black, like Sony, he preached. So that's our approach. Very simple. And we're really shooting for museum of modern art quality.

• 20:14David Senra?

  The way we're running the company, the product design, the advertising, it all comes down to this: let's make it simple. Really simple." Apple's design mantra would remain one that was featured on its first brochure. "Simplicity is the ultimate sophistication." And that quote is widely credited to Leonardo da Vinci. So, again, this is not meant to be a summary of the book. This is meant to just share the parts that I found interesting, the parts that stick out, the parts I highlighted and reread. It's also to encourage you to go read the book, especially if you're interested in Steve Jobs' life. It's very, well worth your time.

• 20:59David Senra?

  So with that said, I'm going to skip ahead. He's got, in addition to these theories on product design, he's got a lot of theories in here about management and building businesses, and a lot of thoughts around talent. And some of this, he catches, his legacy catches a lot of flak for, because he was, at his core, ruthlessly obsessed with product quality. And as such, he wouldn't, he wouldn't mind hurting people's feelings if he felt it would make the product better.

• 21:32David Senra?

  So this is gonna be his theory on B and C players. His B and C player theory.

• 21:46David Senra?

  So, he's still in his twenties at this point. He still has not been kicked out of Apple for the first time.

• 21:52David Senra?

  Instead of seeking ways to curtail Jobs's authority, Scully gave him more. Scully's the guy that Jobs famously recruited from Pepsi by asking him if he actually wanted to change the world or just sell sugar water for the rest of his life. And Scully's the person that actually forces him out later and causes Jobs to leave Apple.

• 22:12David Senra?

  The Lisa and Macintosh divisions were folded together with Jobs in charge. He was flying high, but this did not serve to make him more mellow. Indeed, there was a memorable display of his brutal honesty when he stood in front of the combined Lisa and Macintosh teams to describe how they would be merged. So, at this point, he was leading the Lisa division which was named after his daughter. They removed him because people said he was hard to work with, so he goes on to create something which becomes known as the Macintosh. The Macintosh winds up being a great product. Not as good as the Apple II, but a better product than Lisa. And now they're merging them together and Jobs is in charge. And you're gonna hear what he says here.

• 22:57David Senra?

  "His Macintosh group leaders would get all of the top positions," he said, "and a quarter of the Lisa staff would be laid off." "You guys failed," he said, looking directly at those who had worked on the Lisa. "You're a B team, B players. Too many people here are B or C players. So today, we are releasing some of you to have the opportunity to work at our sister companies here in the valley." Bill Atkinson, who had worked on both teams, thought it was not only callous but unfair. "These people had worked really hard and were brilliant engineers," he said. But Jobs had latched on to what he believed was a key management lesson from his Macintosh experience.

• 23:40David Senra?

  You have to be ruthless if you want to build a team of A players. It's too easy as a team grows to put up with a few B players and then they attract a few more B players. And soon, you'll even have some C players, he recalled. The Macintosh experience taught me that A players like to work only with other A players. Which means you can't indulge B players.

• 24:07David Senra?

  So, it, it, the, the criticism about him being callous is certainly deserved. But I do think there is some truth, um, to him saying that if you're, you really want to assemble a team of great players. Great players wanna, want to work with other great players.

• 24:27David Senra?

  So, at this point, Steve Jobs, we're gonna skip ahead a little bit. Steve Jobs is almost thirty years old. He's actually thirty. And he's about to be kicked out of the company. Um, and then he has to go fa- fa- go found another company. But, he gave this really interesting interview, um, about, cause he always considered him an art, himself an artist, not a business person. Um, that's why he always put like, the quality of the product ahead of profits. He thought, the better the product, the profit would come later. And, he had some interesting thoughts. Uh, he gives this interview to Playboy. And I wanna read part of it.

• 25:06David Senra?

  This is him talking. "It's rare that you see an artist in his thirties or forties able to really contribute something amazing," Jobs said wistfully to the writer David Scheff, who published a long and intimate interview in Playboy the month he turned thirty. "Of course, there are some people who are innately curious, forever little kids in the awe of life, but they're rare." The interview touched on many subjects, but Jobs' most poignant ruminations were about growing old and facing the future." And this is the part that, this is the reason I included this. So now these are direct, uh, this is Steve Jobs talking.

• 25:42David Senra?

  Your thoughts construct patterns like scaffolding in your mind. You are really etching chemical patterns. In most cases, people get stuck in those patterns, just like grooves in a record, and they never get out of them.

• 25:55David Senra?

  I'll always stay connected with Apple. I hope that throughout my life, I'll sort of have the thread of my life and the thread of Apple weave in and out of each other, like a tapestry. There may be a few years when I'm not there, but I'll always come back. If you want to live your life in a creative way as an artist, you have to not look back too much.

• 26:16David Senra?

  You have to be willing to take whatever you've done and whoever you were and throw them away. The more the outside world tries to reinforce an image of you, the harder it is to continue to be an artist, which is why a lot of times artists have to say, "Bye, I have to go. I'm going crazy and I'm getting out of here." And they go and hibernate somewhere. Maybe later they reemerge a little differently.

• 26:44David Senra?

  So I included that part because not only do I think there's a lot of truth in what he's saying, it's really good advice, but it's kind of spooky how he would have these premonitions. I mean, he's talking about him leaving Apple, and this is before he's kicked out, and Apple in his own life weaving back and forth like a tapestry, and that turns out what happens over the next 25 years of his life.

• 27:07David Senra?

  And when he gets kicked out, he creates the company Next, which is rather famous. They consider it a failure. He winds up selling it back to Apple, I think for like $500 million. They build hardware, they were trying to build hardware for like universities and education-based. It was just really expensive. They built some software that winds up being used, but in general, it's one of the few people who consider failures, quote unquote, of Steve Jobs.

• 27:39David Senra?

  But before I skip ahead to that part, there's some really great stories of other famous entrepreneurs when Steve Jobs in Next. So if you're American, you probably know the name Ross Perot. He famously ran for president in the 90s, but before that, he was a super-successful entrepreneur, and I want to just include this story. And it's called "Perot to the Rescue."

• 28:10David Senra?

  In late 1986, Jobs sent out a proposal to venture capital firms, offering a 10% stake in NeXT for $3 million. That put a valuation of the entire company of $30 million, a number that Jobs had pulled out of thin air. Less than 7 million had gone into the company thus far, and that's 7 million out of Jobs' own pocket. And there was little to show for it, other than a neat logo and some snazzy offices. It had no revenue or products, nor any on the horizon.

• 28:45David Senra?

  Not surprisingly, the venture capitals all passed on the offer to invest. Now here's a crazy story. There was, however, one cowboy who was dazzled. Ross Perot, the bantam Texan who had founded Electronic Data Systems, then sold it to General Motors for $2.4 billion, happened to watch a PBS documentary called "The Entrepreneurs", which had a segment on Jobs and NeXT in November 1986. Why can I not say that? 1986, there we go. He instantly identified with Jobs and his gang, so much so, as he watched them on television, he said, "I was finishing their sentences for them."

• 29:27David Senra?

  Perot called Jobs the next day and offered, "If you ever need an investor, call me." Jobs did need one, badly, but he was careful not to show it. He waited a week before calling back. Perot sent some of his analysts to size up NeXT, but Jobs took care to deal directly with Perot. "One of his great regrets in life," Perot later said, "was that he had not bought Microsoft or a large stake in it when a very young Bill Gates had come to visit him in Dallas in 1979." By the time Perot called Jobs, Microsoft had just gone public with a $1 billion valuation. Perot had missed out on an opportunity to make a lot of money and have a fun adventure. He was eager not to make that same mistake again.

• 30:14David Senra?

  Jobs made an offer to Perrow that was three times more costly than had quietly been offered to venture capitalists in a few months earlier. For $20 million, Perrow would get 16% of the equity in the company, and Jobs would put in another $5 million. That meant the company would be valued at about $126 million. And Steve's just making this up as he goes along. But money was not a major consideration for Perrow. After a meeting with Jobs, he declared that he was in. "I picked the jockeys, and the jockeys picked the horses and ride them," he told Jobs. "You guys are the ones I'm betting on, so you go figure it out."

• 30:57David Senra?

  Perrow winds up being really helpful to Jobs and introducing him to other people to invest, and hosting meetings for customers, and he just winds up being really important. It's really interesting how that all happened because he happened to see a PBS documentary on Steve Jobs. So, somebody else we're going to cover on future podcasts, being Bill Gates, of course, since we're doing a podcast on some of the world's greatest entrepreneurs in history. You definitely have to pick Bill Gates up there. But there's a ton of interesting stories because Bill and Steve knew each other, you know, from the time they're both in their twenties, starting out in technology, all

• 31:41David Senra?

  the way up until Steve Jobs' death. But I do want to read this little quick story about, it's a great Bill Gates story, when Steve Jobs was at Next. Bill Gates was not a soulmate. Jobs had convinced him to produce software applications for the Macintosh, which had turned out to be hugely profitable for Microsoft. But Gates was one person who was resistant to Jobs' reality distortion field, and as a result, he decided not to create software tailored for the next platform. Gates went to California to get periodic demonstrations, but each time he came away unimpressed.

• 32:22David Senra?

  "The Macintosh was truly unique, but I personally don't understand what is so unique about Steve's new computer," he told Fortune. "Part of the problem was that the rival titans were..."

• 32:36David Senra?

  Let me start that over, I'm sorry. Part of the problem was that the rival titans were unable to be deferential to each other. When Gates made his first visit to Next Palo Alto headquarters in the summer of 1987, Jobs kept him waiting for a half hour in the lobby, even though Gates could see through the glass walls that Job was walking around having casual conversations.

• 32:58David Senra?

  "I had gone down to Next and I had the Oddwalla, the most expensive carrot juice, and I'd never even seen tech offices so lavish," Gates recalled, shaking his head with just a hint of a smile. And Steve comes a half hour late to the meeting. Job's sales pitch, according to Gates, was simple. "We did the Mac together," Job said. "How did that work out for you?" "Very well. Now we're going to do this together, and this is going to be great." But Gates was brutal to Jobs, just as Jobs could be to others. "This machine is crap," he said. "The optical disk has too high latency. The fucking case is too expensive. This thing is ridiculous." He decided then and reaffirmed on each subsequent visit

• 33:42David Senra?

  that it made no sense for Microsoft to divert resources from other projects to develop applications for Next. Worse yet, he repeatedly said so publicly, which made others less likely to spend time developing for Next. "Develop for it, I'll piss on it," he told Info World. I just love seeing, like, it's obviously not nice, I'm not encouraging this behavior, but it is interesting how these two just, they have like a love-hate relationship their whole lives. And they're very, both, super aggressive. When they happened to meet in the hallway at a conference, Job started berating Gates for his refusal to do software for Next. "When you get a market, I'll consider it," Gates replied. Jobs got angry. It was a screaming battle right in front of everybody,

• 34:27David Senra?

  recalled Adele Goldberg, the Xerox PARC engineer.

• 34:31David Senra?

  Jobs insisted that the next was the next wave of computing. Gates, as he often did, got more expressionless as Jobs got more heated. He finally just shook his head and walked away. Beneath their personal rivalry and occasionally grudgingly respect was their basic philosophical difference. Jobs believed in an end-to-end integration of hardware and software, which we referenced earlier, which led to him to build a machine that was not compatible with others. Gates believed in and profited from a world in which different companies made machines that were compatible with one another. Their hardware ran a standard operating system, which was Microsoft Windows,

• 35:13David Senra?

  and could do all the same software apps, such as Microsoft Word and Excel. "His product comes with an interesting feature called incompatibility," Gates told The Washington Post. "It doesn't run any of the existing software. It's a super-nice computer. I don't think if I went out to design an incompatible computer, I would have done as well as he did."

• 35:34David Senra?

  Which is kind of like a backhanded compliment.

• 35:40David Senra?

  At a forum in Cambridge, Massachusetts in 1989, Jobs and Gates appeared sequentially, laying out their competing worldviews. Jobs spoke about how new waves come along in the computer industry every few years. Macintosh had launched a revolutionary new approach with the graphical interface. Now next was doing it with object-oriented programming, tied to a powerful new machine based on an optical disc. "Every major software vendor realized that they had to be part of this new wave," he said, "except Microsoft." When Gates came up, he reiterated his belief that Jobs' end-to-end control of the software and the hardware was destined for failure.

• 36:24David Senra?

  "Just as Apple had failed in competing against the Microsoft Windows standard, the hardware market and the software market are separate," he said. When asked about the great design that could come from Jobs' approach, Gates gestured to the next prototype that was still sitting onstage and sneered. "If you want black, I'll get you a can of paint."

• 36:50David Senra?

  Interesting enough, though, they wind up doing business together later when Steve Jobs goes back to Apple, something that saved Apple because they were hemorrhaging money. They were only worth maybe one or two billion at the time, they were losing, I think, forty or fifty million a quarter, and Microsoft wind up investing about a hundred and seventy-five million dollars in Apple and helping save the company. And Gates actually went and visited Jobs right before he died, too. They had a very complex and complicated relationship. And there's a lot of anecdotes that are interesting. If you read the book, you'll see. So I'm not going to spend too much time on next.

• 37:34David Senra?

  Honestly, there's not too much interesting things in the book about it. But there is, some people, a lot of people know, obviously, Steve Jobs from Apple, but he had another multi-billion dollar hit that was maybe just as technically advanced stuff that Apple was doing, and that's Pixar. So I want to touch a little bit on how Jobs was able to purchase Pixar and then winds up growing it into a large company. They make, obviously, super-successful animated movies, and then he winds up selling it to Disney.

• 38:14David Senra?

  This is a short anecdote on how he winds up getting Pixar. "I wanted to buy it because I was really into computer graphics, Jobs had called. I realized that they were way ahead of others in combining art and technology, which is what I've always been interested in. He offered to pay Lucas," this is George Lucas of the Star Wars fame, who actually is the person that owns Pixar at the time. "He offered to pay Lucas five million dollars plus invest another five million to capitalize the division as a standalone company. That was far less than Lucas had been asking, but the timing was right. They decided to negotiate a deal."

• 38:54David Senra?

  The chief financial officer, this is really funny. So there's some background, because I don't think it's mentioned in this anecdote, but the reason Lucas is willing to sell the company, because he's already had a huge hit with Star Wars, he's going through a really bitter divorce and he needs money. So that's how Jobs is able to get Pixar for essentially ten million dollars.

• 39:15David Senra?

  This is really funny, though, because there's a lot of people that work with Jobs or in other companies that really don't like him. The chief financial officer at Lucasfilm found Jobs arrogant and prickly. So when it came time to hold a meeting of all the players, he told Catmull. This is Ed Catmull, one of the founders, co-founders of Pixar. "We have to establish the right pecking order. The plan was to gather everyone in a room with Jobs and then the CFO would come in a few minutes late to establish that he was the person running the meeting. But a funny thing happened," Catmull recalled. "Steve started the meeting on time without the CFO, and by the time the CFO walked in, Steve was already in control of the meeting.

• 39:59David Senra?

  Jobs met only once with George Lucas, who warned him that the people in the division cared more about making animated movies than they did about making computers." You, this is a quote from George Lucas. "You know these guys are hell-bent on animation," Lucas told him. Lucas later recalled, "I did warn him that that was basically Ed and John's agenda." These are the two co-founders, Ed Catmull and John Lasseter of Pixar. "I did warn him that that was basically Ed and John's agenda. I think in his heart, he bought the company because that was his agenda too." He winds up having a really good working relationship with Ed Catmull and John Lasseter. He, um, they were both, like you mentioned earlier, interested in the intersection of technology and art.

• 40:43David Senra?

  And they fancied themselves artists, and when someone would fancy themselves an artist, Jobs was very deferential. Um, it's really interesting. So that's not to say that, of course, they didn't have their battles, but they got along, he got along better with the Pixar guys than he did with people at Apple. And if you're interested in learning more about this, I read this great book, uh, Ed Catmull actually wrote, and it's called Creativity, Inc. And it talks, it's, I might, I think I'm gonna cover it on a future podcast. I know I'll cover it on a future podcast. But it talks about it's the, the creation of Pixar and, and it just, this, he goes into, the entire book is, you know, basically

• 41:23David Senra?

  how Pixar came to be and, and how their entire process of how do you build a business that's both profitable, but is centered around extremely creative people? Which is very different than if you're just, say, manufacturing like a widget or whatever the case may be.

• 41:45David Senra?

  Okay, so I'm gonna skip ahead in the book.

• 41:49David Senra?

  Steve Jobs, he's had some success with Pixar at this point. He, uh...

• 41:56David Senra?

  Next is, you know, it's doing okay, but nothing going really well. But while he's gone, Apple's been through a few CEOs. They've created dozens of products. They all basically suck. And, uh... They realize, the board and the CEO of Apple at this time are gonna ask Steve Jobs to come back. But they're not, the CEO, this name, this guy named Gil Amelio, I hope that's how you pronounce his last name. He's not asking him to come back and take his job, even though that's what happens. He wants, like, Steve Jobs back to help with products and maybe be like a chairman, or whatever the case is.

• 42:36David Senra?

  So, this is the, the story of them asking, uh, Steve to, to be, uh...

• 42:50David Senra?

  To, this is the story of what happens after the fact, sorry. I just had to make sure this is the right part. Um, and this was asking Steve to be Apple CEO. He's come back.

• 43:03David Senra?

  He's been helping, try to like fix the problems with, uh, with Apple, but he doesn't really have any, like, real power. He just his power, he's basically taking himself. But the board's sick of Amelio, um, they wanna fire him. Um, and this is the, the backstory. Sorry, I hope that wasn't confusing to you.

• 43:28David Senra?

  "At an executive session of the board in June, with Amelio out of the room, Woodlair, this is the chairman at the time, described to current, to current directors, how he calculated their odds. If we stay with Gil as CEO," they haven't fired him yet. "If we stay with Gil as CEO, I think there's only a 10% chance we will avoid bankruptcy." So, Apple's doing really bad. "He said, 'If we fire him and convince Steve to come take over, we have a 60% chance of surviving. If we fire Gil and don't get Steve back, and have to search for a new CEO, then we have a 40% chance of surviving.'" The board gave him authority to ask Jobs to return.

• 44:11David Senra?

  Willard and his wife flew to London where they were planning to watch the Wimbledon tennis matches. He saw some of the tennis during the day, but spent his evenings in his suite at the inn on the park calling back people in America where it was daytime. By the end of his stay, his telephone bill was $2,000. First, he called Jobs. "The board was going to fire Emilio," he said, "and it wanted Jobs to come back as CEO." Jobs had been aggressive in deriding Emilio and pushing his own ideas about where to take Apple. But suddenly, when offered the cup, he became coy. "I will help," he replied. "As CEO?" Willard asked. Jobs said, "No." So I just want to interject there, just to give you some background, so it's not confusing.

• 44:56David Senra?

  Emilio's the one that recruits Jobs to come back and help Apple, because he was a little, what the book calls like naive, thinking that anybody could manage Jobs. And Jobs is basically plotting the entire time to, because he thought Emilio was a bozo. So he's plotting the entire time to get rid of him. And there's some other stuff, like Wozniak makes a comment later on, like, "Once Steve met Gil, Gil had no shot," is basically their opinion. So let's go back to the story. "As CEO?" Willard asked. Jobs said, "No." Willard pushed hard for him to become at least the acting CEO.

• 45:40David Senra?

  Again, Jobs demurred. "I will be an advisor," he said. "I will be an advisor," he said, unpaid. He also agreed to become a board member. That was something he had yearned for, but declined to be the board chairman. "That's all I can give now," he said. After rumors began circulating, he emailed a memo to Pixar employees, assuring them that he was not abandoning them. "I got a call from Apple's Board of Directors three weeks ago, asking me to return as their CEO," he wrote. "I declined. They then asked me to become chairman, and I again declined. So don't worry, the crazy rumors are just that. I have no plans to leave Pixar. You're stuck with me."

• 46:27David Senra?

  Why did Jobs not seize the reins? Why was he reluctant to grab the job that for two decades he had seemed to desire? When I asked him, this is what he said. Now, this is Steve Jobs talking directly. "We had just taken Pixar public, and I was happy being CEO there. I never knew of anyone who served as CEO of two public companies, even temporarily, and I wasn't even sure it was legal. I didn't know what I wanted to do. I was enjoying spending more time with my family. I was torn. I knew Apple was a mess, so I wondered, do I want to give up this nice lifestyle that I have?" What are all the Pixar shareholders going to think? I talked to people I respected.

• 47:12David Senra?

  I finally called Andy Grove at about 8:00 one Saturday morning, too early. I gave him the pros and the cons, and in the middle, he stopped me and said, "Steve, I don't give a shit about Apple." I was stunned. It was then I realized that I do give a shit about Apple. I started it, and it is a good thing to have in the world. That was when I decided to go back on a temporary basis to help them hire a CEO.

• 47:46David Senra?

  Andy Grove is somebody that's relatively famous. We might cover him in the future, too. He wrote this book called High Output Management. That's really interesting if you have a company that you're running, or if you manage employees, or you even have a division. It's a really short book. You can read it in about a day. I definitely recommend it. It's called High Output Management.

• 48:11David Senra?

  So, I want to skip ahead. We all know where this is going. He comes back. He says he's going to be interim CEO. That doesn't last long. He runs things with an iron fist, as he always has.

• 48:29David Senra?

  And he starts taking over and did probably the greatest single corporate turnaround in history, going from a company that was on the verge of insolvency to the most valuable company in the world is what happens. So we're gonna touch on a lot of stuff like that, a lot of, um, a lot of like what he's doing with that, but there's some anecdotes, uh, so obviously Jobs had a lot of health issues and, uh, wanna talk about some of that real quick. The problems Jobs faced was that running two companies was brutal. Looking back on it, he traced his health problems back to those days.

• 49:13David Senra?

  It was rough. This is, uh, now him talking directly. It was rough, really rough, the worst time of my life. I had a young family, I had Pixar, I would go to work at 7:00 AM and I'd get back at 9:00 at night and the kids would be in bed. And I couldn't speak. I literally, I literally couldn't. I was so exhausted. I couldn't speak to Lorene, this is his wife. All I could do was watch a half hour of TV and vegetate. It got close to killing me. I was driving up to Pixar and down to Apple in a black Porsche convertible and I started getting kidney stones. I would rush to the hospital and the hospital would give me a shot of Demerol in the butt and eventually I would pass it.

• 49:54David Senra?

  So later on, we find out that all these other, um, health issues he's having, they are, uh, that's how they find out that he wants to have having pancreatic cancer, cuz he's getting scans for something unrelated and they, they noticed like a shadow on his pancreas. Uh, this is just gonna be a quick part on some of the, what he identified, this is a famous story, so you might've heard it before, but, um, here's Steve talking, he goes, "Apple had a dozens, dozen versions of the Macintosh, each with a different confusing number, ranging from 1,400 to 9,600. I had people explaining this to me for three weeks," Jobs said.

• 50:38David Senra?

  "I couldn't figure it out." He finally began asking simple questions like, "Which one do I tell my friends to buy?" So he hates that Apple went away from his, his desire for simplicity. And this is where he starts trying to get them back on track.

• 50:54David Senra?

  After a few weeks, Jobs had enough. "Stop!" he shouted at one big product strategy session. "This is crazy." He grabbed a magic marker, went to a whiteboard, and drew a horizontal and a vertical line, making a four-square chart. "Here's what we need," he continued. Atop the two columns, he wrote "Consumer" and "Pro." He labeled the two rows "Desktop" and "Portable." "Their job," he said, "was to make four great products, one for each quadrant." The room was in dub- dumb silence, Schiller recalled.

• 51:33David Senra?

  The most visible decision he made was to kill, once and for all, the Newton, the personal digital assistant with the almost no-good handwriting recognition system. He later described his thinking. "If Apple had been in a less precarious situation, I would have drilled down myself to figure out how to make it work." This is an early, you know, PDA. "I didn't trust the people running it. My gut was that there was some really good technology, but it was fucked up by mismanagement. By shutting it down, I freed up some good engineers who could work on new mobile devices. And eventually, we got it right when we moved on to the iPhone and the iPad." The ability to focus saved Apple.

• 52:16David Senra?

  In his first year back, Jobs laid off more than 3,000 people, which salvaged the company's balance sheet. For the fiscal year that ended when Jobs became interim CEO in September 1997, Apple had lost $1.04 billion. "We were less than 90 days from being insolvent," he recalled. After two years of staggering losses, Apple had enjoyed a profitable quarter, making $45 million. For the first full fiscal year of 1998, it would turn a $309 million profit. Jobs was back, and so was Apple.

• 53:02David Senra?

  So I'm gonna skip ahead a little bit, and this is another one of Jobs' theories on management and people, and you're gonna hear some echoes of his earlier time. When he was making that speech that I referenced a little while ago, he was in his late twenties, maybe thirty years old at the time. This is now the older Jobs, about fifteen years later. So it talks about one of his goals being to be diligent against what he called "the bozo explosion", and this is him talking. "For most things in life, the range between the best and average is thirty percent or so. The best airplane flight, the best meal, they may be thirty percent better than your average one.

• 53:45David Senra?

  What I saw with Woz was somebody who was fifty times better than the average engineer. He could have meetings in his head. The Mac team was an attempt to build a whole team like that, A-players. People say they wouldn't get along, they'd hate working with each other. But I realized that A-players liked to work with A-players. They just didn't like working with C-players. At Pixar, it was a whole company of A-players. When I got back to Apple, that's what I decided to try to do. You need to have a collaborative hiring process. When we hire someone, even if they're going to be in marketing, I will have them talk to the design folks and the engineers.

• 54:27David Senra?

  My role model was J. Robert Oppenheimer. I read about the type of people he sought for the atom bomb project. I wasn't nearly as good as he was, but that's what I aspired to do."

• 54:49David Senra?

  This is also interesting. I referenced earlier how he always thought of himself as an artist, and he really, for as much as people can see, like, didn't care about money. He had more money from the time he was in his twenties than he'd ever be able to spend. And this one's called "Turning Down $400 Million."

• 55:10David Senra?

  Ed Woolard, his mentor on the Apple board, pressed Jobs for more than two years to drop the interim in front of his CEO title. Not only was Jobs refusing to commit himself, but he was baffling everybody by only, by taking only $1 a year in pay and no stock options.

• 55:33David Senra?

  "I make 50 cents for showing up," he liked to joke, "and the other 50 cents is based on performance." Since his return in July 1997, Apple's stock had gone from just under $14 to just over $102 at the peak of the internet bubble at the beginning of 2000, of the year 2000. Woolard had begged him to take at least a modest stock grant back in 1997, but Jobs had declined, saying, "I don't want the people I work with at Apple to think I'm coming back to get rich." Had he accepted that modest grant, it would have been worth $400 million. Instead, he made $2.50 during that period.

• 56:29David Senra?

  So I'm gonna skip ahead. He has this, what turns out to be a revolutionary idea to make retail stores. And at this time, people like Gateway have tried this, um, this tactic or this theory. They failed spectacularly. I think they were having like 250 people a week going to the Gateway stores. Um, and so,

• 56:51David Senra?

  in addition to these stories we have on personality, there's another, um, there's some other anecdotes in the book that are just randomly, uh, that I want to randomly share, and they're called, uh, "Critics Don't Know Shit."

• 57:06David Senra?

  And this has to do with Apple stores.

• 57:14David Senra?

  Most outside experts disagreed. This is, they're disagreeing with opening Apple Store. "Maybe it's time Steve Jobs dropped thinking, drop, or excuse me. Maybe it's time Steve Jobs stopped thinking quite so differently." Business Week wrote in a story headline "Sorry Steve, Here's Why Apple Stores Won't Work." Apple's former chief financial officer, John Graziano, was quoted as saying, "Apple's problem is it still believes the way to grow is serving caviar in a world that seems pretty content with cheese and crackers." And the retail consultant David Goldstein declared, "I give them two years before they're turning out the lights on a very painful and expensive mistake."

• 57:57David Senra?

  And Apple winds up being the most successful retailer in history.

• 58:03David Senra?

  So, they were all wrong.

• 58:07David Senra?

  And not only wrong, but spectacularly wrong. And I think that's the problem with being a critic in general. If you don't like something, just go build an alternative. But to go around criticizing other people that are doing things, I don't understand that trait that a certain percentage of humans have, just seem to have. It's really bizarre.

• 58:31David Senra?

  So, now I'm skipping way ahead. This is the section on the iPhone, which there's some interesting stuff in here. But, and I'm gonna share some stories in here, but the first part is, there's a little known fact that the iPad was actually being developed before the iPhone.

• 58:51David Senra?

  So, this is from the chapter on the iPhone. "The initial approach was to modify the iPod. They tried to use the track wheel as a way for the user to scroll through phone options and without a keyboard try to enter numbers. It was not a natural fit. We were having a lot of problems using the wheel, especially in getting it to dial phone numbers," Fidel recalled. This is Tony Fidel, widely credited with the invention of the iPad, or iPod, rather. It was cumbersome. It was fine for scrolling through an address book, but horrible at inputting anything. The team kept trying to convince themselves that users would mainly be calling people who were already in their address book, but they knew that it wouldn't really work. At the time, there was a second project underway at Apple,

• 59:35David Senra?

  a secret effort to build a tablet computer. In 2005, these narratives intersected, and the ideas for the tablet flowed into the planning for the phone. In other words, the idea for the iPad actually came before and helped to shape the birth of the iPhone. The next few anecdotes or parts of the book that I want to talk to you about has to go with product design and Steve Jobs just having this intuition. A couple of members of the team argued for having a keyboard as well, given the popularity of the BlackBerry. But Jobs vetoed this idea. A physical keyboard would take away space from the screen, and it would not be as flexible and as adaptable as a touchscreen keyboard.

• 1:00:20David Senra?

  "Our hardware keyboard seems like an easy solution, but it's constraining," he said. "Think of all the innovations we'd be able to adapt if we did the keyboard on-screen with software. Let's bet on it, and then we'll find a way to make it work." The result was a device that displays a numerical pad when you want to dial a phone number, a typewriter keyboard when you want to write, and whatever buttons you might need for each particular activity. And then they all disappeared when you're watching a video. By having software replace hardware, the interface became fluid and flexible.

• 1:01:02David Senra?

  So this next story just made me smile. It's called Gorilla Glass, and there's just some funny stuff in here. Jobs became infatuated with different materials the way he did with certain foods. When he went back to Apple in 1997 and started work on the iMac, he had embraced what could be done with translucent and colored plastic. The next phase was metal. He and Ivy replaced the curvy-plastic PowerBook with the sleek-titanium PowerBook G4. So the G3 had curvy-plastic, and the G4 has sleek-titanium. And then they redesigned two years later in aluminum, as if just to demonstrate how much they liked different metals.

• 1:01:44David Senra?

  Then they did an iMac and an iPod Nano in anodized aluminum, which meant that the metal had to be put in both in an acid bath and electrified so that its surface oxidized. Jobs was told it could not be done in the quantities they needed, so he had a factory built in China to handle it. Ivy went there during the SARS epidemic to oversee the process. "I stayed for three months in a dormitory to work out the process," he recalled. Ruby and others said it would be impossible, but I wanted to do it because Steve and I felt that anodized aluminum had real integrity to it. Next was glass.

• 1:02:26David Senra?

  "After we did metal, I looked at Joni and said that we had to master glass." Those are Jobs words. "For the Apple stores, they had created huge windowpanes and glass stairs. For the iPhone, the original plan was for it to have a plastic screen, like the iPod, but Jobs decided it would feel so much more elegant and substantive if the screens were glass. So he set about finding glass that would be strong and resistant to scratches." This is the part that made me chuckle. "The natural place to look was Asia, where the glass for the stores was being made, but

• 1:03:06David Senra?

  Jobs' friend, John Brown, who was on the board of Corning Glass in upstate New York, told him that he should talk to that company's young and dynamic CEO, Wendell Weeks. So he dialed the main Corning switchboard number and asked to be put through to Weeks. He got an assistant who offered to pass along the message. "No, I'm Steve Jobs," he replied, "put me through." The assistant refused. Jobs called Brown and complained that he had been subjected to, quote, "typical east coast bullshit." When Weeks heard that, he called the main Apple switchboard and asked to speak to Jobs. He was told to put his request in writing and send it by fax.

• 1:03:49David Senra?

  When Jobs was told what happened, he took a liking to Weeks and invited him to Cupertino. Jobs described the type of glass Apple wanted for the iPhone, and Weeks told him that Corning had developed a chemical exchange process in the 1960s that led to what they dubbed Gorilla Glass. This is the glass that's gonna wind up being used on the iPhone.

• 1:04:12David Senra?

  It was incredibly strong, but they had never found a market, so Corning quit making it. Jobs said he doubted it was good enough, and he started explaining to Weeks how glass was made. This amused Weeks, who of course knew more than Jobs about that topic. "Can you shut up?" Weeks interjected, "and let me teach you some science." Jobs was taken aback and fell silent. Weeks went to the whiteboard and gave a tutorial on the chemistry, which involved an ion exchange process that produced a compression layer on the surface of the glass. This turned Jobs around, and he said he wanted as much Gorilla Glass as Corning could make within six months. "We don't have that capacity," Weeks replied.

• 1:04:54David Senra?

  "None of our plants make that glass now." "Don't be afraid," Jobs replied. This stunned Weeks, who was good-humored and confident, but not used to Jobs' reality-distortion field. He tried to explain that a false sense of confidence would not overcome engineering challenges, but that was a premise that Jobs had repeatedly shown he did not accept. He stared at Weeks, unblinking. "Yes, you can do it," he said. "Get your mind around it, you can do it." As Weeks retold this story, he shook his head in astonishment. "We did it in under six months," he said. "We reproduced a glass that had never been made."

• 1:05:38David Senra?

  Corning's facility in Kentucky, which had been making LCD displays, was converted almost overnight to make Gorilla Glass full-time. "We put our best scientists and engineers on it, and we just made it work." In his airy office, Weeks had just one frame of mental on display. It's a message Jobs sent the day the iPhone came out. "We couldn't have done it without you."

• 1:06:05David Senra?

  I thought it was funny when Jobs said it was typical east coast bullshit that he couldn't get through to the CEO by calling the switchboard, yet Apple had a much more complicated process of putting it in writing and faxing it if you wanted to talk to Jobs.

• 1:06:21David Senra?

  So the iPhones released and I want to add another entry into our running segment known as "Critics Don't Know Shit."

• 1:06:32David Senra?

  But Apple's competitors emphasized that at $500, it costs too much to be successful. "It's the most expensive phone in the world," Microsoft Steve Ballmer said in a CNBC interview, "and it doesn't appeal to business customers because it doesn't have a keyboard." Once again, Microsoft had underestimated Jobs' product. But by the end of 2010, Apple had sold 90 million iPhones and it reaped more than half of the total profits generated in the global cellphone market.

• 1:07:05David Senra?

  Your Apple stores are gonna fail in two years, winds up being the most successful retail store in history. Your phone's too expensive, it's gonna fail because it doesn't have a keyboard, winds up being the most successful phone in history.

• 1:07:31David Senra?

  So now, I'm gonna jump ahead. The iPhone's a success. Jobs' return is a success. And I just really like this part. "Steve Jobs insights about the globalization of youth, large part due to the internet."

• 1:07:51David Senra?

  He was on, uh, this is, this, he, just to give you a little background. He was in Turkey and he was a history professor, was giving his family a tour. And that's where this idea comes from. This is Steve Jobs talking. "I had a real revelation. We were all in robes and they had made some Turkish coffee for us. The professor explained how the coffee was made very different from anywhere else and I realized, so fucking what?" Which kids even in Turkey gave a shit about Turkish coffee? All day I had looked at young people in Istanbul. They were all drinking what every other kid in the world drinks. And they were all wearing clothes that looked like they were brought up at the Gap.

• 1:08:35David Senra?

  And they were all using cellphones. They were like kids everywhere else. It hit me that, for young people, the whole world was the same now. When we're making products, there is no such thing as a Turkish phone or a music player that young people in Turkey would want that's different from one young people elsewhere would want. We're just one world now.

• 1:09:14David Senra?

  So, before there was such a thing as iCloud, Apple introduced a service called MobileMe that was trying to do similar things. And it was a huge failure. And I want to, as much as I can,

• 1:09:30David Senra?

  I want to turn to

• 1:09:35David Senra?

  Jobs' own words.

• 1:09:41David Senra?

  And in this case, it's his words on his thinking behind iCloud.

• 1:09:48David Senra?

  "We need to be the company that manages your relationship with the cloud, streams your music and videos from the cloud, stores your pictures and information, and maybe even your medical data. Apple was the first to have this insight about your computer becoming a digital hub. So we wrote all of these apps: iPhoto, iMovie, iTunes. And tied in our devices like the iPod and iPhone and iPad. And it worked brilliantly. But over the next few years, the hub is going to move from your computer into the cloud. So it's the same digital hub strategy, but that hub's in a different place. It means you will always have access to your content and you won't have to sync."

• 1:10:29David Senra?

  It's important that we make this transformation because of what Clayton Christensen calls "The Innovator's Dilemma", where people who invent something are usually the last ones to see past it, and we certainly don't want to be left behind. I'm going to take MobileMe and make it free, and we're going to make syncing content simple. We are building a server farm in North Carolina. We can provide all the syncing you need, and that way, we can lock in the customer.

• 1:11:00David Senra?

  I would recommend reading Clayton Christensen's book called "The Innovator's Dilemma", it's really good.

• 1:11:07David Senra?

  It expounds on that theory that Jobs was talking about.

• 1:11:17David Senra?

  So, this is going to be the longest single section, but it's also where we're going to close.

• 1:11:24David Senra?

  So, it's going to take me a few minutes to read, because it's a lot. So, something I left out, I left out a lot of parts of the book. I didn't touch on Jobs's interaction with his family, his complicated relationship with his daughters, complicated relationships with women before he was married, and even while he was married. And then, I didn't really touch on his battle with cancer, which they go into a lot of detail in the book. I wanted to focus on Steve Jobs as the product designer and entrepreneur, but there is a lot of good information in the book that I'd recommend going and reading. And this book does take a while to read, but Isaacson does a really good job. It's very easily, it's very easy to approach and to read.

• 1:12:08David Senra?

  It's not difficult or dense by any means.

• 1:12:15David Senra?

  So, I want to talk about Steve Jobs' legacy.

• 1:12:24David Senra?

  And a large part of this...

• 1:12:30David Senra?

  He's gonna be in his own words as well. And I'll let you know when we get there.

• 1:12:37David Senra?

  His quest for perfection led to his compulsion for Apple to have end-to-end control of every product that it made. He got hives, or worse, when contemplating great Apple software running on another company's crappy hardware. And he likewise was allergic to the thought of unapproved apps or content polluting the perfection of an Apple device. This ability to integrate hardware and software and content into one unified system enabled him to impose simplicity. The astronomer Johannes Kepler declared that "Nature loves simplicity and unity. So did Steve Jobs."

• 1:13:25David Senra?

  Jobs' intensity was also evident in his ability to focus. He would set priorities, aim his laser attention on them, and filter out distractions.

• 1:13:37David Senra?

  If you could only have like a two-sentence summary of how to run a business from Steve Jobs' perspective, I would say it's those two sentences there. If something enraged him, the user interface for the original Macintosh, the design of the iPod and the iPhone, getting music companies into the iTunes Store, he was relentless. But if he did not want to deal with something, a legal annoyance, a business issue, his cancer diagnosis, a family tug, he would resolutely ignore it. That focus allowed him to say no.

• 1:14:13David Senra?

  He got Apple back on track by cutting all except a few core products. He made devices simpler by eliminating buttons, software simpler by eliminating features, and interfaces simpler by eliminating options.

• 1:14:29David Senra?

  The saga of Steve Jobs is the Silicon Valley creation myth writ large. Launching a startup in his parents' garage and building it into the world's most valuable company. He didn't invent many things outright, but he was a master at putting together ideas, art, and technology in ways that invented the truth. He designed the Mac after appreciating the power of graphical interfaces in a way that Xerox was unable to do. And he created the iPod after grasping the joy of having a thousand songs in your pocket in a way that Sony, which had all the assets and heritage, could never accomplish. Some leaders push innovations by being good at the big picture.

• 1:15:15David Senra?

  Others do so by mastering details. Jobs did both relentlessly. So I want to read that part again. "Some leaders push innovation by being good at the big picture. Others do so by mastering details. Jobs did both relentlessly. As a result, he launched a series of products over three decades that transformed whole industries. The Apple II, which took Wozniak's circuit board and turned it into the first personal computer that was not just for hobbyists. The Macintosh, which beget the home computer revolution and popularized graphical user interfaces.

• 1:15:58David Senra?

  Toy Story and other Pixar blockbusters, which opened up the miracle of digital imagination. Apple Stores, which reinvented the role of a store in divining a brand. The iPod, which changed the way we consume music. The iTunes Store, which saved the music industry." And one day I'll learn how to pronounce that word. I don't know why I emphasized the wrong syllable. "The iPhone, which turned mobile phones into music, photography, video, email, and web devices. The App Store, which spawned a new content creation industry."

• 1:16:37David Senra?

  And many multi-multi-billion, if not hundred-billion-dollar businesses. I mean, what would Facebook be if it wasn't on the App Store?

• 1:16:49David Senra?

  The iPad, which launched tablet computing and offered a platform for digital newspapers, magazines, books, and videos. iCloud, which demoted the computer from its central role in managing our content and let all of our devices sink seamlessly. And finally, Apple itself, which Jobs considered his greatest creation, a place where imagination was nurtured, applied, and executed in ways so creative that it became the most valuable company on Earth.

• 1:17:27David Senra?

  Biographers are supposed to have the last word, but this is a biography of Steve Jobs. Even though he did not impose his legendary desire for control on this project, I suspect that I would not be conveying the right feel for him, the way he asserted himself in any situation, if I just shuffled him onto history's stage without letting him have some last words. Over the course of our conversations, there were many times when he reflected on what he had hoped his legacy would be. Here are those thoughts in his own words.

• 1:18:03David Senra?

  My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit, because that was what allowed you to make great products. But the products, not the profits, were the motivation. Scully flipped these priorities to where the goal was to make money. It's a subtle difference, but it ends up meaning everything. The people you hire, who gets promoted, what you discuss in meetings. Some people say, "Give the customer what they want," but that's not my approach. Our job is to figure out what they're going to want before they do. I think Henry Ford once said, "If I'd asked customers what they wanted, they would have

• 1:18:47David Senra?

  told me a faster horse." People don't know what they want until you show it to them. That's why I never rely on market research. Our task is to read things that are not yet on the page. Edwin Land of Polaroid talked about the intersection of the humanities and science. I like that intersection. There's something magical about that place. There are a lot of people innovating, and that's not the main distinction of my career. The reason Apple resonates with people is that there's a deep current of humanity in our innovation. I think great artists and great engineers are similar in that they both have

• 1:19:32David Senra?

  they both have a desire to express themselves. In fact, some of the best people working on the original Mac were poets and musicians on the side. In the 70s, computers became a way for people to express their creativity. Great artists like Leonardo da Vinci and Michelangelo were also great at science. Michelangelo knew a lot about how to quarry stone, not just how to be a sculptor. People pay us to integrate things for them because they don't have the time to think about this stuff 24/7. If you have an extreme passion for producing great products, it pushes you to be integrated, to connect your hardware and your software and your content management.

• 1:20:17David Senra?

  You want to break new ground, so you have to do it yourself. If you want to allow your products to be open to other hardware or other software, you have to give up some of your vision. At different times in the past, there were companies that exemplified Silicon Valley. It was Hewlett-Packard for a long time. Then in the semiconductor era, it was Fairchild and Intel. I think that it is Apple.

• 1:20:49David Senra?

  And I think that it was Apple for a while and then faded. And then today, I think it's Apple and Google, and a little more so, Apple. I think Apple has stood the test of time. It's been around for a while, but it's still at the cutting edge of what's going on.

• 1:21:06David Senra?

  It's easy to throw stones at Microsoft. They've clearly fallen from their dominance. They've become mostly irrelevant, and yet I appreciate what they did and how hard it was. They were very good at the business side of things. They were never as ambitious product-wise as they should have been. Bill likes to portray himself as a man of the product, but he's really not. He's a business person.

• 1:21:31David Senra?

  Winning business was more important than making great products.

• 1:21:37David Senra?

  He ended up the wealthiest guy around, and if that was his goal, then he achieved it. But it's never been my goal, and I wonder in the end if it was his goal. I admire him for the company he built. It's impressive, and I enjoyed working with him. He's bright and actually has a good sense of humor. But Microsoft never had the humanities and the liberal arts in its DNA.

• 1:22:07David Senra?

  Even when they saw the Mac, they couldn't copy it well. They totally didn't get it. I have my own theory about why decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen because they're the ones who can move the needle on revenues, not the product engineers and the designers. So the salespeople end up running the company. John Akers at IBM was smart, eloquent, fantastic salesperson, but he didn't know anything about product. The same thing happened at Xerox.

• 1:22:52David Senra?

  When the sales guys run the company, the product guys don't matter so much, and a lot of them just turn off. It happened at Apple when Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft. Apple was lucky, and it rebounded. But I don't think anything will change at Microsoft as long as Ballmer is running it. I hate it when people call themselves entrepreneurs, when what they're really trying to do is launch a startup and then sell or go public so they can cash in and move on. They're unwilling to do the work it takes to build a real company, which is the hardest work in business. That's how you really make a contribution and add to the legacy of those that went before you.

• 1:23:36David Senra?

  You build a company that will still stand for something a generation or two from now. That's what Walt Disney did, and Hewlett Packard, and the people who built Intel.

• 1:23:48David Senra?

  It's interesting because a lot of people in here, we did a podcast, I did a podcast on Walt Disney already. But Xerox, Edwin Land at Polaroid, Bill Gates, a lot of these people he was mentioning are actually, we're gonna cover in books in the future.

• 1:24:04David Senra?

  So let's go back to what he said. You build a company that will still stand for something a generation or two from now. That's what Walt Disney did, and Hewlett and Packard, and the people who built Intel. They created a company to last, not just to make money. That's what I want Apple to be. I don't think I run roughshod over people, but if something sucks, I tell people to their face. It is my job to be honest. I know what I'm talking about, and I usually turn out to be right. That's the culture I tried to create. We are brutally honest with each other, and anyone can tell me they think I'm full of shit, and I can tell them the same. And we've had some rip-roaring arguments where we are yelling at each other, and it's some of the best times I've ever had.

• 1:24:50David Senra?

  I feel totally comfortable saying, "Ron, that store looks like shit in front of everyone else." Or I might say, "God, we really fucked up the engineering on this," in front of the person that's responsible. That's the anti for being in the room. You've got to be able to be super honest. Maybe there's a better way, a gentleman's club where we all wear ties and speak in this language with velvet code words. But I don't know that way, because I am middle-class from California. I was hard on people sometimes, probably harder than I needed to be. I remember the time when Reed, this is his oldest, his son, when Reed was six years old coming home,

• 1:25:32David Senra?

  and I had just fired somebody that day, and I imagined what it was like for that person to tell his family and his young son that he had lost his job. It was hard, but somebody's gotta do it. I figured that it was always my job to make sure that the team was excellent, and if I didn't do it, nobody was going to do it.

• 1:25:55David Senra?

  You always have to keep pushing to innovate. Dylan could have sung protest songs forever and probably made a lot of money, but he didn't. He had to move on, and when he did, by going electric in 1965, he alienated a lot of people. His 1966 Europe tour was his greatest. He would come on and do a set of acoustic guitar and the audience loved him. Then he brought out what became the band, and they would all do an electric set, and the audience sometimes booed.

• 1:26:31David Senra?

  There was one point where he was about to sing like a Rolling Stone, and someone from the audience yells, "Judas!" And Dylan then says, "Play it fucking loud," and they did. The Beatles were the same way. They kept evolving, moving, refining their art. That's what I've always tried to do: keep moving. Otherwise, as Dylan says, "If you're not busy being born, you're busy dying." What drove me? I think most creative people want to express appreciation for being able to take advantage of the work that's been done by others before us. I didn't invent the language or mathematics I use. I make little of my own food, none of my own clothes.

• 1:27:17David Senra?

  Everything I do depends on another member of our species and the shoulders that we stand on. And a lot of us want to contribute something back to our species and to add something to the flow. It's about trying to express something in the only way that most of us know how, because we can't write Bob Dylan songs or Tom Stoppard plays. We try to use the talents we do have to express our deep feelings, to show our appreciation of all the contributions that came before us, and to add something to that flow.

• 1:27:52David Senra?

  That was what has driven me.

• 1:28:01David Senra?

  And that's the end of what Steve Jobs thought his legacy would be. And it's also the end of this podcast. I think that's, there's not a better place to leave it than there. So, if you enjoyed this podcast, here are a few ways that you can support the work that I'm doing here. And in return, help me and enable me to create even more podcasts on the greatest entrepreneurs in history. First, if you haven't yet, you subscribe to this podcast in your podcast player.

• 1:28:44David Senra?

  I'm releasing a new podcast every Sunday, and it's the easiest way for you to be alerted to when the new podcasts are released. I plan on doing them early Sunday morning. Sometimes these books, so like this book, it took me a while, like I said, anywhere from like 10 to 15 hours to read, then you have to outline what you want to talk about, and then I have to record, and then publish, so maybe 20 total hours. But some of them are longer, like we're gonna do a book on John D Rockefeller, that's gonna take me a long time. So, hopefully I can get it, I release them as early as I can, usually early Sunday morning. That way, you can listen to it, most people don't work on Sundays, listen to this, hopefully be inspired by the stories you hear, and you're ready to get back to whatever you want to

• 1:29:29David Senra?

  do on Monday, whatever's important to you, business you're creating, whether it's an application, or you're just, you're an artist, or you're just a person that wants to do something. So that's why I chose to do it on Sundays. So if you enjoy what I'm doing here, and you want to encourage me to continue to keep going, and support this podcast...

• 1:29:50David Senra?

  I need a favor. I have to ask you a favor. I need you to leave a five-star review for this podcast on iTunes. And as a thank you for taking the time to leave a review, I will buy the book Steve Jobs by Walter Isaacson for the first 10 people that leave a review and mention this specific episode. So in your review, you mention what you liked about this episode. You take a screenshot of the review and you text it to me. You can text the podcast, not only text me the review, but if you have any other feedback, you just want to talk or have direct communication with me. Since podcasts are consumed on mobile, I figured texting was the best way.

• 1:30:33David Senra?

  So that you can text me at 305-809-8899. 305-809-8899. So the first 10 people that leave a review mentioning the Steve Jobs episode and it's a five-star review, I will return the favor and buy the book so you can read it. It's a really, really good book. I've sent it to a few friends. I own both the Kindle version and the paperback version. I did this podcast from the paperback version. I like taking notes and you probably heard me ripping off sticky notes and everything during the podcast. Another way you could support, and the most important actually way to support.

• 1:31:15David Senra?

  I am, I understand most podcasts support themselves through ads. I don't, I want to try to avoid doing that if all possible. And at the same time, I want to build a community of

• 1:31:29David Senra?

  like-minded people that are interested in entrepreneurship and history and reading and books and all the things that I'm interested in, the reason that I create this podcast to begin with. So I have

• 1:31:43David Senra?

  You can sign up to become a member. So becoming a member is the most important thing you can do. This podcast's ad-free, right? Half of the podcasts I do are released for free, like this one. There's no ad in it. The other half are for members only. So this week's podcast is free, the next one's members only, and we alternate back and forth between free and members only.

• 1:32:04David Senra?

  Members are what make this podcast possible. For a small monthly membership fee, you get access to every other episode and the entire back catalog. You can also... are the ones that help me produce future shows, meaning that the people that sign up to be a member on Patreon, which are the links in the show notes, which is available in your podcast player.

• 1:32:28David Senra?

  And if you want, you can just text me and I'll send you the link. But the people on Patreon, the Patreon subscribers, are able to suggest, hey, what if you do this book or this person?

• 1:32:43David Senra?

  And it helps steer the direction of the show. So it's extremely important. If you want to support ad-free and independent podcasts like this one, the best way to do is to sign up to become a member. You sign up once, you never think about it again. It's really convenient. You have access to, you know, members-only episodes that other people are not going to hear. The only people are going to hear that are the members. And the third thing, subscribe to my email list. I leave a link directly for that in the show notes as well.

• 1:33:15David Senra?

  So I send an email out. I only send emails when I release an episode. So I'll send you an email for every episode with lessons I learned from that entrepreneur, some favorite quotes from the book, some of them that don't make it in the podcast, and other kind of behind-the-scenes info. And it's more like a personal letter coming from me.

• 1:33:38David Senra?

  And it's just an easy way to communicate. There's already over 8,000 or 9,000 people on the list already. So please join. It is a good way. In addition to texting me, you can also, the people on the email list, also constantly send me emails, and I read and respond to everyone.

• 1:33:55David Senra?

  And I think this is where I'm gonna end it. I do wanna think, before I close, I'm extremely grateful that you've listened this far, that you decided to click on this podcast, that you wanted to listen to it. I hope you found it worth your time, and I hope you come back for more. Every week, we're gonna be talking about another historically great entrepreneur. I have lists of probably forty to fifty that I wanna cover. And they're always gonna be centered around some kind of biography, so we have a lot of in-depth research to pull from. And I kinda like going through this at the same time, because I'm by no means an authority on this. I'm learning about these things at the same time you are. So, and I hope this is the podcast where I listen to some of the other podcasts,

• 1:34:40David Senra?

  and again, I've only done a few episodes, where like, I'm trying to let my personality shine through as much as possible. So you, when you listen to a podcast, you have a... The reason I love this medium more than almost any other medium, I would say more than any other medium, is because it's very intimate. And the more you listen to podcasts, the more you, you get to know that person. And I, hopefully, that's, that's what's happening here when you're listening to my podcast. And I'll continue to infuse more and more of my personality in there. And it just, I like the connection. I like the direct one-to-one connection. So, I want it to feel like I'm talking directly to you, because I am talking directly to you. With that, I've taken up enough of your time. Thank you very much for listening.

• 1:35:24David Senra?

  If you enjoyed, become a member, rate and review, and share with your friends if you can. And I will talk to you next week.