If Steve Jobs’s life were staged as an opera, it would be a tragedy in three acts. And the titles would go something like this: Act I–The Founding of Apple Computer and the Invention of the PC Industry; Act II–The Wilderness Years; and Act III–A Triumphant Return and Tragic Demise.
The first act would be a piquant comedy about the brashness of genius and the audacity of youth, abruptly turning ominous when our young hero is cast out of his own kingdom. The closing act would plumb the profound irony of a balding and domesticated high-tech rock star coming back to transform Apple far beyond even his own lofty expectations, only to fall mortally ill and then slowly, excruciatingly wither away, even as his original creation miraculously bulks up into the biggest digital dynamo of them all. Both acts are picaresque tales that end with asurge of deep pathos worthy of Shakespeare.
But that second act–The Wilderness Years–would be altogether different in tone and spirit. In fact, the soul of this act would undermine its title, a convenient phrase journalists and biographers use to describe his 1985 to 1996 hiatus from Apple, as if the only meaningful times in Jobs’s life were those spent in Cupertino. In fact, this middle period was the most pivotal of his life. And perhaps the happiest. He finally settled down, married, and had a family. He learned the value of patience and the ability to feign it when he lost it. Most important, his work with the two companies he led during that time, NeXT and Pixar, turned him into the kind of man, and leader, who would spur Apple to unimaginable heights upon his return.
Indeed, what at first glance seems like more wandering for the barefoot hippie who dropped out of Reed College to hitchhike around India, is in truth the equivalent of Steve Jobs attending business school. In other words, he grew. By leaps and bounds. In every aspect of his being. With a little massaging, this middle act could even be the plotline for a Pixar movie. It certainly fits the simple mantra John Lasseter ascribes to all the studio’s successes, from Toy Story to Up: “It’s gotta be about how the main character changes for the better.”
I had covered Jobs for Fortune and The Wall Street Journal since 1985, but I didn’t come to fully appreciate the importance of these “lost” years until after his death last fall. Rummaging through the storage shed, I discovered some three dozen tapes holding recordings of extended interviews–some lasting as long as three hours–that I’d conducted with him periodically over the past 25 years. (Snippets are scattered throughout this story.) Many I had never replayed–a couple hadn’t even been transcribed before now. Some were interrupted by his kids bolting into the kitchen as we talked. During others, he would hit the pause button himself before saying something he feared might come back to bite him. Listening to them again with the benefit of hindsight, the ones that took place during that interregnum jump out as especially enlightening.
The lessons are powerful: Jobs matured as a manager and a boss; learned how to make the most of partnerships; found a way to turn his native stubbornness into a productive perseverance. He became a corporate architect, coming to appreciate the scaffolding of a business just as much as the skeletons of real buildings, which always fascinated him. He mastered the art of negotiation by immersing himself in Hollywood, and learned how to successfully manage creative talent, namely the artists at Pixar. Perhaps most important, he developed an astonishing adaptability that was critical to the hit-after-hit-after-hit climb of Apple’s last decade. All this, during a time many remember as his most disappointing.
Eleven years is a big chunk of a lifetime. Especially when one’s time on earth is cut short. Moreover, many people–particularly creative types–are often their most prolific during their thirties and early forties. With all the heady success of Apple during Jobs’s last 14 years, it’s all too easy to dismiss these “lost” years. But in truth, they transformed everything. As I listened again to those hours and hours of tapes, I realized they were, in fact, his most productive.
Steve Jobs did not wander aimlessly into the wilderness after being ousted from Apple in 1985. No happy camper, he was loaded for bear; burning to wreak revenge upon those who had spuriously shoved him into exile, and obsessed with proving to the world that he was no one-trick pony. Within days, he abruptly sold off all but one share of his Apple stock and, flush with a small fortune of about $70 million, set about creating another computer company, this one called NeXT. The startup ostensibly was a vehicle for revolutionizing higher education with powerful, beautiful computers. In reality, it was a bet that one day he would get the better of Apple
Over all the years Jobs was away from Apple, I can’t recall him saying one good thing about the company’s brass. Early on, he whined about how CEO John Sculley had “poisoned” the culture of the place. As the years went by, and Apple’s fortunes dimmed, Jobs’s attacks became more pointed: “Right now it’s like the wicked witch in The Wizard of Oz: ‘I’m melting. I’m melting,’ ” he told me in the mid-1990s. “The jig is up. They can’t seem to come out with a great computer to save their lives. They need to spend big on industrial design, reintroduce the hipness factor. But no, they hire [Gil] Amelio [as CEO]. It’s as if Nike hired the guy that ran Kinney shoes.”
At NeXT, Jobs was damn well going to deliver a great computer. He was going to do it with massive resources, raising well over $100 million from the likes of H. Ross Perot, Japanese printer maker Canon, and Carnegie Mellon University. He was going to do it with an astonishing automated factory in Fremont, California, where every surface and piece of equipment would be painted in specific shades of gray, black, and white. He was going to do it in style, working with a full-time architect to give the corporate headquarters in Redwood City a distinctive, austere aesthetic; NeXT HQ looked much like the interior of one of today’s Apple Stores. The centerpiece was a staircase that seemed to float in air.
He was also going to do it with a revolutionary organization, something he dubbed the Open Corporation. “Think of it this way,” he explained. “If you look at your own body, your cells are specialized, but every single one of them has the master plan for the whole body. We think our company will be the best possible company if every single person working here understands the whole master plan and can use that as a yardstick to make decisions against. We think a lot of little and medium and big decisions will be made better if all our people know that.” It was a bold theory.
If Jobs’s time in exile can be seen as an extended trip through business school, the heady start of NeXT represents those early days when a student thinks he knows everything and is in a rush to show that to the world. In fact, Jobs had just about every detail wrong. The Open Corporation was a dismal failure in practice. Its hallmark was that employee salaries were not kept secret; there was even an attempt to impose uniform compensation. It didn’t work, of course; all kinds of side deals were cut to satiate key employees.
More concretely, Jobs had the whole business plan wrong. It would be two years before NeXT delivered anything to customers. When the NeXTcube computer finally did arrive, it proved too expensive to ever command a serious market. Ultimately, Jobs was forced to admit that the undeniably beautiful machine he and his engineering team concocted was a flop. He laid off most of the staff and turned the company from hardware to software, first to rewrite NeXT’s operating system, called NextSTEP, for Intel-based computers. The company also engineered an ingenious development environment called WebObjects, which eventually became its best-selling program.
Jobs didn’t know that WebObjects would later prove instrumental in building the online store for Apple and for iTunes, or that NextSTEP would be his ticket back to Apple. The road for NeXT was always rocky, perhaps appropriate for something that was born out of a desire for revenge. It was a good thing he had something else going on the side.
Of the three companies Jobs helped create, Pixar was the purest corporate and organizational expression of his nature. If NeXT was a travail of spite and malice, Pixar was a labor of love.
The Pixar story began even before Jobs left Apple. In early 1985, Apple fellow Alan Kay called his attention to the computer Graphics Group (GG) skunk works in San Rafael, California, an ill-fitting piece of the filmmaking production puzzle George Lucas had assembled for his Skywalker Ranch studios. It was little more than a team of 25 engineers–including a young “user interface designer” named John Lasseter–who desperately wanted to continue to work together even though Lucas, then embroiled in the costly aftermath of a divorce, was looking
Jobs’s trip to take a look-see left an indelible impression. GG’s head geek, Ed Catmull, showed him some short demo films made by Lasseter, who was neither a programmer nor a user interface designer, but a talented animator who had left Disney and been given his faux title by Catmull as a way to convince Lucas to put him on the payroll. The films weren’t much to look at, but they were three-dimensional, they generated by computer rather than hand-drawn, and they displayed the whimsy of a master storyteller.
Fascinated, Jobs tried, unsuccessfully, to persuade Apple’s board to buy the group. “These guys were way ahead of us on graphics, way ahead,” Jobs remembered. “They were way ahead of anybody. I just knew in my bones that this was going to be very important.” After getting bounced from Apple, Jobs went back to Lucas and drove a hard bargain. He paid $5 million for the group’s assets and provided another $5 million in working capital for the company, which was christened Pixar. In hindsight, the price was a pittance. But in 1985, nobody would have expected Pixar to one day outstrip NeXT. Certainly not Jobs: He didn’t build any fancy digs for his motley crew of animators and engineers, who for years made do with used furniture and dowdy offices.
Once again, what Jobs knew in his bones didn’t translate into getting the details right. As with NeXT, Jobs initially intended the company to be a purveyor of high-performance computer hardware, this time for two frightfully niche markets: the special-effects departments of Hollywood studios and medical-imaging specialists. By 1989, however, Pixar had sold only a few hundred of its Pixar Image Computers, faux-granite painted cubes originally stickered at $135,000, that had to be paired with expensive engineering workstations to do anything.
This time, the strategy pivot came from the talent. In 1990, Lasseter and Catmull told Jobs they could make a business of creating computer-animated TV commercials–perhaps one day they could even make, and sell, cartoons! Jobs was smitten with Catmull and Lasseter. They were always teaching him something new. Could they deliver on the ultimate promise of the place, to use computers to create an entirely new kind of animation for the cinema and thus upend the entire business model of animation? Jobs decided to focus on this one disruptive opportunity. It was an instinct he would return to, repeatedly, when he rejoined Apple.
In 1991, he fired much of the Pixar staff, announced the new direction to the survivors, and reorganized so that the studio could pursue one animated project at a time. “I got everybody together,” Jobs said, “and I said, ‘At our heart, we really are a content company. Let’s transition out of everything else. Let’s go for it. This is why I bought into Pixar. This is why most of you are here. Let’s go for it. It’s a higher-risk strategy, but the rewards are gonna be much higher, and it’s where our hearts are.’ ” Then he and CFO Lawrence Levy went to work learning everything they could about the dynamics and economics of the animation business. If they were going to start making cartoons, they were going to do it right.
The shift at Pixar occurred at about the same time as the major turn in Jobs’s personal life: the blossoming of his romance with Laurene Powell. In 1991, two years after she met him following an informal lecture at Stanford University’s Graduate School of Business, Laurene was his pregnant bride, married by a Buddhist monk at the Ahwahnee Hotel in Yosemite National Park.
Jobs had never seemed like the marrying type and hadn’t shown much of a sense of responsibility for Lisa, his first daughter, who was born out of wedlock in 1978. He denied paternity initially, even though he had named an Apple computer after her. Egotistical, narcissistic, and manipulative since childhood, Jobs often behaved like a spoiled brat who was accustomed to getting his way.
His personality didn’t change overnight after meeting Laurene, but his selfish ways did begin to moderate, especially after his children, Reed, Erin, and Eve, came into the family in 1991, 1995, and 1998, respectively. As is often the case with new parents, Jobs behaved as if he were the first person in the world to discover and fully appreciate the joys of family life. He literally stayed closer to home, converting a clapboard storefront building catty-corner from the Palo Alto Whole Foods into a satellite office so his commute would be a short bike ride. (He didn’t use the office all that much after returning to Apple.)
My bureau was a block up the street, and occasionally I’d see him out for a stroll, usually with someone in tow. He always said he could think better when he walked. During these years, his fame had subsided somewhat, so it wasn’t like encountering one of the Beatles at the supermarket. People pretty much left him alone.
I bumped into him on one of those walks when he was alone, and wound up joining him as he shopped for a new bicycle for Laurene’s upcoming birthday. This was before you could do your homework on the Internet, but he had done his research, so there wasn’t much shopping involved. We were in and out of Palo Alto Bicycles in 10 minutes. “I’d never have Andrea do something like this,” he said, referring to his longtime administrative assistant. “I like buying presents for my family myself.”
Even after he went back to Apple, there was nothing Jobs liked more than spending time at home. Not that he wasn’t a workaholic. We were iChat buddies for several years, so his name would pop up whenever he was working at his computer at home. Almost invariably, he was in front of his Mac until after midnight. We’d occasionally have a video chat, and if it took place early in the evening, I’d often see one of his children in the background looking on.
In hindsight, Jobs’s having a real family might have been the best thing to happen to Pixar. He was most effective as a marketer and a business leader when he could think of himself as the primary customer. What would he want from a computer-animated movie, both for himself and for his kids? That was the only market-research question he ever asked. He had always demanded great production values and design for his computer products. He was just as picky about what Pixar produced. Lasseter and Catmull couldn’t have asked for a more empathetic benefactor.
Shortly after his decision in 1990 to let Lasseter and Catmull start producing commercials and short films, Jobs pulled a rabbit out of his hat: He negotiated a $26 million marketing distribution deal with Disney that provided enough capital to make a full-length, computer-animated motion picture. Because Disney had been a Pixar customer, licensing its software for managing conventional animators, then-CEO Michael Eisner and his head of animation, Jeffrey Katzenberg, were fully aware that the company’s technology was solid and unique, and that Lasseter showed flashes of genius as a new breed of animator.
Jobs was candid about the two Disney execs, telling me that both “make the mistake of not appreciating technology. They just assume that they can throw money at things and fix them. They don’t have a clue.” Once upon a time, he would have been enraged by the ignorance he perceived. When I asked him what had soured an earlier partnership between IBM and NeXT, he ranted: “The people at the top of IBM knew nothing about computers. Nothing. Nothing. The people at the top of Disney,” on the other hand, “know a lot about what a really good film is and what is not.”
Even though he believed that Katzenberg and Eisner “had no clue” about how far Pixar could take them–Jobs was convinced that Pixar’s technology could revolutionize the business model for animation, which was then primarily a hand-drawn art–he recognized that the partnership had more or less saved the company: “It’s the biggest thing I’ve done for Pixar,” he said. So he found a common bond between the companies. “There was a certain amount of fear and trepidation, but what always happened was that making a great movie was the focal point of everybody’s concerns. One way to drive fear out of a relationship is to realize that your partner’s values are the same as yours, that what you care about is exactly what they care about. In my opinion, that drives fear out and makes for a great partnership, whether it’s a corporate partnership or a marriage.”
Then he set about designing an organization that could deliver a great movie–and many more. His foray into Hollywood had taught him a great deal. “I started to learn about how films are made. Basically, it’s bands of gypsies getting together to make a film. After the film, they disband. The problem with that is we want to build a company, not just make a single movie.”
This time, there was no flighty discussion of an “open” corporation. “Incentive structures work,” he told me. “So you have to be very careful of what you incent people to do, because various incentive structures create all sorts of consequences that you can’t anticipate. Everybody at Pixar is incented to build the company: whether they’re working on the film; whether they’re working on a potential direct-to-video product; whether they’re working on a CD-ROM. Whatever their combination of creative and technical talent may be, we want them incented to make the whole company successful.”
There was another compensation detail that reflected how completely Jobs was able to mesh the values of Silicon Valley with Hollywood. Pixar paid its animators just as well as its software geniuses (beginning an escalation in salaries that Katzenberg accelerated later that decade at DreamWorks). “We value them both equally,” Jobs said of Pixar’s two talent camps. “Some people say we should value one higher than the other, but we value them equally, we pay them equally, they have stock equally. We made that decision very early. Ed Catmull made that decision, actually. We will always do that; that’s one of Pixar’s core values.”
These were the decisions that cemented the company’s future success. When Disney surprised Jobs by scheduling Pixar’s first movie as its 1995 holiday feature, his team was ready, with a little picture called Toy Story. And Jobs, armed with a renegotiated Disney deal for three pictures, was ready too; Pixar went public 10 days after Toy Story‘s stunning debut, raising nearly $100 million.
After that, it was as if the company hit the fast-forward button. And for the rest of his life, Jobs enjoyed Pixar as he enjoyed little else. Now was the time to throw away the used furniture and build a proper studio in Emeryville, California. He relished this so much more than the NeXT headquarters–after all, this time he and his team had earned it. The design blended aspects of a Hollywood lot and an old-fashioned brick factory building, perfect for his star animators and programmers, perfect for working with Tom Hanks, Ellen DeGeneres, Owen Wilson, and all the other stars who enjoyed voicing Pixar characters. The custom-made bricks came in 12 shades, and if the colors weren’t distributed evenly enough, Jobs would have the bricklayers pull them down and do it again. He would visit the construction site as often as he could as it came together, often clambering around the buildings at night, when no one but the security guards were around.
He also created something called Pixar University for the staff, where his brilliant engineers and clever artists and smart financial people could take classes in all kinds of subjects, to better appreciate what their coworkers did. There were classes in the visual arts, dance, computer programming, foreign languages, drama, mathematics, creative writing, and even accounting. “It is,” he once told me, “the coolest place to work in the world.”
For all the joy that Pixar brought Jobs, it was NeXT that got him back to Apple. After failing to develop new software architecture for the Mac and bungling a joint venture with IBM, Apple was on its deathbed in 1996. NeXT had a powerful, modern operating system and one very persuasive storyteller, who managed to convince CEO Amelio that his stepchild could be Apple’s salvation. In late 1996, Jobs sold NeXT to Apple for $400 million, which he used to pay back Perot, Canon, and some other early investors. Within six months, Jobs had mounted a putsch and became Apple’s “iCEO,” with the i standing for what proved to be a deeply false “interim.”
The ensuing tale, the saga of the modern Apple, is simply the story of the man who emerged from that 11-year business school and implemented the lessons he had learned along the way. As was true when he started at Pixar and NeXT, Jobs had many of the details wrong when he first returned to the Apple helm. He imagined that the company’s business would always be selling computers. He thought that what was then called the “information highway” would be primarily of interest to businesses. He dismissed the idea that computer networks would carry lots of
But some of the tougher years at NeXT and Pixar had taught him how to stretch a company’s finances, which helped him ride out his first couple of years back, when Apple was still reliant on a weak jumble of offerings. With newfound discipline, he quickly streamlined thecompany’s product lines. And just as he had at Pixar, he aligned the company behind those projects. In a way that had never been done before at a technology company–but that looked a lot like an animation studio bent on delivering one great movie a year–Jobs created the organizational strength to deliver one hit after another, each an extension of Apple’s position as the consumer’s digital hub, each as strong as its predecessor. If there’s anything that parallels Apple’s decade-long string of hits–iMac, PowerBook, iPod, iTunes, iPhone, iPad, to list just the blockbusters–it’s Pixar’s string of winners, including Toy Story, Monsters, Inc., Finding Nemo, The Incredibles, WALL-E, and Up. These insanely great products could have come only from insanely great companies, and that’s what Jobs had learned to build.
Jobs had learned how to treat talent at Pixar; he spoke to me about his colleagues there differently from the way he discussed his NeXT coworkers. When he returned to Apple, he often described his very top management team in the same warm terms, with the occasional notable exception. As he had with animators and programmers at Pixar, he integrated designers and technologists at Apple. He cultivated a team he could count on, including the great designer Jonathan Ive, who is to Apple what Lasseter is to Pixar. “We’ve done so many hardware products where Jony and I have looked at each other and said, ‘We don’t know how to make it any better than this, we just don’t know how to make it,’ ” Jobs told me. “But we always do; we realize another way. And then it’s not long after the new thing comes out that we look at the older thing and go, ‘How can we ever have done that?’ “
When I listened to this quote again last month, I was struck by something else in it: the combination of adaptability and intuition that proved so critical to Apple’s rise. Jobs may have been impulsive at times, but he was always methodical. This kind of nature suited an autodidact with eclectic tastes, empowering him either to obsess impatiently about a pressing problem that had to be dealt with immediately–much like an engineer–or else to let an idea steep and incubate until he got it right. This is why Jobs was so often right on the big picture, even when he got the details wrong. Open salaries was a dumb detail of the Open Corporation, but its core idea, of a workplace where every single person understands the company’s goals, is something that most organizations get wrong and that Apple has gotten so right for well over a decade. If Jobs was initially wrong about Apple getting into phones and handheld devices, he was right on about the big idea of the computer at the center of a whirling digital universe. Hence Apple’s ability to deliver a great iTunes store after the iPod, even though it was never planned. Hence the great iPhone, despite Jobs’s dismissal of “Swiss Army knife” digital devices.
There was one other big lesson he learned from his Hollywood adventure: People remember stories more than products. “The technology we’ve been laboring on over the past 20 years becomes part of the sedimentary layer,” he told me once. “But when Snow White was re-released [on DVD, in 2001], we were one of the 28 million families that went out and bought a copy of it. This was a film that is 60 yearsold, and my son was watching it and loving it. I don’t think anybody’s going to be beating on a Macintosh 60 years from now.”
Once he realized he really was going to die, Jobs quietly began to think more seriously about the story of his own life and creations. At his memorial service, Laurene remarked that what struck her most upon really getting to know him was his “fully formed aesthetic sense.” He knew exactly what he liked, and he analyzed it until he could tell you precisely why. Jobs always felt that architecture could be a truly lasting expression of one’s aesthetic, reaching beyond the limits of one’s lifetime. It wasn’t incidental, then, that his last public appearance was at a Cupertino City Council meeting to unveil the breathtaking four-story, doughnut-shaped “mother ship” that’s nearly a half-mile in diameter and that will one day become Apple’s headquarters.
Of course, Jobs wanted his own official story to measure up. So he enlisted Walter Isaacson–creator of a virtual Mount
Rushmore of best-selling biographies of Benjamin Franklin, Albert Einstein, and Henry Kissinger–to tell his tale. Like those giants, Jobs is a man whose history will be told many a time, with fresh insights and new reporting. In the retelling, it may well be that the lessons from his “lost” years in the “wilderness” are the ones that will prove most inspiring.
Check out Design Crazy: Good Looks, Hot Tempers, and True Genius at Apple, our captivating oral history of the company that “taught the world taste.” The ebook is available through Apple, Amazon, and Byliner.