Playboy: How serious was it? Was Apple near bankruptcy?
Jobs: No, no, no. In fact, 1983, when all these predictions were being made, was a phenomenally successful year for Apple. We virtually doubled in size in 1983. We went from $583,000,000 in 1982 to something like $980,000,000 in sales. It was almost all Apple II-related. It just didn’t live up to our expectations. If Macintosh weren’t a success, we probably would have stayed at something like a billion dollars a year, selling Apple IIs and versions of it.
Playboy: Then what was behind the talk last year that Apple had had it?
Jobs: IBM was coming on very, very strong, and the momentum was switching to IBM. The software developers were moving to IBM. The dealers were talking more and more of IBM. It became clear to all of us who worked on Macintosh that it was just gonna blow the socks off the industry, that it was going to redefine the industry. And that’s exactly what it had to do. If Macintosh hadn’t been successful, then I should have just thrown in the towel, because my vision of the whole industry would have been totally wrong.
Playboy: Apple III was supposed to have been your souped-up Apple II, but it has been a failure since it was launched, four years ago. You recalled the first 14,000, and even the revised Apple III never took off. How much was lost on Apple III?
Jobs: Infinite, incalculable amounts. I think if the III had been more successful, IBM would have had a much harder time entering the market place. But that’s life. I think we emerged from that experience much stronger.
Playboy: Yet when Lisa came out, it, too, was a relative failure in the market place. What went wrong?
Jobs: First of all, it was too expensive‐‑about ten grand. We had gotten Fortune 500‐‑itis, trying to sell to those huge corporations, when our roots were selling to people. There were other problems: late shipping; the software didn’t come together in the end as well as we hoped and we lost a lot of momentum. And IBM’s coming on very strong, coupled with our being about six months late, coupled with the price’s being too high, plus another strategic mistake we made‐‑deciding to sell Lisa only through about 150 dealers, which was absolutely foolish on our part‐‑meant it was a very costly mistake. We decided to hire people we thought were marketing and management experts. Not a bad idea, but unfortunately, this was such a new business that the things the so-called professionals knew were almost detriments to their success in this new way of looking at business.
Playboy: Was that a reflection of insecurity on your part‐‑”This thing has gotten big and now we’re playing hardball; I better bring in some real pros”?
Jobs: Remember, we were 23, 24 and 25 years old. We had never done any of this before, so it seemed like a good thing to do. Were most of those decisions, good and bad, yours? Jobs: We tried never to have one person make all the decisions. There were three people running the company at that time: Mike Scott, Mike Markkula and myself. Now it’s John Sculley [Apple’s president] and myself. In the early days, if there was a disagreement, I would generally defer my judgment to some of the other people who had more experience than I had. In many cases, they were right. In some important cases, if we had gone my way, we would have done better.
Playboy: You wanted to run the Lisa division. Markkula and Scott, who were, in effect, your bosses, even though you had a hand in hiring them, didn’t feel you were capable, right?
Jobs: After setting up the framework for the concepts and finding the key people and sort of setting the technical directions, Scotty decided I didn’t have the experience to run the thing. It hurt a lot. There’s no getting around it.
Playboy: Did you feel you were losing Apple?
Jobs: There was a bit of that, I guess, but the thing that was harder for me was that they hired a lot of people in the Lisa group who didn’t share the vision we originally had. There was a big conflict in the Lisa group between the people who wanted, in essence, to build something like Macintosh and the people hired from Hewlett-Packard and other companies who brought with them a perspective of larger machines, corporate sales. I just decided that I was going to go off and do that myself with a small group, sort of go back to the garage, to design the Macintosh. They didn’t take us very seriously. I think Scotty was just sort of humoring me.
Playboy: But this was the company that you founded. Weren’t you resentful?
Jobs: You can never resent your kid.
Playboy: Even when your kid tells you to fuck off?
Jobs: I wouldn’t feel resentment. I’d feel great sorrow about it and I’d be frustrated, which I was. But I got the best people who were at Apple, because I thought that if we didn’t do that, we’d be in real trouble. Of course, it was those people who came up with Macintosh. [Shrugs] Look at Mac.
Playboy: That verdict is far from in. In fact, you ushered in the Mac with a lot of the same fanfare that preceded the Lisa, and the Lisa failed initially.
Jobs: It’s true: We expressed very high hopes for Lisa and we were wrong. The hardest thing for us was that we knew Macintosh was coming, and Macintosh seemed to overcome every possible objection to Lisa. As a company, we would be getting back to our roots‐‑selling computers to people, not corporations. We went off and built the most insanely great computer in the world.
Playboy: Does it take insane people to make insanely great things?
Jobs: Actually, making an insanely great product has a lot to do with the process of making the product, how you learn things and adopt new ideas and throw out old ideas. But, yeah, the people who made Mac are sort of on the edge.
Playboy: What’s the difference between the people who have insanely great ideas and the people who pull off those insanely great ideas?
Jobs: Let me compare it with IBM. How come the Mac group produced Mac and the people at IBM produced the PCjr? We think the Mac will sell zillions, but we didn’t build Mac for anybody else. We built it for ourselves. We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research. We just wanted to build the best thing we could build. When you’re a carpenter making a beautiful chest of drawers, you’re not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.
Playboy: Are you saying that the people who made the PC don’t have that kind of pride in the product?
Jobs: If they did, they wouldn’t have turned out the PC. It seems clear to me that they were designing that on the basis of market research for a specific market segment, for a specific demographic type of customer, and they hoped that if they built this, lots of people would buy them and they’d make lots of money. Those are different motivations. The people in the Mac group wanted to build the greatest computer that has ever been seen.
Playboy: Why is the computer field dominated by people so young? The average age of Apple employees is 29.
Jobs: It’s often the same with any new, revolutionary thing. People get stuck as they get older. Our minds are sort of electrochemical computers. 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. It’s a rare person who etches grooves that are other than a specific way of looking at things, a specific way of questioning things. It’s rare that you see an artist in his 30s or 40s able to really contribute something amazing. Of course, there are some people who are innately curious, forever little kids in their awe of life, but they’re rare.
Playboy: A lot of guys in their 40s are going to be real pleased with you. Let’s move on to the other thing that people talk about when they mention Apple‐‑the company, not the computer. You feel a similar sense of mission about the way things are run at Apple, don’t you?
Jobs: I do feel there is another way we have an effect on society besides our computers. I think Apple has a chance to be the model of a Fortune 500 company in the late Eighties and early Nineties. Ten to 15 years ago, if you asked people to make a list of the five most exciting companies in America, Polaroid and Xerox would have been on everyone’s list. Where are they now? They would be on no one’s list today. What happened? Companies, as they grow to become multibillion-dollar entities, somehow lose their vision. They insert lots of layers of middle management between the people running the company and the people doing the work. They no longer have an inherent feel or a passion about the products. The creative people, who are the ones who care passionately, have to persuade five layers of management to do what they know is the right thing to do. What happens in most companies is that you don’t keep great people under working environments where individual accomplishment is discouraged rather than encouraged. The great people leave and you end up with mediocrity. I know, because that’s how Apple was built. Apple is an Ellis Island company. Apple is built on refugees from other companies. These are the extremely bright individual contributors who were troublemakers at other companies. You know, Dr. Edwin Land was a troublemaker. He dropped out of Harvard and founded Polaroid. Not only was he one of the great inventors of our time but, more important, he saw the intersection of art and science and business and built an organization to reflect that. Polaroid did that for some years, but eventually Dr. Land, one of those brilliant troublemakers, was asked to leave his own company‐‑which is one of the dumbest things I’ve ever heard of. So Land, at 75, went off to spend the remainder of his life doing pure science, trying to crack the code of color vision. The man is a national treasure. I don’t understand why people like that can’t be held up as models: This is the most incredible thing to be‐‑not an astronaut, not a football player‐‑but this. Anyway, one of our biggest challenges, and the one I think John Sculley and I should be judged on in five to ten years, is making Apple an incredibly great ten- or 20-billion‐dollar company. Will it still have the spirit it does today? We’re charting new territory. There are no models that we can look to for our high growth, for some of the new management concepts we have. So we’re having to find our own way.
Playboy: If Apple is really that kind of company, then why the projected twenty-fold growth? Why not stay relatively small?
Jobs: The way it’s going to work out is that in our business, in order to continue to be one of the major contributors, we’re going to have to be a ten-billion-dollar company. That growth is required for us to keep up with the competition. Our concern is how we become that, rather than the dollar goal, which is meaningless to us. At Apple, people are putting in 18-hour days. We attract a different type of person‐‑a person who doesn’t want to wait five or ten years to have someone take a giant risk on him or her. Someone who really wants to get in a little over his head and make a little dent in the universe. We are aware that we are doing something significant. We’re here at the beginning of it and we’re able to shape how it goes. Everyone here has the sense that right now is one of those moments when we are influencing the future. Most of the time, we’re taking things. Neither you nor I made the clothes we wear; we don’t make the food or grow the foods we eat; we use a language that was developed by other people; we use another society’s mathematics. Very rarely do we get a chance to put something back into that pool. I think we have that opportunity now. And no, we don’t know where it will lead. We just know there’s something much bigger than any of us here.
Playboy: You’ve said that the business market is crucial for you to conquer with Macintosh. Can you beat IBM at work?
Jobs: Yes. The business market has several sectors. Rather than just thinking of the Fortune 500, which is where IBM is strongest, I like to think of the Fortune 5,000,000 or 14,000,000. There are 14,000,000 small businesses in this country. I think that the vast group of people who need to be computerized includes that large number of medium and small businesses. We’re going to try to be able to bring some meaningful solutions to them in 1985.
Jobs: Our approach is to think of them not as businesses but as collections of people. We want to qualitatively change the way people work. We don’t just want to help them do word processing faster or add numbers faster. We want to change the way they can communicate with one another. We’re seeing five-page memos get compressed to one-page memos because we can use a picture to express the key concept. We’re seeing less paper flying around and more quality of communication. And it’s more fun. There’s always been this myth that really neat, fun people at home all of a sudden have to become very dull and boring when they come to work. It’s simply not true. If we can inject that liberal-arts spirit into the very serious realm of business, I think it will be a worthwhile contribution. We can’t even conceive of how far it will go.
Playboy: But in the business market, you’re fighting the IBM name as much as anything. People associate IBM with stability and efficiency. The new entry in the computer field, A.T.&T., has that one up on you, too. Apple is a relatively young and untested company, particularly in the eyes of corporations that might be customers.
Jobs: It’s Macintosh’s job to really penetrate the business market place. IBM focuses on the top down, the mainframe centric approach to selling in businesses. If we are going to be successful, we’ve got to approach this from a grass-roots point of view. To use networking as an example, rather than focusing on wiring up whole companies, as IBM is doing, we’re going to focus on the phenomenon of the small work group.
Playboy: One of the experts in the field says that for this industry to really flourish, and for it to benefit the consumer, one standard has to prevail.
Jobs: That’s simply untrue. Insisting that we need one standard now is like saying that they needed one standard for automobiles in 1920. There would have been no innovations such as the automatic transmission, power steering and independent suspension if they believed that. The last thing we want to do is freeze technology. With computers, Macintosh is revolutionary. There is no question that Macintosh’s technology is superior to IBM’s. There is a clear need for an alternative to IBM.
Playboy: Was any of your decision not to become compatible with IBM based on the fact that you didn’t want to knuckle under to IBM? One critic says that the reason Mac isn’t IBM-compatible is mere arrogance‐‑that “Steve Jobs was saying ‘Fuck you’ to IBM.”
Jobs: It wasn’t that we had to express our manhood by being different, no.
Playboy: Then why were you?
Jobs: The main thing is very simply that the technology we developed is superior. It could not be this good if we became compatible with IBM. Of course, it’s true that we don’t want IBM to dominate this industry. A lot of people thought we were nuts for not being IBM-compatible, for not living under IBM’s umbrella. There were two key reasons we chose to bet our company on not doing that: The first was that we thought‐‑and I think as history is unfolding, we’re being proved correct‐‑that IBM would fold its umbrella on the companies making compatible computers and absolutely crush them. Second and more important, we did not go IBM-compatible because of the product vision that drives this company. We think that computers are the most remarkable tools that humankind has ever come up with, and we think that people are basically tool users. So if we can just get lots of computers to lots of people, it will make some qualitative difference in the world. What we want to do at Apple is make computers into appliances and get them to tens of millions of people. That’s simply what we want to do. And we couldn’t do that with the current IBM-generation type of technology. So we had to do something different. That’s why we came up with the Macintosh.
Playboy: From 1981 to 1983, your share of the personal-computer sales slipped from 29 percent to 23 percent. IBM’s part has grown from three percent to 28 percent in the same time. How do you fight the numbers?
Jobs: We’ve never worried about numbers. In the market place, Apple is trying to focus the spotlight on products, because products really make a difference. IBM is trying to focus the spotlight on service, support, security, mainframes and motherhood. Now, Apple’s key observation three years ago was that when you’re shipping 10,000,000 computers a year, even IBM does not have enough mothers to ship one with every computer. So you’ve got to build motherhood into the computer. And that’s a big part of what Macintosh is all about. All these things show that it really is coming down to just Apple and IBM. If, for some reason, we make some giant mistakes and IBM wins, my personal feeling is that we are going to enter sort of a computer Dark Ages for about 20 years. Once IBM gains control of a market sector, they almost always stop innovation. They prevent innovation from happening.
Jobs: Look at this example: Frito-Lay is a very interesting company. They call on more than half a million accounts a week. There’s a Frito-Lay rack in each store, and the chips are all there, and every store’s got the identical rack and the big ones have multiples. For Frito-Lay, the biggest problem is stale product‐‑bad chips, so to speak. For Frito-Lay’s service, they’ve got, like, 10,000 guys who run around and take out the stale product and replace it with good product. They talk to the manager of that department and they make sure everything’s fine. Because of that service and support, they now have more than an 80 percent share of every segment of chips that they’re in. Nobody else can break into that. As long as they keep doing what they do well, nobody else can get 80 percent of the market share, because they can’t get the sales and support staff. They can’t get it because they can’t afford it. They can’t afford it because they don’t have 80 percent of the market share. It’s catch-22. Nobody will ever be able to break into their franchise. Frito-Lay doesn’t have to innovate very much. They just watch all the little chip companies come out with something new, study it for a year, and a year or two years later they come out with their own, service and support it to death, and they’ve got 80 percent of the market share of the new product a year later. IBM is playing exactly the same game. If you look at the mainframe market place, there’s been virtually zero innovation since IBM got dominant control of that market place 15 years ago. They are going to do the same thing in every other sector of the computer market place if they can get away with it. The IBM PC fundamentally brought no new technology to the industry at all. It was just repackaging and slight extension of Apple II technology, and they want it all. They absolutely want it all. This market place is coming down to the two of us, whether we like it or not. I don’t particularly like it, but it’s coming down to Apple and IBM.
Playboy: How can you say that about an industry that’s changing so fast? Macintosh is the hot new thing right now, but will it still be in two years? Aren’t you competing with your own philosophy? Just as you’re after IBM, aren’t there small computer companies coming after Apple?
Jobs: In terms of supplying the computer itself, it’s coming down to Apple and IBM. And I don’t think there are going to be a lot of third- and fourth-place companies, much less sixth- or seventh-place companies. Most of the new, innovative companies are focusing on the software. I think there will be lots of innovation in the areas of software but not in hardware. Playboy: IBM might say the same thing about hardware, but you’re not about to let it get away with that. Why is your point any different?
Jobs: I think that the scale of the business has gotten large enough so that it’s going to be very difficult for anyone to successfully launch anything new.
Playboy: No more billion-dollar companies hatched in garages?
Jobs: No, I’m afraid not in computers. And this puts a responsibility on Apple, because if there’s going to be innovation in this industry, it’ll come from us. It’s the only way we can compete with them. If we go fast enough, they can’t keep up.
Playboy: When do you think IBM will finally, as you put it, fold the umbrella on the companies making IBM-compatible computers? Jobs: There may be some imitators left in the $100,000,000-to-$200,000,000 range, but being a $200,000,000 company is going to mean you are struggling for your life, and that’s not really a position from which to innovate. Not only do I think IBM will do away with its imitators by providing software they can’t provide, I think eventually it will come up with a new standard that won’t even be compatible with what it’s making now‐‑ because it is to limiting.
Playboy: Which is exactly what you’ve done at Apple. If a person owns software for the Apple II, he can’t run it on the Macintosh.
Jobs: That’s right. Mac is altogether new. We knew that we could reach the early innovators with current-generation technology‐‑Apple II, IBM PC‐‑because they’d stay up all night learning how to use their computer. But we’d never reach the majority of people. If we were really going to get computers to tens of millions of people, we needed a technology that would make the thing radically easier to use and more powerful at the same time, so we had to make a break. We just had to do it. We wanted to make sure it was great, because it may be the last chance that any of us get to make a clean break. And I’m very happy with the way Macintosh turned out. It will prove a really solid foundation for the next ten years.
Playboy: Let’s go back to the predecessors of the Lisa and the Mac, to the beginning. How influential were your parents in your interest in computers?
Jobs: They encouraged my interests. My father was a machinist, and he was a sort of genius with his hands. He can fix anything and make it work and take any mechanical thing apart and get it back together. That was my first glimpse of it. I started to gravitate more toward electronics, and he used to get me things I could take apart and put back together. He was transferred to Palo Alto when I was five. That’s how we ended up in the Valley.
Playboy: You had been adopted, hadn’t you? How much of a factor in your life was that?
Jobs: You don’t ever really know, do you?
Playboy: Did you try to find your biological parents?
Jobs: I think it’s quite a natural curiosity for adopted people to want to understand where certain traits come from. But I’m mostly an environmentalist. I think the way you are raised and your values and most of your world view come from the experiences you had as you grew up. But some things aren’t accounted for that way. I think it’s quite natural to have a curiosity about it. And I did.
Playboy: Were you successful in trying to find your natural parents?
Jobs: That’s one area I really don’t want to talk about.
Playboy: The valley your parents moved to has since come to be known as Silicon Valley. What was it like growing up there?
Jobs: It was the suburbs. It was like most suburbs in the U.S.: I grew up on a block with lots of kids. My mother taught me to read before I went to school, so I was pretty bored in school, and I turned into a little terror. You should have seen us in third grade. We basically destroyed our teacher. We would let snakes loose in the classroom and explode bombs. Things changed in the fourth grade, though. One of the saints in my life is this woman named Imogene Hill, who was a fourth-grade teacher who taught this advanced class. She got hip to my whole situation in about a month and kindled a passion in me for learning things. I learned more that year than I think I learned in any year in school. They wanted to put me in high school after that year, but my parents very wisely wouldn’t let them.
Playboy: But location had something to do with your interests, didn’t it? How did Silicon Valley come to be?
Jobs: The Valley is positioned strategically between two great universities, Berkeley and Stanford. Both of those universities attract not only lots of students but very good students and ones from all over the United States. They come here and fall in love with the area and they stay here. So there is a constant influx of new, bright human resources. Before World War Two, two Stanford graduates named Bill Hewlett and Dave Packard created a very innovative electronics company‐‑Hewlett-Packard. Then the transistor was invented in 1948 by Bell Telephone Laboratories. One of the three coinventors of the transistor, William Shockley, decided to return to his home town of Palo Alto to start a little company called Shockley Labs or something. He brought with him about a dozen of the best and brightest physicists and chemists of his day. Little by little, people started breaking off and forming competitive companies, like those flowers or weeds that scatter seeds in hundreds of directions when you blow on them. And that’s why the Valley is here today.
Playboy: What was your introduction to computers?
Jobs: A neighbor down the block named Larry Lang was an engineer at Hewlett-Packard. He spent a lot of time with me, teaching me stuff. The first computer I ever saw was at Hewlett-Packard. They used to invite maybe ten of us down every Tuesday night and give us lectures and let us work with a computer. I was maybe 12 the first time. I remember the night. They showed us one of their new desktop computers and let us play on it. I wanted one badly.
Playboy: What was it about it that interested you? Did you have a sense of its potential?
Jobs: It wasn’t anything like that. I just thought they were neat. I just wanted to mess around with one.
Playboy: You went to work for Hewlett-Packard. How did that happen? Jobs: When I was 12 or 13, I wanted to build something and I needed some parts, so I picked up the phone and called Bill Hewlett‐‑he was listed in the Palo Alto phone book. He answered the phone and he was real nice. He chatted with me for, like, 20 minutes. He didn’t know me at all, but he ended up giving me some parts and he got me a job that summer working at Hewlett-Packard on the line, assembling frequency counters. Assembling may be too strong. I was putting in screws. It didn’t matter; I was in heaven. I remember my first day, expressing my complete enthusiasm and bliss at being at Hewlett-Packard for the summer to my supervisor, a guy named Chris, telling him that my favorite thing in the whole world was electronics. I asked him what his favorite thing to do was and he looked at me and said, “To fuck!” [Laughs] I learned a lot that summer.