Steve_Jobs_The_Exclusive_Biography

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throw it back at them. I’d say, ‘How can you turn it down?’ And he would say, ‘I know they can do better.’” Sculley tried to coach him. “You’ve got to learn to hold things back,” he told him at one point. Jobs would agree, but it was not in his nature to filter his feelings through a gauze.

Sculley began to believe that Jobs’s mercurial personality and erratic treatment of people were rooted deep in his psychological makeup, perhaps the reflection of a mild bipolarity. There were big mood swings; sometimes he would be ecstatic, at other times he was depressed. At times he would launch into brutal tirades without warning, and Sculley would have to calm him down. “Twenty minutes later, I would get another call and be told to come over because Steve is losing it again,” he said.

Their first substantive disagreement was over how to price the Macintosh. It had been conceived as a $1,000 machine, but Jobs’s design changes had pushed up the cost so that the plan was to sell it at $1,995. However, when Jobs and Sculley began making plans for a huge launch and marketing push, Sculley decided that they needed to charge $500 more. To him, the marketing costs were like any other production cost and needed to be factored into the price. Jobs resisted, furiously. “It will destroy everything we stand for,” he said. “I want to make this a revolution, not an effort to squeeze out profits.” Sculley said it was a simple choice: He could have the $1,995 price or he could have the marketing budget for a big launch, but not both.

“You’re not going to like this,” Jobs told Hertzfeld and the other engineers, “but Sculley is insisting that we charge $2,495 for the Mac instead of $1,995.” Indeed the engineers were horrified. Hertzfeld pointed out that they were designing the Mac for people like

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themselves, and overpricing it would be a “betrayal” of what they stood for. So Jobs promised them, “Don’t worry, I’m not going to let him get away with it!” But in the end, Sculley prevailed. Even twenty-five years later Jobs seethed when recalling the decision: “It’s the main reason the Macintosh sales slowed and Microsoft got to dominate the market.” The decision made him feel that he was losing control of his product and company, and this was as dangerous as making a tiger feel cornered.

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CHAPTER FIFTEEN

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THE LAUNCH

A Dent in the Universe

Real Artists Ship

The high point of the October 1983 Apple sales conference in Hawaii was a skit based on a TV show called The Dating Game. Jobs played emcee, and his three contestants, whom he had convinced to fly to Hawaii, were Bill Gates and two other software executives, Mitch Kapor and Fred Gibbons. As the show’s jingly theme song played, the three took their stools. Gates, looking like a high school sophomore, got wild applause from the 750 Apple salesmen when he said, “During 1984, Microsoft expects to get half of its revenues from software for the Macintosh.” Jobs, cleanshaven and bouncy, gave a toothy smile and asked if he thought that the Macintosh’s new operating system would become one of the industry’s new standards. Gates answered, “To create a new standard takes not just making something that’s a little bit different, it takes something that’s really new and captures people’s imagination. And the Macintosh, of all the machines I’ve ever seen, is the only one that meets that standard.”

But even as Gates was speaking, Microsoft was edging away from being primarily a collaborator with Apple to being more of a competitor. It would continue to make application software, like Microsoft Word, for Apple, but a rapidly increasing share of its revenue would come from the operating system it had written for the IBM personal computer. The year before, 279,000 Apple IIs were sold, compared to 240,000 IBM PCs and its clones. But the figures for 1983 were coming in starkly different: 420,000 Apple IIs versus 1.3 million

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IBMs and its clones. And both the Apple III and the Lisa were dead in the water.

Just when the Apple sales force was arriving in Hawaii, this shift was hammered home on the cover of Business Week. Its headline: “Personal Computers: And the Winner Is . . . IBM.” The story inside detailed the rise of the IBM PC. “The battle for market supremacy is already over,” the magazine declared. “In a stunning blitz, IBM has taken more than 26% of the market in two years, and is expected to account for half the world market by 1985. An additional 25% of the market will be turning out IBM-compatible machines.”

That put all the more pressure on the Macintosh, due out in January 1984, three months away, to save the day against IBM. At the sales conference Jobs decided to play the showdown to the hilt. He took the stage and chronicled all the missteps made by IBM since 1958, and then in ominous tones described how it was now trying to take over the market for personal computers: “Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?” At that moment a screen came down from the ceiling and showed a preview of an upcoming sixty-second television ad for the Macintosh. In a few months it was destined to make advertising history, but in the meantime it served its purpose of rallying Apple’s demoralized sales force. Jobs had always been able to draw energy by imagining himself as a rebel pitted against the forces of darkness. Now he was able to energize his troops with the same vision.

There was one more hurdle: Hertzfeld and the other wizards had to finish writing the code for the Macintosh. It was due to start shipping on Monday, January 16. One week before that, the engineers concluded they could not make that deadline.

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Jobs was at the Grand Hyatt in Manhattan, preparing for the press previews, so a Sunday morning conference call was scheduled. The software manager calmly explained the situation to Jobs, while Hertzfeld and the others huddled around the speakerphone holding their breath. All they needed was an extra two weeks. The initial shipments to the dealers could have a version of the software labeled “demo,” and these could be replaced as soon as the new code was finished at the end of the month. There was a pause. Jobs did not get angry; instead he spoke in cold, somber tones. He told them they were really great. So great, in fact, that he knew they could get this done. “There’s no way we’re slipping!” he declared. There was a collective gasp in the Bandley building work space. “You guys have been working on this stuff for months now, another couple weeks isn’t going to make that much of a difference. You may as well get it over with. I’m going to ship the code a week from Monday, with your names on it.”

“Well, we’ve got to finish it,” Steve Capps said. And so they did. Once again, Jobs’s reality distortion field pushed them to do what they had thought impossible. On Friday Randy Wigginton brought in a huge bag of chocolate-covered espresso beans for the final three all-nighters. When Jobs arrived at work at 8:30 a.m. that Monday, he found Hertzfeld sprawled nearly comatose on the couch. They talked for a few minutes about a remaining tiny glitch, and Jobs decreed that it wasn’t a problem. Hertzfeld dragged himself to his blue Volkswagen Rabbit (license plate: MACWIZ) and drove home to bed. A short while later Apple’s Fremont factory began to roll out boxes emblazoned with the colorful line drawings of the Macintosh. Real artists ship, Jobs had declared, and now the Macintosh team had.

The “1984” Ad

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In the spring of 1983, when Jobs had begun to plan for the Macintosh launch, he asked for a commercial that was as revolutionary and astonishing as the product they had created. “I want something that will stop people in their tracks,” he said. “I want a thunderclap.” The task fell to the Chiat/Day advertising agency, which had acquired the Apple account when it bought the advertising side of Regis McKenna’s business. The person put in charge was a lanky beach bum with a bushy beard, wild hair, goofy grin, and twinkling eyes named Lee Clow, who was the creative director of the agency’s office in the Venice Beach section of Los Angeles. Clow was savvy and fun, in a laid-back yet focused way, and he forged a bond with Jobs that would last three decades.

Clow and two of his team, the copywriter Steve Hayden and the art director Brent Thomas, had been toying with a tagline that played off the George Orwell novel: “Why 1984 won’t be like 1984.” Jobs loved it, and asked them to develop it for the Macintosh launch. So they put together a storyboard for a sixty-second ad that would look like a scene from a sci-fi movie. It featured a rebellious young woman outrunning the Orwellian thought police and throwing a sledgehammer into a screen showing a mind-controlling speech by Big Brother.

The concept captured the zeitgeist of the personal computer revolution. Many young people, especially those in the counterculture, had viewed computers as instruments that could be used by Orwellian governments and giant corporations to sap individuality. But by the end of the 1970s, they were also being seen as potential tools for personal empowerment. The ad cast Macintosh as a warrior for the latter cause—a cool, rebellious, and heroic company that was the only thing standing in the way of

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the big evil corporation’s plan for world domination and total mind control.

Jobs liked that. Indeed the concept for the ad had a special resonance for him. He fancied himself a rebel, and he liked to associate himself with the values of the ragtag band of hackers and pirates he recruited to the Macintosh group. Even though he had left the apple commune in Oregon to start the Apple corporation, he still wanted to be viewed as a denizen of the counterculture rather than the corporate culture.

But he also realized, deep inside, that he had increasingly abandoned the hacker spirit. Some might even accuse him of selling out. When Wozniak held true to the Homebrew ethic by sharing his design for the Apple I for free, it was Jobs who insisted that they sell the boards instead. He was also the one who, despite Wozniak’s reluctance, wanted to turn Apple into a corporation and not freely distribute stock options to the friends who had been in the garage with them. Now he was about to launch the Macintosh, a machine that violated many of the principles of the hacker’s code: It was overpriced; it would have no slots, which meant that hobbyists could not plug in their own expansion cards or jack into the motherboard to add their own new functions; and it took special tools just to open the plastic case. It was a closed and controlled system, like something designed by Big Brother rather than by a hacker.

So the “1984” ad was a way of reaffirming, to himself and to the world, his desired self-image. The heroine, with a drawing of a Macintosh emblazoned on her pure white tank top, was a renegade out to foil the establishment. By hiring Ridley Scott, fresh off the success of Blade Runner, as the director, Jobs could attach himself and Apple to the cyberpunk ethos of the time. With the ad, Apple could identify itself with the

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rebels and hackers who thought differently, and Jobs could reclaim his right to identify with them as well.

Sculley was initially skeptical when he saw the storyboards, but Jobs insisted that they needed something revolutionary. He was able to get an unprecedented budget of $750,000 just to film the ad, which they planned to premiere during the Super Bowl. Ridley Scott made it in London using dozens of real skinheads among the enthralled masses listening to Big Brother on the screen. A female discus thrower was chosen to play the heroine. Using a cold industrial setting dominated by metallic gray hues, Scott evoked the dystopian aura of Blade Runner. Just at the moment when Big Brother announces “We shall prevail!” the heroine’s hammer smashes the screen and it vaporizes in a flash of light and smoke.

When Jobs previewed the ad for the Apple sales force at the meeting in Hawaii, they were thrilled. So he screened it for the board at its December 1983 meeting. When the lights came back on in the boardroom, everyone was mute. Philip Schlein, the CEO of Macy’s California, had his head on the table. Mike Markkula stared silently; at first it seemed he was overwhelmed by the power of the ad. Then he spoke: “Who wants to move to find a new agency?” Sculley recalled, “Most of them thought it was the worst commercial they had ever seen.” Sculley himself got cold feet. He asked Chiat/ Day to sell off the two commercial spots—one sixty seconds, the other thirty—that they had purchased.

Jobs was beside himself. One evening Wozniak, who had been floating into and out of Apple for the previous two years, wandered into the Macintosh building. Jobs grabbed him and said, “Come over here and look at this.” He pulled out a VCR and played the ad. “I was astounded,” Woz recalled. “I thought it was the most incredible thing.” When Jobs said the board

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had decided not to run it during the Super Bowl, Wozniak asked what the cost of the time slot was. Jobs told him $800,000. With his usual impulsive goodness, Wozniak immediately offered, “Well, I’ll pay half if you will.”

He ended up not needing to. The agency was able to sell off the thirty-second time slot, but in an act of passive defiance it didn’t sell the longer one. “We told them that we couldn’t sell the sixty-second slot, though in truth we didn’t try,” recalled Lee Clow. Sculley, perhaps to avoid a showdown with either the board or Jobs, decided to let Bill Campbell, the head of marketing, figure out what to do. Campbell, a former football coach, decided to throw the long bomb. “I think we ought to go for it,” he told his team.

Early in the third quarter of Super Bowl XVIII, the dominant Raiders scored a touchdown against the Redskins and, instead of an instant replay, television screens across the nation went black for an ominous two full seconds. Then an eerie black-and-white image of drones marching to spooky music began to fill the screen. More than ninety-six million people watched an ad that was unlike any they’d seen before. At its end, as the drones watched in horror the vaporizing of Big Brother, an announcer calmly intoned, “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like ‘1984.’”

It was a sensation. That evening all three networks and fifty local stations aired news stories about the ad, giving it a viral life unprecedented in the pre–YouTube era. It would eventually be selected by both TV Guide and Advertising Age as the greatest commercial of all time.

Publicity Blast

Over the years Steve Jobs would become the grand master of product launches. In the case of the