Steve Jobs interview: One-on-one in 1995

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It's kind of tragic, but as unemotionally as I can be, that's what's happening. Unless somebody pulls a rabbit out of a hat, companies tend to have long glide slopes because of the installed bases. But Apple is just gliding down this slope and they're losing market share every year. Things start to spiral down once you get under a certain threshold. And when developers no longer write applications for your computer, that's when it really starts to fall apart.

There's obviously a lot of emotional attachment to Apple. Oh sure. Apple could have lived forever and kept shipping great products forever. Apple was for awhile like Sony. It was the place that made the coolest stuff.

Apple customers

Is there a user of Apple or a story that you could tell that in your mind exemplifies what the company stood for and its values at its best? What customers were using the Apple when you were there? There were two kinds of customers. There were the educational aspects of Apple and then there were sort of the non-educational.

On the non-educational side, Apple was two things. One, it was the first "lifestyle" computer and, secondly, it's hard to remember how bad it was in the early 1980's. With IBM taking over the world with the PC, with DOS out there; it was far worse than the Apple II. They tried to copy the Apple II and they had done a pretty bad job.

You needed to know a lot. Things were kind of slipping backwards. You saw the 1984 commercial. Macintosh was basically this relatively small company in Cupertino, California, taking on the goliath, IBM, and saying "Wait a minute, your way is wrong. This is not the way we want computers to go. This is not the legacy we want to leave. This is not what we want our kids to be learning. This is wrong and we are going to show you the right way to do it and here it is. It's called Macintosh and it is so much better. It's going to beat you and you're going to do it."

And that's what Apple stood for. That was one of the things.

The other thing was a little bit further back in time. One of the things that built Apple II's was schools buying Apple II's; but even so there was about only 10% of the schools that even had one computer in them in 1979 I think it was. When I grew up I was lucky because I was in Silicon Valley. When I was ten or eleven I saw my first computer. It was down at NASA Ames [Research Center]. I didn't see the computer, I saw a terminal and it was theoretically a computer on the other end of the wire. I fell in love with it.

I saw my first desktop computer at Hewlett-Packard which was called the 9100A. It was the first desktop in the world. It ran BASIC and APL, I think. I fell in love with it.

And I thought, looking at these statistics in 1979, I thought if there was just one computer in every school, some of the kids would find it. It will change their life.

We saw the rate at which this was happening and the rate at which the school bureaucracies were deciding to buy a computer for the school and it was real slow. We realized that a whole generation of kids was going to go through the school before they even got their first computer, so we thought: The kids can't wait. We wanted to donate a computer to every school in America.

It turns out that there are about a hundred thousand schools in America, about ten thousand high schools, about ninety thousand K through 8. We couldn't afford that as a company. But we studied the law and it turned out that there was a law already on the books, a national law that said that if you donated a piece of scientific instrumentation or computer to a university for educational and research purposes you can take an extra tax deduction. That basically means you don't make any money, you lose some but you don't lose too much. You lose about ten percent.

We thought that if we could apply that law, enhance it a little bit to extend it down to K through 8 and remove the research requirements so it was just educational, then we could give a hundred thousand computers away, one to each school in America and it would cost our company ten million dollars which was a lot of money to us at that time but it was less than a hundred million dollars if we didn't have that. We decided that we were willing to do that.

It was one of the most incredible things I've ever done. We found our local representative, Pete Stark over in East Bay and Pete and a few of us sat down an we wrote a bill. We literally drafted a bill to make these changes. We said "If this law changes we will donate a hundred thousand computers at a cost of ten million dollars to us."

We called it "the kids can't wait bill." Pete Stark introduced it in the House and Senator Danforth introduced it in the Senate and I refused to hire any lobbyists and I went back to Washington myself and I actually walked the halls of Congress for about two weeks, which was the most incredible thing. I met probably two-thirds of the House and over half of the Senate myself and sat down and talked with them.

It was very interesting. I found that the House Members are routinely less intelligent than the Senate and they were much more kneejerk to their constituencies -- which I found initially quite offensive but came to understand later to be a really good idea. Maybe that's what the framers wanted. They weren't supposed to think too much, they were supposed to represent. The Senators are supposed to think a little more. The Bill passed the House with the largest favorable majority of any tax bill in the history of this country. What happened was it was in during Carter's lame duck session and Bob Dole who was then Speaker of the House killed it. He would not bring it to the floor and we ran out of time. We would have had to have started the process over in the next year and I gave up.

However, fortunately something unique happened. California thought this was such a good idea they came to us and said "You don't have to do a thing. We're going to pass a bill that says 'Since you operate in the State of California and pay California Tax, we're going to pass this bill that says that if the federal bill doesn't pass, then you get the tax break in California'. You can do it in California, which is ten thousand schools". So we did. We gave away ten thousand computers in the State of California. We got a whole bunch of the software companies to give away software. We trained teachers for free and monitored this thing over the next few years. It was phenomenal. One of my great experiences and one of my biggest regrets was that really tried to do this on a national level and got so close. I don't think Bob Dole even knew what he was doing but he really unfortunately screwed up here.

That's a great story. That's part of what Apple was about.

On the business side, I was at the Washington Post when the Macintosh was introduced. The Post was an IBM Big Blue Shop and nobody was going to play with it and then the Macintosh infiltrated. There was almost a guerilla movement. It started with ad artists and now the whole front end of the newspaper is being done on Apple machines. Was that fairly common, this guerilla movement? Actually we had no concept of how to sell to corporate America because none of us had come from there. It was like another planet to us. Unfortunately I had to learn all that stuff.

If I only knew [then] what I know now we could have done a lot better. Our attempts to sell to corporate America were just bungled and we ended up just selling to people who just [were] sort of buying a product for its merit not because of the company it came from. I mean everybody was very hooked on Big Blue back then and they bought IBM. There was that famous phrase "You never get fired for buying IBM." We fortunately were able to change a lot of that. And Apple, as you know, I believe, is a bigger supplier of personal computers than IBM.

NeXT

Tell me about what motivated you to establish NeXT and what were the goals you set out to accomplish when you set-up this new company? That's complicated. We basically wanted to keep doing what we were doing at Apple, to keep innovating. But we made a mistake, which was to try to follow the same formula we did at Apple, to make the whole widget. But the market was changing. The industry was changing. The scale was changing.

And in the end we knew we would be either the last company to make it or the first to not make it. We were right on the edge. We thought we would be the last one that made it, but we were wrong. We were the first one that didn't. We put an end to the companies that tried to do that.

We certainly made our fair share of mistakes, but in the end I think we should have taken a bit longer to realize the world was changing and just gone on to be a software company right off the bat.

Right off the bat? The machine got great reviews when it came out. The machine was the best machine in the world. Believe it or not, they're selling on the used market, in some cases, for more than we sold them for originally. They're hard to find even today. We haven't even made them for two, two and a half years.

What are the features that are on the NeXT machine that are still missing from machines today? Well first of all it, was a totally 'plug-and-play' machine. Except for Macintosh, that's hard to find. It's an extremely powerful machine, way beyond the Macintosh. So it sort of nicely combined the power of the workstations with the 'plug and playness' of the Mac. Second of all, the machine had a fit and finish that you don't find today.

It's beautiful. I don't just mean in packaging; I mean in terms of operation. Simple things to complex things. Simple things like soft power on and off. A trivial little thing but as you know one, of the biggest reasons people lose information on computers is they turn them off at the wrong time. And when you get into a multi-tasking network system, that could have much more severe consequences. So we were the first people to do that and some of the only people who do that, where you push a button and you request the computer to turn off. It figures out what it needs to do to shut down gracefully and then turns itself off.

Of course the NeXT Computer was also the first computer with built-in high quality sound, CD quality sound. Most people do that now. It took them a long time but most people do that. It was just ahead of its time.

NeXT Software: What makes it different? What trends does it respond to? That's the real gem. I'll tell you an interesting story. When I was at Apple, a few of my acquaintances said "You really need to go over to Xerox PARC (which was Palo Alto Research Center) and see what they've got going over there."

They didn't usually let too many people in but I was able to get in there and see what they were doing. I saw their early computer called the Alto, which was a phenomenal computer, and they actually showed me three things there that they had working in 1976. I saw them in 1979. Things that took really until a few years ago for us to fully re-create, for the industry to fully re-create in this case with NeXTStep. However, I didn't see all three of those things. I only saw the first one, which was so incredible to me that it saturated me. It blinded me to see the other two. It took me years to re-create them and rediscover them and incorporate them back into the model, but they were very far ahead in their thinking. They didn't have it totally right, but they had the germ of the idea of all three things. And the three things were graphical user interfaces, object oriented computing and networking.

Let me go through those. Graphical interface: The Alto had the world's first graphical user interface. It had windows. It had a crude menu system. It had crude panels and stuff. It didn't work right but it basically was all there.

Objects: They had Smalltalk running, which was really the first object-oriented language. Simula was really the first, but Smalltalk was the first official object-oriented language.

Third, networking: They invented Ethernet there, as you know. And they had about two hundred Altos with servers hooked up in a local area network there doing email and everything else over the network, all in 1979. I was so blown away with the potential of the germ of that graphical user interface that I saw that I didn't even assimilate or even stick around to investigate fully the other two.

NeXTStep turned some of that vision into reality. It incorporated the world's first truly commercial object-oriented system, and really was the most networked system in the world when it came out. I think the world has made a lot of progress in networking but hasn't yet crossed the hurdle into objects and what's happened with NeXTStep. It's starting to get adopted by some very large corporate customers. It is now the most popular object-oriented system in the world, as objects are on the threshold of starting to move into the mainstream.

The company last year recorded its first profit in its nine-year history, and sold $50 million worth of software. I think we're going to have some significant growth this year and it's fairly clear that NeXT can get up to being a few-hundred-million-dollar software company in the next three or four years and be the largest company offering objects -- until Microsoft comes into the market at some point, probably with a pretty half-baked product.

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