Steve Wozniak is tired of all play and no work

Steve Jobs' ex-partner is readying his first major product since the Apple II

By Deborah C. Wise in Los Gatos
Business Week

October 7, 1985

Tucked in the hills above Silicon Valley sits a castle adorned with manmade waterfalls, a miniature merry-go-round, several dogs, two donkeys, and a small herd of llamas. In the turreted, fairy-tale house lives the ultimate computer hacker, Stephen G. Wozniak, the 35-year-old co-founder of Apple Computer Inc., who 10 years ago helped start a revolution by designing the Apple II personal computer. Surrounded by arcade game machines, computers, and dozens of electronic toys, Wozniak, his wife, Candi, and their two children have been living in a world where play takes precedence over everything else:

But playtime is coming to a close: Woz, as his friends call him, is preparing to launch his first major product since the Apple II. In February he left Apple to start a company called CL9 (as in "cloud nine"). It is scheduled early next year to introduce an infrared remote control device that can operate any component of a home entertainment system -- from television to VCR -- regardless of the manufacturer.


Wozniak himself is designing many of the product's nitty-gritty details, and in true hacker fashion, he is putting in his share of grueling 20-hour workdays. "I'm doing a lot that I haven't done since the early days of Apple," he says excitedly. Wozniak has spent the past three years floating from one money-losing project to another. The question now is whether he'll be able to sustain his enthusiasm long enough to make the new venture a success. "He falls in and out of love quickly," says his younger brother Mark.

Friends and associates are delighted to see Woz immersed in a new project. While Apple co-founder Steven P. Jobs pushed hard to stay in the limelight, Wozniak has done little significant design work since creating the Apple II disk drive almost seven years ago. With worldwide fame and a personal net worth well over $50 million, he had little motivation. As Apple grew, his lack of interest in management left him out of the action. And when he did try to get involved, disagreements with Jobs over corporate priorities led to the pair's split early this year. (Wozniak was not the only one to differ with Jobs about Apple. So did Apple's board, which prompted Jobs's Sept. 17 resignation.)

Since Apple went public five years ago, many people have tried to separate Wozniak from his wealth. In the past few years he has gone through as much as $80 million, including failed investments and a $40 million divorce settlement when his first marriage ended in 1981. "I am pretty much a softy," he admits, ticking off such ventures as a company that launched a rocket into the Pacific and a movie theater that opened in the worst section of San Jose. "Pretty much every investment was lost or is in severe risk at the current moment," he laments.


Wozniak began drifting away from Apple after a near-fatal plane crash in 1981. He first took a leave of absence from the company to finish his college education, modestly enrolling in computer-science classes under a pseudonym. Then he made headlines as the organizer of the US Festivals, two rock megaconcerts held on the Labor Day weekends of 1982 and 1983. The extravaganzas, meant to celebrate the union of music and technology, fell victim to 100F heat and organizational wrangling, costing Wozniak as much as $30 million. "He's very naive," says Doug Garr, author of Woz: The Prodigal Son of Silicon Valley. People really do take advantage of him."

Wozniak made his smartest business move in 1984, when he sold his Apple stock while it was trading at 25 to 30. He figures he saved some $40 million: The price has recently been around 16. His remaining $45 million to $55 million is invested in tax-free municipal bonds.

After the 1983 US Festival, Wozniak returned to work in the Apple II division, the cash-cow product line. But despite the continuing success of Wozniak's personal computer, Apple's focus shifted to Jobs's new pet project, the Macintosh. After the stockholders' meeting last January, when Jobs scarcely mentioned the Apple II, Wozniak began speaking out publicly against Apple's management. A month later he left.

Nowadays, Wozniak spends most of his time at CL9's Los Gatos (Calif.) offices. As with the Apple II, Wozniak's own needs gave rise to his new company's remote-control device: "I wanted a personal computer, so I designed the Apple. I live in a house with lots of televisions and VCRs, and I wanted a single unit to control them all." The beginnings of CL9, however, hardly resemble Apple's startup, when Wozniak and Jobs soldered circuit boards in Jobs's garage and sold possessions to raise $1,200 seed money. CL9's plush offices house a staff of eight; Wozniak's initial funding is more than $2 million, including $1 million of his own money.

The once close relationship between Wozniak and Jobs suffered its final rift last February, when Wozniak approached a small company, Frog Design Inc., to design the casing for CL9. Because Frog also did work for Apple, Jobs hit the roof. Claiming that Wozniak's product competed with Apple, Jobs stormed Frog's offices, tore up the designs created for Wozniak, and forbade the company to work with CL9.


Wozniak is still amazed. "I had it in writing from Del Yocam [head of the Apple II division] that I wasn't competing," says Wozniak, who is convinced Jobs caused a fuss because Wozniak had criticized Apple in public. "What he did was not like a friend you could trust," says Wozniak. "You have to question his integrity." Jobs saw things differently. "Woz hasn't done anything at Apple since the Apple II disk drive," he said after the altercation. "He shouldn't be able to use his association with Apple now."

Despite their fight, Wozniak wishes Jobs well in his new venture. "He was smart to leave Apple when he lost control," Wozniak says. And he retains a healthy respect for the abilities of his former partner and friend. "I am sure that whatever he does will be great," he says. "He won't give up excellence."

As for Wozniak's new career, he can only hope that lightning will strike twice. But already the remote-control market is fraught with competitors such as General Electric Co., RCA Corp., and a slew of Japanese companies. Wozniak remains confident. His product will be relatively cheap -- he's aiming for a retail price of about $80 -- and, he maintains, technically superior to others.

Despite the seriousness of his new venture, however, Wozniak can't seem to resist an opportunity to fool around. He brings an interview to an abrupt halt by picking up his three-year-old son, Jesse, and twirling the giggling child above his head. One-year-old Sarah Nadine crawls at his feet, wielding a felttipped marker. That love of child's play could make CL9 a fun place to work -- but as Wozniak has learned, having fun doesn't necessarily lead to success. 


Copyright 1985 McGraw-Hill, Inc.