Can Steve Jobs Do It Again?
By Andrew Pollack
The New York Times
November 8, 1987
San Francisco -- Gliding across the stage, a huge screen behind him, Steven P. Jobs has his audience mesmerized. He is expounding on his vision of computerized education. In the future, Mr. Jobs says, sophisticated computer simulations will allow students to walk through Athens with Plato, experience life in 17th-century France or perform biochemistry experiments normally requiring a $5 million laboratory.
After the speech, the audience of community college educators surges toward the podium. One woman, desperate to have Mr. Jobs visit her computer laboratory but lacking a business card, whips off her conference name badge and hands it to him. Another thrusts the conference program at him and asks, ''May I have your autograph?''
Steve Jobs is on a quest again. Two years after being forced out of Apple Computer, the company he co-founded as a scruffy 21-year-old, he is preparing for his comeback. In a few months, Next Inc., the company Mr. Jobs started with five devotees after leaving Apple, will introduce its first product, a high-powered computer for the college market.
Industry sources expect the machine to be introduced in February or March and to be shipped by the summer, in time for the 1988-89 academic year. Prototypes have been completed, they say, and are being shown to a select group in universities and in the computer industry.
Few people, however, think Mr. Jobs, who is 32 and now tends toward European suits instead of blue jeans, is interested in selling only to educational institutions. His speeches have been sprinkled with references to the coming ''fourth wave'' in personal computers - the machine that will follow the Apple II, I.B.M. PC and Macintosh. He leaves little doubt as to whose machine he thinks that will be.
Next's new machine is already the object of intense speculation in the industry - in part, because of what it is said to be its dazzling sound and graphics capability. Even its color - black - will set it apart. ''It'll make your jaw drop,'' Mr. Jobs promised.
But much of the attention comes from a public fascination with the man behind the computer. Next's success or failure could do much to enhance or destroy Mr. Jobs's reputation as a personal computer visionary. The new product may also test his ability to run a company, something he never really did at Apple.
His reputation on that front is already under siege, in part because of two recent books that discuss in some detail his years at Apple. ''Accidental Millionaire,'' by Lee Butcher, contends that Mr. Jobs was lucky, not talented. ''Odyssey,'' by John Sculley, Apple's chairman and chief executive, is more charitable - it credits Mr. Jobs with being charismatic and ''ahead of his time.'' But both books paint a picture of a man who almost destroyed Apple by ignoring the opinions of others, berating employees and insinuating himself into every decision. Mr. Jobs has said he has not read the books, proclaiming: ''I'd rather shape the future than regurgitate the past.''
Shaping the future will be difficult, though. Few entrepreneurs who make it big are able to strike gold again. (See Box) The product idea Mr. Jobs has chosen is a tough one. Over the past few years, the education market has become highly competitive, with giants like I.B.M., Digital Equipment, Apple and Sun Microsystems making strong efforts. ''Steve is not first this time,'' said Scott McNealy, president of Sun Microsystems.
With the exception of a few speeches, Mr. Jobs has said little about what his new company will do, and he declined to be interviewed for this article. The policy is deliberate - mystery helps generate interest.
What he has said is that Next wants to build a powerful computer to be used in university instruction. It will have the power of an engineering workstation, which generally costs more than $5,000, for a price closer to that of a personal computer - $3,000 to $4,500. The machine will come with software tools to allow professors to create what Mr. Jobs calls ''simulated learning environments.''
''People learn best by being in a learning environment, which means that ideally, you'd offer a physics student a personal linear accelerator, or a ride on a train going the speed of light,'' Mr. Jobs said in a 1986 speech. ''You'd take a biochemistry student and let him experiment in a $5 million DNA wetlab. You'd send a student of 17th century history back to the time of Louis XIV.''
''Next year,'' he concluded in the same speech, ''we will introduce a breakthrough computer to run simulated learning environments, a computer 10 to 20 times more powerful than what we have today.''
Unfortunately for Next, the machine is late, prompting the joke around Silicon Valley that ''Next'' will be renamed ''Eventually.''
As time slips by, the gap that Next is hoping to fill is closing - as the markets for engineering workstations and personal computers converge at a breathtaking pace. Workstations by Digital Equipment and Sun already cost less than $4,000 and Sun is working on another, even cheaper, machine aimed primarily at the education market. Meanwhile, personal computers like the Macintosh II and I.B.M. PS/2 are gaining the power of workstations. ''The window is closing,'' one competitor said.
The operating software seems to be Next's big problem. Programmers working on word processing have been shifted to the main operating system to help get it ready.
But people at Next think the corner has been turned, and spirit is high. ''We've had some sophisticated people see the hardware - it blew them away,'' said H. Ross Perot, the Texas billionaire who is a financial backer and director of the company. Now, he says, all that remains is to perfect the machine. ''Steve and his whole Next team are the darndest bunch of perfectionists I've ever seen,'' he said.
Apparently, there is quite a lot of perfecting to do. Recently, when Aldus Corporation executives showed up for a demonstration, they were told the machine wasn't working. And some people familiar with the machine say that while the computer is impressive, it might not be impressive enough to overcome the competition. ''The question is, can this be an order-of-magnitude better?'' said one industry executive. ''He's got one shot, and the market is predisposed to say, 'So what?' ''
Mr. Jobs, with much to prove after his ouster from Apple, needs this one shot to be his best. The loss of his position as head of the Macintosh division at Apple was crushing to him. ''Imagine yourself being compared to Henry Ford,'' said Michael Murray, a former Macintosh marketing manager and friend of Mr. Jobs. ''And all of a sudden it goes away. You have to ask yourself, 'Was it really me who did all that or was I just a passenger on the bus?' ''
After he left the Macintosh division, Mr. Jobs needed to find something new that would allow him to feel he was making a difference in the world. He even called in a big-time political consultant to discuss the possibility of running for Alan Cranston's seat in the Senate.
His answer finally came at a lunch with Paul Berg, the Nobel Prize-winning biochemist at Stanford University. The two men got to talking about the need for powerful new machines to run educational simulations. The result: Mr. Jobs, who has said he was proudest of Apple's contributions to education, resigned from his remaining position as chairman of the board, and started Next. (He also bought a majority interest in Pixar, a LucasFilm Ltd. spinoff that makes computer graphics equipment.) Apple was furious when it found out that the product Next hoped to build was similar to one in Apple's future, and sued for theft of trade secrets. The resulting settlement places some restrictions on Next's computer. Apple also gets a chance to inspect the machine before it goes to market.
Next is different from many startups. To start Apple, Mr. Jobs and Stephen Wozniak, the electronics hobbyist who co-founded the company, sold a van and a scientific calculator to raise $1,500. To start Next, Mr. Jobs sold his Apple stock and kicked in $7 million.
Financial help came from an unexpected source - Mr. Perot, who founded Electronic Data Systems and sold it to General Motors, saw a profile of Mr. Jobs on television and kicked in $20 million for 16 percent of the company and a seat on the board. Stanford University and Carnegie Mellon also invested $1.3 million for a 1 percent combined share.
While many startups worry first about developing a product, one of the first things Next did was to pay about $100,000 to graphics designer Paul Rand to design a logo - a child's building block with the letters N, e, X and T in different colors.
While Apple started in a garage, Next early on moved to well-appointed offices in Palo Alto. One of its first 10 employees was an interior designer. More than a year ago, Next talked to architects about designing distinctive sales offices in major cities.
All this might suggest extravagance. But to Mr. Jobs, such details are all important and not really that expensive. He believes, for example, that it was the little things, such as the crispness of the display, that made the Macintosh an excellent machine. ''The whole idea of Steve is that he wants total excellence. In every detail, you can tell that,'' said Joanna Hoffman, who has worked for Mr. Jobs at Apple and Next.
In more important matters, Mr. Jobs can be a notorious skinflint. Knowing he has to sell a powerful machine at a low price, he has become expert at cajoling, convincing or otherwise obtaining favorable deals.
One potential software supplier said he was offered no royalties and only a small fee for the use of his technology. Mr. Jobs talked instead about the contribution his machine would make to American education. ''He made me feel like I should pay him for letting him use my software,'' the executive said.
Mr. Jobs is also calling in past favors. Sources say Next is getting a favorable deal on a Motorola microprocessor and sound chip, because Apple's use of the company's microprocessor kept Motorola from being completely beaten by Intel in personal-computer chips.
People still flock to work for Mr. Jobs, drawn by the feeling that they can make a difference in the world. Some hope as well to get rich.
Heidi Roizen, president of T/Maker, a software company that does business with Next, recalls driving with a Next decal on her rear window, when a car came up behind her and started honking madly. When Ms. Roizen pulled over, the other driver got out and came up to her breathlessly. ''Do you work for Next?'' he asked. ''I work for I.B.M. and would love to work for Next.''
Mr. Jobs, some say, is like the charismatic leader of a cult, or at least of a fraternity - a master at motivating people. ''He believes what he is saying, and he believes it so fervently that you want to believe it,'' said Mr. Murray, the former Macintosh marketing manager.
He can also be intimidating, temperamental and demanding. ''He's very impatient with people he views as stupid,'' said one associate. ''And there's no gray area with Steve. You're either bright or you're not.''
At Apple, for example, Mr. Jobs viewed the Macintosh group as special, according to accounts of former employees, and he and his team began openly calling everyone else in the company ''bozos.''
At Next, Mr. Jobs is known for dropping in on meetings and quickly dominating, no matter what the subject. If he hears something he doesn't like, he berates the offending employee, calling the idea or product ''brain-damaged.'' People learn to stand their ground, however, because of what employees dub the ''three times'' theory: The second time Mr. Jobs considers the idea, the theory goes, he will like it better; the third time he will call it ''insanely great.''
With all this, only a few people have left Next. But many of the people Mr. Jobs tried to hire from the Macintosh group have not signed on.
Still, some people close to the company say that both Steve and his followers have mellowed. The people in their twenties who gladly worked 90 hours a week in the Macintosh group are now in their thirties, with families and children. Mr. Jobs no longer believes he alone knows what the customer wants - an attitude he was said to have had at Apple. Indeed, within a week of forming Next, Mr. Jobs and his team headed off to ask universities what they wanted in a new computer.
Next faces a number of challenges in the coming year. Many of its competitors can afford to give computers away to colleges, for example. Still, the education market is full of opportunities. Universities like to push the frontiers of technology and will buy a new, snazzy machine even if it is not backed by a huge marketing effort. They will also do much of the support of the machine themselves, working out bugs and even writing software.
Next hopes to capitalize on this by selling direct, perhaps to university book stores. By bypassing retail markups, and by relying on the universities for support, the company plans to sell its machines cheaply but profitably. It is expected to start with the most prestigious universities and rely largely on personal relationships to sell, keeping advertising to a minimum. Sales and marketing are headed by Dan'l Lewin, who headed Apple's higher education marketing efforts and helped make Apple's Macintosh successful on campus.
Even at $3,000, though, the computer might be out of the price range of most students. So at first, Next will probably sell its computers to the universities, which will place the computers in clusters on campus.
Next also needs programs to run on its machine. ''The barriers that Steve and his company will have to contend with have to do with software and getting applications to run on his machine,'' said Douglas Van Houweling, vice provost for information technology at the University of Michigan.
One problem is that Next is reluctant to give out prototypes of its machines to software developers, because it would then have to show its computer to Apple, under the two companies' legal agreement.
A key question is whether the new machine will conform to standards. Educators are strongly pushing for this throughout the computer industry - ideally, they want to run any software on any machine.
Under Mr. Jobs, Apple Computer always came out with propriety computers - the Macintosh can run only Macintosh software, and Macintosh software cannot run on other machines. At Next, however, Mr. Jobs is expected to make some concessions for the university market, to make it possible for Next's ''courseware'' to run on other machines using the Unix operating system.
But Mr. Jobs is not expected to introduce machines that can run existing I.B.M. or Macintosh software. ''If they are truly revolutionary,'' he said in his community college speech two weeks ago, ''they don't run software that already exists.''
Naturally, Mr. Jobs hopes to be truly revolutionary. Given the heights to which he has risen in the past, anything else would be a letdown.
Hints and Rumors of the Next Computer
San Francisco - Just what kind of computer will Next produce?
Those familiar with it say it will be more powerful than existing personal computers, but it will not be as radical a departure from tradition as was the Macintosh, which first popularized the ''mouse'' and the use of screen ''windows.'' Instead, there will be a host of improvements in sound, graphics, speed and software that will add up to a qualitative improvement.
The computer, aimed at the university market, is expected to be based on the Motorola 68030 microprocessor, Motorola's top-of-the-line chip. The microprocessor will be surrounded by custom circuits that speed performance and reduce costs.
Another Motorola chip, a signal processor, will provide high quality stereo sound, which, rumor has it, will be played through 8-inch speakers. This chip will also be able to act as a high-speed modem.
The machine is expected to have 4 megabytes of internal memory and a 17-inch black-and-white screen. It is also rumored to have a high-capacity storage disk - perhaps one that uses optical technology -and a built-in circuit board, allowing it to connect to other computers using Xerox's Ethernet network system.
As an option, the computer might also offer the ability to play videos from a video cassette or videodisk. Some academic computer experts have expressed an interest in this feature, but it is thought not to be a high priority at Next. Mr. Jobs recently said that video is of little use on a computer.
More important than the hardware, though, is the computer's software. The machine will use Unix as its operating system, so it will be able to handle several tasks at once. It will also make use of icons - pictorial symbols - to allow a user to direct the operations of the computer. Software known as Postscript, now mainly used to control laser printers, will be used to control images on the screen. Someone using the computer will be able to draw letters and objects in any size and at any angle and to rotate the characters in dazzling displays.
Next itself will not write education programs for physics or history. It will provide software tools to allow a professor, even one without computer programming skills, to write his or her own ''courseware.'' The software allows teachers to point to and modify objects used in simulations.
Finally, no Steve Jobs computer would be complete without the elegant details. This computer is rumored to be sleek and black, with a flat screen. Rumor also has it that the computer will stand on legs (the keyboard will slide underneath) - and when turned on, it might play a song.
Making it Work a Second Time
San Francisco -- When asked if he can succeed a second time, Steve Jobs likes to say that he already has - with Apple II and the Macintosh.
But now Mr. Jobs is trying to succeed with Next, a new company. And when it comes to new companies, few entrepreneurs who hit it big the first time can repeat their success.
Gene Amdahl, who founded the Amdahl Corporation, flopped with Trilogy Ltd. Kenneth G. Fisher, who ran Prime Computer during its high-growth years, got off to a rocky start with Encore Computer. Nolan Bushnell, despite several attempts, never repeated the initial success he had with Atari.
The reasons? In some cases, an entrepreneur's early success blinds him to his own shortcomings. In others, he is already wealthy, and not hungry enough. Luck is also a factor.
In the case of an entrepreneur fired from his company, the motivation for starting up again might be suspect.
''When an entrepreneur builds a company and then essentially gets thrown out, it's a huge emotional defeat - it tears these guys apart,'' said William R. Hambrecht, co-chief executive of Hambrecht & Quist, a company that has invested in dozens of startups. ''It generates a great desire to prove he was right.''
Rather than having a good idea and then starting a company, Mr. Hambrecht said, these people often start a company and ''grab the first idea that's available.''
Some people do find happiness the second time around. John W. Poduska founded two successful companies - Prime Computer and Apollo - and is now hoping to strike again with Stellar Computer.
Of course, not everyone wants to start over. Stephen Wozniak, the co-founder of Apple and designer of the Apple II, took a completely different path from Mr. Jobs after leaving the company. Mr. Wozniak went back to college, sponsored rock concerts and started a small company that makes a sophisticated remote control device.
Now, he spends much of his time taking care of his two children, going to the office only to read his mail. His new career? ''I'm Mr. Mom,'' he said.
GRAPHIC: Photo of Steven P. Jobs; logo of his new company, Next Inc.; Stephen G. Wozniak and Jobs at Apple in 1980 (Liane Enkelis) (pg. 8); Gene Amdahl, chairman of Trilogy; William R. Hambrecht, of Hambrecht & Quist (NYT/Terrence McCarthy) (pg. 8); graph of ownership shares in Next Inc. (Source: Next Inc.) (pg. 8)
Copyright 1987 The New York Times Company