How did you feel when Steve Jobs returned to Apple?

Woz: I wasn’t totally happy about it in light of the fact that Apple was having horrible problems. Steve being there looks good—it inspires people. I don’t think he’s the best choice as a hero for Apple, but I think he believes inside himself very strongly that he is. You’d rather have a person that just totally believes in the company. But the press is looking for a hero. Basically, the steps he’s taken are to run Apple as efficiently as possible. In the past, we would just take big flyers and have tons of junk leftover that we couldn’t sell, and that was really where we lost our money. Now things are very tight. That means you can’t get computers and accessories very easily. But if you know that a certain number of people are going to buy Macs, build a good Mac for them and you are guaranteed the profit. Just don’t make mistakes and overbuild and try to challenge new markets. So it’s being run conservatively. Good for Apple.

"Everything we did we were setting the tone for the world."

How do you think history views your involvement with Apple?

Woz: I get more mention than I deserve. For some reason I get this key position of being one of two people that started the company that started the revolution. Steve and I get a lot of credit, but Mike Markkula was probably more responsible for our early success, and you never hear about him. In the end, I hope there’s a little note somewhere that says I designed a good computer. I’m just kind of amazed how many people say, "We owe so much to you." They just better not act like I wasn’t a top engineer. That would upset me.

What did you think about how you were portrayed in the "Pirates of Silicon Valley"?

Woz: [Laughs]. I was amazed. I thought it was extremely accurate in terms of personality and the way I was.

What about how it portrayed other key people?

Woz: Unbelievably accurate. The scenes were all made up, but they were presenting issues and psychological conflicts that really did happen. They even had Steve in the scene where I was showing the press a computer I built, although it was a different guy that built that with me. So there’s inaccuracies—if you want to look at it in one respect—but the personalities and the issues that were going on were extremely accurate. For legal reasons, they didn’t talk to any of the principals. They didn’t have any firsthand input—only from press stories and things that had been said. That’s partly why it was so accurate—because when people talk about themselves they don’t portray themselves accurately.

What do you generally think of the books that have been written about Apple?

Woz: I like them more if they have a bit of entertainment in them. I don’t want to read books that are business-y. There was one, "The Silicon Boys," by David Kaplan, that had some really interesting stories. More like reading People magazine than the Wall Street Journal.

When you were at Apple on a day-to-day basis, what did you like best about working there?

Woz: Back then it was so exciting. Everything we did we were setting the tone for the world. We were the computer to have in your home. Any project you worked on had value. Today, if you work on 10 different things, one of them might have value.

Was there a particular point when it started to lose its allure?

Woz: For myself personally, there was a point where all of a sudden I wasn’t the sole engineer that was critical for everything. That was a difference for me. And Apple had such great financial success I really didn’t need to be there.

Are you still an Apple employee?

Woz: Yeah, I am, just out of loyalty. I’d like to always be an Apple employee—just a real small paycheck and a badge. You know what, Steve Jobs is real nice to me. He lets me be an employee and that’s one of the biggest honors of my life. Some people wouldn’t be that way. He has a reputation for being nasty, but I think it’s only when he has to run a business. It’s never once come out around me. He never attacks me like you hear about him attacking other people. Even if I do have some flaky thinking.

Do you talk to him at all these days?

Woz: Yeah, occasionally. Sometimes there’s a new product and I get onto some of the issues real quickly. I’ll contact him right away and let him know what I find.

What were your thoughts back when Microsoft was declared a monopoly?

Woz: I totally agreed with the thinking. I was asked back in the early days of the lawsuit to write an Op-Ed piece for the New York Times, but they didn’t print it. I got a letter back from the editor months later saying that maybe they’d run it, but it needed a little fixing. So, [I said] re-write it. I wrote ‘Microsoft’s a monopolist’ and the Times wanted to edit it to say, ‘Microsoft is innovative.’ The funny thing is that I had started out in my own head without having a bias. I thought Microsoft did a lot of things that were good and right building parts of the browser into the operating system. Then I thought it out and came up with reasons why it was a monopoly. I specified the strong penalties they should undergo. Eventually I found out that the New York Times had tight friendship ties with Microsoft and that one of Microsoft’s key people had an editorial column in the Times. They were trying to use me. But I know newspapers. They have the first amendment and they can tell any lie knowing it’s a lie and they’re protected if the person’s famous or it’s a company.

What was Microsoft’s motivation for plugging money into Apple?

Woz: They didn’t plug money into Apple. It’s a phony perception that was conveyed that way to get public opinion swaying that way. Microsoft has billions of dollars in cash, and a small little chunk could be invested in Apple for a while. It doesn’t mean, "Oh, yeah, we’re buying into this company." And it wasn’t their choice to. Basically, Apple accused them of ripping off a lot of software patents—this story has been told—over a billion dollars worth. Microsoft wasn’t going to admit that and they weren’t going to pay a huge billion dollar fine in a settlement, but they were willing to do things that were worth a lot of money to Apple. They were looking for a low cost way out for themselves and this was a logical one. It brought cash into Apple, and it really didn’t cost Microsoft anything. So it’s not like Microsoft came in and said, "Hey, we want to buy into you." No, no, no. It was the other way around.

The public perception is that Microsoft injected money into Apple so they wouldn’t look like a monopoly.

Woz: Nope. It was just a proposal that was good to Apple and it didn’t offend Microsoft.

Would you describe it as a win-win for both Apple and Microsoft?

Woz: I don’t think it meant much to Microsoft. Where was Bill Gates proactively speaking out, "I really believe in Apple. I think they’re going to do this and that and go here and there."

I’m going to name a few defunct computer companies. What comes to mind when I say . . . Commodore?

Woz: We went to Commodore in the early days and showed them our Apple II before it was out and offered to sell it to them for maybe hundreds of thousands of dollars—I don’t know what Steve was talking. They turned it down and said, "No, we’ll just design our own. We’ll go cheap here and cheap there and we’ll only have black-and-white and we’ll have a crappy keyboard and we’ll only have this much memory, no expandability, we’ll build in a little black-and-white monitor. . . ." They could have been the Apple II. Jack Tramiel made the decision, but after our presentation, his head of engineering, Andre Souson, talked to us for a while. He believed in us and left Commodore to come to Apple.

Atari?

Woz: Atari is a very sad story. When we had the Apple II we were looking for a way to shop it because it was worth selling thousands a month but we didn’t have enough money to build thousands. We went over to Al Alcorn’s house in Los Gatos and we put the Apple II on his big projector TV and showed it to him. He was very impressed but they were about to come out with the first home video game. They were going to sell millions, and they had their hands full with this hot project. They couldn’t do two things at once. So they also chose not to buy it, just like Commodore. It’s funny that in later years they had their own computer, but it just didn’t go as a long-term platform.

Tandy?

Woz: No closeness to Tandy. After the Apple II was introduced, then came the Commodore and the Tandy TRS-80. Tandy, like Commodore with their Pet, was non-expandable. You would buy it with 4k of memory and you’d have 4k of memory for life. Early on we came out with our floppy disk drive. How do you add a floppy disk drive to a Tandy? It turns out there was no designed way built in. So the Tandy machines and the Commodore machines, because of their lack of expandability, lost out in the early exciting things, which were floppy disks and VisiCalc. They had to go back to the drawing board. They tried to make their products go for a while longer, which was another mistake. They would have been smarter to get to the drawing board sooner. That’s really where Apple won out.

What’s your primary computer nowadays?

Woz: For a decade it’s been a PowerBook because I like to be free and flexible and have it all with me in my hands. A certain size computer—go right back to the Apple II—is just the size I want.

What do you see happening over the next couple of years with computers?

Woz: Well, you can always say that the speeds and the hard disk capacity are going to go up. Hard disks have disappointed me more than most technologies. Speed, it’s hard to say where we need more at the moment. I’ve always noticed it in the past and now for the first time in my life I’m just not pressed to be seeking speed.

I think computers are obviously getting thinner and smaller. The screens on laptops have gotten larger and larger. The display size is approaching the size of a briefcase. It would be nice to design a real briefcase—you open it up and it’s your computer but it also stores your books.

Obviously, prices of displays are still dropping. Maybe they will replace televisions. Other than that I don’t know. The world is going a lot more wireless. But I don’t react to it as strongly as most people do because 7 years ago I taught a class that was wireless. Everybody came in the door, plugged in a little transmitter, and it sat right next to their PowerBooks.

What would you say your biggest strength is?

Woz: Right now? Probably being able to listen and communicate and teach others, especially how something works. I am also very observant of things that the Macintosh stood for originally—user interface and the ways computers should work for us and not against us. But anything new you get for your computer, it’s horrible to go through a five minute installation. Because you know there’s a 50% chance that you’re going to wind up spending five hours and you may not even get it working. Every techno product is that way. It’s always the dumbest little tech things. A switch won’t work—one switch shuts down your whole life and you think, "Why are all these low-tech things going wrong?" It’s just not right that so many things don’t work when they should. I don’t think that will change for a long time.

What would you say your biggest failure is?

Woz: I don’t know. It depends how you define failure.

How would you define it?

Woz: I think everything I have done in my life, my reasons at the time were right no matter how things worked out. However, I only applied to one college, the University of Colorado, and I think MIT was the perfect school for me. Maybe that was a mistake. That’s about the only thing I question, right down to addresses not being linear on an Apple II and things like that. I don’t ever look back and say, "Oh, I wish this would have been different." I don’t live like that.

Do you consider yourself an entrepreneur?

Woz: Not now. I’m not trying to do that because I wouldn’t put 20 hours a day into anything. And I wouldn’t go back to the engineering. The way I did it, every job was A+. I worked with such concentration and focus and I had hundreds of obscure engineering or programming things in my head. I was just real exceptional in that way. It was so intense you could not do that for very long—only when you’re young. I’m on the board of a couple of companies that you could say are start-ups, so I certainly support it, but I don’t live it. The older I get the more I like to take it easy.


FAILURE INTERVIEW
MICHAEL S. MALONE, EDITOR-IN-CHIEF OF FORBES ASAP
by Jason Zasky

In order to get another insider perspective, Failure sat down with Michael Malone, author of "Infinite Loop," the most recent biography of Apple. Having grown up with both Steve Wozniak and Steve Jobs and having covered the Silicon Valley beat for years, Malone is perhaps the person best-suited to contextualize the history of Apple.

Why did you write "Infinite Loop"?

Michael Malone: I was asked to. The publisher came to me and said, "we really think that Apple needs a story right now." That was during the Amelio era, when the numbers were getting worse and worse and it looked like Apple would die. Luckily I took too long to write it. So I was able to get the return of Jobs and the introduction of the iMac. But I wasn’t able to get the iMac turnaround.

What was your reaction when you heard Jobs was coming back?

Michael Malone: I had predicted he was going to come back. I could tell that Jobs wanted Apple back and he was going to steal it from Amelio. I watched him being kicked out, because I was right there with the ’84 annual report. He was the best thing Apple had and also the worst thing Apple had. He was the best thing in terms of vision and desire and he was the worst thing because he was tearing the company apart from the inside. He was creating these enormous employee morale problems and fights between the Mac group and the II group. He had to leave Apple because he would have killed it, but the very act of his leaving doomed the company. He was the only person who could save the place. On the whole, his current reign has been very much to the positive. He’s done a lot for and not too much damage against.

How has he learned from the past to improve this time around?

Michael Malone: Now he knows his limitations. He knows he’s not a day-to-day line manager. iCEO is the perfect role for him. He’s there when they need him, just like he is at Pixar, but he’s also not there when they don’t. I didn’t think he’d ever learn that. That’s why the company is a lot more successful—a lot less troubled than last time around.

How do you feel about the fact that people criticized you for the way you portrayed Jobs in "Infinite Loop"?

Michael Malone: I’m really intrigued. A lot of people got angry at me for the negative things I said about Steve Jobs, but no one has gotten angry at me for the even worse things I said about John Sculley. Basically, everyone that has run that company gets slammed to one degree or another. Jobs gets slammed early on for his behavior. Sculley gets slammed for his incompetence. Spindler gets slammed because he might have done a good job five years before, but he was too wrecked by the time he took the job. And Amelio gets slammed because he was a solid executive who just let the fame go to his head. I nail every one of these guys; no one has yet defended any of them. I keep waiting for that e-mail or that Amazon review that says, "John Sculley did a great job. What are you talking about?" Everybody lets all these other guys hang out to dry, but not Jobs. He’s a Teflon guy. You saw that movie about him they showed on TNT? He comes across as fairly monstrous, but everybody goes, "Yeah, but that’s Steve."

Michael Malone: Another interesting thing is that some people thought I was so insanely jealous of Steve Jobs that I did this ‘hit’ book about him. He disappears after the first third of the book, and reappears in the last 30 pages. For anybody who grew up in this Valley, it’s pretty hard to be envious of Steve Jobs. We know him too well. You might be envious of David Packard, but not Jobs. It was so frustrating writing this damn book. It was like a [Theodore] Dreiser novel, where you want to scream at the character, "Just knock it off. You know you’re blowing it. Can’t you see where you’re heading?" I felt that way about Apple. Just once, make the right decision.

"Jobs may have been his exploiter, but some people need to be exploited, and you can't say that Jobs didn't get the very best out of Steve Wozniak."

Do you think that another collapse is inevitable?

Michael Malone: No, I think that if Jobs proved anything, it’s that the core body of Macolytes is pretty inviolable. It would be very damn hard to lose them. The question is: Can he do much more than he’s done right now? He’s up against 300 companies. No matter how clever he is, the combined creativity and brainpower of 300 companies ultimately will defeat him. He didn’t believe that the first time around. I think he knows that now. That’s why I think he’s positioned Apple for the big exit. I suspect he’s shopping the place around. I hear rumors to that effect but I couldn’t confirm them. If he was smart he’d do the same thing as NeXT. Remember, NeXT almost died, he managed to go sideways with it, establish it with a certain amount of prestige but not a lot of long-term potential, and sold it to Apple. He ended up being a hero, but he came within weeks of being a goat. If he can sell Apple and make a ton of money, then he becomes the savior.

That’s something else that has changed about him. He’s much more of a pragmatist than he’s ever been. But I think there’s still a bit of the totalitarianism in him. You’re not going to need a floppy disk so we’re not going to put one in. The optical memory in the NeXT computer and not enough memory in the original Mac. He’s authoritarian about memory. He’s going to tell us how we’re going to get memory. But on the whole, he’s grown up. He just can’t take on this juggernaut called Intel/Windows. Look at the combined market capitalization of Gateway, Dell, Compaq, Intel and Microsoft. That’s like two trillion dollars that he’s up against. No matter how well he does, he’s still got himself a $15 or $20 billion company.

When I talked to Wozniak he had nothing but good things to say about Jobs. Does that make sense to you?

Michael Malone: I don’t pretend to understand that relationship. You notice you rarely see him and Woz together? When they are together they don’t talk to each other. I suspect they’ve reached a separate peace. I think Woz has decided that Jobs is a compelling figure that did extraordinary things for him and without Jobs it wouldn’t have happened. I think Jobs looks upon Woz as this brilliant, brilliant guy—they did wonderful things together and now he’s just kind of ancillary to what he’s doing. Eventually, everybody buries the hatchet. They’re looking back on their lives and realizing they’re famous and part of this incredible historic event and they did it together. But in the thick of it there was some blood.

Steve Wozniak thinks he’s received too much credit for Apple.

Michael Malone: For creating Apple, but not for creating the personal computer. If Woz’s Ice Cream [Cream Soda] computer hadn’t blown up that day when the press came out— I think it was the Sunnyvale Scribe/Cupertino Courier—Woz would have had the P.C. revolution all to himself. He would have been the Edison.

He said that the guy who has not gotten enough credit is Mike Markkula.

Michael Malone: Markkula was key. He was a grownup. It’s just like all these dot-coms right now. If you look closely, all the ones that have succeeded have one grownup in there somewhere. That was Markkula. But I give Woz all the credit for the Apple computer. Fernandez doesn’t get any, Jobs doesn’t get any. But Woz left to his own devices would have just fiddled in the garage, and worked for HP. Jobs may have been his exploiter, but some people need to be exploited, and you can’t say that Jobs didn’t get the very best out of Steve Wozniak. He seduced him, he intimidated him, he followed him, but look what he got out of him? And somebody had to think of packaging. The computer revolution would have never taken off without Jobs coming in and trying to package a sale.

It seems like Woz and Jobs are pretty predictable. Have they done anything that has really surprised you?

Michael Malone: [Long pause.] I don’t think so. They are very predictable in interesting kinds of ways. You know that Woz is going to be kind of out there, and he’ll do very brilliant things if he latches onto something and puts all his focus into it. But the results probably won’t be all that practical unless somebody guides it. I think Woz has been very destructive in his life at various times. His is almost like a Candide destructiveness, that with all that money and all that power, and the sort of naivete he had . . . when you’re around really rich people that aren’t conscious of their power, they can sometimes crush you without even knowing it.

Jobs always does great things and leaves a lot of carnage in his wake. I don’t want to say Steve Jobs is a one trick pony, but his two great successes are the Mac and the iMac and they’re both the same thing. You know, clever design, fixed screen, not enough . . . not the right kind of memory. And marketed with a revolutionary image. It’s like, he did it twice, once in ’84 and once in ’98. It’s amazing just how stuck in the mud and stupid most of the computer industry is. As smart as Michael Dell is, and as smart as Ben Rosen is, how come Compaq and Dell never thought to themselves, people are sick and tired of beige boxes? Jobs is the only guy that cares about design.

How do you think history will treat Jobs?

Michael Malone: It’s a very interesting question. He’s very cynical about regards—he’s quite Machiavellian. What’s missing is the second part of that statement, which is the ends justify the means. For all the psychological damage he does to people around him, he also rewards them. It’s his ability to make people feel really, really special. You don’t want to lose that specialness by being cast into purgatory, and he regularly delivers purgatory on people. But he will give them heaven; that’s one thing about him. He’s not cruel—he does have that reward structure there.

Jobs’ greatest skill is that he believes in something so profoundly that he almost creates a mass hypnosis. His force of personality is so strong that when he believes in something he convinces everybody around him to believe in it. The old joke about "drink the Kool-Aid" at Apple, is that there’s an element [of truth] to that. He has that Jim Jones kind of skill. Thank God it’s been used on computers and not on some cult or something. That’s extraordinary power. I think if you want one thing that has changed about him, it’s that he’s learned to be more responsible with that skill. That doesn’t mean he’s necessarily a nicer guy. But I think he’s more responsible. Better he uses it on making "Toy Story 2" and building an iMac than for something bad. History is going to treat him pretty well. All the bad things I said aside, those things are overshadowed by success in this town.

Any thoughts about the Microsoft case?

I don’t think the whole story was about Microsoft as a monopoly. The Justice department coming in had to do with power. Orrin Hatch let the cat out of the bag when he said, "Microsoft should have thought about working in Washington a lot sooner." Spend more money on campaigns, spend more money on lobbyists, get back here and schmooze us. Tug on your forelock and show respect. Look what happened after the Justice department announced its case. Microsoft gave away millions to campaigns, got a whole army of lobbyists back there, and Bill Gates went around from door to door to all the congressmen. That’s why Intel did such a better job. Intel, the moment they announced the Justice department case, the whole executive team flew back there and said, "How can we settle this in an amicable way?" No one even remembers there was an antitrust case against Intel. They got out of that sucker in a week and a half. Microsoft was too arrogant. They said we don’t need a federal government. They should have remembered Al Capone; he said the same thing. Federal judges and the United States Army, they’ll get you. Gates’ mistake was he didn’t immediately apologize, settle, and say, "How can we make this thing better?" and by the way, we’re donating a million dollars to the Democratic national committee and 2 million dollars to the Republican national committee. He’s paying for being Bill Gates. Part of Gates’ personality is to never, ever give up an inch of ground. But I think what they’re scared of now is that they’ve now been categorized as evil. Everybody knew that in the industry anyway. Where it’s going to hurt them is recruiting. The key to all these companies is what kind of talent they can recruit for the next generation of products. Do you really want to go work for the Evil Empire? People are embarrassed to say they work for Microsoft now. In the long run that’s what kills you because the quality of your talent starts falling and you can’t fix it. And so your products don’t get out on time and they’re not as good as they used to be. They should have just caved the first day. Big mistake.

Well, the computer industry is full of mistakes.

Exactly. It’s the ability to learn from those mistakes that is key.