Alan Deutschman - The Second Coming of Steve Jobs

Alan Deutschman

BROADWAY BOOKS NEW YORK

Contents

To my parents and Katharine
And very special thanks to Suzanne Oaks and Suzanne Gluck

Preface

December 1992

It was all going to hell.

His followers were abandoning him. His friends no longer believed in him. The press, which had adored him for so long, now excoriated him. His money was running out. An awesome fortunenearly squandered. He had made a hundred million in a handful of years, and now he was blowing it just as quickly on his failing startups. Within a few months, it could all be gone. Super rich and world famous in his twenties, and now, in his thirties, he was... what? A has-been? A guy who got lucky once but couldnt do it again? A fallen hero, the victim of his own hubris?

He had vowed to show that his precocious success at Apple wasnt a fluke, that the board had been wrong to kick him out, that he could launch another great company and once again change the world with a revolutionary machine. But after seven years of intense struggle, his new venture, Next, was one of the most conspicuous flops in American business. Apple sold more computers in a single day than Next sold in a full year. Next was bleeding money, hemorrhaging money, and seemingly everyone was walking away: his sales honcho, his hotshot marketing chief, even four of his five cofounders.

Steve himself was very close to quitting. He told a friend that he contemplated giving up entirely, abandoning his career. He was right at the edgeemotionally, psychologically, financially. He felt trapped. He dreaded the shame of walking away from a great public failure, the embarrassment of conceding that he couldnt do it again, that he couldnt go it alone, that maybe it had all been a fluke.

In a meeting at Nexts headquarters on the shore of San Francisco Bay, he looked around at the besieged refugees of his thinned-out executive team and he told them, in a tone of bitterness and envy: Everyone here can leaveexcept me.

ON FEBRUARY 10, 1993, Next announced that it was shutting its factory, killing its computer, and laying off most of its people. The following day, a newspaper reporter went to Nexts headquarters for a conversation with Steve. She asked him point-blank: Does this mean that Next is a failure?

Steve sunk his head into his folded arms on the table.

He rubbed his fingers into his temples.

I dont want to do this interview, he said softly. I dont want to do this interview. He seemed fragile, depressed, and withdrawn.

He got up and walked away.

For months he was emotionally distraught. He had failed, and it was devastating to him. Gut-wrenching. Humbling, even.

On May 25, 1993, Steve was scheduled to deliver the keynote address at the annual Next convention at San Franciscos Moscone Center. He was going to talk about his plans for resuscitating the company. That morning The Wall Street Journal ran a front-page story about hima brutal put-down. It said that Steve had taken a steep fall from a very lofty perch and that he was fighting to show that he still matters in the computer industry.

His public relations handler saw him as he prepared to go onstage in front of a thousand people.

He had read the article.

It could have been worse, she said, trying to lighten the mood.

Yeah, he shot back morosely. If you were me.

THE NEXT LAYOFFS PROCEEDED BITTERLY. Three hundred people cleared out of headquarters. The place seemed like a wasteland. A bunch of salvagers and used-furniture dealers went to the Next factory for an auction of what was still left. They bid on hundreds of lots that were laid out on the barren cement floor. They bought everything on the cheapthe chairs, the trash cans, the paper shredders, all the surplus Next computers and laser printers and oversized monitors. It was weirdly reminiscent of the famous scene from Citizen Kane when the many possessions of the vanquished mogul are carted up and then either shipped away or burned in a great fire.

Steves dream was being liquidated. He was at the nadir.

BY THE END OF 1993, he had virtually disappeared from the publics consciousness. And then, only two years later, something happened that was sublimely bizarre. He suddenly reemerged in the spotlight: triumphant, vindicated, and far richer than ever before. His stunning redemption came from an unexpected source: it turned out that he owned another company, Pixar, which had struggled quietly for a decade. In November 1995, Pixar released the first full-length computer-animated feature film, Toy Story. The following week, Steve took Pixar public, and investors clamored to buy the shares. His 70 percent stake was suddenly worth more than a billion dollars. And then, only a year later, he returned to Apple, which during his long absence had suffered a desperate decline and began spiraling toward its demise. In the summer of 1997 he took the title of interim chief executive officer and became the companys unexpected savior. He propelled Apples stock price from $13 a share to $118 a share in late 1999, raising the market valuation from less than $2 billion to almost $20 billion. It was an extraordinary resurgence.

On January 5, 2000, he stood at San Franciscos Moscone Center, where only a few years earlier he had agonized over the premature postmortem in The Wall Street Journal. This time, though, he was facing the crowd as a conquering hero.

He stalked the stage for a very long timetwo hours and thirteen minutes. Who else, besides Fidel Castro, could command the attention of his troops for such a long oration? No one in American business was so hypnotic. No one was so charismatic. And so they sat there patiently, four thousand people waiting for the news. By now, they knew exactly what to expect from one of Steves grand speeches. He always saved his biggest revelation for the very end. He created an unbearable sense of anticipation. And when he finally got around to it, he always dropped the bomb in the most casual way, as though it were an afterthought, as if he were oblivious to all the excitement.

One last thing, he said nonchalantly. After two and a half years of hesitation and indecision, he was finally accepting the title of chief executive officer of Apple Computer.

The thousands rose and rejoiced. Wave after wave of applause resonated through the vast hall. They chanted his name like a mantra: STEVE! STEVE! STEVE! STEVE!

His attempt at stoical coolness finally gave way to a half-smile that betrayed his pride and then to a look of bashfulness at the unbridled commotion he had caused.

Thank you, thank you, he said, and within seconds an eerie quiet was restored, as the faithful waited for more words from their leader.

You guys are making me feel funny now, he said sheepishly, because I...

He was so emotional that he had to stop for a moment and regain his composure.

... because I get to come to work every day and work with the most talented people on the planet, he said. Its the best job in the world.

AS THE YEAR 2000 BEGAN, Steve Jobs was adulated by a press corps that only a few years earlier had delighted in lambasting him. The old rap claimed that he was some kind of mystical visionary but he couldnt run a companyhe wasnt a manager. But now his photo appeared on the cover of the January 10th issue of Business Week for its story The Top 25 Managers of the Year. The following week