With the passing of Steve Jobs, it’s easy to think that Jobs’ career began and ended with Apple. It did, but the fastest way from A to B is rarely a straight line. In Jobs’ 2005 Stanford Commencement Speech, he talks about ‘connecting the dots’, saying “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”
Here’s thirteen dots that for me defined the story of Steve:
DOT ONE: When Steve Jobs launched Apple with Steve Wozniak in 1976, they decided to name the company after the fruit that according to legend spurred Isaac Newton’s theories on gravity. Jobs then spent most of his life defying gravity, and defying the odds.
DOT TWO: Starting with the premise that the best ideas are already out there, Jobs negotiated with Xerox to grant Apple engineers access to the Xerox PARC facilities in return for selling them one million dollars in pre-IPO Apple stock. It was from this visit that Jobs collected the ideas behind the fundamentals of today’s PC – the graphic user interface, mouse and pointer.
DOT THREE: How did Jobs go from start-up to listed company in four years? By getting his mentors to work for him. Jobs brought on a local VC, Mike Markkula, who bought shares in the company and subsequently became CEO. He brought in Regis McKenna, the best public relations man in Silicon Valley, to market the Apple II. Markkula was responsible for the early financing of the company, and for taking Apple public in 1980.
DOT FOUR: Despite becoming worth $217 million when Apple listed, Jobs kept relying purely on his intuition. Apple’s head of marketing, Mike Murray, commented, “Steve did his market research by looking into the mirror every morning.” Sales stalled, Jobs’ management style was seen by his board as a liability and, in 1985, he was thrown out of the company he had started nine years earlier.
DOT FIVE: That might have been the end of another entrepreneur story, was it not for Jobs’ perseverance. Having left Apple, he launched NeXT, to provide PCs to the education market. Apple sued Jobs for launching in competition, prompting him to say, “It’s hard to think that a $2 billion company with 4,300 plus people couldn’t compete with six people in blue jeans.” Jobs sold all but one of his Apple shares, and Apple continued to languish, falling from 20% market share to under 5% by 1996. Jobs, in the meantime, struggled with NeXT, burning through $250 million of investors’ money as he tried to market his new computers.
DOT SIX: In the same year that Jobs founded NeXT, George Lucas was looking to sell a small computer animation group he owned. Disney rejected an offer to buy 50% for $15 million, and a deal to sell to Ross Perot and Phillips for $30 million fell through. Jobs ended up negotiating Lucas to under $10 million for the business, thinking he could market the high-end animation computers that the group had designed.
DOT SEVEN: Renamed ‘Pixar’, Jobs’ new company began marketing the Pixar Image Computer to the medical market – with little success. By 1989, with Pixar losing over $1 million each month, and NeXT faring little better, Jobs found himself left with less than 20% of the $150 million he had received when he sold his Apple stock. At the rate he was going, within two years he would be back to zero.
DOT EIGHT: Taking drastic measures, Jobs sold the hardware side of Pixar for several million, taking a massive loss. By luck, an animated short movie the Pixar team produced in their spare time, “Tin Toy”, received an Oscar, and in 1993, Disney approved a full feature joint venture with Pixar called “Toy Story”.
DOT NINE: The victory was short lived with Disney shutting production of Toy Story down later in the year after losing confidence in the script. Then in 1994, Disney lost four executives in a helicopter crash, including Chief Operating Officer Frank Wells. Jobs was left attempting to get Toy Story back on track while also having to close the NeXT manufacturing facility and sales operation. Most of the NeXT team left. The investors, having put in another $100 million, saw that money disappear too. Toy Story, now back on Disney’s agenda, it would need to earn at least $100 million for Pixar to make any money from it at all; more than any other Disney film had made at the time.
DOT TEN: Even so, an audacious Jobs, down to his last dollar, decided to bet that not only would Toy Story be a success, it would enable him to publicly list Pixar and raise further funds. In November 1995, Toy Story opened to enormous acclaim, becoming the highest grossing release of the year, generating over $450 million in sales. One week later, Pixar had its IPO. Less than twelve months after his worst year financially, Steve Jobs was a billionaire.
DOT ELEVEN: Then, in 1996, Gil Emilio (the new CEO of Apple) went hunting for a new operating system and finally found it… in NeXT. Approaching Jobs for his system, Jobs was only interested in selling the entire company. Apple bought it for $377.5 million in cash and $1.5 million in Apple shares. In one fell swoop, Jobs could pay off all his investors and was involved with Apple again – after over ten years.
DOT TWELVE: In 1997 Apple sales were $7 billion and losses were over $1 billion. Jobs took to the challenge of revitalizing Apple. By 1998, Jobs launched the iMac, followed with the iPod, iPhone and iPad. The rise of Apple to become the most valuable company in the world are well documented, but less is known of the trials that shaped Jobs in his darker times.
DOT THIRTEEN: In January 2006, Disney (having rejected the chance to buy 50% of Pixar for $15 million ten years earlier) bought a transformed Pixar from Jobs for $7.4 billion in stock, making Jobs Disney’s largest individual shareholder and a billionaire for the third time.
To become a billionaire is already rare. To become a billionaire from scratch (or from $1 billion in losses) in three entirely different industries is unprecedented.
Jobs died today with a net worth of over $8 billion after having worked for $1 a year for the last 14 years.
Many people have heard his quote “Being the richest man in the cemetery doesn’t matter to me… Going to bed at night saying we’ve done something wonderful… that’s what matters to me.”
What most don’t know was that this was from a quote in the Wall Street Journal in Summer 1993 – Not when he was sitting on a billion dollars, but in his darkest days, outcast from Apple and the Tech community, struggling with both NeXT and an aimless Pixar, and about to run out of money.
That was Steve.
- By Roger James Hamilton