November 2018

That evening Apple’s general counsel Al Eisenstat had a small

That evening Apple’s general counsel Al Eisenstat had a small barbecue at

his home for Sculley, Gassée, and their wives. When Gassée told Eisenstat

what Jobs was plotting, he recommended that Gassée inform Sculley.

 

“Steve was trying to raise a cabal and have a coup to get rid of John,”

Gassée recalled. “In the den of Al Eisenstat’s house, I put my index finger

lightly on John’s breastbone and said, ‘If you leave tomorrow for

China, you could be ousted. Steve’s plotting to get rid of you.’”

Friday, May 24: Sculley canceled his trip and decided to confront Jobs at the

executive staff meeting on Friday morning. Jobs arrived late, and he saw

that his usual seat next to Sculley, who sat at the head of the table, was

taken. He sat instead at the far end. He was dressed in a well-tailored suit

and looked energized. Sculley looked pale. He announced that he was

dispensing with the agenda to confront the issue on everyone’s mind.

“It’s come to my attention that you’d like to throw me out of the company,”

he said, looking directly at Jobs. “I’d like to ask you if that’s true.”

Jobs was not expecting this. But he was never shy about indulging in

brutal honesty. His eyes narrowed, and he fixed Sculley with his unblinking

stare. “I think you’re bad for Apple, and I think you’re the wrong person

to run the company,” he replied, coldly and slowly. “You really should leave

this company. You don’t know how to operate and never have.” He accused

Sculley of not understanding the product development process, and then

he added a self-centered swipe: “I wanted you here to help me grow,

and you’ve been ineffective in helping me.”

As the rest of the room sat frozen, Sculley finally lost his temper. A

childhood stutter that had not afflicted him for twenty years started to

return. “I don’t trust you, and I won’t tolerate a lack of trust,” he stammered.

When Jobs claimed that he would be better than Sculley at running the

company, Sculley took a gamble. He decided to poll the room on that question

. “He pulled off this clever maneuver,” Jobs recalled, still smarting thirty-five

years later. “It was at the executive committee meeting, and he said,

‘It’s me or Steve, who do you vote for?’

 

He set the whole

thing up so that you’d

kind of have to be an

idiot to vote for me.”

www.sh419ag.com

That night Jobs took his Macintosh team out to dinner at

That night Jobs took his Macintosh team out to dinner at Nina’s Café in

Woodside. Jean-Louis Gassée was in town because Sculley wanted him

to prepare to take over the Macintosh division, and Jobs invited him to

 

join them. Belleville proposed a toast “to those of us who really understand

what the world according to Steve Jobs is all about.” That phrase—“the world

according to Steve”—had been used dismissively by others at Apple who

belittled the reality warp he created. After the others left, Belleville sat with

Jobs in his Mercedes and urged him to

organize a battle to the death with Sculley.

Months earlier, Apple had gotten the right to export computers to China,

and Jobs had been invited to sign a deal in the Great Hall of the People over

the 1985 Memorial Day weekend. He had told Sculley, who decided he wanted

to go himself, which was just fine with Jobs. Jobs decided to use Sculley’s absence

to execute his coup. Throughout the week leading up to Memorial Day,

he took a lot of people on walks to share his plans. “I’m going to launch a

coup while John is in China,” he told Mike Murray.

Seven Days in May

Thursday, May 23: At his regular Thursday meeting with his top lieutenants

in the Macintosh division, Jobs told his inner circle about his plan to oust Sculley.

He also confided in the corporate human resources director, Jay Elliot, who

told him bluntly that the proposed rebellion wouldn’t work. Elliot had talked

to some board members and urged them to stand up for Jobs, but he

discovered that most of the board was with Sculley, as were most members of

Apple’s senior staff. Yet Jobs barreled ahead. He even revealed his plans to

Gassée on a walk around the parking lot, despite the fact that Gassée had come from

 

Paris to take his job.

“I made the mistake of telling

Gassée,” Jobs wryly

conceded years later.

sh419vc.com

Plotting a Coup “You were really great the first year, and everything

Plotting a Coup

“You were really great the first year, and everything went wonderful.

But something happened.” Sculley, who generally was even-tempered,

lashed back, pointing out that Jobs had been unable to get Macintosh

 

software developed, come up with new models, or win customers. The

meeting degenerated into a shouting match about who was the worse

manager. After Jobs stalked out, Sculley turned away from the glass wall

of his office, where others had been looking in on the meeting, and wept.

Matters began to come to a head on Tuesday, May 14, when the Macintosh

team made its quarterly review presentation to Sculley and other Apple

corporate leaders. Jobs still had not relinquished control of the division, and

he was defiant when he arrived in the corporate boardroom with his team.

He and Sculley began by clashing over what the division’s mission was. Jobs

said it was to sell more Macintosh machines. Sculley said it was to serve the

interests of the Apple company as a whole. As usual there was little cooperation

among the divisions; for one thing, the Macintosh team was planning new

disk drives that were different from those being developed by the Apple

II division. The debate, according to the minutes, took a full hour.

Jobs then described the projects under way: a more powerful Mac, which

would take the place of the discontinued Lisa; and software called FileServer,

which would allow Macintosh users to share files on a network. Sculley learned

for the first time that these projects were going to be late. He gave a cold critique

of Murray’s marketing record, Belleville’s missed engineering deadlines, and

Jobs’s overall management. Despite all this, Jobs ended the meeting with

a plea to Sculley, in front of all the others there,

 

to be given one

more chance to prove he

could run a division.

Sculley refused.

www.sh419vc.com

The board became increasingly alarmed at the turmoil, and in

The board became increasingly alarmed at the turmoil, and in early 1985

Arthur Rock and some other disgruntled directors delivered a stern lecture to

both. They told Sculley that he was supposed to be running the company, and

 

he should start doing so with more authority and less eagerness to be pals with

Jobs. They told Jobs that he was supposed to be fixing the mess at the Macintosh

division and not telling other divisions how to do their job. Afterward Jobs retreated

to his office and typed on his Macintosh, “I will not criticize the rest

of the organization, I will not criticize the rest of the organization . . .”

As the Macintosh continued to disappoint—sales in March 1985 were only 10%

of the budget forecast—Jobs holed up in his office fuming or wandered the halls

berating everyone else for the problems. His mood swings became worse, and so

did his abuse of those around him. Middle-level managers began to rise up against

him. The marketing chief Mike Murray sought a private meeting with Sculley at an

industry conference. As they were going up to Sculley’s hotel room, Jobs spotted

them and asked to come along. Murray asked him not to. He told Sculley that Jobs

was wreaking havoc and had to be removed from managing the Macintosh division.

Sculley replied that he was not yet resigned to having a showdown with Jobs. Murray

later sent a memo directly to Jobs criticizing the way he treated colleagues and

denouncing “management by character assassination.”

For a few weeks it seemed as if there might be a solution to the turmoil. Jobs became

fascinated by a flat-screen technology developed by a firm near Palo Alto called

Woodside Design, run by an eccentric engineer named Steve Kitchen. He also was

impressed by another startup that made a touchscreen display that could be controlled

by your finger, so you didn’t need a mouse. Together these might help fulfill Jobs’s vision

of creating a “Mac in a book.” On a walk with Kitchen, Jobs spotted a building in nearby

Menlo Park and declared that they should open a skunkworks facility to work on these

ideas. It could be called AppleLabs and Jobs could run it,

 

going back to the

joy of having a small

team and developing

a great new product.

www.sh419cn.com

There were many reasons for the rift between Jobs and Sculley in

There were many reasons for the rift between Jobs and Sculley in the sprin

of 1985. Some were merely business disagreements, such as Sculley’s attempt

to maximize profits by keeping the Macintosh price high when Jobs wanted to

 

make it more affordable. Others were weirdly psychological and stemmed from

the torrid and unlikely infatuation they initially had with each other. Sculley had

painfully craved Jobs’s affection, Jobs had eagerly sought a father figure and mentor,

and when the ardor began to cool there was an emotional backwash. But at its core,

the growing breach had two fundamental causes, one on each side.

For Jobs, the problem was that Sculley never became a product person. He didn’t make

the effort, or show the capacity, to understand the fine points of what they were making.

On the contrary, he found Jobs’s passion for tiny technical tweaks and design details to

be obsessive and counterproductive. He had spent his career selling sodas and snacks

whose recipes were largely irrelevant to him. He wasn’t naturally passionate about products,

which was among the most damning sins that Jobs could imagine. “I tried to educate him

about the details of engineering,” Jobs recalled, “but he had no idea how products are created,

and after a while it just turned into arguments. But I learned that my perspective was right.

Products are everything.” He came to see Sculley as clueless, and his contempt was exacerbated

by Sculley’s hunger for his affection and delusions that they were very similar.

For Sculley, the problem was that Jobs, when he was no longer in courtship or manipulative

mode, was frequently obnoxious, rude, selfish, and nasty to other people. He found Jobs’s

boorish behavior as despicable as Jobs found Sculley’s lack of passion for product details. Sculley

was kind, caring, and polite to a fault. At one point they were planning to meet with Xerox’s vice

chair Bill Glavin, and Sculley begged Jobs to behave. But as soon as they sat down, Jobs told Glavin,

“You guys don’t have any clue what you’re doing,” and the meeting broke up. “I’m sorry, but I

couldn’t help myself,” Jobs told Sculley. It was one of many such cases. As Atari’s Al Alcorn later

observed, “Sculley believed in keeping people happy and worrying about relationships. Steve didn’t

give a shit about that. But he did care about the product in a way that Sculley never could, and he

was able to avoid

 

having too many bozos

working at Apple by

insulting anyone who

wasn’t an A player.”

sh419in.com

When the Wall Street Journal heard what happened, it got in

When the Wall Street Journal heard what happened, it got in touch with

Wozniak, who, as usual, was open and honest. He said that Jobs was punishing

him. “Steve Jobs has a hate for me, probably because of the things I said about

 

Apple,” he told the reporter. Jobs’s action was remarkably petty, but it was also

partly caused by the fact that he understood, in ways that others did not, that

the look and style of a product served to brand it. A device that had Wozniak’s

name on it and used the same design language as Apple’s products might be

mistaken for something that Apple had produced. “It’s not personal,” Jobs told

the newspaper, explaining that he wanted to make sure that Wozniak’s remote

wouldn’t look like something made by Apple. “We don’t want to see our design

language used on other products. Woz has to find his own resources. He can’

t leverage off Apple’s resources; we can’t treat him specially.”

Jobs volunteered to pay for the work that frogdesign had already done for Wozniak,

but even so the executives at the firm were taken aback. When Jobs demanded that

they send him the drawings done for Wozniak or destroy them, they refused. Jobs

had to send them a letter invoking Apple’s contractual right. Herbert Pfeifer, the design

director of the firm, risked Jobs’s wrath by publicly dismissing his claim that the dispute

with Wozniak was not personal. “It’s a power play,” Pfeifer told the Journal.

“They have personal problems between them.”

Hertzfeld was outraged when he heard what Jobs had done. He lived about twelve

blocks from Jobs, who sometimes would drop by on his walks. “I got so furious about

the Wozniak remote episode that when Steve next came over, I wouldn’t let him in

the house,” Hertzfeld recalled. “He knew he was wrong, but he tried to rationalize, and

maybe in his distorted reality he was able to.” Wozniak, always a teddy bear even

when annoyed, hired another

 

design firm and even

agreed to stay on Apple’s

retainer as a spokesman.

Showdown, Spring 1985

www.sh419in.com

Instead of using off-the-shelf chips for the NeXT, Jobs had his

Instead of using off-the-shelf chips for the NeXT, Jobs had his engineers design

custom ones that integrated a variety of functions on one chip. That would have

been hard enough, but Jobs made it almost impossible by continually revising the

 

functions he wanted it to do. After a year it became clear that this

would be a major source of delay.

Jobs had not tempered his way of dealing with employees. “He applied charm or

 

public humiliation in a way that in most cases proved to be pretty effective,” Tribble

recalled. But sometimes it wasn’t. One engineer, David Paulsen, put in ninety-hour

weeks for the first ten months at NeXT. He quit when “Steve walked in one Friday

afternoon and told us how unimpressed he was with what we were doing.” When Business

Week asked him why he treated employees so harshly, Jobs said it made the company better.

“Part of my responsibility is to be a yardstick of quality. Some people aren’t used to an

environment where excellence is expected.” But he still had his spirit and charisma. There were

plenty of field trips, visits by akido masters, and off-site retreats. And he still exuded the pirate

flag spunkiness. When Apple fired Chiat/Day, the ad firm that had done the “1984” ad and taken

out the newspaper ad saying “Welcome IBM—seriously,” Jobs took out a full-page ad in the

Wall Street Journal proclaiming, “Congratulations Chiat/Day—Seriously . . .

Because I can guarantee you: there is life after Apple.”

Perhaps the greatest similarity to his days at Apple was that Jobs brought with him his reality

distortion field. It was on display at the company’s first retreat at Pebble Beach in late 1985.

There Jobs pronounced that the first NeXT computer would be shipped in just eighteen months.

It was already clear that this date was impossible, but he blew off a suggestion from one engineer

that they be realistic and plan on shipping in 1988. “If we do that, the world isn’t standing still,

the technology window

 

passes us by, and all the

work we’ve done we

have to throw down

the toilet,” he argued.

sh419ccc.com

Frustrated, Wozniak decided to leave quietly to start a new

Frustrated, Wozniak decided to leave quietly to start a new company that would

make a universal remote control device he had invented. It would control your

television, stereo, and other electronic devices with a simple set of buttons that you

 

could easily program. He informed the head of engineering at the Apple II division,

but he didn’t feel he was important enough to go out of channels and tell Jobs or

Markkula. So Jobs first heard about it when the news leaked in the Wall Street Journal.

 

In his earnest way, Wozniak had openly answered the reporter’s questions when he called.

Yes, he said, he felt that Apple had been giving short shrift to the Apple II division.

“Apple’s direction has been horrendously wrong for five years,” he said.

Less than two weeks later Wozniak and Jobs traveled together to the White House,

where Ronald Reagan presented them with the first National Medal of Technology.

The president quoted what President Rutherford Hayes had said when first shown a

telephone—“An amazing invention, but who would ever want to use one?”—and then

quipped, “I thought at the time that he might be mistaken.” Because of the awkward

situation surrounding Wozniak’s departure, Apple did not throw a celebratory dinner.

So Jobs and Wozniak went for a walk afterward and ate at a sandwich shop.

They chatted amiably, Wozniak recalled, and avoided any discussion of their disagreements.

Wozniak wanted to make the parting amicable. It was his style. So he agreed to stay on

as a part-time Apple employee at a $20,000 salary and represent the company at events

and trade shows. That could have been a graceful way to drift apart. But Jobs could not

leave well enough alone. One Saturday, a few weeks after they had visited Washington

together, Jobs went to the new Palo Alto studios of Hartmut Esslinger, whose company

frogdesign had moved there to handle its design work for Apple. There he happened to

see sketches that the firm had made for Wozniak’s new remote control device, and he

flew into a rage. Apple had a clause in its contract that gave it the right to bar frogdesign

from working on other computer-related projects, and Jobs invoked

 

it. “I informed them,

” he recalled, “that working

with Woz wouldn

’t be acceptable to us.”

www.sh419ccc.com

Sculley was thrilled by the possibility. It would solve most of

Sculley was thrilled by the possibility. It would solve most of his management

issues, moving Jobs back to what he did best and getting rid of his disruptive

presence in Cupertino. Sculley also had a candidate to replace Jobs as manager

 

of the Macintosh division: Jean-Louis Gassée, Apple’s chief in France, who had

suffered through Jobs’s visit there. Gassée flew to Cupertino and said he would

take the job if he got a guarantee that he would run the division rather than

work under Jobs. One of the board members, Phil Schlein of Macy’s, tried to

convince Jobs that he would be better off thinking up new

products and inspiring a passionate little team.

But after some reflection, Jobs decided that was not the path he wanted. He declined

to cede control to Gassée, who wisely went back to Paris to avoid the power clash

that was becoming inevitable. For the rest of the spring, Jobs vacillated. There were

times when he wanted to assert himself as a corporate manager, even writing a memo

urging cost savings by eliminating free beverages and first-class air travel, and other

times when he agreed with those who were encouraging

him to go off and run a new AppleLabs R&D group.

In March Murray let loose with another memo that he marked “Do not circulate” but

gave to multiple colleagues. “In my three years at Apple, I’ve never observed so much

confusion, fear, and dysfunction as in the past 90 days,” he began. “We are perceived

by the rank and file as a boat without a rudder, drifting away into foggy oblivion.”

Murray had been on both sides of the fence; at times he conspired with Jobs to

undermine Sculley, but in this memo he laid the blame on Jobs. “Whether the cause

of or because

 

of the dysfunction,

Steve Jobs now

controls a seemingly

impenetrable power base.”

sh419cn.com

One table featured software moguls, including Bill Gates and

One table featured software moguls, including Bill Gates and Mitch Kapor.

Another had old friends such as Elizabeth Holmes, who brought as her date

a woman dressed in a tuxedo. Andy Hertzfeld and Burrell Smith had rented

 

tuxes and wore floppy tennis shoes, which made it all the more memorable

when they danced to the Strauss waltzes played by the San Francisco

Symphony Orchestra.

 

Ella Fitzgerald provided the entertainment, as Bob Dylan had declined. She sang

mainly from her standard repertoire, though occasionally tailoring a song like

“The Girl from Ipanema” to be about the boy from Cupertino. When she asked

for some requests, Jobs called out a few. She concluded with

a slow rendition of “Happy Birthday.”

Sculley came to the stage to propose a toast to “technology’s foremost visionary.”

Wozniak also came up and presented Jobs with a framed copy of the Zaltair hoax

from the 1977 West Coast Computer Faire, where the Apple II had been introduced.

The venture capitalist Don Valentine marveled at the change in the decade since

that time. “He went from being a Ho Chi Minh look-alike, who said never trust

anyone over thirty, to a person who gives himself a fabulous thirtieth

birthday with Ella Fitzgerald,” he said.

Many people had picked out special gifts for a person w

ho was not easy to shop for.

Debi Coleman, for example, found a first edition of F. Scott Fitzgerald’s The Last

Tycoon. But Jobs, in an act that was odd yet not out of character, left all of the

gifts in a hotel room. Wozniak and some of the Apple veterans, who did not take

to the goat cheese and salmon mousse that was served, met after

the party and went out to eat at a Denny’s.

“It’s rare that you see an artist in his 30s or 40s able to really contribute something

amazing,” Jobs said wistfully to the writer David Sheff, who published a long and

intimate interview in Playboy the month he turned thirty. “Of course, there are

some people who are innately curious, forever little kids in their

awe of life, but they’re rare.” The interview touched on

 

many subjects, but Jobs’s

most poignant ruminations

were about growing old

and facing the future:

www.sh419aaa.com