My original selections from the video:
- [9:10] We were young and what we learned was that we could build something - ourselves -that could control billions of dollars worth of infrastructure in the world. That was what we learned [âŚ] and that was an incredible lesson. I donât think there would have ever been an Apple Computer had there not been blue boxing.
- [ 14:40 ] It was very clear to me that while there were a bunch of hardware hobbyists that could assemble their own computers - or at least take our boards and add a case, etc - for every one of those, there were a thousand people who couldnât do that but wanted to mess around with programming - software hobbyists. [âŚ] My dream for the Apple II was to sell the first fully packaged computer, packaged personal computer.
- [ 17:54 ] âHow do you learn to run a company?â You know, throughout the years in business, I found something, which was Iâd always ask why you do things. And the answers you invariably get are: âOh thatâs just the way itâs doneâ. Nobody knows why they do what they do. Nobody thinks about things very deeply in business - thatâs what Iâve found. Iâll give you an example. When were building our Apple Iâs in the garage, we knew exactly what they cost. When we got into a factory in the Apple II days, the accounting had a notion of a standard cost where youâd kind of set a standard cost and at the end of quarter youâd adjust it with a variance. And I kept asking âwhy do we do thisâ [âŚ] After about six months of digging into this, what I realized was, the reason you do it is because you donât really have good enough controls to know how much it costs, so you guess and then you fix your guess at the end of the quarter⌠And the reason you donât know how much it costs is because your information systems arenât good enough. But nobody said it that way. [.] So in business, a lot of things, I call it âfolkloreâ; they are done because they were done yesterday and the day before. So what that means is that if youâre willing to ask a lot of questions and think about things and work pretty hard you can figure things out.
- [20:43] It had nothing to do with using them for anything practical. It had to do with using them to be a mirror of your thought process. To actually learn how to think. [.] It teaches you how to think. Itâs like going to law school - I donât think everyone should be a lawyerâŚ.
- [24:03] I was so blinded by the first thing they showed me, which was the graphic user interface. I thought it was the best thing Iâd ever seen in my life. Now remember, it was very flawed, what we saw was incomplete, theyâd done many things wrong - but we didnât know that at the time- but still the germ of the idea was there. And within 10 mins, it was obvious to me that all computers would work like this. It was so obvious. You would have felt the same way.
- [25:52] What happens is - like with John Sculley - John came from Pepsico, and they at most would change their product every 10 years. And to them a new product was like a new size bottle right? So if you were a product person, you couldnât change the course of that company very much. So who influenced the success of pepsico? The sales and marketing people. Therefore, they were the ones that got promoted, and therefore they were the ones that ran the company. Well, for Pepsico, that might have been okay but it turns out that same thing can happen in technology companies that get monopolies - like IBM or Xerox. If you were a product person at IBM or Xerox - so you make a better copier or computer? so what? When you have a monopoly marketshare, the companyâs not any more successful. So the people who can make the company more successful are sales and marketing people and they end up running the companies. And the product people get driven out of the decision-making forums. And the companies forget what it means to make great products. Sort of the product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies who have no conception of a good product versus a bad product. They have no conception of the craftsmanship that required to take a good idea and turn it into a good product. And they really have no feelings in their hearts usually about wanting to really help the customers.
- [30:11] So I found that in a way, Apple - Apple did not have the caliber of people that was necessary to seize this idea in many ways. And there was a core team that did, but there was a larger team that mostly had come from HP that didnât have a clue. [âŚ] Itâs that people get confused. Companies get confused. When they start getting bigger, they want to replicate their initial success. And a lot of them think âwell, somehow thereâs some magic in the process in how that success was created. And so they start to institutionalize the process across the company. And before very long, people get very confused that the process is the content. [âŚ] And in my career, Iâve found that the best people are the ones that really understand the content. And theyâre a pain in the butt to manage, but you put up with it because theyâre so great at the content and thatâs what makes great product. Itâs not process, itâs content.
- [32:00] In a way, it was very far ahead of its time. But there wasnât enough fundamental content understanding. Apple drifted too far away from its roots. To these HP guys, $10k was cheap. To our market, to our distribution channels, $10k was impossible. So we produced a product that was a complete mismatch for the culture of our company for the image of our company, for the distribution channels of our company, for our current customers. None of them could afford a product like that. And it failed.
- [35:45] And that disease - Iâve seen other people get it too - itâs the disease of thinking that a really great idea is 90% of the work and that if you just tell all these other people, you know, hereâs this great idea, then of course they can go off and make it happen. And the problem with that is that there is just a tremendous amount of craftsmanship in between a great idea and a great product. And as you evolve that great idea, it changes and grows. It never comes out like it starts, because you learn a lot more as you get into the subtleties of it. And you also find there is tremendous trade-offs that you have to make. [.] And as you get into all these things, designing a product is keeping 5000 things in your brain - these concepts - and fitting them all together and kind of continuing to push to fit them together in new and different ways to get what you want. And every day, you discover something new that is a new problem or a new opportunity to fit these things together a little differently. And itâs that process that is the magic.
- [38:26] The same common stones that had gone in, through rubbing against each other like this, creating a little bit of friction, creating a little bit of noise, had come out these beautiful polished rocks. And thatâs always been in my mind, my metaphor for a team working really hard on something theyâre passionate about - is that itâs through the team, through that group of incredibly talented people bumping up against each other, having arguments, having fights sometimes, making some noise, and working together they polish each other and they polish the ideas.
- [39:36] In most things in life, the dynamic range between âaverageâ and âthe bestâ is at most 2-to-1. The best taxi gets your there 30% faster. Automobile, whats the difference between the best and average? 20%? So 2-to-1 is a big dynamic range in most of life. In software - and it used to be like this in hardware too - the difference between average and the best is 50-to-1 maybe 100-to-1. Very few things in life are like this, but what I was lucky enough to spend my life in is like this. And so Iâve built a lot of my success of finding these truly gifted players, and not settling on âBâ or âCâ players. But really going for the âAâ players. And I found something. When you go through the incredible work to find like 5 of these âAâ players they really like working with each other because they never had a chance to do that before and they donât want to work with âBâ and âCâ players. And so it becomes self policing.
- [51:42] Apple was in a state of paralysis in the early part of 1985, and I wasnât at that time capable, I donât think, of running the company as a whole. You know I was 30 years old and I donât think I had enough experience to run a two billion dollar companyâŚ
- [53:34] We had a 10-year lead on everybody else in the industry. Macintosh was 10 years ahead. You know we watched Microsoft take 10 years to catch up with it. Well, the reason that they could catch up with it was because Apple stood still. I mean, the Macintosh thatâs shipping today is 25% different than the day I left.
- [54:08] What happened was, the understanding of how to move these things forward and how to create these new products somehow evaporated. And I think a lot of the good people stuck around for a while, but there wasnât an opportunity to get together and do this, because there wasnât any leadership to do that. So whatâs happened with Apple now is - is that theyâve fallen behind, in many respects, certainly in market share. And most importantly their differentiation
- [56:44] The only problem with Microsoft is they just have no taste. They have absolutely no taste. And I donât mean that in a small way, I mean that in a big way, in the sense that⌠They donât think of original ideas and they donât bring much culture into their products [âŚ] And so I guess I am saddened, not by Microsoftâs success. I have no problem with their success. Theyâve earned their success for the most part. I have a problem with the fact that they just make really third-rate products. Their products have no spirt to them. Their products have no sort of spirit of enlightenment about them. They are very pedestrian. And the sad part is that most customers donât have a lot of that spirit either. But the way that weâre gonna ratchet up our species is to take the best and to spread it around to everybody so that everybody grows up with better things and starts to understand the subtlety of these better things. And Mircosoft - itâs McDonalds.
- [1:00:24] Software is infiltrating everything we do these days. In businesses, software is one of the most potent competitive weapons. [âŚ] Software is becoming an incredible force in this world to provide new goods and services to people, whether itâs over the internet or what have you. Software is going to be a major enabler in our society.
- [1:02:13] I think the internet and the web - there are two exciting things happening in software and in computing today. I think one is objects, but the other one is the web. The web is incredibly exciting because it is the fulfillment of a lot of our dreams that the computer would ultimately not be primarily a device for computation, but metamorphosize into a device for communication. And with the web, thatâs finally happening. [âŚ] So I think that the web is going to be profound in what it does to our society. As you know, about 15% of the goods and services in the US are sold via catalogues or over the television. All thatâs gonna go on the web and more. [âŚ] A way to think about it is that itâs the ultimate direct-to-consumer distribution channel. Another way to think about it is, the smallest company in the world can look as large as the largest company in the world on the web.
- [1:06:38] âBut how do you know itâs the right direction?â Ultimately it comes down to taste. It comes down to taste. It comes down to trying to expose yourself to the best things that humans have done and then try to bring those things in to what you are doing. I mean Picasso had a saying. He said âGood artists copy. Great artists steal.â And we have always been shameless about stealing great ideas. And I think that part of what made the Mcintosh great was that the people working on it were musicians and poets and artists and zoologists and historians who also happened to be the best computer scientists in the world. [âŚ] And they brought with them, we all brought to this effort a very liberal arts sort of air, a very liberal arts attitude that we wanted to pull in the best that we saw in these other fields into this field. And I donât think you get that if youâre very narrow.
- [1:08:55] So to me, the spark of that [being a hippie] was that there was something beyond sort of what you see every day. Thereâs something going on here in life beyond just a job and a family and two cars in the garage and a career. Thereâs something more going on. Thereâs another side of the coin that we donât talk about much. And we experience it when thereâs gaps, when we kind of just arenât really - when everythingâs not ordered and perfect, when thereâs kind of a gap. You experience this in-rush of something. And a lot of people have set off throughout history to find out what that was [âŚ] the hippie movement got a little bit of that, they wanted to find out what that was about. And that life wasnât about what they saw their parents doing. And of course the pendulum swing too far the other way and it was crazy but there was a germ of something there. And itâs the same thing that causes people to want to be poets instead of bankers you know? And I think thatâs a wonderful thing. And I think that same spirit can be put into products. And those products can be manufactured and given to people and they can sense that spirit.