00:00:00 ◼ ► I don't want you to think of this as just a film. Some processes are converting electrons
00:00:13 ◼ ► and magnetic impulses into shapes and figures and sounds. No, listen to me. We're here to
00:00:20 ◼ ► make a dent in the universe. Otherwise, why even be here? We're creating a completely new
00:00:25 ◼ ► consciousness, like an artist or a poet. That's how you have to think of this. We're rewriting
00:00:31 ◼ ► the history of human thought with what we're doing. That was, of course, Noah Wiley as Steve
00:00:38 ◼ ► Jobs in the 1999 film The Pirates of Silicon Valley. Why am I reading this? Why? Why? Because
00:00:46 ◼ ► today we are continuing, kind of beginning our series celebrating Apple at 50 by taking a look
00:00:53 ◼ ► back at how the company was founded. I am Mike Hurley, and today I am thrilled, as always,
00:01:03 ◼ ► Oh, I'm excited. I'm very excited. I should note that this episode is brought to you by
00:01:07 ◼ ► Insta360, Claude, and Century. Over the years, there have been many, many interpretations of
00:01:14 ◼ ► how Apple was founded. It feels like in the last week, many more, and I guess over the next
00:01:18 ◼ ► week, many, many more. So we're adding our reflection on this historic moment, and you've
00:01:26 ◼ ► Yeah, I think it is. One of the things that I've learned is that 50 years is a long time,
00:01:33 ◼ ► and it wasn't as long back when I started, right? And now it feels like this has just gotten dimmer
00:01:39 ◼ ► and further into the past. Fortunately, there are a lot of different books about the subject.
00:01:44 ◼ ► And if we're talking about Apple at 50, we can talk about the origin of the Mac, and we
00:01:48 ◼ ► can talk about Apple buying next, and we can talk about all those things. But I think it
00:01:52 ◼ ► is, for this particular occasion, the most appropriate thing to do is talk about what happened that
00:02:03 ◼ ► All right. So to get to 1976, we have to start earlier. So I thought we would start in the 1960s,
00:02:12 ◼ ► because it's important to understand, especially for people who are not from or are familiar with
00:02:16 ◼ ► the Bay Area, to know about where this all happened, because that matters. The geography
00:02:24 ◼ ► and the culture matter. So in the 60s, this story starts in what we now call Silicon Valley,
00:02:33 ◼ ► but back then it was just called the Santa Clara Valley. The concept of Silicon Valley had not even
00:02:38 ◼ ► been coined, let alone spread. Santa Clara Valley is 40 miles southeast of San Francisco at the southern
00:02:45 ◼ ► end of San Francisco Bay. If you've been there in the 21st century, you will think, Mike, as you
00:02:52 ◼ ► probably do, of freeways, strip malls, a lot of suburban sprawl. There's not a lot of city down there.
00:02:58 ◼ ► It's not a lot of super tall buildings. It's a lot of kind of mid-height buildings, strip malls,
00:03:05 ◼ ► office parks, and single family homes more than anything. And there are more apartments there now,
00:03:10 ◼ ► but like it is kind of a suburb, a crowded, car-filled California suburb. Does that seem fair to you?
00:03:19 ◼ ► Any apartments that I've seen look astoundingly new when I've been in that part of California?
00:03:27 ◼ ► That's only been recently. It was a suburb. Even now, when I leave the Apple Park Visitor Center
00:03:33 ◼ ► after an Apple event to come home, the way I need to go is I actually drive north on Tantau Boulevard
00:03:40 ◼ ► and then make a left on, what is that, Homestead Road, I think. And so you're traveling alongside
00:03:47 ◼ ► the north end. To your left is the north edge of Apple Park, which is just a wall of trees at this
00:03:53 ◼ ► point, right? That is a privacy wall of trees. To your right, literally across the street from Apple
00:04:00 ◼ ► Park are single family homes. You would never believe it if you were from anywhere else in the world,
00:04:07 ◼ ► but it's just a bunch of single family homes across the street from Apple Park, which seems so
00:04:10 ◼ ► unbelievable. And like many places like that in America, it is astoundingly unwalkable.
00:04:24 ◼ ► The hotel that I stay at for WWDC is walkable distance from Apple Park, believe it or not.
00:04:30 ◼ ► But then they changed the entrance to a different entrance and then it wasn't walkable anymore.
00:04:40 ◼ ► I walked it once. There was sidewalk. It's true. So back in the 60s, though, the Santa Clara
00:04:46 ◼ ► Valley was a whole lot more rural than it is so far from San Francisco. When you think 40
00:04:51 ◼ ► miles away from San Francisco, it's not as if there were a lot of commuters in those days
00:04:56 ◼ ► to San Francisco. I don't think you could even call it suburban at that point. It was mostly
00:05:01 ◼ ► fruit orchards. But the seeds of Silicon Valley had been planted in that era. Hewlett-Packard
00:05:08 ◼ ► was based in Palo Alto near Stanford University, and that had been set up by Mr. Hewlett and
00:05:22 ◼ ► History echoes, doesn't it? In the 60s, HP was making electronics equipment of various kinds.
00:05:28 ◼ ► It would eventually get into calculators and computers. But at that point, calculators and
00:05:35 ◼ ► computers were part of an entirely different sphere than what HP was doing in electronics.
00:05:40 ◼ ► also in the Valley was Lockheed, the defense contractor. And that brought aerospace, mechanical
00:05:47 ◼ ► and electrical engineers to Mountain View. And all these towns that I mentioned, they're all right
00:05:52 ◼ ► next to each other. It's a bunch of fairly small towns, Mountain View, Cupertino, Sunnyvale, Los Altos,
00:05:59 ◼ ► Santa Clara. They're all right next to each other in this area that's sort of northwest of San Jose.
00:06:06 ◼ ► They're all names that people that listen to this show are familiar with, right? Because they're now
00:06:16 ◼ ► Mountain View is Google. Mountain View used to be Adobe, and it used to be Facebook, and now it's Google.
00:06:21 ◼ ► Palo Alto is Facebook now. Cupertino, obviously, is synonymous with Apple. So definitely, you know
00:06:29 ◼ ► these names. You may not know the geography. It doesn't really matter other than to say that they're
00:06:32 ◼ ► all... I use them kind of... I'll throw out a name, and you don't need to keep track of where
00:06:36 ◼ ► that is on a map, because they're all right next to each other. The most important part... So
00:06:41 ◼ ► incubators, you know, we have Stanford and Hewlett-Packard in Palo Alto. And then over in
00:06:48 ◼ ► Mountain View, you have Lockheed. And one of the reasons Lockheed is there is because the Moffitt
00:06:52 ◼ ► Field, we call it now, Moffitt Naval Air Station is there, and the NASA Ames Research Center is there.
00:06:59 ◼ ► So you've got an aerospace concentration in that part. And then you've got this electronics
00:07:05 ◼ ► concentration over by Stanford. And as a result, you've got a relatively open area near a major
00:07:12 ◼ ► population center, home to a major university, some technically-oriented government installations,
00:07:18 ◼ ► and now at least two major corporations focused on engineering, hiring highly educated people from
00:07:25 ◼ ► all over the country, and bringing them to the Santa Clara Valley. And, you know, is that simplifying it a
00:07:33 ◼ ► little bit? I guess a little bit, but like, this is how Silicon Valley got started. The kids, not just
00:07:38 ◼ ► their parents, not just the engineers who were brought there, the kids living in those suburban tract homes
00:07:44 ◼ ► in this area. Those are the ones who would power the personal computing revolution. There are so many
00:07:49 ◼ ► stories about this, including some that we'll talk about, where it's literally your dad brought home
00:07:56 ◼ ► electronics for the kid to play with, or the guy down the street would bring home excess stuff from
00:08:03 ◼ ► Hewlett-Packard that the kids who were electronically inclined on the block would mess around with on the
00:08:10 ◼ ► weekend. Literally, you had such an educated workforce, a technical workforce, that it wasn't just about
00:08:17 ◼ ► the parents. And I'm going to say dads a lot, because it's very gendered in this era. It was mostly
00:08:23 ◼ ► the dads. It was mostly men working on this, and the stories are mostly about them. But you end up with
00:08:30 ◼ ► this incubator where it's not just that the dads are there, but I just want to get across that the kids
00:08:36 ◼ ► on those blocks, in those suburban tracts, were surrounded by people, surrounded by engineers
00:08:42 ◼ ► who were their mentors, their dads, their dad's friends, their neighbors. And they looked up to
00:08:50 ◼ ► them, and they were encouraged by them. And I think that is really the story of how Silicon Valley got
00:08:55 ◼ ► It really feels like this is a story of a time, like this kind of beginning of computing,
00:09:01 ◼ ► because so many of the stories, I mean, we've already heard it, and everybody knows we're going
00:09:05 ◼ ► to talk about one, about a company being started in a garage by a couple of people. And I just feel like
00:09:11 ◼ ► now, today, in like the age of co-working spaces and stuff, like that's gone. Like this like garage
00:09:19 ◼ ► company, like it felt like it was a thing that was so common then for the companies we have now. And
00:09:28 ◼ ► Well, it was what you would expect in a suburban area. To work out of a garage made sense if you
00:09:35 ◼ ► were living in a suburban tract home. Today, we have a lot of remote stuff. And then, yeah, there tends
00:09:41 ◼ ► to be more of a culture of funding that happens sooner, that leads to office space in a way that,
00:09:48 ◼ ► as we'll see with Apple's story, it was a more complex step to get there, although they did get
00:09:55 ◼ ► there fairly quickly. But you have to start somewhere. And especially if you're doing hardware,
00:10:01 ◼ ► you have to assemble the hardware. And that's a big part of the Apple story. So let's start
00:10:10 ◼ ► Woz, Stephen Gary Wozniak, born in 1950 in San Jose. His dad, guess what? Engineer at Lockheed
00:10:17 ◼ ► on the street Woz grew up on in Sunnyvale, which is right next to Cupertino in Mountain View.
00:10:22 ◼ ► Everybody's dad worked at Lockheed or NASA or some other electronics companies that had begun to emerge
00:10:28 ◼ ► because of, again, this incubator of all these different engineers and electronics companies.
00:10:33 ◼ ► And some of them beget more of them beget more of them. And that was what was happening
00:10:37 ◼ ► in the Santa Clara Valley in this period. Kids in the neighborhood would often pitch in with their
00:10:43 ◼ ► dads who on the weekend were tinkering with weird electronic stuff or mechanical stuff in their
00:11:02 ◼ ► I'm terrified by it. Steve Wozniak was probably soldering things when he was like five or six.
00:11:08 ◼ ► Because that was the environment. You know, his dad was an engineer and they were surrounded by
00:11:12 ◼ ► engineers. By the time Woz was in fifth grade, he had built a computerized tic-tac-toe game.
00:11:18 ◼ ► The next year he built a ham radio. His eighth grade science project was an electronic adding
00:11:23 ◼ ► machine, which I just want to read this quote from Michael S. Malone from the book Infinite Loop. He
00:11:29 ◼ ► said, 13-year-old Steven Wozniak on his own, from his own design, had built a computer as powerful as
00:11:40 ◼ ► Do you think for Woz, it was the life experience of, of like, you know, the people around him and
00:11:46 ◼ ► working with his dad, or do you think he had some kind of like born extra talent? Like he was just,
00:11:54 ◼ ► I think Steve Wozniak is a special, is a genius. And, and, and people, as, as we'll see,
00:12:01 ◼ ► that genius was recognized really quickly. I think he absolutely was, is a genius to this day.
00:12:07 ◼ ► Um, and a sweet guy. Um, I, I think though it's that combination, right? Not every kid on Steve
00:12:16 ◼ ► Wozniak's block became Steve Wozniak or even in his neighborhood, it was him, but to be in that
00:12:24 ◼ ► environment and be encouraged and be exposed to these concepts so early, it's that magical, it's like a
00:12:32 ◼ ► musical, a Mozart in, in a period where there was lots of classical music and that was a cultural
00:12:42 ◼ ► thing was the music. A Mozart is more likely to spring than in a place where music is impossible
00:12:49 ◼ ► and doesn't exist and is, is, uh, right. It's not accessible. It, you, if you can put the,
00:12:56 ◼ ► if you can couple the genius with a, I would say perfect environment to, for, for the incubation
00:13:10 ◼ ► So, um, Woz goes to Homestead High in Cupertino, uh, which had a, apparently a legendary electronics
00:13:18 ◼ ► class taught by a guy named John McCollum. And this is the moment where Woz seems to have realized
00:13:25 ◼ ► what he wanted out of life. This is where he started to think about designing circuit boards.
00:13:32 ◼ ► He would look at the designs of other devices in electronics magazines and figure out how he could
00:13:39 ◼ ► do them better, how he could make them more simply and elegantly, which in that days often was a game
00:13:45 ◼ ► of, do I need this many computer chips? Because chips were expensive and he would, and he would say,
00:13:51 ◼ ► I don't need, I can, I can, I can make this board with five fewer chips. And, and so he started to
00:13:58 ◼ ► think in terms of like efficiency and outdoing what, uh, what professional corporations were doing.
00:14:06 ◼ ► Like this high school kid was thinking I could do better than this. So, um, of course everything else in
00:14:15 ◼ ► his high school career basically fell apart. I mean, he had no social life. Uh, he did a lot
00:14:22 ◼ ► of pranks that got him in trouble. Um, cause he is a prankster to this day. He was really only focused
00:14:27 ◼ ► on his obsession. Yeah. That's, that's one of the key things about Woz that has kind of prevailed through
00:14:33 ◼ ► all of the popular culture about Apple is that the guy told pranks like in, in all of the movies and all
00:14:40 ◼ ► of the TV movies and all of them, and I've seen all of them. That is kind of the thing that persists
00:14:45 ◼ ► for him the whole time. Well, if you're a writer of a movie, you're trying to find a hook, right? A hook
00:14:49 ◼ ► of like, who is this guy? And honestly being a studious, uh, well, at least in the stuff,
00:14:54 ◼ ► a nerdy guy who's obsessed with looking at electronics magazines and optimizing circuit boards,
00:15:00 ◼ ► probably not the most visual cue, uh, of his genius for a movie. So they make it about the pranks.
00:15:07 ◼ ► That was the, that was kind of his outsized, um, uh, personality trait was he's a merry prankster.
00:15:15 ◼ ► Um, and even though that's not the part that makes him a genius, that's the part that makes him
00:15:21 ◼ ► interesting as a character in this period. So I see why they went with that. Um, I will say though,
00:15:27 ◼ ► I don't want to portray Woz as a social outcast or a nobody. Everybody at Homestead High knew who
00:15:33 ◼ ► Woz was. And they all knew he was a genius in the making that, that there is no doubt about that.
00:15:39 ◼ ► Like the, all the reports about this period say people knew Woz, and they knew the guy was brilliant.
00:15:44 ◼ ► Um, you know, not, not doing well in some of his classes, but like he was obviously brilliant at what
00:15:51 ◼ ► he cared about. Um, he got a high school internship at an electronics company, Sylvania,
00:15:58 ◼ ► which a lot of us will know as a company that made life light bulbs, but it was an electronics
00:16:02 ◼ ► company. And this is where he started to think about the unified unification of hardware and software,
00:16:11 ◼ ► right? That computers could not, could be more than just simple calculating machines because they could
00:16:17 ◼ ► be mediated and controlled by software. This is where he started programming in a very early programming
00:16:21 ◼ ► language called Fortran. And, and that moment of him realizing that the software could help control
00:16:28 ◼ ► his hardware and make things that could do more than just some math for you. This is like the moment
00:16:37 ◼ ► where he couldn't be stopped because it is important to note, right? That like at that point, computers could
00:16:44 ◼ ► exist without software. They were kind of hardware things that you could program to do things.
00:16:50 ◼ ► Right. There were main for, obviously because he learned Fortran, there was programming language out
00:16:54 ◼ ► there, but these were things that were happening on computers, the size of rooms, right? And he was
00:17:00 ◼ ► building little calculating machines, but in this moment he had that idea of like, well, wait a second.
00:17:05 ◼ ► It's that moment that, that you can see the incubation of the personal computer because it's like,
00:17:08 ◼ ► wait a second, I can build things and there's software, put them together. And what do we have?
00:17:13 ◼ ► Yep. Yep. Yep. So, um, the only question is like, okay, what's, was gonna do? So he goes to college
00:17:20 ◼ ► at, uh, University of Colorado in Boulder. It's unclear what happened there other than that he
00:17:28 ◼ ► hacked the college's computer system, um, to essentially print, uh, Nixon sucks on page after page of the
00:17:37 ◼ ► printer at the university computer center. Um, unclear whether he was expelled or dropped out, uh, the
00:17:45 ◼ ► sources that I've got conflicted about this. So I'm just going to say he wasn't, he left, uh, CU Boulder,
00:17:50 ◼ ► uh, as a merry prankster, um, came home, went to junior college. The plan was that he was going to transfer to
00:17:57 ◼ ► UC Berkeley in 1971. That summer he and his neighbor and friend, a high school student. So a little
00:18:05 ◼ ► younger named Bill Fernandez, they built a simple computer together. This has become famous as the
00:18:12 ◼ ► cream soda computer, which is not what they called it, but they drank a lot of cream soda while they
00:18:16 ◼ ► were making it, I guess. And then they had a reporter come over or a photographer from the local paper to
00:18:20 ◼ ► take a picture of it. And then, and something happened and it kind of blew out and it was a kind
00:18:25 ◼ ► of a flop, but it is notable in the sense that they were building a computer. They wanted to build a
00:18:30 ◼ ► personal computer themselves, um, design and build it. Um, Bill Fernandez, by the way, going to Homestead
00:18:38 ◼ ► High, he's a little younger than Waz. He's got another friend at Homestead High who's an interesting
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00:21:21 ◼ ► of relay. Okay, Mike, let's talk about Steve Jobs. Okay. Not giving anything away here, but let's
00:21:31 ◼ ► talk about Steve Jobs. Stephen Paul Jobs. So born in 1955 in San Francisco to, as we all know now,
00:21:38 ◼ ► a Syrian PhD student named Abdul Fatah Jandali and a Wisconsin native and classmate of his at the
00:21:45 ◼ ► University of Wisconsin, Joanne Schiebel. They put their baby up for adoption and Joanne requested
00:21:53 ◼ ► that he be adopted by college graduates. These are two highly educated people and they wanted
00:21:59 ◼ ► their baby. She was really, I mean, they couldn't be married. His father back in the Middle East was very
00:22:10 ◼ ► opposed to the whole idea. I get the sense just in reading about it that she still held out some hope
00:22:17 ◼ ► that she could keep the baby. And I think that she was kind of bargaining by putting roadblocks in like
00:22:23 ◼ ► they got to be college graduates. The adoption agency finds a couple to adopt. That falls through and then
00:22:29 ◼ ► they get placed with this different couple, neither of whom has even graduated from high school. And in the end,
00:22:34 ◼ ► she only signs the adoption papers when the adoptive couple signs a pledge, signs on paper, a pledge to send
00:22:41 ◼ ► the baby to college. And they will immediately start saving into a college fund for him. And there are
00:22:50 ◼ ► stories about how she still kind of held out hope that she would be able to get the baby back. She does end up
00:22:58 ◼ ► marrying John Dolly. And they have another child who is Mona Simpson, the novelist, for whom, by the way,
00:23:07 ◼ ► Homer Simpson's mother is named because her ex-husband now was a writer on The Simpsons, writer-producer on The
00:23:13 ◼ ► Simpsons. The Simpsons were named by Matt Groening, but Mona Simpson is literally Steve Jobs's sister's
00:23:20 ◼ ► name. And that's how they, Richard Apple, named Homer's mom after her. But it was not to be, and it was a
00:23:28 ◼ ► closed adoption. So the family did not know where the baby went. That couple that signed that paperwork
00:23:34 ◼ ► was Paul and Clara Jobs. Paul Jobs, interesting guy, I think, Coast Guard veteran, just like the birth
00:23:42 ◼ ► mother actually from Wisconsin. I think that's kind of a funny connection. He was a tinkerer, especially with
00:23:48 ◼ ► cars, worked as a mechanic, a machinist, a realtor, at one point a repo man repossessing cars. Just a lot
00:23:56 ◼ ► of different jobs that Paul Jobs had. It's quite great, really. His name is Jobs. He's done lots of
00:24:01 ◼ ► many jobs for Jobs. He was a Jobs man. Yeah, I guess so. It's nominative determinism at its best.
00:24:07 ◼ ► He's Paul Jobs. He is. He's, so many jobs. So Clara grew up in San Francisco, and when they adopted
00:24:13 ◼ ► Steve, she was working as a bookkeeper, bookkeeper doing accounting and stuff for companies. Steve
00:24:19 ◼ ► grew up in a typical Santa Clara Valley neighborhood of the period with engineers everywhere. A Hewlett-Packard
00:24:27 ◼ ► engineer lived a few doors down and would bring young Steve gadgets to play with. Again, this is that
00:24:32 ◼ ► incubation that, like, there are engineers everywhere. And even Paul Jobs, who is a more working-class
00:24:39 ◼ ► guy, but even he is a mechanical tinkerer. So there's, it's just, it's everywhere around.
00:24:46 ◼ ► Ultimately, the family moves to Los Altos, which is in a better school district. It means Steve can go
00:24:54 ◼ ► to Homestead High. Mike, you remember my story about how, like, after Apple events, I would like to,
00:24:59 ◼ ► like, on the way home, I'd stop by, like, the good deli and get a sandwich on the way home.
00:25:06 ◼ ► It's like four doors away from that is where Steve Jobs grew up. It's, I had no idea. It's
00:25:11 ◼ ► unbelievable. It's right there. In fact, David Pope points out in Apple at 50 that, or sorry, Apple,
00:25:17 ◼ ► the first 50 years, his book, that, and the book opens with a map. It's like every major event in
00:25:27 ◼ ► Yeah, he was talking about that in the episode that he did with you, the interview, right? That
00:25:35 ◼ ► And it's, and there's nothing, I mean, it's very, all very close together. In fact, this is about as
00:25:40 ◼ ► far away from the story as you get, and it's not far at all. It's one exit up the freeway. It's not,
00:25:45 ◼ ► not far at all. Homestead High. He, so Steve Jobs, I mean, you're not going to be surprised by any of
00:25:52 ◼ ► this. He also was interested in pranks, like someone else I can think of. At one point,
00:25:57 ◼ ► he was working on a project. He literally called, he looked in the phone book and called Bill Hewlett,
00:26:02 ◼ ► the CEO of Hewlett-Packard, that co-founder of Hewlett-Packard, at home, and asked him for some
00:26:08 ◼ ► parts for one of his projects. And not only did Hewlett give him the parts, he got him a job
00:26:13 ◼ ► at the Hewlett-Packard plant that made those parts, encouraging the youth. Again, part of this
00:26:19 ◼ ► incubator that's going on here in the Santa Clara Valley. Steve Jobs also took that same
00:26:25 ◼ ► legendary electronics class from that legendary teacher that Woz had taken, but he only got
00:26:30 ◼ ► through a single year because he was too rebellious and didn't get along with the teacher.
00:26:34 ◼ ► Surprise. Surprise. But he did make a good friend, Bill Fernandez, Steve Wozniak's neighbor. And
00:26:44 ◼ ► Fernandez really thought Steve would get along with his neighbor. So maybe we got to get these
00:26:49 ◼ ► two together. It's interesting in reading through this and like hearing you talk about it.
00:26:54 ◼ ► I feel like time forgets that Jobs was interested, at least at one point, in the physical aspect of
00:27:02 ◼ ► building computers. Because it kind of feels like from the point that Apple becomes a thing,
00:27:07 ◼ ► that's never mentioned for him anymore. And is often, and potentially it's just because he's
00:27:13 ◼ ► compared to Woz, who was like a savant at it. But like, it is almost considered as time goes on,
00:27:24 ◼ ► It's not true. In fact, there was, I just saw something the other week, I'm not sure if it was
00:27:29 ◼ ► from David Pogue or if it was maybe somewhere else, but, oh no, it was Harry McCracken wrote a great
00:27:34 ◼ ► fast company kind of oral history of Apple history. And he pointed out, Harry did, that
00:27:41 ◼ ► they talk a little bit about some stuff that Steve Jobs built. And, and it really gets across the fact
00:27:47 ◼ ► that it's not fair to say Steve Jobs wasn't actually, was kind of a poser when it comes to
00:27:55 ◼ ► electronic tinkering. He did a bunch of electronic tinkering. I think the, I think though, compared to
00:28:01 ◼ ► Steve Wozniak, he was just a, an amateur, right? Like, and once you, once you're with Woz, why would
00:28:08 ◼ ► you bother, right? Like he just is a genius. So I think that's what happened is that Steve was
00:28:14 ◼ ► interested in this stuff, but in the end, Woz was clearly the engine that was going to drive
00:28:20 ◼ ► everything creative that was happening because Woz was so brilliant at it. But yes, definitely there's
00:28:25 ◼ ► evidence that Steve really was interested in this and was building his own, uh, you know,
00:28:30 ◼ ► whether it's sketching circuit boards or building other electronic gadgets. I think that's absolutely
00:28:35 ◼ ► true. Yeah. But, um, so Bill Fernandez, I'm going to read, this is from, uh, David Pogue's book.
00:28:42 ◼ ► He says, um, this is Bill Fernandez telling the story. So one day when Jobs came over to visit,
00:28:47 ◼ ► I took him across the street. I saw Woz washing his car in front of the Wozniak family house. And I
00:28:52 ◼ ► introduced them to each other on the sidewalk. And then what Woz told Walter Isaacson in the
00:28:57 ◼ ► Steve Jobs biography, Steve and I just sat on the sidewalk in front of Bill's house for the longest
00:29:01 ◼ ► time, just sharing stories, mostly about pranks we'd pulled and also what kind of electronic designs
00:29:07 ◼ ► we'd done. We had so much in common. Typically it was really hard for me to explain to people
00:29:12 ◼ ► what kind of design stuff I worked on, but Steve got it right away. And I liked him. He was kind of
00:29:18 ◼ ► skinny and wiry and full of energy. And I would say that quote suggests Steve got it right away.
00:29:26 ◼ ► Right? Like even if Steve, we've collapsed our conception of Steve Jobs, but he does, he did
00:29:32 ◼ ► have a technical foundation because although Woz was far and away beyond everybody else, this
00:29:40 ◼ ► I think is Woz paying Steve tribute that Steve got it. He got it in a way that maybe if he didn't
00:29:46 ◼ ► understand the technicalities of it, he wouldn't have gotten it. Um, and what Steve Jobs said is Woz
00:29:53 ◼ ► was the first person I met who knew more electronics than I did, which if you're thinking Steve doesn't
00:29:58 ◼ ► know anything about electronics, this is a hilarious statement, but I think the evidence is that he knew
00:30:04 ◼ ► more than that. But, but again, overshadowed by what, what was like, you, you think, you know,
00:30:08 ◼ ► you think, you know, electronics, Steve Jobs meet Steve Wozniak and you're like, Oh, I know nothing.
00:30:13 ◼ ► This guy, uh, job said, I liked him right away. I was a little more mature than my years and he was a
00:30:19 ◼ ► little less mature than his. So it evened out. Woz was very bright, but emotionally he was my age,
00:30:24 ◼ ► which I mean, having tracked these guys over the years, kind of story checks out. Yeah.
00:30:30 ◼ ► Story checks out. Um, was did say Steve didn't know very much about electronics, but again,
00:30:35 ◼ ► I think this is coming from the perspective of Steve Wozniak that, that, uh, you know, compared to
00:30:41 ◼ ► what he knew, Steve Jobs didn't really know anything, but at least he got it right away.
00:30:45 ◼ ► I think that is, I think that's, these are all encouraging signs that these two kids are going
00:30:49 ◼ ► to do something interesting. So that's it. They, they sitting on the sidewalk in this street in,
00:30:57 ◼ ► in front of Bill Fernandez's house, I guess that that's how it started. They became good
00:31:08 ◼ ► You know, I, today in preparing for my incredible reading at the beginning of the show, which I've
00:31:15 ◼ ► definitely emulated Noah Wiley emulating Steve Jobs. I think. Oh yeah. Um, I, I actually watched
00:31:21 ◼ ► some of the iPhone keynote. I just wanted to kind of like set, set my tone for the day, uh, which is
00:31:28 ◼ ► just truly one of the greatest, uh, not the greatest product introduction of all time and it'll never
00:31:34 ◼ ► be beaten. Um, but in that, when he's showing the iPod, he starts with the Beatles and then goes to Dylan.
00:31:47 ◼ ► Of course. So, um, Woz and Jobs, one of their bonding experiences, they became obsessed with bootlegs of live
00:31:53 ◼ ► shows of Dylan. Um, when Woz went to Berkeley, he, cause he did go in 71. Um, what they had done is they
00:32:01 ◼ ► built a blue box, which they read an article on a magazine about this, that, that this guy named,
00:32:05 ◼ ► uh, with the nickname Captain Crunch had figured out the test tones that you could use in the phone
00:32:10 ◼ ► system. So you basically could get free long distance calls, uh, at a time when long distance
00:32:17 ◼ ► Falling anywhere outside your local area. Um, and Jobs is the one, and this is that typical,
00:32:22 ◼ ► like we, we built this thing and Jobs was like, we can sell these. Let's make a bunch of these
00:32:39 ◼ ► It is the data point. I think when you're trying to connect the dots, this is a dot that you can't
00:32:45 ◼ ► fail to connect, even though it's not super important and they didn't sell very many of them.
00:32:50 ◼ ► And it was not like the important part here is that they used Woz's technical acumen. And it's a
00:32:56 ◼ ► moment where Jobs said, you know, we can make some money selling these. And, and because of where the
00:33:00 ◼ ► story goes next, this is that, that's why this dot is a must connect. You have to have this dot here
00:33:07 ◼ ► because it leads to everything else. Now, you know, there's a, there's a big gap here. There's like a
00:33:12 ◼ ► four year gap, um, before things really start to kick off in terms of leading to Apple. Um, what was
00:33:19 ◼ ► going on then was had went to Berkeley for a year, but then he didn't have money to keep going. So he took a
00:33:25 ◼ ► year off from college, got a job at HP to earn money, to go back to college in this period is
00:33:32 ◼ ► when Steve Jobs went to read, uh, which in Portland, which fulfilled his birth mother's demands of his
00:33:38 ◼ ► parents. Famously, he washed out, you know, stopped going or kept going, stopped paying, uh, after a
00:33:45 ◼ ► year came back home, got a job at Atari. So the Steves are back after this period apart. They'd see each other,
00:33:53 ◼ ► like, uh, you know, coming back home, but then they're, they're back both working in the valley
00:33:58 ◼ ► together. This is the, the, the moment the Steves are back together. What will happen? This is that
00:34:06 ◼ ► moment. I think it's a little bit sad. Like the, the irony that Jobs never got the degree that his
00:34:13 ◼ ► birth mother was so desperate that he would get, like, there is something sad in there for me.
00:34:19 ◼ ► The way I read that is she wanted to, the last, her last gesture was to give him the opportunity.
00:34:30 ◼ ► Right. And that was all you could guarantee. It wasn't like, you know, the parent birth parents or
00:34:36 ◼ ► the, um, the adoptive parents can't guarantee that their baby will finish college. That's up to the
00:34:41 ◼ ► child, but they can guarantee the opportunity to go. Yeah. And in the end, Steve Jobs, if things had gone
00:34:48 ◼ ► different, you know, he would have gone back to school. Right. But like, he didn't need to, he
00:34:52 ◼ ► never, he never needed to even was, I mean, was ended up beyond the scope of this story. He ended up
00:34:59 ◼ ► with so much money that he was like learning how to fly a plane and he crashed and he got injured.
00:35:03 ◼ ► And he basically like took a sabbatical from Apple and went back to Berkeley and got his degree under an
00:35:08 ◼ ► assumed name. So he did eventually. But even then it was in these weird circumstances because Apple was
00:35:14 ◼ ► already a thing and Steve Jobs never, um, never wanted or needed to do that. Yeah. But so,
00:35:21 ◼ ► so I think it's a happy story in the end. It is. Uh, but because, and also that, that Paul and Clara
00:35:27 ◼ ► Jobs made good, right? Like they saved up the money and sent Steve to college. And then Steve was like,
00:35:34 ◼ ► no, thank you. Um, and in fact, one of those stories is that Reed was so expensive and he,
00:35:40 ◼ ► and he said, I'm not getting anything out of this. And my parents could probably use this money for
00:35:44 ◼ ► something else, but that's his decision as a almost adult. Yep. Okay. Um, 1975. I'm going to tell you
00:35:53 ◼ ► about computers, Mike, uh, please. So the first computers in the fifties and sixties were the
00:35:59 ◼ ► size of the room. Like I said before, just like enormous mainframes in the late sixties,
00:36:04 ◼ ► they had the mini computer. These were smaller, but they were still very expensive. Um, these computers,
00:36:12 ◼ ► you could only enter programs into them by using like paper tape that had punches in it,
00:36:17 ◼ ► pressing physical switches in a sequence or later you could like fill out a punch card that was kind
00:36:24 ◼ ► of the equivalent of paper tape. Um, and then hand it in. And then literally you'd hand it in,
00:36:29 ◼ ► it would get in a queue, they would run it and they'd send you the response back later. Like this
00:36:33 ◼ ► is how computers were back in this era. You mean hand it into a person? Like you'd go and give it to
00:36:38 ◼ ► the operator essentially? I think it depends on the place, like, or into a basket and then you come back
00:36:43 ◼ ► hours or a day later and get your print out of what happened. Right. Like this is what it was. It
00:36:49 ◼ ► was time sharing. These were incredibly complicated. Um, and rare is an important point too. These were
00:36:56 ◼ ► mostly found in big businesses or, uh, universities or government installations. They're, they're
00:37:02 ◼ ► basically nothing like what we think of when we use the computer today. Okay. That word computer
00:37:08 ◼ ► doesn't mean what you think it means. But in the early seventies, personal computers started to
00:37:13 ◼ ► appear. Even now I have to say they weren't what we think of as personal computers. They were kind
00:37:19 ◼ ► of scaled down many computers. The, the groundbreaking, I think everybody would say first personal computer
00:37:24 ◼ ► was the Altair, which costs more than $400 in 1970s money. So not cheap. And then here's the thing
00:37:34 ◼ ► about the Altair. You had to assemble it yourself. Like it was a kit computer. You, you bought the
00:37:39 ◼ ► parts and then you assembled it. That was part of the fun was you put it together. Um, it was the big
00:37:46 ◼ ► groundbreaking thing about the Altair was that it was, uh, powered by a single chip instead of a whole
00:37:50 ◼ ► bunch of different chips that did different jobs. It had a, a, a single chip at its core, which was the
00:37:55 ◼ ► Intel 8080. And if you hooked it up and turned it on, you could flip switches on the front panel
00:38:02 ◼ ► and then it would reply with flashing lights. So you could be like, add these numbers together. And this is
00:38:08 ◼ ► laborious to get this up and running. And, and to the point where it will blink a light, the number of times
00:38:13 ◼ ► of the answer, by the way, I worked it out. Well, say I worked it out. I just, I Googled it. Uh, $3,368 is, is what
00:38:22 ◼ ► that would be in today's money for the Altair for the Altair. It's a very expensive. Yeah. All of
00:38:27 ◼ ► them were really expensive at the time, but this was the first personal computer and you could actually
00:38:31 ◼ ► type on a keyboard and get results sent back to you. But what you'd have to do is buy a terminal,
00:38:38 ◼ ► a teletype terminal. So basically you're, you're going to get a screen or a printer or whatever,
00:38:42 ◼ ► and a keyboard and attach it to the Altair. And this was not part of the deal. The switches were part
00:38:48 ◼ ► of the deal, not the rest of the things that we think of computers having was not part of the
00:38:52 ◼ ► deal. So really, really rudimentary. You can ask a friend of the show, Kieran Healy, I believe built
00:38:58 ◼ ► a, uh, an Altair, uh, replica. And, um, I mean, it's the lights, I think Leo Laporte has one too,
00:39:06 ◼ ► the lights blink and you can like do the switches and all that. And it just takes forever. And it,
00:39:12 ◼ ► you know, again, not super practical, but kind of amazing at that period that you could make that.
00:39:17 ◼ ► without the keyboard, what does it actually do? Like, what do you do on it? What can it do?
00:39:24 ◼ ► You flip switches to do the input and then the light blinks to give you the output. That's it.
00:39:29 ◼ ► So it's like calculation, right? Like you, yeah, yeah. That, that kind of thing. You give it a math
00:39:38 ◼ ► Yeah. I know. It's kind of just barely, it's just barely above a calculator. Wow. And it costs $4,000.
00:39:47 ◼ ► Yeah. Okay. You see why I liken the Vision Pro to the early personal computers, right? Yeah. It's
00:39:54 ◼ ► amazing. It costs how much? It does nothing? What? Yeah. Okay. So the personal computer is here sort of,
00:40:01 ◼ ► but it's not like anything we think of as a personal computer today, but this is the moment. This is the
00:40:06 ◼ ► moment where it's going to change. And that's why we have to, I guess, famously go to the homebrew
00:40:11 ◼ ► computer club in 1975. This is a gathering of electronics hobbyists who are interested in
00:40:19 ◼ ► the computer and the growth of the computer and the introduction of personal computers.
00:40:25 ◼ ► And in 1975 was sees that Altair and goes, whoa, I could make that circuit board. I don't need to buy an
00:40:36 ◼ ► Altair. I could make a circuit board based on that Intel chip. He's like that Intel one chip, you know,
00:40:42 ◼ ► was right. It's like the fewer chips, the better. He's like, oh, I get rid of so many chips when I just
00:40:46 ◼ ► had this Intel chip. So he starts, he's like, I'm going to design this computer. Um, important moment here,
00:40:55 ◼ ► is I think a year before he built a terminal, what he called the TV terminal. Um, and, and so it was
00:41:04 ◼ ► basically a keyboard with a bunch of video circuitry that could be attached to a television set.
00:41:08 ◼ ► And then you could connect it via, I think either via a modem or serial to a remote computer,
00:41:16 ◼ ► like on the ARPANET, which was like early version of the internet. So he built, he, he did this whole
00:41:21 ◼ ► project, incredibly impressive to make his own terminal that he could use that had, so it was
00:41:29 ◼ ► basically the keyboard and a display. And for the display, he had built the circuitry that went output
00:41:32 ◼ ► to it, just a TV set, uh, readily available, cheap, great. Um, so this is, this is, I think one of the
00:41:41 ◼ ► leaps that he made is he saw the Altair, he thought about building a computer and he realized
00:41:46 ◼ ► that if he was going to build a computer, he could use the work he did on the TV terminal to build a
00:41:51 ◼ ► computer that would integrate a keyboard and output to a television set. So you could have what we would
00:41:59 ◼ ► all expect now, a computer that has a display and a keyboard attached to it, which is way better than
00:42:04 ◼ ► the switches on the Altair. What did the TV terminal do that the computer didn't say like the, the Apple
00:42:11 ◼ ► one? It was a dumb terminal. So the TV terminal, what it did was put text on a screen and input,
00:42:20 ◼ ► take input from a keyboard and then send that over a line to a computer somewhere. Okay. Right. That was
00:42:27 ◼ ► the idea. Yeah. It was like a chat bar basically. It's a very, very simple chat bar. I mean, it's not
00:42:36 ◼ ► even a, I mean, there's not even any chat, but yeah, like it's literally like anytime, I mean, it's the
00:42:41 ◼ ► equivalent today of like SSHing to a remote server. That's basically what this thing did is it, it made a
00:42:46 ◼ ► serial connection, uh, or modem connection to a, you know, probably Unix system at somewhere. I don't even
00:42:55 ◼ ► know where, um, but he built that. That was a cool thing. And, and this is important because video output
00:43:00 ◼ ► becomes a huge differentiator in the success of Apple down the road. Yep. The other thing that was did.
00:43:06 ◼ ► So, so he reuses all that circuitry from the terminal. He integrates it with this computer design that he's
00:43:12 ◼ ► working on. So he creates this computer with built-in support for video output and keyboard input, big leap
00:43:17 ◼ ► forward. And it starts up in less than a minute. And you're thinking, well, wait a second, what does that
00:43:23 ◼ ► mean? Like the Altair didn't have ROM read-only memory. So when you turned on an Altair, you had
00:43:32 ◼ ► to input everything to get it to run with a little switches. Took minutes, maybe many minutes, half an
00:43:42 ◼ ► hour, maybe to get it up and running where you wanted it to be, because it started from completely blank
00:43:46 ◼ ► up. And Woz had a ROM chip on his computer. So it loaded, it could load the initial startup
00:44:03 ◼ ► So if I can simplify it, it's essentially like the Altair, you were basically also putting
00:44:10 ◼ ► the OS in before you did it. You had to type, yes. You had to not even type, flip switches to
00:44:14 ◼ ► input the operating system to get it to run. Right. The concept of booting is not even the
00:44:21 ◼ ► right way to put it. Booting is more of what Woz's computer did, because it was reading its
00:44:26 ◼ ► operating system essentially off the ROM and getting in a point where you could start to like type
00:44:32 ◼ ► commands or type in a program or whatever you could do. And the Altair didn't work like that,
00:44:38 ◼ ► at least not initially. So this was another breakthrough that Woz had. So he built this
00:44:45 ◼ ► prototype. Remember, he had this job at Hewlett Packard. So he would literally go to work all day
00:44:54 ◼ ► at Hewlett Packard, finish his workday, go get dinner, and then go back to his desk. It's good
00:45:00 ◼ ► that he didn't really have a social life, I guess. He'd go back to his desk at HP, and then he would
00:45:05 ◼ ► build this computer in his off hours at HP, which later would mean that he would feel like funny about
00:45:14 ◼ ► using their facilities and wanted to offer his computer to HP. And we'll get to that. But
00:45:19 ◼ ► once it was finally done, he went to Homebrew and showed off the computer and showed off his design.
00:45:25 ◼ ► Because again, the key here is the design of the circuit board and the chips. And that's what he was
00:45:32 ◼ ► proud of. And he was proud that it worked. But Homebrew was all about these enthusiasts about
00:45:36 ◼ ► building computers. So he brought photocopies of the instructions and said, here. It was basically
00:45:43 ◼ ► open source. You can make it too, if you want. Just assemble it from parts. You can just use my board
00:45:53 ◼ ► and then buy all these chips and solder them on, which was easier than what they had been doing.
00:45:59 ◼ ► Not necessarily easy, because this is still a very hobbyist kind of thing. But this was a leap,
00:46:08 ◼ ► Yeah. I mean, if you're going to the Homebrew Computer Club, I'm expecting that something like
00:46:14 ◼ ► this could not be more exciting to you. Like, you want to build it anyway, right? Like, that's why
00:46:19 ◼ ► you're going. You are a tinkerer, right? You are someone who is going and wanting to build.
00:46:27 ◼ ► Yeah. I've made a better piece for you to use that will make it a lot easier for you to assemble
00:46:32 ◼ ► a computer. And here's what it is. So shortly thereafter, his friend Steve Jobs pulls Woz aside
00:46:38 ◼ ► and says, actually, why give away assembly instructions when we could make your printed circuit boards?
00:46:47 ◼ ► Or make your circuit boards. Printed circuit boards is like, we can make an order where they will print
00:46:51 ◼ ► these circuit boards instead of them being handmade. So we'll make a bunch of them. And then we could
00:46:56 ◼ ► sell them for a profit. This is the beginning right here, right? It would make it. And what he's
00:47:02 ◼ ► appealing to Woz here is like, this will make it easier for the hobbyist to assemble your computer.
00:47:06 ◼ ► They're not going to have to wire that board. They just buy the chips and solder them on. Let's do
00:47:11 ◼ ► that, right? Let's try that. And Woz would say later, Steve didn't do one circuit designer piece of
00:47:21 ◼ ► I would love to know more. And maybe we'll never know now, really. Like, what their kind of
00:47:29 ◼ ► relationship was at this point that Jobs thought he could go to Woz and suggest this, and that Woz
00:47:38 ◼ ► Again, I think maybe there's a level of maturity and emotional intelligence here, which is Steve
00:47:44 ◼ ► thinking, like Woz. And you look at them and their later history, and I think that it makes sense,
00:47:51 ◼ ► right? Woz, to this day, just loves making stuff, loves the accomplishment, loves the challenge.
00:47:58 ◼ ► And Jobs was always thinking, there's something here that's beyond, I would say, beyond yourself
00:48:07 ◼ ► to Woz. Like, Woz was not just thinking about himself because he was distributing the plans,
00:48:10 ◼ ► but he was thinking very narrowly about like, well, I'll give these plans out and people can
00:48:14 ◼ ► make their own circuit boards. And it was Jobs, and this is one reason I think they worked well
00:48:19 ◼ ► together, is that Jobs appealed to Woz's excitement by saying, we can reach more people with your
00:48:28 ◼ ► design by mass producing it. I mean, mass, like making 50 boards or whatever, printing 50 boards,
00:48:35 ◼ ► and then we can sell them. And you'll get, we'll get money from that, which is good because,
00:48:43 ◼ ► you know, it was a lot of work. They get an easier build of your computer. So it's good for them. It's
00:48:50 ◼ ► good for everybody. And in a real open source kind of way, it's also like, it's also, here are the plans
00:48:56 ◼ ► if you want to do it yourself, but wouldn't it be easier if you could just buy this board from us?
00:48:59 ◼ ► So I think that, I think that Jobs was thinking about this could be more, I think he was dazzled
00:49:03 ◼ ► a little bit by the genius of Woz and thinking, this shouldn't be constrained to people who Woz
00:49:12 ◼ ► meets, who will duplicate his effort, right? This is, this is bigger than him and it's bigger than us.
00:49:19 ◼ ► And so why don't we, you know, I, I really, my read on it is that Steve Jobs thought if I can help
00:49:28 ◼ ► disseminate Woz's genius, I'm doing a, I'm doing a positive thing. Plus he's looking around at
00:49:36 ◼ ► businesses in Silicon Valley and saying, maybe this is a business. I'm not sure he's at that point yet,
00:49:41 ◼ ► but I do think it's one of those things where it appeals to everybody. They make money and the people
00:49:46 ◼ ► don't have to build this board themselves because this is one of the tensions here is personal
00:49:50 ◼ ► computers are really hard to make at this point, incredibly hard to make. And this makes it a
00:49:55 ◼ ► There is almost like a democratization in Jobs's plan, right? Because by doing the printing of the
00:50:05 ◼ ► They were wiring boards and stuff. And, and, and like the, the reduction in work of having a printed
00:50:11 ◼ ► circuit board designed by Woz is, um, is major. And so, yeah, I think it is an interesting, it's a
00:50:17 ◼ ► really complicated dynamic. It's not as easy as a lot of the stories make it sound, but I think that
00:50:21 ◼ ► that's the dynamic is they're friends. Woz doesn't feel exploited and Steve isn't exploiting him.
00:50:30 ◼ ► Steve is, I'd say enabling him and, and wants his work to reach a larger audience. And I've been in
00:50:38 ◼ ► situations with friends of mine where like, I've had friends who are like, you're an amazing writer.
00:50:43 ◼ ► You're, you should post, you know, you write these amazing, funny things and send them to me an email.
00:50:48 ◼ ► Maybe you should have a blog. And I'm like, I will set up your blog for you, right? Like I want you to
00:50:53 ◼ ► be out in the world with this stuff and you can't do that part. Or, or you are great on podcasts,
00:50:58 ◼ ► but you can't make a podcast. So I will enable you. I will, I will make a podcast that we will do and I
00:51:04 ◼ ► will produce it and you just get to be out there in the world. I think that is what Steve is thinking
00:51:08 ◼ ► here is yes, we can, it's going to cost. So we'll do it and we'll maybe make it a little bit of a
00:51:14 ◼ ► business because there's a lot of effort going in here. But at the same time, we're, I'm spreading the,
00:51:19 ◼ ► the genius of Woz to people who will appreciate it, right? Like it's, it's, it's a net benefit for
00:51:26 ◼ ► everybody. And I do think that that's the, the key of this dynamic is I think Woz, sometimes Woz gets
00:51:32 ◼ ► portrayed as being kind of a bumpkin and he's not, I think, I think Woz cares about the work. And what
00:51:38 ◼ ► Steve was doing is let's get more people to appreciate your work, not in an ego way even, but like I can
00:51:45 ◼ ► get way more people to use this cool computer you built if we print circuit boards. And I think that
00:51:50 ◼ ► that was the key dynamic is Woz was not like, well, wait a second. I don't want that. He was like,
00:51:58 ◼ ► Yeah. You would say today, Steve was the entrepreneur, right? He had the entrepreneurial
00:52:03 ◼ ► spirit of seeing a potential business. This is job, sorry. Seeing a potential business to be made
00:52:10 ◼ ► and was, was the product guy. Like he was, that's what he did. He could build, he could conceive of a
00:52:21 ◼ ► Which takes me back to that quote that I read earlier that I'll say again from Woz. Steve didn't
00:52:26 ◼ ► do one circuit design or piece of code, but it never crossed my mind to sell computers. And that's the
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00:54:08 ◼ ► So Waz thinks he's going to get fired. Waz is like, oh man, I made a computer at my desk
00:54:19 ◼ ► at HP and it was after hours. We'll say that. I mean, was it? Did he work a diligent day and
00:54:28 ◼ ► It doesn't matter what time of day he's doing it. He's doing it using HP's equipment. Like
00:54:34 ◼ ► that is without a doubt. Right? Yeah. Oh yeah. Undoubtedly. Absolutely. Um, so, and I gotta
00:54:41 ◼ ► say good credit to Waz here. Cause he, I think he could have snuck out, but he is a, I think
00:54:46 ◼ ► he is just a kindhearted, uh, gentleman who, who believes in doing the right thing. So he
00:54:52 ◼ ► goes to his boss and says, I built a computer at my desk after hours. I'm thinking, you know,
00:55:04 ◼ ► think? Do it, uh, because I did it here and I work for HP really, if HP wants this, it's
00:55:12 ◼ ► yours. Do you want it? And his boss is like, I get how cool this is. He's very impressed
00:55:20 ◼ ► with it. I don't, I don't want to say he, the boss poohs it. The boss gets it. The boss
00:55:32 ◼ ► and Packard. We don't care about computers. We sell, we sell calculators and electronics,
00:55:37 ◼ ► uh, measuring devices and things. Um, but he doesn't, he's like, he's like, uh, I can't
00:55:43 ◼ ► be the one to make this decision. So they get, they get a lawyer at HP to go and ask all the
00:55:51 ◼ ► divisions in HP. So like, probably there's like a little, uh, synopsis that was, or his
00:55:57 ◼ ► boss writes up. The lawyer goes out and canvases the whole company and says, we have an employee
00:56:11 ◼ ► is no, not interested. It's unbelievable. Like there is no world in which these kids should
00:56:21 ◼ ► have been allowed to do this, but clearly the people at HP just could not see what was coming
00:56:27 ◼ ► for them. They had no idea of the future that was actually even coming for that exact company.
00:56:34 ◼ ► I mean, this is, this is so speculative and not a consumer product in any way that I understand
00:56:38 ◼ ► it on that level, but you're right there. They're there. I think it's probably asking too much,
00:56:43 ◼ ► but I do wonder if maybe if this had reached one of the founders, for example, if they would have
00:56:50 ◼ ► said, you know, and again, I think it's maybe asking too much, but they might've said, you know,
00:56:55 ◼ ► this personal computer thing is interesting. This kid is really smart. What if we give some seed
00:57:01 ◼ ► funding to this kid, maybe give him like a business manager or something? Do you know Steve
00:57:06 ◼ ► jobs? Um, and see where it goes. Maybe we, maybe we should do that. I think that's asking too much.
00:57:12 ◼ ► Like HP is just not geared to do this. And I think that there's no mindset here of like,
00:57:17 ◼ ► because this is, it's not a fit with their existing business at all. And, and, and so culturally,
00:57:28 ◼ ► what they probably would have need to say, which was let's set this kid up with some other people
00:57:34 ◼ ► and funding and explore this. It won't cost us very much. And this might go somewhere interesting.
00:57:40 ◼ ► I think the bottom line is they're like, it's hobbyist. It's not a consumer product. Uh, it's
00:57:46 ◼ ► not what we do. So it doesn't make sense. But I do think it's really telling that they,
00:57:50 ◼ ► they did the due diligence of asking basically everybody in power at HP, is this anything? And
00:57:57 ◼ ► the answer was universally. No, this is not anything. It's unbelievable. Like the, the story
00:58:04 ◼ ► should have stopped there. I feel like, yeah, like this is where the story should have ended.
00:58:09 ◼ ► Look, the, my, my, my fantasy alternate timeline here is exactly that is that Hewlett or Packard
00:58:16 ◼ ► swoops in and goes, Oh my God, this guy's a genius. Let's just set them up on the side. And we're
00:58:21 ◼ ► going to, and, and, um, we're going to see where this goes and maybe we can build a computer out of
00:58:26 ◼ ► this and maybe there's a business here, but I just think it's too far away for them to see it.
00:58:30 ◼ ► Yeah. I, I, I really, I, I really think so. Now there is a moment later when maybe when Steve is
00:58:37 ◼ ► still, Steve Wozniak is still an HP employee. There's a moment later where HP might, might've
00:58:42 ◼ ► other than that they said, no, I guess it might've said, you know what, actually don't set up a company.
00:58:48 ◼ ► We will, uh, we'll set it up for you here at HP, but they never, it's too late by the time that
00:58:53 ◼ ► happens. I guess I would say, but HP doesn't deserve all the blame here because remember Steve
00:59:00 ◼ ► Jobs is working at Atari at this point. And so Steve's like, all right, HP doesn't want to, well,
00:59:05 ◼ ► let's go, let's, let's see. And they're actively trying now to find a company that will do this
00:59:11 ◼ ► thing. Like, is this a thing a company would buy? That's step one. It's not, let's do a startup. It's
00:59:17 ◼ ► let's find somebody to buy this thing that you've invented. So Jobs goes to Atari and he's like,
00:59:25 ◼ ► is this anything? And they're interested in the idea. But at this point, Atari's entire business
00:59:35 ◼ ► focus is selling the home version of Pong. I feel like podcasts don't have footnotes, but I feel like
00:59:42 ◼ ► I almost need a footnote here. It's like, I don't know, ask your grandparents about Pong. Pong was the
00:59:48 ◼ ► first video game and they made a home version of it, which is kind of a computer, right? That just
00:59:53 ◼ ► does one thing, which is play this video game of Pong, which is two little lines that are like ping
00:59:59 ◼ ► pong paddles and a dot, which is the ball. And you move them up and down. And if it gets past the line,
01:00:11 ◼ ► Maybe I'm giving more credit than necessary, but I feel like Atari was really onto something here.
01:00:17 ◼ ► Like Pong was huge, right? It was. And I feel like maybe they were like, we have not got time
01:00:22 ◼ ► to look at this weird computer. That's the, that's the story is like, they were so focused on shipping
01:00:27 ◼ ► Pong for the home. Yeah. Which was, and it was all huge, right? And they would eventually get to
01:00:34 ◼ ► computers, but they got there through video games. And this was a little bit of a, and again,
01:00:38 ◼ ► it's a road not taken. Like with Steve Wozniak's genius at Atari, what would they have done?
01:00:43 ◼ ► They could have done some amazing things, but again, the business, and again, I don't think HP
01:00:49 ◼ ► and Atari should be thought of as lesser for turning it down. I don't think it makes sense for either of
01:00:54 ◼ ► their businesses at this point, but it's interesting that they had this opportunity and this is going to
01:00:58 ◼ ► be, I mean, this is the story, right? Is lots of people have the opportunity and let it pass them by
01:01:03 ◼ ► because it didn't look like anything at the time. Anyway, talk to your grandparents about Pong.
01:01:09 ◼ ► So to do this, to, to print these circuit boards, they need money. That's the, that's why they have
01:01:17 ◼ ► gone to HP and Atari is that it's, they have to go to a company that makes circuit boards,
01:01:23 ◼ ► prints circuit boards, which means they need to buy 50 of them or whatever, which needs,
01:01:27 ◼ ► they need to meet, which means they need to spend money. So Steve Jobs has a Volkswagen bus,
01:01:37 ◼ ► like a, like a minivan, basically. He sells it. Woz has an HP programmable calculator, which,
01:01:46 ◼ ► although it doesn't sound like much now when calculators are a dime a dozen, was actually a
01:01:50 ◼ ► very expensive electronic object. Like, um, they, so the VW bus and the HP calculator, they sell.
01:01:57 ◼ ► And with the money, by the way, the VW bus sold for a lot more than the calculator, just to be
01:02:01 ◼ ► clear. So Jobs is really kind of putting in his money here. And with that money, they are able to
01:02:07 ◼ ► order the printed circuit boards. It's great. Um, so they're on their way. They're going to make this
01:02:14 ◼ ► thing. Woz is still worried about HP and, you know, do they own this and all of that? And Jobs is like,
01:02:19 ◼ ► we should make our own company. And he's like, Oh, I don't know. I don't know. At which point I need
01:02:24 ◼ ► to introduce a new character to the story, which is a guy named Ron Wayne, who is 41 years old,
01:02:29 ◼ ► which is so much older than these guys in their twenties. He's a designer at Atari. So Steve knows
01:02:36 ◼ ► him. Steve Jobs knows him. And Ron Wayne had already accumulated a couple of decades of rough and tumble
01:02:43 ◼ ► business experience. He had businesses that succeeded. He worked for like a slot machine company at one
01:02:48 ◼ ► point. He, he had businesses that failed, gone bankrupt. He had seen it all. And he was working
01:02:54 ◼ ► at Atari as a designer. And, and Steve Jobs explains to Ron Wayne, like, ah, we really need to set up a
01:03:02 ◼ ► company. We sold our stuff. We're printing some circuit boards. He's working at HP. He's afraid,
01:03:08 ◼ ► like he can't work at HP and start a company. But I think we really need a company and a partnership
01:03:13 ◼ ► here of some kind to formalize this relationship. If we're going to do this. And Ron Wayne says,
01:03:19 ◼ ► why don't you boys come over to my apartment? We'll have a chat about this. And I like to imagine it was
01:03:25 ◼ ► like that. You kids, you boys come to the apartment. Let me, let me teach you a thing or two.
01:03:29 ◼ ► Yeah. I, I have, I, I, the wise 41 year old man who has seen it all. I'm going to educate you
01:03:36 ◼ ► about the way of the world. Okay. I mean, and I mean, that's literally what it is. It is therapy
01:03:42 ◼ ► with the two Steves work through your feelings. Where is this business partnership going to go?
01:03:48 ◼ ► And in the end, Woz comes around to the idea that a new company would be formed and it would own all
01:03:55 ◼ ► of his designs and what they decide to do. And, and this is not what Ron Wayne suggested, but it's
01:04:02 ◼ ► what Steve and Steve decided to do, which is make the company 45, 45, 10. So if Woz and Jobs disagree
01:04:20 ◼ ► Pretty good idea. Not bad. Right. And again, this is the idea is like, we need to formalize this
01:04:25 ◼ ► because money is changing hands and we put in our own money and all of this stuff. And Ron Wayne's
01:04:29 ◼ ► like, you got to do this. And he's look, Ron Wayne, I don't know a lot of detail. He's still around.
01:04:33 ◼ ► He was actually at David Pogue's computer history museum event. Claiming he still owns 10% of Apple,
01:04:40 ◼ ► by the way, which is like, okay. All right. We can talk about that. How's that going? Have you
01:04:44 ◼ ► cashed that in yet? I mean, I think he's just, he's just leaving it out there. Like maybe,
01:04:48 ◼ ► maybe, um, because they keep, look, I'm jumping ahead here, but they keep sending him checks to
01:04:53 ◼ ► buy them out and he never cashes them. So he says, interesting. So this is what they set up. And
01:05:01 ◼ ► the whole point here is Ron Wayne has undoubtedly seen some stuff, right? Like if you've been involved
01:05:08 ◼ ► in companies that have succeeded wildly and failed wildly, he has seen all of the scenarios where people
01:05:14 ◼ ► turn on each other, where there are lawsuits, where there's questions of who owns the intellectual
01:05:19 ◼ ► property. And I think that's, what's motivating Ron Wayne here is you got to do this and put it all
01:05:24 ◼ ► in this because otherwise there are so many potential downsides here. What if you walk away with the
01:05:30 ◼ ► intellectual property? You can't, you know, you can't build a company on, you know, on nothing.
01:05:37 ◼ ► You have to have skin in the game. You've got to put your intellectual property in the game.
01:05:56 ◼ ► Yeah. Yeah. Yeah. I mean, so they're throwing around names for it. We'll go, well, we'll get to some of
01:06:04 ◼ ► them in a minute. Suffice it to say they're all bad. Yeah. They're all terrible. And one day Steve Jobs
01:06:19 ◼ ► He's doing his thing, man. Steve Jobs. He's just a cool man. We're just growing fruit out here in
01:06:25 ◼ ► Oregon. And Woz picks him up from the airport because they are friends. Picks him up at the San
01:06:29 ◼ ► Jose airport. On the drive back from the airport, Steve Jobs says to Woz, I've got a great name.
01:06:38 ◼ ► Apple computer. And Woz is like, what? What are you talking about? Super out of left field.
01:06:49 ◼ ► But this is what Woz said later. He said, both of us tried to think of technical sounding mixtures
01:07:10 ◼ ► Oh, man. So Woz says after 10 minutes of trying, we both realized we weren't going to beat Apple
01:07:17 ◼ ► It's a pretty good name, right? Like, I know it's one of these things that we're too far into it now.
01:07:24 ◼ ► We cannot judge it accurately. But I think that it is a good name. Like, Apple. It's just,
01:07:32 ◼ ► it's nice enough. It's soft and it's human sounding. And like, it's not Executech. Like,
01:07:43 ◼ ► So, okay. So I am slightly older than Apple. I was a kid when I was first exposed to Apple
01:07:52 ◼ ► computers in probably like 1980, maybe 81, 80, something like that. Not the first computer,
01:08:06 ◼ ► My best friend and his, my best friend's dad was a teacher at my elementary school. Shout out to Chuck
01:08:13 ◼ ► and Crispin Holland. They, and Chuck was kind of a hippie, but also a school teacher. And he loved
01:08:23 ◼ ► computers. He was, he got into that scene and they bought an Apple two plus at one point. And before
01:08:29 ◼ ► that we had like Commodore pet in the school and like, it blew my mind. And I say this because when I
01:08:34 ◼ ► saw the Apple two and in that era and thinking about it, that brand resonated for exactly what you said,
01:08:46 ◼ ► which is it's organic. It's simple Apple. Like it is the simplest thing. Like it is just,
01:08:56 ◼ ► it's not Executech. It's just Apple. It's like, it does so much to demystify technology. It's like,
01:09:06 ◼ ► I know it's a high tech product, but it's just an Apple. And, and we'll talk about the branding,
01:09:12 ◼ ► but the ultimate Apple branding of the bite out of the Apple, which also implies it's biblical. It implies
01:09:18 ◼ ► knowledge, not just forbidden fruit, but knowledge. Like it's a good idea. And again, you know, this,
01:09:26 ◼ ► and I know this naming things is hard. And sometimes you get a name and you're like, Oh,
01:09:31 ◼ ► or you get a name and you go, I guess we'll go with it. And then it becomes rapidly clear that it's the
01:09:42 ◼ ► Or even exactly what, I mean, in naming relay, very similar to this of like the suggestion was made
01:09:49 ◼ ► and we couldn't think of anything better. Like we've got to that point of like, we've run this
01:09:58 ◼ ► I mean, that is the basic due diligence of any of this stuff, right? Is that there's very rarely
01:10:02 ◼ ► like a beam of light that comes out and makes you realize you've got the right answer. It's more like
01:10:11 ◼ ► I think it's the winner. And then over time, you're like, yeah, that's because honestly,
01:10:14 ◼ ► that's because it was the best one. But in the moment, it's more like you're picking from a group
01:10:20 ◼ ► and you're like, well, this one, I can't think of anything better. And that's true with like,
01:10:23 ◼ ► let me tell you for over the years, like headlines, cover lines on magazine covers, all that. It's the
01:10:29 ◼ ► exact same process where you have like a list of 10 and then it's down to three. And then you're like,
01:10:33 ◼ ► you know, it's never like, I love this one. This is the best one. It's very clear. It's more like,
01:10:38 ◼ ► I can't think of anything better. Let's go with that one. And that's what happened with Apple
01:10:41 ◼ ► computer. They couldn't think of anything better. Now I said, Ron Wayne was a designer at Atari.
01:10:46 ◼ ► Boy, was he, he was a designer and an artist. And so for his 10%, he made a super sweet logo for Apple.
01:11:05 ◼ ► Yes. It's more like a, it's more like a family crest or a coat of arms than a logo as we think
01:11:12 ◼ ► of it today. But it was something that they created. So it was Isaac Newton sitting under the apple tree
01:11:20 ◼ ► with a glowing apple sitting over his head, ready to drop. And then in letters that appear almost like
01:11:26 ◼ ► they're embossed on a, a flowing banner ribbon. Yeah. Banner, banner, scarf, ribbon. Yeah. The words
01:11:33 ◼ ► Apple computer co around the border were words from the poet Wordsworth Newton, a mind forever
01:11:40 ◼ ► voyaging through strange seas of thought alone. That's the original Apple logo. Again, it's almost
01:11:47 ◼ ► like a stained glass window more than a logo, but that's what Ron Wayne with his sweet design skills
01:11:54 ◼ ► came up with. And what were the Steve's going to do? They're like, cool, man. That's, I mean, it was
01:11:59 ◼ ► the seventies. Yeah. These were, you know, kind of hippie, hippie thoughts going on here. So
01:12:05 ◼ ► uh, great. It only lasted about a year, but it is the original Apple logo. And most importantly,
01:12:11 ◼ ► on the very next day, Ron Wayne went down to the Santa Clara County registrar and took out a certificate
01:12:20 ◼ ► that recognized their business partnership. So this is filing the first paperwork. And that was
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01:15:05 ◼ ► All right. So now they're official. We need to talk about what happened after that, right? So the
01:15:14 ◼ ► original business goal, remember the business goal here was to sell 50 printed circuit boards.
01:15:18 ◼ ► That was the goal. They needed money. They sold stuff to get the money to order the printed circuit
01:15:25 ◼ ► boards. And what they decided to do is sell them at $50 each. And this would make it slightly easier for
01:15:31 ◼ ► people at the Homebrew Computer Club to assemble a computer with only a bunch of chips and soldering,
01:15:40 ◼ ► So they go to the Homebrew Computer Club and Jobs is selling these boards there, talking to them and
01:15:46 ◼ ► saying, oh, look at this. You can get this. It's Waz's computer and you can, it's an easier computer
01:15:50 ◼ ► kit. And one of the people at the Homebrew Club is a guy named Paul Terrell or Terrell. I don't
01:15:57 ◼ ► know. Paul Terrell, we'll say. He owns a store called the Byte Shop, which is possibly the first
01:16:04 ◼ ► computer store. His business at this time was to buy Altair computer kits and assemble them and then
01:16:14 ◼ ► sell those ready to use computers at a profit. This is, it reminds me of how like even now on the internet,
01:16:20 ◼ ► you can buy like, you can buy certain kind of products you can buy in parts or spend an extra
01:16:26 ◼ ► hundred dollars and buy it assembled. Keyboards. Right? Like custom mechanical keyboards. Keyboards
01:16:30 ◼ ► are like that. Yeah. Yeah, exactly like that. That's the thing that it reminds me the most of,
01:16:34 ◼ ► honestly, is the mechanical keyboard scene. Yeah. So that's, that's the Byte Shop's business model
01:16:39 ◼ ► is, and perfect synergy with Steve Jobs, I would say. And I wonder how much Steve Jobs kind of like
01:16:45 ◼ ► vibed with this guy or got some of his thoughts by watching Paul Terrell, because the whole idea here
01:16:51 ◼ ► is your addressable market for a board, a circuit board. Well, let's start even back then. Jobs knew
01:16:58 ◼ ► the addressable market, so to speak, for Waz's photocopied circuit board plan is tiny. It's some people at the
01:17:09 ◼ ► homebrew club who want to do that level of work. And Jobs realized, if we print the circuit boards,
01:17:14 ◼ ► our addressable market, the number of people at the club or elsewhere who will do this project,
01:17:19 ◼ ► who will embark on this, building this computer, increases a lot because we've done the circuit
01:17:25 ◼ ► board for you. You don't need to do that. You just need to get the chips and do the soldering.
01:17:28 ◼ ► Okay. Paul Terrell has built a business on the idea that there is an even larger addressable
01:17:38 ◼ ► blink lights. If we assemble it for them, right? This is like, I don't want to build a kit. I just
01:17:46 ◼ ► want to have a computer. I just want to buy the computer. They're like, we can do that. We will sell
01:17:50 ◼ ► you a fully assembled computer, an Altair, and we make a profit because we sell it to you for more than
01:17:57 ◼ ► the kit costs. And that covers our labor and a profit. Okay. This is a very Steve Jobs kind of like,
01:18:04 ◼ ► how do you reach, because it's not just about building a business. It's about reaching more
01:18:08 ◼ ► people. It's your business is healthier because you're addressing a larger market segment. That's
01:18:14 ◼ ► what's going on here. So Paul Terrell says, this Apple computer is really interesting. And at this
01:18:22 ◼ ► point, I think it's just called the Apple computer, right? Really interesting. But he presumably already
01:18:29 ◼ ► has a setup where he's got people assembling Altair's and he's like, I'm interested in this
01:18:34 ◼ ► thing. I don't want to assemble it. So he says to Jobs and Was, he says, I'll make you a deal.
01:18:44 ◼ ► You build it for me. Take 50, you know, you're going to do 50 printed circuit boards, build them out into
01:19:06 ◼ ► This is Paul Terrell saying, I will pay you $25,000. And I'm sure Terrell was going to make a profit
01:19:22 ◼ ► reselling those, right? He was going to sell them for more than $500. That is what would end up being
01:19:26 ◼ ► what Apple would call the wholesale price of these computers. Once they sold them themselves, this was
01:19:32 ◼ ► the wholesale price. But it's a huge opportunity for, for Apple, this entity, this partnership to make
01:19:39 ◼ ► money. Except to get that $25,000, they calculated that to buy all the parts, to assemble all the boards
01:19:49 ◼ ► into computers, they'd need $15,000. Now keep in mind, these guys just sold their van and calculator
01:19:59 ◼ ► to make 50 circuit boards. They sold like, goodbye van, goodbye calculator. They're in a cash crisis
01:20:11 ◼ ► Exactly. None of them. And I just plugged all these numbers in again. That's $126,000 in today's money.
01:20:17 ◼ ► So it's huge, a huge amount of money. Obviously they were going to make a lot of money, right? But they
01:20:23 ◼ ► needed a huge amount of money to be able to get started. Right. Now there's some reasonable ways
01:20:29 ◼ ► you handle this in business and they will find them. Yeah. But they had no idea at this point,
01:20:34 ◼ ► right? No idea. No. And so here, so Ron Wayne, Mr. 10%, he, he, he's been through the wars, right?
01:20:43 ◼ ► The advantage of him is that he's seen everything. The disadvantage of him is that he's seen some
01:20:48 ◼ ► terrible business situations. This is less than two weeks after he has filed the paperwork in Santa
01:20:54 ◼ ► Clara. It's like 11 days later. He's been around a bunch of failed businesses. He is terrified about
01:21:03 ◼ ► ending up having to like own, owe lots of money as a part of Apple going into debt and these kids failing
01:21:10 ◼ ► to do what they're saying or getting into involved in bankruptcy or whatever else. And so he says,
01:21:16 ◼ ► I'm out. He literally less than two weeks later, he goes back to Santa Clara County and files an
01:21:22 ◼ ► amendment to the partnership agreement saying he is no longer a partner. And a few months later,
01:21:26 ◼ ► Apple computer company sends him a check for $1,500 as an acknowledgement that he is no longer
01:21:43 ◼ ► From my perspective, you're done. Like you're out. You're done. And you go and you go to the
01:21:50 ◼ ► courthouse or whatever and say, I'm not a part of this anymore. Yeah. It's not like they said,
01:21:55 ◼ ► you can't be a part of this anymore. He's like, I don't want it. This is too risky. So he got cold
01:22:00 ◼ ► feet. Sorry, Ron Wayne. Anyway, I mean, this is how they saw the crisis. They contacted the company
01:22:06 ◼ ► that they'd have to buy the parts from. It's like an electronics parts distributor in the Valley,
01:22:10 ◼ ► presumably, and asked for a line of credit. And the guy at the supplier basically calls Paul Terrell
01:22:18 ◼ ► at the bite shop. And he says, yeah, they're legit. That order, my $25,000 order is legitimate.
01:22:25 ◼ ► And they're like, okay, we will sell this to you net 30 credit. Yeah. So basically the idea here,
01:22:31 ◼ ► and this is not a non-standard business thing at all. It's like, you don't have to pay us right away.
01:22:34 ◼ ► You seem good for it because the bite shop confirms you're good for it. So we're going to sell you the
01:22:41 ◼ ► $15,000 in parts. You can have the parts now and you owe us $15,000 in 30 days. That's it.
01:22:50 ◼ ► Great. Well, now you have 30 days. You have a ticking clock and you have to assemble 50 computers
01:22:55 ◼ ► out of circuit boards in 30 days. Let me say that. I think Terrell seems like a good guy because
01:23:02 ◼ ► he could also net 30 Apple, right? Like from when he receives the finished product. He doesn't have
01:23:15 ◼ ► But he obviously decided he would do that. So I think there is a level with a lot of these people.
01:23:20 ◼ ► There's a level of let's help these kids out. Yeah. They're doing something interesting. Not like
01:23:26 ◼ ► let's exploit them, but it's like, let's help them out. They're doing something interesting.
01:23:30 ◼ ► And we benefit, right? Everyone else is like benefiting here, right? That he's going to have a new
01:23:35 ◼ ► interesting product to sell in his shop. And he clearly can't get this from Altair. He has to
01:23:41 ◼ ► assemble them, but this new company coming along, he's going to make them assemble them.
01:23:45 ◼ ► It's going to be easier for him. The electronics, if this works out, the electronics people are going
01:23:50 ◼ ► to be able to make way more sales to this. It's a single $15,000 order. If this goes well for 50,
01:23:57 ◼ ► how much more will they order? So they're like, let's take a chance on these kids and do it this way.
01:24:08 ◼ ► because they've got 30 days to build this. This is a legendary story. This is the, I keep thinking
01:24:17 ◼ ► this would be a great Steven Spielberg movie scene, this montage, because it's in the suburbs. It's very
01:24:23 ◼ ► E.T. It's a bunch of teenagers, kind of hairy 70s teenagers. They use, so Steve Jobs's sister isn't
01:24:33 ◼ ► living at home at this moment. So they use her bedroom to start assembling these computers.
01:24:38 ◼ ► They get in all the parts. They recruit a bunch of friends. So again, it's just like a bunch of
01:24:42 ◼ ► teenagers and 20-somethings in this house, in a bedroom, with all this electronics equipment,
01:24:49 ◼ ► which is why David Pogue pointed this out in his Apple book, that Apple, it's not technically
01:24:56 ◼ ► correct to say Apple started in a garage. Technically, it started in Steve Jobs's sister's bedroom.
01:25:02 ◼ ► But very rapidly, it was too much. So they moved it to the garage. It was too much in the bedroom,
01:25:18 ◼ ► These kids. Well, it is. I mean, imagine all of these young characters doing, and the music
01:25:30 ◼ ► and I've got to do that again. And then eventually, Waz has to test them at the end and figure out
01:25:37 ◼ ► what's wrong with the ones that don't work. And it's just, this is not only part of the legend,
01:25:41 ◼ ► it is like an 80s movie montage. Pirates of Silicon Valley does a good job with this part.
01:25:47 ◼ ► I will say, I love that movie, by the way. I think it is an absolute classic, which is really
01:25:52 ◼ ► underrated. And if you listen to the show and you've not seen the Pirates of Silicon Valley,
01:25:55 ◼ ► you should treat yourself to watching that movie. And I think if I'm remembering right, there's like
01:26:00 ◼ ► people smoking, I think someone's pregnant and do it. It's like a whole rabble of kids.
01:26:05 ◼ ► It's the 70s, right? So all of those things, all of those things, exactly right. All hands on deck.
01:26:10 ◼ ► Like literally, Patty comes back and helps Jobs' sister. They're friends from college. Waz is
01:26:20 ◼ ► apple orchard organic farm in Oregon, and they came down. I don't know. Friends from high school are
01:26:26 ◼ ► there. It literally is like, we got to assemble these things in 30 days or we're bankrupt. Help!
01:26:33 ◼ ► And so they do it. And they deliver 50 boards to the Byte Shop, which leads to another amazing
01:26:40 ◼ ► twist in this story, Mike. Amazing absolute scenes happening at the Byte Shop right now.
01:26:46 ◼ ► Because Terrell says, wait a second. When I said I wanted a fully assembled Apple computer,
01:26:55 ◼ ► I meant a case, a power supply, a monitor, and a keyboard. Now, I don't know if I believe this.
01:27:06 ◼ ► And the best analogy I can say is, this is like Nigel Tufnel in This Is Spinal Tap drawing Stonehenge
01:27:15 ◼ ► on the back of a napkin and using the symbol for inches instead of feet. Get it in writing, dude.
01:27:24 ◼ ► So I think he was hoping. Yes. I think there's a lot of hope going on here. I think he was hoping
01:27:31 ◼ ► that it would be, because again, this guy doesn't want to assemble anything, that it would be
01:27:36 ◼ ► a whole computer. And what they got is the fully assembled circuit boards with the chips on them.
01:27:46 ◼ ► But to his credit, he paid them. He paid the $25,000. They made that money. That's $10,000 in
01:27:56 ◼ ► profit less whatever they were paying their friends to assemble them in the garage. And that's Apple's
01:28:03 ◼ ► big sale. That's Apple's first big sale is 50 fully assembled circuit boards to the Byte Shop.
01:28:09 ◼ ► And if you're the Steves at this point, you are on top of the world. Your company's like
01:28:26 ◼ ► That they know how to build now as well, right? Like they've built enough of them. They know how to
01:28:32 ◼ ► do it. Well, I mean, step three profit, right? Now they've got this success. What does Steve Jobs do? He's
01:28:39 ◼ ► like, let's order more printed circuit boards. Let's make more of these. We can sell them to
01:28:44 ◼ ► electronic stores. We can sell the pre- now that we know how to assemble these things. And they're
01:28:50 ◼ ► probably a lot faster and they've learned because it's production, right? This is the part of the
01:28:54 ◼ ► story that makes Tim Cook's heart warm, right? Is the, oh, you can optimize the production now. You
01:29:01 ◼ ► know what all the bugaboos are. You can figure it out. Now you can make them much faster and more
01:29:14 ◼ ► seem like a lot, but remember 50 was the beginning of this and they made $10,000 on those. So
01:29:20 ◼ ► you can do the math there, but they made a lot of money. Um, and now some people were like,
01:29:26 ◼ ► uh, the bite shop who are like, would it be nice if it was in a case? There was a local cabinet
01:29:31 ◼ ► maker who designed a wooden case that you could put it in. Um, was designed an interface where you could
01:29:37 ◼ ► plug in a cassette tape player and load, load and save programs off of a cassette tape rather than
01:29:43 ◼ ► typing them in by hand every time you, cause remember there's no storage. So you turn it on
01:29:48 ◼ ► and it boots because was put ROM in it. But then if you want to write a program, you have to write it
01:29:52 ◼ ► and run it. And then when you turn it off, it's gone, right? There's no way to save it. So he designed
01:29:57 ◼ ► a cassette tape interface that you could use, uh, that would save that out. And so this is,
01:30:03 ◼ ► and I haven't said it yet. So I'll say it here. This is what we now think of as the Apple one.
01:30:08 ◼ ► Right. It's in the 175 box too, right? Like that, if you Google Apple one, usually it's,
01:30:16 ◼ ► it's in a wooden case. Right. But there were only a few that were actually in the wooden case. That's
01:30:20 ◼ ► the thing. Maybe those are the ones that survived cause they were protected cause they were in a case,
01:30:23 ◼ ► but like it was, it was sold as just this board and then you bring your own case and TV
01:30:31 ◼ ► and keyboard. Those were all extra and storage eventually. Yeah. That was all extra. So it was
01:30:38 ◼ ► a super rudimentary product, uh, but still very, you know, transformational at the time because it was so
01:30:45 ◼ ► much more capable than others. And they sold, I should say also the 500 was the wholesale price. The, um,
01:30:51 ◼ ► retail price they decided on was six, $666 and 66 cents, which got a lot of like a people who
01:30:58 ◼ ► thought it was the mark of the devil angry at them. But I, I think Steve jobs and Steve Wozniak
01:31:03 ◼ ► didn't care. They were just like, they thought it was a funny, they thought it was a funny price.
01:31:16 ◼ ► cause they, they, they've, they've filed the paperwork, uh, runway left, uh, they, they've shipped
01:31:22 ◼ ► the Apple one, but it really is a proof of concept. And obviously Woz, you know, Woz is thinking,
01:31:27 ◼ ► he's always thinking this is a, this is his old design and they've been making it. But like,
01:31:31 ◼ ► what is Woz doing? Woz is thinking about what he's going to do next. And Steve is thinking,
01:31:36 ◼ ► how are we going to sell whatever Woz does next? What's the next thing here? Cause this is the
01:31:40 ◼ ► start, but what are we going to do? If only they only sell 175 Apple ones, right? So Steve knows,
01:31:47 ◼ ► sorry, jobs knows they're going to need more net 30 credit agreements, right? For a bigger
01:31:54 ◼ ► product from a part supplier. And they're like, we need money. We need investors. So he starts asking
01:32:01 ◼ ► around. The net 30 is not going to like last them over a long period of time. They need more than
01:32:06 ◼ ► that. They're going to need to make an investment if they're going to make a better product here.
01:32:09 ◼ ► So Steve goes again, using his Atari connections, he goes and talks to Nolan Bushnell, the Atari guy
01:32:16 ◼ ► and says, will you invest in my little computer company? And he says, no, again, another missed
01:32:21 ◼ ► opportunity that Nolan Bushnell talked about afterward as being like, well, blew, blew that one. Um, but he
01:32:28 ◼ ► recommended a venture capitalist who also didn't want to invest in it, but that venture capitalist recommended
01:32:36 ◼ ► a tech executive named Mike Markkula. Mike Markkula had made a killing in tech and had retired.
01:32:46 ◼ ► He's almost like the mirror image of Ron Wayne. Ron Wayne had been through the wars. Mike Markkula had been
01:32:54 ◼ ► through the wars and made a lot of money. I think actually Mark Markkula might be the guy who did the, the,
01:32:57 ◼ ► the slot machines, not Ron Wayne. And it doesn't matter. Um, no, but it's another person who, again,
01:33:03 ◼ ► we're talking, when we talk about these wise men of Silicon Valley, Ron Wayne was 42 or whatever.
01:33:11 ◼ ► Mike Markkula is 34. He's not that much older, but he is literally retired because he's made so much
01:33:22 ◼ ► money in, in the electronics industry at this point. But he wants to keep his skin, skin in the game,
01:33:29 ◼ ► right? Keep a hand in the game. He loved mentoring younger business people about what he had learned,
01:33:35 ◼ ► obviously, and been successful at. So it's, it's November of 76. It's literally five months after
01:33:41 ◼ ► the papers were filed. This all happened so fast in 76. It's all in 76. Unbelievable. Mike Markkula
01:33:48 ◼ ► sees something in these two guys. He gets a demo of the computer that was is working on,
01:33:57 ◼ ► which is what's going to become the Apple two. And it's going to have just a little spoiler.
01:34:06 ◼ ► They're going to have a case. It's going to, it's going to have a keyboard. It's going to have
01:34:11 ◼ ► available storage. It's going to be the next step, a computer that more people would buy and use
01:34:25 ◼ ► Because it's got the video circuitry, but now, but now it's just, you plug that in and the keyboard,
01:34:28 ◼ ► you won't have to find a keyboard and attach it. It'll come with a keyboard in a case. All very
01:34:33 ◼ ► important. He gets a demo of this, which is not with all those pieces intact, but it's what
01:34:43 ◼ ► And Markala is like, yeah, let's do a business plan. Let's set sales goals. He invests some of his own
01:34:50 ◼ ► money. He gets the company, uh, a line of credit. It's unclear how much of his money he invests versus
01:34:57 ◼ ► what the line of credit is from the bank of America. But basically they, they end up with like a quarter
01:35:04 ◼ ► Okay. So it's a real company with a real line of credit. And, and I think this is a very important
01:35:11 ◼ ► for us to remember as we celebrate Apple's 50th anniversary that on January the 3rd, 1977,
01:35:18 ◼ ► they officially file incorporation papers for Apple computer incorporated surprise everybody.
01:35:28 ◼ ► We may be celebrating the wrong anniversary after all. In fact, just to make sure that everything is
01:35:37 ◼ ► on the up and up in March of 1977, Apple computer incorporated buys the assets of Apple computer
01:35:45 ◼ ► company for $5,300. And then Ron Wayne, you know, gets his check for his 11 days based on that
01:35:53 ◼ ► valuation. Cause they're like, you don't actually own this. We bought that and you, you get your
01:35:58 ◼ ► 5,300, which he doesn't, he doesn't cash the check. It's like, no, no, no. I still own 10%. I think this
01:36:03 ◼ ► is where the court would say you don't actually, cause they bought the partnership out with this new
01:36:07 ◼ ► corporation. But Apple computer Inc is, is January, 1977. So, you know, I guess stay tuned for all the
01:36:14 ◼ ► Apple 50 celebrations to happen again, again, early next year. Yeah. Anything we don't get to, we can
01:36:19 ◼ ► just move it to January. Recycle it, run those stories again. Such a good factoid. I love this so
01:36:25 ◼ ► much. It's like this actually isn't the 50th anniversary of Apple, the company that became Apple Inc.
01:36:32 ◼ ► The corporation. Yeah. It's, it's based on the filing of the partnership papers, not the actual
01:36:43 ◼ ► Very funny. So yeah. Anyway, here we are. We got our, we got our characters to take Apple,
01:36:49 ◼ ► the corporation forward. Mike Markala is the adult supervision. Steve Jobs is hungry to take over the
01:36:53 ◼ ► world. Steve Wozniak has finally quit his job at HP. I guess he had to do it at some point.
01:37:00 ◼ ► Yeah. And he's working on that new computer, the Apple two, that's going to change everything.
01:37:03 ◼ ► Yep. They've rented an office. They're out of the garage. They moved all the workbenches they had
01:37:09 ◼ ► been using to assemble the Apple one and in Steve's parents garage over to this new office. The only
01:37:16 ◼ ► thing left to do, Mike is hire a CEO. This is going to be an ongoing issue with Apple, right? Who's
01:37:21 ◼ ► going to run this? Steve Jobs is too young and too inexperienced. Mike Markala could do it, but like
01:37:27 ◼ ► he really likes being the Jedi master. Who's like, Oh yeah. So let me tell you my wisdom,
01:37:31 ◼ ► but doesn't really want to do the day-to-day thing anymore. He has too much money for that. He wants
01:37:35 ◼ ► to be a mentor. He doesn't want to get his hands dirty, but Mike Markala is like, I know a guy.
01:37:40 ◼ ► I know a guy. He's an executive over at national semiconductor. He might be persuaded to
01:37:46 ◼ ► take the job, which brings us momentously to the arrival of Apple's very first chief executive
01:37:53 ◼ ► officer. You know him, you love him. He's the famous, the irreplaceable Mike Scott, everybody.
01:38:00 ◼ ► Welcome Mike Scott to the story. Scotty, Scotty is here. Let's go. Let's roll. Mike Scott is here.
01:38:09 ◼ ► Who is this man? I don't know him. I also love, this is the name of Steve Carell's character in the
01:38:16 ◼ ► office. Yeah. Yeah. Michael Scott. Yeah. Anyway, the, the, the, what, what can I say? Uh, on that
01:38:24 ◼ ► bombshell, Mike, we are done with the first chapter, at least in the story of Apple, uh, how they got to
01:38:32 ◼ ► where they were going. Um, maybe we'll tell more of the story down the road somewhere, but that is,
01:38:37 ◼ ► that is my story from here. And obviously, um, I think we both need to shout out our favorite podcast
01:38:43 ◼ ► for inspiring this episode, which is the rest is history. This is basically my, the rest is Apple
01:38:49 ◼ ► history. I hope people enjoyed the, the, the leap back in time to the actual story of what we're
01:39:00 ◼ ► Let me say shout out to the rest is history, of course, but Jason shout out to you. I, you had this
01:39:08 ◼ ► idea. You said to me, I got a thing, I'm going to do it. And then you delivered this script to me
01:39:18 ◼ ► Yeah. Well, a lot of fun. I went through a lot of books, so many, but I have so, I have a, a continuing
01:39:24 ◼ ► to grow Apple, uh, collection of books, some of which are in print and some of which are very,
01:39:36 ◼ ► And this has also, uh, gone three times as long as we thought it would. So that is the episode for
01:39:42 ◼ ► this week. Uh, we have things that we'll get to next week. Uh, I guess we can eulogize the Mac
01:39:48 ◼ ► Pro next week. Maybe I'm going to just do it now. Rest in peace, Mac Pro. Uh, there's probably going
01:39:54 ◼ ► to be about nine hours of other podcasts about the Mac Pro this week. So, you know, people can go get
01:39:59 ◼ ► those in other places. Uh, if you would like to send us your feedback, follow up and questions for
01:40:03 ◼ ► this show, please go to upgradefeedback.com. I want to thank, uh, our members who support us of
01:40:08 ◼ ► Upgrade Plus. You can go to getupgradeplus.com and you'll get longer ad-free episodes each and
01:40:17 ◼ ► together and exactly what, uh, we did, uh, to try and make this a reality. Um, if you would like to
01:40:23 ◼ ► see a video version of the show, please search for the Upgrade Podcast on YouTube. Thank you to our