It was on display at the company’s first retreat at Pebble Beach in late 1985. There Jobs pronounced that the first NeXT computer would be shipped in just eighteen months. It was already clear that this date was impossible, but he blew off a suggestion from one engineer that they be realistic and plan on shipping in 1988. “If we do that, the world isn’t standing still, the technology window passes us by, and all the work we’ve done we have to throw down the toilet,” he argued.
Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge Jobs, did so. “Reality distortion has motivational value, and I think that’s fine,” she said as Jobs stood at a whiteboard. “However, when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.” Jobs didn’t agree: “I think we have to drive a stake in the ground somewhere, and I think if we miss this window, then our credibility starts to erode.” What he did not say, even though it was suspected by all, was that if their targets slipped they might run out of money. Jobs had pledged $7 million of his own funds, but at their current burn rate that would run out in eighteen months if they didn’t start getting some revenue from shipped products.
Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his list of maxims with “The honeymoon is over.” By the time of the third retreat, in Sonoma in September 1986, the timetable was gone, and it looked as though the company would hit a financial wall.
In late 1986 Jobs sent out a proposal to venture capital firms offering a 10% stake in NeXT for $3 million. That put a valuation on the entire company of $30 million, a number that Jobs had pulled out of thin air. Less than $7 million had gone into the company thus far, and there was little to show for it other than a neat logo and some snazzy offices. It had no revenue or products, nor any on the horizon. Not surprisingly, the venture capitalists all passed on the offer to invest.
There was, however, one cowboy who was dazzled. Ross Perot, the bantam Texan who had founded Electronic Data Systems, then sold it to General Motors for $2.4 billion, happened to watch a PBS documentary,
Jobs did indeed need one, badly. But he was careful not to show it. He waited a week before calling back. Perot sent some of his analysts to size up NeXT, but Jobs took care to deal directly with Perot. One of his great regrets in life, Perot later said, was that he had not bought Microsoft, or a large stake in it, when a very young Bill Gates had come to visit him in Dallas in 1979. By the time Perot called Jobs, Microsoft had just gone public with a $1 billion valuation. Perot had missed out on the opportunity to make a lot of money and have a fun adventure. He was eager not to make that mistake again.
Jobs made an offer to Perot that was three times more costly than had quietly been offered to venture capitalists a few months earlier. For $20 million, Perot would get 16% of the equity in the company, after Jobs put in another $5 million. That meant the company would be valued at about $126 million. But money was not a major consideration for Perot. After a meeting with Jobs, he declared that he was in. “I pick the jockeys, and the jockeys pick the horses and ride them,” he told Jobs. “You guys are the ones I’m betting on, so you figure it out.”
Perot brought to NeXT something that was almost as valuable as his $20 million lifeline: He was a quotable, spirited cheerleader for the company, who could lend it an air of credibility among grown-ups. “In terms of a startup company, it’s one that carries the least risk of any I’ve seen in 25 years in the computer industry,” he told the
Perot also traveled in rarefied social and business circles that complemented Jobs’s own. He took Jobs to a black-tie dinner dance in San Francisco that Gordon and Ann Getty gave for King Juan Carlos I of Spain. When the king asked Perot whom he should meet, Perot immediately produced Jobs. They were soon engaged in what Perot later described as “electric conversation,” with Jobs animatedly describing the next wave in computing. At the end the king scribbled a note and handed it to Jobs. “What happened?” Perot asked. Jobs answered, “I sold him a computer.”
These and other stories were incorporated into the mythologized story of Jobs that Perot told wherever he went. At a briefing at the National Press Club in Washington, he spun Jobs’s life story into a Texas-size yarn about a young man
so poor he couldn’t afford to go to college, working in his garage at night, playing with computer chips, which was his hobby, and his dad—who looks like a character out of a Norman Rockwell painting—comes in one day and said, “Steve, either make something you can sell or go get a job.” Sixty days later, in a wooden box that his dad made for him, the first Apple computer was created. And this high school graduate literally changed the world.
The one phrase that was true was the one about Paul Jobs’s looking like someone in a Rockwell painting. And perhaps the last phrase, the one about Jobs changing the world. Certainly Perot believed that. Like Sculley, he saw himself in Jobs. “Steve’s like me,” Perot told the
Bill Gates was not a soul mate. Jobs had convinced him to produce software applications for the Macintosh, which had turned out to be hugely profitable for Microsoft. But Gates was one person who was resistant to Jobs’s reality distortion field, and as a result he decided not to create software tailored for the NeXT platform. Gates went to California to get periodic demonstrations, but each time he came away unimpressed. “The Macintosh was truly unique, but I personally don’t understand what is so unique about Steve’s new computer,” he told
Part of the problem was that the rival titans were congenitally unable to be deferential to each other. When Gates made his first visit to NeXT’s Palo Alto headquarters, in the summer of 1987, Jobs kept him waiting for a half hour in the lobby, even though Gates could see through the glass walls that Jobs was walking around having casual conversations. “I’d gone down to NeXT and I had the Odwalla, the most expensive carrot juice, and I’d never seen tech offices so lavish,” Gates recalled, shaking his head with just a hint of a smile. “And Steve comes a half hour late to the meeting.”
Jobs’s sales pitch, according to Gates, was simple. “We did the Mac together,” Jobs said. “How did that work for you? Very well. Now, we’re going to do this together and this is going to be great.”
But Gates was brutal to Jobs, just as Jobs could be to others. “This machine is crap,” he said. “The optical disk has too low latency, the fucking case is too expensive. This thing is ridiculous.” He decided then, and reaffirmed on each subsequent visit, that it made no sense for Microsoft to divert resources from other projects to develop applications for NeXT. Worse yet, he repeatedly said so publicly, which made others less likely to spend time developing for NeXT. “Develop for it? I’ll piss on it,” he told
When they happened to meet in the hallway at a conference, Jobs started berating Gates for his refusal to do software for NeXT. “When you get a market, I will consider it,” Gates replied. Jobs got angry. “It was a screaming battle, right in front of everybody,” recalled Adele Goldberg, the Xerox PARC engineer. Jobs insisted that NeXT was the next wave of computing. Gates, as he often did, got more expressionless as Jobs got more heated. He finally just shook his head and walked away.
Beneath their personal rivalry—and occasional grudging respect—was their basic philosophical difference. Jobs believed in an end-to-end integration of hardware and software, which led him to build a machine that was not compatible with others. Gates believed in, and profited from, a world in which different companies made machines that were compatible with one another; their hardware ran a standard operating system (Microsoft’s Windows) and could all use the same software apps (such as Microsoft’s Word and Excel). “His product comes with an interesting feature called incompatibility,” Gates told the
At a forum in Cambridge, Massachusetts, in 1989, Jobs and Gates appeared sequentially, laying out their
