Apple did bring a stick to the negotiations. The company had a long-standing patent suit against Microsoft alleging that Windows, which largely replicated the conventions of the Mac’s graphical user interface, infringed on Apple’s own intellectual property. Many observers thought Apple had a good case, and Gates really wanted it settled. But Amelio had insisted on a variety of ancillary agreements and never could close the deal.
When Steve called on Gates, he kept things simple. He explained that he would be willing to drop the patent litigation, but for a price. Not only did he want Microsoft to publicly announce a five-year commitment to provide Office for the Mac; he also wanted his powerful rival to publicly, and financially, make clear that this was an endorsement of Apple’s new direction by purchasing $150 million in nonvoting shares. In other words, Steve wasn’t asking for a loan, he was asking Bill to put his money where his mouth was.
“It was classic,” remembers Gates. “I’d been negotiating this deal with Amelio, and Gil wanted six things, most of which were not important. Gil was complicated, and I’d be calling him on the phone, faxing him stuff over the holidays. And then when Steve comes in, he looks at the deal and says, ‘Here are the two things I want, and here’s what you clearly want from us.’ And we had that deal done very quickly.”
The deal closed at quite literally the eleventh hour of the night before Steve gave his MacWorld keynote address in a downtown Boston theater called the Castle. By Steve’s standards, this speech was on the short side, clocking in at just about thirty minutes. He had no products to introduce or demo. Instead, he presented the corporate equivalent of a State of the Union address. Pacing the stage like a caged tiger, Steve was visibly tense. He wore a white, long-sleeved T-shirt underneath a black sweater vest that was buttoned up in a lopsided way—the lowest button didn’t have a free buttonhole, so one side of the vest hung lower than the other. A couple of times he had trouble getting the remote control to advance the slides projected on the enormous screen behind him. But once he got rolling, his presentation was one of his most concise, and a clear signal that things would change—for the better—at Apple.
Much of his talk was more of a lecture than a presentation, in which he outlined his thinking about what it would take to bring Apple back. He dismissed some of the popular criticisms of Apple, namely that its technology wasn’t relevant, that it couldn’t execute well, and that the company was so disorganized that it couldn’t be managed. “Apple is executing wonderfully well, just on the wrong things,” he quipped. The reason the company seemed in such disarray was that it hadn’t had any real leadership for years. The biggest immediate problem, he added, was that the company’s sales were shrinking. To address that, Apple would need to sharpen its market focus, reassert its brand, and shore up partnerships. “And the place to start is at the top.” That’s when he introduced the new board, describing the strengths of each new director and only then mentioning that he too would join it. He said there would be no chairman named until a new, permanent CEO was hired.
After about twenty minutes he turned to partnerships. What he really wanted to talk about was one business relationship—the one with Microsoft. His first mention of Bill Gates’s company drew only tepid applause, and a few hoots. But in short order, he laid out a five-point deal that would prove to the world that “Microsoft will be part of the game with us,” and later adding that “we have to let go of … this notion that for Apple to win, Microsoft must lose.” Once it all sank in, however, the crowd warmed to the idea, booing only at the mention of Internet Explorer becoming the default browser on future Macs. When Steve introduced Bill, who appeared via a live video feed from Seattle, the audience forced the Microsoft CEO to wait while it applauded before he could make his short statement.
The moment turned out to be Steve’s worst case of stage management ever. Bill’s face, with his familiar smile that can border on a smirk, was about six feet tall on the massive screen above and behind Steve. He looked down on Steve as if to say, “I’m sorry, little people, while I enjoy gracing you with my presence, I can’t be bothered to fly down to your little campfire singalong.” The comparisons with Apple’s old “Big Brother” ad were inevitable.
Overlooked in the ensuing news coverage was the quiet unveiling at the end of the show of a new slogan. One of the themes Steve came back to at several points in the program was how important it can be to try to look at things from another perspective, just to test your assumptions. In other words, he was urging people to “Think Different.” Ads sporting that tagline wouldn’t appear for another few months. But Steve was already sold on the concept as a rallying cry for the new Apple. In fact, he also was already sold on coming back to Apple full-time.
“I watched Bob Dylan as I was growing up, and I watched him never stand still,” Steve would tell me about a year later, in a circuitous attempt to explain why he finally dived back into Apple. “If you look at true artists, if they get really good at something, it occurs to them that they can do this for the rest of their lives, and they can be really successful at it to the outside world, but not really successful to themselves. That’s the moment that an artist really decides who he or she is. If they keep on risking failure they’re still artists. Dylan and Picasso were always risking failure.
“This Apple thing is that way for me. I don’t want to fail, of course. When I was going in I didn’t know how bad it really was, but I still had a lot to think about. I had to consider the implications for Pixar, and for my family, and for my reputation, and all sorts of things. And I finally decided, I don’t really care, this is what I want to do. And if I try my best and fail, well, I tried my best.”
Steve waited till September to announce that he would formally take the reins. Even then, he agreed only to become Apple’s “interim” CEO, or iCEO, as he liked to say, because he still was unsure where the gig would take him. “It was amazing,” remembers Gates. “NeXT the hardware company disappears. NeXT the software company is going absolutely nowhere. But then the Apple board of directors hands the keys over to Steve, even as they’re all thinking, ‘It’s too bad all the normal ways of saving a company didn’t work. Holy smokes, what are we doing here? This is our only chance, but whoa! Here we go!’ ”
Chapter 9
Maybe They Had to Be Crazy
At a trade conference on October 6, 1997, exactly three weeks after Steve announced that he was taking on the title of iCEO, Michael Dell, the billionaire founder of his eponymous build-to-order PC clone business, was asked what he would do if he were put in charge of Apple Computer. “What would I do?” brayed the CEO, who was a decade younger than Steve. “I’d shut it down and give the money back to shareholders.” Steve shot back an emaiclass="underline" “CEOs are supposed to have class,” he wrote. But just a year and a half earlier he had told me pretty much the same thing: “Apple ain’t worth anything like the price of its stock,” he’d said.
Dell’s flippant suggestion was not just a reflection of conventional wisdom—it also sounded like a much safer idea than putting the company in the hands of Steve Jobs. There was no evidence to suggest that someone with Steve’s record had the chops to turn around a mess as daunting as Apple. He had shown himself to be erratic, undisciplined, and petulant. He had only succeeded when leading small groups of people; Apple had thousands of employees scattered from Cupertino to Ireland to Singapore. He had been a prima donna and a spendthrift, but this job seemed to call for a cold-blooded CEO who understood the value of patience, discipline, and cutting costs in a hurry. Perhaps Steve was a genius—the success of Pixar seemed to reinforce that. Perhaps he was an opportunist—selling NeXT to Apple seemed to bear that out. But a great CEO? A proper leader? The world could be forgiven its skepticism.