Thank you. There’s no risk. That’s why you need to do it young. That’s why we started Apple. We said, you know, we have absolutely nothing to lose. I was 20 years old at the time. Waz was 24 or 5. We have nothing to lose. We have no families, no children, no houses. Waz had an old car. I had a Volkswagen van. I mean, all we were going to lose is our cars and the shirts off our back. We had nothing to lose and we had everything to gain. And we figured even if we crash and burn and lose everything, the experience will have been worth ten times the cost. So what did we have to lose? There was no risk.
Apple was a very classic Silicon Valley startup in the sense that Steve Wozniak and my partner both worked for Hewlett Packard. As a matter of fact, Woz was still working there when we started Apple. And Hewlett-Packard was the genesis of not just the concept of starting your own company, but, and of course it was the primary role model in the Valley, but it was also the ethics or the ethical basis of how you wanted to build your company, a company that was based on values, not based on just making money. And HP had the HP way and they had a list of their values. And the first one was, we need to make a profit or else we can’t keep this company going. But after that, they got into how they wanted to treat individuals and conduct their corporate life. And it’s very idealistic, in my opinion. So we were very much influenced by that.
The second thing that made us very typical, in a way, was that we were building a product that we ourselves were the customer for. We were building something we wanted ourselves. just like Hewlett and Packard started building test equipment and equipment for engineers. Well, they were engineers, so they could, in essence, do the marketing. They could figure out what an engineer might want in a product as well as design it. We wanted a computer, and we knew exactly what we wanted in a computer. So we could do the marketing as well as the engineering of that product. This changed later as we started selling to people that were different than us, but certainly in the first several years of Apple, we were selling to people that were just like us. and a lot of Silicon Valley companies have started that way.
In Silicon Valley, if you had to say what was the seminal bud, it was Stanford University, Fred Terman, encouraging Hewlett Packard, the Varian brothers, to not go back east but to stay here. That was the germ. The second big growth phase and the real modern-day shot in the arm was when William Shockley, the racist, returned home to his hometown of Palo Alto to start a semiconductor company. He was one of the three co-discoverers of the transistor at Bell Labs. And he returned home to Palo Alto and he started Shockley Semiconductor and he brought with him about a half a dozen of the brightest young people in the country on this. And in a way, it was very lucky that he turned out to be a terrible manager and businessman and several of these people defected, headed by Bob Noyce, who raised money from a big company out east called Fairchild Cameron Instrument to start Fairchild Semiconductor. And the rest is history.
Fairchild was the second seminal company in the valley after Hewlett-Packard and really was the launching pad for every semiconductor company and the whole semiconductor industry which built the valley. So it’s an incredible place. When you look back at the end of the century, I’m sure that people will feel of the ten greatest inventions and discoveries of the century, five of them happened within ten miles a year, twenty miles a year. Genetic engineering, the integrated circuit, the microprocessor, the personal computer. It’s just amazing what this valley has done.
I think that’s a very healthy way to look at it. Some people say, well, you could have gone to college and been a lawyer. Well, you’re right, but you can go to college and be a lawyer when you’re 25. And there’s nothing that stops you from doing that. The only thing you really have in your life is time. And if you invest that time in yourself to have great experiences that are going to enrich you, then you can’t possibly lose.
So I always advise people, don’t wait. Do something when you’re young, when you have nothing to lose, and keep that in mind. And I think that’s the best way. Not that people can’t start companies when they’re 50. I’ve seen that. Very successful companies. But it’s a lot easier when you’re young and have nothing to lose and don’t have the responsibilities to other people that you will acquire later on in your life.
So over the years, we developed some very, very sophisticated ways of tracking human factors before we knew the name human factors. We called it gameplay interface. But in fact, it was human factors pushed to an extreme. And I think that it’s not by accident that Steve Jobs worked at Atari because he understood some of the human factors that was part of it that ultimately turned into the Macintosh, which has been the human factors winner. And even though an awful lot of it was developed at Park, Steve knew it when he saw it.
I called up Bill Hewlett when I was 12 years old, and he lived in Palo Alto. His number was still in the phone book. And he answered the phone himself. He said, yes. He said, hi, I’m Steve Jobs. I’m 12 years old. I’m a student in high school, and I want to build a frequency counter. And I was wondering if you had any spare parts I could have. And he laughed, and he gave me the spare parts to build his frequency counter, and he gave me a job that summer in Hewlett-Packard working on the assembly line, putting nuts and bolts together on frequency counters. He got me a job in the place that built them. and I was in heaven.
One of the things that Was and I did was we built blue boxes. These are obsolete now, but they were devices that you could build. You know, when you make a long-distance phone call in the background, you hear, do-do-do-do-do-do. Those are the telephone computers actually signaling each other, sending information to each other to set up your call. And the signaling they use is a lot like touch-tone phones, only it’s different frequencies. Well, you can make a box that emits those frequencies, that can make those tones. And there used to be a way to fool the entire telephone system into thinking you were a telephone computer and to open up itself and let you call anywhere in the world for free. And matter of fact you could go to you could you know call from a payphone go to White Plains New York take a satellite to Europe take a cable to Turkey, come back to Los Angeles. And you go around the world three or four times and call the payphone next door and shout in the phone, be about 30 seconds and come out the other end of the other phone.
So we actually, and these were illegal, I have to add, but in spite of that, we were so fascinated by them that Woz and I actually figured out how to build one. We built the best one in the world. It was the first digital blue box in the world. And we would give them to our friends and use them ourselves. And, you know, you rapidly run out of people you want to call, but it was the magic of the fact that two teenagers could build this box for $100 worth of parts and control hundreds of billions of dollars of infrastructure in the entire telephone network in the whole world from Los Altos and Cupertino, California. That was magical.
And experiences like that taught us the power of ideas, the power of understanding that if you could build this box, you can control hundreds of millions of dollars worth of telephone infrastructure around the world. That’s a powerful thing. And that, if we hadn’t have made blue boxes, there would have been no apple. Because we would have not had not only the confidence that we could build something and make it work, because it took us six months of discovery to figure out how to build this. It was a tremendous process in itself. But we also had the sense of magic that we could sort of influence the world. you know, control it in the case of blue boxes, but something much more powerful than controlling, influencing in the case of Apple. And they’re very closely related. I really do to this day feel if we hadn’t had those blue box experiences, there never would have been an Apple computer.
Now, if you want to know what’s going to happen in five years, you don’t look in the mainstream, you look at the fringe. And the fringe back in 1975 was the Homebrew Computer Club. and it was a bunch of people that were in this area that were into building their own computers because they couldn’t afford to buy them. Computers were $100,000, $50,000, and we could afford that.
Every two weeks we had a meeting at the Stanford Linear Accelerator Center on Wednesday nights, and boy, that was the most important day of my life. The rest of the two weeks was almost all my spare time was spent planning and writing some software to show up and planning for this event, the Homebrew Computer Club, and go down there, and as shy as I was and I’d never raise my hand and say anything, there was a period where we could show off something we have and i would set up my computer with my sears color tv and people would come up and ask questions and i could answer them. and um everybody that was interested in building computers was at that meeting and there were you know a few hundred people at that meeting it got up to that that big initially it was maybe 50 but it grew to 200 300 people eventually and um we started going when it was you know, literally 30, 40 people. And we always had, Wozniak and I always had the coolest stuff there. And we built a reputation for, you know, having the needed stuff.
I remember Steve Jobs asking me whether I wanted to help him fund Apple Computer, offering me a third for $50,000, and I turned him down. So that’s kind of one that got away.
I can remember Steve and Steve, Steve Wozniak, Steve Jobs, working on the product breakout and doing a design that was so clever, because in those days it was heavily hardware, that they essentially broke the bank. I think we felt that 70 chips was about a normal thing and that if you could get it down to 60, you were really doing good. I think they got it down to 38. The only problem was it used so many feedback loops that you couldn’t really test it, so we had to escalate it back up again. But they got their bonus, and everybody was happy.
It’s interesting, you look at something and you say, wow, that’s neat, but if you look before it, by several years, you’ll find the precursors to it, all the things that you learned along the way that kind of added up to be able to take a bigger step. And for Waz and I, you know, Waz and I, I met Waz when I was maybe 12 years old, 13 years old. He was the first person I met that knew more electronics than I did. So we became fast friends.
A couple of guys with no money didn’t really have the capital to build the sort of computer that was going to sell zillions into all the homes, build a thousand a month. We didn’t have the money either. But Steve again went out and started, you know, looking for people who would put money into something that could go.
When Steve Jobs and Woz decided they might be able to build a business out of what they had, they didn’t know anyone to call except Nolan Bushnell’s friend, Don Valentine. So Steve called Don, and Don went over to the garage in Los Altos and came out shaking his head. and called me up and said, there are these two fellows, and boy, do they really need some help.
We went and talked to the venture capitalists, and none of them would give us any money. One of them referred to me as a renegade from the human race because I had longer hair then. And, you know, none of them would give us any money, thank God, because then they would have ended up owning most of our company. So, I think that Apple and a few other companies were good examples to the venture capitalists, that great ideas are not the exclusive providence of people with gray hair.
I’ve never found anyone who said no or hung up the phone when I called. I just asked. And when people ask me, I try to be as responsive, you know, to pay that debt of gratitude back. Most people never pick up the phone and call. people never ask. And that’s what separates sometimes the people that do things from the people that just dream about them. You’ve got to act. And you’ve got to be willing to fail. You’ve got to be willing to crash and burn, you know, with people on the phone, with starting a company, whatever. If you’re afraid of failing, you won’t get very far.
We had the Apple I, which we sold about 200 of. And the key thing about that product was we learned. We had it 50% right, but we cut our teeth. We figured out how to make the next big jump. We learned a lot from the market about what they wanted. And that really was what made the Apple II such a giant success. And that was our first real success. And we launched that in 1977 at the West Coast Computer Fair in April. And that went on to sell I don know maybe 10 million units over its lifetime It was the first really successful personal computer by a mile.
And it wasn until later on actually after we launched the Apple II in April, probably in the fall of that year, I realized we needed to do some advertising. And so I was looking in technical journals and the company’s advertising caught my eye, which was Intel’s. So I called up Intel and asked them who did their advertising, and they said Regis McKenna. I said, what is a Regis McKenna? I said, it’s a person. So I went over to Regis’s, and the first time I walked in there, he almost kicked us out, but he eventually took us on as a client. And so he was involved very early on. Fred Hoare came on maybe two years later.
The personal computer industry was really quite different from Intel in that the personal computer industry really began as a countercultural movement. You know, the first people were sort of, you know, they were the long hair software developers or hobbyists in the computer industry, and they really distinguished themselves from being part of the mainframe world that was dominating the computer industry. So that in the mainframe world, the Big Brother world, the centralized computing world, the personal computer represented the individual, the freedom of the individual.
So the design and the development of Apple was lightweight personal computing, came out of, in contradistinction to the mainframe, which was impersonal. The Apple colorful logo was distinguished between the sort of the stark black and white IBM logo. And so everything that was in the computing world prior to the personal computer industry was big and massive centralized control of an organization, control of the individual. The personal computer industry was this countercultural movement that came out of the 60s.
Youngsters, many of them with two years experience, but that’s better than somebody with two years experience ten times. In other words, we didn’t have any of those impediments to growth that happened with large bureaucratic organizations. It was the startup that was the primordial, prototypical startup in every respect. And more importantly, it was informed with true evangelism, a true sense of mission. In other words, really changing the world. There was a true sense of changing the world.
So the atmosphere was one of youth. It was one of passion. It was one of creativity. It was one of very little structure, but a process that everybody understood. And it might not codify that process, but you knew it was there. And the process was to get something done and make a difference. And Steve kept using the phrase, give something back. And so there was that really sense of not being part of a company, but being part of a cause, or a crusade, or whatever you like to call it.
Well, I think Steve Jobs did something for us all. He kind of broke the age ceiling, the glass age ceiling, if you will, on kids going off and doing things that they shouldn’t be doing. People didn’t look at us as so young when we were 27 because he, at a very young age, created a very successful company. Secondly, you had Stanford and Berkeley and all of the other technology companies here, and the geography is such that everybody’s kind of forced down to the lowlands by the bay. And so it’s a great infrastructure. We were able to start the company in nanoseconds, literally, get it up and running, and nobody batted an eye that we were barely shaving.
I think Steve Jobs is perhaps the most gifted person in our business in terms of vision and leadership. He really is the father of the personal computer. He really did popularize graphical user interfaces. He really has a passion for great technology.
There is an entrepreneurial risk culture in the Valley that is as important to… It is as key of a reason why Silicon Valley exists as any other reason. I mean, the primary reasons are the entrepreneurial risk culture, of which role models are a very big part. Second is the universities, Stanford and Berkeley. There wouldn’t be a Silicon Valley if there weren’t Stanford and Berkeley constantly bringing in human capital, which decides to stay here because it’s so nice. And third, certainly for the number of companies that start, is the financial infrastructure as well.
And then fourth is the beehive effect. you’ve got a lot of extraordinarily talented people and the beehive effect says that it’s a lot more efficient to have that talent and all those companies together and let me give you an example when you want to start a company you need to hire some experienced people you just can’t hire people out of school most of the time so you have to hire some experienced talent well you’re going to ask somebody to leave a job maybe they have a family and come to your place to work Well, if your company’s in Montana and they move their family and your company fails, there’s not another company in Montana that they can go to work for most likely. So you’re going to have to move again. As where if you, all you have to do is convince them to turn left instead of right down the road to go to work in the morning, but they keep their same house, their kids don’t have to change school, et cetera. And if your company fails, well, they just go get a job another week at some other company, you’re going to have a much higher probability of recruiting them. And so that’s the beehive effect. And those four things together, I think, are why Silicon Valley is today what it is.
The entrepreneurial risk culture has a lot to do with role models, starting off with Hewlett and Packard, and models of engineers that started companies, models of marketing people that started companies, and even some spectacular failures. Some of the failures are as widely discussed as the successes. And even the failures, people are admired for trying. And I think they pick themselves up, dust themselves off, and go get a job. Maybe they don’t own the company. Maybe they’re not a founder of the next company. But they’ve got a really good job, and there’s no real chance that they’ll end up destitute.
Like Steve Jobs at Apple, we don’t anticipate that customers are going to tell us the product they want. They’re going to tell us the slew of problems that they have. and then we can come up with the products that they want. Obviously, from a disruptive innovation standpoint, Steve Jobs is the epitome of it. And Steve is the epitome of it because he got fired for being too innovative, and they brought him back, and he was still too innovative, and it just turned out he was right. He was right all along, and they should have listened to him. But it was so innovative that it was disruptive, actually, to the organization. And finally he came back with a nearly bankrupt company, and now it didn’t matter how disruptive you were to the organization. And you know he might not be the gentlest kindest manager and it just doesn matter He right 75 80 of the time and when he right he right big You know the iPad is an amazing you know an amazing 22 million sold or whatever it is already So you have to think that’s a once-in-a-lifetime find of a person that is so disruptive and got to be back in a place where they’d let him be that disruptive, regardless of what was going on in the organization.
Steve has been a friend since May of 1983. Great, right. he called one day and said, gee, I understand you guys have done something neat. I’d like to come by and see it. And so we showed him the early stuff in PostScript. He immediately loved the technology and was a great supporter. He sort of saw the vision for the technology and drove it through Apple, even though almost everybody in Apple disagreed with him. He drove it through and caused the laser writer to be produced in 1985. He made calls that everybody said, no, Steve, you can never sell a printer for more than the computer. Steve, you can’t do this. Steve, you can’t do that. And he did it anyway. He was right. I mean, he actually was proven to be correct.
We were friends with Steve through his founding of Next, Next Computers. We supported Next with DisplayPostScript. Steve has called many times when he was thinking about helping out Apple, when Apple called us and asked for, well, gee, should we let Steve back? Or the, you know, the whole thing. And both Chuck and I have been friends with Steve since the beginning.
Steve’s coming back has been the best thing that could have ever happened to Apple. He has a sense of design taste and a sense of perfection and a sense of the customer like no one ever seen. But the fact that Steve is back, they’re getting great machines, they’re very delighted about that. And Steve has always had excellent taste in technology in terms of thinking of what people will buy.
And frankly, I think in terms of companies, because he tried to buy us, right after he saw the technology, He said, why don’t you just become part of Apple? And we said, well, thank you very much, but we’d like to stay independent. And to his credit, he eventually stopped asking and said that was fine. And he made an investment, which made Apple a lot of money.
I don’t think it will be like that because, like, I’ll take myself. All the work that I have done, this is a very strange business and a very strange endeavor of life. all the work that I have done in my life will be obsolete by the time I’m 50 Apple II is obsolete now Apple I’s were obsolete many years ago the Macintosh is on the verge of becoming obsolete in the next few years this is a field where one does not write a principia which holds up for 200 years this is not a field where one paints a painting that will be looked at for centuries or builds a church that will be admired and looked at in astonishment for centuries. No. This is a field where one does one’s work and in 10 years it’s obsolete and really will not be usable within 10 or 20 years. I mean, you can’t go back and use an Apple I because there’s no software for it. In another 10 years or so, you won’t be able to use an Apple II. You won’t even be able to fire it up and see what it was like.
So it’s sort of like sediments of rocks. I mean, you’re building up a mountain and you get to contribute your little layer of sedimentary rock to make the mountain that much higher. But no one on the surface will, unless they have x-ray vision, will see your sediment. They’ll stand on it. It’ll be appreciated by that rare geologist. But no, it’s not like the Renaissance at all. It’s very different.
As soon as we look at the tight relationship between an individual’s being at the pulse point of inventiveness and progress in his community and the flowering of art and culture and so on around them, we realize that Galileo could be Damien Hirst, that Cosimo de’ Medici could be Steve Jobs, jobs, that mankind has stayed pretty consistent over the ages, that ambition, a sharp mind, an eye for where the market is, a stronghold on who the people are that can make the key bits of technological equipment that you need to move the enterprise forward, plus a love of the consumer goods and a sense of taste in your community, what people like to buy and sell, all of that together makes a major entrepreneurial figure. And it doesn’t matter whether they were born in 1450 or in 1970. They’re fundamentally the same person.
so the thing I would say is when you grow up you tend to get told that the world is the way it is and your life is just to live your life inside the world try not to bash into the walls too much try to have a nice family life have fun save a little money but life that’s a very limited life Life can be much broader once you discover one simple fact, and that is everything around you that you call life was made up by people that were no smarter than you. And you can change it. You can influence it. You can build your own things that other people can use. And the minute that you understand that you can poke life and actually something will, you know, if you push in, something will pop out the other side, that you can change it, you can mold it.
that’s maybe the most important thing is to shake off this erroneous notion that life is there and you’re just going to live in it versus embrace it, change it, improve it make your mark upon it I think that’s very important and however you learn that, once you learn it you’ll want to change life and make it better because it’s kind of messed up in a lot of ways once you learn that you’ll never be the same again
Thank you.