How Bill Gates and Steve Jobs Work, Part 1

me as always is senior writer Jonathan Strickland. Hey there everyone, We were gonna, i don't know, take it down a notch, you do, mill out with a couple of guys from born in Yeah, a couple of guys who you know, they sort of had that typical experience of the growing up during the whole counterculture movement, tried college for a while, decided it wasn't for them. They both are college dropouts, and yet they both managed to have a you know,

somewhat significant impact on the tech world. Well, you know, if you use a Microsoft product or an Apple product. Yeah, yeah, that's a pretty minor impact. Where talking here about William Billy Gates and uh Stephen Paul Jobs PAULA Yeah that's his name. Yeah, Okay, okay, um, Yeah, both of these guys, uh, you know, they've been uh they've been sort of grouped together for a very long time. In fact, there was even a movie starting Noah Wiley and Anthony Michael Hall

called Pirates and Silicon Valley made about these two. And you know, really when you look at them together, yes, they were. They were both born in the same year they were they both dropped out of college, and they're both huge people in the tech industry. And they both founded their their own companies in nineteen Yeah, there you go. So both when they were twenty years old, they they founded a company. Dropped out of college to found a company.

It's pretty crazy. Yeah, I've just lost them. I've never found them. No, Yeah, I've been very fortunate in finding companies either. So anyway, so we were thinking about starting with Mr Jobs. I was, and, um, there are a lot of interesting parallels, but I think the more interesting parts are sort of the places where jobs and gates are are are not alike. Yeah, but you know, I'll start with jobs. Okay, So came from born in California

and went to school. You know, it didn't seem to be a huge enthusiastic student, I guess you could say, Um, but he did go to some Hewitt Packard electronics lectures that that he really got interested in Um, that's where he met a certain fellow by the name of Stephen Wozniak. The yeah, jobs actually worked at HP for a while. I'm yeah, yeah he did, and they the two of those guys went to uh Atari. Right. Yeah. Between his HP experience and his Stari experience, he did attend one

semester of college. Um. Yeah, he went to uh He went to Read College, Oregon, which is famous for its counterculture or semi famous for counterculture. Yes, and we have to mention something. We had a specific request for this podcast. Yes, our our colleague Josh Clark wanted us to point out that one thing that sets jobs apart from Gates is that jobs apparently dropped acid. So this is according to

our colleague Josh Clark. You can direct all iro at him. Um. Yeah, from what I understand, he even, um, after he dropped out of college, went to India for a while to explore some spirituality and yes, and so he was really into, you know, learning more about the spiritual side of life. Sure, yeah,

he's he's definitely, he's considers himself a Buddhist. He's, Um, yeah, he's very much in touch with that part of his life, which is kind of interesting if you learn a little more about his personality, because it doesn't seem like the typical I don't know, Buddhist sort of approach to life. Say not, but we we're getting ahead of ourselves. We should we should go a little more slowly. I guess. Yeah, So so was and Uh and Jobs are over ATITORI

and they're designing video games. And after a while, Uh, Jobs gets this crazy idea. He thinks, hey, you know what we should do is build a computer that could be used in the home. Because up to that point, computers were pretty much these enormous devices that really existed

only in the realms of the government and large universities. Yeah, and the people who were interested in ideas like like Jobs and wise were at this point where hobbyists we're talking radio shack boxes of switches and diodes and electronics that you wired together to make a very rudimentary machine. They like the al tear. Yes, so we'll come back to yes. So so Jobs ends up convincing Wozniac that hey, this is a great idea. Let's actually try and do this.

Because here's here's the other interesting thing about Jobs is that, um, he's a brilliant man. There's no denying the fact that Jobs is brilliant. I mean, you can't get around it. U. But he is not the engineer. When it comes down to the whole Apple story, that would that would pretty much fall on Wozniak's shoulders, at least in the early years. Yeah, I mean the two of them were both interested in electronics and engineering, but was is really the I mean,

he was the phone freak. He was. He was definitely into the technology and fiddling with electronics end of it. Where I think for for Stephen Jobs, it was more

a means to an end. Yeah. Jobs. Jobs recognize the potential of creating a brand new product market uh, and he could saw that it could be very lucrative, and he knew that Wozniak had the ability to to bring this into life as it were, so together, the two of them worked on building some computers, and they got a local UM computer store interested in their products, and the computer store actually ordered uh several It depends on the sources you read. I've read everything from twenty five

to fifty five machines UM. And with the money they made from that, that's where they decided to create the company. Apple. Yeah, we're we're in the realm of the Apple One, which was very much the pictures I've seen of it are pretty rudimentary compared to what you would see on your desktop. Um, you know, wooden box and it's got you know, the electronics inside of it, and you'd hook it up to a TV. Um. And of course they chose, being being

jobs and wise, they chose a very interesting price point. Yes, six and sixty six dollars. It was the computer of the Beast. Yes, yes, and they actually sold they sold quite a few of these machines. Yeah, this was in so that's a pretty good chunk of change. You know, you think today like a six computer isn't that expensive, but in seventy six dollars it's snows. Yeah, it was a healthy purchase. Yeah yeah. And so um, a year after they introduced the Apple One, they go back, they

retool it. They and they introduced the Apple Too, which was a little bit more advanced as you would expect, and uh incorporated some other technologies, including a monitor. And um, this is where my story about computers kind of comes into play, because my first real experience with computers was

with an Apple to eat. I see ye see, well lots of uh, I'm willing to bet to lots of the people listening to the podcast at this point had an apple too of some kind, any in our age range, Yeah, or at least they know what they are, and they're probably seen one thinking about those giant five and a quarter inch floppy disk drives, right, Yeah, an Oregon trail

and lemonade dand trail uh nostalgias so sweet. But this, but the apple too is really where a lot of people first came in contact with computers, and it spurred a lot of people to start pro gramming, start fiddling around with the idea of having computers on desktops for work or you know, for their for their home, for educational purposes. And in fact, that's why we had one. My father is an author, so he purchased the computer as a way so that he could, you know, write

books and he should store them on discs. And suddenly, you know, you don't have to worry about a paper copy suddenly being ruined by your five year old sons spilling coffee all over it. Although I should add that his um son, being me, did once turn off his computer before he had saved his chapters and so I am personally responsible for deleting I think it's three chapters

of my father's work. Yeah, it was good times so um but yeah, within three years of the Apple two coming out, and it earned almost a hundred forty million dollars. That's a lot of money. And uh, and so that's when Jobs and Woznia decided to to go public with the company, So Apples public and UH and the shares where I think at twenty two dollars a share when it first went public and then shot up to twenty

nine dollars by the end of the first day. So yeah, it was a lot of people were really excited about this company. And uh. It was right around this time that IBM started to try and make headway into the consumer market. Now IBM had been producing machines for years, but yes, exactly, so these are these machines though were mainly these large machines used in mainframe computers, not like personal computers. UM, but they decided to try and get

into the personal computer business. And they were taking a slightly different route than Apple and um using a completely incompatible operating system than Apples at uh. At certain points, so uh, there were a lot of strong decisions that need to be made. Jobs had to decide whether or not to stay the course and continue doing what he was doing, or to try and find a way to merge Apple with IBM, like some sort of operating system

that could work on both. And there were some serious attempts at that for many years, it never happened, at least not on any large scale. Right. And and for those of you playing at home who weren't around during this time, we're talking a lot of this stuff is you know, we didn't have mice really for the most part for a lot of these early years. We're talking keyboard commands and the disc operating system that the IBM PC ran on. UM. You know this, it's very clunky

for those of you who weren't there to see it. UM. So some of the changes that came up UM were sort of the result of Apple successes because they got so large that they started branching off into different products UM, including some that started using mice. UM. That's Lisa. Yeah, Well, the Apple Lisa, many of which are in landfills now, were extremely expensive machines. Yes, exactly, we're all in ones UM.

And they also had controlled they did have mice and uh, there was another product that came out right about the same time as the Lisa that Steve Jobs was working on. The The CEO had put him on the project because he had become one of the uh, one of the directors in the company, but he was no longer directly in charge of Apple at that point. Are you are you thinking of the Macintosh computer? That would be the one because we totally skipped over the Apple three. I'm sorry,

I forgot about the Apple Yeah, well most people did. Oh, that's right, because the Apple three ended up. Here's the thing about the Apple three. There was a problem early in the production and Apple had to recall around fourteen thousand units, and after that it just couldn't get a grip on the market because no one trusted it. I wonder, can you think of any current products that people have of a growing mistrust about, even though it seems like

all the problems have been fixed. Uh, yeah, I'm thinking of I'm thinking of we can talk about that when we get the gates. I guess, because there's there's a it's interesting that right now there's a product that is experiencing the same problem. Early on, it had problems, They fixed the problems, and yet no one wants to use it. Um suppose it depends on your outlook or so. Back to the Macintosh you have now, the Macintosh was really

designed to compete directly with the PC. So now we've got we've got our our classic matchup here, the Mac and the PC UM. And the Mac had an advantage because it used a graphical user interface and yes, which was very similar to one that Xerox created, wasn't not Yes, it was almost identical. But that's funny because future versions of a program called Windows, people would accuse accuse Microsoft of creating Windows to essentially recreate the macin toosh experience,

and the Macintosh experience was kind of recreating the Xerox experience. Well, you know that shrewd guy over at Microsoft I can't remember his name. Yeah, we'll get to him managed to convince Alpha to let them license the micro the Macintosh operating system so that they could build Windows. And and the Macintosh was, at the time of its arrival, a

superior machine to the PC. It was it had a better memory, had a better processor, UM, but it was also more expensive, which you know what, Hey, some thing's never change. And um also around this time was the infamous Super Bowl add the nineteen four Super Bowl add. Now, that was a Macintosh ad that was very Orwellian in nature. It was this very dreary world where everyone was bald and which you know I identify with, and um sitting

at desks and stuff. And then you had the female athlete run in and her a hammer essentially through a giant screen and it was very dramatic. Well, that was the thing was that in three there weren't graphical user interfaces, at least not on everyone's desktop. So um, that was the point of the ad was that wouldn't be like the book. Um So this was the big introduction for

the McIntosh in general. Was the the famous ad, right and and surround this time also that um, Steve Jobs brings in a guy to help run the Apple Company to make it, you know, more successful against the PCs, a guy named John Scully who was from Pepsi. And this turned out to not be such a great decision. I mean, in the end, I guess it was, but not in the short term. Um So Jobs brings in Scully, and Scully by five thinks Jobs is more of a

problem than an asset for Apple. Yeah, that that's true. Um, you see jobs is Uh, he's got a bit of a strong personality. Yeah, that's a that's a light way of putting it. Yeah, very Yeah. He's known for um, throwing things and people around. No, he's he's known for throwing tantrums. He's known for he's known for throwing town or maybe that's probably the wrong term for it, but he is known for getting very very angry and making

sure people knew about it. Well, it's no secret that in his days at Apple, when he takes someone off, and he has been known to fire people, uh, with a very hair trigger sort of spirit, it's called getting steved um. And that's that's really no surprise. Here's the thing was that Steve got steved so in n he gets steved well sort if he decided they basically it relegated him to second class or maybe even fifth class.

They pretty much stripped him of all his power. They put him in a totally different building, which he dubbed Siberia, and they put him on meaningless projects and nothing of important has ever seemed to cross his desk. So eventually he said, you know what, I get the message loud and clear. I've done what I set out to do here, and I'm not getting to do the things I want to do. And if I can't do them here, I'll do him somewhere else. So he took a little bit

of a break. He resigned from Apple, and then he founded the Next corporation. Yeah. Now, uh, Steve had been working on some different educational projects at Apple, and Next was designed, or at least conceived in in Steve Jobs had to be an educational computer system UM, and it was more advanced. It was supposed to run cross platform on different processors UM, and they actually did. They produced hardware UM, an actual box plus an operating system. Right.

The problem though, was again the computer. The physical computers were consider a lot of people consider him to be too expensive, so they never really found a foothold UM in the market. I mean they sold some, but they didn't sell as many as they needed to and have. Ventually, Jobs made the decision to get away from hardware and concentrate mainly on software and operating systems. Although that machine

was pretty sexy looking, it was kind of bored cubish. Yeah. Um. Meanwhile, at Apple things were going downhill and that's putting it very mildly. They had come out with a whole string of products that didn't make any sense. Um model numbers, the quality that the box, the actual computers themselves, they were not always they didn't meet they didn't meet the earlier standards than Jobs hadn't demanded back when he was in charge. And then so a decade goes by and uh,

and Apple is on the brink of bankruptcy. They the company purchases uh, the next corporation, which you know now Steve Jobs is now back under the umbrella of Apple, and in fact, Jobs makes a move and essentially rests control back so that he's charge of Apple again. And I'm not so certain that that gil Amelia was very

sad about that. He seemed to be, uh, sort of he seemed to be sort of happy with that, because I think, um, you know, where Scully was not exactly thrilled with jobs outlook on the on the computer company. I think that uh, he had convinced Amelia that he could do the you know, and do the work necessary. And I think well a lot of people at the time said that Apple didn't buy Next, they bought Steve Jobs back, So you know, it's not as surprising. It's

not as surprising. Um, there was something else, another little project that Steve Jobs worked on in the in the meantime to uh, he bought a little a part of the LucasArts Company, the Computer Animation Studio, for ten million dollars, which would never amounted anything well under its original name, but it changed his name to Pixar. Oh yeah, yeah, Pixar of course, being the the movie company that brought us such wonderful things as a toy story, a Bug's Life,

um in Incredibles, well come on, even even cars. So but yeah, so they were in charge of that. So yeah, that's Jobs was very savvy. He purchased that company. No no, no, no, no, no, not savvy. He bought it for ten million dollars. And uh, of course in two thousand six, Disney bought it in an all stock purchase for seven point four billion dollars. Right, that's savvy. Yeah yeah. But and of course now Jobs Jobs is on the board for Disney, so there's that

as well. He owns part of the Disney So that's uh, yeah, that was a good investment. Yeah, that's the reasonable. Now, granted I don't have ten million to make those kind of investments. Otherwise you would see me totally reeling zealing. But anyway, Jobs gets back into Apple, he fires the board and and hires a new board of six members. Um and the and uh completely revamped all the line,

the product line, simplified everything. Um. And that's kind of where you know, that's that's leading us up to present day. His decisions to really streamline things, make things look really really sexy. Uh, control everything from the ground up. That was That's kind of what has defined Apple to this day. It's very much a closed system. Um. And Job's point of view is that that way he can guarantee quality.

So yeah, his system is closed and his machines are more expensive, but they also look really nice and they work yep. Um and uh, just a note before we we go to Bill Gates. UM. You know now people

are concerned. I'm not sure exactly when this will be posted, but it was announced in December two eight that Steve Jobs would not be leading the keynote at the Macworld Expo in January, which has caused some consternation because he's had some health issues that his death was falsely reported, and people are concerned now that he is so intertwined with Apple and its future that if he if something happens to him, if he steps down, or if he

were you know, horror. You know, he's been diagnosed with pancreatic cancer. He had a surgery to remove the tumor um a year after they discovered it, because he resisted the surgery. But uh an Apple actually got some flak for that because they didn't report that to shareholders. And some people say, well, you know, when when your CEO has been diagnosed with a potentially fatal um illness, the shareholders have a right to know because that could completely

affect the shares of the company. Uh. The other side of that is that it's a private matter. It's a health matter, um and that's a sticky situation. But at any rate, he seemed to make a pretty good recovery, although people always comment on you know, he looks thin, he's lost way, so people are are concerned. So there's some concern that maybe jobs as health had something to do with him stepping away. I don't think that that's

necessarily the case at all. It's just one of those unfortunate coincidences that can lead you to a faulty conclusion. Now that's not to say the conclusion is faulty. I could be totally wrong, but I'm willing to believe them on this one. UM. And I was gonna point out one other thing before we move on to Bill Gates,

because it's an interesting counterpoint. Uh So, the Stanford Social Innovation Review founder once referred to Steve Jobs as UM are actually to Apple itself as America's least philanthropic company. Um And in an Apple it h cut a lot of its philanthropic UM programs. Uh and in a way to to try and cut costs and never reinstituted them. And I had no idea we could talk about Steve Jobs that neither got a lot of Well, since we've gone on so long, I'm guessing we should probably divide

this up and have a part too. Let's let's visit Mr Gates in another podcast. Yeah, next week we'll we'll tackle Billy Gates before we go. There's one other thing I'd like to share that I think is really cool about Steve Jobs. So, what's this amazing fact? So I got one of these things that I just think is really cool. Um. And it's the kind of thing that a showman like Steve Jobs would pull out um back when they were trying to find a way to turn Apple around. Uh, Steve agreed to take a pay cut.

Oh yeah, he now makes as as the co founder, chairman and CEO of Apple, he makes one dollar a year in salary and now was so he could keep his medical benefits. Of course he has compensated in other ways. He gets a little stock which yeah, yeah, But it's funny because with all the the automakers talking about ways to do, you know, turn the companies around in Congress giving them a hard time about it, that's one of the things they've talked about doing is taking a pay

cut to a dollar a year or so. You know, again an innovator, That sounds good. Well, until then, check out some articles on how stuff works dot com. We've got everything from iPods to Apple cloud computers on there and that should keep you nice and entertainment educated throughout the week before we hit Billy and we'll talk to you again soon for more on this and thousands of other topics. Does it how stuff works dot com? Let us know what you think. Send an email to podcast

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