Chapter 6: Bill Gates Pays a Visit

This unusual chapter is based upon a single historic meeting, one of only two “on the record” lengthy encounters between Bill Gates and Steve Jobs. As such, there aren’t many outside sources beyond my interview transcripts, my notes, and my own recollections and analysis of the industry at that time.

We retrieved statistical information from the U.S. Bureau of Economic Affairs, Annual Industry Accounts—1976–2012, which can be found at https://www.bea.gov/scb/pdf/2005/01January/0105_Industry_Acct.pdf.

For background information on Gates we consulted an article by Bro Uttal, published in Fortune on July 21, 1986, called “The Deal That Made Bill Gates, Age 30, $350 Million”; an interview with Mike Slade on July 23, 2012; and an exclusive, more recent interview with Gates himself on June 15, 2012.

Chapter 7: Luck

This chapter describes how Pixar evolved into a maker of computer animated feature films. It is based in large part on our own recent interviews with Pixar’s principals, and is supplemented by the many feature stories I had written over the years about Pixar’s remarkable run as a maker of animated feature films (see bibliography). Ed Catmull and John Lasseter were both very generous with their time for profile stories I had written about each, and made themselves available again during our research for this book. We also drew from my previous interviews with Jeffrey Katzenberg of Dreamworks and Michael Eisner of Disney in the late 1990s. Ed Catmull’s book Creativity Inc. also provided lots of useful background information.

Other published sources included two books: Karen Paik’s official corporate history, To Infinity and Beyond: The Story of Pixar Animation Studios; and The Pixar Touch: The Making of a Company, by David A. Price. And for information on how it was his investment in Pixar that eventually made Steve Jobs a genuine billionaire, we consulted the website for Forbes; specifically an interactive article called “Two Decades of Wealth,” located at www.forbes.com/static_html/rich400/2002/timemapFLA400.html.

We also relied upon the website of the Securities and Exchange Commission, to confirm details of Netscape Communications Inc.’s initial public offering on August 9, 1995. The company offered 3.5 million shares at a price of $28 a share, generating proceeds of $98 million.

Above all, however, we benefitted from our lengthy interviews with Ed Catmull on January 16, 2014; John Lasseter on May 8, 2014; and my many encounters over the years with Jobs.

Chapter 8: Bozos, Bastards, and Keepers

This chapter reflects an unusual period in my relationship with Jobs because it coincides with a time that Jobs, who was CEO of both NeXT and Pixar, was calling me seemingly out of the blue to talk about what was going on at Apple Computer. Previously, we hadn’t talked much about his original entrepreneurial fling, mainly because he wasn’t one to look in the rearview mirror. But he seemed genuinely alarmed at what appeared to be the beginnings of a death spiral for Apple. I spent the better part of a year reporting off and on to prepare what was supposed to be a cover story about the breadth and depth of Apple’s troubles, informed not only by what Steve whispered in my ear, but also by grumblings from other people inside and outside the company. The story, called “Something’s Rotten in Cupertino,” wasn’t published until the March 3, 1997, issue of Fortune, more than two months after Apple’s hasty decision to acquire NeXT Computer. The reporting that went into that particular story, plus other stories I reported and wrote about Microsoft, NeXT, and Pixar during 1995 through 1997, informed much of this chapter. Numerical data about Apple came from Apple’s annual reports during this period. Two lengthy interviews with Fred Anderson in August 2012 were particularly helpful in explaining how he was able to mastermind Apple’s escape from a dire fiscal situation when he arrived there in the spring of 1996.

Aside from snippets from my own encounters with Jobs, most of the direct quotations in this chapter were drawn from those interviews with Anderson; and others with Mike Slade on July 23, 2012; Ed Catmull on January 16, 2014; Jean-Louis Gassée on October 17, 2012; Avie Tevanian on November 12, 2012; Andy Grove on June 20, 2012; and Bill Gates on June 15, 2012.

Other sources of information include archival video of Jobs addressing MacWorld Boston, August 6, 1997, http://www.youtube.com/watch?v=PEHNrqPkefI; and an article in the New York Times of March 19, 1992, titled “Business People: NeXT Finds a President in Telephone Industry,” by Lawrence Fisher, which provided background information about Peter van Cuylenberg.

Chapter 9: Maybe They Had to Be Crazy

This chapter covers the first four years after Steve Jobs had returned to the helm of Apple, and relies primarily upon my own reporting and writing about Apple during the time period that it covers, 1997 through 2001. Despite Apple’s precarious situation and widespread skepticism, there was tremendous interest among techies and businesspeople of all stripes in what Jobs might have up his sleeve that could turn things around at the iconic company. Jobs knew it was in his interest to be fairly open with me about his initial strategies to stabilize things, and by this time we had developed solid trust. Consequently, he was not nearly as secretive during these first few years back at Apple than he would be after the turn of the century.

Aside from snippets from my own encounters with Jobs, most of the quotations in this chapter were drawn from interviews with Lee Clow on October 14, 2013; Jon Rubinstein on July 25, 2012; Avie Tevanian on November 12, 2012; Rubinstein and Tevanian together on October 12, 2012; Jony Ive on June 10, 2014; Bill Gates on June 16, 2012; and Mike Slade on July 23, 2012.

The financial numbers and headcount statistics and other numerical information in this chapter came primarily from Apple’s SEC filings reporting its financial results for 1996 through 2000, so we are not citing them here individually. The notorious quote from Michael Dell suggesting that Jobs should simply liquidate Apple came during a Q and A session at the Gartner Symposium and ITxpo97 in Orlando, Florida, on October 6, 1997, http://news.cnet.com/Dell-Apple-should-close-shop/2100-1001_3-203937.html. Background information about Dieter Rams, the design genius who was the primary inspiration of Jony Ive, Apple’s head of design, came from the website of the German furniture design company Vitsœ, https://www.vitsoe.com/us/about/dieter-rams and https://www.vitsoe.com/us/about/good-design. The technical details we cite about the iMac and other computer models came from www.everymac.com/systems/apple/imac/specs/imac_ab.html.

Chapter 10: Following Your Nose

This chapter describes how Apple finally invented its way back to growing again namely by entering and shaking up an entirely different business, in this case personal audio electronics with the introduction of the iTunes music management application and the iPod portable digital music player. It also demonstrates in great detail the new methodology Jobs had come to embrace, which he called “following your nose,” rather than plotting out some sort of predetermined strategic “road map.” The significance of iTunes, the iPod, and later the iTunes Music Store is in how one led to the next and then to the next. I described this process in piecemeal fashion at Fortune as these products rolled out. Only in hindsight can you see how each was a case of Steve and his team following their noses, seeing what might be possible after each successive step. Again, the stories we reported, wrote, and edited for Fortune provide most of the factual basis of this chapter.