Another industry leader was equally unimpressed by NeXT. Bill Gates refused to develop software for the NeXT computer, despite Steve’s repeated, if confused, efforts to lure him in with promises that Microsoft would profit as much with NeXT as it had with the Mac (for years, Microsoft had been the Mac’s leading applications developer). When Bill first visited Steve in Palo Alto to see what Jobs was putting together at NeXT, Steve left him stewing in the lobby for half an hour before coming to get him. It was a spiteful beginning to what would turn out to be a nonexistent relationship between Microsoft and NeXT. Gates rebuffed Steve again and again and again, with venom. “Develop for it?” he told InfoWorld. “I’ll piss on it.” Microsoft software was already on its way to defining the industry standard in nearly all aspects of computing, so Gates’s reluctance to support NeXT with custom versions of its application software effectively marginalized the company.

Gates didn’t let up after the Davies Hall showcase. “In the grand scope of things,” he said, “most of these features are truly trivial.” A year later, he said of the NeXT computer, “If you want black, I’ll get you a can of paint.” To this day Gates remembers the moment he definitively told Jobs that Microsoft absolutely would not develop software for NeXT. “He wasn’t livid,” Gates told me recently. “He was deflated. He was at a loss for words, which wasn’t typical. He knew what I was saying might be right. And it wasn’t a particularly pretty picture in terms of what it meant for big black cubes changing the world.”

TOWARD THE END of the show at Davies Hall, Steve Jobs revealed what should have been the biggest news to come out of the event: computer industry colossus IBM had decided to license the NeXTSTEP operating system for use on a line of its own engineering workstations. The vision of the world’s biggest computer company running Steve’s revolutionary operating system seemed a great endorsement.

The basic agreement between the companies was that IBM would license the right to use the NeXTSTEP operating system as a graphical interface in return for $60 million—a pittance for IBM, but critical operating capital for NeXT, which was burning through its investors’ cash as the years dragged on. Many people believed that the arrangement might have broader implications, an impression that Steve did nothing to dispel. IBM had an existing deal with Microsoft to jointly develop a new operating system for future PCs called OS/2. By announcing the deal with NeXT, IBM seemed to be indicating that it was not comfortable with Microsoft as its sole key partner. (Indeed, within a few months of the NeXT announcement, it became clear that IBM and Microsoft were having serious issues working together.) The tantalizing possibility was that Steve’s operating system might eventually power not only workstations but also the personal computers of Apple’s most feared competitor. If that ever happened, Steve’s comeback would be complete.

But Steve never seemed to quite know how to play his cards with IBM. He displayed an unsettled and juvenile mix of hubris and uncertainty. Jobs could be bold and strong, as when he secured IBM’s promised investment before any Big Blue exec had even laid eyes on the NeXTSTEP operating system. But he could also be just plain rude: Walking in late to one meeting with a suite of IBMers who had flown out to NeXT, Steve interrupted the proceedings with the dismissive pronouncement: “Your UI [user interface] sucks.” Dan’l Lewin, who would meet with Steve to carefully plot their strategy before every IBM meeting, never knew what to expect from his boss. Sometimes Steve would completely undermine the groundwork the two had carefully laid. “I’d sit there and literally kick him under the table,” Lewin recalls. “There was one meeting, for example, where he went in and actually told them, ‘I really don’t understand why you guys would want to help us.’ ”

Psychologically and emotionally, signing on with IBM was every bit as complicated for Steve as begging Bill Gates to support his computer. Steve had always envisioned NeXTSTEP as the backbone of his own spectacular computer. He wanted to be the hero, not a secondary partner to a more powerful computer company. If IBM had exploited his operating system, and sold a lot of computers running their version of NeXTSTEP, the glory would have been theirs, not his.

It shouldn’t have been surprising, then, that Steve failed to make this important relationship work. He killed the IBM deal by failing to follow through as a good business partner. IBM’s Bill Lowe, a veteran who had been instrumental in launching the PC back in 1981, had initiated the deal. But Lowe retired in 1990, and James Cannavino replaced him. Cannavino logically assumed IBM could use NeXT’s 2.0 version of NeXTSTEP on its machines. But Steve, who hadn’t even met Cannavino, held up IBM for more money, leading to another round of protracted negotiations. He overplayed his hand. Cannavino stopped taking Steve’s calls and just abandoned the project, although there was never any real announcement that it was over. It was a minor disappointment for IBM, ending its “Plan B” fantasy of creating a real alternative to Microsoft’s new Windows graphical operating system for PCs. But it was a fatal blow to NeXT, ending its last real chance to achieve the kind of scale that would have turned it into, as Steve had said in 1985, “the world’s next great computer company.”

Lewin quit NeXT in frustration months before the IBM deal dissolved. He was the first of the five original employees to leave NeXT. “We owned the world when we were at NeXT. And it failed because of Steve,” Lewin remembers. Steve invited Lewin to lunch two weeks after his resignation. “Well, now that you’re leaving, what do you really think?” Steve asked him.

“You’re going to go through every penny, the way you’re headed,” said the now former head of sales. At the time NeXT still had some $120 million in cash. “This company is just not going to happen. You may own 51 percent of it, or 58, whatever it is, but more than half the company worked for me. And I’ve been fighting with you because I believe in what I know we need to do to run this business. If you want to succeed, you need to listen to your people. Otherwise you’re doomed.”

A few months later, George Crow, another cofounder, left, tired of bearing the brunt of Steve’s furor for the delays in hardware development. Susan Barnes left around the same time in 1991. Managing Steve’s finances when he had little fiscal discipline and no checks on his spendthrift ways had grown wearying. “It was classic: his visionary optimism versus my reality,” says Barnes. “He always felt that we were going to turn the next corner. And I would always tell him that there was nothing in the business model to indicate that that was so.”

When Barnes resigned, Steve immediately and without warning cut off her phone and email access. A year later, Rich Page quit the company, and Barnes’s husband, Bud Tribble, picked up the phone to ask Scott McNealy at Sun if he could use a highly seasoned software engineer. A few days later Tribble went to work for the company that was everything NeXT should have been. Just six years after those heady brainstorming days at the old Woodside house, the renegades had all departed, leaving their rock star behind.

Chapter 5

A Side Bet

During that strange and heady autumn of 1985, just after he had bolted from Apple to go start NeXT, Steve found that there was one other intriguing opportunity he couldn’t get out of his mind. His thoughts kept returning to the Lucasfilm Graphics Group, the team of engineering whizzes that he’d tried to convince Apple to buy back in the spring. The outfit had the kind of cutting-edge technology in search of a broader purpose that Steve loved. It was cool: its software tools had helped Lucas’s Industrial Light & Magic division create special effects for other studios’ movies, including Star Trek II: The Wrath of Khan and Young Sherlock Holmes. It had wide commercial potential, he believed: the outfit’s astounding technology for manipulating three-dimensional images might be perfect for the hospitals, corporations, and universities he was targeting at NeXT. It might even be transformative. Looking way down the road, he could imagine the inexorable force of Moore’s law driving down the cost of processing power to the point where everyday users could easily manipulate 3-D images. And there was one other thing that seemed really “neat,” to use an adjective that Steve quite liked: its people. “He wanted to keep that group together,” says Susan Barnes. “To Steve, it was really hard to see this great integrated team under the threat of getting blown up. It was really hard to think about that natural set of huge intellectual energy going away.” So Steve decided he’d go back to Marin County and visit the place again. It was a decision that changed his life. But not in any way he had anticipated.