Steve Jobs

Summary

In 1976 Steve Jobs co-founded Apple in a Los Altos garage and, by the time the company went public in December 1980, he was worth roughly $250 million on paper at age 25. He had become the public face of the personal-computer revolution. Yet by September 1985 he had resigned from the company he created, after the board sided with CEO John Sculley and stripped him of any operational role.

The exile lasted twelve years. Jobs poured his money and reputation into NeXT, a high-end workstation maker that struggled to sell hardware, and into a small computer-graphics outfit he bought from Lucasfilm in 1986 and renamed Pixar. For most of a decade both ventures consumed cash. NeXT never became a commercial success on its own terms, and Pixar lost money year after year while Jobs covered the shortfalls personally.

The turn came in 1995, when Pixar released Toy Story, the first fully computer-animated feature film, and went public a week later in an offering that made Jobs a billionaire. A year later Apple, near collapse, bought NeXT for about $400 million, bringing Jobs back as an adviser. By September 1997 he was interim CEO of the company that had cast him out.

What followed was one of the most complete comebacks in business history. The iMac (1998), iPod (2001), iTunes Store (2003), and iPhone (2007) turned a near-bankrupt computer maker into the most valuable company in the world. Jobs sold Pixar to Disney in 2006 for about $7.4 billion, becoming Disney's largest individual shareholder. He died in October 2011, having built two fortunes and reshaped several industries.

Timeline

The First Fortune

Steven Paul Jobs co-founded Apple Computer with Steve Wozniak and Ronald Wayne on April 1, 1976, building the Apple I in the Jobs family garage in Los Altos, California. The Apple II, launched in 1977, became one of the first mass-market personal computers and the engine of the company's early growth. Wozniak supplied the engineering genius; Jobs supplied the vision, the obsession with design, and the salesmanship that turned a hobbyist machine into a consumer product.

When Apple went public on December 12, 1980, it was the largest initial public offering since Ford in 1956, and it minted hundreds of millionaires. Jobs, then 25, held a stake worth roughly $250 million. He had become the most visible figure in the personal-computer industry, a young entrepreneur on magazine covers as the face of a technological revolution.

Jobs then bet the company's future on the Macintosh, introduced in January 1984 with the famous Ridley Scott Super Bowl commercial. The Mac pioneered the mouse-driven graphical interface for a mass audience. But it sold below expectations, and Jobs, who ran the Macintosh division, increasingly clashed with John Sculley, the former PepsiCo executive Jobs himself had recruited in 1983 to be Apple's CEO.

The Fall

The conflict came to a head in the spring of 1985. With Macintosh sales lagging and the company under pressure, Sculley proposed a reorganization that would remove Jobs from running the Macintosh division. Jobs tried to rally support to oust Sculley; instead, the board backed the CEO. At the end of May 1985, Jobs was stripped of all operational responsibility and left with only the largely ceremonial title of chairman.

It is more accurate to say Jobs was sidelined than fired. He was not terminated; he was relieved of any meaningful role and shuffled into a powerless position. After a summer of being marginalized, he submitted his resignation to the board on September 17, 1985, and five senior Apple engineers left with him to start a new company. In the process he sold all but one of his Apple shares.

His new venture, NeXT Computer, aimed to build powerful workstations for higher education and research. The machines were technically admired but expensive and slow to sell; NeXT struggled for years and eventually abandoned hardware altogether in 1993 to focus on software. In 1986 Jobs also paid about $5 million to buy the computer-graphics division of Lucasfilm, plus a further $5 million in capital, and renamed it Pixar. For most of a decade Pixar lost money, and Jobs reportedly sank tens of millions of dollars of his own fortune into keeping it alive.

The Comeback

The reversal began in 1995. Pixar, having signed a feature-film deal with Disney, released Toy Story on November 22, 1995. It was the first feature-length film animated entirely by computer and a massive box-office success. One week later, on November 29, Pixar held its initial public offering, and the stock soared. Jobs, who owned about 80 percent of the company, was suddenly a billionaire for the first time.

Meanwhile Apple was failing. After years of declining market share and a string of unsuccessful products, the company needed a modern operating system and could not build one in-house. In December 1996 Apple agreed to acquire NeXT for roughly $400 million, bringing Jobs back as an adviser and bringing NeXT's software in as the foundation of what would become Mac OS X. By July 1997 the board had pushed out CEO Gil Amelio, and in September Jobs became interim CEO of a company that was reportedly within about 90 days of insolvency.

Jobs moved fast. He cut the product line, settled a long-running dispute with Microsoft and accepted a $150 million investment from it in August 1997, and refocused the company. The candy-colored iMac arrived in 1998 and restored Apple to profitability. Then came the iPod (2001), the iTunes Store (2003), and, decisively, the iPhone in 2007. In 2006 Disney bought Pixar for about $7.4 billion in stock, making Jobs Disney's largest individual shareholder. Apple, near death a decade earlier, grew into the most valuable company on earth.

The Turnaround

Legacy

Steve Jobs died on October 5, 2011, at the age of 56, of complications from pancreatic cancer, having stepped down as Apple's CEO only weeks earlier. At his death the majority of his estimated $10 billion-plus net worth came not from Apple but from the Disney shares he received when Pixar was sold. He had, in effect, built two fortunes after losing his first foothold at Apple.

His legacy is the modern consumer-technology company. The iPhone reorganized the telephone, music, camera, and computing industries around a single device, and the App Store created an economy of its own. Pixar, under his stewardship, redefined feature animation. Apple itself went on, years after his death, to become the first U.S. company to reach a trillion-dollar valuation and then several times that.

The deeper lesson of his arc is that the exile was not a detour but the making of him. The maturity, breadth, and managerial command he brought back to Apple in 1997 were forged at NeXT and Pixar. Jobs himself said that getting pushed out of Apple was one of the best things that ever happened to him, because it freed him to enter the most creative period of his life.

Lessons

References

• Steve Jobs Wikipedia
• Steve Jobs Encyclopaedia Britannica
• Disney to Acquire Pixar The Walt Disney Company
• August 6, 1997 — The day Apple and Microsoft made peace AppleInsider