Steve Jobs, On early days of Apple & Amplifying Human Ability

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hi I must apologize to all for being

late of driving 90 miles an hour

enough didn’t find a parking place and

all the experiences he’s been through

this morning I have a photographer from

Scientific American wanted to take some

pictures in the last few days so we went

over to a school we thought they decided

they wanted to take some pictures of

someone from Apple and a educational

setting using some computers and we

wandered over turns out there’s a little

booklet it is put out in Cupertino and

there’s about 20 different schools with

apples and we picked one out that had

six Apple computers and wandered over

there one afternoon this happened to be

the afternoon at the fourth and fifth

graders we’re going to be there once a

week fourth and fifth graders from this

one school in a sort of advanced

learning program come over and use the

Apple computers and I had the most

delightful conversation with some four

and five-year-olds they they probably

know as much about the computer as I do

anymore and they’re they’re totally

fluent in it

and they’re very much at home in it and

they beat me in most of the games and it

was really quite an experience because

we always talked about all these things

happening sort of intellectual verbal

level they actually got a chance to see

twenty students interacting with these

computers on a one-on-one basis and I

couldn’t help remembering my own school

days when none of these things existed

we’re just giving the trouble all the

time

11:30 at night last night a friend of

mine Bob Metcalfe calls me up and he’s

got three German friends visiting from

Germany and they want to buy 22:30 app

as a month for some god-awful who knows

what reason

then they wanted in Germany and they

want to talk about buying 11:30 at night

and you know a guy in Nebraska is using

an Apple computer to calculate soil

samples to know what kind of fertilizer

between two grandmother just it’s an

endless array of things that people are

doing with this to your mind oh the

other one we had absolutely no idea what

people were going to do these things

when we started out matter of fact the

two people it was designed for was was

in myself because we couldn’t afford to

buy it a computer cheat on the market so

we liberated some parts from Hewlett

Packard and tari and worked on the

design for about six months and decided

that we would build our own computer so

we built and once was up till 4:00 in

the morning for many moons and we got it

working we showed some reference

immediately everybody wanted one and it

turned out to take about 40 hours to

build one of these things and have

another twenty thirty forty to debug it

and we had a lot of friends at work that

similar companies who could liberate the

parts also without subsidy every

sterling or

time helping our friends to build

computers it’s just getting to be a

tremendous drain on our on our lives so

we got the idea one day that we could

make a printed circuit board without the

parts and it’s le blank printed circuit

boards to our friends and probably cut

the assembly and debug time down to you

know five ten hours so waz soul is HPC

calculator and I sold my van we got

1,300 bucks together and we pay our

friend of ours who is this PC board

layout person thirteen hundred bucks to

do us a layout and decided we’d sell

printed circuit boards twice what it

costs to build him and hopefully recoup

our calculator and transportation

assembly today so that’s what we did and

I was out trying to pedal PC boards one

day and walked into a bike shop the

first by chopping Mountain View and Paul

Terrell then owner of the bike shop said

he would like to take 50 of these

computers and I saw dollar signs in

front of my eyes and but he had one

catch which was that he wanted them

fully assembled and tested ready to go

which is a new twist so we spent the

next five days on the phone at

distributors and convinced the

electronics parts distributors around

here to give us about 10 thousand

dollars worth of parts on thin air

this time enthusiasm so we got the parts

and we built 100 computers and we sold

50 of them for cash in 29 days paid off

the distributors and that’s how we got

started so we had 50 computers left over

while that meant we had to sell them so

then we started learning about marketing

whirring but distribution got on the

phone of the other computer stores

around the country and gradually the

whole thing began to build momentum and

at that point in time we had some

feeling that we were onto something but

the feeling was so different than the

experience it actually

seeing it happen right now it’s entirely

different and sometimes a lot of people

ask what did you know it was going too

much her into this phenomenon and you

can say yeah you know we planned it out

we have led on a piece of paper but

different than the experience of seeing

five hundred people working at Apple

Computer it’s very different than the

experience of seeing a five-year-old kid

who really understands what he’s the

tool that he’s gotten from and it the

best analogy I’ve ever heard is

Scientific American I think it was did a

study in early 70s on the efficiency of

locomotion was what they did was for all

different species of things on the

plants birds and cats and dogs and fish

man goats and stuff they measured how

much energy does it take for a goat to

get from here to there right

kilocalories per kilometer or something

I don’t know what they measured him and

they ranked them they published the list

and then the Condor won the Condor took

the least amount of energy to get from

here there and man didn’t do so well

came in with rather unimpressive showing

about a third of the way down the list

but fortunately someone at Scientific

American was insightful enough to test

man with a bicycle and man with a

bicycle won twice as good as the Condor

all the way off the list and what it

showed was that man is a tool maker has

the ability to make a tool to amplify an

inherent ability that he has and it’s

exactly what we’re doing here it’s

exactly what we’re doing here we’re not

making bicycles to be ridden between

Palo Alto and San Francisco okay we’re

making bicycles and yes certain bicycles

have certain generic attributes like in

general 10 speeds are vetted right in

mountains and one speeds and other

things like that but in general

what we’re doing is we’re building tools

that amplify a human ability just like

the you could say that the Industrial

Revolution was basically an

amplification of a human ability sweat

amplified sweat fractional horsepower

motors etc etc what we’re working

towards now is the ability to amplify

another human ability and we’re just

starting to get the glimmerings of where

it’s going to go as an example how many

of you visit healthy quite a few

at Apple every secretary now has an

apple on is a four-disc and they’re

doing all the word processing on you got

to give him credit for that given the

software that’s out there doing a

tremendous amount of financial modeling

on the thing as an example I have to

keep a budget for about 40-50 people and

by the 10th of every month

my Secretary’s got all the information

from accounting put it into the VisiCalc

model and giving me the actuals versus

forecast and all the variances and etc

etc and we’re asking what if questions

on a daily basis I can say Turner’s Pat

likes a pat what happens if I hire five

more people this month you know what’s

that going to do to the budget hour

later I know it’s incredible and what’s

even more incredible is when you go talk

to these fifth graders because they’re

growing up with this thing you know it’s

new for myself I know anything about

fifteen years ago ten years ago but

these kids are growing up with it I’ve

seen some of the kids of people that

work at Apple I’ve seen go from being

one two years old where they push the

return key how they sit on their

father’s lap mother’s lap and what their

part is is to push the return key to

actually know how to program in the last

four years it’s remarkable so one of the

things that

that Apple is going to try to do over

the next three or four years is to

further that goal and the key area we’re

focusing on is the following right now

if you buy a computer system and you

want to solve on your problems we

immediately throw a big problem right in

the middle of you and your problem which

is learning how to use the computer all

right substantial problem to overcome

once you overcome that it’s a phenomenal

tool but there is a barrier of having to

overcome that problem what we trying to

do and I think there’s a reasonable

chance that Apple is going to make a

real contribution solving this problem

in the next 36 months is to remove that

barrier so that someone can buy a

computer system that knows nothing about

it and directly attack their problem

without learning how to program the

computer and the reason I think that

after it’s got a chance is solving that

problem versus a lot of other computer

companies that we all know they’re much

much larger than we are now although

we’re catching up is that our whole

company our whole philosophical base is

founded on one principle and that one

principle is that there’s something very

special and very historically different

that takes place when you have one

computer and one person very different

than if you have 10 people in one

computer and let’s look at some of the

things that our industry has or our

segments of the computer industry is

contributing to the computer industry

because of that Phylis underlying

philosophical concept in general we were

in retail channels three four years

before the rest of the computer

industries were now waking up to that

fact

why because to serve that one-on-one

relationship it was necessary to

distribute the products that way it was

necessary to have products priced so

that a person one-on-one could afford

the computer system and therefore was

necessary to distribute them through a

relatively lower cost distribution

channel rather than direct sales force

interactive software interactive video a

computer

system that can be sold for a few

thousand dollars that can actually do

some animation that actually has the

video that’s so tightly coupled to the

rest of the computer you can do

real-time we’ve got a def 1170 at Apple

where the terminals communicate with the

1170 you know 9,600 bits per second that

can’t do anything like visit calc yet

okay this is three hundred thousand

dollar computer system and yet my

secretary keeps the budgets on an apple

it’s far superior so and again that

comes from that one-on-one interaction

and that perspective is what gives us

the feeling that we have an opportunity

to really contribute to solving that

problem and that’s where Apple’s going

now we’re very fortunate because the

timing seems to be following into place

in other words as we move into the 80s

the amount of computational power the

amount of raw horsepower we can get into

a small box for a reasonable prices is

staggering even in the last three years

since you know four years since we

started it it’s increased few orders of

magnitude and one of the things that

people always ask me is you know what we

got right now is just fine visit

California

some of the database stuff runs fast

enough what are we gonna do with this

expert awesome power and the answer to

that is that we’re going to put it into

applying into solving that problem again

in other words we’re going to start

chewing up power specifically to help

that one on one interaction go smoother

and specifically not to actually do the

number crunching and the database

management and the word processing

whatever we’re actually going to start

applying a lot of that power

specifically to help us remove that

barrier and so assuming that we don’t

get into World War 3 assuming that we’re

able to continue

outstanding people it looks like a

timings just right for that to occur so

hopefully when we have our international

apple core meeting you know the third

fourth one from now we’ll all be able to

to talk about how we solve that problem

because I really think it’s going to

happen and I really think it’s going to

come out an industry that four years ago

didn’t exist that three years ago

everyone said was a flash of the flock

in the frying pan you know and I think

right now doesn’t wake up so thank you

very much I know that start a company

you have to follow what’s called a

fictitious business name statement and

what the purpose of that statement which

you file with the government is to

simply tell everyone the if Apple

computer goes necessarily or anything

how to do that but if you’re these are

the court Rene yeah

we thought that was important so we and

everyone’s name feels like matrix

electronics or all sorts of different

names and simply decided we were going

to call it Apple Computer suggested a

better name by five o’clock that day and

partly because I like apples a lot and

partially Chicago head of Atari in the

phone book 90s work but we’re e’en dit

on a regular basis and we found that the

juxtaposition of something that seemed

to epitomize what we were going after

which was the simplicity and yet very

refined sophistication God being our

first brochure probably somebody had a

bit had that title it was simplicity is

the ultimate sophistication and that

wasn’t just a slogan it

actually was really what we’ve been

striving for and the Apple seemed to

symbolize that so I think we’re going to

stick with it yeah getting back to what

you’re talking about about your goals

about eliminating this barrier this

obstacle the computer they’re talking

about all this basically hardware power

that’s available inside that little box

what sort of things you’re talking about

that’s going to translate that Hardware

power the car that that’s inside there

into removing the obstacle of what’s

inside there on a more concrete level

well you’re asking me to talk about

future products

and I don’t want to do that but I felt

awfully philosophically first of all

we’ve done an awful lot you know when we

first started out we didn’t know how to

spell the word software and gradually

we’ve learned we’ve gone through the

standard motions of setting up an

internal application software Department

which proceeded to fall on its face

picking it up and watching it fall on

its face again finally we went through a

phase where we decided at what we were

selling solutions not hardware and so we

realize that software was a big part of

the solution and therefore we better get

our software act together matter of fact

now we have more people in software

engineering than are boarding in here

you know our engineering departments

over half people are devoted to software

and a lot of times we ask ourselves what

software is matter of fact notice all

these every other word software that

must give you some clue but what wood is

software and I’ve often thought about

this and what’s between software Harmon

the only I can think of is that software

is something that either is changing too

rapidly yours is you don’t exactly know

what you want yet or even have time to

get into hardware or the technology is

not they’re getting harder ready that’s

all I think of so and what I see

happening is that more and more software

is getting integrated into the hardware

yesterday’s software is today’s hardware

so those two things are merging I think

and the line between hardware and

software is going to get finer and finer

and finer and finer in one of the ways

that we’re approaching the problem of

how to remove the barrier is to try to

look at a few years and make some some

predictions as to where the technology

will be both hardware and software

technology and how there

we merge together and at the same time

looking at very carefully looking at the

kinds of high-level tools that our

customers are going to need and trying

to make those two points the same target

I know that’s very vague and I guess I

really don’t talk to anyone that so one

said that

yeah there are a lot of us that bought

Apple twos here and that that put a

tremendous amount of money and effort

into using them and planning on using

that for an eight years accomplish your

top

what does that we’ll have in mind or for

continuing support with Apple 2 in other

words not dropping it like some other

things about that sure this Ally one

startup the new and everyone else

abilify all new

what do we have in mind for people who

want to entertain Wow there’s 300

different parts of answer one I dress

each one designed it’s a really

important question for some crazy reason

in the universe two people from Los

Altos and Cupertino California managed

to want something that just so happened

to be what about a million other people

wanted and it’s seem to fit the need

fairly well so well matter of fact that

in the last two and a half years nobody

else has come close so I don’t think

that’s who’s ever going to be obsolete

to answer it in another angle the second

angle Apple is eventually going to have

a broader line products simply because

let’s look at automobiles compare a

Volkswagen Rabbit and a dump truck and

Mercedes Benz let’s say they all have

transmission engines four wheels seats

and the basically off perform the same

basic function of transportation what’s

the difference there is an emphasis

there’s a difference in emphasis and I

think that that’s what we’re going to

look at doing is is potentially

broadening the product on you with

computers with a different emphasis

slightly different emphasis than

attitude and

I hope you’re pleased with the bidding

clock that will come out with over the

year but I don’t think that many of you

are going to actually feel like giving

up your attitude I don’t see it

happening one other thing I heard a

comment up here as you were asking your

questions when they said like Apple won

right an Apple one was an instance where

we did actually our cart we absolutely

did absolutely fine and what we did was

we decided that we were going to take

care of the people who bought Apple one

and the people that contacted us and

said listen I’d really like to have an

Apple 2 we work out an arrangement that

I think everyone is very happy with so

we could take care of those people I

don’t think we’ll ever be in a situation

like that again of obsolete economy but

like you can’t afford about 500 people

now and Apple will do this year is

probably somewhere between 150 and 200

million dollars with the sentence and if

you actually divide the sales number by

the people you’ll find as we probably

have the highest sales dollars per

employee anybody’s ever heard of and the

reason is is because we’ve got the most

incredible collection of people on the

planet that I always the most incredible

collection I’ve ever seen amongst all

the other people have ever seen and it

wasn’t very very hard and if you

actually look at why they’re there why

people have come to Apple why people

came originally it certainly wasn’t for

the salary a lot of people came to out

went to a 50% cut in salary initially we

picked competitive salaries now we

certainly don’t attract people on the

basis of salary we track people on the

basis of an opportunity to work your

butt off and get something done right

we lost food art and an opportunity to

work with professionals they’re as good

as you are other business country so

what Apple’s what we’re going to make

where we’re going to judge ourselves by

the scene you mentioned the companies

can judge itself by which can you

maintain this atmosphere of creativity

tremendous productivity a company where

it’s just fine to fall on your face

would want you to pick yourself up

pretty fast not in an environment where

we give people enough rope to hang

themselves by and hope that they don’t

if we can maintain that for the next 10

years and beyond we’ll have been

successful and the rest of the stuff

will take care of the shop the rest the

stuff will take care is not