he shaped how I came to view the world we were both strong-minded but he had a fully formed aesthetic and I did not it is hard enough to see what is already there to remove the many impediments to a clear view of reality but Steve's gift was even greater he saw clearly what was not there what could be there and what had to be there his mind was never a captive of reality quite the contrary he
imagined what reality lacked and set out to remedy it his ideas were not arguments but intuitions born of a true inner freedom for this reason he possessed an uncannily large sense of possibility an epic sense of possibility Steve's Love of beauty and his impatience with ugliness pervaded Our Lives No Object was too small or insignificant to be exempt from Steve's
examination of of the meaning and the quality of its form he looked at things and then created things from the standpoint of perfection that could be an unforgiving standpoint but over time I came to see its reasons to understand Steve's unbelievable rigor which he imposed first and most strenuously on himself he was the most unfettered thinker I have ever known
that was Steve's wife speaking at his memorial service after he passed away and is an excerpt from the book that I'm going to talk to you about today which is becoming Steve Jobs the evolution of a reckless upstart into a Visionary leader and it was written by Brent schender and Rick teli so this is the second time I read this book I originally read it several years ago it
was episode 19 of Founders at the at the time I first read this book though I had only read two books about Steve Jobs so I didn't really have an advanced understanding of who who he was and why his career is so important for ENT future generations of entrepreneurs to study since then I've read over 10 books on Steve Jobs many of them multiple times and then I tracked down every
single biography I could find about the people that he discussed where their heroes or influences or people he studied when he was building Apple I made episodes about every single one of those books I'm going to included in the show notes you can also go to Founders podcast.com and you'll find it there it's about 40 different episodes and so all that reading and all that
time invested heavily informs when I pick up the book the second time and the reason I wanted to reread this book is because if you should read you know as many books as possible you can about Steve Jobs in my opinion but if you only had time to read one or if you only wanted to read one this is the one I would choose and the reason for that is
because it's the book that covers most deeply his Evolution the change from a reckless but gifted 20-year-old entrepreneur into the older wiser maybe greatest entrepreneur of all time and Steve was able to make that transition because he was a learning machine constantly honing his craft which the author goes into right in the prologue when he tells us why he wrote the book I
wanted to offer a fuller picture and deeper understanding of the man I had covered so intensely so that is Brent writing one of the co-authors and he actually was a reporter and a writer he covered Steve in the technology industry for over 20 years and this is the perfect paragraph to start with cuz it's going to form the discussion that you and I going to have about Steve today
right the most basic question about Steve's career is this how could the man who had been such an inconsistent inconsiderate rash and wrong-headed businessman that he was exiled from the company he had founded become the venerated CEO who revived apple and created a whole new set of culture divining products that transformed the company into the most valuable and
admired Enterprise on Earth and then he gets into the period of time in Steve's life which I agree with what he's about to say here is it's most important to study there's a fantastic book I read a long time ago after you read this book I would read Steve Jobs and the next big thing it's written by Randle Strauss it covers his Wilderness years the years
between when he left apple and he returned it's originally uh episode 77 of Founders if you haven't listened to it you might want to listen to it after you get done with this episode I kept coming back to the time that many have described as his Wilderness years the Dozen Years between his first tenure at Apple and his return that era from 1985 to 1997 is easy to overlook the lows aren't
as dramatic as the blowups of his first 10e at Apple and the highs aren't as thrilling as those engineered in the first decade of the 21st century these were muddled complicated times I call them on that podcast it is Bizarro Steve Jobs and the reason I called that is because you have one of the most gifted entrepreneurs of all time making bad decision after bad decision over and
over again as he's trying to build next but those years are in fact the critical ones of his career that is when he learned most everything that made his later success possible and that is when he started to temper and channel his behavior to overlook those years is to fall into the Trap of only celebrating success we can learn as much if not more from failure from promising paths that
turned into dead ends the vision understanding patience and wisdom that informed Steve's last decade were forged in the trials of those intervening years and this next sentence is really the punchline of what he's trying to to tell us and I agree with it after reading you know all these books on Steve Jobs especially Steve Jobs and the next big thing he had to go through that the last
Act of his career the most valuable work he ever did would not have occurred without that happening he mentioned that himself if you have ever gone back and uh listened to that commencement address that he gave at Stanford I think back in 2005 the failures stinging reversals miscommunications bad judgment calls emphas empasis on the wrong values the
whole Pandora's box of immaturity were necessary prerequisites to the clarity moderation reflection and steadiness that he would display in later years and yet even as you read about that time period and he's making you know like you can clearly see in hindsight what Steve that's a terrible idea what why are you doing that you are impressed by his his
willing his unwillingness to quit his perseverance was remarkable driven and curious even when things were tough he was a learning machine during these years and finally I want to wrap up this section before I go to what I think is the most important one of the most important events that happens in Steve's childhood really you can think about this section this next section is like
why the book is named becoming Steve Jobs and I wanted to include this because I really believe like this right now this paragraph This is the process that you and I are in the middle of most of the people that you and I study on the podcast are dead their story is written you and I are writing our story now Steve is a great object lesson in someone who masterfully improved his
ability to make better use of his strengths and to effectively mitigate those aspects of his personality that got in way of those strengths his negative qualities did not go away nor were they replaced by new good traits but he learned how to manage himself so let's go to when Steve was 5 years old his father was a middle class maybe lower middle class mechanic
Craftsman he made furniture and he also rebuilt cars on the weekend and even from a very young age he taught his son to take pride in the quality of what you're making and later in the book and I'll talk to you about it later there is a conversation that's happening between Steve Jobs and Johnny IV and they're having a discussion on how are we going
to define success at Apple how do we know if we can consider the work that we're doing success like what are the what are we what are the metrics that we're actually going to agree on and I think the conclusion they arrive at is the correct one and that discussion is completely informed in my opinion by what's happening when he's a young kid and the lessons that his father taught
him he taught his son the Paramount value of taking one's time paying attention to details and since Paul was anything but Rich putting in the leg work to hunt for spare parts that were a good value he had a workbench out in his garage when I was about 5 or six he sectioned off a little piece of it and said Steve this is your workbench now he showed me how to build things it really
was very good for me he spent a lot of time with me teaching me how to build things Paul is also raising his son in the right area this is the area that's now called Silicon Valley this is in the late 1960s late uh late 1960s and early 1970s and this talks about the people that they're interacting with this area attracted Highly Educated electrical engineers chemists uh computer
programmers and physicists who were drawn to the Region's blossoming semiconductor telecommunications and electronics company living there a curious child could easily develop a much deeper sense of the Leading Edge of Technology than those growing up elsewhere in the country so you can combine with the environment with what his father's teaching he's like listen
everything around you was built by somebody else and these are not great Mysteries you can learn to take them apart you can learn to prove them you can learn then to build your own things that add value to other people in the world the implicit promise in all of this was that anything could be figured out and since anything could be figured out anything could be built and that is
so important because about 12 years after this is happening in Steve's life he's hanging out with Steve wnc and he's like hey we can also build our own computer other people are building computers we don't have to build them one the way everybody else is doing it but we can we can actually build a computer and sell it that was Steve Jobs uh main contribution and sell it to
other people and so I want to go to where where Steve wnc and Steve Jobs are having this conversation and where Steve makes a calculation based on arrogance and he wind up being correct this is really important so at the time for Simplicity sake we can just think about what wnc is building as a computer he's working at HP at the time and he's like hey we Steve Jobs we can't make our own
computer why don't we pitch this to my employer like they might want to manufacture a version version of this concept and the reason I say it's a calculation based on arrogance is because Steve has no education no experience no contacts no resources and very little money and he's like we don't need HP and this is what he says he didn't think was needed HP he thought he
and was could develop a business of their own that business that idea more eventually morphs into apple and the premise the idea behind What's Happening Here you and I have seen over and over and over again in history of Entrepreneurship I use that that maximum as a way for for me to remember it because it came from that book the fish that ate the whale I just reread that
book book it's episode 255 if you haven't listened to it but at the time Sam Zam Murray is an 18-year-old penniless immigrant living in Alabama so you have him on one hand on the other hand is one of the the world's largest multinational corporations at that time in history United fruit company and he's saying hey these bananas that you guys are just throwing out I can actually
find a market for I can build this I can build what you're trash as the Cornerstone the foundation of my future Empire and that line is from that book it was a calculation based on arrogance and zuray like jobs where we are in this story was right and so Steve says forget that we don't need HP let's gather up our meager resources and sell them so it
says to raise cash Steve sold his treasured Volkswagen minibus and was uh sold his precious hp65 programmable calculator this is this is so wild think about you know Apple today is what multiple trillion dollar company this is the very first product they're going to make together that they actually sell into the Apple brand I should say and they spent $1,000 and I want to bring that out
because I I was reading this it says after spending $1,000 on designing the board and Contracting to have a few doesn't made uh they wind up making their money back by selling these for $50 a piece of that $50 sales price $30 is profit and this is when Steve makes the decision he's like hey we need to form a company let's name the company Apple I'll get there in a minute but
when I got to this section there's something that Jeff Bezos said that has never left my mind and I've known this for years and I've mentioned this several times on the podcast but he talks about he was talking about the experience like the unique experience Amazon has because they've grown multiple $10 million do businesses into billion doll businesses and he talks
about having that institutional knowledge is very important and he says it in a metaphor that's fantastic and he says we know from our this is Jeff speaking now we know from our past experiences that big things start small the biggest Oak starts from an acorn if you want to do anything new you've got to be willing to let that Acorn grow into a little sapling and then into a
small tree and maybe one day it will be a big business on its own and this next story is an example of that so they make their first version of their computer they register apple as a California business this is in 1976 and they were part of this small group of hobbyists people are really enthus Astic about technology and personal Computing I don't even think there was such a term
as personal Computing at this time in history if I'm not mistaken and so they go to present it and this is important says Steven W made one more trip to the home brew Computer Club to show off their finished fully assembled version of their new computer the reaction from most club members however was tepid most were Tinkers who believe that half the
fun of computing was in designing and building their own machines there's it's not in this book there's another fantastic Steve reflects on this later on life in another book I read and he's like what I the one Insight that I had is like for every one hobbyist right that actually wants to go through the trouble of like building their own computer and picking out the parts doing
all that stuff he's like there's a thousand customers that just want to go to the store and buy a computer like they'd buy any other Appliance and so if you think about what's what I'm about to read to you now go back to that line it's a calculation based on arrogance right so they do this presentation almost everybody in the club's like no this doesn't make sense this is like
against our ethos uh it says with the apple one all you had to do was set it up connect it to a keyboard and a monitor plug it in and turn it on so like this is stupid this isn't going to work now why is that important because this next sentence is fantastic understanding of Steve Jobs and I would argue almost every other person that you and I study on this podcast he was a
freeth thinker whose ideas would often run against the conventional wisdom of any community in which he operated Steve didn't care at all it was irrelevant your criticism of what he wanted to do he was going to make it happen and it's what happens at the very end of this this meeting this guy named Paul walks up to them he owns a small uh computer shop I think it might be like a
small chain of computer shops and it says the owner of the bite shop computer store introduced himself to Steven W after the presentation he was impressed enough to want to talk about doing some business so Steve always jumps on things as fast as possible they're like okay cool we'll do some business the next day Steve walks into Paul's shop he walks over to the bite shop right and he does
a deal with Paul where he says okay you pay $500 and will'll make 50 of them he goes from prototype the night before to $25,000 in sales and this story was always always humorous to me because you think about you know Apple the multitron dollar company today think about this the first Apple sale ever made was made Barefoot Barefoot he walks into the bite
shop and does this sale he does not have shoes on and then there's a line here that I think is really important Steve said yes first and then learn how to later without missing a beat Steve happily promised delivery even though he and was had neither the wherewithal to buy the components nor anything like a factory or a labor force necessary to build anything so at the beginning of Apple we
have the first major conflict in Steve's life he has a this famous saying that he says later on this famous maximum he's like listen it's more fun to be a pirate than join the Navy he wanted to build insanely great products from the time he was a very young man until the day he died he did not want to be a businessman as he told me several times I didn't
want to be a businessman because all the businessmen I knew I didn't want to be like Steve's natural inclination was to position himself as the critic the rebel the Visionary a Nimble David against the stagi Goliath and so one way to resolve this conflict he's like listen we have we know we're building a good product there in the uh about to build the Apple
2 one of the most commercially successful Apple products of all time but to do so they need help and so there's just one sentence here that any time if any you spent any time studying the life of Steve Jobs you know is one of his superpowers he had no qualms about calling anyone up in search of information or help that is a trait that he had at the very beginning of his life
the one he possessed his entire life so I'm going to go to another I'm going to go to my notebook so I I this is like several years ago there's this interview with Steve he's probably late 30s maybe early 40s I think this is like right before he goes back to Apple and he's talking about his ability to ask for help and he's talking about how this is
something that separates people like him who accomplish things from people who just dream about it and so this is a these are notes from a talk that he gave you know probably 40 years ago 30 years ago he says now I've always actually found something to be very true which is most people don't get those experiences because they never ask I have never found anybody who didn't want to help me
when I've asked them for help I have never found anyone who said no or hung up the phone when I called I just asked and when people ask me I try to be as responsive to pay back that debt of gratitude most people never pick up the phone and call most people never ask and that is what separates the people that do things from the people that just dream about them you got to act and you
got to be willing to fail you got to be ready to crash and burn with people on the phone with starting a company with what whatever if you're afraid of failing you won't get very far and I think a key part here is the fact that Steve had a deep belief in the Excellence of what him and W were building and so he has no problem he starts going around Silicon Valley and
one phone call after another he's like I'm going to find people that can help me I'm going to find Venture capitalists I'm going to find company Builders I'm going to find anybody that can tell me how can I take this idea and transform it into a company he had such faith in the Excellence of his work that he just assumed that someone someone would eventually agree to fund it and the the
way I think about that is like how can I take that idea and never forget it first you believe and then you work on making other people believe too he tirelessly navigated the Valley's network of experts one phone call and one meeting at a time and so then we skip ahead in the timeline and we see these two main ideas that I want to talk to you about which
is this is about the evolution of Steve Jobs the fact that he was not static he changed and that Steve like every every single other one of History's Greatest entrepreneurs spent their very valuable time studying the great entrepreneurs that came before them that is why there's almost 40 episodes on Steve Jobs and the people he studied in the archive listen to that Steve developed a
reputation as an egomaniac who wasn't willing to learn from others it is a fundamental misunderstanding of the man even during his youngest brashest and most overbearing years the time in history where we are in app's history and in Steve's life history while Steve didn't yet have the skills to build a great company he ad HED those who had pulled it off and he would go to Great
Lengths to meet them and learn from them now this is Steve talking about the lessons he learned from some of Technology's greatest uh entrepreneurs and Company Builders right none of these people were really in it for the money Dave Packard for example left all his money to the foundation obviously one of the co-founders of HP he may have died
the richest guy in the cemetery but he wasn't in it for the money Bob noise co-founder of Intel is another I'm old enough so this is this quote that I'm reading you from Steve Jobs this comes towards the end of his life so he's reflecting back on it he says I'm old enough to have been able to get to know these guys before they passed away is what he's talking about I met Andy Grove
who was then the CEO of Intel when I was 21 I called him up and I told him there's that there's a superpower guy right he's just going to call you on the phone he winds up calling bill hulet which is David Packer's partner obviously when he was like 12 or 13 years old cuz everybody's everybody's name and number used to be in the wife pages so he just he had the like that
just proves like his his level of uh I guess aggressiveness or his like default aggressive nature he just calls him up he's like hey I'm 12 years old I'm Steve Jobs I'm trying to build a frequency counter you guys have parts for them where you give me parts and uh Bill winds up laughing and laughing and then not only gives him the parts but gives him a job during the summer to to
assemble frequency counters at HP so it says uh I'm old enough to have known to be able to get to know these guys I met Andy Grove Co of Intel when I was 21 I called him up and told him I had heard he was really good at operations and asked if he could take if I could take him out to lunch I did that with Jerry Sanders founder of Advanced Micro
Devices and with Charlie Spork founder of national semiconductor and others basically I got to this is the main reason I'm telling you this and why it's so important that you and I do the same whether we do it in person or whether we have to use you know these these people Mentor Us in like an historical context which is exactly what books are basically I got to know these guys who
were all company Builders and the particular scent of Silicon Valley at that time made a very big impression on me and on the very next page he talks about the the person I've spent I just spent what the last right before I ReRe read this book I spent probably 10 days reading it's got to be close to a thousand pages on Edwin land I just reread three books on Edwin land they're
the last two episodes obviously there's you know five or six episodes on Edwin land in the archive and this is the reason it's because we have in my opinion Steve Jobs is the greatest entrepreneur to ever live and he's saying hey this is my hero this is the person I patterned my career off of I just um was interviewed on a podcast and a newsletter with my friend Frederick
and and something he asked me which I don't know if it'll make it in there but he's like why do you read books like it's not you don't just read one book on a person like he was he mentioned Edward land he's like you read five books on Edward land he's like essentially like what is wrong with you I told him I can't help it I have to read once I find somebody interesting I have to read
every single thing I can find on him I've just always been like that some Were Heroes like Edwin land Steve admired many things about land his obsessive commitment now this is Steve talking about why he admired one of the reasons he admired Hond land his obsessive commitment to creating product of style practicality and great consumer appeal and his Reliance on gut instinct
rather than consumer research and the Restless Obsession and invention he brought to the company he founded that is Steve describing Edwin land come on come on you could take out Edwin L's name put in Steve Jobs and it's the exact it still holds true Steve had an obsessive commitment to creating products of style practicality and great consumer appeal he Steve relied on gut
instinct rather than consumer research and Steve had a wrest Obsession and an invention that he brought to the company he founded I never get tired of hearing stories like this I absolutely love it I'm going to move ahead because I want to hit on another thing again this is not a summary of the book these are just the ideas that I want to remember the
ideas that I think I can use in my work the ideas I know you can use in your work and this is the idea like the Storyteller one of my favorite quotes of Steve Jobs is like the Storyteller is the most powerful person in the world and storytelling is a skill like anything else and one that you can practice and get better at and so listen to how good now obviously we all know
you've probably seen a lot of the like the product demonstrations and the interviews that Steve did later in his life he was also gifted now he's a better Storyteller later obviously but he was gifted listen to the storytelling ability he has as a 22-year-old this is remarkable there is a long and wonderful quote from a New Yorker piece in late
1977 that offers Rich proof of Steve's fully formed verbal Mastery it was written at a time when the average reader knew so little about computers so the Magazine's reporter is at a like a computer conference right and he finds a young Steve Jobs Manning the Apple computer booth and so he walks up to him and here let's go into Steve's verbal Mastery I wish we had these personal
machines when I was growing up jobs tells him before continuing on for a total of 224 words this is a master class in Marketing sales and product positioning in 224 words in my opinion people have been hearing all sorts of things about computers during the past 10 years through the media supposedly computers have been controlling various aspects of their lives yet in spite of
that most adults have no idea what a computer really is or what it can or can't do now for the first time people can actually buy a computer for the price of a good stereo interact with it and find out what it's all about consider the camera there are thousands of people across the country taking photography courses they'll never be professional photographers they just
want to understand what the photographic process is all about same with computers we started a little personal Computing Manufacturing Company in a garage in Los Altos in 7 in 1976 now we're the Lar largest personal computer company in the world we make what we think of as the rollsroyce of personal computers it's a domesticated computer people expect blinking lights but what they find is
that it looks like a portable typewriter which connected to a suitable readout screen is able to display in color there's a feedback it gives to people who use it and the enthusiasm of the users is tremendous we are always asked what it can do and what and it can do a lot of things but in my opinion the real thing it is doing right now is to teach people how to program the computer
that's the end of the 224 words then the this author this Brent's interpretation of what just occurred is fantastic so I'm going to read that to you as well the reporter asks if Steve would mind us telling his age 22 speaking off the cuff to a passing journalist Steve finds so many ways to demystify for the average person the insanely geeky device that he
and was had created he understood their fundamental fear that computers may take over too much of Modern Life he sympathizes with their ignorance he offers several analogies which is how most people think analogy is extremely useful way to get ideas into other people's brains he offers several analogies to comforting examples that they will understand typewriters cameras
indeed he makes using a computer seem no more complicated than taking a photograph going so far as to call the Apple 2 domesticated and yet he elevates this is this is his gift it's a incredible that he was able to do this so at a young age listen to this this is about the product positioning part I mentioned earlier and yet he elevates both his computer excuse me his company
and its computer into something aspirational he links this machine made a few months earlier a few months ago by some disheveled California Misfits to Rolls-Royce the 73-year-old Paragon Paragon of sophisticated industrial manufacturing and Elite consumer taste he even calls Apple a world leader an absolutely unprovable claim that Rockets the little company into the same league
as IBM which was then the industry's giant he was an extraordinary speaker and he wielded that tool to great effect so that's an upside of young Steve chops let's go to the downside or one of the downsides this is the dividing line in Steve's life if you are valuable to his if you're not valuable to his work you are completely replaceable and so this
is somebody describing Steve at this point his name is Lee CLA he was the ad director he went to becoming a very close friend of Steve Jobs he says Steve had this incredible bandwidth but he devoted almost all of it to work and this is pre-evolution of Steve right he gets a he he's so much better at dealing with people at leading people at building a company in the second return
to Apple than he was in the first and he made a mistake that you and I know not to make because when we went over s Lauder fantastic autobiography uh it's back on episode 270 or excuse me 2117 she made the point multiple times in that book and I think I brought it to your attention multiple times in in that episode to never underestimate the value of an
ally stop going around collecting enemies collect allies and Friends Steve was incapable absolutely incapable of doing this at his this point in the career and this leads him to getting kicked out of his own company when he turns 30 Steve's Behavior isolated him within the company he had little sense at this point of how important it can be to have true allies in a corporate
setting it was a blind spot that would catch up to him eventually and so no study of Steve Jobs life is not is complete without introducing a main supporting character uh their careers weave in and out of each other's for decades and that's Bill Gates this is the first time Bill Gates pops up in the story The Apple 2 is already super successful they're selling a ton of them
uh Steve is Rich Apple's already public Bill Gates is on the come up they're meeting they're both in their 20s and says in 1981 Bill Gates visited Apple the 26-year-old CEO of Microsoft made the trip fairly often since his company worked closely with apple and programming languages at the time Steve was Far richer and far more wellknown and the reason I'm bringing this your
attentions because it's a massive mistake Steve's about to make here this is what Bill Gates saw that Steve Jobs missed and it's the impact that a major company like IBM is going to have when it ships its first personal computer and because of the immense success they go from zero computer sold to a public company four years later that's printing money the Apple 2 is a massive hit and
that quick success inflated you know Steve's already gigantic ego and it opens up blind spots when you do that the way I think about this is like if you go to sleep on a win you're going to wake up with a loss Steve is about to go to sleep on a win so let's go to what again I love studying the early days of Bill Gates uh I think maybe the most popular episode of Founders ever was
episode 140 when I read that book hard drive I'm going to reread the book again soon and the reason I think that that book is so fantastic because for as famous and as successful as Bill Gates is there's not very many great biographies of him and that is nearly the perfect biography for you and I to study because it covers the first 35 years of his life
it you have an understanding exactly who he is how extreme he is and then it ends on the Microsoft IPO and so at this point in the book that I'm holding my hand where we're at Gates comes to visit Steve he's like yo do you see what's about to happen here man and Steve is completely oblivious Gates came to business naturally Gates predicted this
is fascinating too an entirely new kind of software industry would arise really the author is telling us about what is the most important impact or Insight Bill Gates had that impacted the technology industry so think about the ideas is like to have a pure software company was not something people ever considered Gates predicted an entirely new kind of software industry would
Arise at that point soft this is why at that point software development was mostly in the hands of the makers of computer hardware who buried the development costs in the final price of the devices they sold the prospect of making money by building software Gates believed would spur Innovation and he wrote a Manifesto about this it says Gates Manifesto is every bit as
significant as Mo's law in the explosion of personal Computing software development requires very little capital investment it is basically intellectual Capital the main cost is the labor required to design and test it there's no need for expensive factories it can be replicated endlessly for practically nothing Gates was right on this point excepting the fact that the soft that
software was worth paying for led to the emergence of a dynamic new industry this was Gate's greatest contribution to the world and it's so amazing he saw this before anybody else did think about how much economic value comes from software today like it's incalculable right and what's crazy is like he had this idea back in the 1970s Microsoft winds up being the first company in history I
always found this fascinating it's the first company in history to sell billion dollars billion dollars of software in one year and part of being able to do that is obviously he's he's Relentless I think I called him on that podcast there's so many people people have sent me messages over the years about I called Bill Gates the young Bill Gates uh that he was gangas Khan dressed
as uh in a in a Mr Rogers costume and I don't know where that came from other than when you read the book it's it's clear like he's one of the most uh ruthless and Relentless uh entrepreneurs in history and you wouldn't picture that like looking at him and people even knew that when he was 21 somebody else uh said that he was in this he was in this um
fight over uh there was like some kind of lawsuit going on and on the other side of the lawsuit is this new company and Bill's former partner and Bill's former's partner is like dude this is not going to be easy us fighting this guy they took a look at you know they're like this this is some 21y old kid nerd with shaggy hair he's like we'll eat him alive and he says it was kind of like
Churchill thinking he could deal with Stalin so I wasn't the only one to realize how extreme he was at that age so let's go back to this though so it says listen you know he was right the idea that the the software is worth paying for that you can build entire new businesses around it entire new Industries it can enable so much more if you get it out of the hands of Hardware
makers was Gate's greatest contribution to the world uh he was his role as the first champion of the concept that software itself held Val had value and again I don't think you probably become the first or you you found the company that becomes the first company to sell a billion dollars with the software without arriving at that Insight before most people even like before a lot of
other people like there is an advantage to just arriving at insights that is completely uh at odds with the existing nature of the uh the industry that you're operating in right Steve had always decided this is the problem so they're having this conversation and you know IBM's this is 1981 IBM shipping his first computer and Steve's like this is irrelevant no one's
going to choose that ugly piece of thing over this like piece of art this master like uh result of this this master craftsmanship that we've made here Steve had always derided big blue IBM as a lumbering monstrosity and truly believe that no Discerning buyer would ever perfect or would ever prefer uh a computer from IBM to one made by Apple Gates on the other hand knew this might
be the beginning of something big but on that fall afternoon no one Gates spoke to it Apple seemed aware that their world was about to change much Le much less acted worried years later Gates remembered that it kept walking around asking isn't this a big deal but no one seemed concerned and then the book is just full like spread out through so many pages I hope you buy the book I
hope I can convince you to buy the book and if you do I would work through it very slowly it's only 400 Pages uh but still took me over 20 hours to really like digest and understand and I do not obviously never rush through definitely not going to rush through this book because there's just so it covers just so much history of not only Steve's life
the technology industry Apple in particular but spread throughout the book there's just these fantastic onliners and they don't need much explanation they give you an Insight of so who he was and what was important to him he cared passionately and he never dialed it in so let's go to this idea that our strengths and weaknesses are constantly there they complement each
other they work off each other our successes and failures do the same if you really think about what's taking place he's at this point in the story he's all all for all intents and purposes going to get kicked out of apple and it goes back to this idea that if you go to sleep on a win you'll wake up with a loss after the initial success with the Apple 2 think about this
Steve probably the greatest entrepreneur ever live is going to have three commercial failures in a row the Apple 3 the Lisa and the Macintosh now the Macintosh obviously is like one of the most beloved computers but commercially successful like the the huge launch they did around it the sales start off really really great and then they quickly Peter
out to the point I think this book makes the point where a few years even after this the Apple 2 is still responsible for something like 70 or 80% of all of Apple's Revenue so think about you GNA have a massive success then you have three straight failures but even at the S same time that he's having three story failures he is right about this this is where he discovers hidden in George
Lucas's Lucas film division is what's going to eventually become Pixar Pixar is what makes Steve Jobs a billionaire the entire unbelievable unpredictable journey of how he goes from almost spending his last dollar on Pixar when he leaves apple he has like $70 million he puts 50 of it into Pixar over time and there's still losing money before they do Toy Story I I did this entire
podcast on this because the first CFO that guy Steve recruited he wrote a book about the history of Pixar which is fascinating it's episode 235 if you haven't um listened to that I would go back there that's almost like another Steve Jobs episode because he's obviously a main character in there but just the level of persistence is just unbelievable so I I don't want to get
distracted though the point I'm trying to make here is in the middle of failure after failure after failure is one of his greatest successes he just didn't know it at the time so he visit it's the graphics Group which is what Lucas's division is called they're going to be renamed Pixar and he realizes oh these are these are the best in the world at what they're doing Apple should buy them
at this point he didn't have any Sway With the board he's just about to get kicked out so they're like no Steve we're not buying them uh he visited the graphics group made up of Leading Edge computer graphic technicians who were working for film director George Lucas and began to think that the possibilities for computers with high-end 3D Graphics images were
Limitless this is in the 80s this is happening so he suggested that the apple board might want to consider buying the group these SE guys were way ahead of us on Graphics way ahead Steve said they were way way way ahead of anybody I just knew in my bones that this was going to be very important the board was not paying much attention to Steve anymore
and they passed on inquiring what would eventually become known as Pixar so he gets fired he goes into a deep deep depression this is ex incredibly important for you and I to realize the ups and downs of life never end until we die and especially for entrepreneurs because this entrepreneurial emotional roller coaster the best term I've ever heard about this comes from Mark and re
where he's like listen if you're building a company you only experience two emotions and there almost like there's like a bipolarness to this it's Euphoria and Terror we are in the terror part of Steve Jobs story you have one of the most aggressive driven people that have ever lived and he's completely lost he's thinking about leaving the computer industry forever retiring and being an
artist in Europe for a while he behaved more like a retire than one of the world's most highly driven 30-year-olds he just wasn't ready he did not have the skill set yet to to be able to not only found a great company but to lead a great company he was a slave to so much else to his celebrity to his unbalanced and obsessive desire for Perfection to his managerial flightiness
to his shortcomings as an analyst of his own industry to his burning need for revenge and the most important part to his own blindness of his faults at 30 years old Steve Jobs wasn't ready and why is that important for you and I to to remind ourselves of that because in this industry there's like this entrepreneurial industry that gives into this myth that you have these like young
20 something year old Geniuses that start a company and can do it for a long time and and they just intuitively get it you and I know how many biographies of in the history of Entrepreneurship have we gone over I can't think of an example where the younger version of the entrepreneur is better than the older version that doesn't mean you can't have
success as a young person doesn't mean obviously you can't start a company you can manage you can keep you can do it for decade after decade but if all these entrepreneurs we could if we could dig them up from their grave and ask them at what point in history do you think one point in your life do you think you were the the the peak of your powers the best
they're not going to say when I was 20 when I was 25 when I was 30 a main theme of this podcast that is rooted in like my subconscious now is that time carries most of the weight and in nearly every case you could have a 40 or 50y old version of the entrepreneurs you and I study and if they we were able to have them do a one-on-one battle for their 20 or 25y old version of themselves they
would kick the living out of them the 45-year-old version of Steve Jobs could take 10 of the 25y old versions of Steve Jobs and the reason I bring this up is because I talk to Founders all the time and someone's like oh I'm 30 I'm 35 I haven't achieved what I what I what I thought I would at this age or oh it's too late if you're in that spot just keep going people that are learning
machines and they refuse to quit are incredibly hard to beat Steve Jobs was a learning machine who refused to quit and in this book that I hold in my hand right now you have a 30-year-old Steve Jobs saying I give up I can't do this anymore I am brokenhearted but that feeling passed he got up dusted himself off said okay you win the first fight now best two out of
three here's another example of Steve Jobs a young Steve Jobs not being ready yet he's raised a bunch of money from Ross perau from giant corporations every single decision he's making it winds up being the the wrong one there's an entire book about that like I mentioned earlier please do pick up that book and read it especially if you're in the middle of building a company and why did
I just say that a 45-year-old Steve Jobs or 40-year-old Steve Jobs would kick the living crap out of the younger version of him he is trying to do a negotiation with a giant company IBM he needs this money right now he needs a win they're about to give him them $60 million that he desperately needs and we're going to contrast this right now with the Disney
Pixar negotiations that he's going to do like 15 years into the future which was a masterful negotiation this is the whatever the opposite of a masterful negotiation is IBM had decided to license his nextstep operating system for use in uh for a use in a line of its own engineering workstations the world's biggest computer company running Steve's
operating system seemed like it would be a great endorsement they would also provide $6 million which was critical operating capital for next at this time because they were burning through its in investor money 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 there was one meeting where he went in
one meeting with IBM obviously where he went in and actually told them I really don't understand why you guys 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 so they're talk they're referencing a story that happened earlier in the the history of next where he's like Bill we like at
this point uh they were still Steve was sh trying to make next hardware and he's like Bill we need you really to uh to build software for this thing please and remember the reversal of Fortunes they meet in Steve's office Steve's a richer more successful than one Bill Gates is 26 now a decade later the rules are completely reversed right St I think at
this time Bill Gates is close to being the one of the richest people in the world and Bill Gates tells Steve develop for it all piss on it and so he shows his ruthlessness he's like you're not selling anything this Market is Tiny I'm not developing anything for it so that's what they're referencing there so it says Steve wanted to be the hero not a secondary partner to a more
powerful computer company uh if IBM sold a lot of computers running their version of next next step the glory would be theirs and not his remember there's ego I understand it's not the ideal situation but you're burning through money you're not selling anything he's about to have a mass Exodus of like the first I think they they start next with him and like five other people almost
all of them are about to leave very shortly so he's in dire need that's why you have to get this deal done and so it says he killed the IBM deal by failing to follow through as a good business partner so the person that eventually that the person that reached out that wanted to do the deal it gets replaced so now there's another person running
the company or the or in charge of this de this uh division rather and his name is Kino I think so it says Kino logically assumed IBM could use next 2.0 version on its machines but then Steve met him and held him up for more money leading to another round of protracted negotiations and this they say Steve overplayed his hand this this kind of V guy got pissed off and he just stopped
taking Steve's calls and just abandoned the project and what this book does wonderfully is comparing contrasting when he's making every wrong decision at next right he's in the middle of a giant failure another part of him was spending time at Pixar and Pixar The Experience he has a Pixar is everything for Steve's growth as a leader and a CEO later on
when he goes back to Apple at Pixar he would lay the foundation of two of his greatest strengths his ability to fight back in times of distress and his ability to make the most of Innovation that put him ahead of anyone else in that field in other words it taught him how to keep his head and fight back when cornered and how to run like the wind in the open field and it became the place
where he really learned and this is this is so important the what they're about to the point he start they're going to make right here albeit slowly so he's really learned but slowly and reluctantly and against his Natural Instincts this is the evolution remember becoming Steve Jobs the evolution of a reckless upstart into a Visionary leader this is the beginning of the evolution
he began to go against his Natural Instincts that sometimes the best management technique is to forgo micromanagement and give good talented people the room they need to succeed the co-founder of Pixar the guy that wrote creativity Inc Ed CMO taught more taught Steve Jobs more about management than anyone else in his entire career although it would take almost a decade
Steve's Pixar Adventure would help him ReDiscover his self-respect make him a billionaire and align him with people who would teach him more about the management than anyone he'd ever work with without lessons he learned at Pixar there would be no great second act at Apple and they're going to make the case that catmull Ed catm is the best manager of creative people ever overseeing the
mly crew at Pixar had turned cill into an expert imaginative manager of creative people he started treating management itself as a kind of art this quiet bearded man with a measured professional demeanor knows more about managing and motivating creative people than anyone I've met so this is now Brent remember he covered the technology industry he's interviewed a ton of
people 70s 80s 90s all these entrepreneurs and very formidable Founders many of which I've done uh episodes about right he's saying listen this guy knew more about managing and motivating creative people than anyone I've met including Sony's founder Akia Marita Intel's Andy Grove Bill Gates Jeffrey kenberg and Southwest Airlines herb Keller his success would prove a
powerful example for Steve at the end of his fantastic book creativity Inc there's an afterward called The Steve we knew I think it's like 20 or 30 pages and he just tells the story of his relationship with Steve and he's just like the Steve that's reported about in the news his public Persona this is after he passed away obviously is not the person that I worked every day with
you know they they had the longest uninterrupted partnership in Steve's life it was like 25 or 26 years 24 years something like that and so I just want to pull out one or two things that cat says in this book because I think this is so important over time catm became perhaps The keenest Observer of Steve Jobs thisen what he says he's like this
Reckless jerky behavior that Steve was known for when he was in his 20s and 30s was true but it was a deficit of skill this blew my mind catl call catl saw po potential for change there were times when the reactions against Steve baffled Steve I remember him meaning Steve sometimes saying to me why are they upset what what that said to me was that he didn't intend to get
that outcome this is the most important sentence of what Ed is telling you and I it was a lack of skill as opposed to meanness a lack of skill of dealing with other people and so already mentioned earlier the fact that it's how many investors would have done that the idea it's like I have 70 million I believe in this my my main company NEX is not doing
well I'm going to dump 50 million of the 70 million a have into Pixar and I'm still writing checks every month every month the crazy thing is up until they do this distribution deal the original distribution deal with Disney Steve is floating the company every month just like it's there's no end in sight here and so this is just a few sentences and there it just jumps off the page if
you've done any studying about Steve Jobs Pixar next Ed cill and everything else and so we go back to what cill says Steve once told us that he had nothing to prove when he started next catm recalls now I don't believe that for a second we knew that he had everything to prove with next we were the only other gamble that he took and he said we turned out to be such a handful to begin
with that he stopped taking any other gambles Beyond those now I'm going to pause there before I get to my second point because I want to make the first point here this is remarkable he didn't know if you think about what's taking place of what camel just told us and where we are in the history of Steve Jobs life Steve did not know then but these two bets were all he needed Pixar
is going to make him a billionaire a few years from now next gets him back to Apple and then the lessons he learned in his Wilderness years turns helps turn Apple into the most valuable company in the world then we get into cat M's next Point Steve's main reason for keeping Pixar alive was that he still believed in this little band of geniuses and their leaders the business seemed to be
even though the business seemed to be going nowhere he had great admiration for kl's business and management expertise and then the other co-founder is Lasser which is probably the greatest animator of all time and Lasser was one of those rare Geniuses who can always make life seem full of possibilities what's the second point there everyone tells you bet on small groups of smart
people bet on small groups of smart people Steve actually did it and then there's a caption in the photo overlay in the middle of the book you see Ed kml's face the caption is the perfect summary of what I'm trying to get across watching Pixar's president Ed cill Steve absorbed a series of lessons about managing a creative corporation that became the foundation of his
moderated evolved is another way to think about that right his moderated Behavior upon his return to Apple at this point in Pixar's history they're still trying to sell I'm pretty sure they're still trying to sell computer hardware there's actually a their computer is named the Pixar computer that's where the company's name came from what Ed and ler what catm and ler
really want to do is they want to make the first the world's first computer animated full featurelength animated movie and so to show off some of the things that their their storytelling ability and what their hardware and their technology could do they would do these little short films they could be like five minutes long eight minutes long but this is like this is just a
paragraph but there's so many lessons embedded in here if we're going to if me and you can pause for a second and really think about what's happening okay so main thing here is like like Edwin Lan who you and I have just discovered the last or just discussed the last two weeks Edwin L made a lot of non-economic decisions Steve did Steve did too when ler had gone to Steve to get approval
for the budget of a short film called the tin toy Steve's response had been just make it great tintoy winds up winning the Oscar for the best short animated film it's incredible so then Steve winds up after they win the Oscar he takes everybody out that had worked on the short film to dinner and this is now a part of his life at least for one night where we have the Euphoria aspect
of the emot the entrepreneur emotional roller coaster Euphoria and Terror at least for one night this is a Euphoria he was so proud last said I remember grabbing the Oscar and putting it right in front of him at dinner you asked me to make it great I told him there you go that was the dinner where I met Loren this is going to wind up being his wife
he's I think it's just as at this point she yep that's right she and Steve had started dating a few months earlier we just love being with the two of them that night because Steve was so clearly in love he had his arm around Loren all night and he was so happy so full of feeling like everything is champagne bubbles in your life he was so excited he had won an Oscar and he had this
marvelous woman and so this is the note I wrote myself when I got to this part of the book pause here think about this this is 1989 he has at least six to seven years of intense struggle ahead of him he has already gone through four years of stagnant failure and that is after having his heart ripped out by losing the company he founded this is my punchline to myself
that I want to share with you it is one thing to know that you have to persevere it is another thing completely to actually do it and something that's going to help you persevere is a lesson that Steve learned directly from Pixar and their process in making movies which can be applied to building any product or any company and this is what he learned
creative thinking at its best is chalk full of failures and dead ends and Cat Mill says when you're out there on the edge some things go right and some things go wrong if nothing is going wrong you're fooling yourself and Steve believed that and Steve's receptive to learning from Ed Because he believes in Ed's mind I liked him from the very moment I met him Steve told me he found
him an intellectual match Ed is a quiet guy and you could mistake the quietness for weakness but it's not it's strength it Ed's really thoughtful this is all Steve talking okay Ed's really thoughtful and he's really really smart he's used to hanging around with really smart people and when you're around really smart people you tend to listen to them what did Michael Jordan tell us
right I told you when I read Michael Jordan's biography his 700 Page biography it's called Michael Jordan the Life it's all the way back on episode 212 that book changed my life that's a main theme that Michael would say over and over again he's like I'm not too dominant you know you have one of the most maybe the best at his job than anybody's ever been at their job right
then you have one of the most aggressive and dominant like Alpha personalities like alpha male personalities right and yet he's telling you over and over again he's like I'm not so dominant that I don't listen successful people listen those that don't listen don't last long that is a quote from Michael Jordan what are we hearing this when you're around
really smart people you tend to listen to them Steve listened he listened to cat Steve was constantly trying to learn so at this point in the story Apple has already brought next Steve's still trying to figure out okay do I want to become back as like full-time CEO like what am I actually going to do my life is pretty good but in the meantime he's like renegotiating the Pixar deal for uh
with Disney that was his main thing he was like he was their protector he was their financier but he also did all the negotiating because they didn't need his advice on how to make a movie he's just that's not the role he's he's playing now this highlight I'm about to read to you is one of my favorite highlights that I made in this book remember I
haven't read this book it's probably been four years since I read it the first time and it expresses an idea that I've compressed down to a maximum that I've repeated over and over again on this podcast and that's bad boys move in silence when you have something that's working you do not talk about it you shut up because the more you talk about it the more broadcast you broadcasting
you do about it the more it encourages competition Steve is intensely studying the business model of Animation what what like what is the like how valuable could it possibly be to Disney and he realizes Disney shuts up about it because they don't want to encourage competition and he does it in a fantastic little short story he was truly proud that he and Lawrence Levy
had studied Hollywood closely that is the guy I told you the CFO that wrote the book that I did on the past podcast okay and they had learned enough to understand how Pixar could cut a great deal in an industry that thrived on plundering this is Steve's own word here the industry thrives on plundering the dumb money of Star Struck Outsiders this is my favorite part this is Steve
talking you can't go to the library and find a book titled the business model of Animation the reason you can't is because there's only been one company Disney that has ever done it well and they were not interested in telling the world how lucrative it was so then we go into Steve's deliberation this decision am I going to is it even he didn't even know if it was possible to be CEO of two
publicly traded companies because he was CEO of Pixar at this time too and so we go into like his deliberation and then there's just a hilarious Andy Grove story to know Andy or to know about Andy is to love him as you'll see in a minute according to his wife Loren he was still torn about whether to go back she knew that her husband was most fulfilled when
he was tackling something gripping and important and there's all this series of questions he's asking was he even convinced that that apple had the people and the resources to become competitive did he really want to work that hard now that he had a young family did he want to risk what was left of his reputation Steve didn't know it at the time but his IND decisiveness was actually the kind
of breakthrough Steve was developing a more nuanced measured approach to decision-making more about his Evolution right the point of the book is to study his Evolution to realize who you are today is not going to be who you are at your in your final form Steve was developing a more nuanced measured approach to decision-making then Steve called his friend and Confidant Andy
Grove Steve told Grove that he was torn about whether or not to return as Apple CEO and wound his way through his tortured deliberations Grove groud Steve I don't give a about Apple just make up your mind and then he hung up the phone and that helped Steve make the decision because he's like oh I do give a about Apple this is the CFO of Apple at the
time describing why it had to be Steve we needed a spiritual leader that could bring apple back as a great product and marketing company and nobody else great who had those skills was going to take on Apple at that time we had to have Steve again the founder is the guardian of the company's Soul Steve was the guardian of Apple Soul then I want to bring up another point one of my
favorite stories again I think speaks this evolution of Steve where remember he he was complicating a deal that he desperately needed done uh with next and IBM he completely over complicated it moved too slow messed it up right now he's coming back to Apple they're losing a bunch of money he so he calls up Bill Gates and this is Bill Gates on Steve's simplicity
and Bill does a fantastic job of comparing and contrasting the way Steve negotiated a deal with the way that the previous CEO Gil amio did reaching an agreement with Microsoft was absolutely critical to laying the foundation of Apple to be saved when Steve called on Gates he kept things simple he explained that he would be willing to drop the litigation they're involved in patent
litigation but for a price Microsoft would need to publicly announce a 5-year commitment to provide uh office so uh Microsoft Office for the mac and then 100 and then make an investment of $150 million and apple it was classic remembers Gates i' had been negotiating this deal with Amelio and Gil wanted six things most of which were not important
Gil was complicated and I'd be calling him on the phone faxing him stuff over the holidays and then when Steve comes in he looks at the deal and says here are the two things I want and we got a deal done very very quickly so we're still in the late 90s Steve is still trying to turn around apple and this is where the author gets to actually have an interview and a conversation with
them and he has us a question and this is one of my favorite parts of the book because Steve tells us okay this is why I build companies and he has a line in here that's just fantastic he says the company is one of the most amazing inventions of humans so it says one day I asked him if he had come to enjoy the process of building companies now that he was trying to do do so for the third
time uh no he said as if I were a fool but if he didn't enjoy building companies he sure had a thoughtful and convincing way of describing why he kept doing it this is what Steve said the only purpose for me in building a company is so that the company can make products one is a means to the other over a period of time you realize that building a very strong company and a
very strong Foundation of talent and culture in a company is essential to keep making great products the company is one of the most amazing inventions of humans this abstract construct that's incredibly powerful even so for me it's about the products it's about working together with really fun smart creative people and making wonderful things it is
not about the money what a company is then is a group of people who can make more than just the next big thing it is a talent it is a capability it is a culture it is a point of view and it is a way of working together to make the next thing and the next one and the next one so in the last episode I talked about this idea that Edwin L used that a Marita used and I think it's a very
powerful idea it's a idea that you should hire a paid critic in the building of Sony and Polaroid they both use that idea to effect it's a way to constantly improve the quality of the product that you're selling to your customers this is another idea that's similar to that hire an outsider that you can trust and you can organize your thoughts with so there is and I'm going
to go into how he uses this idea but something I learned from um when I read Katherine Graham's fantastic autobiography that was back on episode 152 a main character in that book is Warren Buffett because Warren Buffett does a major investment into Graham's company things that's happening back in the maybe the 70s or something like that she had taken over the company right and
her husband had committed suicide she wasn't expecting to run uh such a large business and so Warren becomes like this mentor and he like like her his her now he teaching her everything he knows about business imagine having Warren Buffett you're one-onone tutors you build your company it's got to be insane right but he also was the person that she would organize her thoughts with and
there's a line from that book I want to read to you because it's called it's Charlie Munger orangutang there Warren told me he subscribed to Charlie monger's orangutang Theory which essentially contended that if a smart person goes into a room with an orangutang and explains whatever his or her idea is the orangutang just sits there eating his banana and at the end
of the conversation the person explaining comes out smarter Warren claimed to be my orangutang I heard myself talk when I was with him and I always got a better idea of what I was saying Steve used that idea in the rebuilding of Apple his last and final act Steve liked having a confidant someone he could banter with outside the formal lines of responsibility of daily
corporate life Mike Slade served that function so Mike Slade is going to wind up being close friends with both Steve Jobs and Bill Gates but he did not have a formal position he would just drop in and essentially Shadow uh Steve for like a day or two and then they would just talk right so he said he had made it uh clear that Mike that is he had made it clear he did
not want an executive position Apple Slade would show up in copertino on Mondays and Tuesdays flying down from Seattle no one reported to him and Steve had told the group that he had no particular Authority but when he was at Apple he almost never left Steve's side Steve did not allow himself to relax with his inner circle the way he would with Slade so again you have an outsider
one that you know you can trust and somebody you can organize your thoughts with they help your company but they're not part of your company another trait of History's Greatest entrepreneurs they are involved they're not putting their feet up impassive to what the state of their product or the state of their company is this is the level of Steve's involvement we went over OSX again and
again pixel by pixel feature by feature screen by screen there is nothing in that operating system that Steve Jobs did not approve and so how was Steve able to do this and still have a family life this was actually really interesting cuz there an idea that I've uh that's come up a bunch that work in in many cases like you'll there'll be like a line in a
biography it's like oh like his or her work was their hobby work is a hobby is basically the idea it's just like they happen to love it they're obsessed with it and so for Steve he's like had two basically things he wanted to focus on work and family and so this is Steve's schedule they're on better footing they're not going to go out of business like when they were almost you know
maybe on the precipice of bankruptcy uh he's putting a lot more time and effort but now he's again he's not not he's building out Talent just like Ed build out Talent at Pixar and so I just want to read this to you because I think it might be enlightening on how he spent his time back when he had been leading the Mac team or driving next Steve had
spent many late nights in the office as part of a small team trying to deliver the next great thing but now his role at Apple was so different he was heading up a company with thousands of employees and Steve managed everything to his small team of senior Executives he could do much of his work via email he would make it home for dinner almost every night spend time with his wife and the
kids and then work on his computer late into the night on a spectrum plotting how much time parents spend with their kids versus how much time they spend focused on their job Steve would land far towards the latter end meaning spending most of the time at work both he and Loren knew Steve would always work very very hard it had been a basic assumption when they got married neither
of us had much of a social life says Loren it was never important to us Loren often worked beside him at night he'd spent an hour or two talking over Apple business with her they'd often then catch a TV show before falling asleep so that's his basic schedule I will have to say the way to think about this and you know um there's a big struggle with you
know you have a family you're you're addicted to your work or you're fairly passionate about whatever it is there's two people I think you know there's not you're not going to be like it's not a perfect not a perfect solution to this but two ideas that may help you is Estee Lauder struggled with this and Sam Walton struggled with this and their partial compromise or partial
solution how you think about it is they made it a family business so sa's lauder's husband sold his business she he worked full-time with them her son was in college they would send them this is when Este Lauder was a private company they'd send him like all the financials they would send them email there's no email at the time they'd send them letters about decisions they're
making essentially like making sure the communication about the family business he was in the loop even when he wasn't working on there full-time so when he came back to the company he know what's going on so they there's like they it's like kind of like what Jeff Bezos said he's like I don't believe in work life balance I believe in work life Harmony
so for them they just said okay well we're still going going to spend a lot of time together but we're going to spend time together working on the business that you know it's providing the life that our family enjoys Sam Walton did this similarly where he had his kids work in Walmart stores from a very very young age again I don't think it's not that sa Lauder spent an insane
amount of time with her children Sam Walton didn't either Steve Jobs didn't as well but it it's it's a way to spend more time and as they just said it's also a way to spend more time with his wife because they're sitting next to each other at the computer at night he's talking about Apple tour he's like basically involving with her and again it's a way to organize his thoughts and
maybe more importantly now I'm sitting here thinking about it's like a way to organize your thoughts with somebody you know you can implicitly trust another good question for you to ask what do I focus on that sets me apart from my competitors Steve was always most fascinated with the contact point between a person and a computer there were good reasons that Steve found this
point of interaction so critical if the point at which a person interacted with a machine was complicated remember he just got done saying they went through every pixel every screen every button everything he did this for all the devices there's a fantastic book that talks about this especially with the development of the iPhone it's called creative selection is one of the bonus
episodes I did in probably two years ago I think I've read the book three times anybody building a product should order creative selection immediately it's written by a programmer who demoed and worked directly with Steve you can read it in a weekend it gives you an insight into how he thought about building products but it's this idea where he was
just completely obsessed about the point in which a person interacts with the machine and this is the reason if that point of interaction is complicated then the customer will likely never unlock its Secrets most people don't care about the inyard of their computer they care only what's on the screen and what they can get to through that screen Steve
understood the profound importance of this from the very beginning of his career it was part of what distinguished him from many of the other computer makers most of whom were engineers who believe that a rational customer point me to ra to a rational human being I don't I'm pretty sure that's like a unicorn right uh most of whom were engineers who believe that a rational
customer would of course care deeply about about the insides of his or her computer so again Steve focus on the interface what's on the screen the point of contact between the products he makes and the customers he wants to Delight to sell his products to and to delight and the the way to think about this paragraph we don't have to remember the details all we have to say is okay what
am I focusing on that sets me apart from my competitors and if you can't come up with something that's a sign there's more work to do another main theme in the career of Steve and almost every other entrepreneur we studied they're obsessed with control they do not want people in between them and their customers and so they have this idea it's like we're selling all these
freaking Apple computers and Steve's like I hate these Outlets it's just like they're crappy big box department stores computer retailers the salespeople are idiots or he calls them I forgot what he calls them but again he evolved and modulated his behavior but he's still an extreme person so he never he never got like a they said he deviated very far from the
mean so he kept that that trait his entire life I got tears in my eyes right now thinking about it but um so he he he has this idea he like okay well we're building products that are different than anybody else we our point of focus is different than everybody else why are we selling them the same way everybody else sells so he's like just a few months after he comes back from Apple he
asked a couple people in the compan like we need to come up with an online store where Apple could sell its computers directly to customers and so this guy named Eddie Q is one of the people that is put in charge of this and they have this giant meeting and everybody in the meeting besides Eddie and Steve thinks this isn't going to happen because we
can't do that because our distribution part Partners these channels as they call them uh they're going to be mad at us we don't want to make them mad and so it says Steve asked the others in the room about Q's proposal which is about the basic idea of selling direct to the customers online they were all worried the most worrisome about about this idea is the potential for alienating our
Retail Partners so one of them that's in this meeting says that Steve isn't all this pointless you're not going to do this because the channel will hate it Q turned to the person that said that and said the channel we lost two million dollar last year who gives a about the channel Steve perked up you he said pointing to the senior exec are wrong and you he said looking at Q are right
he asked Q to create an online store and have it completed in two months another great idea Steve learned through experience he has this idea called the Apple experience but you could put your Co company name in that the your company name experience and it's the fact that every single uh experience a customer has with your company will either add or subtract from
that customer's like impression of your company and so that's why Steve obsessed about every single interaction Point not only with the customer in screen and the device but also as simple as like uploading a credit card or paying for something literally every single time the the customer interacts with your company look at that point and eliminate
any points of friction or unhappiness that can cause a withdrawal from your company's reputation with that customer Steve had begun calling this the Apple experience Steve understood that every interaction customer had with apple could increase or decrease his or her respect for the company as he put it a company could accumulate or withdraw credits from its reputation which is why
he works so hard to ensure that every single interaction a customer might have with app Apple from using a Mac to calling customer support to buying a single from the iTunes stores and then getting build for it was excellent so then I just stumbled across this fantastic paragraph which describes like the it just cannot believe from the state of Apple was in 1997 when he comes
back to now they revamped the line they've they've increased profitability they Tim Cook's got inventory under control their product line is actually understandable as the consumer they're starting to they at one point only saw themselves as a computer company now they're starting to make little devices in fact what was remarkable is like the building of the iPod they considered it
like a making a a computer peripheral is the name is the the term they put on it which is like akin to making like a printer that is a massive success then they build the iTunes Store and they're they're building all these other things around this but the point is is is that they lack the skills as a company to do so and then once they GA the more they
gathered skills the more they gathered learning it opened opportunities and unlocked opportunities they couldn't see and so this is why I'm going to like preach this from the the rooftop as much as I can and maybe even like make a shirt and sell it it's just like time carries most of the weight like stay in the game as long as possible let me just read this and hopefully it makes sense
to you it is so hard to remember given Apple string of hits the resulting ubiquity of its later products and the dominant role it eventually assumed in our culture that this rise was entirely unexpected and a surprise even to the people who engineered it one little thing led to another one success one particular challenge could spur thoughts about another product or a different
iteration of an existing product or a whole new channel of Revenue as Steve liked to say you can only connect the dots of how things really happened in hindsight another idea that I think you and I can use Steve the synthesizer Steve did not like the idea of relegating all forward-looking tinkering to a separate area Apple did not have a formal research and development uh unit
per se instead research projects flowered in pockets all around the company many of them without Steve's blessing or even awareness they'd come to Steve's attention only if one of his key managers decided that the project or technology showed real potential in that case Steve would check it out and the information he this is oh my goodness cers this is so important I might I'm
going to read this part two times in that case Steve would check it out and the information he glean would go into the learning machine that was his brain sometimes that's where it would sit and nothing would happen sometimes on the other hand he concoct a way to combine it with something else that he'd seen or perhaps to twist it in a way to benefit
an entirely different project altogether this was one of his great talents the ability to synthesize separate developments and Technologies into something previously unimaginable that is Steve the synthesizer that is going to happen the more time you spend on your company it is also going to happen the more episodes that you listen to Founders the more of these books this
what Steve's doing inside his company we're doing for the entire history of Entrepreneurship there's going to be these weird ideas these weird lines that you hear these weird stories that you read uh read when you pick up the book that you might use two years from now five years from now 10 years from now you might use it next week it might spawn an idea that you have from a
previous experience like oh I'll combine the two all you're doing is exposing your brain downloading your brain a bunch of different ideas from Geniuses when it comes to their work the people that you and I are studying on this podcast are geniuses they think about it they're so good at what they do somebody wrote a book about it that is crazy and they're doing exactly what and I'm I'm
trying to do this myself you're obviously doing it I assume you're doing it as well but that's exactly what Steve's saying it's like dude all these things are pocking up over all these ideas are coming from all these different places many of them are occurring without our blessing or even our awareness right all these people built our companies in many cases they
built them and ran them their entire lives before you and I were even born that's they didn't need our blessing and we weren't even aware of it because we didn't exist then they come to Steve's attention only if one of his key managers decided the project or technology show real potential in that case Steve would check it out and the information he would gleam would go into
the learning machine that would his what was his brain sometimes that is where it would sit and nothing would happen sometimes on the other hand he con coocked a away to combine it with something else he'd seen or perhaps to twist it in a way to benefit an entirely different project altogether this was one of his great talents the ability to synthesize
separate developments and Technologies into something previously unimaginable and I just realized something now that I'm rereading this paragraph before I read it to you embedded in that idea is seeing yourself as just one in the line of the entrepreneurs and Company builders that came before you and so I interesting a couple days ago when I got to the
section for the first time I guess the second time cuz I've read the book twice now I I just pulled out just one paragraph from his amazing commencement spe speech at Stanford I felt that I had let the previous generation of entrepreneurs down he's talking about what he felt like after he got kicked out of apple okay I felt that I had left the pre let the previous generations of
entrepreneurs down that I had dropped the Baton as it was being passed to me I met with David Packard and Bob noise and tried to apologize for screwing up so badly I was a very public failure and I even thought about running away from the valley but something slowly began to Dawn me I still love what I did the turn of events at Apple had not changed that one bit I had been rejected
but I was still in love and so I decided to start over so I mentioned earlier huge theme of the book is the evolution of Steve compared you know him making needing that deal with IBM when he's at next messing it up terribly and I said at that point hey we're going to compare this with his beautiful negotiation he winds up St you may already know this
but Steve Jobs winds up being the the largest single shareholder in Disney and I'm going to read some notes that I have took from years back about synthesizing this in a minute but I want to read you Bill Gates on Steve Jobs Disney negotiation because Bill's again Bill's a main character in the book he's hilarious but it says Bill Gates was astounded by what Steve had been able to
negotiate when he's got the upper hand he's good at using it says Gates you know he'd wait people out just look at how much of the resulting company meaning Disney ends up being owned by this fairly small and yes very high tech and very brilliant Animation Studio they end up owning a very substantial percentage of the entire Disney ABC ESPN entity it is owned by this little
Animation Studio that took three rounds of negotiation and by the time the acquisition is being done Disney is just flat on its back saying take me because of the political dynamics of Disney at the time they needed that win and Steve knew they needed it and so several years ago I wrote out in like a quick post form uh like just how remarkable this this
turn of events was that like how the hell does Steve wind up being like not only you found Apple you make it you know make the most successful consumer device of all time or product of all time before you die but like you wind up being the largest shareholder in Disney like how could you not want to study and learn from Steve Jobs it's insane so I'm just going to read you you know I suck
at writing these are really just like my synthesis of all these books I was reading and this is like years ago but uh it says uh in 1986 Steve Jobs was in Exile from Apple the company that would one day become Pixar I'm reading my own notes to you this is not in the book obviously uh was called Graphics group and was owned by Star Wars Creator George Lucas George Lucas was going
through a divorce and needed to sell off some assets Steve agreed to give George Lucas $5 million for graphics group and invest another 5 million in the company they renamed the company Pixar Steve would eventually invest more than 50 million of his own money this made him the majority owner of Pixar this is important to know this was not the first time Steve Jobs had expressed interest
in the technology behind Graphics group years earlier he had tried to get Apple's board to buy the the company they turned him down uh after several years of failing to make the Pixar image computer Pixar decided to go all in on making films the problem was that after years of poor sales and Rising expenses they were short on cash to solve this
problem Steve signed a $26 million deal to produce three animated films for Disney the first of these movies was Toy Story the world's first entirely computer animated feature film now here's where the story gets interesting Steve decided to capitalize on the publicity of toy stoies release and take Pixar public at the same time Toy Story was released on November 22nd 1995 Pixar
went public on four days later November 29th 1995 his two partners Ed CML and John Lasser did not want to go public they thought it was too early they wanted to make a few more movies first that is until Steve laid out his strategy and told him what it was like what was likely coming from Disney Steve said let's assume Toy Story is a big success it was it wind up grossing over
370 million the first year Well when that happens this is again I'm just so impressed by the clarity of his thinking check this out he's laying this out before it happened when that happens the CEO of Disney who at the time was Michael Eisner will realize that he inadvertently created a rival company for Disney Animation Pixar only had to make two more films for Disney and then
they'd be free to do as they like Steve said iser's next move would be to negotiate to renegotiate with Pixar and keep Pixar closer to Disney's control Steve said that if they went public and they had more money they'd be able to negotiate better terms with Disney now why did he say that because their deal with Disney they only got like 12 or 15%
of the revenue because Disney's putting up all the money so Steve's like yo let's take the money some of the money we got from Pixar let's then go public right the same week that that is a massive success then we'll take that money and we'll come back to Disney like hey uh we can put up 5050 we're going to be 50-50 burners I'm pting up 50% of the money I'm want 50% of the profits and so
let's go back to where I'm at in these notes Steve said that when in Republic they and have more money they'd be able to negotiate better terms with Disney Steve wanted a 50-50 split with Disney on returns in order to request this Pixar had to be able to put up 50% of the production costs going public would allow Pixar to be able to afford this the time is now Steve said this is our
moment and he was right a few months later Eisner approached jobs and said he wanted to keep Pixar as a partner Eiser accepted Steve's 50-50 deal the good times were not to last Steve and Michael Eisner were like oil and water they did not get along a few years later negotiations broke down completely and Pixar started looking for other partners then Michael Eisner got fired the new
CEO of Disney was Bob Iger when Bob Iger found out that he was going to be the CEO the next CEO of Disney he called his daughters the the next person he called was Steve Jobs he laid all of his cards out on the table he told Steve he valued Pixar and wanted to make a deal this is Bob explaining why he felt Disney needed to buy Pixar Michael Eisner did not
understand that Disney's problems in animation were as acute as ever that manifested itself in the way in which he dealt with Pixar he was like really rough with jobs when iger's like we can't afford to be rough with him right because we need those assets we need Pixar's assets he never felt he needed Pixar as much as he really did Eiser did every negotiation needed be resolved by
compromises neither one of them iser and jobs is a master of compromise so that's what Bob that's the mindset Bob Iger is coming into this negotiation when he's about to buy Pixar for $7 billion right still in my notes by the way so this is extremely help helpful I should do this more often anyways but wait a minute how did Bob come to the realization that
Disney needed Pixar you won't believe this a random parade at a Disney at Disney Hong Kong made him realize how important Pixar was to Disney Iger realized he's standing next to Eisner when this has happened this is amazing Iger realized that the only characters in the parade that had been created in the past decade were pixars a light bulb went off I'm standing next to Michael
but I kept it completely to myself because it was such an indictment of his leadership of Animation during that period after 10 years of The Lion King Bey the Beast and Aladdin there were 10 years of nothing Bob begins to negotiate with Steve to buy Pixar and does something very unusual he does something anyone negotiating would tell you never to do he tells Steve how badly Disney
needs Pixar even more surprising that worked this is how Steve reacted that is why I love Bob Iger he just blurted it out now that's the dumbest thing you can do as you enter negotiation at least according TOA the traditional rulebook he just put his cards out on the table and said we're screwed I immediately like the guy because that's how I work too let's just put all the cards out on
the table and see where they fall and was it really a dumb idea no of course not because Disney purchased Pixar for $7.4 billion how much would Pixar be worth today if it was still a private company hell of a lot more than 7.4 billion and the fact that Disney can capitalize on those assets like to a greater degree than any other company in the world right Steve Jobs was the
single largest shareholder in Pixar this made Steve Jobs the single largest individual shareholder in Disney that is how Steve Jobs ended up owning so more so many Disney shares so that is exactly what Bill Gates that's a longer story more detail that came from multiple books that had read and then Sy synthesizing that information across multiple books into just like one note
that is you know extremely useful for me to go back and just relearn these lessons over and over again and so now we get to the part where I actually want to end it's what I mentioned earlier I started the podcast with to me one of the most important events in Steve Jobs Life as a kid five six years old his dad telling him this is your workbench now
you can build things you can make things let's explore all the made objects around us let's learn how they're made and let's add a contribution to the world that is what you and I are doing as product Builders as creators of products that make other people's lives better right that is all a business is just an idea that makes somebody else's life better so once we do that then we
need to Define what success is and this is the way Steve and Johnny IV defined success I remember a conversation in which we talked about how do we Define our metrics for feeling that we have really succeeded Johnny said we both agreed clearly it is not about share price is it about the number of computers we sell no it all came back to whether we felt really proud of what we collectively had
designed and built were we proud of that that's a great question to ask ourselves it's a great question to close on for the full story buy the book if you buy the book using the link that's in the show notes also available at Founders podcast.com you'll be supporting the podcast at the same time that is 265 books down 1,000 to go and I'll talk to you again soon