Jobs had the audience cheering from his opening line: “It’s great to be back.” He
began by recounting the history of personal computer architecture, and
he promised that they would now witness an event “that occurs only once or twice in a decade—a time when a new architecture is rolled out that is going to
change the face of computing.” The NeXT software and hardware were designed, he said, after three years of consulting with
universities across the country. “What we realized was that higher ed wants a personal mainframe.”
As usual there were superlatives. The product was “incredible,” he said, “the best thing we could have imagined.” He praised the beauty of even the parts
unseen. Balancing on his fingertips the foot-square circuit board that would be nestled in the foot-cube box, he enthused, “I hope you get a chance to look
at this a little later. It’s the most beautiful printed circuit board I’ve ever seen in my life.” He then showed how the computer could play speeches—he
featured King’s “I Have a Dream” and Kennedy’s “Ask Not”—and send email with audio attachments. He leaned into the microphone on the computer to
record one of his own. “Hi, this is Steve, sending a message on a pretty historic day.” Then he asked those in the audience to add “a round of applause” to the message, and they did.
One of Jobs’s management philosophies was that it is crucial, every now and then, to roll the dice and “bet the company” on some new idea or technology.
At the NeXT launch, he boasted of an example that, as it turned out, would not be a wise gamble: having a high-capacity (but slow) optical read/write
disk and no floppy disk as a backup. “Two years ago we made a decision,” he said. “We saw some new technology and we made a decision to risk our company.”
Then he turned to a feature that would prove more prescient. “What we’ve done is made the first real digital books,” he said, noting the inclusion of the
Oxford edition of Shakespeare and other tomes. “There has not been an advancement in
The Launch, October 1988Jobs had perfected the art of turning product
launches into theatrical productions, and for the world premiere of the NeXT computer—on October
12, 1988, in San Francisco’s Symphony Hall—he wanted to outdo himself. He needed to blow away the doubters. In the weeks leading up to the event, he drove up to San Francisco almost every day to hole up in the Victorian house
of Susan Kare, NeXT’s graphic designer, who had done the original fonts and icons for the Macintosh. She helped prepare each of the slides as Jobs fretted over everything from the wording to the right hue of green to serve as the
background color. “I like that green,” he said proudly as they were doing a trial run in front of some staffers. “Great green, great green,” they all murmured in assent.
No detail was too small. Jobs went over the invitation list and even the lunch menu (mineral water, croissants, cream cheese, bean sprouts). He picked out a video projection company and paid it $60,000 for help. And he hired the
postmodernist theater producer George Coates to stage the show. Coates and Jobs decided, not surprisingly, on an austere and radically simple stage look. The unveiling of the black perfect cube would occur on a starkly minimalist
stage setting with a black background, a table covered by a black cloth, a black veil draped over the computer, and a simple vase of flowers. Because
neither the hardware nor the operating system was actually ready, Jobs was urged to do a simulation. But he refused. Knowing it would be like walking a tightrope without a net, he decided to do the demonstration live.
More than three thousand people showed up at the event, lining up two hours before curtain time. They were not disappointed, at least by the show. Jobs
was onstage for three hours, and he again proved to be, in the words of Andrew Pollack of the New York Times, “the Andrew Lloyd Webber of
product introductions, a master of stage flair and special effects.” Wes Smith of the Chicago Tribune said the launch
The negotiations lasted into 1988, with Jobs becoming prickly over tiny details. He would stalk out of meetings over
disagreements about colors or design, only to be calmed down by Tribble or Lewin. He didn’t seem to know which frightened him more, IBM or Microsoft. In April Perot decided to play
host for a mediating session at his Dallas headquarters, and a deal was struck: IBM would license the current version of the NeXTSTEP software, and if the managers liked it, they would use it on some of their workstations. IBM sent
to Palo Alto a 125-page contract. Jobs tossed it down without reading it. “You don’t get it,” he said as he walked out of the room. He demanded a simpler contract of only a few pages, which he got within a week.
Jobs wanted to keep the arrangement secret from Bill Gates until the big unveiling of the NeXT computer, scheduled for October. But IBM insisted on
being forthcoming. Gates was furious. He realized this could wean IBM off its dependence on Microsoft operating systems. “NeXTSTEP isn’t compatible with anything,” he raged to IBM executives.
At first Jobs seemed to have pulled off Gates’s worst nightmare. Other computer makers that were beholden to Microsoft’s operating systems, most notably Compaq and Dell, came to ask Jobs for the right to clone NeXT and
license NeXTSTEP. There were even offers to pay a lot more if NeXT would get out of the hardware business altogether.
That was too much for Jobs, at least for the time being. He cut off the clone discussions. And he began to cool toward IBM. The chill became reciprocal.
When the person who made the deal at IBM moved on, Jobs went to Armonk to meet his replacement, Jim Cannavino. They cleared the room and talked one-on-one. Jobs demanded more money to keep the relationship going and
to license newer versions of NeXTSTEP to IBM. Cannavino made no commitments, and he subsequently stopped returning Jobs’s phone calls. The deal lapsed. NeXT got a bit of money
Jobs came up with a brilliant jujitsu maneuver against Gates, one that could have changed the balance of power in the computer industry forever. It required Jobs to do two things that were against his nature: licensing out his
software to another hardware maker and getting into bed with IBM. He had a pragmatic streak, albeit a tiny one, so he was able to overcome his reluctance.
But his heart was never fully in it, which is why the alliance would turn out to be short-lived.
It began at a party, a truly memorable one, for the seventieth birthday of the Washington Post publisher Katharine Graham in June 1987 in Washington.
Six hundred guests attended, including President Ronald Reagan. Jobs flew in from California and IBM’s chairman John Akers from New York. It was the
first time they had met. Jobs took the opportunity to bad-mouth Microsoft and attempt to wean IBM from using its Windows operating system. “I
couldn’t resist telling him I thought IBM was taking a giant gamble betting its entire software strategy on Microsoft, because I didn’t think its software was very good,” Jobs recalled.
To Jobs’s delight, Akers replied, “How would you like to help us?” Within a few weeks Jobs showed up at IBM’s Armonk, New York, headquarters with his
software engineer Bud Tribble. They put on a demo of NeXT, which impressed the IBM engineers. Of particular significance was NeXTSTEP, the machine’s
object-oriented operating system. “NeXTSTEP took care of a lot of trivial programming chores that slow down the software development process,” said
Andrew Heller, the general manager of IBM’s workstation
When they happened to meet in the hallway at a conference, Jobs started berating Gates for his refusal to do software for NeXT. “When you get a market, I will consider it,” Gates replied. Jobs got angry. “It was a screaming
battle, right in front of everybody,” recalled Adele Goldberg, the Xerox PARC engineer. Jobs insisted that NeXT was the next wave of computing. Gates, as
he often did, got more expressionless as Jobs got more heated. He finally just shook his head and walked away.
Beneath their personal rivalry—and occasional grudging respect—was their basic philosophical difference. Jobs believed in an end-to-end integration of hardware and software, which led him to build a machine that was not
compatible with others. Gates believed in, and profited from, a world in which different companies made machines that were compatible with one another; their hardware ran a standard operating system (Microsoft’s Windows) and
could all use the same software apps (such as Microsoft’s Word and Excel). “His product comes with an interesting feature called incompatibility,” Gates
told the Washington Post. “It doesn’t run any of the existing software. It’s a super-nice computer. I don’t think if I went out to design an incompatible computer I would have done as well as he did.”
At a forum in Cambridge, Massachusetts, in 1989, Jobs and Gates appeared sequentially, laying out their competing worldviews. Jobs spoke about how
new waves come along in the computer industry every few years. Macintosh had launched a revolutionary new approach with the graphical interface; now
NeXT was doing it with object-oriented programming tied to a powerful new machine based on an optical disk. Every major software vendor realized they
had to be part of this new wave, he said, “except Microsoft.” When Gates came up, he reiterated his belief that Jobs’s end-to-end control of the software and
the hardware was destined for failure, just as Apple had failed in competing against the Microsoft Windows standard. “The hardware market and the
software market are separate,” he said. When asked about the great design that could come from Jobs’s approach, Gates gestured to the NeXT prototype that was still
Gates and NeXTBill Gates was not a soul mate. Jobs had convinced him to produce software applications for the Macintosh, which had turned out to be hugely profitable for Microsoft. But Gates was one person who was resistant
to Jobs’s reality distortion field, and as a result he decided not to create software tailored for the NeXT platform. Gates went to California to get
periodic demonstrations, but each time he came away unimpressed. “The Macintosh was truly unique, but I personally don’t understand what is so unique about Steve’s new computer,” he told Fortune.
Part of the problem was that the rival titans were congenitally unable to be deferential to each other. When Gates made his first visit to NeXT’s Palo Alto
headquarters, in the summer of 1987, Jobs kept him waiting for a half hour in the lobby, even though Gates could see through the glass walls that Jobs was
walking around having casual conversations. “I’d gone down to NeXT and I had the Odwalla, the most expensive carrot juice, and I’d never seen tech
offices so lavish,” Gates recalled, shaking his head with just a hint of a smile. “And Steve comes a half hour late to the meeting.”
Jobs’s sales pitch, according to Gates, was simple. “We did the Mac together,” Jobs said. “How did that work for you? Very well. Now, we’re going to do this together and this is going to be great.”
But Gates was brutal to Jobs, just as Jobs could be to others. “This machine is crap,” he said. “The optical disk has too low latency, the fucking case is too
expensive. This thing is ridiculous.” He decided then, and reaffirmed on each subsequent visit, that it made no sense for Microsoft to divert resources from
other projects to develop applications for NeXT. Worse yet, he repeatedly said so publicly, which made others less likely to spend time developing
Less than $7 million had gone into the company thus far, and there was little to show for it other than a neat logo and some snazzy offices. It had no
revenue or products, nor any on the horizon. Not surprisingly, the venture capitalists all passed on the offer to invest.
Jobs made an offer to Perot that was three times more costly than had quietly been offered to venture capitalists a few months earlier. For $20 million, Perot would get 16% of the equity in the company, after Jobs put in another
$5 million. That meant the company would be valued at about $126 million. But money was not a major consideration for Perot. After a meeting with
Jobs, he declared that he was in. “I pick the jockeys, and the jockeys pick the horses and ride them,” he told Jobs. “You guys are the ones I’m betting on, so you figure it out.”
There was, however, one cowboy who was dazzled. Ross Perot, the bantam Texan who had founded Electronic Data Systems, then sold it to General Motors for $2.4 billion, happened to watch a PBS documentary, The
Entrepreneurs, which had a segment on Jobs and NeXT in November 1986. He instantly identified with Jobs and his gang, so much so that, as he watched
them on television, he said, “I was finishing their sentences for them.” It was a line eerily similar to one Sculley had often used. Perot called Jobs the next day and offered, “If you ever need an investor, call me.”
Jobs did indeed need one, badly. But he was careful not to show it. He waited a week before calling back. Perot sent some of his analysts to size up NeXT,
but Jobs took care to deal directly with Perot. One of his great regrets in life, Perot later said, was that he had not bought Microsoft, or a large stake in it,
when a very young Bill Gates had come to visit him in Dallas in 1979. By the time Perot called Jobs, Microsoft had just gone public with a $1 billion
valuation. Perot had missed out on the opportunity to make a lot of money and have
Perhaps the greatest similarity to his days at Apple was that Jobs brought with him his reality distortion field. It was on
display at the company’s first retreat at Pebble Beach in late 1985. There Jobs pronounced that the first
NeXT computer would be shipped in just eighteen months. It was already clear that this date was impossible, but he blew off a
suggestion from one engineer that they be realistic and plan on shipping in 1988. “If we do that,
the world isn’t standing still, the technology window passes us by, and all the work we’ve done we have to throw down the toilet,” he argued.
Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge Jobs, did so. “Reality
distortion has motivational value, and I think that’s fine,” she said as Jobs stood at a whiteboard. “However,
when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.” Jobs
didn’t agree: “I think we have to drive a stake in the ground somewhere, and I think if we miss this window, then our
credibility starts to erode.” What he did not say, even though it was suspected by all, was that if their targets slipped they might run out of money. Jobs had
pledged $7 million of his own funds, but at their current burn rate that would run out in eighteen months if they didn’t start getting some revenue from shipped products.
Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his list of maxims with “The
honeymoon is over.” By the time of the third retreat, in Sonoma in September 1986, the timetable
Perot brought to NeXT something that was almost as valuable as his $20 million lifeline: He was a quotable, spirited cheerleader for the company, who could lend it an air of credibility among grown-ups. “In terms of a startup
company, it’s one that carries the least risk of any I’ve seen in 25 years in the computer industry,” he told the New York Times. “We’ve had some