Steve’s personal courtship of Sculley, then the president of PepsiCo, has been endlessly documented. It’s the story of two men who saw exactly what they wanted to see in the other, who salivated at the thought of how pairing up might transform their lives, and who both wound up sorely disappointed.
Sculley was a soda pop and snack food executive, a forty-three-year-old native New Yorker who was the product of the best prep school and Ivy League educations that money could buy, graduating from Brown and getting his MBA at Penn’s Wharton School. He made a name for himself at Pepsi designing taste-it-and-rate-it advertising campaigns like the “Pepsi Challenge,” and bringing new innovation to supermarket aisle “endcap” promotions and other cosmetic marketing ploys. He was a great champion of consumer research to determine how best to refine product offerings.
Despite his dismissive penchant for ignoring Scotty and Markkula, Steve was fully aware that he still had much to learn about the world of business. In Sculley, he thought he had found an open-minded Fortune 500 exec who would be the in-house mentor he thought he wanted and the enlightened, disciplined leader for a company breaking into the big time. As Steve spun tales of Apple’s potential, Sculley seemed full of ideas of how his expertise could fuel Steve’s notion of where the company should go. The fact that he played hard to get only heightened Steve’s infatuation. He turned down Apple’s initial offer of a salary of $300,000 a year, plus options for 500,000 shares of Apple stock, which at the time were worth about $18 million. On March 20, 1982, the two met at the Carlyle Hotel for the signature moment of their courtship. They wandered around Central Park and the Metropolitan Museum of Art before winding up at the San Remo apartment building on Central Park West. A two-story penthouse apartment in one of the building’s distinctive twin towers was vacant and for sale, and Steve had been mulling making an offer to buy it. Standing together on a balcony thirty stories up, Sculley told Steve that before he’d even consider coming to Apple, they’d have to agree to pay him $1 million in salary, plus a $1 million signing bonus, and a guaranteed $1 million severance payment if things didn’t work out. It was a stunning demand for the time, but Steve was undeterred. He said he’d pay it out of his own pocket if necessary.
He sealed the deal by challenging Sculley with a line that would become a famous part of the Steve Jobs lore: “Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?”
Two days later CBS founder William S. Paley told Sculley that if he were a young man, he would head for Silicon Valley, because that was where the future was being made. Sculley started work in Cupertino on April 8, 1983. His extravagant salary package made him by far the highest-paid executive the computer industry had ever seen.
Falling for Sculley would prove to be another regrettable mistake on Steve’s part. In his anxiety to find a big-time manager whose skills would mesh with his, Steve had missed some glaring weaknesses. While Sculley possessed strong, if conventional, marketing skills, he was not well versed in many of the other parts of business, despite his MBA and years at PepsiCo. In his own way, he was every bit as insecure as Steve. He felt he had much to prove to the tech wunderkinds at Apple. He bragged that as a kid he had been a ham radio operator and had invented a color television tube. But he knew little about computers. One of his first hires upon arriving in Cupertino was a technical assistant to help him bone up on digital technology and master the Apple II in his office.
Smart as he was, Steve made his fair share of bad hires, often after deciding all too quickly that a flashy outsider was stronger than the people who were already working for him. Later the cost of such mistakes would diminish, as he learned how to react quickly when he had to clean up a mess he had made. But the Sculley hire was double trouble. First, Steve did not get the strong mentor he needed, the leader who truly could have furthered his business education. Second, Sculley was a much more skilled practitioner of the dark arts of corporate politics than Steve. It would take time for Steve to realize that Sculley didn’t bring as much to the table as he had hoped. And when Steve did finally come to that realization, he didn’t know how to win the ensuing battle.
DESPITE THE MANAGEMENT mess at Apple, veterans of those years remember Apple as a company with a unique soul, and cite Steve as a powerful inspiration. The long and winding development of the Macintosh is the saga that best shows why Steve remained so admired even as he was so instrumental in tearing apart the company he loved.
To understand this, we need to take a step back chronologically, to the fall of 1980, when Scotty dumped Steve from the Lisa team. At the time, he had suggested that Steve take a look at an intriguing side project being run by Jef Raskin, a smart, idiosyncratic, theoretically inclined former college professor whose first job at Apple had been to supervise the preparation of user manuals and product documentation for the Apple II. Steve thought Raskin was a pedantic egghead, but he was intrigued by the goal of his project: to create a consumer-oriented “computer appliance” that would sell for just $1,000. Raskin planned to call his machine the Macintosh.
Once Steve had decided that he wanted the Mac as his own sandbox, he made quick work of Raskin. He repeatedly and publicly contradicted and undermined Raskin, asking his engineers to tackle projects that didn’t relate to the project’s stated goals. He made clear that he thought Raskin’s product plan fell far short of what was actually possible. Ultimately, he forced a meeting with Scotty and Raskin in which he made an impassioned plea for outright ownership of the product. Shortly after Scotty’s decision in favor of Steve, Raskin quit in a huff. But before he left he fired off a memo to his bosses that still stands as an angry summary of Steve’s weaknesses. “While Mr. Jobs’s stated positions on management techniques are all quite noble and worthy, in practice he is a dreadful manager.… He is a prime example of a manager who takes the credit for his optimistic schedules and then blames the workers when deadlines are not met,” he wrote, adding that Steve “misses appointments … does not give credit … has favorites … and doesn’t keep promises.”
All true. And yet Steve was right to dump Raskin. He saw that the self-consciously modest Macintosh Raskin had proposed would fall far short of a real breakthrough. To truly expand the consumer market, a transformative step was required, and that meant finally delivering on the promise of those graphical user interface technologies he had first seen at PARC. Steve was convinced he could do this, and equally convinced that Raskin could not. Steve never really cared if people thought he was selfish or that his elbows were a little too sharp. He was willing to do whatever he felt it took to achieve his goals.
To that end, Steve also did everything he could to separate “Mac” from “Apple.” He ran the project as a fiefdom that just happened to have access to all the funds of the corporation. He spent a million dollars setting up a new home for the team in a separate building known as Bandley Three, down the road from Apple headquarters. Shortly after they moved in, a programmer named Steve Capps hoisted a skull-and-crossbones flag over the building. It became a rallying point for the team—although the rest of the company, of course, took it as a clear sign that Steve was in it for Mac, not for Apple. Again, this was true insofar as it went. But the Lisa would soon prove to be as big a dud as the Apple III, and the Apple II would come under growing pressure from Big Blue’s successful entrant in the market—the IBM PC. Apple needed a breakthrough product. And this time around, Steve would succeed brilliantly in leading the company’s talented engineers to heights they never imagined they could reach.