Chapter 3

Breakthrough and Breakdown

Every cliché is built on some truth. The cliché that Steve Jobs was half genius, half asshole is based largely on his actions during the nine years that constituted his first tenure at Apple. This is when his highs would shine most famously, and when his lows were reprehensible. It was the period when he most sought the limelight, and when he was most out of control. He developed followers and he created enemies. This is when his bundle of contradictory qualities unraveled, leaving him, and his company, at loose ends. These years provide a baseline for the rest of his career.

Steve’s personal life, which had been chaotic in the scattered, sloppy way of most twenty-somethings—especially those throwing themselves at a career without regard for sleep, social life, or family—spun out of control in 1978, when he denied the paternity of his own child. Chrisann Brennan, who had been his girlfriend for some time, gave birth to their daughter, Lisa, in May 1978. She was born in Oregon, at Robert Friedland’s orchard, and three days after her birth Steve flew north to be with her and Chrisann. But for months afterward, Steve denied he was Lisa’s father and refused to pay child support. He even resisted when a court-ordered paternity test established the likelihood that he was the father at 94.4 percent; it was as if the mere fact of his denial would negate the proof. When he finally starting paying child support of $385 a month, he continued to protest that he might well not be Lisa’s father. He saw her rarely, letting Chrisann raise Lisa on her own in a small house in Menlo Park.

It would take years for Steve to bring Lisa into his life in any significant way, and later he would repeatedly express deep regret over his behavior. He knew he had made a terrible mistake. The event obviously crossed the line of what anyone would consider acceptable behavior. Lisa has spoken about the distance she felt from her father, and the confusion and instability she felt as a child. Chrisann has spoken and written about this, too, creating a picture, albeit one-sided, of a careless, indifferent, and cruel lover and father. When people debate whether Steve was a “good” or “bad” man, this is the strongest indictment against him. He was twenty-three years old when Lisa’s birth presented him with a clarion call to accept adult responsibility. He rejected the call as fully as he rejected her.

Colleagues he worked with closely knew about Lisa, and heard Steve deny his paternity and complain about being pursued by Chrisann. Arthur Rock would later describe Steve’s behavior as “delusional.” Especially for someone as unsentimental as Rock, Steve’s behavior tied in to a pattern of irresponsibility that was developing at Apple. Whether working with his ostensible superiors, such as Rock, or making decisions that widely affected subordinates, Steve could seem indifferent to the impact of his choices. He conveyed a lack of empathy.

This behavior only worsened in the year after Steve’s visit to the Garden of Allah, when Apple made a big splash by going public. Several years later, Jobs told Susan Barnes, a financial manager at Apple and at NeXT, that December 12, 1980—the date of Apple’s IPO—was the most important day of his career, because only then was he sure that the folks who had driven Apple’s early success would make serious money. But Steve had specifically excluded people like Bill Fernandez and Daniel Kottke, an engineer whom he’d met at Reed, from the options bonanza, even though they had been instrumental in getting Apple started during that summer of 1976 in his parents’ garage. Jobs had a bureaucratic rationalization for doing so: they were hourly employees, and therefore not guaranteed the “founder’s stock” that helped make three hundred longtime salaried employees millionaires. But Steve’s lack of generosity was reflective of something that was starting to seem part of a broader character trait.

“He had this incredible bandwidth,” explains Lee Clow, the Chiat\Day ad director who would become Steve’s close friend after working on the famous “1984” television ad, “but he devoted almost all of it to work.” Prioritizing things in this way, especially as an immature young man, made most people in his life replaceable. Fernandez and Kottke, for example, had been important to Steve three years earlier, but to Steve’s way of thinking they had not kept up. They were not key contributors to Apple, and therefore to Steve’s life, anymore. The bigger priority was to reward the people who were improving Apple at present. It was a cold evaluation by a young man whose work life was exploding into something much bigger than he had ever anticipated. But his logic carried an emotional cost the young man didn’t even consider. Kottke and Fernandez and others like them felt snubbed and unappreciated. 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.

After the IPO, Steve was worth $256 million. That widely publicized number, along with the fancy cars that started appearing in the Apple parking lot and the talk of country homes and expensive vacations, contributed to a sense within the company that the offering had created a set of winners and losers. Apple, which had grown from a handful of people in 1977 to 2,900 employees by the summer of 1981, was riven in more ways than one. In the fall of 1980, its head count had doubled in just three months. Apple “old-timers” took to calling that short stretch of time “the bozo period,” and scorned the newbies.

Steve was rarely showy about his newfound wealth, but he widened the rifts in the company in other solipsistic ways. Broadly speaking, Apple employees were focused either on supporting and milking the revenue from the Apple II or on exploring new products. The Apple II was the breadwinner driving the company’s growth. The work going on around it was the classic, incremental work of improving and deepening the usefulness of a product so that it would be successful for years. Apple II staffers built an extensive retail sales channel of hundreds of resellers; worked with the emerging world of software developers to ensure that they had the necessary tools to write more interesting software that would attract even more buyers; and labored on follow-up machines, like the Apple IIe and the Apple II GS. Their work paid off: the Apple II, in its various models, was a remarkably resilient product, selling nearly six million units before it was finally discontinued in 1993. For a decade, the company would depend on Woz’s reliable old Apple II to fuel its soaring growth. Indeed, it wasn’t until 1988 that Macintosh revenues at long last exceeded those from Apple II sales.

It didn’t take long for Steve, whose official job was to head up product development, to simply stop caring about the Apple II. He felt, in his bones, as he liked to say, that Apple would need a great new product, that the industry was moving at such a rapid pace that the company would be fatally wounded if all it had to offer were slightly improved versions of the Apple II. He made his feelings very clear, and suggested that any engineer or marketer worth his salt would be drawn to working on the creation of the next breakthrough product with him. While Steve’s narrow attitude slighted scores of the company’s hardware and software designers, it was especially insulting to Woz, who eventually chose to nurse along the Apple II rather than join the Mac team. “Some Apple II engineers were being treated like they didn’t exist,” Woz would later say. As the company grew, he and Steve couldn’t help but grow apart.

In a broad way, Steve was correct in thinking that Apple needed a significant new offering, and soon. The best recipe for maintaining steadily rising revenues in the computer hardware business is to have a breakthrough product ready just when your last breakthrough is reaching the peak of its own success. Markkula, Scotty, and the board all agreed that the company urgently needed a new model, ideally one better tailored to the needs of office workers. IBM, which had been the sleeping elephant of the industry, had reportedly started studying the possibility of building its own personal computer. (The device would eventually make it to market in the summer of 1981.) So in 1978 the Apple board gave Steve the budget and the engineering talent to go ahead and start developing a successor to the Apple II.

The personal computer industry was in its infancy, and everyone was flying blind, including Steve. One important thing he didn’t yet understand was that most breakthrough products result from a long cycle of hit-and-miss prototypes, the steady accumulation of features, and a timely synthesis of existing technologies. He and Woz, on the contrary, had stuck their heads down, worked hard, and on their very first try created something brilliant that the industry had never before seen. That was Steve’s idea of product development. But he was about to discover that that wasn’t the way it worked inside a corporation.

The company had concrete and meaningful goals for its new machine, to be called the Apple III. It would be aimed at the office as well as the home, and would support a color monitor that displayed 80 characters of text on each line, twice as many as the original Apple II. Since a typical typewritten document can accommodate 80 characters per line, the Apple III would compete head-on with specialized word-processing computers from Wang Laboratories that over the past two years had cascaded into offices across the United States and Europe in even greater numbers than the Apple II had landed in people’s homes. Done right, the new model would have been Apple’s entree into the corporate market for personal computers.

The success of the Apple 1 and the Apple II had given Steve a little too much confidence in his own technical judgment. He made a series of bad decisions that would be hard to undo later, the most important being his edict that the Apple III, whose footprint had to be small enough to leave lots of open room on an office desk, would be absolutely silent, which meant no internal cooling fan. This slowed the development process to a crawl, because engineers had to figure out how to create convection currents to draw heat away from the motherboard, which held all the semiconductor chips, as well as from the power supply. Without a fan, those components could make the innards of a small computer hot as a pizza oven. The solution the engineers finally came up with was to make the cabinet itself act as a heat sink to help draw out and dissipate the heat; however, that meant making it out of cast aluminum, a good heat conductor but a material that added considerably to the cost and complexity of manufacture.

It wasn’t just Steve’s demands that slowed the Apple III. Since Apple would be wooing customers who might have purchased an Apple II, the company had to make sure that that software created for the II would also run on the III. This “backwards-compatibility” was an annoying requirement that was far more complicated than Steve imagined, and the time his engineers spent learning to accomplish it slowed the project almost as much as his fussy hardware demands. Steve pushed the Apple III engineers relentlessly to solve these problems quickly. It didn’t matter to him that these were gnarly problems to solve. Accustomed to Woz’s magical ability to defy old boundaries and technical obstacles, he expected these new hardware and software engineers to do the same. They couldn’t.

STEVE’S IMPATIENCE WITH the nuts and bolts of corporate life was understandable. Steve was a visionary. It’s a word that is loosely tossed around these days, especially in Silicon Valley, but it legitimately applied to Steve even from very early in his life. He had the ability to see around corners, to envision how the seeds of existing ideas could be combined to create something unimaginable to others. The challenge he faced was to become an effective visionary—that’s what turns a dreamer into someone who changes the world.

A few weeks before he made that drive up to the Garden of Allah in late 1979, Steve had decided, at the urging of Bill Atkinson, Jef Raskin, and several other Apple technical employees, to check out some work being done by a well-known computer scientist named Alan Kay and some other engineers at Xerox Corporation’s Palo Alto Research Center, just a ten-minute drive up the peninsula from Cupertino. PARC, as it was known, would become famous for developing the concepts behind any number of important technologies, including Ethernet local area networking, high-resolution video monitors, laser printing, and object-oriented programming. That summer, Xerox had joined a number of venture capital firms in a $7 million secondary investment round in Apple (as part of the deal, Steve sold $1 million worth of his own stock to the investors), and in return had agreed to give Apple a peek at its most advanced technologies, or, as people in Silicon Valley like to say, to “open the kimono.” These visits were nothing short of an epiphany for Steve, because the technology at PARC was the visual expression of everything he believed computers could and should be.

It was at PARC that Steve and his group from Apple first saw the nascent technologies that would later become the distinguishing features of the Lisa and the Macintosh, and eventually all personal computers. They were shown a computer that featured a screen that was white like a sheet of paper, not black. Moreover, that screen had the exact dimensions of standard typing paper—8½ inches wide by 11 inches tall. On it were projected black characters so sharp and shapely that they looked as if they had been printed on that sheet of paper. The characters had been “bitmapped,” meaning that each pixel of the screen followed individual instructions from the computer, a radical new technology that gave developers full graphic control of the monitor screen. (Previously they had only been able to place rudimentary white, green, or orange characters on a black screen. Graphical images, other than meticulously arranged agglomerations of standard characters, were out of the question.) These bitmapped characters were really just the beginning of the changes: that screen also could display and organize the contents of the machine’s digital data storage by means of graphical “icons”—little symbolic figures a tad smaller than a postage stamp—representing documents that could be placed “inside” chimerical folder icons by means of a strange pointing device the geeks at PARC called a “mouse.” This mouse could also be used to directly move a cursor around a document on the screen when writing or editing. To delete a file or a folder, you would throw it in the trash by using the mouse to “drag” the icon representing a document over to a special icon on the screen that looked like a garbage can, and “drop” it in. Compared to the black screen with eerie green characters that had preceded it, this “graphical user interface”—or GUI (pronounced “gooey”), as it came to be known—represented at least as radical a break as when silent movies shifted to talkies.

The PARC researchers understood full well how significant a development this was, and were dismayed that Xerox had, in effect, paid for the privilege of giving Steve and the other Apple visitors access to technology this radical and new. They believed, correctly, that Xerox senior management back east was not that interested in building a full-blown computer; rather, they wanted to create better photocopiers, and perhaps a dedicated word processor to compete with Wang’s. Xerox did not come out with a computer using the PARC technology until 1981. Called the STAR, it was an intriguing device that was sold not to individual consumers but to businesses, as part of a networked system of at least three desktop units that sold for about $16,000 each. While it was a capable microcomputer for its time, customers balked at having to shell out $50,000 or so just to get the minimum setup for an office. It had little impact in the marketplace.

Steve realized that the Xerox GUI could be the foundation of something very ambitious and very personal. Visual iconography on a screen could make computing almost intuitive for just about everyone. Existing computer interfaces put a wall of arcane commands and typographical symbols that looked like expletives between the user and the results spewed back by the computer. If you replaced those commands with visual icons that could be easily manipulated via a mouse, harnessing the data-processing power of a computer might feel more like going to the library and pulling a book off the shelf, or like engaging in a discussion with a really smart friend or teacher. This interaction, this feeling of comfort with the back-and-forth with a computer, could lead to the realization of Steve’s overarching goal, the creation of a truly personal computer for ordinary people. Steve even had a metaphor for what that computer could be—a bicycle for the mind. After visiting PARC he was a changed man; these were technologies he wanted to bring to everyone in the world.

NOW STEVE FACED the challenge of delivering on this promise within the gnawing confines of Apple. It would be a staggeringly ambitious project—one that no one at Apple but Steve could have imagined, and one that no one but he could have made so maddeningly complicated. The long road had many detours and would be pockmarked with collateral damage, but it would eventually lead to the introduction of the Macintosh computer in 1984.

After that visit to Xerox PARC, Steve completed what had been a slow abandonment of the Apple III development. The more he realized that the machine was simply a modest renovation of the Apple II, the more his attention wandered. Now he turned away completely, with the intention of applying what he’d learned at PARC to another computer already under development at Apple. This machine was specifically designed for Fortune 500 companies that required heavy-duty networked computing to accomplish tasks that were significantly more data-intensive than anything that could be handled by the Apple II or even the Apple III.

The Lisa, as this machine was dubbed, had been gestating since mid-1978, without making much progress. So when Steve assumed full control of the project in early 1980, the team felt a brief spurt of optimism. Steve told them that he fully intended to have the Lisa be the first computer to feature a graphical user interface and a mouse. They had, he told them, a chance to make history. He asked Bill Atkinson, the project’s lead software architect, how long it would take to translate what they’d seen at PARC into software that could be run on the Lisa. Atkinson predicted that he could do it in a mere half a year—missing the mark by some two and a half years. Clearly, Steve wasn’t the only person at Apple who could confuse a clear vision for a short path.

Steve’s brief management of the Lisa project revealed all his weaknesses. Once again, he couldn’t resolve the disparity between the corporate demands for this computer and his own ambitions. The Lisa was supposed to be for businesses, but Steve focused almost exclusively on what would make the machine accessible and friendly for an individual. Once again, he had the right idea for the long run—years later, easy-to-use computers would make personal computing ubiquitous across businesses both small and large—without the perspective needed to succeed in the short term. He paid lip service to the special needs of corporations and institutions, but what really fascinated him were the rounded edges of the icons on the Lisa’s “desktop” interface.

Atkinson and his programmers did create significant improvements on what they’d seen at PARC; the Lisa project is where the modern user-interface concepts of overlapping windows, seamless scrolling, and the mouse came into their own. But Steve was a failure at managing this group, in large part because he didn’t offer them a unified vision to rally around, given that his own interests were not those of the target audience—business users. When the project stalled, as was inevitable, Steve lashed out, excoriating the team and threatening to bring in Woz, who could surely get things done better and faster. Scotty tried to help Steve out by recruiting Larry Tesler, one of Xerox PARC’s own top researchers, and a group of his associates to try to bring a little more discipline and focus to the project. But two months after Tesler’s hire, Scotty looked at where the Lisa was headed and saw that the computer he had been counting on to represent Apple in the all-important business market was going to be too late, too expensive, and most likely a muddled mess of a machine.

In the fall of 1980, Scotty kicked Steve off the team after only nine months of being in charge, and handed its management over to a former Hewlett-Packard senior engineering exec named John Couch. Twice now, in rapid succession, Steve had failed when trying to lead a team to create a computer for the business market. While more and more people in the computer industry were keenly in tune with the needs of enterprise customers, Steve wasn’t one of them.

STEVE’S INSTINCTIVE PROBLEMS with authority—his inability to successfully manage large teams, his failure to adapt his strengths to the needs of his admittedly weak bosses—were wreaking havoc. The launch of the Apple III was a disaster. The computer didn’t ship until May 1980—a year later than planned—and sold for a base price of $4,340, more than double its target price. Within weeks, many buyers were returning their machines and demanding refunds, after an alarming number of Apple III’s started suffering catastrophic failures due to overheating. In some cases the motherboard got so hot that the solder softened and chips popped out of their sockets. All told, 14,000 had to be replaced. (The aluminum chassis worked fine for dissipating heat; the problem turned out to be that the parts had been nestled too closely to one another on the circuit board.) Moreover, backwards-compatibility had proved so thorny that very few programs were available out of the gate, so the computers that did happen to work weren’t particularly useful. The Apple III was an unmitigated commercial failure, selling only 120,000 units before it was discontinued in 1984. During that same time, the company sold nearly two million Apple II’s.

The pressure to get things right, which was amped up considerably now that the company’s stock was widely held, fell mainly on Scotty. But Jobs undercut his boss again and again. He humiliated suppliers that Scott had wooed; he complained endlessly and publicly about little things like the color of laboratory benches; and he repeatedly interfered with Scotty’s production schedules by insisting on the completion of inconsequential details. Steve’s own failures did nothing to chasten him. In fact, they only heightened his antipathy for Scotty, who was trying to balance the competing needs of thousands of employees. Steve didn’t accept the idea of compromise when it came to his own ideas, and so he turned every decision that didn’t go his way into a confrontation. The battles between the two became known within the company as the Scotty Wars.

Having such a difficult partner was just one of Scotty’s many frustrations, and finally it all became too much. Bit by bit, he disintegrated into an unreliable leader of a company that needed a firm hand. He started to develop some physical ailments, which seemed clearly related to stress. When he finally decided to repair some of the damage resulting from the bozo period by laying off some staff, he did so at a company-wide meeting in March 1981, at which he admitted to all present that he didn’t find running Apple to be all that much fun anymore.

Soon after that the board agreed that Scotty had to go. He departed after taking one last shot with a letter that attacked what he saw as a culture of hypocrites, yes-men, and “empire builders.” Of course, the divided culture was as much his fault as anyone else’s. But Steve knew that Scotty had borne the heaviest load as Apple morphed from a startup into a real operation. After his departure, Steve reportedly experienced a sudden bout of guilt; he was quoted as saying, “I was always afraid that I’d get a call to say that Scotty had committed suicide.”

ON A SEPTEMBER day in 1981, just a couple of months after Scotty’s departure, Bill Gates visited the Apple campus in Cupertino. The twenty-six-year-old CEO of Microsoft made the trip fairly often, since his company worked closely with Apple on programming languages for software developers. At the time, Steve was far richer and far more well-known. Gates, however, was the far more precocious and astute businessman.

After dropping out of Harvard, Gates had started Microsoft in 1975 in Albuquerque, New Mexico, with his prep school programming buddy, Paul Allen. Albuquerque was home to MITS, the maker of the Altair computer that had so excited the Homebrew hobbyists. Gates and Allen wrote a piece of software called an “interpreter” that made it possible for hobbyists to write their own programs for the Altair in the simple but popular BASIC programming language. MITS opted to bundle the program with each Altair it sold, and Micro-soft was in business.

The fortunate son of a prominent Seattle attorney and an accomplished, civic-minded mother, Gates came to business naturally. After he and Allen discovered that hobbyists were giving away pirated copies of their Altair BASIC interpreter, Gates wrote a kind of manifesto, asserting that developers of software for microcomputers should be paid for their programs. If that happened, Gates predicted, an entirely new kind of software industry would arise that would benefit software developers, microcomputer makers, and users alike. This would represent a huge change: 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 help the new microcomputer manufacturers take better advantage of the breakneck pace of improvement in semiconductor technology promised by Moore’s law.

Gates’s manifesto was every bit as significant as Moore’s law in the explosion of personal computing. Software development requires very little capital investment, since it is basically intellectual capital, pure thoughtstuff, expressed in a set of detailed instructions written in a language that machines can understand. The main cost is in the labor required to design and test it. There is no need for expensive factories or for the invention of fabrication equipment and processes. It can be replicated endlessly for practically nothing. And the prospect of hundreds of thousands of potential customers, or even more, means that developers don’t have to charge enormous prices.

Gates was right. Accepting the fact that software was worth paying for led to the emergence of a dynamic new industry. One could argue that Gates’s greatest contribution to the world was not Microsoft, or the MS-DOS or Windows operating systems, or the Office productivity applications that hundreds of millions of people use. It was his role as the first champion of the concept that software itself had value. The mind that could envision all that was a mind suited for the organizational matrixes of the corporate world. In those early days, Microsoft never lacked for enlightened leadership, unlike Apple.

On that September morning in 1981, IBM shipped its first personal computer. Steve had always derided Big Blue as a lumbering monstrosity, and truly believed that no discerning buyer would ever prefer a microcomputer from IBM to one made by Apple. Gates, on the other hand, knew this might be the beginning of something big. His MS-DOS operating system software sat on every IBM PC that went out the door, and he had witnessed the speed with which IBM’s Don Estridge and Bill Lowe had steered their PC project around IBM’s hidebound bureaucracy. In fact, their rush to market had led them to acquiesce to a historic deal with Gates, allowing him the right in the future to license MS-DOS to other computer makers. It was a decision they would forever regret, since it ultimately tilted power from hardware manufacturers to Microsoft—thereby proving the validity of Gates’s manifesto and setting the stage for virtually the entire industry to adopt MS-DOS as a standard that would marginalize Apple, which did not license its operating system. But on that fall afternoon, no one Gates spoke to at Apple seemed aware that their world was about to change, much less acted worried. Years later, Gates remembered that “I kept walking around, asking, ‘Isn’t this a big deal?’ But no one seemed concerned.”

WITH SCOTTY’S DEPARTURE, Mike Markkula became president and Jobs was elevated to chairman. At a moment when it was about to be blindsided by IBM, and by the series of “clone” computer companies like Compaq that would follow in Big Blue’s wake, Apple was led by two men who didn’t want and weren’t suited for the positions they held. Steve’s reckless immaturity and authority issues had left the company rudderless, and Markkula was an ambivalent leader who did little to give staffers a clear sense of direction. Apple muddled along this way for several months before finally getting serious about the search for a new CEO by hiring Gerry Roche, the chairman of the renowned headhunting firm Heidrick & Struggles, to handle the quest for a new boss. Roche was the man who introduced Steve to John Sculley.

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.

Raskin had opted for a cheap and anemic Motorola 6809e microprocessor chip, which would not have had the processing horsepower to employ a mouse or to create screen resolution high enough to support bitmapped graphics. Playing to the competitive instincts of hardware engineer Burrell Smith, a twenty-four-year-old savant with technical chops that rivaled those of Woz, Steve challenged him to build a prototype of the machine that instead incorporated the Lisa’s much more powerful chip—the Motorola 68000—without dramatically raising the overall cost of the machine. It was a daunting goal: you could buy twenty 6809e chips for the price of one 68000.

Smith, like Woz, could never say no to an engineering challenge. His central breakthrough was to find a way to multiply the flow of digital data from the 68000 processor through the rest of the circuit architecture, a trick that ingeniously allowed the computer to take full advantage of the increased processing power without requiring more support chips or circuits. The result: detailed and responsive graphics, exactly what was essential for a machine that employed a mouse and made bitmapped images. Smith literally lived in his lab for a month, while others in the company took off for the Thanksgiving and Christmas holidays. He didn’t even stop to celebrate his twenty-fifth birthday on December 19. But he accomplished the impossible.

Egging on Burrell Smith was just the beginning. The Mac project was an expanded version of rallying the gang in the garage, with Steve leading and inspiring a small group of extremely creative people. He stole the best programmers from the Lisa team and other projects around Apple, with a disregard for corporate niceties that was matched only by his boldness. To cite one famous example, when he was unwilling to wait a few days for the extraordinary Andy Hertzfeld to finish up some work on the Apple II, he unplugged Hertzfeld’s computer (wiping out his code in the process) and drove him and his computer over to the building where the Mac team was working. Personality traits that failed him elsewhere worked here. As always, he could be more temperamental than his subordinates, but with this group of artiste engineers he was afforded considerable leeway. “If you could take Steve, he made you up your game,” says Lee Clow. “People who were too thin-skinned to deal with his abusive approach to demanding what he wanted walked away. But I want to prove to guys like that that I can do it. I’m the kind of person who steps up.” So were many of the other stars on the Mac team.

Steve led the group on retreats every once in a while, which gave him occasion to have the team all to himself, separate from the distractions of the rest of Apple. He was an inspirational speaker. “The work fifty people are doing here,” he told them, “is going to send a giant ripple through the universe.” His language changed over the months as the project, predictably, took longer than he had expected. “The journey is the reward” and “It would be better to miss rather than turn out the wrong thing” gave way to “Real artists ship.” But the phrasing always gave his team the sense that he did indeed see them as artists, as creative innovators. “He was so protective of us,” one of them told Fortune, “that whenever we complained about somebody outside the division, it was like unleashing a Doberman. Steve would get on the telephone and chew the guy out so fast your head would spin.”

The best of them felt truly empowered and gained Steve’s respect by challenging him directly, using facts, ability, and persistence to change his mind. Sometimes they would simply ignore him outright. One of the Mac hardware engineers, Bob Belleville, worked with Sony to develop a new, much smaller disk drive for the Mac, despite being ordered directly by Steve to not do so. In the end, Sony’s disk drive made it into the Mac and prevented a potentially disastrous delay. Jobs applauded Belleville for sticking it out on his own.

“You read the books and you wonder, ‘As difficult as he is, why would anyone ever work for him?’ ” says Susan Barnes, the general manager on the Mac project. A no-nonsense financial whiz with a soothing way of managing both above and below her level, Barnes has a quiet, measured intensity that acted like a gyroscope for Steve. She may have been physically small and unassuming, but she commanded respect. “If you’ve worked enough, you know the difference between a boss who just gets it and someone you have to drag into understanding what you’re trying to do. And when you find that boss that just gets it, you’re just like, ‘Oh my God, it’s wonderful. You’re making my life so easy now.’ Steve was that kind of person. He was intellectually right up there with you. You didn’t really have to go into too many explanations. He cared passionately. And he never dialed it in.”

Over two years, the team performed heroic work. Steve drove them as relentlessly as he drove himself. He reminded them that the fate of the company hinged on their work. He harangued them for failing to meet deadlines and for falling short of perfection. The pressure grew steadily over time. It was taxing on both mind and body, and some members burned out so completely that they were never able to work in the high-tech industry again. Others found the experience exhilarating, but not something they’d want to repeat, and left Apple to find a less stressful employment environment. And then there was the small group of folks who loved it so much they stuck around, ready to do whatever it would take all over again, in order to work in the rarefied, exhilarating, and charged atmosphere that Steve created when he was running the show. When the job was over, Steve had the signatures of the forty-six key players on the team engraved on the inside of every Mac. Even people working on the Apple II found Steve’s performance inspiring. “We used to say that the Mac people had God on their side,” said one only half jokingly.

THE DEBUT OF the Macintosh established Steve as a master showman. Between the famous “1984” ad, which played just once, during the Super Bowl broadcast on January 22, 1984, and the Mac’s official presentation at the Flint Auditorium on the campus of Cupertino’s De Anza College on January 24, 1984, Steve transformed expectations of what a product introduction could be. “Steve was P. T. Barnum incarnate,” says Lee Clow, a plain-spoken man who sports a wizardly beard and sprangly white hair. “He loved the ta-da! He was always like, ‘I want you to see the Smallest Man in the World!’ He loved pulling the black velvet cloth off a new product, everything about the showbiz, the marketing, the communications.”

Working with a team of marketers and PR execs, Steve would rehearse endlessly and fastidiously. Bill Gates made appearances at a couple of these events, and remembers being backstage with Steve. “I was never in his league,” he remembers, talking about Steve’s presentations. “I mean, it was just amazing to see how precisely he would rehearse. And if he’s about to go onstage, and his support people don’t have the things right, you know, he is really, really tough on them. He’s even a bit nervous because it’s a big performance. But then he’s on, and it’s quite an amazing thing.

“I mean, his whole thing of knowing exactly what he’s going to say, but up on stage saying it in such a way that he is trying to make you think he’s thinking it up right then …” Gates just laughs.

Making the “1984” ad with Steve was a pirate enterprise for creative director Clow, art director Brenton Thomas, and Steve Hayden, who wrote the copy. Steve didn’t let the board see the ad until a couple of days before the Super Bowl, and they were horrified. Directed by Blade Runner’s Ridley Scott, the sixty-second spot features a lone woman, in color, running through a sea of gray men and women listening obediently to a huge talking head nattering threateningly from an enormous screen about the enlightened potential of absolute conformity. As the ad nears its end, the woman hurls the large hammer she’s been carrying and smashes the screen. A simple line follows: “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like ‘1984.’ ” Sculley got cold feet and told Chiat\Day to sell off the expensive Super Bowl ad space it had purchased. The agency unloaded a thirty-second spot, but lied to Sculley and told him they couldn’t sell the longer one. Marketing chief Bill Campbell decided to air the ad despite the worries of Sculley and the board. Hayden, who was as talented in his own right as Clow, later drew a cartoon that summed up his feelings about Sculley. According to Clow, it showed the CEO and Jobs walking together through a park. Steve is telling Sculley, “Ya know, I think technology can make the human race better.” The thought bubble above Sculley’s head reads, “I’m gonna win over the board. This kid’s gonna be out of here within six months.”

As it was supposed to do, the brilliant ad set up Steve’s “ta-da!” at the official presentation at De Anza. That day, Jobs was P. T. Barnum at his very best. He strolled the stage confidently. He positioned the Mac on the side of the rebellious, the creative, and the bold by reading lyrics from Bob Dylan’s “The Times They Are a-Changin’.” He took gleeful aim at IBM. He showed off the computer’s beautiful graphics, with its script “Insanely Great” unscrolling across the giant video screen above the stage. The amazing new machine even introduced itself to the crowd, its goofy cyborg voice intoning, “Hello. I’m Macintosh. It sure is great to get out of that bag,” referring to the padded canvas tote bag that had concealed it until Steve pulled it out and plugged it in. The crowd went wild, and Jobs, who seemed to choke up, soaked in the admiration. He delivered to the audience the idealized version of what the Mac was supposed to be, and the press ate it up. Primed by a long and brilliant pre-debut press campaign by McKenna, the magazines and trade journals went crazy. The Mac won raves across the board, from Computerworld to Fortune to Esquire to Money magazine, which called it “hands down, the best piece of hardware for its price.” Rolling Stone hailed its subculture bona fides. Venture magazine even went so far as to applaud Steve’s “maverick” management.

The machine was housed in a cute, seemingly self-sufficient ivory-colored box the shape of a miniature refrigerator, a design so cozy it de-fanged the word computer all on its own. But the user interface was the real triumph of friendliness. For the first time, you could create files that looked like paper documents. You could use your mouse to control a cursor that would drag those documents into folders. If you wanted to delete what you had worked on, you put the document into a trash bin. These things had all been demonstrated at PARC but with none of the wondrous simplicity and playfulness on display at De Anza. The superlative reviews, curiosity, and deals with some of the nation’s leading universities fueled strong sales for a few months. But after the initial curiosity wore off, sales declined precipitously.

Truth is, the Mac that Steve had delivered was deeply flawed. It was a brilliant piece of engineering and a gorgeous vision of where computing could go, but it was far too underpowered to be useful. Trying to hold the Mac to a $1,995 retail price, he had refused to include more than 128K of memory—about a tenth of what came with the higher-priced Lisa. The Mac’s bitmapping technology soaked up power. The lines and characters that appeared on its screen were pretty, but they sometimes took forever to show up. In fact, the original Mac did just about everything at a glacial pace. It came with a floppy disk drive rather than a hard drive, so copying files from one floppy disk to another was an arduous process in which the user had to pop the two floppies in and out of the computer multiple times. Adding to the machine’s woes: the Mac launched with hardly any software, because the operating system was still being tweaked right up to the day of launch. No wonder sales dried up. In his effort to realize a vision, Steve had slighted the machine’s utility.

STEVE SHOULD HAVE been the guy leading the charge to overcome the Mac’s technological faults. There was plenty to be done—develop a hard drive for the machine, increase its memory, work with independent software developers to build more applications that took advantage of its great graphics. In fact, shortly after the Mac shipped, he was officially put in charge of the division overseeing both the Lisa and the Mac. But Steve wasn’t interested in supervising incremental improvements for either model. His career to date consisted of a couple of failures—his work on the Apple III and the Lisa—and a couple of breakthrough products. After creating an industry, and then capturing the world’s imagination with another revolutionary computer, he couldn’t be bothered with the heavy lifting required to make the Mac succeed as an ongoing business.

Moreover, the glittery debut of the Mac sent Steve’s life spinning into a new stratosphere of celebrity, one that pumped up his sense of grand accomplishment. He delivered Macs to Mick Jagger, Sean Lennon, and Andy Warhol. For his thirtieth birthday, he hired Ella Fitzgerald to entertain a crowd of a thousand guests at the St. Francis Hotel in San Francisco. He affected a high-handedness that hurt him within his own industry as well. Steve had alienated the critical software developer community throughout the entire development of the Mac by making it seem that it would be a grand privilege if he allowed them to develop applications for his precious machine. “We’d go down to Cupertino,” remembers Bill Gates, “and Steve would be like, ‘This thing is so fucking cool; in fact, I don’t even know why I’m going to let you guys have anything to do with this. You know, I heard what a bunch of idiots you guys are, and, you know, this thing is so golden. It’s going to ship for $999, we’re about nine months away.’ ” Other times, Steve would betray his own insecurities. “And then the second day we’d have another meeting,” remembers Gates, “and Steve would be like, ‘Oh, shit, is this thing any good? Oh, God, can you help us out with this?’ ” Either way, he wasn’t easy to work with.

The arrogance wasn’t tempered by the Mac’s swooning sales. Mike Slade, who then worked in marketing at Microsoft but later became an Apple employee and one of Steve’s close friends, remembers seeing that ego on full display in the fall of 1984, when Slade accompanied Gates to Apple’s national sales meeting at the Hilton Hawaiian Village in Honolulu. Getting its application software onto the Mac was critical for Microsoft, which had assigned a slew of developers to create graphical software for the new machine. And eventually Microsoft would become the leading Mac software vendor. But at the time the company had serious competition from Lotus, which had developed a spreadsheet for Mac called Jazz. “Jim Manzi and Eric Bedel [Lotus’s CEO and the Jazz product manager] were like the new girl in the frat,” remembers Slade, whose sharp sense of humor masks the kind of analytic chops that made him a favorite of both Gates and Jobs. “Steve and his whole gang were there, and they’re ignoring not only me but Bill [Gates]. They’re treating Bill like he’s the fucking janitor. They even gave us a bad table for dinner.” That night, Slade and Gates went for a long walk on the beach. “Bill was so caught up in the thing, so nervous. He had these Bass Weejuns on, and by the time we got back to the hotel they had salt water all over them. He had no idea he had been walking through water. He was oblivious to the whole thing.”

Things were no better three months later when Slade and Gates prepared to demonstrate Excel to Steve, Sculley, and the other Apple brass. “We start showing them Excel, but we can’t show much, because the demo is barely working. After thirty seconds Steve totally loses interest. If the demo’s not working, he’s not interested. Sculley gets it, though, and we talk about how to position it as better than what’s on a PC. But Jobs is out of there, he’s moved to the other side of the table. And he and Bill and Andy Hertzfeld just get into this raging battle about BASIC [the popular programming language]. No one can control Jobs. I mean, I come from a pretty dysfunctional family and I’m thinking, This is the most unbelievable shit fight. But finally, finally, Steve leaves, and the meeting gets better.” Years later, after Steve’s death, Gates told me, “Steve’s a tough character, but he didn’t direct his anger at me all too often.” (Like many of the people we interviewed, Gates slipped into the present tense when talking about Steve, as if he were still alive.) When I asked him if there was anything Steve was terrible at, he laughed: “Sitting in meetings where he wasn’t the person presenting, and the subject was something mundane. Steve was hopeless at that.”

MAC SALES FELL off a cliff in the second half of 1984. The Apple II still accounted for 70 percent of the company’s revenues. IBM’s PC was gaining market share. And the New Year provided no relief. Sales were so far off target that it began to look like the Macintosh might prove to be just as much of a failure as the Apple III and the Lisa. The board of directors, which had been led to believe that the Mac was both the replacement to the Apple II and an IBM-killer, was beginning to see that neither its CEO nor the head of its most important product division had a clear plan forward. As the pressure grew on Steve and Sculley, the two spent less time together, less time finishing each other’s sentences and singing each other’s praises. And that spelled trouble for Steve.

In March 1985, Sculley decided that Steve would have to step down as head of the Mac product division. Steve tried to dissuade him for several weeks, with both flattery and scorn, the tools he’d used to great, if isolating, effect on those who had worked for him. But Sculley persisted and brought the matter to the board on April 11. The board sided unanimously with Sculley, even though it included Markkula, Rock, and others who had invested so much in Steve over time. For someone who had given his all to the company he had founded, who was known entirely for what he had accomplished at Apple, the prospect of such a demotion was devastating.

After a few weeks, Steve decided that he wouldn’t accept the demotion. Instead, he tried to get Sculley fired. He told his closest confidants that he intended to dethrone the CEO over Memorial Day weekend, when Sculley was supposed to be in Beijing signing an accord to allow Apple to sell its computers in China. Steve was so certain of the rightness of his position—and so naïve—that he even laid out his plans to Jean-Louis Gassée, the company’s director of European operations, who was in Cupertino only because Sculley planned to bring him in to replace Steve. “I made my choice,” Gassée says now. “At that point I’d rather work with Sculley than work with Steve, who was absolutely out of control.” Gassée informed Sculley of the plan, telling him, “If you go to China, you’re dead.” Sculley canceled his trip to China and confronted Steve directly at the next day’s executive committee meeting. He asked the company’s top management either to support him or to support Steve. One by one, around the conference table, everyone explained why they would support Sculley. Steve watched as the support he’d counted on, which he’d always expected would be there at the end, vanished. Afterward, still in shock, he called his co-conspirators and a couple of friends to tell them he’d lost the battle. “I counted wrong,” he told Larry Brilliant that afternoon, recounting, through tears, how the team turned against him, one by one. The board, which Sculley then contacted by phone over the weekend, went against Steve as well. By Tuesday, Steve knew he was finished at Apple. On the following Friday, May 31, he sat in the back of the Apple auditorium and watched as Sculley announced a reorganization that promoted Gassée and left Steve with nothing more than a nonexecutive role as chairman, with no one reporting to him. It was Steve’s second demotion, and this time there’d be no recovery. “Steve always had an animal inside him,” says Gassée, “and in the early eighties that animal threw him to the ground. Boom!”

STEVE’S EXILE WAS complete and designed to humiliate. He was given an office in another building, far from Sculley, Gassée, and the other executives who were now without question running Apple. He was sent to Russia to promote the Apple II, of all things, and to Italy, France, and Sweden, ostensibly on company business. Back in California, he visited the Graphics Group, made up of leading-edge computer graphics technicians who were working for film director George Lucas of Star Wars fame, and began to think that the possibilities for computing with high-end, 3-D graphic images were limitless. So he suggested that the Apple board might want to consider buying the group from Lucasfilm. “These guys were way ahead of us on graphics, way ahead,” Steve later told me. “They were way, way ahead of anybody. I just knew in my bones that this was going to be very important.” But the board wasn’t paying much attention to Steve anymore, and they passed on acquiring what would eventually become known as Pixar. Indeed, Steve, the cofounder of Apple, wasn’t even consulted on most meaningful decisions anymore.

Sculley made clear that he would take the company in a more “market-driven” direction. Apple would now respond to the demands of its customers, instead of dictating to the market, as Steve had tried to do. Product decisions would be led by the sales and marketing teams, not the engineers. It was a rational decision by a CEO trying to sharpen an organization that had flailed every time it tried to establish some consistency. But it wouldn’t re-create the Apple dream that had drawn so many employees to Cupertino, especially the veterans who had experienced the thrilling and terrifying highs and lows of the Mac development. One employee told Fortune, “They’ve cut the heart out of Apple and substituted an artificial one. We’ll just have to see how long it pumps.” Susan Barnes was one of those who felt the company was becoming mundane, losing its edge. “We were going the wrong way,” remembers Barnes. “Apple was reorganizing, and you had to go down seven levels of management to find an engineer. That’s a really dangerous place for a technology company to be.”

Steve started to think about life without Apple. He spent more time with his daughter Lisa, beginning the process of figuring out how she could fit into his life in a more meaningful way. He gardened, organically, in a plot in the yard of his big house in Woodside. He mused about running for public office. He even applied to fly as a civilian on the space shuttle. For a while he behaved more like a retiree than one of the world’s most highly driven thirty-year-olds. “One day he called me,” Barnes recalls, “and said, ‘We’re supposed to have dinner next week, but I’m going to Europe. I may stay there for twelve months.’ And I said, ‘Thank you, great, but I’m having a bad day at work and don’t really need to hear about you in Paris and Italy.’ ”

He went to Europe on company business, but he made time to visit museums and enjoy the life of a tourist. He spent a lot of time alone, or with his girlfriend. “Apple had been formed when he was twenty-one,” says Barnes, “so he never really had any time off to think about what he really wanted to do with his life.” It seemed as if this was a time to reflect, to take to heart the hard lessons learned at Apple. It could have been a time to think about what had gone wrong, to understand his own contributions to the quandary that he and the company were in. In some meaningful way, Steve and his followers were right: Steve was the heart of Apple, and without him the company was headed straight for mediocrity. How had he let things get so out of hand?

Self-reflection didn’t come easy for the thirty-year-old. In Europe he was still hailed as a revolutionary business figure, and his visits to heads of state, university presidents, artists, and others reinforced his vision of himself as an extraordinary person who had been done in by a conventional bureaucrat. That kind of ego inflation was accompanied by the real pain and insecurity resulting from getting rejected by the company he had founded. Later that summer, Steve phoned Barnes from Italy, so depressed that she started to worry that he might be suicidal.

But when he returned to the United States, he turned his focus right back to where it had always been: discovering the Next Big Thing. In early September, he met with the Nobel Prize–winning scientist Paul Berg, who told him about his frustration that computers were not yet speeding up the scientific research process significantly. Macs and PCs weren’t powerful enough to do the kind of computational modeling he needed to do, and mainframes and minicomputers were too expensive and unwieldy for many labs. Steve began to develop an inchoate vision of where computing might go next, and of the kind of powerful computer he now wanted to concoct for demanding users like Berg. With Barnes and others telling him how wrongheaded Sculley was, he knew he could woo a handful of powerful allies from within Apple to start a new company. And at an Apple board meeting on September 13, he told Sculley and the other board members what he planned to do.

He was going to start a new company, he told them. He would like to take a few “low-level” employees with him. The company would try to concoct a radically new, high-end computer “workstation” for a specific and limited market—the upper echelons of higher education. It would not, he assured them, compete with Apple. In fact, he’d be happy to have Apple be a ground-floor investor in the new venture.

In the coming days, all hell would break loose. The employees he wanted were hardly “low-level,” Sculley would say. Board members would call Steve a liar in the press. Once again, national magazines like Newsweek would put him on the cover. Steve would resign. And Apple would sue him.

But none of that mattered. He was gone. Now his great work could really begin. He was ready to go create the Next Big Thing. Again.