Welcome back to the 5th summary of Founder’s Podcast!
I realized that these articles can be confusing and I recently listened to a podcast David Senra (the founder of Founder’s Podcast) and I wanted to clear something up. David reads a biography of a great founder and then makes a podcast about his favorite parts of the book and what he found interesting. His goal isn’t to summarize the book in a chronological order, it’s to share what interested him from the book in hopes that you will read the book as well.
My newsletter is about summarizing the Podcast which is why the articles can be all over the place sometimes. In this article especially, it is not in order but it holds so much value and insight to one of the greatest founders of all time.
I recently got accepted into a huge entrepreneurial program and I’m working on something really cool! I’m creating a place where you can can have access to everything you have ever wanted to know about the great founders. There will be lessons, summaries, stories, advice, and “how to’s” all in once place.
The goal is to give people 3 different options for each individual founder I study.
Short-form content: this includes lessons, advice, and short stories from the founder
Long-from content: this would be this newsletter as well as other articles and podcast the founder has done
Deep dives/case studies: this is where you get 1 + 2 but you will get access to an entire folder that studies the founder’s entire life, failures, lessons, advice, road to success, their regrets, and much more
So stay tuned and I will update you once it is live and complete! I hope you enjoy today’s summary of one of the greatest founders of all time, Steve Jobs.
Introduction and Background
Steve Wozniak and Steve Jobs had a partnership that would eventually change the world. It all started one Sunday afternoon when Wozniak read an article in Esquire about hackers and phone phreakers. This article described how these hackers found ways to make long-distance calls for free by mimicking the tones used by the AT&T network. Wozniak was so intrigued that he immediately called his best friend, Steve Jobs, to share the discovery.
The article highlighted John Draper, also known as Captain Crunch, who discovered that a toy whistle from a cereal box emitted a 2,600 hertz tone identical to that used by phone networks' call routing switches. This tone could trick the system into allowing free long-distance calls. The article also mentioned that other tones used for routing calls were published in The Bell System Technical Journal, which AT&T quickly tried to remove from libraries.
Wozniak and Jobs’ Partnership
Excited by the article, Wozniak and Jobs headed to the Stanford Linear Accelerator Center library to find the journal. After furiously searching the stacks, they found the issue with all the frequencies. They were ecstatic, repeatedly saying to themselves, “It's real. Holy s*, it's real.”
The blue box was a device used by phone phreakers to make free long-distance calls. Although no one had created a digital version yet, Wozniak took up the challenge. Using diodes and transistors from RadioShack and help from a music student with perfect pitch, he built the first digital blue box.
Their first test call was to Wozniak's uncle in Los Angeles, but they dialed a wrong number. Despite this, their device worked perfectly. Wozniak excitedly shouted to the confused person on the other end, “Hi, we're calling you for free. We're calling you for free,” and Jobs added, “We're calling from California, from California, with a blue box.”
Jobs came up with the idea that the blue box could be more than merley a hobby. He suggested they build and sell them. He gathered the necessary components, including the casing, power supply, and keypads, and figured out the pricing. Jobs decided they should sell the blue boxes for $150 each, with parts costing around $40.
They made about 100 blue boxes and sold nearly all of them. They demonstrated the device in college dorms, making calls to places like The Ritz in London or a dial-a-joke service in Australia. However, the fun and profits ended abruptly when they were robbed at a pizza parlor. Jobs had pitched the device to some guys who then robbed them at gunpoint. It was a very odd robbery as the robber gave Jobs a phone number, promising to pay if the device worked. Job’s called the robber later on to find out he couldn’t figure out how to use the blue box. The robber asked to meet but Jobs and Wozniak decided against meeting him again, despite the chance to get their $150 back.
Learning and Confidence Building
The blue box experience was pivotal for Jobs and Wozniak. “If it hadn’t been for the blue boxes there wouldn’t of been an Apple.” Jobs reflected. They learned how to solve technical problems and put something into production. They created a device with a little circuit board that could control billions of dollars' worth of infrastructure, which gave them immense confidence.
This venture established their roles: Wozniak as the gentle wizard who loved inventing and Jobs as the one who made the inventions user-friendly, packaged them, marketed them, and generated revenue.
Apple's Formation and Early Success
In 1975, Paul Terrell opened a computer store called the Byte Shop. A year later, he had three stores and planned to build a national chain. Jobs and Wozniak demoed the small computer that Wozniak created to Terrell. Terrell who was impressed enough to hand them his card saying, “keep in touch.”. Jobs followed up the next day, and made the sale. Terrell agreed to order 50 computers, but he wanted them fully assembled, not just circuit boards. He offered to pay about $500 each, cash on delivery.
At a personal computer festival, Jobs realized the value behind Terrell’s insight on wanting the computers fully assembled. He figured out that for every tech geek that could assemble their own computer with just the circuit boards, there were 1,000 people that would want a computer already fully assembled. Jobs decided that the next Apple needed a great case, built-in keyboard, and end-to-end integration from the power supply to the software. Job’s vision was to create the first fully packaged computer.
Job’s vision leads to the Apple II. The Apple II was Apple’s first big success. The Apple II was marketed in various models for the next 16 years, sold close to 6 million units and launched the personal computer industry. This success allowed Apple to file for an IPO in a few short years.
Jobs’ Attitude Toward Wealth
Jobs had a complex attitude toward wealth. Despite becoming worth $256 million at age 25 when Apple went public, he maintained a simple lifestyle, living in modest homes and not traveling with an entourage or keeping a personal staff. He appreciated well-designed objects like Porsche and Mercedes cars, Henckels knives, Braun appliances, BMW motorcycles, Ansel Adams prints, and Bang & Olufsen audio equipment. However, he avoided ostentatious living and lavish spending, focusing on building great products rather than personal wealth.
“I watched people at Apple who made a lot of money and felt they had to live differently. Some of them bought a Rolls-Royce and various houses, each with a house manager and then someone to manage the house managers. Their wives got plastic surgery and turned into these bizarre people. This was not how I wanted to live my life. I made a promise to myself that I'm not going to let this money ruin my life.” said Job’s 30-years later reflecting on his philosophy on money.
College and Personality Insights
Jobs dropped out of Reed College because he disliked the required classes but stayed on campus to attend classes that interested him, such as calligraphy. A person who knew him at Reed described him as someone who refused to accept automatically received truths and wanted to examine everything for himself. Jobs had an attitude that he could do anything, and therefore, so could others. This self-confidence was a key part of his personality and approach to life.
Reality Distortion Field
Jobs had a “reality distortion field,” a term coined by a colleague, which described his ability to make reality seem malleable and convince anyone of practically anything. The reality distortion field was effective even when people were aware of it, and it often led to innovative breakthroughs. Jobs' charisma and salesmanship were core components of this phenomenon.
Management Style and Talent
Jobs believed in building teams of A players and was ruthless about eliminating B and C players. He felt that great players wanted to work with other great players and would not tolerate mediocrity. In a memorable display of brutal honesty, Jobs merged the Lisa and Macintosh teams (2 separate teams at Apple working on 2 different products), keeping only the top positions for his Macintosh group leaders and laying off a quarter of the Lisa staff, whom he labeled as B or C players. “You guys failed” Jobs said, looking directly at those working at Lisa, “you’re a B team. Too many people are B or C players. Today, I am releasing you.”.
Artist, Not Businessperson
Steve Jobs was often criticized for being harsh, but he believed that to have a great team, you needed to work with the best people. As he approached 30 and was about to be kicked out of Apple, he gave an interview where he discussed his self-view as an artist, not a businessperson. He always put the quality of the product above making money, thinking that great products would eventually lead to profits.
In this interview, Jobs talked about how rare it is for artists in their 30s or 40s to make amazing contributions. He thought staying curious and avoiding getting stuck in routines was key. He also hoped his life and Apple’s would weave together, emphasizing the need to keep reinventing oneself to stay creative. This idea hinted at his future, where he would leave Apple, come back, and continue to shape its destiny.
Founding NeXT
After leaving Apple, Jobs started a new company, NeXT. Although it’s often seen as a failure, it was eventually sold back to Apple for about $500 million. A key story from this period involves Ross Perot, a successful entrepreneur who later ran for president.
In 1986, Jobs was looking for investment for NeXT, valuing the company at $30 million. Most venture capitalists passed, but Ross Perot saw potential after watching a PBS documentary about Jobs and NeXT. Perot invested $20 million for 16% equity, valuing NeXT at $126 million. His support was crucial, helping Jobs find more investors and customers.
Bill Gates and NeXT
During the NeXT years, Jobs had a complicated relationship with Bill Gates. Jobs convinced Gates to develop software for the Macintosh, which was profitable for Microsoft, but Gates wasn’t impressed with NeXT. He refused to create software for it, criticizing its high cost and lack of compatibility.
Despite their rivalry, Gates later invested $175 million in Apple, helping save the company when it was struggling. Gates even visited Jobs before his death, showing the complex nature of their relationship.
Philosophical Differences
Jobs and Gates had different approaches to technology. Jobs believed in controlling both hardware and software for a seamless experience, while Gates focused on making software that worked on many different machines. This difference often led to public disagreements, but both men respected each other's achievements.
Jobs promoted NeXT as the next big thing in computing, emphasizing its innovative approach. Gates, however, criticized its incompatibility and high cost. Despite their rivalry, both made significant contributions to the tech world, highlighting the impact of their differing philosophies.
Pixar Acquisition and Success
Jobs bought Pixar (at the time, it was a computer division at the company “Lucasfilm”) from George Lucas for $10 million. Jobs really liked how Pixar combined art and technology, which is what he’s always been interested in. Lucas sold it because he needed money due to a bitter divorce.
The Chief Financial Officer at Lucasfilm (created Starwars) found Jobs arrogant and prickly. So when it came time to hold a meeting of all the players, he told Catmull (co-founder of Pixar) "We have to establish the right pecking order.”. The plan was to gather everyone in a room with Jobs and then the CFO would come in a few minutes late to establish that he was the person running the meeting. “But a funny thing happened”, Catmull recalled. Steve started the meeting on time without the CFO, and by the time the CFO walked in, Steve was already in control of the meeting.
Because of this, Jobs established a good working relationship with Pixar’s founders, Ed Catmull and John Lasseter. Jobs, Catmull, and Lasseter shared an interest in the intersection of technology and art, leading to Pixar's significant success in animated movies. Jobs’ respect for their artistic vision helped create a collaborative and productive environment.
Return to Apple
By the mid-1990s, Apple was struggling financially and facing potential bankruptcy. The Board decided to fire CEO Gil Amelio and approached Jobs to return as CEO. Initially, Jobs declined the CEO position and only agreed to be an advisor and Board member. He later changed his mind after realizing he cared deeply about Apple and its future. Jobs simplified Apple's product line, focusing on a few core products and eliminating unnecessary ones. He laid off over 3,000 people to stabilize the company’s finances. Under his leadership, Apple returned to profitability within a year.
Innovation and Product Design
Initially, Apple worked on a tablet project, but then shifted focus to the iPhone. Jobs insisted on a touchscreen interface instead of a hardware keyboard, betting on the flexibility and adaptability of software keyboards. Jobs contacted Corning’s CEO, Wendell Weeks, to develop strong glass for the iPhone screen. Despite Corning not having the capacity initially, Jobs’ insistence led to the rapid production of Gorilla Glass, which became a key component of the iPhone.
Many experts were skeptical about the iPhone’s potential, citing its high cost and lack of a physical keyboard. However, the iPhone’s success proved them wrong, with Apple selling 90 million iPhones by 2010 and dominating the global cell phone market.
Legacy and Philosophy
Jobs realized that globalization and the internet had created a unified youth culture worldwide. He noted that young people everywhere had similar tastes and preferences, making it unnecessary to design region-specific products. Jobs emphasized the importance of cloud computing, envisioning iCloud as a way to manage and sync content seamlessly. He believed this shift was crucial to stay ahead of the innovator’s dilemma, where successful companies fail to adapt to new technologies.
Jobs wanted to build an enduring company focused on great products rather than profits. He believed in integrating hardware, software, and content to create a seamless user experience. His drive to innovate and create products that added to the flow of human creativity defined his legacy. He often reflected on the contributions of those who came before him and felt a deep sense of responsibility to add something meaningful to that legacy.
In his own words, Jobs said, “My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit because that was what allowed you to make great products. But the products, not the profits, were the motivation.” This philosophy guided him throughout his career, shaping the way he led Apple and his approach to business and innovation.
Personal Takeaways
Unmatched Focus:
Job’s was only 25 when Apple IPO’d and he was worth $256 million. Even after that insane success at such a young age, he avoided an onstentatious lifestyle and lavish spending. He was able to stay focused on 1 thing: building great products rather than personal wealth.
This focus is fascinating and something you rarely see. Job’s was able to, at such a young age, decide that he was going to care more about his work and building great products than focusing on how much he was worth and living a lifestyle that he easily could have chosen when being worth that much.
Jobs didn’t allow a craving for profits to take precedence over his passion for building great products. Creating great products was his motivation and his sole focus
Vision + Conviction:
Jobs had the highest level of conviction in himself, his work, and his vision. He prioritized product quality over profits, confident that superior products would eventually lead to financial success.
Jobs believed in his work and the products he would produce so much that he was able to never think about revenue or profits because he knew that his amazing work and creations would lead to financial success. That is the definition of having vision and conviction.
Another example is with the iPhone. Everyone was against the iPhone. It was expensive and didn’t have the physical keyboard. We all know how this story ends, but Jobs at the time was the only person that really saw the vision and had full conviction that he would be able to create it.
Control
Jobs liked control. This is a very common characteristic that the founder’s have. Job’s is similar to Disney with the control.
Jobs believed in controlling both hardware and software for a seamless experience even though Bill Gates disagreed with him.
Also, Job’s story with the CFO at Pixar when he started the meeting on time with all the players at Pixar without the CFO goes to show that Jobs will take control of any situation and take matters into his own hands. He’s proactive instead of reactive.
Thank you for reading! I hope you enjoyed this newsletter. Please stay tuned for when I launch the website and product so you can all have access to learn from the greatest founders in history.
Join me next week in learning about one of my personal favorite founders, Sam Walton.
Have a great week!
~ AJ