Talking about Captialization

Steve Jobs: The greatest second act in the history of business
Excerpts from Steve Jobs’ unauthorised portrait — ‘iCon’ by Jeffrey S.Young, William L. Simon

Flowering and Withering

There was something about Jobs and Nolan Bushnell, the founder of Atari, responded to. “When he wanted to do something, he would give me a schedule of days and weeks, not months and years. I liked that,” said Bushnell.

One day, according to Alcorn, Bushnell “grabbed Jobs and made a deal on the side. On his blackboard, Nolan defined the game of Break-Out, how the game would work, the details.

Then Alcorn, the head of engineering, took over with the logistics—Jobs could build it as long as he worked at night when none of the other engineers were around. “He said that for every (computer chip) under fifty—or some number—I’m going to give you, like, a thousand dollars or something as a bonus to salary.”

In Break-Out, the player would constantly fight a brick wall, trying to ‘break out’ of it to win. Mastering the game turned out to require total concentration upon the task at hand, determination to succeed, and a driven attitude— all of which Jobs and Woz had in their blood.

The design for Break-Out was completed in one forty-eight-hour stretch. The company thought Jobs was designing it, but it was entirely Woz’s work. “Steve's role was to buy the candy and cokes while Woz did all the design,” said Randy Wigginton, a very young camp follower who would end up at Apple.

True to his past achievements, Woz managed to do the work using a ridiculously small number of chips. Alcorn was impressed and paid Steve the $1,000 he had offered. But Steve went back to Woz and said that Atari had paid only $600. He gave Woz his ‘half.’ So Woz, who had done all the work, ended up with $300, while Steve Jobs pocketed $700.

Let’s Be Pirates!

Despite the successes, Steve Jobs wasn't happy. The Apple II was Woz’s machine. Steve wanted a machine that everyone would know had been created by Steve Jobs. He wanted to show that he could do it, that Woz wasn’t the only computer genius at Apple Computer.

Steve had in mind a new machine that would go well beyond any thing anyone had ever seen or even dreamed of. He already had a name for it. In one of the strangest, most difficult-to-understand choices possible, decided to give the computer the same name as the baby he at the time refused to accept as his own: Lisa. For many years, one of the great Apple insider games was for employees to outdo each other in coming up with plausible-sounding explanations for what the letters LISA meant in computerese. Few people were fooled.

Defining the future

If impossible tasks are the catnip of overachievers, then Steve Jobs was rolling in catnip.

On the last Monday in April 2003, Steve was back at the Moscone Center, an hour’s drive north of Apple headquarters in the heart of Silicon Valley. Looking radiant, pumped as usual in front of an audience, his charisma turned up to the max, he launched into his announcement of the iTunes Music Store. Steve the outsider had done what observers would have predicted was impossible: getting signatures on agreements with the top music companies.

He’d wanted those agreements so badly that he’d done the negotiating personally. Ordinarily, on an issue with as many strategic implications as this, the CEOs would have agreed in principle and then left their underlings to see whether an agreement could be worked out. Steve got each CEO to say, “We’ll consider it,” and then had been willing to do the horse-trading himself.

Even for Steve Jobs, breaking the logjam of the music industry was no pushover. Hilary Rosen, who was then chief executive of RIAA (the Recording Industry Association of America), explained that top executives of major music companies were wary of people from the computer industry, who in the past had shown little grasp of music industry issues.

Steve won them over for two reasons, Hilary believes. The first is mundane and almost laughable: “Apple had such a small market share that it made their risk fairly low.” The other reason isn’t unexpected: “The shift came from above all because of the sheer will power of Steve. His sheer charisma and his intensity absolutely made a difference.”

Many people, Hilary said, believe that Universal first signed up for Steve’s vision. In fact, “Steve developed a relationship at the outset with Roger Ames, at Warner. Roger was really the first one to jump on board.”

One executive who was closely involved in the negotiations for a top-five music firm saw the action from an inside perspective. The music companies, he said, had been wary about the idea of downloading, dragging their feet, unwilling to move ahead until completely satisfied with every detail of the terms. Then Steve Jobs showed up on the scene. Suddenly, the source said, “the industry folded at his feet, acquiescing to whatever he wanted. There was a train about to leave, and everybody wanted to be damned sure their company was on it. For the first time, the leverage (in negotiating download deals) shifted to the other side.” It was the same at all five of the companies, he said.

Speaking on condition of anonymity, he described one of the most visible executive vice presidents in the music industry, who was that company’s point man in dealing with Steve, the target for every bit of Steve’s overpowering charisma. Every time our informant saw the vice president during this period, the man was full of talk about Steve this and Steve that. He was completely taken in, glowing as if had just found his true love or at least a lifelong friend. If the vice president had been asked, the informant said, he would have knelt down and shined Steve’s shoes and would have been willing to do it in front of a conference room of other people.

Other executives quickly fell in line because what Steve was proposing made so much sense. Andrew Lack, CEO of Sony Music Entertainment, was one of those. “I don’t think it was more than a fifteen-second decision in my mind (to license music to Apple) once Steve started talking,” he said.

Steve the billionaire, Steve the pooh-bah of a global company, sat at his conference table while a parade of executive vice presidents and CEOs marched up to Cupertino to be serenaded by him.

ipod, iTunes, Therefore I Am

When Steve returned to Apple he shut down the clone Macs that his predecessors had reluctantly licensed. He claimed that they only stole sales from Apple with their low prices, never penetrating the Windows and IBM PC market. Now he was going one step better. With the falling prices of components, and his experience with Far Eastern contract manufacturing for the iPod, Apple was outcloning the PC clonemakers. Steve has put together all the pieces—Bill Gates is a tough competitor. The battle should be intense. Will cool beat copycat?

Steve wasn’t done. It was time to move to iTunes and finally the iPod.

“In the last quarter I am pleased to report that we have sold over four and a half million iPods.

That is a 50% growth year on year. We have sold over 10 million iPods to date and over 8 million of them in 2004. The digital music era is upon us, and we are leading the charge.

‘Thank you.’ It was a remarkably heartfelt thanks, given directly to his audience. Steve seemed to have learned that the real key to his success were his customers. This was the new Steve Jobs.

With that, he described some of the over four hundred secondary products for the iPod—iPod Nation —and described a series of cars with iPod adapters. “Even Alfa Romeo and Ferrari.”

But that wasn’t all. He told about the Motorola iTunes deal and showed one of the cell phones that will soon play music. “These two things and many more are why we believe that
we have just begun the world of digital media. “But there is one more thing we want to tell you about. It’s pretty great.”

To finish the presentation off, he invited John Mayor onstage to sing his Grammy-winning song, “Daughters,” For a man who had neglected his own firstborn daughter for years, it was an ironic choice. But maybe not. “Fathers, be good to your daughters,” sang Mayer. “Daughters will love like you do.”

Steve Jobs had returned, to all appearances as fit as before and even better.

Yet at times it seems as if he is only just getting started. He hasn’t changed fundamentally. He’s still the same aggressive, opinionated, driven creator who inspires people around him to reach unimaginable heights and destroys the fragile egos of those whose skin is too thin to handle his abrupt barbs and relentless questioning. Yet not he’s a middle-aged man, with three kids at home and a world of experience standing, but on reaching fifty, he’s still the same man he always was.

URL: http://www.financialexpress.com/fe_full_story.php?content_id=144938