APPLE SEEDS

In February 1974, a 20-year-old college dropout named Steve Jobs answered a newspaper classified ad and landed a $5-per-hour job as a technician at a new company in Los Gatos, California, called Atari. If you’re old enough to remember the 1970s, you probably remember the name: Atari is the company that essentially invented the video game industry when they introduced the game Pong in 1972.

At Atari, Jobs soon earned a reputation for being, well, a bit of a jerk. He was brilliant, and he knew it. He was also quick to let his coworkers know when he thought he was smarter than they were. He called them names to their faces. As if that wasn’t bad enough, Jobs, who was a vegetarian, had somehow gotten the idea that his meatless diet eliminated his body odor. That, he felt, made it unnecessary for him to bathe regularly, so he didn’t. (But he did soak his dirty bare feet in workplace toilets.)

BEEN THERE, DONE THAT

As anyone who worked around Jobs during his Atari days would assure you, conceit does not win you friends, and vegetarian diets do not eliminate body odor. The stinky, stuck-up prodigy was soon banished to the night shift, where his brains could be put to work for the company without his offensive personality and pungent aroma driving coworkers out into the street.

One man at Atari that Jobs did get along with was the chief draftsman, Ron Wayne. Jobs was intrigued with the idea of one day starting his own business, and Wayne, who was in his early 40s, had done this before. Jobs looked up to him as a mentor, and his advice would come in handy when Jobs and a high-school friend named Steve Wozniak considered launching their own company together in 1976.

LIGHT SHOW

Jobs’s and Wozniak’s decision to start a business together grew out of their participation in the Homebrew Computer Club, a group of hobbyists who built computers from mail-order kits or by scrounging parts from surplus military equipment and old office machines. The computers they were building were primitive: If you saw one today, you’d have trouble recognizing it as a computer.

Consider the Altair 8800, the machine that inspired the founding of the Homebrew club: Sold in kit form through Popular Electronics magazine, it was little more than a metal box with rows of lights and toggle switches on the front. It had no keyboard and no monitor. You “programmed” the Altair by flipping the toggle switches on and off to enter binary computer code. Once entered, the code made the lights blink in a specific sequence.

That was it—making lights flash on command was the only thing that the Altair 8800 could do. And yet it was so dazzling and so powerful a machine for its time that it not only inspired the founding of the Homebrew Computer Club, it also inspired a Harvard student named Bill Gates to drop out of college and form a business with his friend Paul Allen—a company they named Micro-Soft—to create a programming language for the machine.

THINKING SMALL

Wozniak, an engineer at Hewlett-Packard’s calculator division, wanted to design a home computer that could do more than the Altair 8800. There were computers at the time that were capable of performing much more powerful operations, but they were enormous machines that took up entire rooms and cost so much money that only universities, large corporations, and government agencies could afford them. Some of these big computers could be accessed remotely over telephone lines, using a video terminal—a video monitor and keyboard that connected to the computer using a dial-up modem.

Wozniak thought that the newest microprocessor chips were powerful enough to enable video terminals to have small computer brains of their own, so that they wouldn’t need to connect to big computers far away. He decided to try to build one: Working in his Hewlett-Packard cubicle at night and on weekends, Wozniak designed and built a computer that had a keyboard, an ordinary TV for a video display (he thought computer monitors were too expensive), and a whopping 8 kb of memory. He also wrote the software that made the computer work.

Meditate on this: For his hobby, the Dalai Lama likes to repair watches.

On Sunday, June 29, 1975, Wozniak finished the computer and started it up. He typed a character, and it appeared on the screen! That’s something we take for granted today, but Wozniak’s machine was the very first “personal computer”—as they would soon be known—capable of such a feat. Wozniak didn’t know it at the time, but with that single keystroke, he had brought the era of toggle switches and flashing lights to a close. The personal computer revolution had begun.

A COMPANY IS BORN

Wozniak had designed his computer simply for the fun of the challenge. He planned to print up the plans and give them away at meetings of the Homebrew Computer Club, so that the members could build their own computers. It did not occur to him that money could be made from his invention—that was where Steve Jobs came in.

Jobs thought they could make circuit boards pre-printed with Wozniak’s design, almost like a paint-by-numbers kit, so that hobbyists would know where to install each component. He figured he could sell the circuit boards to members of the Homebrew Club for $50 apiece. So when Wozniak and Jobs decided to form a company in 1976, that was all they set out to make: pre-printed circuit boards.

NOT FAR FROM THE TREE

To raise the money, they needed to launch their company and print the first batch of circuit boards. Jobs sold his Volkswagen van for $1,500 and Wozniak sold his programmable calculator for $250. Next they needed a name for their company, and tried out techie-sounding ones like “Executek” and “Matrix Electronics.” Jobs was on an all-fruit diet at the time (which proved no better that his old vegetarian diet at controlling body odor), and had recently returned from an Oregon commune, where he’d pruned some Gravenstein apple trees. He suggested “Apple Computer.” That sounded better than anything else they could think of, and it came before Atari in the phone book, so Apple it was.

APPLES AND ORANGES

It was probably inevitable that Wozniak, who created things for fun and liked to give them away, would clash with Jobs, who wanted to build a business by selling things for profit. The two had their first big disagreement when Wozniak balked at giving Apple Computer the exclusive rights to his invention; he wanted to give his plans away free to Homebrew members who didn’t buy the circuit boards. And since he’d built the computer at his Hewlett-Packard workbench after hours, he felt that HP also had a claim to the technology.

Jobs, on the other hand, was convinced that Wozniak’s computer was the heart of Apple’s business, and without the exclusive use of that technology the company would have no value. He shared his concerns with Ron Wayne, his friend at Atari, and Wayne agreed.

MR. 10 PERCENT

Wayne offered to have the pair over to his apartment, where he would try to convince Wozniak that Apple needed the exclusive rights to his design. It took about two hours to do it, but by the time Wayne was finished, Wozniak was a believer. His invention would be Apple’s and Apple’s alone.

Wayne was 20 years older than Jobs and Wozniak, and more mature than either of them. They were impressed by his business sense, and decided to make him a partner in the company. Instead of splitting ownership of Apple Computer 50/50 as they had planned, Wozniak and Jobs each took a 45 percent stake in the company, and gave Wayne the remaining 10 percent. That way, whenever they couldn’t agree on something, Wayne would serve as a tiebreaker, giving the winner the 55 percent majority needed to prevail.