Category: Business

Apple Co-founder Steve Wozniak reveals a lot in this interview, but his discomfort with Steve Jobs’ profit plan in the beginning days are specially interesting. Not only because it confirms the price hiking profit plan but because it shows that that was the whole idea from day 1.

“Steve had a background working in computer stores buying stuff cheap and selling it for a lot more. I was shocked when he told me how you could buy something for 6 cents knowing he could sell it for 60 bucks. He felt that was normal and right, and I sort of didn’t. How could you do that? I was not for ripping people off. But then we started Apple and I went with the best advice which is that you should make good profit in order to grow.”

It really illustrates how wealth can be created from thin air. Just like that. There’s nothing, and then some sharp mind comes along and turns it into something. and then a bigger something. and then a billion somethings. Pretty awesome.

Woz talks more about his non-profit state of mind vs Jobs’ profit-centric mindset, which is particularly interesting considering Woz was the one with the tech employment and Jobs’ was the one working with plants in a commune.

I never wanted to run a business. I had a perfect job for life at HP. I went to club meetings every week and I passed out my schematics for the Apple I, no copyright, nothing, just “Hey all you guys here is a cheap way to build a computer.” I would demo it on a TV set.

Then Steve Jobs came in from Oregon, and he saw what the club was about, and he saw the interest in my design. I had the only one that was really affordable. Our first idea was just to make printed circuit boards. We could make them for 20 dollars and sell them for 40 or something like that. I had given the schematics away. But Steve thought it could be a company.

This was actually our fifth product together. We always were 50-50 partners. We were best friends. We first did the blue boxes. The next one I did was I saw Pong at a bowling alley so I built my own Pong with 28 chips. I was at HP designing calculators. Steve saw Pong and ran down to Atari and showed it to them and they hired him. Whether thought he had participated in the design, I don’t know and I could not care less. They offered him a job and put him on the night shift. They said he doesn’t get along with people very well, he’s very independent minded. It rubbed against people. So they put him on the night shift alone.

Our next project was when Steve said that Nolan (Bushnell, head of Atari) wanted a one-player game with bricks that you hit out. He said we could get a lot of money if we could design it with very few chips. So we built that one and got paid by Atari.

I’m allegedly related to Nolan Bushnell, though I forget how the family tree works out in that regard since it was explained to me.

Woz was also asked about the legend that Steve Jobs cheated him out of some money in that first computer deal.

The legend is true. It didn’t matter to me. I had a job. Steve needed money to buy into the commune or something. So we made Breakout and it was a half-man-year job but we did it in four days and nights. It was a very clever design.

The next project we did together was we saw a guy using a big teletype machine that cost as much as a car hooked up to a modem dialing in to the Arpanet. You could get into 12 universities and log in as a guest and do things on a far-away computer. This was unbelievable to me. I knew you could call a local time-sharing company. But to get access to university computers was incredible. So I went home and designed one myself. I designed a video terminal that could go out over the modem to Stanford and then on to the Arpanet and bring up a list of university computers.

The far-away computers would talk in letters on my TV set. Instead of paddles and balls in Pong, I put in a character generator. The terminal was very inexpensively designed. We sold it to a company called Call Computer. They now had a cheap terminal. Steve and I split the money.

When the interviewer raised the seemingly odd partnership between the two Steve’s, Woz said they weren’t all that different in his mind.

We were very similar. We would hunt through stores in Berkeley looking for Dylan bootlegs. Steve was interested in computers, and he really wanted to find a way to build a computer out of these new devices called microprocessors. He thought that someday they could replace big computers and everyone could have their own computer relatively cheap. Steve had a background working in computer stores buying stuff cheap and selling it for a lot more. I was shocked when he told me how you could buy something for 6 cents knowing he could sell it for 60 bucks. He felt that was normal and right, and I sort of didn’t. How could you do that? I was not for ripping people off. But then we started Apple and I went with the best advice which is that you should make good profit in order to grow.

Steve was willing to jump right into that. Mike Markkula was the mentor who told Steve what his role would be in Apple, and told me mine. He was the mentor who taught us how to run a company. He’s very low-key. He stays out of the press and he’s not that well-known. But he saw the genius in Steve. The passion, the excitement, the kind of thinking that makes someone a success in the world. He saw that in Steve.

Mike Markkula had worked at Intel in engineering and marketing. He really believed in marketing. He decided that Apple would be a marketing driven company. He was introduced to us by Don Valentine. Don had come to the garage and I ran the Apple II through its paces and he said, “What is the market?” I said, “A million units.” He asked me why that was and I sad, “There’s a million ham radio operators and computers are bigger than ham radio.” We didn’t quite get the formula. Steve Jobs and I had no business experience. We had taken no business classes. We didn’t have savings accounts. We had no bank accounts. I paid cash at my apartment — I had to, because of bounced checks.

Woz left Apple in the mid 80s to start his own company but remained an Apple employee all these years and receives a salary of 200 bucks every two weeks.

It will never happen, but I would like to see him replace Tim Cook (Apple CEO) as the event host rolling out new products. Cook didn’t look like he’s into it or wanted to be there in that role in his first try while Steve Jobs was alive but recently resigned. Woz could do it and could breathe new life into it.