#265 Becoming Steve Jobs: The Evolution of a Reckless Upstart into a Visionary Leader

0:00 He shaped how I came to view the world. We were both strong minded, but he had a fully formed aesthetic. And I did not. It is hard enough to see what is already there. To remove the many impediments to a clear view of reality.

0:13 But Steve's gift Was even greater. He saw clear What was not there? What could be there.

0:20 And what had to be there. His mind Воз неверий каптив. Of reality. Quite the contrary.

0:28 He imagined what reality lacked. And set out to remedy it. His ideas were not arguments. But intuitions. Born of a true inner freedom.

0:39 For this reason. He possessed an uncanny large sense of possibility. An epic sense of possibility. Steve's love of beauty and his impatience with ugliness

0:51 Pervaded our lives. No object. Was too small or insignificant. To be exempt From Steve's examination

0:59 And the quality Of its form. He looked at things and then created things. From the standpoint

1:08 Of perfection. That could be an unforgiving standpoint. But over time I came to see its reasons. To understand Steve's unbelievable rigor. Which himped

1:20 First. And most strenuously. On himself. He was the most unfettered thinker. I have ever known.

1:30 That was Steve's wife speaking at his memorial service after he passed away, and it's an excerpt from the book that I'm gonna talk to you about today, which is Becoming Steve Jobs, the evolution of a reckless upstart. into a visionary leader. And it was written by Brent Schlender. And Rick Tet Sally.

1:46 So this is the second time I read this book. I originally read it several years ago. It was episode nineteen of Founders. At the f at the time I first read this book, though, I had only read two books about Steve Jobs. So I didn't really have an advanced understanding of who he was and why his career is so important for unch future generations of entrepreneurs to study. Since then I've read over ten books on Steve Jobs. Many of them multiple times. And then I track down

2:11 Every single biography I could find about the people that he discussed were there heroes or influences or people he studied When he was building Apple. I made episodes about every single one of those books. I'm gonna include it in the show notes. You can also go to founderspodcast dot com and you'll find it there. It's about forty different

2:29 Episodes. And so all that reading and all that time invested heavily informs when I pick up the book the second time, and the reason I wanted to re read this book is because If you should read, you know, as many books as possible as you can about Steve Jobs, in my opinion, but if you only had time to read one. Or if you only wanted to read one.

2:47 This is the one I would choose. And the reason for that is because it's the book that covers Most deeply. His evolution. The change from a reckless but gifted twenty year old entrepreneur

2:58 Into the older, wiser Maybe greatest entrepreneur of all time. And Steve was able to make that transition because he was a learning machine constantly honing his craft, which the author goes into right in the prologue when he tells us. why he wrote the book. I wanted to offer a fuller picture and deeper understanding of the man I had covered so intensely. So that is Brent Writing, one of the co authors. And he actually was a reporter and a writer. He covered Steve and the technology industry for over twenty years.

3:26 And this is the perfect paragraph to start with,'cause it's gonna inform the discussion that you and I are gonna have about Steve today, right? The most basic question about Steve's career is this. How could the man who had been such an inconsistent Inconsiderate. rash and wrongheaded businessman that he was exiled from the company he had founded. become the venerated CEO who revived Apple and created a whole new set of culture divining products that transformed the company into the most valuable and admired enterprise.

3:55 On earth. And then he gets into the period of time in Steve's life, which I agree with what he's about to say here, is it's most important to study. There's a fantastic book I read a long time ago. After you read this book, I would read Steve Jobs and The Next Big Thing. It's written by Randall Strauss. It covers his wilderness years, the years between when he left Apple and he returned. It's originally Uh episode seventy seven of Founders. If you haven't listened to it, you might want to listen to it after you get done with this episode. I kept coming back to the time that many have described as his wilderness years, the dozen years between his first tenure at Apple and his return. That error.

4:28 From Ninete Five to Ninete Nighty Seven is easy overlook. The lows aren't as dramatic as the blow ups of his first tenure at Apple. And the highs. Aren't as thrilling as those engineered in the first decade of the twenty first century. These were muddled.

4:44 Complicated times. I call them on that podcast. It is bizarro Steve Jobs. And the reason I call it that is because you have one of the most gifted entrepreneurs of all time Making Bad decision after bad decision.

4:56 over and over again as he's trying to build next. But those years are in fact the critical ones of his career. That is when he learned most everything that made his later success possible. And that is when he started to temper And channel his behavior. To overlook those years is to fall into the trap of only celebrating success.

5:15 We can learn азма. If not more from failure. From promising past that turned into dead ends. The vision. Understanding.

5:24 Patience and wisdom that informed Steve's last decade were forged in the trials of those intervening years. And this next sentence is really the punchline of what he's trying to to tell us. And I agree with it after reading You know, all these books on Steve Jobs, especially uh Steve Jobs is the next big thing, he had to go through that. The last act of his career, the most valuable work he ever did would not have occurred without that happening. He mentioned that himself. If you have ever gone back and uh listened to that commencement address that he gave at Stanford, I think back in two thousand five.

5:55 The failures, stinging reversals, miscommunications, bad judgment calls, emphasis on the wrong values, the whole Pandora's box of immaturity. Весре пререксити. Moderation, reflection. And steadiness. that he would display in later years.

6:12 And yet, even as you read about that time period And he's making, you know, like you can clearly see in in hindsight. What Steve, that's a terrible idea. What why you doing that? You are s impressed. By his His willing his unwillingness to quit.

6:24 His perseverance was remarkable. driven and curious even when things were tough. He was a learning machine. During these years. And finally I wanna wrap up this section before I go to what I think is the most important one of the most important events that happened since Steve's childhood.

6:39 Really th you can think about this section this next section is like why the book is named becoming Steve Jobs. And I wanted to include this because I really believe like this right now, this paragraph, this is the process that you and I are in the middle of. Most of the people that you and I study on the podcast are dead. Their story is written. You and I are writing our story now.

6:59 Steve is a great object lesson in someone who masterfully improved his ability to make better use of his strengths. And to effectively mitigate those aspects of his personality that got in way of those strengths. His negative qualities. Did not go away. Nor were they replaced by new good traits. But he learned

7:20 How to manage. Himself So let's go to when Steve was five years old. His father was a middle class, maybe lower middle class. Mechanic.

7:29 Craftsman he made Furniture and he also rebuilt cars on the weekend. And even from a very young age he taught his son to take pride in the quality of what you're making. And later in the book.

7:42 There is a conversation that's happening between Steve Jobs and Johnny Ive, and they're having a discussion. On how are we gonna define success at Apple. How do we know if we can consider the work that we're doing success. Like what are the what are we are what are the metrics that we're actually gonna agree on?

7:59 And I think the conclusion they arrive at is the correct one en that Discussion. is completely informed in my opinion by what's happening when he's a young kid and w the lessons that

8:10 His father taught him. He taught his son the paramount value of taking one's time. Paying attention to details. And since Paul was anything but rich, putting in the legwork to hunt for spare parts that were of good value.

8:24 He had a workbench out in his garage. When I was about five or six He sectioned off a little piece of it. And said Steve

8:32 This is your workbench now. He showed me how to build things. It really was very good for me. He spent a lot of time with me. Teaching me how to build things.

8:42 Paul is also raising his son. in the right area. This is The area that's now called Silicon Valley. This is in the late nineteen sixties, late uh late nineteen sixties, and early nineteen seventies. And this talks about the people that they're interacting with. This area attracted highly educated electrical engineers, chemists. Uh, computer programmers and physicists who were drawn to the region's blossoming semiconductor telecommunications and electronics company. Living there a curious child could easily develop a much deeper sense of the leading edge of technology than those growing up elsewhere in the country. So you can combine the environment with what his father's teaching he's like, listen, everything around you was built by somebody else.

9:20 And these are not great mysteries. You can learn to take them apart. You can learn to deprove them. You can learn then to build your own things that add value to the other people in the world. The implicit promise in all of this was that anything could be figured out. And since anything could be figured out. Anything could be built. And that is so important because about twelve years after this is happening in Steve's life,

9:42 He's hanging out with Steve Wozniak and he's like, Hey We can also build our own computer. Other people are building computers. We don't have to build them one the way everybody else is doing it, but we can a we can actually build a computer and sell it. That was Steve Chobs uh main contribution, and sell it to other people. And so I'm gonna go to where Steve

10:00 And where Steve makes a calculation based on arrogance. And he wind up being correct. This was really important. So at the time, for simplicity's sake, we can just think about what Wozniak is building as a computer. He's working at H P at the time. And he's like, Hey, we Steve Jobs, we can't make our own computer. Why don't we pitch this to my employer?

10:20 like they might want to manufacture a version version of this concept And the reason I say it's a calculation based on arrogance is because Steve has no education, no experience, no contacts. No resources and very little money, and he's like we don't need HP. And This is what he says. He didn't think WAS needed HP.

10:37 He thought he and was could develop a business of their own. That business, that idea morph eventually morphs into Apple. And the premise the idea behind what's happening here. you and I have seen over and over and over again in the history of entrepreneurship

10:52 I use that that maxim as a way for y t for me to remember it because it came from that book, The Fish That Ate the Whale. I just reread that book. It's episode two fifty-five if you haven't listened to it. But at the time, Sam Zamurry Is an eighteen year old penniless immigrant living in Alabama. So you have w him on one hand, on the other hand, is one of the the world's Largest.

11:11 multinational corporations at that time in history, United Fruit Company, and he's saying, Hey These bananas that you guys are just throwing out. I can actually find a market for I can build this. I can build what your your trash as the cornerstone The foundation of my future empire. And that line is from that book. It was a calculation based on arrogance, and Zamuri, like Jobs where we are in this story. was right.

11:35 And so Steve says, Forget that. We don't need HP. Let's Gather up our meager resources and sell them. So it says to raise cash. Steve sold his treasured Volkswagen mini bus. and was uh sold his precious HP sixty five programmable calculator. This is this is so wild. Think about you know, Apple today is what, multiple trillion dollar company. This is the very first Product they're gonna make together.

11:57 that they actually sell into the Apple brand, I should say. And they spend a thousand dollars. And I want to bring that up. Because I I was reading this that says after spending a thousand dollars on designing the board and contracting to have a few dozen made uh they wind up making their money back by selling these for fifty dollars piece.

12:11 Thirty dollars is profit. And this is when Steve makes the decision. He's like, hey, we need to form a company. Let's name the company Apple. I'll get there in a minute, but when I got to this section, there's something that Jeff Bezos said. that has never left my mind and and I've known this for years and I've mentioned this several times on the podcast, but he talks about he was talking about the experience, like the unique experience that Amazon has because they've grown multiple ten million dollar businesses into billion dollar businesses. And he talks about

12:37 having that institutional knowledge is very important. And he says it in a metaphor that's fantastic. And he says, We know from our this is Jeff speaking now, we know from our past experiences that big things start small. The biggest oak starts from an acorn. If you wanna do anything new, you've got to be willing to let that acorn grow into a little sapling. And then into a small tree. And maybe one day

13:00 It will be a big business. On its own. And this next story is an example of that. So they make their first version of their computer. They register Apple as a California business. This is in nineteen seventy six. And they were part of this small group of hobbyists, people are really enthusiastic about technology and and personal computing. I I don't even think there was such a term as personal computing at this time in history, if I'm not mistaken.

13:21 And so they go to present it, and this is important. So Steven Waz made one more trip to the Homebrew Computer Club to show off their finished, fully assembled version of their new computer. The reaction from most club members, however, was tep it. Most were tinkers who believe that half the fun of computing was in designing and building their own machines. There's an it's not in this book, but it's another fantastic Steve reflects on this later on in life in another book that I read and he's like what I the one insight that I had is like for every one hobbyist, right, that actually wants to go through the trouble of like building their own computer and picking out the parts and doing all that stuff, he's like there's a thousand customers that just want to go to the store and buy a computer like they'd buy any other appliance And so if you think about what's w what I'm about to reach you now, go back to that line. It's a calculation based on arrogance, right? So they do this presentation. Almost everybody in the club's like, No, this doesn't make sense, this is like against our ethos. Uh, it says with the Apple one, all you had to do is set it up, connect it to a keyboard and a monitor, plug it in and turn it on. So like this is stupid, this isn't gonna work.

14:19 Now why is that important? Because this next sentence is fantastic understanding of Steve Jobs, and I would argue almost every other person that you and I study on this podcast. He was a free thinker whose ideas would often run against the conventional wisdom of any community in which he operated. Steve didn't care at all. It was irrelevant. Your criticism of what he wanted to do. He was going to make it happen. And it's what happens at the very end of this m this meeting. This guy named Paul walks up to them. He owns a small com uh computer shop. I think it might be like a small chain of computer shops, and it says, The owner of the Bite Shop computer store introduced himself to Steven Waz after the presentation. He was impressed enough to want to talk about doing some business.

14:59 So Steve always jumps on things as fast as possible to like okay cool, we'll do some business. The next day. Steve walks into Paul's shop. He walks over to the bike shop, right? And he does a deal with Paul where he says, Okay You pay five hundred dollars and we'll make fifty of them. He goes from prototype the night before to twenty five thousand dollars in sales.

15:20 And this story was always hu always humorous to me because you think about you know Apple multi-trillion dollar company today. Think about this. The first Apple sale ever made. Barefoot. He walks into the bite shop. And does this sale, he does not have shoes on. And then there's a line here that I think is really important. Stief said yes first.

15:40 and then learn how to later. Without missing a beat, Steve happily promised delivery, even though he and Waz had neither the wherewithal to buy the components, nor anything like a factory or a labor force necessary to build Anything. So at the beginning of Apple we have the first major conflict. In Steve's life.

15:58 He has this famous saying that he says later on, this famous Maxim, he's like, Listen, it's more fun to be a pirate than join the navy. He wanted to build Insanely great products from the time he was a very young man and to the day he died. He did not want to be a businessman. As he told me several times, I didn't want to be a businessman because all the businessmen I knew I didn't want to be like.

16:15 Steve's natural inclination was to position himself as the critic The rebel The visionary. A nimble David against the stargy Goliath. And so one way to resolve this conflict is like listen, we have we know we're building a good product. They're in the uh they're about to build the Apple two, one of the most commercially successful Apple products of all time.

16:32 But to do so they need help. And so there's just one sentence here. That it any time if any b you've spent any time studying the life of Steve Jobs, you know was one of his superpowers. He had no qualms about calling anyone up. In search of information. Or help.

16:46 That is a trait that he had at the very beginning of his life, the one he possessed his entire life. So I'm gonna go to another I'm gonna go to my notebook. So I I why this is like several years ago, there's this interview with Steve. He's probably late thirties, maybe early forties. Think this is like right before he goes back to Apple. And he's talking about his ability To ask for help.

17:07 And he's talking about how this is something that separates people like him who accomplish things from people who just dream about it. And so this is uh these are notes from a talk that he gave Yeah. Price. Forty years ago, thirty years ago. He says, Now I've always actually found something to be very true. Which is most people don't get those experiences because they never ask. I have never found anybody who didn't want to help me when I've asked them for help.

17:28 I have never found anyone who said no or hung up the phone when I called. I just asked. And when people ask me, I try to be as responsive to pay back that debt of gratitude. Most people Never pick up the phone.

17:43 And call. Most people Never ask. And that is what separates the people that do things from the people that just dream about them. You gotta act.

17:52 And you gotta be willing to fail. You gotta be ready to crash and burn with people on the phone, with starting a company, with whatever. If you're afraid of failing You won't get very far. And I think a key part here

18:05 Is the fact that Steve had a deep belief in the excellence of what him and Waz were building. And so he has no problem. He starts going around Silicon Valley, and one phone call after another, he's like, I'm gonna find people that can help me, I'm gonna find venture capitalists, I'm gonna find company builders, I'm gonna find anybody that can tell me how can I take this idea and transform it into a company. He had such faith in the excellence of his work that he just assumed That some would w someone would eventually agree to fund it. And the w the way I think about that is like how can I take that idea and never forget it? First you believe And then you work on making other people believe too.

18:39 He tirelessly navigated the valley's network of experts One phone call. And one meeting at a time. And so then we skip ahead in the timeline and we see these two main ideas that I want to talk to you about, which is this is about the evolution of Steve Jobs, the fact that he was not static, he changed. And that Steve

18:57 Like every single other one of history's greatest entrepreneurs spent their very valuable time studying the great entrepreneurs that came before them. That is why there's almost forty episodes on Steve Jobs and the people he studied in the archive. Listen to this. Steve developed a reputation as an egomaniac who wasn't willing to learn from others. It is a fundamental misunderstanding of the man even during his youngest. brashest and most overbearing years. The time and

19:21 history where we are in Apple's history and in Steve's life history. While Steve didn't yet have the skill to build a great company, he admired those who had pulled it off, and he would go to great lengths to meet them and learn from them. Now this is Steve talking about the lessons he learned from some of s technology's greatest uh entrepreneurs and company builders, right? None of these people were really in it for the money. Dave Packard, for example, left all his money to the foundation, obviously one of the co founders of HP.

19:48 He may have died the richest guy in the cemetery. But he wasn't in it for the money. Bob Noyce, co founder of Intel, is another. I'm old enough, so this is This quote that I'm reading you from Steve Jobs.

20:00 This comes towards the end of his life. So he's reflecting back on it. He says, I'm old enough to have been able to get to know these guys before they passed away, is what he's talking about. I met Andy Grove. Who was then the CO of Intel. When I was twenty one. I called him up and I told him There's that there's his superpower again, right? He's just gonna call you on the phone. He winds up calling Bill Hewlett, which is pa David Packard's partner, obviously.

20:22 When he was like twelve or thirteen years old. 'Cause everybody's everybody's n uh name and number. So he just He had the like that just proves like his his level of uh I guess aggressiveness or It's like default aggressive nature. He just calls him up. He's like, Hey, I'm just twelve years old, I'm Steve Jobs, and trying to build a frequency counter.

20:40 You guys have parts for them, will you give me parts and uh Bill winds up laughing and laughing and then not only gives him the parts but gives him a job during the summer to to assemble frequency counters at H P. So it says uh I'm old enough to have known To be able to get to know these guys, I met Andy Grove, CEO of Intel, when I was twenty one. I called him up and told him I had heard he was really good at operations and asked if he could take if I could take him out to lunch. I did that with Jerry Sanders, founder of Advanced Micro Devices, and with Charlie Spork, founder of National Semiconductor and others.

21:07 Basically I got to this is the main reason I'm telling you this and why it's so important that you and I do the same. Whether we do it in person or whether we have to use y you know, these these people mentors in like an historical context, which is exactly what books are. Basically I got to know these guys who were all company builders. And the particular scent of Silicon Valley at that time made a very big impression on me. And on the very next page, he talks about the the person I've spent. I just spent what? The last right before I reread this book, I spent uh probably ten days. Reading it's gotta be close to a thousand pages on Edmund Land. I just re read three books on Edmund Land or the last two episodes.

21:40 Obviously there's uh you know, five or six episodes on Edwin Land. in the archive and this is the reason. It's'cause we have, in my opinion, Steve Jobs is the greatest entrepreneur to ever live and he's saying, Hey This is my hero. This is the person I patterned my career off of.

21:54 I just um was interviewed on a podcast in a newsletter with my friend Frederick and something he asked me, which I don't know if it'll make it in there. But he's like Why do you read Books like y it's not you don't just read one book. On a person like

22:06 He was he mentioned Edwin Land. He's like you read five books on Edmund Lan. He's like essentially like what is wrong with you? I told him I can't help it. I have to read. Once I find something interesting, I have to read every single thing I can find on him. I've just always been like that. Some were heroes like Edwin Land, Steve admired many things about Land. His obsessive commitment. Now this is Steve talking about why he admired one of the reasons he admired Edmund Land. His obsessive commitment to creating products of style, practicality, and great consumer appeal. And his realiance on gat instinct. Rather than consumer research. And the restless obsession.

22:37 An invention he brought to the company he founded. That is Steve describing Edwin Land Come on. Come on. You could take out Edwin Land's name, put in Steve Jobs, and it's the exact it still holds true. Steve had an obsessive commitment to creating products of style, practicality, and great consumer appeal. He w Steve relied on gut instinct rather than consumer research, and Steve had a restless obsession and uh an invention that he brought to the company he founded. I never get tired of hearing stories like this. I absolutely love it. I'm gonna move ahead because I wanna hit on another thing. Again, this is not a summary of the book. These are just the ideas that I wanna remember.

23:11 The ideas that I think I can use in my work, the ideas I know you can use in your work, and this is the idea that the storyteller one of my favorite quotes of Steve Jobs is like the storyteller is the most powerful person in the world. And storytelling is a skill like anything else. and one that you can practice and get better at. And so listen to how good now obviously we all know y you've probably seen a lot of the like the product demonstrations and the interviews that Steve did later in his life. He was also gifted. Now he's a better storyteller later, obviously, but he was gifted. Listen to the storytelling ability he has as a twenty-two year old. This is remarkable. There's a long and wonderful quote from a New Yorker piece in late nineteen seventy seven that offers rich proof of Steve's fully formed verbal mastery.

23:48 It was written at a time when the average reader knew so little about computers. So the magazine's reporter Is at a like a computer conference, right? And he finds a young Steve Jobs. Manning the Apple computer booth. And so he walks up to him.

24:03 And here let's go into Steve's verbal mastery. I wish we had these personal machines when I was growing up, Jobs tells him. Before continuing on for a total of two hundred and twenty four words. This is a master class in marketing, sales, and product positioning in two hundred and twenty-four words, in my opinion. People have been hearing all sorts of things about computing the past ten years through the media. Supposedly computers have been controlling various aspects of their lives. Yet in spite of that, most adults have no idea what a computer really is or what it can or can't do.

24:32 Now for the first time people can actually buy a computer for the price of a good stereo. Interact with it. And find out what it's all about. Consider the camera. There are thousands of people across the country taking photography courses. They'll never be professional photographers, they just want to understand what the photographic process is all about.

24:50 Same with computers. We started a little personal computing manufacturing company in a garage in Los Altos in seven in nineteen seventy six. Now we're the largest personal computer company in the world. We make what we think of as the Rolls Royce of personal computers. It's a domesticated computer. People expect blinking lights, but what they find is that it looks like a portable typewriter.

25:12 Which, connected to a suitable readout screen, is able to display in color. There's a feedback it gives to people who use it. And the enthusiasm of the users is tremendous. We're always asked what it can do. And what and it can do a lot of things. But in my opinion

25:27 The real thing. Is to teach people How to program. The computer.

25:33 That's the end of the two hundred twenty four words. Then the this author, this Brent's interpretation of what just occurred is fantastic. So I'm going to read that to you as well. The reporter asked if Steve would mind us telling us his age. Twenty two. Speaking off the cuff to a passing journalist, Steve finds so many ways to demystify For the average person The insanely geeky device that he and Waz had created.

25:55 He understood their fundamental fear that computers may take over too much of modern life. He sympathizes with their ignorance. He offers several analogies, which is how most people think. Analogies are extremely useful way to get ideas into other people's brains. He offers several analogies to comforting examples that they will understand. Typewriters. Camera.

26:15 Indeed, he makes using a computer. Seem no more complicated than taking a photograph. Going so far as to call the apple two domesticated, and yet he elevates this is this is his gift. It's incredible that he was able to do this so at a young age. Listen to this. This is about the product positioning part I mentioned earlier. And yet he elevates both his computer, excuse me, his company and its computer into something aspirational. He links this machine made a few months earlier. A few months ago by some dishevelled

26:42 California misfits. To Rolls Royce. The seventy three year old paragron paragon of sophisticated industrial manufacturing. An elite consumer taste. He even calls Apple a world leader, an absolutely unprovable claim.

26:58 That rockets the little company into the same league as IBM. Which was then the industry's giant. He was an extraordinary speaker. And he wielded that tool to great effect. So it's the upside of young Steve Jobs. Let's go to the downside.

27:14 Or one of the downsides. This is the dividing line in Steve's life. If you are valuable to his if you're not valuable to his work You are completely replaceable. And so

27:23 This is somebody describing Steve at this point. His name's Lee Clow. He was the ad director, he wants to becoming a very close friend of Steve Jobs. He says Steve had this incredible bandwidth. But he devoted almost all of it to work. And this is pre evolution of Steve, right? He gets all he g he's so much better.

27:40 at dealing with people, at leading people, at building a company. in the second return to Apple than he was in the first, and he made a mistake that you and I know not to make. Because when we went over S D Lauder's fantastic autobiography Uh it's back on episode two seventy. Or excuse me, two seventeen, she made the point multiple times in that book, and I think I brought it to your attention multiple times in S uh in that episode.

28:02 To never underestimate the value of an ally. Stop going around collecting enemies. collect allies and friends, Steve was incapable. absolutely incapable of doing this at his point at this point in the career and this leads him to getting kicked out of his own company when he turns thirty. 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.

28:27 That would catch up to him eventually. And so no study of Steve Jobs life is n is complete without introducing a main supporting character their careers weave in and out of each other's for decades and that's Bill Gates. This is the first time Bill Gates pops up. In the story.

28:43 The Apple two is already super successful, they're selling a ton of'em. Uh Steve is rich. Apple's already public. Bill Gates is on the come up, they're meeting, they're both in their twenties, and says in nineteen eighty one, Bill Gates visited Apple. The twenty six year old CEO of Microsoft made the trip fairly often since his company worked closely with Apple on programming languages. At the time, Steve was far richer and far more well known. And the reason I'm bringing this to your attention is because it's a massive mistake Steve's about to make here.

29:08 This is what Bill Gates saw that Steve Jobs missed. And it's the impact. that a major company like IBM is going to have when it ships its first personal computer. And because of the immense success, they go from

29:22 Zero? Computer sold. To a public company four years later. That's printing money. The Apple Two's a massive hit. And that quick success.

29:30 inflated, you know, Steve's already gigantic ego, and it opens up blind spots when you do that. The the way I think about this, like if you go to sleep on a win, you're gonna wake up with a loss. Steve is about to go to sleep on a win. So let's go to what Again, I love studying the early days of Bill Gates. Uh I think maybe the most popular episode of Founders ever. was episode one forty when I read that book hard drive. I'm gonna reread the book again soon.

29:55 And the reason I think that that book is so fantastic is because for as famous and as successful as Bill Gates is, there's not very many great Biographies of him. And that is nearly the p a perfect biography for you and I to study because it covers the first thirty five years of his life. It you you have an understanding exactly who he is, how extreme he is, and then it ends in the Microsoft IPO. And so at this point in the book that I'm holding my hand.

30:16 Where we're at, Gates comes to visit. Steve is like, Yo, do you see what's about to happen here, man? And Steve is completely oblivious. Gates came to business naturally. Gates predicted this is fascinating too. An entirely new kind of software industry would arise. Really the author's tell us about What is the most important impact or insight Bill Gates had that impacted the technology industry. So think about the ideas like to have a pure software company was not something people ever considered. Gates predicted an entirely new kind of software industry would arise. At that point, soft this is why. 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.

31:00 And he wrote a manifesto about this. Says Gates Manifesto was every bit as significant as Moore's Law in the explosion of personal computing. Software development requires very little capital investment. It is basically intellectual capital. The main cost is the labor required to design and test it. There's no need for expensive factories. It can be replicated endlessly for practically nothing. Gates was right on this point. Excepting the fact that the soft that software was worth paying for.

31:25 Led to the emergence of a dynamic new industry. This was Gates greatest contribution to the world. And it's so amazing he saw this before anybody else did. Think about wha how much Economic value comes from software today. Like it's incalculable, right?

31:39 And what's crazy is like he had this idea back in the nineteen seventies. Microsoft winds up being the first company in history I always found this fascinating. It's the first company in history to sell billion dollars billion dollars of software in one year. And part of being able to do that is obviously he's rent he's relentless. I think I called him on that podcast. There's so many people have sent me messages over the years about I called Bill Gates a young Bill Gates.

32:03 Uh that he was Genghis Khan dressed as mil uh in a in a Mr Rogers costume. And I don't know where that came from, other than when you read the book it's it's clear like he's one of the most uh ruthless and relentless uh entrepreneurs in history. The and you wouldn't picture that like looking at him. And people even knew that when he was twenty one. Somebody else uh said that he was in this

32:25 He was in this um fight over uh there was like some kind of lawsuit going on and on the other side of the lawsuit is this new company and Bill's former partner.

32:36 And Bill's former partner is like Dude, this is not gonna be easy, us fighting this guy. They took a look at, you know, they're like, This this is some twenty-one year old kid nerd with shaggy hair. He's like, We'll eat him alive. And he said it was kinda like Churchill thinking he could deal with Stalin. So I wasn't the only one to to realise how extreme he was at that age. So let's go back to this though. So it says listen, you know, he was right

32:57 The idea that the the software is worth paying for, that you can build entire new businesses around it, entire new industries that can enable so much more if you get it out of the hands of hardware makers was Gates' greatest contribution to the world. Uh he was his role as the first champion of the concept that software itself held val had value. And again, I don't think you probably become the first or you you found the the company that becomes the first company to sell a billion dollars worth of software without Before most people even like before a lot of other people. Like there is an advantage to just arriving at insights that is completely

33:31 uh at odds with the existing nature of the uh the the industry that you're operating in, right? Steve had always decided, and this is the problem. So they're having this conversation. And you know, the IBM's uh this is nineteen eighty one, IBM shipping his first computer and Steve's like, This is irrelevant, no one's gonna choose that ugly piece of thing over this like piece of art, this master like uh result of this this master craftsmanship that we've made here. Steve had always derided Big Blue IBM as a lumbering monstrosity and truly believe that no discerning buyer would ever perfect

34:02 Or whatever prefer. uh a computer from IBM to one made by Apple. Gates, on the other hand, knew this might be the beginning of something big. But on that fall afternoon, no one Gates spoke to at Apple seemed aware that their world was about to change, must l much less acted worried. Years later Gates remembered that I kept walking around asking Isn't this a big deal?

34:24 But no one seemed concerned. And then the book is just full, like spread out through so many pages. I hope you buy the book. I hope I can convince you to buy the book. And if you do, I would work through it very slowly. It's only four hundred pages. Uh, but still it took me over twenty hours to really like digest and understand and I do not obviously never rush th definitely not gonna rush through this book because it's just so m it covers just so much history of not only Steve's life, the technology industry, Apple in particular, but spread throughout the book there's just these fantastic one liners. And they don't need much explanation. They give you an insight as to who he was and what was important to him.

34:58 He cared passionately. And he never dialed it in. So it's go to this idea that our strengths and weaknesses are constantly there. they compliment each other, they work off each other, our successes and failures do the same. If you really think about what's taking place, he's at this point in the story, he's all all for all intents and purposes gonna get kicked out of Apple. And it goes back to this idea that if you go to sleep on a win, you'll wake up with a loss. After the initial success

35:21 With the Apple two. Think about this. Steve. Probably the greatest entrepreneur to ever lived. is gonna have three commercial failures in a row.

35:29 The Apple three. Lisa. And the Macintosh. Now the Macintosh obviously is like one of the most beloved computers, but commercially successful, like the uh the huge launch they did around it. The sales start off really, really great and then they quickly peter out to the point I think this book makes the point where

35:45 A few years even after this The Apple too. Is still responsible for something like seventy or eighty percent of all of Apple's revenue. So think about you can have a massive success. You can have three street failures.

35:56 But even at the sa same time Then he's having three story failures. He is right about this. This is where he discovers hidden In George Lucas's Lucas Film Division. is what's going to eventually become Pixar. Pixar is what makes Steve Jobs a billionaire.

36:13 The entire unbelievable, unpredictable journey of how he goes from almost spending his last dollar on Pixar. When he leaves Apple. He has like seventy million dollars. He puts fifty of it. Into Pixar.

36:25 Over time. And they're still losing money before they do Toy Story. I I did this entire podcast on this because the first CFO that guy that Steve recruited, he wrote a book about the history of Pixar, which is fascinating. It's episode two thirty five, if you haven't Um, listen to that. It I would go back. We could there's that's almost like another Steve Jobs episode because he's obviously a main character in there. But just the level of persistence is just unbelievable. So I I don't want to get distracted though. The point I'm trying to make here is in the middle of Failure at failure at failure is one of his greatest successes. He just didn't know it at the time.

36:56 So he visits the graphics group, which is what Lucas's division is called. And he realizes oh these are the these are the best in the world at what they're doing. Apple should buy them. At this point he didn't have any sway with the board, he's just about to get kicked out. So they're like, no, Steve, we're not buying them. Uh he visited the graphics group made up of leading edge computer graphic technicians who were working for film director George Lucas. and began to think that the possibilities for computers with high end three D graphics images were limitless. This is in the eighties this is happening. So he suggested that the Apple board might want to consider buying the group. These guys were way ahead of us on graphics, way ahead, Steve said.

37:30 They were way, way, way ahead of anybody. I just knew in my bones that this was gonna be very important. The board was not pay much attention to Steve anymore and they passed on acquiring what would eventually become known as Pixar. So he gets fired, he goes into a deep, deep depression. This is extrem incredibly important for you and I to realize the ups and downs of life.

37:49 Never end until we die. And especially for entrepreneurs because this entrepreneurial emo emotional roller coaster, the best term I've ever heard about this comes from Mark and Dreeson, where he's like, Listen, if you're building a company, you only experience two emotions. And they're almost like there's like a bipolarness to this. It's euphoria. In terror. We are in the terror.

38:06 part of Steve Jobs' story. You have one of the most aggressive driven people that have ever lived. and he's completely lost. He's thinking about leaving the computer industry forever, retiring and being an artist in Europe. For a while he behaved more like a retiree. Then one of the world's most highly driven thirty year olds.

38:25 He just wasn't ready. He did not have the skill set yet to group to be able to not only found a great company, but to lead a great company. He was a slave to so much else, to his celebrity, to his unbalanced and obsessive desire for perfection. to his managerial flightiness, to his shortcomings as an analyst of his own industry, to his burning need for revenge. And The most important part.

38:48 to his own blindness of his faults. At thirty years old, Steve Jobs wasn't Ready. And why is that important for you and I to remind ourselves of that? Because in this

38:58 industry. There's like this entrepreneurial industry that gives into this myth that you have these like young twenty something year old geniuses that start a company and can do it for a long time and and they just intuitively get it. You and I know. How many biographies of in the history of entrepreneurship have we gone over? I can't think of an example. Where the younger version of the entrepreneur is better than the older version. That doesn't mean you can't have success as a young person, doesn't mean obviously you can't start a company, you can manage, you can keep you can do it for decade after decade.

39:25 But if all these entrepreneurs, if we could if we could dig them up from their grave and ask them at what point in history do you think at one point in your life, do you think you were the the the like a peak of your powers, the best. They're not gonna say when I was twenty, when I was twenty five When I was thirty. A main theme of this podcast that is root in like my subconscious now. Is that time carries most of the weight. And in nearly every case.

39:46 You can have a forty or fifty year old version of the entrepreneurs you and I study And if they we were able to b have them do a one on one battle for their twenty or twenty five year old version of themselves, they would kick the living shit out of them. The forty five year old version of Steve Jobs. Could take

40:02 Ten. of the twenty five year old versions of Steve Jobs. And the reason I bring this up is because I talk to founders all the time. And someone's like, Oh, I'm thirty, I'm thirty five, I haven't achieved what I what I what I thought I would at this age, or oh, it's too late. Bullshit. If you're in that spot, just keep going. People that are learning machines and they refuse to quit.

40:19 Are incredibly hard. To beat. Steve Jobs was a learning machine. Who refused to quit. And in this book that I hold in my hand right now, you have a thirty year old Steve Jobs saying I give up.

40:32 I can't do this anymore. I am broken hearted. But that feeling past. He got up. Dustin himself off, said okay, you win the first fight.

40:41 Now best two out of three. Here's another example of Steve Jobs, a young Steve Jobs not being ready yet. He's raised a bunch of money from Ross Perot, from giant corporations. Every single decision he's making, it winds up being the wrong one. There's an entire book about that, like I mentioned earlier. Please do pick up that book and read it, especially if you're in the middle of building a company. And why did I just say that a forty-five year old Steve Jobs or a forty-year-old Steve Jobs would kick the living crap out of the younger version of him?

41:09 He is trying to do a negotiation with a giant company, IBM. He needs this money right now. He needs a win. They're about to give him them sixty million dollars that he desperately needs. And we're gonna contrast this right now. With the Disney Pixar negotiations that he's gonna do like fifteen years into the future, which was a masterful negotiation. This

41:30 is the whatever the opposite of a masterful negotiation is. IBM had decided to license his next step operating system for use in uh for use in a line of its own engineering workstations. The world's biggest computer company running Steve's operating system seemed like it would be a great endorsement. They would also provide sixty million dollars, which was critical operating capital for Next at this time because they were burning through its investors' money. But Steve never seemed to quite know how to play his card with IBM. He displayed an unsettled and juvenile mix of hubris And uncertainty.

42:06 There was one meeting where he went in, one meeting with IBM obviously, where he went in and actually told them, I really don't understand why you guys want to help us. psychologically and emotionally, signing on with IBM was every bit as complicated for Steve as begging Bill Gates to support his computer. So they're talking they're referencing a story that happened earlier. In the the history of next. Where he's like, Bill, we like he's at this point, uh they were still Steve was still trying to make next hardware and he's like, Bill, we need you really to uh to build software for this thing, please.

42:34 And remember the reversal of fortunes. They meet in Steve's office. Steve's a richer, more successful than one. Bill Gates is twenty six. Now a decade later the rules are completely reversed, right? Ste I I think at this time Bill Gates is close to being a r one of the richest people in the world, and Bill Gates tells Steve Develop for it. I'll piss on it. And so he shows his ruthlessness. He's like, You're not selling anything, this market is tiny, I'm not developing anything for it.

42:56 So that's what they're referencing there. So sa Steve wanted to be the hero, not a secondary partner to a more powerful Computer company. Uh if I BM sold a lot of com computers running their version of next next step, the glory would be theirs and not his. Remember there's ego.

43:09 I understand that's not the ideal situation, but you're burning through money You're not selling anything. Of like the first I think they they start next with him and like five other people. Almost all of them are about to leave very shortly. So he's in dire need. That's why you have to get this deal done.

43:24 And so it says he killed the IBM deal by failing to follow through as a good business partner. So the person that Eventually the the person that reached out that wanted to do the deal, it gets replaced, so now there's another person running the company or the p or in charge of the civil This uh division rather. And his name is Conovino, I think. So it says Conovino logically assumed IBM could use next two point oh version on its machines, but then Steve

43:46 Met him. and held him up for more money. Leading to another round of protracted negotiations. And this w they say Steve overplayed his hand. This this Conovino guy got pissed off.

43:57 And you just stopped taking Steve's calls and just abandoned the project. And what this book does wonderfully is comparing and contrasting. When he's making every wrong decision and next, right? He's in the middle of a giant failure. Another part of him was spending time at Pixar. And Pixar

44:13 The experience he has a Pixar. It's Everything. For Steve's growth. as a leader and a CEO later on.

44:19 when he goes back to Apple. At Pixar he would lay the foundation of two of his greatest strengths, his ability to fight back in times of distress, and his ability to make the most of an innovation that put him ahead of anyone else in that field. In other words, it taught him how to keep his head and fight back when cornered. And how to run like the wind in the open field, and it became the place where he really learned. And this is this is so important that the what they're about to the point he's trying they're gonna make right here. Albeit slowly, so he's really learned.

44:45 But slowly and reluctantly and against his natural instincts. This is the evolution, remember, becoming Steve Jobs, the evolution of a reckless into a visionary leader. This is the beginning of the evolution. He began to go against his natural instincts that sometimes the best management technique is to forego micromanagement and give good

45:06 talented people, the room they need to succeed. The co founder of Pixar, the guy that wrote Creativity Inc. Ed Catmall taught more taught Steve Jobs more about management than anyone else in his entire career. Although it would take almost a decade, Steve's Pixar adventure would help him rediscover his self respect, make him a billionaire, and align him with people who would teach him more about the management than anyone he'd ever work with. Without the lessons he learned at Pixar, there would be no great second act at Apple. And they're gonna make the case that Catmole Ed Catmull is the best manager of creative people ever. Overseeing the Motley crew at Pixar had turned Catmill into an expert imaginative manager of creative people. He started treating management itself as a kind of art. This quiet bearded man with a measure professional demeanor knows more about managing and motivating creative people than anyone I've met. So this is now Brent. Remember he covered

45:53 the technology industry. He's interviewed a ton of people. Seventies, eighties, nineties. all these entrepreneurs and very formidable founders, many of which I've done uh episodes about, right? He's saying, Listen, this guy knew more about managing and motivating creative people than anyone I've met, including Sony's founder, Akea Marita. Intel'dy Grove. Bill Gates

46:12 Jeffrey Katzenberg and South West Airlines Herb Keller. His success. would prove a powerful example for Steve. At the end of his fantastic book, Creativity Inc., there's an after word called the Steve We Knew. I think it's like twenty or thirty pages.

46:26 And he just tells a story of his relationship. With Steve. And he's just like the Steve that's reported about in the news, his public persona, this is after he passed away, obviously, is not the person that I worked every day with. Uh you know, w they they had the longest uninterrupted partnership.

46:41 in Steve's life. It was like twenty five or twenty six years, twenty four years, something like that. And so I just want to pull out one or two things that Camellow says in this book because I think this is so important. Over time. Catmole became perhaps the keenest observer of Steve Jobs. This isn't what he says. He's like this reckless

46:57 jerky asshole behavior that Steve was known for when he was in his twenties and thirties was true. But it was a deficit of skill. This blue my mind. Capmel call Cadmill saw potenti potential for change. There were times when the reactions against Steve baffled Steve. I remember s him, meaning Steve, sometimes saying to me

47:17 Why are they upset? What What that said to me was that he didn't intend to get that outcome. This is the most important sentence of what Ed is telling you and I. І воз алак в скіл.

47:29 As opposed to meanness. A lack of skill of dealing with other people. It's already mentioned earlier, the fact that it's how many investors would have done? It's like I have seventy million.

47:40 I believe in this. My my main company, Next, is not doing well. I'm gonna dump fifty million of the seventy million I have. Into Pixar. And I'm still writing checks every month. Every month. The crazy thing is

47:50 Up until they do this d distribution deal, the original distribution deal with Disney. Steve is floating the company every month. Just like It's there's no end in sight here. And so

48:01 This is just a few sentences. And there's j it just jumps off the page if you've done any studying about Steve Jobs, Pixar next, Ed Catmill, anything else. And so we go back to what Catmall says. Steve once told us That he had nothing to prove when he started next, Catmole recalls. На I don't believe that for a second.

48:18 We knew that he had everything to prove what next. We were the only other gamble that he took. And he said we turned out to be such a handful to begin with, that he stopped taking any other gambles beyond those. No. I'm gonna pause there before I get to my second point, because I wanna make the first point here.

48:34 This is remarkable. He didn't know. If you think about what's taking taking place and what Camel just told us and where we are in the history of Steve Jobs' life Steve did not know then. But these two bets were all he needed. Pixar is gonna make him a billionaire.

48:48 Few years from now. Next gets him back to Apple. And then the lessons he learned in his wilderness years turns helps turn Apple into the most valuable company in the world. Then we get into Catmole's next point. Steve's main reason for keeping Pixar alive. was that he still believed in this little band of geniuses and their leaders.

49:07 The business seemed to be even though the business seemed to be going nowhere. He had great admiration for Catmole's business and management expertise and then The other co-founder is Lassiter, which is probably the greatest animator of all time. And Lassiter was one of those rare geniuses who can always make life seem full of possibilities. What's the second point there? Everyone tells you.

49:26 Bet on small groups of smart people. Bet on small groups of smart people. Steve actually did it. And then there's a caption in the photo overlay. In the middle of the book you see Ed Catmall's face the caption is the perfect summary of what I'm trying to get across.

49:41 Watching Pixar's president Ed Catmill, Steve absorbed a series of lessons about managing a creative corporation that became the foundation. evolved is another way to think about that, right? His moderated behavior Upon his return to Apple. at this point in Pixar's history, they're ch still trying to sell I'm pretty sure they're still trying to sell computer hardware. There's actually a uh c their computer's name, the Pixar computer. That's where the company's name came from.

50:05 What add and Lasseter, what Cabmel and Lassiter really wanna do is they wanna make the first the world's first computer animated full feature linked animated movie. And so to show off some of the things that their their storytelling ability and what their hardware and their technology could do. They would do these little short films they could be like five minutes long, eight minutes long.

50:24 But This is like this is just a paragraph. But there's so many lessons embedded in here. If we're gonna if me and you can pause for a second and really think about what's happening, okay. So Main thing here is like like Edwin Lann, who you and I've just discovered the last or just discussed the last two weeks. Edmund Land made a lot of non economic decisions. Steve did s Steve did too.

50:43 When Lassiter had gone to Steve to get approval for the budget of a short film called The Tin Toy, Steve's response had been Just make it great. Tintoy winds up winning the Oscar. For the best short animated film.

50:56 It's incredible. So then Steve. winds up after they win the Oscar, he takes everybody out that had worked on the short film to dinner. And this is now a part of his life, at least for one night where we have the euphoria. aspect of the emotion the entrepreneur emotional roller coaster.

51:09 Euphoria and terror. At least for one night. This is a euphoria. He was so proud, Lester said. I remember grabbing the Oscar and putting it right in front of him at dinner. You asked me to make it great, I told him, There you go. That was the dinner where I met Lorene.

51:22 This is gonna wind up being his wife. He's j I think it's just his girlfriend at this point. She yep, that's right. She and Steve had started dating a few months earlier. We just love being with the two of them that night because Steve was so clearly in love. He had his arm around Lorreen all night. And he was so happy. So full of feeling like everything Is champagne bubbles in your life. He was so excited.

51:42 He had won an Oscar. Enhi had this marvelous woman. And so this is the note I wrote myself when I got to this part of the book. Pause here. Think about this.

51:52 This is nineteen eighty nine. He has at least six to seven years. of intense struggle ahead of him. He has already gone through Four years.

52:03 Of stagnant failure, and that is after having his heart ripped out. By losing the company he founded. This is my punchline to myself that I want to share with you. It is one thing to know that you have to persevere. It is another thing completely

52:19 To actually do it. And something that's gonna help you persevere is a lesson that Steve learned directly from Pixar. And their process in making Movies, which can be applied to building any product or any company. And this is what he learned.

52:35 Creative thinking at its best. Is chalk full of failures and dead ends. And Catmill says when you're out there on the edge, some things go right. And some things go wrong. If nothing is going wrong.

52:47 You're fooling yourself. And Steve believed that. And Steve's receptive to learning from Ed because he believes in Ed's mind. I like him from the very moment I met him, Steve told me. He found him an intellectual match. Ed is a quiet guy, and you can mistake the quietness for weakness, but it's not. It's strength.

53:04 Ed Ed's really thoughtful. This is all Steve talking, okay? Ed's really thought and he's really, really smart. He's used to hanging around with really smart people. And when you're around really smart people You tend to listen to them. What did Michael Jordan tell us, right? I told you when I read Michael Jordan's biography. His seven hundred page biography is called Michael Jordan the Life. It's all the way back on episode two twelve. That book changed my life.

53:25 That's a main theme that Michael would say over and over again. He's like, I'm not too dominant and you know, you have one of the most maybe the best at his job than anybody's ever been at their job, right? Then you have one of the most aggressive and dominant like alpha personalities to like alpha male personalities, right? And yet he's telling you over and over again, he's like, I'm not so dominant that I don't listen. Successful people listen. Those that don't listen don't last long. That is a quote from Michael Jordan. What are we hearing that's When you're around really smart people

53:49 You tend to listen to them. Steve listened. He listened to Catmole. Steve was constantly trying to learn. So at this point in the story Apple has already brought next. Steve's still trying to figure out, okay, do I wanna become back as like full time CEO? Like what am I actually gonna do? My life is pretty good.

54:07 But in the meantime, he's like renegotiating the Pixar deal for uh with Disney. That was his main thing. He's like he was their protector, he was their financier, but he also did all the negotiating because they didn't need his advice on how to make a movie. He's just that's not the role he's he's playing. Now this Highlight I'm about to read to you. is one of my favorite highlights that I made in this book. Remember I haven't read this book. It's probably been four years since I read it the first time. And it expresses an idea that I've compressed down to a maximum that I've repeated over and over again on this podcast, and that's bad boys move in silence.

54:37 When you have something that's working. You do not Talk about it. You shut up. Because the more you talk about it, the more broadcast you broadcasting you do about it.

54:46 The more it encourages Competition. Stief is intensely studying. Wha what like what is the pot like how valuable could it possibly be to Disney

54:57 And he realizes Disney shuts up about it because they don't Want to encourage competition. And he does it In a fantastical short short story. He was truly proud that he and Lawrence Levy had studied Hollywood. That is the guy I told you the CFO that wrote the book that I did on the past podcast, okay? And they had learned enough to understand how Pixar could cut a great deal.

55:17 In an industry. That thrived on plundering, this is Steve's own word here. the industry thrives on plundering the dumb money. This is my favorite part.

55:28 This is Steve Song. You can't go to the library and find a book titled The Business Model of Animation. The reason you can't It's because there's only been one company. Disney that has ever done it well.

55:39 And they were not interested. In telling the world How lucrative it was. So then we go into Steve's deliberation, this decision, am I going to Is it even he didn't even know if it was possible to be CO of two publicly traded companies'cause he was CO of Pixar at this time too.

55:55 And so we go into like his deliberation and then there's just an hilarious Andy Grove story. to know Andy or to know about Andy is to love him, as you'll see in a minute. According to his wife Lorreen, he was still torn about whether to go back. She knew that her husband was most fulfilled when he was tackling something gripping and important. And there's all this series of questions he's asking. Was he even convinced that it that Apple had the people and the resources to become competitive? Did he really want to work that hard now that he had a young family? Did he want to risk what was left of his reputation?

56:22 Steve didn't know it at the time, but his indecisiveness was actually the kind of breakthrough. Stів was developing a more nuanced measured approach to decision making, more about his evolution, right? The point of the book is to study his evolution, to realize who you are today is not going to be who you are at your f in your final form. Steve was developing a more nuanced, measured approach to decision making. Then Steve called his friend and confidant Andy Grove. Steve told Grove that That he was torn about whether or not to return as Apple CEO.

56:53 And wound his way to his torture deliberations. Grove. Groud. Steve. I don't give a shit about Apple.

57:01 Just make up your mind. And then he hung up the phone. And that helps Steve make the decision'cause he's like, Oh I do give a shit about Apple. This is the CFO of Apple at the time describing why it had to be Steve. We needed a spiritual leader that could bring Apple back as a great product and marketing company.

57:19 And nobody else great. who had those skills was gonna take on Apple at that time. We had to have. Steve. Yeah.

57:27 The founder is the guardian of the company's soul. Steve was the guardian. of Apple salt. Then I wanna bring up another point, one of my favorite stories, again, I think speaks to this evolution of Steve. Where remember he he was complicating a deal that he desperately needed done?

57:43 uh with next and IBM. He completely overcomplicated it, move too slow, messed it up, right? Now he's coming back to Apple, they're losing a bunch of money. He so he calls up Bill Gates and this is Bill Gates on Steve's simplicity. And Bill does a fantastic job of comparing and contrasting the way Steve negotiated a deal to with the way that uh previous CEO, Gil Emilio, did. Reaching an agreement with Microsoft was absolutely critical to laying the foundation of Apple to be saved. When Steve called on Gates, he kept things simple. He explained that he would be willing to drop the litigation, they're involved in patent litigation, but for a price. Microsoft would need to publicly announce a five year commitment to provide uh office. So my uh soft office for the Mac.

58:21 And then a hundred and then make an investment of a hundred and fifty million dollars in Apple. It was classic, remembers Gates. I'd been negotiating this deal with Emilio and Gil wanted six things, most of which were not important. Gill was complicated, and I'd be calling him on the phone, fasting himself over the holidays, and then when Steve comes in, he looks at the deal and says, Here are the two things I want. And we got a deal done very, very quickly. So we're still in the late nineties, Steve is still trying to turn around Apple, and this is where the author gets to actually have an interview and a conversation with him.

58:50 And he has a question and This is one of my favorite parts of the book because Steve tells us okay, this is why I build companies. And he has a line in here that's just fantastic. He says the company is one of the most amazing inventions of humans. So it says one day I asked him if he had come to enjoy the process of building companies, now that he was trying to do do so for the third time. Uh no. He said, as if I were a fool.

59:12 But if he didn't enjoy building companies, he sure had a thoughtful and convincing way of describing why he kept doing it. This is what Steve said. The only purpose for me in building a company is so that the company can make products. One is a means to the other. Over a period of time you realize that building a very strong company and a very strong foundation of talent and culture in a company is

59:34 is essential to keep making great products. The company is one of the most amazing inventions of humans. This abstract construct that's incredibly powerful. Івен софмі і цабата продукс. It's about working together with really fun, smart, creative people and making wonderful things.

59:52 It is not about the money. What a company is then is a group of people who can make more than just the next big thing. It is a talent. It is a capability. It is a culture.

1:00:03 It is a point of view. And it is a way of working together. To make the next thing. And the next one. And the next one.

1:00:12 So in the last episode I talked about this idea that Edwin Land used, that Ake Marito used, and I think it's a very powerful idea. It's this idea that you should hire a paid critic. In the building of Sony and Polaroid, they both use that idea to great effect. It's a way to constantly improve the quality of the product that you're selling to your customers. This is another idea. That's similar to that. Hire an outsider.

1:00:33 That you can trust. And you can organize your thoughts with. So there is and I'm gonna go into how he uses this idea, but Something I learned from um when I read Catherine Graham's Fantastic autobiography.

1:00:45 That was back on episode one fifty two. A main character in that book is Warren Buffett, because Warren Buffett does a major investment. into Graham's company. I think this is happening back in maybe the seventies or something like that. She had taken over the company, right? And her husband had committed suicide. She wasn't expecting to run uh such a large business. And so

1:01:03 Warren becomes like this. Mentor and it's like Like her his her Not only teaching her everything he knows about business. Imagine having Warren Buffett, your one on one duder, you build your company, it's gotta be insane, right? But he also was the person that she would organize

1:01:16 And there's a line from that book I want to read to you because It's called it's Charlie Mungers. Orangutang.

1:01:24 theory. Warren told me he subscribed to Charlie Munger's orangutan theory. Which essentially contended that If a smart person goes into a room with an orangutan and explains whatever his or her idea is, the orangutan just sits there eating his banana. And at the end of the conversation.

1:01:41 The person explaining comes out smarter. Warren claimed to be my orangutan. I heard myself talk when I was with him. And I always got a better idea. of what I was saying.

1:01:53 Steve used that idea. in the rebuilding of Apple, his last and final act. Steve liked having a confidant, someone he could banter with outside the formal lines of responsibility of daily corporate life. Mike Slade serve that function. So Mike Slade is gonna wanna be close friends with both Steve Jobs and Bill Gates. But he did not have a formal position. He would just drop in and sh essentially shadow.

1:02:16 Uh Steve for like a day or two. And then they would just talk. So he said he had made it uh Clear. that Mike, that is, he had made it clear an executive position at Apple. Slade would show up in Cupertino on Mondays and Tuesdays flying down from Seattle. No one reported to him and Steve had told the group that he had no particular authority. But when he was at Apple, he almost never left Steve's side.

1:02:37 Steve did not allow himself to relax With his inner circle. the way he would with Slade. So again, you have an outsider One that you know you can trust. And somebody you can organize your thoughts with.

1:02:48 They help your company, but they're not part of your company. Another trait of history's greatest entrepreneurs. They are involved. They're not putting their feet up. impassive to what the state of their product or the state of their company is. This is the level of Steve's involvement. We went over OS X

1:03:05 Again. And again. Pixel by pixel. Feature by feature. Screen.

1:03:11 By screen. There is nothing. In that operating system. that Steve Jobs did not approve. And so how was Steve able to do this?

1:03:20 And still Have a family life. This was actually really interesting'cause this is an idea that I've uh that's come up a bunch that work y and in many cases like you'll s there'll be like a line in a biography. It's like oh Like his or her work was their hobby.

1:03:34 work is a hobby is basically the idea. It's just like they happen to love it, they're obsessed with it. And so for Steve he's like he had two basically things he wanted to focus on work and family. And so this is Steve's schedule. They're on better footing, they're not gonna go out of business like when they were almost, you know, maybe on the precipice of bankruptcy. Uh he's putting a lot more time and effort.

1:03:52 But now he's st again, he's not he's building out talent just like Ed built out talent at Pixar. And so I just want to read this to you because I think it might be enlightening on how he spent his time. Back when he had been leading the Mac team or driving next, Steve had spent many late nights in the office as part of a small team trying to deliver the next great thing. But now his role at Apple was so different. He was heading up a company with thousands of employees, and Steve managed everything to a small team of senior executives. He could do much of his work via email. He would make it home for dinner almost every night. spend time with his wife and the kids, and then work on his computer late into the night.

1:04:23 on a spectrum plotting how much time parents spend with their kids versus how much time they spend focused on their job, Steve would land far towards the latter end. meaning spending most of his time at work. Both he and Lorreen knew Steve would always work very, very hard. It had been a basic assumption when they got married. Neither of us had much of a social life, says Lorene. It was never important to us.

1:04:43 Lorine often worked beside him at night. He'd spent an hour or two talking over Apple business with her. they'd often then catch a TV show before falling asleep. So that's his basic schedule. I will have to say The way to think about this and you know um

1:04:58 There's a big struggle with you know, you have a family, you're you're addicted to your work or you're fairly passionate about whatever it is. There's two people I think Yeah, there's nothing. Is S Day Lauder struggled with this and Sam Walton struggled with this.

1:05:16 And they're Partial compromise or partial solution, how you think about it. is they made it a family business.

1:05:25 Laughter's husband sold his business. She he worked full time with them. Her son was in college, they would send them this is when Estee Lauder was a private company, they'd send him like all the financials. They would send him email uh there's no email at the time, they'd send him letters about the decisions they're making, essentially like Making sure that communication about the family business, he was in the loop even when he wasn't working on their full time. So when he came back to the company, he knew what's going on. So they there's like they they it's like kinda like what Jeff Bezos said. He's like, I don't believe in work life balance, I believe in work life harmony. So for them. They just said, Okay, well we're still gonna spend a lot of time together, but we're gonna spend time together working on the business that you know is is providing the life that our family enjoys. Sam Walton did this similarly where he had his kids work in Walmart stores from a very, very young age.

1:06:06 Again, I don't think it's not that SA Lauder spent an insane amount of time with her children. Sam Walton didn't either, Steve Jobs didn't as well, but it it's it's a way to spend more time. And as they just said, it's also a way to spend more time with his wife because They're sitting next to each other at the computer at night. He's talking about Apple tour, he's like Then you basically involving with her and again, it's a an a a way to organize his thoughts. And maybe more importantly, not I'm sitting here thinking about it's like a way to organize your thoughts with somebody that you know you can implicitly trust.

1:06:32 Another good question for you to ask. What do I focus on? That sets me apart from my competitors. Steve was always most fascinated with the contact point between a person and a computer. There were good reasons that Steve found this point of interaction so critical. If the point at which a person interacted with a machine was complicated, remember he just got done saying I w they went through Every pixel, every screen, every button.

1:06:54 Everything. He did this for all the devices. There's a fantastic book that talks about this, especially with the development of the iPhone. It's called Creative Selection. is one of the bonus episodes I did in probably two years ago. I think I've read the book three times. Anybody building a product should order creative selection immediately. It's written by a programmer who demoed and worked directly with Steve. You can read in a weekend, it g gives you an insight into how he thought about building products, but it's this idea where he was just completely obsessed about the point in which a person interacts with the machine. And this is the reason. If that point of interaction is complicated, then the customer will likely never unlock its secrets. Most people don't care about the inyards of their computer. They care only what's on the screen.

1:07:29 to through that screen. Steve understood the profound importance of this from the very beginning of his career. It was part of what distinguished him from many of the other computer makers, most of whom were engineers who believe that a rational customer point me to the r to to a rational human being. I don't I'm pretty sure that's like a unicorn, right? Uh most of whom were engineers who believe that a rational customer would of course care deeply about the insides of his or her computer. So again Steve focus on

1:07:58 What's on the screen? a point of contact between the products he makes and the customers he wants to delight to sell his products to and to delight and the qu the way to think about this paragraph, we don't have to remember the details. All we have to say is okay, what am I focusing on and that sets me apart from my competitors. And if you can't come up with something, that's a sign there's more work to do. Another main theme in the career of Steve and almost every other c entrepreneur we studied, they're obsessed with control. They do not want people in between them and their customers. And so they have this idea it's like we're selling all these freaking Apple computers.

1:08:28 And Steve's like I hate these outlets. It's just like they're crappy big box department stores, computer retailers. The salespeople are idiots or he calls them shit. I forgot what he calls them. But uh Again. He evolved and modulated his behavior, but he's still an extreme person, so he never he never got like a n He said he deviated very far from the mean. So he kept that that tree his entire life. I got tears in my eyes right now thinking about it. But um So he he he has this idea, it's like okay, well we're building products that are different than anybody else.

1:08:58 Where our point of focus is different than everybody else, why are we selling them the same way everybody else sells? So he's like just a few months after he comes back from Apple He asked Uh a couple of people in the companies like we need to come up with an online store where Apple could sell its computers directly to customers. And so this guy named Eddie Q is one of the people that is put in charge of this and they have this giant meeting. And everybody in the meeting besides Eddie and Steve thinks this isn't gonna happen because we can't do that because our distribution partners

1:09:24 These channels as they call them. uh they're gonna be mad at us. We don't wanna make them mad. And so says Steve asked the others in the room about Q's proposal, which is about the basic idea of selling direct to the customers online. They were all worried. The most worrisome about about this idea is the potential for alienating our retail partners.

1:09:41 So one of them that's in this reading says that Steve, isn't all this pointless? You're not gonna do this because the channel will hate it. Q. And said

1:09:51 The channel. We lost two billion dollars last year. Who gives a fuck about the channel? Steve perked up. You, he said, pointing to the senior exec.

1:10:01 Are wrong. And you He said, looking at Q. Or right. He asked you to create an online store and have it completed in two months.

1:10:12 Another great idea Steve learned through experience. He has this idea called the Apple Experience, but you could put your c company name in that, the your company name experience. And it's the fact that every single uh experience a customer has with your company, will either add or subtract from that customer's like impression of your company. And so that's why Steve obsessed about every single interaction point, not only with the customer and the screen And the device, but also

1:10:35 As simple as like uploading a credit card or paying for something. Literally every single time the the customer interacts with your company. Look at that point. And eliminate any points of friction or unhappiness that could can cause a withdrawal From your company's reputation with that customer. Steve had begun calling this the Apple Experience. Steve understood that every interaction a customer had with Apple could increase or decrease his or her respect for the company. As he put it, a company could accumulate or withdraw credits from its reputation, which is why he worked so hard to ensure that every single interaction a customer might have with Apple from using a Mac. to calling customer support, to buying a single from the iTunes and then getting build for it.

1:11:12 was excellent. So then I just stumbled across this fantastic paragraph which describes like the it's just cannot believe from the the state of Apple was in nineteen ninety seven when he comes back. To now they've revamped the line, they've s they've increased profitability, they Tim Cook's got Inventory under control.

1:11:29 Their product line is actually understandable to the co consumer. They're starting to They f at one point only saw themselves as a computer company. Now they're starting to make little devices, in fact. What was remarkable was like the building of the iPod. They considered it like a Making a uh computer peripheral is the n is the the term they put on it.

1:11:46 Which is like akin to making like a printer. That is a massive success. Then they build the iTun store and they're they're building all these other things around this. But the point is that they lack the skills as a company to do so. And then once they get the more they gathered skills, the more they gathered learning, it opened opportunities and unlocked opportunities they couldn't see. And so this is why I'm gonna like preach this from the the rooftop as much as they can. And maybe even like make a shirt and sell it, is just like time carries most of the weight.

1:12:12 Like stay in the game as long as possible. Let me just read this and hopefully it makes sense to you. It is so hard to remember given Apple's string of hits. The resulting ubiquity of its later products and the dominant role it eventually assumed in our culture that this rise was entirely unexpected. And a surprise even to the people who engineered it. One little thing led to another, one success, one particular challenge could spur thoughts about another product.

1:12:35 or a different iteration of an existing product, or a whole new channel. of revenue. As Steve liked to say. You can only connect the dots of how things really happened. In hindsight.

1:12:49 Another idea that I think you and I can use. Steve. The synthesizer. Steve did not like the idea of relegating all forward looking tinkering. To a separate area.

1:12:59 Apple did not have a formal research and de p development unit per se instead research projects flowered in pockets all around the company Many of them without Steve's blessing or even awareness. They'd come to Steve's attention only if one of his key managers decided that the project or technology showed real potential. In that case.

1:13:19 Steve would check it out. And the information he this is so my goodness gracious. This is so important. I might I'm gonna read this part. Two times. In that case.

1:13:29 Steve would check it out. And the information he'd glean would go into the learning machine that was his brain. Sometimes that's where it would sit and nothing would happen. Sometimes on the other hand he'd concoct a way to combine it with something else that he'd seen, or perhaps to twist it in a way to benefit an entirely different project altogether. This was one of his great talents.

1:13:48 The ability to synthesize separate developments and technologies Into something. Previously. Unimaginable. That is Steve, the synthesizer. That is going to happen the more time you spend on your company. It is also going to happen the more episodes that you listen to founders, the more of these books. This is what Steve's doing inside his company, we're doing for the entire history of entrepreneurship.

1:14:09 There's gonna be these weird ideas, these weird lines that you hear. These weird stories that you re uh read when you pick up the book that you might use two years from now, five years from now, ten years from now, you might use it next week. It might spawn an idea that you have from a previous experience like Ooh, I'll combine the two. All you're doing is exposing your brain, downloading your brain a bunch of different ideas from geniuses. When it comes to their work, the people that you and I are studying on this podcast are geniuses. They think about it, they're so good at what they do, somebody wrote a book about it. That is crazy.

1:14:39 And they're doing exactly what and I'm doing I'm trying to do this myself. You're obviously doing it, I assume you're doing it as well, but that's exactly what Steve's saying. It's like dude, all these things are pocking up all over All these ideas are coming from all these different places. Many of them are occurring without our blessing or even our awareness, right? All these people built our companies. In many cases they built them and ran them their entire lives before you and I were even born. And that's they didn't need our blessing and we weren't even aware of it'cause we didn't exist. Then they come to Steve's attention only if one of his key managers decided that the project or technology showed real potential. In that case, Steve would check it out and the information he would glean would go into the learning machine that would his w was his brain. Sometimes that is where it would sit and nothing would happen. Sometimes, on the other hand, he'd concoct a way to combine it with something else he'd seen, or perhaps to twist it in a way to benefit an entirely different project altogether. This was one of his great talents, the ability to synthesize separate developments and technologies into something previously unimaginable.

1:15:35 And I just realize something now that I'm rereading this paragra before I read it to you. Embedded in that idea is seeing yourself As just one in a line. Uh Uh the entrepreneurs and company builders that came before you.

1:15:46 And so I uh interesting, a couple of days ago when I got to the section for the first time, or I guess the second time'cause I've read the book twice now. I just pull out just one paragraph from his amazing commencement speech speech at Stanford. I felt that I had let the previous generation of entrepreneurs down. He's talking about what he felt like after got kicked out of Apple, okay? I felt that I had left the previous let the previous generations of entrepreneurs down, that I had dropped the baton. As it was being passed to me. I met with David Packard

1:16:12 And Bob Noyce. And try to apologize for screwing up so badly. I was a very public failure and I even thought about running away from the valley. But something slowly began to dawn on me. I still love what I did.

1:16:26 The turn of events at Apple. Had not changed that one bit. I had been rejected. But I was still in love And so I decided to start over.

1:16:38 So I mentioned earlier. Huge theme of the book is the evolution of Steve. compared, you know, him d making n needing that deal with IBM when he's at next, messing it up terribly, and I said at that point, hey, we're gonna compare this with his Beautiful negotiation. He winds up Ste uh you may already know this, but Steve Jobs winds up being the the largest single shareholder in Disney.

1:16:56 And I'm gonna read some notes that I have took from years back. About synthesizing this in a minute, but I wanna read you Bill Gates on Steve Jobs. Disney negotiation.'Cause Bill's again, Bill's a main character in the book. He's hilarious. But says Bill Gates was astounded by what Steve had been able to negotiate. When he's got the upper hand, he's good at using it, says Gates.

1:17:15 You know, he'd wait people out. Just look at how much of the resulting company, meaning Disney, ends up being owned by this fairly small. And yes, very high tech and very brilliant animation studio. They end up owning a very substantial percentage of the entire Disney A B C ESPN entity.

1:17:31 It is owned by this little animation studio. That took three rounds of negotiation. And by the time the acquisition is being done, Disney is just flat on its back saying, Take me Because of the political dynamics of Disney at the time, the

1:17:45 They needed that win. And Steve knew they needed it. And so several years ago I wrote out In like a quick post form. Uh like just

1:17:54 J how remarkable this this turn of events was that like how the hell does Steve wind up being like not only you found Apple, you make it, you know, make the most successful consumer device of all time or product of all time before you die. But like you wind up being the largest shareholder in Disney. Like How could you not want to study and learn from Steve Jobs? It's insane. So I'm just gonna read you Yeah, I suck at writing.

1:18:16 These are really just like my synthesis of all these books I was reading and this is like years ago. But uh it says uh in nineteen eighty six, Steve Jobs was an exile from Apple, the company that would one day become Pixar. I'm reading my own notes. to you. And this is not in the book, obviously. Uh was called Graphics Group and was owned by Star Wars creator George Lucas. George Lucas was going through a divorce and needed to sell off some assets. Steve agreed to give George Lucas five million dollars for Graphics Group and invest another five million in the company. they renamed the company Pixar. Steve would eventually invest more than fifty million of his own money. This made him the majority owner of Pixar. This is important to know.

1:18:46 This was not the first time Steve Jobs had expressed interest in the technology behind Graphics Group. Years earlier, he had tried to get Apple's board to buy the company, they turned him down. Uh after several years of failing to make the Pixar image computer, Pixar decided to go all in on making films. The problem was that after years of poor sales and rising expenses, they were short on cash. To solve this problem, Steve signed a twenty six million dollar deal to produce three animated films for Disney. The first of these movies was Toy Story, the world's first entirely computer animated feature film. Now here's where the story gets interesting. Steve decided to capitalize on the publicity of Toy Story's release and takes Pixar public at the same time. Toy Story was released on November twenty second, nineteen ninety five. Pixar went public on four days later.

1:19:27 November twenty ninth, nineteen ninety five. His two partners, Ed Catmole and John Lasseter, did not want to go public. They thought it was too early. They wanted to make a few more movies first. That is until Steve laid out his strategy and told him what it was like what was likely coming from Disney. Steve said, Let's assume Toy Story is a big success. It was. It wind up grossing over three hundred and seventy million the first year. Well, when that happens, this is again I'm just so impressed by the clarity of his thinking. Check this out. He's laying this out before it happened.

1:19:54 When that happens, the CEO of Disney, who at the time was Mike Weisner, will realize that he inadvertently created a rival company for Disney animation. Pixar only had to make two more films for Disney and then they'd be free to do as they like. Steve said Izer's next move would be to negotiate to renegotiate with Pixar and keep Pixar closer to Disney's control. Steve said that if they went public and they had more money, they'd be able to negotiate better terms with Disney. Now why did he say that?

1:20:17 Because Their deal with Disney They only got like twelve or fifteen percent. Of the revenue because Disney's putting up all the money. So Steve's like, yo.

1:20:25 Let's take the money, some of the money we got from Pixar. Let's then Go public. Right, the same week that that is a massive success. Then we'll take that money and we'll come back to Disney be like, Hey Uh we can put up fifty fifty we're gonna be fifty fifty partners. I'm putting up fifty percent of the money on fifty percent of the profits. And so let's go back to where I'm at in these notes.

1:20:41 Steve said that when they went public they d and had more money they'd be able to negotiate better terms with Disney. Steve wanted a fifty-fifty split with Disney returns. In order to request this, Pixar had to be able to put up fifty percent of the production costs. Going public would allow Pixar to be able to afford this. The time is now, Steve said. This is our moment. And he was right. A few months later Eisner approached Jobs and said he wanted to keep Pixar as a partner. Eisner accepted Steve's fifty fifty deal. The good times were not to last. Steve and Michael Eisner were like oil and water. They did not get along.

1:21:09 A few years later, negotiations broke down completely and Pixar started looking for other partners. Then Michael Eisner got fired. The new CO of Disney was Bob Iger. Bob Iger found out that He was going to be the C the next CO of Disney he called his daughters.

1:21:22 The next person he called was Steve Jobs. He laid all of his cards out on the table. He told Steve he valued Pixar and wanted to make a deal. This is Bob explaining why he felt Disney needed to buy Pixar. Michael Eisner did not understand that Disney's problems in animation were as acute as ever. That manifested itself in the way in which he dealt with Pixar. He was like really rough with jobs. When I'm like, We can't afford to be rough with them, right? Because we need h those assets. We need to pick those assets.

1:21:48 He never felt he needed Pixar as much as he really did. Eisern did. Every negotiation needed to be resolved by compromises. Neither one of them, Isern Jobs, is a master of compromise. So that's what Bob that's the mindset Bob Iger is coming into this negotiation when he's about to buy Pixar for seven billion dollars, right? Still in my notes, by the way. So this is extremely hel helpful. I should do this more often. Anyways. But wait a minute. How did Bob come to a realization that Disney needed Pixar? You won't believe this. A random parade at a Disney h at Disney Hong Kong made him realize how important Pixar was to Disney. Iger realized he's standing next to Eisner when this happened. It's just amazing. Iger realized that the only characters in the parade that had been created in the past decade were Pixars. A light bulb went off.

1:22:26 I'm standing next to Michael. But I kept it completely to myself because it was such an indictment of his leadership. of animation during that period. After ten years of the Lion King Beauty and the Beast and Aladdin.

1:22:38 There were ten years of nothing. Bob begins to negotiate with Steve to buy Pixar and does something very unusual. He does something anyone negotiating would tell you never to do. He tells Steve how badly Disney needs Pixar. Even more surprising, that worked. This is how Steve reacted. That is why I love Bob Iger. He just blurted it out.

1:22:55 Now that's the dumbest thing you can do is you enter negotiation, at least according to tr day traditional rule book. He just put his cards out on the table and said, We're screwed. I immediately like the guy because that's how I work too. Let's just put all the cards on the table and see where they fall. And it was it really a dumb idea? No, of course not, because Disney purchased Pixar for seven point four billion dollars.

1:23:15 How much would Pixar be worth today? If it was still a private company, hell of a lot more than seven point four billion. And the fact that Disney can capitalize on those assets like to a greater degree than any other contact company in the world, right? Steve Jobs was the single largest shareholder in Pixar. This made Steve Jobs the single largest individual shareholder in Disney.

1:23:34 That is how Steve Jobs ended up owning so more d so many Disney shares. So that is exactly What Bill Gates that's a longer story, more detail. That came from multiple books I had read and in synthesizing that information. Across multiple books. And there's just like one note that is you know, it's extremely useful for me to go back and and just relearn these lessons over and over again.

1:23:53 And so now we get to the part where I actually want to end. It's what I mentioned earlier. I started the podcast with To me, one of the most important events. In Steve Jobs' life as a kid. Five, six years old, his dad telling him. This is your work between.

1:24:06 You can build things. You can make things. Let's explore all the made objects around us. Let's learn how they're made. And let's add a contribution to the world. That is what you and I are doing as product builders, sp as creators of products that make other people's lives better. Right, that is all a business is. Just an idea that makes somebody else's life Better.

1:24:27 So once we do that. Then we need to define What success Is And this is the way Steve and Johnny I've defined success.

1:24:36 I remember a conversation in which we talked about how do we define our metrics For feeling that we have really succeeded. Johnny said. We both agreed clearly. It is not about share price.

1:24:49 Is it about the number of computers we sell? No. It all came back. To whether we felt really proud. Of what we collectively

1:24:59 had designed And built. Were we proud of that? That's a great question to ask ourselves. Great question to close on for the full story.

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