Santa Cruz Good Times

An Early Profile of Steve Jobs
In the early 1980s, the late Santa Cruz writer James D. Houston, who had come of age in the Santa Clara Valley and who later studied at both San Jose State and Stanford, was one of the first journalists to explore the burgeoning computer industry on the other side of the Santa Cruz Mountains.

His seminal work of nonfiction, “Californians: Searching for the Golden State,” originally released by Knopf in 1982 and presently published by Otter B Books, included a lengthy profile of one of the young leaders of the computer revolution, Steve Jobs. Houston spent an afternoon with Jobs in Cupertino—not far from where both Houston and James D. HoustonJobs had graduated from high school—and conducted a candid and uninhibited interview with the self-assured entrepreneur, long before he became a global icon. In the immediate aftermath of Jobs’ death—and at a time when Walter Isaacson’s authorized biography of Jobs has become a runaway national bestseller—Houston’s fascinating early portrait provides a unique glimpse into the mindset and persona of a young man out to change the world and who, as the following excerpt reveals, was convinced of the certainty of his success.
— Geoffrey Dunn

Not long ago someone wrote to the San Jose Mercury News complaining about the way the term “Silicon Valley” turns up more and more often as a synonym for the Santa Clara Valley.  “They are not the same,” this citizen cried out.  And I agree with him. The valley called Santa Clara has been here in its present shape for many thousands of years—a flat and fertile basin, in times past a submerged and southerly extension of San Francisco Bay, and still bordered by parallel ridges of the Coast Range.  Silicon Valley is a very recent event, and it exists much more in the mind than it does in the landscape.
Physically it is a collection of low buildings that have been added, laid into various niches and cleared spaces like a scattering of heat-resistant ceramic tiles, around and among the various towns that now contain it: Palo Alto, Los Altos, Mountain View, Sunnyvale, Cupertino, Santa Clara, San Jose.  The four long, low buildings that house Apple Computer—sand-colored, with red roof-tiles in the mission manner—are so new, green plastic nursery tape still flutters around the saplings staked outside.  They have to be new.  Six years ago the personal computer industry did not exist.  At the moment, according to the fellow I am about to meet, it is the fastest-growing industry in the history of American business. “In six years,” he will soon be telling me, “from zero to a billion dollars.”
His name is Steve Jobs.  Together with his partner, Steve Wozniak, he developed the first Apple when he was 21 years old.  Now he is 26, lean and purposeful as he comes striding toward me through the lobby of one of his buildings.  He wears jeans, sandals, a plain checkered shirt.  His dark brown hair is collar length, his dark beard trimmed.  Behind the rimless glasses his eyes, very shrewd and watchful eyes, show a glint of amusement as he says—and this is his opening line—“I have to walk down and draw some money out of the bank.  How’s that for an introduction to Silicon Valley?”
He is flying out tonight to Boston, to a gathering of some 10,000 people who use his company’s equipment—a gathering called The Apple Fest, where he will be the keynote speaker, and he has run short of cash.  So we walk two blocks to the nearest Bank of America, another new, low building that presides over a recently completed shopping plaza.  From the way Steve prowls around looking over the tellers’ fences I figure that whoever usually handles his accounts is not here.  Finally he steps into the long line of customers waiting for service.
I am struck by the humbleness, or perhaps it is the sheer youthfulness, of this move.  Here he is, vice chairman of a company that in recent months moved $250 million through the securities markets, a company that, according to Time magazine, enjoyed “one of the biggest and most successful stock launchings in the history of Wall Street;” here is Steve standing in line at the neighborhood bank waiting to get some spending money for his trip to Boston.
This is not, as I quickly discover, an uncharacteristic moment.  Loose is his middle name.  He is loose of limb and loose on formalities.  At the corporate headquarters he has no parking slot of his own.  In his office, which is the size of a small kitchen, the desk is right-angled into one corner, more like a tinkerer’s workbench.  On the wall above it, there is one embellishment, a small frame around the red and vibrating word:

THINK

We have come back to his office to talk about the history of Apple—which is really the history of his relationship with Wozniak and with these two coexisting valleys—and when we sit down at the round, breakfast-sized conference table in the center of the room, he slips off his sandals and puts his bare feet up there next to the table’s one decoration, a small transparent apple made of solid glass.
“I first met Woz when I was 13,” he says, “in another friend’s garage.  He was four years older than me and had just graduated from the same high school I was about to go to.  He was the first person I met who knew more than I did about electronics.  I started hanging around him after that, soaking up all I could.  We became friends and have been friends ever since.  I’ve known him now for 13 years.  That’s half my life.”

Jobs was still in high school when they teamed up for their first collaboration, which he begins to describe, then hesitates.
“I don’t know if I can tell you this.”
He turns to look out the window.  “What’s the statute of limitations, seven years?  Woz and I …” Another pause.  Then he laughs.
“Did you ever hear of a blue box?  You know how when you make a long distance phone call, you hear these tones that go”—and he sings the bleeping rise and fall—“doo-doo-doo-doo-doo-doo?  Well, you can make a box that goes doo-doo-doo-doo-doo-doo. And you can basically make free phone calls all over the world.  And we made the best one ever.  We put a note down in the bottom of each one, it was our little trademark.  It said, ‘He’s got the whole world in his hands.’  You could get on a pay phone and get over White Plains, New York, and take a satellite to London and cable to Tokyo, and another satellite back to Paris, and take a cable back to White Plains, and call the pay phone next door.”
I ask Steve if he was taking any electronics courses back in those high school days.
He shakes his head.  “There really weren’t any.  You just got it by osmosis.”
“Osmosis?”
“It’s in the atmosphere.”
Some kids grow up on the ranch and become cowboys.  Some kids grow up in Beverly Hills immersed in show business and become studio executives.  Steve Jobs grew up five miles from where we’re sitting, in what appears to be a suburban neighborhood like thousands across the land, but you talk to him for a while and you see that he and Woz came of age in this new realm called Silicon Valley just as its headlong energy reached full acceleration.  Neither of them holds a college degree or any of the other emblems of formal training.  Wozniak’s father was an electronics engineer at Lockheed, who had his son designing logic circuits by the time he was in the fourth grade.  A few years later he was already building his own computers.  Jobs in turn learned a lot from Woz, and from belonging to local computer clubs, and from hanging around the neighborhood garages.
He is the first to acknowledge that Apple could only have happened within the unique support system this Valley has to offer.  He feels a sense of lineage that goes back at least as far as the 1930s, and he feels immersed in an environment he is eager to talk about.  He calls it the culture of entrepreneurial risk.
“You do not get penalized for failure here,” he says.  “You are expected to try things.  If you go out on your own and try something and fail, your career isn’t over.  You can actually be more valuable to the next person you work for, because of what you have learned in the process.  It operates at every level.  
“There was a point, when Woz and I were working on the first Apple, [when] we needed $10,000 worth of parts.  So we went to a parts distributor and asked him to help us out.  And he did.  He lent us the parts on a 29-day loan with no credit, because there is a role model for doing things that way.  And you need that infrastructure.  You need the engineer who is willing to go out on his own, and you need the parts distributor who is not going to say, ‘Well, I want you guys to sign over your house.’  He has to be able to say, ‘Okay, I’ll tell you what.  You don’t have a house, but I’ll take a gamble anyway.’  So he lent us the parts, and we went off and built the equipment and paid him back in 29 days.”
Adventurous risk is all around you, along with the legendary results, the breakthrough devices that keep this atmosphere charged up and ever challenging.  Steve’s voice rises with urgency and fills the office when he exclaims, “Look what’s come out of this valley.  Basically, the first integrated circuit.  The first micro-processor was invented 10 miles from here.  The first personal computer.  Now, the first genetics companies.  Probably five out of the top 10 things we’re going to look back 50 years from now and say, these are the 10 things that impacted the world the most, five of them are going to come from right here in this valley.”
The passion in his voice almost has the ring of patriotism, making it that much clearer to me that Steve is talking about his true homeland and native surroundings—this volatile mix of microchips and circuit boards and commerce in the fast lane.  He grew up in the midst of it, with a native’s grasp of how it all works.
The more he talked, the more I began to wonder where this new valley had actually come from, this little country unto itself where, among other things, a new kind of apple had sprouted.  What was it doing here?  When I finished high school in Santa Clara Valley back in 1951, the word “silicon” was still something you maybe heard mentioned once in chemistry class and never remembered.  By the time Steve finished high school, 21 years later, an entirely new type of valley had made its appearance, superimposed upon the original.  But why?  Why here, in a sunny basin that for a hundred years had been cherished for its apricots, pears, walnuts, peaches, and prunes?  
The new industry did not require any of the things the old farms and ranches required, unless it be vision, and hustle, and a gambler’s nerve.  The basic ingredient is a crystalline substance that can be processed in labs anywhere but happens to be processed in large quantities here—in some of these low buildings spread around among the suburbs, often in the shade of surviving walnut trees.
It is strange.  It is almost out of character in a state where most of the industry and so much of the fame has been directly tied to the physical endowments.  Gold.  Oil.  Soil.  Harbors.
If you add climate to that list, electronics too might be said to have a regional and earthly anchor.  Climate explains a lot of what goes on in California, and has helped keep this industry centered here.  But climate is not where it begins.  When I started asking around, everyone sooner or later mentioned Stanford University and a two-way flow of brain power between New England and the Bay Area.  The phrase “critical mass” also came up several times; a gathering of ingredients which acquires its own magnetic effect.  A clustering begins and breeds more of itself.
The earliest name you hear is that of Lee De Forest, who was living in Palo Alto in 1912 when he invented the triode, a key component in the vacuum tube, which made it possible for the first time to modulate or amplify electric current.  De Forest, who had studied at Yale, was working for Federal Telegraph, a company founded in 1909 by a Stanford graduate, with some help from David Starr Jordan, Stanford’s first president.  Today, in one of Palo Alto’s tree-lined, vintage neighborhoods, a small plaque near the corner of Channing and Emerson marks “The Birthplace of Electronics.”
The next name you hear—and this one lurks right at the center of the critical mass—is that of Frederick Terman.  He graduated from Stanford in 1920 with a degree in chemical engineering, went to M.I.T. for a doctorate in electrical engineering, then returned to Stanford, where he eventually became a department head and later provost.  Two of his students in the early 1930s were William Hewlett and David Packard.  Both received electrical engineering degrees in 1934.  Five years later, with Terman’s support, they founded Hewlett-Packard in Palo Alto, now one of the world’s largest electronics firms, with annual sales more than $3 billion.
Hewlett and Packard are the archetypal Silicon Valley pioneers.  The way they started—in a garage—has become the classic way.  This is where Apple got started.  According to Steve, this is where some of next year’s discoveries are already in the works.  “There are guys in garages all over,” he says.  “I could show you thousands.”  
When Steve Jobs and Steve Wozniak met up again—after a few years of going their separate ways—they began to tinker again in the family garage in the summer of 1975, and the home computer, the classroom computer, the computer for the small partnership and the backyard businessman, the preassembled, personal, and affordable computer you could unwrap and plug right in was an idea whose time had come.
Like one of those radiating lightbulbs above the inventor’s head in the old-time cartoons, the idea was hanging in the air above the entrepreneurial garage door, which from the street still looked much like any number of garage doors between San Jose and Daly City.
After high school, Jobs spent a year and a half at Reed College in Oregon.  When he ran out of money he came back and worked a while for Atari, the video game company, in Sunnyvale.  They sent him to Europe, and not long afterward he was off by himself on a six-month trek through India.  Wozniak, in the meantime, had been to the University of Colorado and had done a few quarters at Berkeley.  He had designed a computing calculator and low-cost hobby kit.  He was working at Hewlett-Packard designing hand-held calculators, when he and Jobs began thinking their way toward a new kind of machine.
“We had designed—mostly Woz, actually, but a little bit on my part—a little terminal you could hook up to another computer to use cheap.  And we thought, well, we don’t just want a terminal, we really want a computer.”
They spent six months designing the prototype.  Now, from a cabinet below his desk he pulls out an uncovered circuit board and casually tosses it onto the table, in the same way I have seen writers showing the galleys of a first novel long out of print, a thin packet of ink-filled pages that represent a year of one’s life.  It is the size of a small hand-tray, packed tightly with rows of dark blocks.  In one corner I see the stamped letters Apple I.
“Only 200 of these were ever made,” he says.  “That was the first computer we designed together, and we basically designed it because we couldn’t afford to buy one.”
When they showed their idea to a local retailer, he immediately said, “Great! I’ll take fifty!”
In a matter of seconds they had gone from zero to a $25,000 order.  All they lacked was a company, and some start-up capital, and some merchandise to sell.
Making what some Californians would consider the ultimate sacrifice, Jobs sold his VW van.  When Woz sold his HP-65 calculator, they had a total of $1,300.  They borrowed some parts, and while Woz worked overtime perfecting Apple I, Jobs got on the phone to organize the fledgling corporation.
“What was your feeling at that point?” I ask him.  “Did you know you were on to something very large?”
“Yeah.  But not this large.  Woz and I had done a lot of stuff together, the blue boxes, and other ideas.  At that point ‘large’ meant, Boy, if this really flies, maybe we can afford to buy a house, or get the car back.”
By the summer of 1976 they were designing Apple II.  Simultaneously, as Steve says, “We had to learn about marketing and distribution.  And so we did.  I wrote the first ad myself.  And we got it placed.  We wrote a technical article.  And we got that placed.  We started finding dealers.  We called up Intel and asked who their ad agency was, and they said, Regis-McKenna, so we called up Regis and went over there and said ‘We want you to do some ads for us but we don’t have any money to pay you.’”
Regis-McKenna is a Palo Alto agency that specializes in high-tech Silicon Valley companies.  On the day I visited Apple, Rene White, the fellow supervising their account, had spent the morning with a writer from the Wall Street Journal briefing him on the mechanics of gene-splicing.  Five years earlier, when Jobs and Woz came asking for ads on credit, Regis-McKenna said, “Go away.”
“They told us ‘Go away’ four times,” Steve says, smiling.  “Finally they said, ‘OK, we’ll do it.’ And we became their largest account.”
Call it brass. Call it moxie.  Call it self-assertiveness.  Or call it, as Steve does, “the entrepreneurial risk culture.”  Whatever its source, Jobs and Woz were never afraid to ask for what they wanted, or to go right to the best people they could reach to find answers to whatever they needed to know next.  In Steve’s case, he seems to have discovered it early in life, perhaps by osmosis.  “When I was 13,” he says, “I called Bill Hewlett on the phone and asked him for some parts I needed to build a little piece of electronic equipment I was working on.  And he helped me out.”  With another smile, he adds, “I actually got a summer job at H-P, too.”
From other Silicon Valley firms they hired away some top management people to help orchestrate the company’s growth.  Healthy sums of venture capital soon followed.  In 1977, the year Apple II was introduced, sales hit $2.5 million.  In 1978 the gross was more than $15 million, and in 1979 it had jumped to $70 million.  By the time I talked to Steve that annual figure had increased fivefold, 1,800 people were on the company payroll, a quarter of a million Apples had been sold, and there was no end in sight.
In August of 1980, a full-page advertisement for Apple had appeared in the Wall Street Journal and had caught my attention:
”What is a personal computer?”
Let me answer with the analogy of the bicycle and the condor.  A few years ago I read a study—I believe it was in Scientific American—about the efficiency of locomotion for various species on earth, including man.  The study determined which species was the most efficient, in terms of getting from point A to point B with the least amount of energy exerted.  The condor won.  Man made a rather unimpressive showing, about one-third of the way down the list.
But someone there had the insight to test man riding a bicycle.  Man was twice as efficient as the condor!  This illustrated man’s ability as a tool maker.  When man created the bicycle he created a tool that amplified an inherent ability …
Now, there are not many places in the world where you will find this particular gathering of images.  A bicycle.  A condor.  An apple.  And a personal computer.  Something more than circuitry is going on here, I thought.  A sense of poetry.  Perhaps even a sense of history.
It had all been a triumph of timing and superb design, together with a brilliantly simple packaging idea.  Something about the Apple catches the imagination in a way that the equipment inside—the integrated circuits, the micro-processors—never could.  The name, it turns out, was Steve’s idea, along with the condor and the bicycle. Apple.
“I thought it up,” he says.  “But Woz and I talked about it for a long time.  We wanted a name that wasn’t so harsh and didn’t have such a heavy connotation.  For a lot of people, ‘computer’ is still a scary word.  Apple is sort of warm and takes the edge off it.”
“It’s earthy,” I say, “organic, nonthreatening…”
He interrupts me, bristling slightly, and I see that his sense for connotation is carefully tuned.  “‘Organic’ is probably the wrong word,” he says.  “We just wanted something simple and friendly.”
At a computer convention in San Francisco a few months earlier I had seen a young woman walking around in her clogs and her jeans and a snug-fitting Apple T-shirt, with a big bite chomped out of the apple. Does that suggest anything, I pondered. Eve? The Garden of Eden? The Tree?  The Original Apple?  The question is: When Eve sank her teeth in to take that first karmic bite, what was she after?  She wasn’t after vitamins and minerals, as I understand the story.  She was after more knowledge, more information.  The eternal human quest.  And the more forbidden, or forbidding, the information, the more urgent and attractive that quest becomes.
“What about the bite?” I ask, still thinking of Eve, at her fateful moment.  “Who decided to take the bite out of the side?”
“Oh, that.” He laughs lightly. “A fellow at the agency is the one who designed our logo.  He did it sort of for fun.  It’s a pun.  Byte is a computer term.  Technically, eight bits of information.  I guess the main reason, graphically, was he wanted to make sure everyone knows it’s an apple.”
“What else could it be?”
“A cherry.  He wanted to make sure no one would mistake it for a cherry.”
Hmmmmm, thinks the writer, deflated.  So much for the biblical symbols.  I had been ready to ask him about my Garden of Eden theory.  At the mention of puns and cherries, I decided against it.
Steve is getting restless.  He takes his feet off the table and slips them back into his sandals.  He has things to do before catching the plane to Boston.  A writer from Fortune magazine is waiting to talk to him.  Then he has to pick up a suit.  “All my suits are either in a state of disrepair,” he mutters, “or at the cleaners.  And they close in an hour.”
There is time for a final question, and I am relieved to hear that his reply answers the one I did not ask.  In an oblique way he confirms my reading of the logo.  Eve bit into the apple and opened whatever secrets had been locked inside The Tree of Knowledge.  It is Steve’s belief that a bite into Apple II, or Apple III, is a 1980s way to liberate some new resources of the mind.
I ask him if he actually foresees the day—the one we so often hear predicted now—when every home owner will have the console and the personal keyboard.
“They are going to be in every school and office first,” he says.  “Eventually in every home.  We think there is a revolutionary process going on here, which is the integration of personal computers into the society at a very individual level.  That is going to take about 10 years to happen, and we want to be a driving force behind that.”
He leans forward and his voice accelerates, with the same fervor I heard when he summed up this valley’s history.
“It’s my belief that each time there has been a new source of free energy, civilization has taken a step forward.  We are living now off the wake of the petrochemical revolution, based on petrochemical energy, which is still basically free, relative to the energy inside.  And look at the impact that’s had!  We have very rarely had things that free intellectual energy.  Language was a big breakthrough.  And mathematics.  And printing, to some degree.  But this thing”—pointing to the 12-pound, typewriter-sized Apple II sitting on his desk, with video display terminal attached—“it takes about a third of the power of one lightbulb, and it saves me two hours a day.  That is basically free intellectual energy, in a very limited way.  But it is going to get much more interesting in the next decade.  I think the revolution is going to come through free intellectual energy.  It is going to dwarf the petrochemical revolution and I think it is going to happen in my lifetime.” •

Copyright 1982 and 2011 by the Estate of James D. Houston.

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