Episode Transcript
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Welcome to part two of thisbrilliant book, Steve Jobs in Exile,
and the author, Geoffrey Cain.
Welcome back, sir.
(01:10):
Good to be Back, Aidan
Great to have you back, man,and thank you for doing this.
Geoffrey's just, finished this bookwhile he was having a baby, and the
baby's with him now, so we're gonnaget through as much as we can, and
he's kindly fitted us in for part two.
Doing two parts on thisbook does not do it justice.
I know many of the interviews youdo are shorter, but man, I don't
(01:31):
know how you could fit in the amountof gold you have in this book.
It's just a phenomenal piece of work.
I- you sent me down so many rabbit holeswith all the videos on YouTube that
exist, loads of articles that are outthere, but you've joined them together
in a beautiful, beautiful way, andthank you for joining us for part two
Well, thank you andhonored to hear it from you
(01:52):
It's great, man.
So let's, let's start.
We… I, I was kinda thinking part twowould be the comeback, but we didn't
even get through the crisis, 'causethe crisis almost lasted 10 years as
he burned through his personal fortune.
He bought Pixar.
There's so much in there, but let's startwith a chapter you call When Reality
Distorts Back, and this is a referenceto his famous reality distortion field.
(02:17):
But he couldn't distort this realitybecause the Cube's expensive components
had driven the price of the Cube upto six and a half thousand dollars.
That was more than double what hehad initially promised, and light
years from the $1,000 that hadmade the Mac a campus s- sensation.
And that's in reference to itbeing an educational product.
(02:37):
So let's pick it up from there andjust talk about how it just inflated,
and also the backstory of him beingdriven by vitriol and rancor to prove
himself after the ousting from Apple
Right.
So Steve Jobs was filled with asense of vengeance when he started
this company, NeXT Computer, becausehe had been sidelined from Apple.
(03:01):
He spent the summer of 1985adrift, traveling, trying to
figure out what to do with life.
But his baby had been taken from him,and his baby was the Macintosh computer.
That was the, the pride ofwhat Steve Jobs had created.
But he lost this power struggle with,CEO John Sculley, who he had famously
hired a few years earlier by saying, " doyou wanna make sugar water the rest
(03:24):
of your life, or do you wanna comeand join me and change the world?"
That was how he recruited John Sculley.
And Sculley pushed himout, so he was angry.
He was full of rageover what had happened.
And so when he founded NeXT Computer,the mission was to get revenge on Apple.
And the decisions that he made becamea series of his, of mistakes precisely
because of that, because he was tryingto get back at Apple for removing him.
(03:48):
Here's what's interestingabout this story.
This is what I alwaysfound so fascinating.
People talk about thereality distortion field.
That was Steve Jobs' most famous, trait.
It was this characteristic where hecould walk in a room, and he could
look somebody in the eye, and hecould say, "The sky is green," and
(04:08):
they would end up believing him.
He could convince anybody of anything.
He could sell anything.
That was really his masterly trait,something that people saw in him.
But there's a limit to that.
You can't bend reality to your willforever, and eventually reality's
gonna snap back at you and you'regonna be put in your place.
It's an iron law of the universe.
(04:30):
, I think there's a misconceptionout there that, the reason Steve
Jobs is so successful is becausehe could bend reality so well.
He could put a computer in front ofyou and sell it to you in an instant.
You would take out your checkbook,write that $4,000 check.
that's not how, the SteveJobs story actually went.
In this period of his life, the middleperiod, tried to do exactly that.
(04:52):
He built this perfectcube, the NeXT Computer.
He unveiled it, it was October 12th, 1988.
Had a major launch event.
It was the talk of the town.
People had, literally gotten on busesand come out from Kansas City 'cause
they wanted to see Steve Jobs again.
This was his big debut after beingfired from Apple, and this was gonna
(05:13):
be the moment when he would, put hisfoot down and say, "i am Steve Jobs
and I'm here." And for the time, hegave a brilliant product presentation.
He had a, a violinist from the SanFrancisco Symphony come in and played,
one of the first, one of the first piecesin which a computer was calculating its
part in real time and did it as a duetwith one of the world's top violinists.
(05:33):
Uh, And, for the year 1988,that's incredible because you
gotta remember, computers backthen, they did boops and bleeps.
I don't know, how manypeople remember that.
Maybe the younger crowd doesn't,but, you put in your old NES, your
Nintendo, or your, turn on your oldApple computer, and it was like a
boop, boop, boop, bleep, bleep, bleep.
This was the end of it, this wasa new, era in technology that
(05:55):
Steve was heralding in But backto the reality distortion field.
So this cube comes out ni- late 1988.
It only sells about 100computers in the first month.
And I have all the data, I have allthe old memos where they're stating
the numbers, and it's, something like100 the first month, 50 the second
month, 80 are sold the third month.
(06:17):
The numbers are ridiculous.
And Steve Jobs is there, tellinghis team that actually w-
we're gonna sell a lot more.
We're gonna sell 10,000 this year.
We're gonna sell 50,000, 100,000.
He keeps inventing these, these greaternumbers to show that, this is a success.
But the reality, everybody seesit, is that they're only selling
about 80 to 100 computers a month.
So by any reasonable investor'saccounting, that's a failure.
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That's not something that went so well,especially when you consider the amount of
investment that goes into this technology.
It's a loss.
and so, what's the lesson here?
The lesson is thatreality does distort back.
Steve Jobs did not wish his way intosuccess by warping the world around
him, by, warping people into his vision.
(07:01):
The way that he got to successwas how he figured out the way
that his vision meets the world.
and that's a- an entrepreneur's lesson.
You can't fight the market.
You can't swim upstream.
If the market wants something and you'retrying to cram something else down the
market's throat, it's going to fail.
And it's just an iron law of business.
So I know it's kind ofa, a prosaic, lesson.
(07:25):
It's not the kind of lesson that a lot offounders wanna hear necessarily because,
founders are visionaries by definition.
And, it's very easy to get captured,caught inside your vision to, have
this feeling of, I'm going to showthe world what I'm made of and what
I'm capable of." But ultimately, whatthe world needs from you might not be,
(07:45):
the vision that you have in your head
I love that, and maybe we'll talkabout that because he, he, just like
Macworld, he'd created an event.
He'd co-created and co-owned anevent called NeXTWorld, and this
was kind of the start of it, thisexpose, this demo with the violinist.
But I wanted to mention something 'causew- we'll move on from his, his early
(08:09):
days because there's a risk peoplemight think that Steve Jobs remained an
absolute jackass, and there's criticsout there that said, well, he did.
But when you read the book, you really seethe transfor- from a transformation of a
person on, on a hero's journey, really.
It's essentially like a movie plot.
You see this person change, andyou see the character emerge over
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time, but from all the failures.
And one of the horrible things hedid, one of the many, was a young au-
audio engineer who had joined was incharge of making the sound, the audio
for, the audio software for NeXT,which actually, for those who use Mac,
became an early version of GarageBand.
And I love that in the story as well,that there's so many what are perceived
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failures that led to successes laterbecause he had enough runway and because
he stayed at the table long enough,
Mm-hmm.
and I think that's a, a realimportant lesson as well
Yes,
That's the hero shitheadrollercoaster in action.
That's, another famous Steve trait.
I believe we talked about that last time.
And, there's the reality distortionfield, and then there's the
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hero shithead rollercoaster.
what Steve was great at doing,it was a double-edged sword.
He was great at doing this, butit could also be to his detriment.
It was his ability to, look atsomebody, look into their soul.
NeXT executives, they-- Some of them,they called Steve a street hustler.
He's like this guy.
That was his personality.
He could look at you and sizeyou up immediately and reach into
(09:39):
your soul and pull out things,that you didn't know are there.
And what I mean by that istalent, creativity, ideas.
He was so good at walking into a roomand pushing people, just pushing and
pushing and asking harder questionslike, "Why can't we do it this way?
Why not that way?
Why does the software have tolook like that?" engineers would
(10:00):
look back at him and say, "Well,you know, this is how we do it.
This is what software lookslike in the year 1988.
We can't do it anywhere else."But he would not accept that.
The way that he approached creativitysort of like being a film director.
And the director, certainly differentfrom an actor, you know, like you're
not the one with the roles, you're notsetting up the costumes, but you have
the vision, and your job is to bringout what you need from every piece of
(10:25):
this film set, every person who's doingsomething, and unifying it into a whole.
So there was something that a NeXTexecutive mentioned that, a lot of,
a lot of business founders, leadersout there, they tend to look at
one or two parts of the business.
That's a mistake.
What Steve Jobs was so brilliant atwas taking the whole thing and looking
(10:46):
at it together, and that's how hecould get these great ideas out of
people who were focused on one or twothings It's outside-the-box thinking.
That's exactly what it is.
But, you know, this was not always a greattrait in him because, flip side of this
is that he could be, especially earlier inhis life, mean and vindictive and nasty.
He would go in, he would scream at people,yell at them, call them worthless, swear.
(11:09):
Like, there was a lot of swearing thatwent on at the early NeXT Computer,
according to people who were there.
It was not nice to be around Steve allthe time, and, one day he could hold
you up, the next day he could cut youright down in front of an entire group.
And in the book, there are manyinstances of this where he's just
being outright irrational, andhe's just impossible to work with.
It's interesting watching this in the lifeof Steve Jobs because it's clear that,
(11:32):
he has this brilliance at the outset.
He knows what creativity is and how to getthe, how to get his vision working with
people, but he misapplies it early in hislife, and he does it in a, in such a way
that he damages relationships, he chasesoff talent, he angers his investors.
He's got that energy there, but he'spointing it in the wrong direction,
(11:53):
and a lot of what my book is aboutis how he learns to harness this
energy, how to work with it, howto not use it in a destructive way,
but to use it in a building way.
That's the magic of Steve Jobs, learningthat lesson, how to build and not destroy.
One of the interesting things that cameup, Geoffrey, was I was talking recently
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on an episode about Nokia and the cultureat Nokia to Quy Huy and Timo Vuori, these
two scholars who did a lot of researchinto the culture, the real culture
at Nokia, much like you did in Next.
And one of the things they saidwas the difference between Jobs and
Olli-Pekka Kallasvuo, which was theCEO at Nokia, and the culture at
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Nokia, which was a screaming culturelike that as well, very autocratic
culture.
Stories.
But they said the difference wasJobs sold people a vision for
the future, a compelling vision.
And to your point, he'd reachinside and he'd pull out something
they didn't know was there,versus just being driven by fear.
So he, yes, he used fear, but heactually used both the carrot and
(12:57):
the stick at the same time, andthat was a huge skill that he had
Right.
Right.
It's the carrot and the stick.
Um, that's a skill that a lot oftalented CEOs are able to harness.
It's unfortunate that early in life, SteveJobs, you know, was more of a stick guy.
He would yell and scream and stepover people's boundaries and so forth.
But, later in life, as histransformation happened, as he learned
(13:19):
the lessons of failure, he learnedthe usefulness of the carrots and how,
you know, you really, as the CEO…
There's even a quote, this was inthe Steve Jobs archive, a video
interview that recently surfaced.
He talks about what it's like torealize what it really means to be
a leader, and he says, look, he'stalking about Pixar at this point.
"At Pixar, I have the mostbrilliant people working for me.
(13:43):
They're at the cutting edge."Remember, this is the age of
Toy Story, one of the greatestcomputer-animated films of all time.
And he's talking about just howgood the people are he works with,
and he wants to keep them around.
And the realization he had isthat there's a kind of inversion
that happens when you're leading acompany of highly talented people.
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the inversion is that you, theCEO, are actually at the bottom.
The people you work with, the animators,the engineers, the software developers,
the so forth, they're above you.
They're at the top.
It's in an inverted pyramid, and yourjob as the CEO is to keep them around.
And how do you keep them around?
You treat them well.
(14:24):
Remember, this is somethingthat a Steve advisor told him.
Steve's advisor said, "Rememberthat your assets have feet." Your
employees, they're not, peoplewho you can just use and abuse.
You have to keep them around,and you do that by being a more
humble leader and asking for theiradvice and going along with it
Beautiful.
I think, I think that was Paul Rand, thelogo designer actually m- might have said
(14:46):
it from, from memory, or maybe Ross Perot.
But he had so many people saying thisto him all the time, and he kinda
going, "You're gonna lose good people."Let's lean into that, because he did.
He burned so many bridges.
Let's talk about the relationships,the original NeXT founders,
'cause they went one by one.
Dan'l went as well, and
Mm-hmm.
And you see this oftentimes where they,a leader like Jobs will lose somebody
(15:10):
like Dan'l, and then publicly humiliatethem in a way to go, it was his fault,
not mine, and then also to let nobodyelse think that if you leave, by the
way, I'm gonna do the same to you
Right.
Right.
And, that's one of the stories that popsup again and again in, in this book.
The original NeXT co-founders,it was a team of six people.
(15:33):
So there was Steve, and thenthere were five co-founders.
They were Dan'l Lewin, SusanBarn, Susan Barnes, George Crow,
uh, Rich Page, and, Bud Tribble.
And these are some of the most talentedpeople in Silicon Valley, the top
engineers and marketers of their day.
So Steve is taking aserious team with him.
Now, what immediately happens it'sperfectly predictable, and I'm always
(15:57):
careful about writing history becauseI try to put it from the perspective
of the people living in the era.
Like, if we do this, we don't know.
If we make this decision, we don't knowfor sure how things are gonna turn out.
Like in Japan, sorry, in, in WorldWar II, Japan attacks Pearl Harbor.
They did not know that that was gonna leadto the collapse of the Japanese empire.
You see these examples all throughouthistory, and you have to write
(16:19):
from the perspective of people atthe time with that uncertainty.
So in this particular case, it wasinteresting because I thought I would
go back into the archives, and Ithought I would find evidence of people
who thought that they were makingbrilliant visionary decisions and that
they truly thought this was gonna bethe next great technology of its era.
But what I found was interesting, 'causeit wasn't that at all, this is like the
(16:42):
opposite of most historical writing.
Steve Jobs was the only personwho truly seemed to think that he
was doing something revolutionary.
else was on board, and they liked workingat the company, but they were telling
Steve the entire time exactly what wasgonna happen and how this was gonna fail.
(17:03):
The entire way through, from thestart of the company, until the 1990s
when the last co-founder left out offrustration, just frustrated with Steve,
entire time everybody was telling him,"This is what you have to do, Steve.
This is what's gonna happen if youdon't do it." And then years later,
when they released the product, theexact things that they said were gonna
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happen, the exact failures happenedjust as they said it was gonna happen,
but Steve was not listening to them.
when they told him that, Steve blamedthem, just put it right back on them.
Book to write because you don'tsee that in a lot of places.
You usually see much moredisagreement among advisors,
disagreement among colleagues.
Like this might work, this might not.
In this case, everybody knewwhat was gonna happen, but
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Steve blew them off anyway.
Major life lesson
One of the things that was so differentfrom what became Apple 2.0 was, and even
NeXT 2.0 when they became a softwarecompany or a web objects company, was
the difference in how they trackedthings like bugs or released products.
So the Cube was releasedand not fully working.
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It was buggy.
It was breaking down all the time.
The software was useless, dubbeduseless by many, many developers.
And on top of that, they didn't havemuch of an application database, so
there wasn't many apps working on it.
And you see this as an early version,and this is what I say about Jobs, had
a second chance, which is so unusual.
(18:31):
And I think there's a danger in readingthis book that y- you look, or looking at
Steve Jobs, which is why it's so importantyou wrote this book, to think he was this
genius that just laid out this visionand had this reality distortion field.
But when you read your book and readit with other accounts of his life,
you see actually he just learnedfrom his failures time and time again
(18:53):
And that's what I found interestingabout exploring this period
in the life of Steve Jobs.
The biographical element, it'sdifferent from, the way that most
biographies kind of play out.
And the reason is because--Here's the way I think about it.
So this is a contributionthat I've written.
This is not the one defining story.
There is an entire litany of biographiesout there and histories, books on Apple,
(19:16):
books on Steve Jobs, and so forth.
And they all contribute something, butthey all bring a different contribution
to a man who's extremely complex, one ofthe most brilliant inventors of our age.
He's not somebody you can pindown easily into one cardboard,
archetype or that sort of thing.
And so Steve Jobs, what'sinteresting about him, I thought…
I, think about it this way.
(19:37):
A lot of other biographies outthere, those are the donut.
And what I've been doinghere is writing the hole.
This is the part thattends to get overlooked.
You know, when you're looking at a donut,you don't think about the hole so much.
But this is, the goal of the book, toshow something that's a little different
that we haven't really thought aboutbefore with Steve Jobs, and that's
really what I'm trying to do here.
(19:57):
Let's talk about a coupleof the investors here.
So Canon was a huge investor who came inlater on and got 16.67% of the company
Right.
So Canon came in, and they came inunder interesting circumstances.
So they originally were not, youknow, on Steve's list of investors,
but they had built this opticaldrive for the NeXT Computer.
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And what this optical drive was, wasthe next generation of technology
that was gonna shape storage.
It was also visually beautiful,something that Steve really liked.
And as Canon was developing this drive,well, they were late and the drive didn't
work very well, which is the story ofNeXT Computer, stuff just doesn't work
'cause it's so far out of its time.
and so what happened was that, Canon, asa result of getting involved with this
(20:44):
NeXT cube, ended up being pulled in as aninvestor because Steve Jobs needed money.
He was just burning throughcash left and right.
He was almost out of money,and so who do you call?
Call your supplier.
It's Canon, major Japanese company.
Of course they're gonna wannainvest because this is Steve Jobs.
so that's really, how Canon arrived.
It wasn't just a matter of investingin the company NeXT, but it was
(21:07):
because they saw Steve Jobs and hisbrilliance, and so they put money in.
But, not a relationship that ended well,like a lot of his relationships in this
period, just because he was, blowingthrough cash and not being accountable.
So Canon eventually saidsayonara, and just like everybody.
So I don't wanna get too far intothe ending 'cause there's a lot that
happens, a lot that happens that'shard to , get into in, in one episode.
(21:30):
But, things do not end well, withthe way things are going here.
One of the other examples, IBM,and there's a brilliant story you
tell about on their way to Dallas.
So Steve, you call it Steve on a stick.
This is what they used to call it,where Steve was a brilliant salesman.
Like you said, he had this realitydistortion field, but he, but he
also gave great demos of the product.
(21:50):
And he was on his way to an expowith IBM, and one of his colleagues,
Mark Hayes, a salesman, comes up tohim at a bookstop, a bookshop in San
Fran in the airport, and he tellshim, "Look, there's two screens here.
We've only w- " And at the timeyou would've needed two separate
presentations, and Steve had the only one.
I'll let you take it from there.
(22:10):
And just, this is an example of theego, but also the self-sabotage.
There's so much self-sabotage in the lifeof Steve Jobs in the early part of his
life, and this is such a great examplebecause what happened, was that had
entered a massive deal with NeXT Computer.
They were gonna build, IBMworkstations that could run Steve
(22:31):
Jobs' operating system NeXTSTEP.
So, to put this into context, this issignificant because you have to remember
at the time that Windows was just startingto become the dominant, operating system.
One of the reasons we actually useWindows today, why it's so common, is
because IBM had adopted it in theseearly years, and it was sort of like
the operating system that everybodybooted up if you didn't have an Apple.
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So Steve Jobs manages to convince IBMfor its workstation market, which is
a level up from PCs, to put NeXTSTEPon it, which is a major coup d'état
against Bill Gates because Bill wantedthat market, and Bill wanted to have
the only operating system of the future.
This is when he was creating hisMicrosoft monopoly of the era.
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Steve Jobs, couldn't have had a betterhand played to him with the help of
all of his executives because whatthis meant, if this deal had succeeded,
then NeXTSTEP, like we-- today we wouldprobably not be using Apple and the OS.
We would actually be usingthe NeXT operating system.
Like, that's how significant this is.
It would be everywhere, most likelyBut, Steve just sabotaged it.
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He, I mean, it's a very complicatedstory 'cause he's a complicated man.
But, IBM, like he couldn't geteverything he wanted from IBM.
They were slow to put the operatingsystem on their computers.
And in the end, you know, Stevewas afraid of giving up total
control of his operating system.
And you have to remember that, thathe was always a man of total control.
(24:00):
He wanted to have the walled garden wherehe controlled all the software and all
the hardware, and he just couldn't imaginelicensing away his beautiful operating
system to IBM, a company that he hated.
There was even a famous photoof him flipping off the IBM
logo, - in New York City.
It's one of those like famousphotos that everybody looks at.
(24:21):
And so Steve Jobs,sabotages this relationship.
He just can't get what he wants from IBM.
He doesn't wanna get up, give upcontrol, and so he allows, they're
about to go give this presentation.
This is when talks arealready breaking down.
He's gonna fly to IBM and give apresentation for 800 IBM employees.
And, the way that the room is setup is that, it has two sides of
(24:45):
the room and like each side has aslide, but they only have enough
slides for one side of the room.
So people can't look in both directions.
They can't look, you know, to theside or back or whatever it is.
And so Steve Jobs is at, literally atthe airport getting ready to fly out to
New York to give this presentation and,tells his, salesperson who's there with
him, his assistant, I don't wanna do this.
(25:07):
I don't have enough slides.
I don't have the tools I need today."So he literally got in his Porsche,
drove home or drove to the office andsaid goodbye. So this poor salesman,
Mark Hayes, who's very prominent inthe company, has to show up to IBM's
office, has to stand in that roomwith 800 IBM engineers, tell them
that, there's no Steve Jobs today."
(25:30):
And how does IBM this?
They realize that the deal is dead.
This is just one example of manyexamples of this kind of behavior,
and this is what gets Steve in trouble
Maybe one last one because there's loads.
And, and this one was Dan'l saying toSteven, "You're blowing it up. You're
going to blow up the relationshipwith Ross." So put it in context.
(25:54):
Ross Perot was a major investor, thechairman of the board as well, from
memory, and had put lots of his own moneyin, believed in Steve, but brought, more
importantly, he was a such a strategicinvestor 'cause he brought the government,
he brought all the alphabet soup ofgovernment agencies with him because they
wanted the security and the animationthat the, the Next Cubes could offer.
(26:18):
But he blows this one up as well
Exactly.
Exactly.
Uh, Ross Perot is, um, here'show you think about Ross Perot.
He's the Chuck Norris of technology.
This is a guy who, uh, sent his employeesinto Iran during the revolution of
1979 to rescue other employees whowere kept in an Iranian prison.
(26:41):
Uh, y- you know, it's like, I mean,that doesn't even happen anymore today.
It's just we have dronesand all this stuff.
But, um, you know, RossPerot is a military veteran.
He's tough as nails, straightforward.
He tells you when you're wrong.
And so, um, know, Ross is somebody who'svery interested in Steve at the beginning.
He signs up to be an investor.
He's actually Steve's biggest backer.
(27:02):
And part of the goal is that RossPerot, who's a military and government
contractor, uh, is gonna line upNeXT Computers with intelligence
agencies, three-letter agencies, CIA,NSA, with the Department of Defense.
They're, they're chasing a lot ofthese major governmental contracts.
And one of the reasons that theintelligence community loves
the NeXT Computer is because ofthis futuristic tech-- the, the
(27:23):
futuristic technology of the day.
Um, you know, just for example, thatoptical drive that Steve loves that
I mentioned earlier, uh, spies fromthe CIA like it because they can
remove it and destroy it, and it's notlike a hard drive where it, it sits
around forever and, you know, somebodycan steal it and gain access to it.
So NeXT Computer is, like,exactly what these spies and
(27:44):
soldiers need in the field.
It's like the computer ofthe future of intelligence.
And, um, so Ross Perothas this all lined up.
He's really well-connectedin government work.
And so what does Steve do?
He says, in the end, "I don't wanna workwith the federal government. I don't
like the feds." You know, he's s-- youhave to remember Steve's personality.
He's not a man known for, um,bureaucracies and ranking, rank
(28:07):
and file, and hierarchies that,like, this is a world that is
alien to somebody like Steve Jobs.
He's the man of democratizing technology.
Like, he would rather have a computerthat every student in a dorm room
can use rather than a computer that'sbeing used by the federal government,
you know, to manage databases.
It's just not his style.
so Steve, uh, kills the relationship.
(28:29):
You know, he just, he just decides, "Idon't wanna do business with the feds."
And so this puts his relationship withhis investors, including Ross, up in the
air once again because they're saying,"Well, you know, if you're not gonna sell
to the government, who is your market?
Because you're only selling 100 of thesecomputers a month to actual consumers,
so you gotta figure something out here."
So we talked in part one about howhe had bought Pixar for a song.
(28:52):
He g- got it for 5 millionbecause Lucas was under pressure
for a divorce settlement.
But later on then, he's in a meetingwith Disney executives, and this was
a huge opportunity for both Pixarand NeXT, eventually for Pixar.
But Disney was using Pixar software todevelop movies like The Rescuers, Rescuers
Down Under, but refused to give Pixarcredit, and Steve kept a receipt on that.
(29:17):
So despite having this opportunitywhere he was gonna show them the
technology, he blew that one up as well
Exactly.
And so Disney was gonna becomepotentially a major customer.
Geoffrey Katzenberg at thetime was the, I believe the CEO
of Disney, and he was there.
So th- this was a scene that a couple,NeXT employees who were in the room
(29:39):
with Steve recounted this same scene.
And it was, Steve in there withDaffy Duck u- up on the wall.
What he was doing is he wasdemonstrating this new color display
that the new NeXT Computer, could use.
Steve was really proud.
This was, this was the second NeXTComputer release, and Steve was
really proud that it now had color,which at the time was an innovation.
(30:01):
And so, he put Daffy Duck up on thewall and, you know, he was making his
pitch to the senior Disney leadership.
They were gonna, potentiallybuy thousands of computers.
Another example, big corporateacquisition, something that could really
make a difference for the company.
And instead of just swallowinghis pride and selling the damn
computer, he has to bring up hisunhappiness with this deal with Pixar.
(30:25):
So Pixar, his other company, is doingbusiness with Disney making computer
graphics, but under their contractat the time, Disney was not giving
credit to Pixar, in these movies.
And Steve didn't like that.
He wanted credit.
He thought that he was gettingthe short end of the stick.
And so he brings this up,and it just becomes a fight.
And Geoffrey Katzenberg, according topeople in this room, legally threatened
(30:47):
Steve and said, "You're using DaffyDuck on the wall without our permission.
You have to, get our permission forthat." And then what happens in the end?
So Disney orders, like, somethinglike 20 of these computers, maybe 100.
I forgot the number, but it'sso small, and it's just clear
that Steve blew that one too.
So let's flip around, 'causehe starts to change pretty
much after he gets married, and
you have a chapter here called
(31:10):
The Two Steves, and it's, it'sreally when he's kinda hit, hits rock
bottom, and it so happens to be atthe emergence of the internet as well.
And a really interesting fact youlearn from your book was that Tim
Berners-Lee, who invented the internetessentially, actually used Cube, and
as did another developer who createdthe game Doom that so many of us know
(31:34):
Right, right.
Tim Berners-Lee invented the WorldWide Web, and he literally created
the web on a So originally, wethink of the web as this sprawling
network that anybody can log into.
We use Facebook and social media.
But at the beginning, in the year1990, this was such a new concept,
and it was literally runningon one computer in a laboratory
(31:57):
overseen by Sir Tim Berners-Lee.
, It was a NeXTcube.
It was a NeXT computer.
And, this is just one example of how farahead of its time this technology was.
The NeXT computer was so sophisticatedthat in the year 1990, you could
literally create the World Wide Web onthis computer I mean, think about that.
Like, think about how many computers youneed for the web to work, the cloud, all
(32:20):
this technology, and there's one computerin a lab that can run the World Wide Web.
It's just-- I, I find that mind-blowing,the level of creativity that people
could unleash on this NeXT Computer.
other one, Doom.
The, one of the greatest computergames of all time, one that
is, literally game-changing.
(32:40):
Play on words, I suppose, butliterally changes the game industry
from this, this old pixelated,, side-scrolling business to something
that's more three-dimensional,shooting, gory, violent.
Like this is a new age in gaming, andSteve Jobs not care for it being built
on a NeXT Computer with NeXT Softwarebecause he just didn't like games.
(33:03):
It wasn't his thing.
And he didn't see games assomething to be taken seriously.
He wanted this computer to beused for scientific revolutions
and medical discoveries.
so another big mistake, they missed out.
Doom had the, they, the Doom creatorswent to NeXT Computer and offered to put,
made on a NeXT Computer, like an openingscreen on Doom, and they said, "No, forget
(33:25):
it." So another big missed opportunity.
What is the lesson from all this?
lesson is that sometimes theproduct that you're making is so far
ahead of its time that you're notsure what it can be used for yet.
It's easy to get boxed in and tothink, "I'm making something for
this or that, something that solvesthis or that problem." But a lot of
(33:49):
the time, if you're really at thecutting edge, y- don't really know
how it's gonna be adapted out there.
And if your users are speaking toyou, if somebody's saying, "I just
created the World Wide Web," you know,"I just created a major video game,
best-selling game on here," that'ssomething to listen to because that
shows what your tech is capable of.
And this is such a pertinentlesson to today with the massive,
(34:11):
the AI revolution, the advanceshappening week by week with AI.
We still don't know for sure how thisis gonna be adopted in so many cases.
We see that people are now using itfor generative purposes, for writing
their school essays and so forth.
But with this new agentic AI, um, youknow, AI bots that can go out there
and actually make decisions and executecode, , without you having to approve
(34:34):
it, that's a major, major revolution.
I mean, that's, that's technologicallybeyond anything that we've done before.
You know, a computer system thatcan process information on its own
and doesn't need human oversight,I mean, that's, that's major.
So You know, my s- my suggestionto people who are, at the cutting
(34:54):
edge of AI right now is, you know,don't, don't get too boxed in.
Like you might-- So you might think you'remaking AI for medical purposes, AI that
can help diagnose X-rays, for example.
If you're focused on that, you know,step back and look at the whole picture.
If your AI is generating, diagnosesbased on medical X-rays, you know, what
other imagery purposes, you know…what else can this system be used
(35:17):
for that you're not thinking about?
And is there some smart kid outthere in a dorm room who has been
taking your product and using it forsomething that you didn't anticipate?
If they are, listen to them,because that could be the future
revolution right there, but maybeyou're just not paying attention
And one of the interesting ones wasNeXT had always used Motorola chips.
(35:38):
So next, the next thing thathappens, Motorola goes with
IBM and they cut out NeXT.
So NeXT then go to Intel, but thisleads to a far bigger pivot than they'd
imagined, and a compromise that Stevewas just not used to, and, essentially
NeXT becomes a software company
Right.
It's a comedy of errors, andit's all leading up to this
(36:00):
final collapse of NeXT hardware.
One of the things that, um, historiansremember is that NeXT as a company,
they tend to think of the hardware,the, the computer, the cube.
That cube is famous in design schools,but really what was the game changer was
the software that Steve was developing.
But Steve wasn't really, as we just saidwith Doom and the World Wide Web, Steve
(36:20):
was not, paying attention to how hissoftware was being adapted on the market.
He only wanted it to be usedfor what he intended, and he
didn't want to give up control.
But this comedy of errors just plays out.
It's one after the other.
If you pick up my book, if you read it,you're gonna see that it's a cascade of
failure after failure, and each failurefeeds the next failure, and it gets to
(36:42):
this snowballing point where the failuresare just so massive that the business
can't possibly sustain itself anymore.
So by the end, I guess it's not the end.
By, by the middle, NeXT hardware,there's a reason it no longer exists
today, because the company effectivelygoes bankrupt and he has to sell
it off at a fire sale to Canon.
so Steve Jobs is he's just, thisis rock bottom, and the final
(37:07):
error in this whole tragedy is,betting that Motorola, his main chip
maker, is gonna stand behind him.
The small company, NeXT Computer.
If you're making chips, that'sa scaled, massive business.
You're working on billion-dollarcontracts, and just because Steve Jobs
comes along with his NeXT Computerthat's selling 100 a month doesn't
mean that you're gonna drop yourother, contracts out there and just
(37:29):
suddenly want to work with Steve Jobs.
It's just not how the marketworks, and this is a lesson
that Steve also had to absorb.
What happened in the end was thatMotorola just dumped NeXT Computer.
They decided, pure businessdecision, cold, calculated.
They decided that they're gonnago, with this new PowerPC being
designed by Apple and IBM.
(37:51):
It's the, these two, Apple and IBMwere enemies and competitors, but
they teamed up at this one point.
And by this time, thewriting is on the wall.
Every single NeXT executive thatthe hardware business is dead.
We don't have a chip.
A chip is the engine.
Without a chip, we're screwed.
And they realize, look, we made a lotof major mistakes because at this point,
(38:11):
NeXT Computer is about eight or nine yearsold it's well into its business cycles.
And they still haven't achieved the scale.
They still don't have the sales.
They don't have what they need.
And so why would anybody in theirright mind look at NeXT Computer
and say, "I want to, work with thiscompany that has been small for eight
years, that's failed after another"?
(38:33):
It's just, it doesn't make any sense.
So falls apart.
They don't have a chip, and, uh thisis when the hardware business ends.
So the, , next we're onto h-everything's falling apart.
He's, he's really not enjoyingit, Steve, here at all.
He, he actually is getting mostof his fulfillment from Pixar.
Between… He was putting $50million of his personal wealth into
(38:55):
Next, $54 million into Pixar, and combinedall together, this new CFO comes in
and he estimated that he was burningthrough about 50 to $60 million a year
to just keep these businesses alive.
So then he recruits his neighbor, hisformer neighbor, Oracle founder Larry
Ellison, to join the board, and he startsto get things together a little bit.
(39:17):
And this guy Dominique, this Belgianguy, he brings in a bit of discipline,
and they start to get pra- positivepractices, so away from the deep
shit list towards a more proactivelist, and they start to track bugs
and develop different types of apps.
Maybe we'll mention thisperiod of time where the kinda,
the change starts to happen
(39:38):
so this is the change.
This is where thetransformation really hits.
It's the end of the hardware business.
The hardware businesscollapsed in 1993, springtime.
This is when NeXT Computerbecomes a software company.
And, why does it becomea software company?
It's not because Steve Jobsloves this software necessarily.
It's just a matter of survival.
(39:59):
And so they pivot, and they dosomething finally that everybody's
been begging them to do, but thatSteve has refused at this point.
They start selling enterprise software.
So think about this.
Steve Jobs, the man in the turtleneck, theman with his brilliant, colorful, devices
and iPhone, his brilliant presentations.
(40:21):
Can you see this guy walking into GoldmanSachs and standing up there and talking
about finance and selling financialengineering to Goldman Sachs, traders?
Like, no.
Like, totally no.
Like, that's, that's something thatnobody has ever seen in Steve, I mean,
nobody outside of this period of his life.
But this point in the 1990s,this is what Steve is doing.
(40:43):
He's going to Goldman Sachs.
He's going to IBM.
He's going to all these bigfederal bureaucracies, military.
He's walking in, and even hisphysical appearance changes.
He's no longer informal Steve,but he's wearing these gray,
these, gray and beige suits.
You can look it up on YouTube, andhe's got like, a formal red tie and
he wears white button-down cottonshirts, , that are nicely tailored.
(41:07):
He looks like a corporate salesman.
And Steve Jobs, like, if he's acorporate salesman, that's how
you know he's hit rock bottom.
That's not Steve Jobs.
That's not who he is.
And even the people around him told him,like, "Steve, this is not you. Like, this
is not who you are." But Steve knew thathe had to survive, that he had to bring in
(41:31):
the money, he had to build the business.
He only had about three years of cashleft, so if this had failed, he would
have failed possibly permanently andmaybe even been written out of history.
He would not be remembered as thegenius who we know today, but he
would've been remembered as a failure.
This is drastic.
The stakes are high, and this is themoment where they re- Steve finally
(41:53):
concedes that, reality has distorted back,that reality, objective reality exists
out there, and Steve has to conform to it.
so he finally starts conforming anddoing just what he needs to do to
keep the business alive, which meansbuilding stronger systems, doing
basic things, keeping track of bugs.
NeXT Computer, for most of itslife, did not have a method for
(42:16):
keeping track of, keeping trackof bugs and errors and so forth.
It was a very disorganized company,and finally he brings order to it.
And ironically, last point here, thisis the, I think one of the greatest
lessons for any founder out there.
He knows when to step awayfinally and to, when to a- when
(42:36):
to let people, do their job.
This is the big lesson of this period.
A man named Dominique Trampot, whobecomes the CFO, he's a Belgian
executive, he comes in and becomesSteve's right-hand man and institutes
order in processes, in finances, ensuringthat the basics are there, that, how
can we get of debt and make a profit?
(42:59):
If the company is notprofitable, nothing else matters.
So it's just basic business logic.
And I just have to say, it'salso, it's an unsexy lesson.
You know, we love the sex appeal of beinga founder, those, the hot presentations,
like what's the next big thing?
But sometimes you just have tosit down and work out the basics.
You can't always be that star.
(43:21):
You have to know when to pull awayfrom being a star and when to look at
your accounting books, when to hiresomebody new, when to, kill that debt.
If you don't get the basics down,then the stardom is never gonna come.
One of the, again, pivots , the many,many pivots of got rid of the Cube.
There's a deal with Sun that fallsthrough, 'cause Sun weren't really
(43:43):
committed to it, but they end upwith this product called WebObjects,
which came just out of Steve's desireto allow the developers to just be
curious and follow their instincts.
And a couple of guys built this new,basically a website over the weekend
to track bugs, but it led to this thingthey called WebObjects, which essentially
(44:03):
became the underpinning of many ofthe products we use on Apple today.
Right, right.
WebObjects is a, a forgotten app.
You know, like WebObjects is one ofthose things that existed in its time
in the 1990s, forgotten today, but,one of Steve's favorite soft- one
of his favorite apps at the time.
comes-- Okay, so here's the irony.
(44:26):
love the story of WebObjects becauseI think it encapsulates the many
lessons of Steve Jobs in exile.
This is software that can create dynamicwebsites and update them real time, live.
Um, you have to remember what theinternet was like in the 1990s.
These were the, you know--I mean, I remember it well.
I was a kid.
(44:47):
These were these old static, uh, youknow, these, like, odd colors that clash.
Like, people would make their personalwebsites, and it's, like, pink and green,
and then there's, like, a flashing,uh, animated GIF, you know, of an icon,
and it's, like, their favorite car.
Just, you know, re- like, the, theinternet was-- It, it was the Wild
West of that day, and people werejust fiddling with it, but there was
no way to, you know, really builda serious business on the web yet.
(45:11):
And Steve Jobs saw that.
even said himself that he hadabandoned his idea that technology
was gonna change the world.
He said that this was not gonnachange the world, but it will
be helpful for businesses.
And how will it be helpful?
Look at the web today.
Look at Amazon.
Look at all these onlineshops, Barnes & Noble.
Y- go anywhere on the web, andit's all live, real time, updated.
(45:34):
You go in, you type what you want.
You, you wanna buy thisor that, and then it gives
recommendations with an algorithm.
Like, is now.
Steve Jobs was planningfor this 30 years ago.
This was exactly what he saw was gonnahappen, and that's what WebObjects was.
It was software that wouldcreate dynamic websites.
So why is this so important for thebook, for the lessons of the book?
(45:57):
The one big takeaway here is thatthis is the culmination of what NeXT
Computer was really meant to do.
know, they had ignoredthe original internet.
They had-- Sorry, theweb, not the internet.
They had ignored the originalweb created by Tim Berners-Lee.
They had ignored Doom.
They had released a cubecomputer that was not selling.
(46:18):
But in all those failures, what wasadding up was the real purpose of NeXT,
and it was that it was a networked itwas the software that was set that,
, if it had continued on this path, itwould've been the software that would
have led the transformation from theold age of the static, boring computer
(46:41):
to the new age of the hyper-networkedinternet world that we all live in now.
That's the vision of Steve Jobs,and that's what he saw that was
just so far ahead of its time.
just took, it took a long time to getthere because WebObjects was created in
1996 Next Computer was created in 1985.
(47:02):
So that's 11 years to figure outyour true purpose in this world.
So what does that mean?
Like, yeah, so those failures didnot go, those failures at NeXT
did not go out for no reason.
They had a purpose.
It's just that it took a lot longerthan Steve thought to get there, and
(47:24):
if Steve had made decisions differentlyearlier on, they would've probably
arrived at this much earlier and itwould've been even more profitable.
So it's a complex lesson, but it's alesson of, a mixture of knowing your
timing, knowing your market, knowingthe people you need to reach, and
knowing which ideas might work sometimein the future versus what works now
(47:47):
and what needs to happen right now.
So we'll start landing theship, because there's so many
brilliant stories in there.
Michael Dell, Dell Computers, hebuilt, he, he… Apple built this
for him as basically his onlinestore that saved his company.
The or- origins of anybodywho's ordered a pizza online all
happened through web objects.
But one of the big changes was Pixar,because Pixar gave him now a lifeline,
(48:12):
and in a way, it kinda quenched thatresentment that now he was somebody,
he'd made something of himself.
He'd vindicated himself in many ways.
He still held onto that bad reputationfrom the Apple days and the NeXT days, but
it gave him a different kind of energy.
He had children.
He'd been married, and therewas a huge transformation,
personal transformation going on
(48:35):
Exactly.
Uh, Pixar… Okay, solet me start with this.
You know, Steve Jobs,he was not a money man.
He was not-- He, he didn'tdo things for the money.
He took his, know, his symbolic salaryat Apple was one do- uh, $1 a year.
Like, he, he was not, was not openingthe books and trying to, to make it big.
(48:56):
the people who knew him during this timeat Pixar said that money was useful to
him because it allowed him to keep score.
Um, you know, he, he didn'treally wanna be a billionaire.
That wasn't his goal in life.
once the movie "Toy Story" from Pixarwas a major success, and then right
after that it had a very risky butvery successful IPO, the moment in
(49:19):
1996 that Steve became a billionaire.
He joined the club.
And you have to remember, you know,today billionaires are a dime a dozen,
but back then, um, there were only ahandful of billionaires in America,
and one of them was Bill Gates, therichest man in the United States, and
the other newcomer was Steve Jobs.
Um, so what does this mean?
(49:41):
It's not that Steve Jobs ishappy to be a billionaire.
It's that, "Oh, I am now vindicated. Soall the things that I have been doing
for the last 15 years, the failures,the, the, you know, the, the ideas
that went nowhere, the people who leftme, well, finally I can recover and
finally I have money in the bank."
Um, and there are lots oflessons in here too for founders.
(50:03):
You know, I, I think that there'sa kinda myth out there that if
you're a creative person, you're notsupposed to care about the money.
That, you know, like caring about moneysomehow taints or makes dirty your ideas.
But no, you have to remember that even themost creative fields are, at their core,
they're businesses too, and there's alwaysbusiness logic that applies to them.
Business means you have to havemoney in your bank account.
(50:26):
You have to be profitable becausethat money, it's not what you
live for, but it's a tool.
It shows you what themarket thinks of your idea.
If there's good feedback,you have money in the bank.
If there's bad feedback, you lose money.
That's what Steve learned, andthat's the feedback he got.
He became a billionaire because"Toy Story" was brilliant.
And why was "Toy Story" brilliant?
It was because he stepped away from Pixarand allowed his people to do their work
(50:52):
Last one for you, 'cause I know youhave a baby about to wake up, and
I know how precious your time is.
And you and your wife
with the baby.
will… Your, your wife will becursing me for taking your time,
your precious time when she's asleep.
But the last one, which was animportant one, is it's these transitions
that I love that you did, Geoffrey.
It's not like the story of SteveJobs is he was fired from Apple,
(51:16):
he disappeared, he found himself,and he came back as this hero.
But it's these little storieslike the serendipity of a
phone call that saved Apple.
So this was, a developer inside NeXT whohears that Apple need a operating system.
Their operating system, Copelandor Copland, was failing.
(51:36):
They had hired an IBMexecutive, the Iron Grandmother.
She was out there lookingfor a new operating system.
She'd been asked to this by GilAmelio, the chairman of Apple, who'd
become interim CEO, and this guy justgoes, "Why don't we just call Apple?"
It wasn't Steve's idea, which wasreally interesting, and this changed
the fate and the course of history
(51:58):
You know, one of the incrediblethings about this book that I
found is that, Steve-- We allknow what happens at the end.
We know that Steve Jobs returns toApple and creates the renaissance.
I mean, that's not the question here.
But, around that time when he wasreturning to Apple, Steve gave an
interview to Time Magazine, he saidsomething remarkable in there that it
(52:20):
actually sent shivers down my spine.
He said, "I don't believe that anythingin life happens by chance, that there
is a design, that there is an orderto it." And that's my paraphrase.
That's not the literal quote.
But I'm sitting there thinking, onceI got to that stage in the story, I'm
sitting there thinking, "Okay, lookat this entire story of NeXT Computer.
(52:41):
It's failure after failure.
It's disaster.
It's, a company going down in flames.
It's the reputation of Steve Jobs goingdown in flames." It's like everything
that can go wrong does go wrong at NeXTComputer, and yet there are a series
of things that people do, not alwaysSteve, but also just random people
that, put the play back in a differentorder, and he ends up, through these
(53:06):
series of decisions, returning to Appleand igniting the Apple renaissance,
creating the most valuable company in theworld, the one that we all know today.
I'm sitting there thinking like, thisis Steve reflecting on the meaning
of life and why things happen as theydo, and it really is remarkable, if
any of these little decisions had gonedifferently at any stage of the story,
(53:29):
Steve would be written out of history.
He would be completely forgottentoday, and he would not be the
person we read about in businesscase studies, for example.
It's just, it would be a different world.
And yet, at one point, there's one,know, like a mid-level, mid-senior level
employee at NeXT who just says, "Look,Apple is gonna acquire another company.
(53:51):
They're looking to buy an operatingsystem. How about I just pick up the phone
and call Apple and tell them more aboutNeXTstep and what we're doing?" Steve is
actually neglecting NeXT at this point,so he's all focused on Pixar and like
he, he doesn't wanna return to Apple.
Laurene, his wife, doesn't wantto, want him to return to Apple.
The place, it's tainted.
It's doing poorly.
It's not the Apple that heknew back when he founded it.
(54:13):
It's not a place that he wants to go to.
And it's just, it's this random employeejust picking up the phone, getting the
attention of Apple, and then suddenlyan executive nicknamed the Iron
Grandmother, so Ellen Hancock is her name.
Everybody said she was smart.
She's the kind of person you wantlooking at this kind of thing, and
she's the one who goes in and says,"Okay, let's take a look at NeXT."
(54:35):
And that creates the cascade ofevents that lead to Steve when
he has uncertainty about it thatlead to Steve returning to Apple
Beautiful, man.
I think we'll leave it there becausethere is so many lessons in there, and
I… If you get the book, and I highlyrecommend you do read to the end, 'cause
(54:58):
Geoffrey does a great job of extractingthe lessons from the story as well.
And you know, Geoffrey, as muchas I do, so many people don't get
to the end of the book they intend
Oh
to.
yeah.
But get to the end of this book.
It's there.
Oh, it's where it's… I'veafter where I'm after putting it.
It's here beside me.
It's a brilliant book.
This is not the cover.
I've an early access cover.
Steve Jobs in Exile, absolute brilliantstory, and you do a brilliant job.
(55:20):
And we'll be back again when thebaby's a little bit older to cover
Samsung Rising as well, one of yourprevious books that I absolutely love.
before I finish, before I finish off, justlet's tell people where they can find you
I'm at X. My handle is @Geoffrey_Cain,so my name G-E-O-F-F-R-E-Y
underscore Cain C-A-I-N.
(55:42):
on LinkedIn and it's GCain.
And then I'm also at my websitegeoffreycain.net where I post updates.
And also check out my Substack,The Burner Files, which is my
name geoffreycain.substack.com
It's been an absolute pleasure, and I'mso grateful for you taking the time out
this very precious time that you have.
Author of Steve Jobs in Exile,Geoffrey Cain, thank you for joining us
(56:05):
Thank you, Aidan.
Great to be here
thanks again to our sponsor, Kyndryl,who runs and reimagines the technology
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(56:27):
You can find Kyndryl atK-Y-N-D-R-Y-L, kyndryl.com