Steve Wozniak, Co-Founder of Apple in conversation with Nadine Dereza

It's great to be here. I heard Bay's comments here. You want to take something home from the event? Now I want to attend as much as I can, yes.

No, when you're dealing with no money, no bank accounts, trying to grab a few hundred dollars to start a company, no, you're not thinking of that huge, huge of a thing. And at the time, we really raised money to become a real big company and put out this great product, the Apple II, and it was going to go places. But when we raised that money, the investor had business experience and he spoke of these markets that spring up, you know, once a decade that become a billion-dollar market in five years. And I thought, well, the more accomplished you are, the bigger words you can use. Remember, Steve and I were in our young 20s, no business experience, no business schooling. So it was just Steve was more of the businessman, though he was just scrambling, wanted to have some way to have companies to make a little bit of money so you can invest it and make some more. And yes, I was just the key technologist, not just the inventor, the engineer, the innovator.

Wow, it goes way back. It goes back to when I was young and discovered that computers are easy for a youngster to understand. You don't need higher-level mathematics, and it just made it a passion in my life. I never thought I'd touch a computer, never thought I'd actually see one or be with one. And then I started learning, teaching myself how to design them with the early chips. It was kind of nice growing up in Silicon Valley. We were moving from vacuum tubes to transistors to integrated circuits, and I got an early start, early young ham radio operator where you build your own equipment. So in those days, you had all of the parts pretty available except for chips were not affordable. But I sat down with pencil and paper and designed computers over and over and over, and I made a game of getting better and better at it. How do you design it with fewer parts? Efficiency became the heart of engineering. And engineering is like science and math; you have real answers that you know are right or wrong, and it's not subjective and can't be decided by the way somebody speaks with words. So I was kind of a technical nerd, very scientific type person, had that reputation, but I was all private. I designed these computers, never showed my designs to anyone, could never get the parts to build them, and that was a part of the process. Then as I was in college, I would have to take time off to work to earn the money for more college, and I was at a company working and I told one of the executives I used to design all these computers, and he said, 'I can get you the parts. I know the Silicon companies, I've got connections.' And the prices were coming down, so I designed a computer, he got me the parts, and building that computer was where I met Steve, who went to the same school I went to.

He was about, yeah, he was four years behind.

Well, I was building this computer I had designed with a friend. He said, 'You've got to meet Steve Jobs because he understands this digital electronics and how these little devices can be hooked together,' and very few people did in those days, it was very unusual. And he also liked humor and pranks and jokes, which I do. So Steve and I met and we just had so much in common, you know, especially the technology understanding, what kind of chips were available that could count numbers and display numbers on displays. So we pretty much became best friends for the next eight years. And on the way to Apple, some great things happened. We did a lot of fun projects on our own, but I got a job. I was very lucky. I did not have a college degree yet, but I got hired by Hewlett-Packard as a designer, designing their early handheld calculators. And it's really great that they interviewed me and realized I could do the work. I didn't need to have certain degrees and credentials; by answering questions, they knew I was a great designer. So I had this great job, but I loved engineering so much and I was all alone, never had any hopes of a girlfriend or a wife. So when I came home from work, I had all the time in the world to work on electronics, and it was just constantly, you know. And I had access to parts. Hewlett-Packard had a very favorable policy that was instituted by the founders of the company: that an engineer who designed something of their own for themselves could have access to the parts in the storeroom with the manager's approval.

Well, I had this long, long, long life of loving computers, of telling my father when I was in high school, I said, 'I'm going to own a 4K computer someday, enough that I can write programs on.' And he said, 'It costs as much as a house.' So I told him, 'Well, I'll live in an apartment.' I had already made the decision, wanted a computer in my life. Now, there were a lot of other people that knew how to use computers and how they worked that were like me, young. They wanted their own computer. They didn't want to use the computer the company owned, where it was very much off-limits to you to do your own exploration, your own work on it. And the Homebrew Computer Club, it was the first club in the United States, probably the world, that started up to celebrate the idea that computers were going to be affordable by people, and based upon the cost of chips like the microprocessor finally hitting a price range, and the price of RAM, computers were visible in the affordable range. And we started meeting. We talked about the great social revolution: how those of us who knew how to program were going to be more important than the CEO in our companies, because we'd go to our big companies with a little computer on our desk and we'd run the finances and get the financial answers quicker than their big, huge, multi-million-dollar mainframes. So it was really thrilling. It thrilled me, inspired me, and it gave me the motivation to use my designing skills to design the products that would help these other good people achieve the social benefits. And communication was a big part of it.

Well, it was alcohol-free during the meetings. Afterwards, a lot of them met down at a beer place. I didn't drink, so no.

I was very shy in those days, and I sat in the very back of 500 people, never once raised my hand to speak. I listened, but I listened to the ongoing ideas of where computers would take the world. We had academicians from Stanford, we had companies starting up that were building small products for early little hobby kit computers. And so I listened, and I listened to what products were coming out and what companies were planning, what strategy moves that would relate to us. And I just sat down and I figured out the way to build a complete, usable computer for the affordable price. And it was quite a bit different than computers that had ever been built before, so I had to take a whole different direction. But I was used to that. When you're quiet and shy, you're a very inside person. You don't really care if your way is different than the rest of the world. If you can see your end result, you'll meet your goal.

The Apple I came about step by step. I had already seen a friend using the early internet, the very precedent to the internet was called the ARPANET, started by the United States military. And the idea was to link a bunch of computers in different cities together with different routes so you could remap things if parts of it went down. And it was called the ARPANET. I saw a friend typing on a teletype, a big expensive teletype that costs as much as a car, and he said, 'I was playing a game with a computer in Boston across the country.' And I said, 'Wow, I have to have this.' Well, whenever I said I have to have something, my way was design it, build it with very few affordable parts. And so I had already built this little terminal that I could type on a keyboard, go through a modem into my phone line, call a local number at Stanford, and I was on the ARPANET and I could talk to all these computers and run guest programs. And Steve Jobs had already come around and said, 'Let's sell it.' Whenever I developed something good, there were four different things that he said, 'Let's sell.' And he came along and said, 'Let's sell it.' We actually sold some of that terminal. It was a terminal that talked to faraway computers. Well, the Homebrew Computer Club convinced me I could buy little chips, a microprocessor. I could afford one. Intel was too expensive, $400, but I found one for $20. I bought it and designed a whole computer. But I just took my terminal, so now I could type to my own computer and it could type back to my television. I had to use a television because input/output was the forbidding, the highest cost of computers is always input/output, and a person couldn't really afford things like teletype machines. But my home TV was free because I already had it. But in those days, you had to snake wires to the inside of it. So now I had designed this, and I started passing out my designs and the software I wrote. And the method I came up with was you have a keyboard like a typewriter instead of a big front panel that looks ugly and intimidating and looks like something a normal person doesn't want to touch. Every computer before the Apple I had the front panel, and every computer after the Apple I had a keyboard. So it was a big turning point. Now, Steve Jobs came and he said, 'All these people that you're giving your designs to, no copyrights, no patents,' he said, 'they want to build them, but we could build a PC board for $20, sell it for $40, and we'll make a bunch of them and sell them.' And he had come from, he used to work in surplus parts dealerships. He was a salesman at surplus parts stores, so he knew where to find a part you could buy for 60 cents and sell it for $60. He was good at that. So I kind of rejected it. I had to get approval from my company. I loved Hewlett-Packard. That was a company for engineers. I was determined to be an engineer my whole life. You don't have to move up the management chain; you can work till you're old at Hewlett-Packard. It was a company founded by engineers. They respected engineers. Engineers came up with the ideas for the next products. So I'm going to work at Hewlett-Packard, and I pitched them. I wanted them to build these machines. I described, for $800, you can type on it and you can run programs. They turned me down five times. But they turned it down for good reasons. The corporate culture of Hewlett-Packard, the kind of products that they built and were known for, they saw that what I had was incredible. When they saw the Apple II, they said, 'It's the best product we've ever seen.' But they couldn't build it as a Hewlett-Packard product because they couldn't build a product that was fanciful, fun, you know, all these home-type things. They had to be professional for engineers and expensive and very, very formal, and it just didn't fit what I was doing. So they turned me down. And now Steve Jobs and I went into business, named it Apple Computer, just to sell these PC boards for $40. And very shortly, the local store said, 'We want to buy completely built computer boards for $500 each.' They gave us an order for $50,000, when my salary at Hewlett-Packard as an engineer was only $24,000. So that was scary. Yes, that was scary. That was the big time. I went back to Hewlett-Packard's legal department because I was going to work at Hewlett-Packard for life. No matter what we did at Apple, it was just a play thing. Apple was sort of a thing on the side. And Steve and I basically went into business. Now, how do you do it with no money? You have no bank account, you have no cars. Well, every step of the way, we did whatever we could with the little bit of money we had. So what we did was we got the parts on credit, built the computers in 10 days, and delivered them to the store and got paid cash. And we had 30 days credit on the parts. So basically, the store took the credit for us to start our company. And we probably built a couple hundred of that computer and sold 150 of them. We had a little bank account of about $10,000. So we had our start. But really quickly, I developed the Apple II, and that was the one that we knew was going to sell huge, huge amounts of quantity of computers and money and everything.

We had the whole product. I had conceived it, developed it, done every bit of the hardware, the software, writing a computer language, doing every bit of the work. I don't know how I did so many different tasks. You look back now, it's incredible, really, isn't it? There is a misconception that you didn't do all of that, and I know you've put the records straight in your book. But just interesting about forming a company with Steve Jobs and raising the money, and then getting the Apple II. Raising the money was very difficult because with the Apple II, we had a computer that we couldn't afford, we couldn't get credit on. We would need $250,000 to build the thousand computers that we knew we could sell in a month. So that was difficult. And raising the money, we went down to a company, Commodore, and we were describing what we had and showing them my Apple II. And then Steve, out of the blue, starts talking, 'Well, they could buy it for a few hundred.' And I shut up because this was too much money, it was too big an amount, and I was just scared. I mean, good Lord, I designed this thing in half a year, you know. And he was going, 'We'd get jobs and we would have stock in the company and everything.' And they turned us down. Another company turned us down. The venture capitalist turned us down because we didn't speak business talk well, and introduced us to an angel. And he was an accomplished person who had stock options at Intel, and he had wanted to look around for investments in electronics, and he was favorable to computers in the home. He had thought about it also. Mike Markkula, and he joined us, put the money in as a third equal partner to Steve and I. You never hear about him because he didn't come from the early starting with absolutely nothing in a garage, but he was very instrumental because he provided the guidance, the mentorship to basically train us. And when we started, we were lucky that we did have good people in the roles that the company needed: a really good president who just made sure that everybody was getting their work done and that the right things were being attended to. Steve Jobs was learning to basically run every single department of any company. It was kind of a random definition of his job, but he was sort of like the spirited leader, and I was clearly the engineering, the digital engineering.

I think he feels he's a little unrecognized, but I don't think he minds it. He's done okay. He's done okay. He actually joined us. He ran our marketing, which is what he had done at Intel. So he ran our marketing for a few years. He became a CEO of Apple for some period of time, chairman of the board for a very long time. And he loves to be an engineer. He loves to sit down and write programs with the newest coding systems and everything. So he's a really great guy.

Well, there were some very lucky things about the timing of the product that I was sensitive to. Before the Apple, computers were so huge they took a team of people to design and build. And after the Apple, they're so valuable in money they take teams of people to design. So it was the only point in time one person could design it. And I had learned, I had been self-taught. I hadn't really learned in books in college. I'd never taken courses in things like writing computer languages. But I was so smart I could figure out what you had to do very quickly from a few pages when the time came. So basically, I forget what I was going to say. You're talking about the openness of Apple. Yes, so I had learned from other people's work. I had looked at other people's circuits, other people's code, and said, 'Aha, that's how they did that.' And that was my early learning, and I wanted to pass that on. So in the Apple II, we put out all of the schematics, the circuits, the listings in code examples, and a very thick manual. We put out the first one was called the Red Book, and we put that manual out, and people could look at it. That's how computers work. In other words, people who had a mind like myself that liked logic could say, 'Oh, now I understand what chips you use and how they connect together, and oh, this programming.' And I tried to also be an artist and make it very beautiful, both the designs and the code, by using very few pieces to do a lot. So people really learned from that. I run into a lot of CEOs today say, 'I started out programming on an Apple II.' You know, it's like they discovered it was their love in life. But that openness, you wouldn't get that in this day and age, now would you? Oh, the real openness was we had a lot of slots you could plug things in, and it was easy to write your programs in all sorts of languages because of the information we gave. It was easy to design boards that connected to various printers, boards that connected to various modems, boards that were modems, boards that connected to floppy disks. And thousands of companies sprung up of little guys, little innovators that never thought in their life they'd have a company and that their skills were going to be worth anything other than as an employee in a technician category. And all of a sudden, they were selling stuff and feeling proud of themselves. And it was so neat to see all these thousands of companies starting. So we had a platform, but we had thousands of companies that were advertising for our product.

Well, the Apple III, yeah, was the first time we had a product that wasn't designed by one clear mind, and it had a bit of push from upstairs marketing. The first spreadsheet program, VisiCalc, had come out. It would only run on the Apple II, and our market expanded 10 times. So we realized, oh, this small business market, it was the first killer app, the first time people could come in and say, 'Wow, for a few thousand dollars, I can do more work than I could do in 10 years on pencil and paper. I have to buy it.' It made the computer a must-buy thing. So we said, 'Oh, we should build the machine for that market, the business computer.' And we failed in a lot of ways. We failed in hardware, we failed in software, we failed in openness, not making it easy to design for. We didn't have as many slots to plug your own things into. It was a very much more closed machine. And it just unfortunately, it actually cost the company a lot more money than you ever really report. And by that stage, the company got a lot bigger as well. So that hands-on approach, you know, the Apple II was just expanding throughout the world and bringing in such huge revenues that even though every employee in the company was forced to have an Apple III on their desk and all the projects were Apple III projects, the only guy working for the Apple II was the guy reprinting the price list. It was pulling in all the huge revenues that were driving our company. So we got through the Apple III. We went public at that time, and the expectations for the Apple III were so great. We had a great public offering, you know, one of the greatest of its time, I think.

And then we started looking. Steve Jobs was always a bit paranoid. He was always thinking, 'Oh, the competition is going to be right breathing down your back. We've got to move quicker than them.' And you know, we have some fine people and some fine teams, and a small team in a small company like Apple can outperform a small team in a company like IBM, you know, if you're good enough. And that's what led us to... We had influence from the outside. A guy named Jeff Raskin introduced us to the idea that one computer can calculate, another computer can calculate, they can both do equal amounts of work, but if you put a lot of effort into the software on the second computer, it can be very easy for somebody who's never used a computer in their life to get some benefit from it, whereas the first computer might need a computer expert to use. And Jeff Raskin brought that humanist thinking into Apple, took us to Xerox PARC, where Steve and I saw the windows-type machine with a mouse. And the mouse was a big surprise to you at the time. And although this was, you know, 1980, that machine had been really written about in 1963, a paper by Douglas Engelbart, really that technology. But we weren't aware of it. So it's the first time, and as soon as I saw windows popping up on a screen in multiples, I said, 'That's like more than one computer in one.' Once you have that, you'll never go back. Yes. And we got to work on the first graphical user interface machine. We hired a lot of very fine academicians and humanists in the software team that were really testing what works well with human beings, what with the way that you already do things. We took a screen and we called it a desktop because human beings were used to desktops with papers on them. So we tried to make it as familiar a world as possible. We did such unusual testing, I've never heard of in my life. We would just bring people, and Jeff Raskin said, 'If you build a machine right, the person who knows nothing about computers can use it. The youngest person, a young child, can come in and use it.' So we would bring in young children, spouses, people that we knew that knew nothing about computers, sit them in front of a box and say, 'See what you can do with it,' and we'd leave the room and leave them alone for an hour. And we'd watch them through mirrors, and we'd figure out what sort of icons, words on the screen, placement of things, coloring, what would they find out how to use a program. So was that usability, that ease of use? Yeah, that ease of use really came along with this. And the Lisa computer did it very well, but because it was really built to be like today's machines, it was too expensive in that age. So we didn't sell very many at $10,000 a pop. And the Macintosh was an attempt to do it much cheaper in that year.

Well, two ways to look at it. Sometimes it's very critical. You're first, the world swamps your way and makes a decision that you have a great product. And you know, it's the brand. The brand Apple is a great brand. The brand Macintosh is a great brand. We were so early, now people see it's a PC or Macintosh, and they don't think back to who really was first. We don't have the greatest market share for, you know, probably a lot of reasons. But I look at it this way: there was a time when we had the Macintosh with a mouse and the system we're used to today, and the PCs all had memorized commands.

that you had to type in commands to move files around and they were much more difficult to use. And now I'd say every computer today is a Macintosh, that's how I look at it. The acceleration, there are other facets too. Sometimes a lot of people will try to build a product, a new market, and do it clumsily. And if you can analyze it and say, boy, a lot of people are building these products but they just don't have that feel. It's something you can't really describe in words, you have to almost use it, have it in your hand and have a feeling, does it fit me as a human being.

Well, of course, the ones from Apple, the recent ones, the iPod and the iPhone. Just like the iPod, there were a lot of music devices being built all over the world. And I traveled the world a lot and I bought every one I could. And I had some that were RAM-based and some that were media-based and some that were the mini discs. And when the iPod came out, it just sort of found the right formula and worked so well with my hand. I didn't really have to think, it was a pleasure to use. You know, and there's nothing wrong with the equipment that you use in daily life, even for work. There's nothing wrong if it feels good, I enjoy this. And that's what makes people fall in love with your products. An iPod really does embody that openness of Apple. And we've always been very hot on style, and that comes largely from when we came out with the Apple II. Steve Jobs took on the project of designing a case that would be attractive enough to put in a person's home but called a computer. And so he continues to very much emphasize the design, the quality, the style of all the products. That a little bit of money really goes a long way in that regard.

Wow, you know, and a lot of them really miss the formula that are trying to. It's not very easy and it's actually not cheap to do a lot of the things the right, best way. Today the products, your love for a product like Apple's almost always comes down to very small, convenient size and things are positioned well and all this. So manufacturing technologies have taken over the world, you know, ways to fold in chips and get the most electronics in but in the smallest space. That's a large part of it. So a lot of companies have that trouble. You know, I know Google is probably the company I would say that stands out right now as probably the closest to Apple in its philosophies. It has a lot of philosophies that we started with when we were young too. You only do good and the employees have a lot of free time to work on their own projects. And that's where Apple came from, out of HP actually.

Google, you know, you look at some of the social networking sites and there've been just dozens and dozens of them and a couple pop to the top, you know, and Facebook and MySpace. And Facebook, I was talking to one of the early founder investors and he was talking about how it's the little nuances, tiny little details, spending so much time to getting them absolutely perfect. And you know, you'll work very late into the night to just get every screen looking right and then it will feel right to other people if you are representative. So you first of all got to build design products that you love yourself. You want to be a user, you have that passion, I want this to be the best thing I could ever use. Another thing that comes out though is if you are kind of a key developer, designer in charge of a product and you want it to represent yourself, in other words, as good as that product looks to others is how good you look. And you really want it to be that perfect, even things that another user won't see, you want so perfect like an artist. That makes great products.

Yeah, clearly, we conduct everything we do today with the computer. You realize how much effort it would take or be impossible to do the same amount of work without the computer. But that was really a result of Moore's Law, the fact that we had developed this integrated circuit technology and the technology of digital electronics in a fashion that was going to decrease in price a billion times in our lifetime. You know, a lot of people look at other markets and they say, oh, you know, maybe there's some alternative energy technologies and they're all going to come down in price, but nothing's going to come down a billion times over our lifetime. So just the chips getting inexpensive and doing so much and so much more brings them closer and closer to acting like a human. We're not really very close yet.

Well, I may be sort of a traitor in Apple, but I prefer the open philosophy that we started the company with. And Bill Gates went to IBM and he said, look at the Apple II, it's so open, anyone can attach their own devices to it and grow from it. And that IBM should do that, build the hardware open and leave the software and the operating systems to other people. Of course, Microsoft's operating system was closed, you couldn't attach it and do your own versions and modify it and all that stuff. So it's kind of a joke. We're very, very closed and proprietary now and our devices work with our devices and we don't want you to buy music and be able to use it on any general purpose device. And part of me doesn't like that. It's just like, I want, like when I travel the world, I like the fact that Wi-Fi works everywhere, a worldwide standard that just works everywhere. And you know, and I can kind of plug in my adapters now pretty much in the world, but there were times that was a big problem. And I really, every time you remove a constraint, you have to operate this way in one place, that way in another place, it's moded, you have to be in different modes wherever you go. My mind is the type that doesn't like that. I just want sort of a general principle and it works everywhere.