nerds1.2.txt

Bill Gates We were pretty young. We started when I was 19 and so we just had a lot of - a lot of energy. David Bunnell They worked really hard. They listened to really loud music, I could hardly stand to go to the software room sometimes because the music would be banging off the walls, mostly acid...

Bill Gates We were pretty young. We started when I was 19 and so we just had a lot of - a lot of energy. David Bunnell They worked really hard. They listened to really loud music, I could hardly stand to go to the software room sometimes because the music would be banging off the walls, mostly acid rock. Paul Allen You know we’d usually go out, eat pizzas and then go out and watch action movies. David Bunnell They would work all night long, and there were days when Bill Gates would be sleeping on the floor in the software lab. Paul Allen Sometimes it would be Bill and these two other guys all, you know, sitting on tables around the apartment with stacks and stacks of paper writing, converting the BASIC for the 8080. Bill Gates I still know the source code by heart, and that was er, er, a work of love, you know, we just kept tuning and tuning that thing. And - and so that kind of craftsmanship paid off. BASIC let the Altair be used for both fun stuff and real work. People attached terminals to the computer and began writing games, word processors, and accounting programs. Most of us didn’t notice but soon there was thriving industry for enthusiasts. By the end of 1975, dozens of other companies were building microcomputers. Ed Roberts We created an industry and I think that goes completely unnoticed. I mean there was nothing - every aspect of the industry when you talk about software, hardware, application stuff, dealerships, you name it, it was all in a mess. Bill Gates It was a wild time. It was a very exciting time. And the first user convention - where we got people to come in and tell us what they were doing, what they were excited about, and other companies like Processor Technology or Imsai or Comemco got going as add-on companies. These companies are long-forgotten, but they were the - the humble beginnings of the - of the PC industry. Left in the hands of those early hobbyists the PC might never have made it to the shopping mall. Reaching the wider market required a different type of vision. Enter the flower children of California, who thought the PC was, well, groovy. Steve Jobs Remember that the Sixties happened in the early Seventies, right, so you have to remember that and that’s sort of when I came of age. So I saw a lot of this and to me the spark of that was that there was something beyond sort of what you see every day. It’s the same thing that causes people to want to be poets instead of bankers. And I think that’s a wonderful thing. And I think that that same spirit can be put into products, and those products can be manufactured and given to people and they can sense that spirit. To help you understand all this, I will now take off my clothes. Jim Warren And he says well frame relay is scaleable. Jim Warren knows better than most what the hippy movement did for the PC. A sixties radical himself, he staged the West Coast Computer Faire – for a time the biggest computer show in the world. The Faire was where the PC really arrived. It’s also where Jim got rich. BOB: So eh Jim is this where you hold all your meetings? JIM: Uhm as many as possible - sure why not. BOB: This is how silicon vallye entrepreneurs conduct business? JIM: Oh I don’t know if it’s how entrenpreneurs conduct business. Believe it or not, Jim once taught mathematics at a Catholic girls school. JIM: Bubbles Bob? BOB: Sure. JIM: OK. Jim was immediately fascinated by the PC like many Bay Area hippies. The California counter culture was crucial to the PC’s development. Jim Warren And the whole spirit there was working together, was sharing. You shared your dope, you shared your bed, you shared your life, you shared your hopes. And a whole bunch of us had the same community spirit and that permeated the whole Home Brew Computer Club. As soon as somebody would solve a problem they’d come running down to the Home Brew Computer Club’s next meeting and say hey everybody you know that problem that all of us have been trying to figure out how to solve, here’s the solution, isn’t this wonderful? Aren’t I a great guy. And it’s my contention that that is a major component of why Silicon Valley was able to develop the technology as rapidly as it did, because we were all sharing - everybody won. Out of this creative show-and-tell came Apple Computer, the first mass market PC company. The Apple founders, a couple of recent graduates from Homestead High were regulars at Homebrew meetings. Steve Wozniak was the technical wizard and Steve Jobs was the visionary who saw microcomputers as a possible business. But Apple wasn’t their first business. Woz & Jobs had once built a device to cheat the phone company - they called it a blue box. Steve Wozniak Blue boxes were devices that could put tones into your phone and direct the phone company to switch your calls anywhere in the world for free and it was kind of…kind of weird for people to imagine that how could this worldwide phone system let you put a few little tones into your phone just like punching a touchtone phone, put the right tones in and it would direct your call anywhere in the world for free. Steve Jobs And it turned out we were at Stanford Linnear Accelerator Centre one night and way in the bowels of their technical library way down at the last bookshelf in the corner bottom rack we found an AT&T technical journal that laid out the whole thing and that’s another moment I’ll never forget - we saw this journal we though my God it’s all real and so we set out to build a device to make these tones. Steve Wozniak What we’d do is we’d walk into a dorm with a big tape recorder and we’d set the tape recorder on the floor and play the phone through it, hook up the phone with alligator clips so that everyone in the room could hear the phone conversations. And I was master jokester, and then I would get on the phone and dial some countries to show how easy it was. I would dial The Ritz in London and make a reservation and dial something and dial a joke in Sydney, Australia and everybody was really amazed by these things and so one time I said I could call the Pope. I called into Italy and asked for the number of The Vatican and eventually got the call into The Vatican. And I said this is Henry Kissinger - I didn’t even use an accent. This is Henry Kissinger and I’d like to speak to the Pope about the summit trip, he was on a summit trip. And they said oh wait wait a minute we’d have to wake him up. It was like 4:30 in the morning there. And I hung on the line and they said we’re waking him up, we’re waking him up and finally the Bishop came on who was the highest Bishop up who was going to be the translater for the Pope and he said you’re not Henry Kissinger and I went into a little accent and said oh yes I am you can call me back at this call-back number and I gave them a weird number where they’d call it back, I’d call a different number, we’d talk to each other but they don’t know my phone number and eh they never called back - but it was a good - I woke him up. Steve Jobs What we learned was that we could build something ourselves that could control billions of dollars worth of infrastructure in the world - that was what we learnt was that us two you know, we’re not much, we could build a little thing that could control a giant thing and that was an incredible lesson. I don’t think there would ever have been an Apple computer had there not been blue boxes. The first Apple computer was primitive. It was cobbled together by Woz to impress his friends at the Hombrew meetings. Steve Wozniak Everybody was interested in computers so I started getting a crowd around me because even although I was too shy to raise my hand and say anything in a club meeting - after the club meetings I would put my computer that I had built and every week it had a little bit more working on it too but I would set it down and let people type on the keyboard and I would explain what’s in it. If they would come up to me and ask the question I can answer eh you know nowadays I would have the ability to tell them what it is you know and be a little bit more promotional but back then I could only answer questions that they asked me but a kinda group started gathering around me. And Steve Jobs saw that I had a lot of interest around me at the club and he said let’s start selling it and let’s make this company. He came up with the name Apple and eh and eh thatÍs how it started. Apple was at best a funky company…started by a couple of teenage hackers who had previously been working as Alice in Wonderland characters in a local shopping mall and they started it in this garage right here. The first Apple computer was built here, now there are more than ten million in use around the world. And I was there - well for a short time I was an employee of Apple Computer, employee number 12 and one day I helped move materials out of this garage. At the time Steve Jobs said that the company was short of loot so he offered to pay me in company shares, but I held out for the money - my mother still reminds me of that incident. The Apple 1 was even less of a computer than the Altair – a single circuit board that came with neither a case nor a keyboard. Still, Steve Jobs managed to sell 50 Apple 1’s. That experience showed Jobs there was a market for a real computer – the Apple II. Steve Jobs It was very clear to me that while there were a bunch of hardware hobbyists that could assemble their own computers, or at least take our board and add the transformers for the power supply and the case the keyboard and go get, you know, et cetera, go get the rest of the stuff. For every one of those there were a thousand people that couldn’t do that, but wanted to mess around with programming - software hobbyists. Just like I had been when I was, you know, ten, discovering that computer. And so my dream for the Apple 2 was to sell the first real packaged computer. Steve Jobs’s dream was impossible. It needed too many chips, making the product too complicated and expensive to build. But Woz didn’t know it was impossible. Steve Wozniak And then I got in to a way of why have memory for your TV screen and memory for your computer, make them one, and that shrunk the chips down, and I shrunk the chips here, and why not take all these timing circuits and I looked through manuals and found a chip that did it in one chip instead of five, and reduced that, and one thing after another after another happened. I wound up with so few chips, when I was done I said hey, a computer that you could program to generate coloured patterns on a screen, or data or words or play games or anything it was just the computer I wanted, you know, for myself pretty much, but it had turned out so good. He said I think we have a computer we could sell a thousand a month of. How can you sell a thousand a month, you know? Steve Jobs But we needed some money for tooling the case, things like that, we needed a few hundred thousand dollars. Steve Wozniak That was a lot of money for two people who had nothing in their lives to speak of, didn’t have a 400 dollar bank account. Steve Jobs So I went looking for some venture capital. The scruffy 19 year-old seduced the conservative world of venture capitalists. The man Jobs persuaded to part with his cash was Arthur Rock, the inventor of venture capital and the man who had originally funded Intel. At least the Intel boys had graduated from university and owned suits. Arthur Rock Venture Capitalist Well, he wore sandals and he had long, very long hair and a beard and a moustache, but very articulate. He was, I think at one time in his life, and it was probably when I first met him that he ate nothing but fruit. Bob: So as a mainline venture capitalist, is this… Arthur: This is not the norm. This is not the norm. With money in hand and under occasional adult supervision from an ex-Intel manager named Mike Markkula, Woz & Jobs finished the Apple II and ordered a local factory to build 1000 machines. Two years passed between the Altair and the Apple 2. And in that time a lot of things changed. We went from a computer that was designed for hobbyists and engineers and certainly looked like a piece of test equipment to a computer that looked like a piece of consumer electronics and we can thank Steve Jobs for that - his sense of design demanded that this structural foam case be used for the Apple 2 - the first case of its type on a personal computer. And not that there wasn’t good engineering inside either. The Apple 2 was a model of efficient engineering - here’s the floppy disk drive controller for example. There are eight chips here where previously there would have been thirty-five. This is an amazing bit of engineering that we can attribute to Steve Wozniak who is certainly the Mozart of digital design and all told it turned the Apple 2 into a sensation. The Apple II was launched at Jim Warren’s West Coast Computer Faire – one of the first big microcomputer shows. The 1978 show drew thousands of attendees and dozens of exhibitors – many of them members of the Homebrew Computer Club, which spawned most of the early microcomputer companies. But there was only one company showing something that looked like a modern personal computer. Right by the entrance, in a prime spot negotiated by Steve Jobs, sat the Apple II. It mesmerized all who saw it. One later became a top Apple programmer. Andy Hertzfeld Apple Computer Designer As a grad student I went to the first West Coast Computer Faire because I was interested in personal computers, and just on a tiny little table, like a picnic table almost - just covered with a tablecloth there was this Apple 2 and I swear, in my memory, it seems to have a halo around it now. It just drew me right to it. Steve Jobs My recollection is we stole the show, and a lot of dealers and distributors started lining up and we were off and running. Bob: How old were you? Steve: Twenty-one. Bob: Twenty-one! Following the West Coast Computer Faire, the next two years were ones of explosive growth for Apple, with thousands of customers literally arriving on the doorstep of the tiny office in Cupertino, California. Sales and profits grew so quickly that Apple had more money than the company could spend. And the company was very young. The founders were in their twenties and some employees were even younger, like 14 year-old Chris Espinosa, who never left. He still works at Apple, almost 20 years later. Chris Espinosa Manager, Media Tools, Apple And there would be public demonstrations of our product every Tuesday and Thursday afternoon at 3 o’clock and that was good because it was after school. So I would get out of my, you know sophomore-junior year of high school, I would ride my little moped down to the Apple offices and at 3 oÍclock I’d give the demonstrations of the Apple 2. Steve Wozniak When we were in the office it was hey jokes and we were wiring up people’s phones to do weird things, just every one of us I mean there wasn’t a person in Apple I don’t think for a couple of years that was you know super serious. We were lucky, we had like the hot product of its day. Chris Espinosa And some of the people that I did original demos to came up to me years later and said you know I founded a hundred million dollar chain of computer stores based on the demo you showed me one Tuesday afternoon at Apple. It was really fun. Steve Wozniak It went so successful that all of a sudden Steve and I wouldn’t have to worry about work for the rest of our lives. And then it got even more successful and more successful after that, and eh it was sort of a shock. The Apple II set a new standard for personal computers and showed there was some real money to be made. Rival companies popped-up all over, but the market was still hobbyists – guys with big beards who thought a good use for their computer was controlling a model train set. But for microcomputers to be taken seriously, they had to start doing things that needed doing – functions that were useful, not just for fun. The enthusiast had its limits. To reach the rest of us the Apple 2 needed what nerds call a killer application. Software that’s so useful that people will buy computers just to run it. For the Apple II, this application was called VisiCalc. It came straight from the blackboards of the Harvard Business school. Invented by a graduate student, Dan Bricklin with his programmer friend Bob Frankston, VisiCalc was the first electronic spreadsheet. A spreadsheet is a tool for financial planning, bringing together for the first time the seduction of money with the power of microcomputing. Dan Bricklin’s professor at Harvard showed how companies used a grid of numbers on a blackboard to work out profits and expenses. Dan Bricklin VisiCalc Inventor Sixty down here and your profit would be this minus this which gives you forty. And then well let’s see what’s the sales growth, say there’s a ten percent… The trick to a spreadsheet is that all the values in the table are related to the others. So changes in one year would ripple through the table, affecting prices and profits in subseqent years. Students were asked to calculate how future profits would be affected by various business scenarios. It was called running the numbers and they did it laborously by hand. Dan Bricklin Well let’s say your initial costs have a hundred fixed costs at the beginning so now you have a minus twenty is how much you make the first year and in the second year you have a hundred but your variable is say let’s say twenty-five so now your losing what is it - it’s a pain in the neck I wasn’t very good at this stuff - eighty what - no no no - fifteen - minus fifteen right and eventually your making money, what year do we make money and how much does the cost of money that’s what running numbers was. Because each value was linked to others, one mistake could mean disaster. Dan Bricklin It blows your all number afterwards because you make all your calculations based on the other numbers before them. If I had miscalculated… Dan, who had worked as a programmer, started daydreaming about how he could use a computer to replace the tedious hand calculations. Dan Bricklin I imagined that there was this magic blackboard that did like word processing does word wrapping - if you make a change to a word it automatically pulls everything back, well why no recalculate in the same way? So that if I change my number, you know, I should have used ten per cent instead of twelve per cent, I could just put it in and it would recalculate everything and go through it you know and that would be this idea of an electronic spread sheet. Following a model that’s common today, Dan Bricklin designed the program, but got his friend Bob Frankston to write the actual computer code. After months of programming late at night when computer time was cheaper, the Harvard Business School blackboard came to life. Dan Bricklin Now weÍve set this up, OK. Then we type a new value in, then I’m going to take that one hundred, I’m going to change it right and here, it recalculated! Woa! That saved me so much time. People who saw it and went and got it like an accountant, I remember showing it to one around here and he started shaking and said that’s what I do all week, I could do it in an hour you know, you know, they would take their credit cards and shove them in your face. I meet these people now they come up to me and say I gotta tell you you know… BOB: You changed my life. DAN: You changed my life. You made accounting fun and… Bob Frankston VisiCalc Programmer You have to remember what it was like in those days we did not use the word spreadsheet cause nobody knew what a spreadsheet was. I came up with the name visible calculator or visicalc because we wanted to emphasise that aspect. VisiCalc hit the market in October, 1979, selling for $100. Marv Goldschmitt sold the first copies from his computer store in Bedford, Massachusetts. After a slow start VisiCalc took off. Marv Goldschmitt What it did in our society, it gave people who were obsessed with numbers, whether they were in business or at home, how much am I worth today, what’s my stock portfolio worth, how am I doing against budget on this project. It gave them an ability to play with scenarios and change it and say well, what if I do this. So it put people in a sense in control of the thing that lots of people in our society feel is driving them and that’s numbers. The spreadsheet was every businessman’s crystal ball. It answered all those ‘what if’ questions. What if I fire the engineering department? What if I invest $10 million in pantyhose futures? Look! I’ll be rich in under a year and have slimmer thighs at the same time! The Computer says so! The effect of the spreadsheet was enormous. Armed with an Apple 2 running Visicalc a twenty-four year old MBA with two pieces of dubious data could convince his corporate managers to allow him to loot the corporate pension fund and do a leverage buy-out. It was the perfect tool for the eighties…the lead decade where money was everything and greed was good. In five years, the PC had gone from a hobbyist’s toy to an engine that shaped the times we lived in. Thanks to VisiCalc the Apple II made history. Steve Wozniak Everybody you talked to just seemed excited about talking about what we were doing. And there was this huge media explosion, kind of like the Internet is receiving today, of this is the happening thing. You read about it over and over and over, and every time you took an airplane flight you read about it, in every newspaper every week you’d read something about small computers coming, and Apple was one of the highlight companies so we were being portrayed as a leader of a revolution, and we really felt that we were a leader of a revolution. We were going to change life a lot. Pretty good for a company started in a garage three years before. But not all the PC pioneers made great fortunes. Dan Bricklin decided not to patent his spreadsheet idea. Though more than 100 million spreadsheets have been sold since 1979, Bricklin and Frankston haven’t earned VisiCalc royalties in years. Dan Bricklin You know, looking back at how successful a lot of other people have been it’s kind of sad that we weren’t as successful… Bob Frankston It would be very nice to be gazillionaires, but you can also understand that part of the reason was that that’s not what we’re trying to be. Dan Bricklin We’re kids of the Sixties and what did you want to do? You wanted to make the world better, and you wanted to make your mark on the world and improve things, and we did it. So by the mark of what we would measure ourselves by, we’re very successful. And what about Ed Roberts? Three years and 40,000 computers after assembling that first Altair, the fun was over for Ed. MITS was just another player in what had become a competitive market for personal computers. Roberts sold his company in 1978 and started a new life. He went back to his native Georgia and retrained as a doctor. Ed Roberts I hadn’t really thought anything at all about it for the last few years until people started taking credit for things that we did at MITS eh that’s the only thing I think about. It irritates me when I think about the things that we did at MITS and we took all the heat for that other people have tried to take credit for and that frustrates me. While Ed Roberts invented the personal computer, it was the founders of Apple who got rich. When Apple went public in spectacular fashion in 1980, Jobs and Woz became multimillionaires. The nerds had inherited the earth. Steve Jobs I was worth about over a million dollars when I was twenty-three and over ten million dollars when I was twenty-four, and over a hundred million dollars when I was twenty-five and ehm it wasn’t that important ehm because I never did it for the money. Steve Wozniak It was just a little hobby company like a lot of people do not thinking anything of it. I mean it wasn’t as though we both thought it was going to go a long ways. It was like we’ll both do it for fun but back then there was a short window in time where one person who could sit down and do some neat good designs could turn them into a huge thing like the Apple 2. It’s astonishing that at the beginning of 1975 nobody owned a personal computer all there was was a mock-up on a magazine cover yet within five years there had emerged here in Silicon Valley a billion dollar industry. An unhealthy fascination with technology on the part of a few adolescents had awakened the nerd within us all. PC companies were sprouting like mushrooms to meet the enormous demand. Apple had emerged as the top fungus and had taken fifty per cent of the market. To the boys in Cupertino, every day seemed like Christmas…but Scrooge was around the corner. There was a company that everyone associated with the word computer, a company that expected, no demanded to dominate its market - IBM - Big Blue was on the move and Silicon Valley would soon be feeling the reverberations.