Apple's origins: An oral history from inside the loop

Alums share memories as Apple marks another anniversary. Spoiler: Bill Gates had a bigger role in Apple's success than he may know.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
17 min read
Clement Mok

Editors' note: This article originally ran April 1, 2016, for Apple's 40th anniversary. 

Whether Apple was actually started by two guys in a California garage may be debatable, but what's certain is that the pioneering computer maker turned consumer electronics juggernaut has come a long way.

Forty-three years after Steve Jobs and Steve Wozniak set out to turn computers into a tool that anyone could use, Apple has become one of the most valuable brands in the world, with some of the most successful products ever made.

Apple has shaped countless industries, from computing to music, and its former employees have gone on to innovate and create new tech industries around everything from enterprise software to smart thermostats.

It has reinvented itself numerous times, changing from Apple Computer to the iPhone maker. Apple now is going through another transition as smartphone sales slow. The company is making a bigger push in services, with its first TV streaming, game streaming, news subscription and credit card offerings unveiled during an event in March

At its heart, Apple has always been about creating elegant, easy-to-use products we never even knew we wanted. 

"It was love at first sight when I first encountered the Apple II at the inaugural West Coast Computer Faire in April 1977," said Andy Hertzfeld, one of the original members of the Macintosh team who designed the system's software. "I continue to be thrilled by new Apple products to this day."

Other former Apple executives and partners shared their favorite memories of the company and Jobs, who was, to many people, the driving force behind its success. They include former finance execs Debi Coleman and Susan Barnes, ex-Apple designer Clement Mok, technical visionary Alan Kay, chief evangelist Guy Kawasaki, and Jobs' marketing mentor, Regis McKenna.

Here's what they had to say.

90 hours a week and loving it

Apple's first success came from the Apple II computer, and it tried to follow that up with the Lisa. But early Apple became better known for another computer, the Macintosh. The Mac started as a research project in the late '70s with only four employees before becoming Jobs' pet project by January 1981.

There was a lot of competition between the Apple II, Lisa and Mac teams. For one off-site retreat, the Mac group, which flew the pirate flag over its offices, had gray hoodies printed up. They read: "90 hours a week. And loving it," in a red and black font, recalled Coleman, who joined Apple in 1981 as finance controller for the Mac.

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Mark Hobbs/CNET

Every member of the Mac team, about 100 people at that time, got the hoodie. It was a hit. (See the photo, courtesy of Mok, at the top of this story.)

"Within a week of coming back [from the retreat], the Lisa group had a shirt that said 'Working 70 hours a week. And shipping product,'" Coleman said. "A week later, the Apple II group, which was making all the money hand over fist, had a shirt that said, 'Working 50 hours a week. And making profits."

"Who knew it was going to cause a reaction across the entire campus?" Coleman added.

She became head of Mac manufacturing in 1984 and was one of the highest-ranking women in the tech industry. She took over the role of Apple chief financial officer in 1986. At a November reunion of some women on the Mac team, Coleman attributed a big part of Apple's success to Jobs, saying he made people at Apple believe they could change the world.

Look and feel like The Beatles

As he was getting ready to launch the Mac, Jobs wanted the computer "to look and feel like The Beatles. Not the late Beatles, but the early Beatles," remembered Mok, a designer hired by Apple to work on branding for the Mac launch. "Tom Hughes [the creative director on the Mac team] and myself scratched our heads. What the hell is that?"

They decided it meant there was a certain rawness to the Mac, but with a sense of passion and artistry. "It's an artistic expression of technology," said Mok, who joined Apple in 1982. "This product has been crafted."

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The branding for the first Mac featured a squiggly line drawing of the computer, later dubbed the "Picasso logo."

Image courtesy of Clement Mok

(They were so successful in giving Apple a Beatles feel that Apple Corps, the company that owned the rights to the Beatles music, sued the Cupertino, California, company for trademark infringement. The two sides had a long-running legal tussle, but ultimately reached a settlement in 2007 and in 2012 sorted out ownership of the logo.)

Mok became co-manager of Apple Creative Services in 1985 and served as creative director for corporate and the education market. He's one of the people responsible for the iconic imagery of Apple in its marketing and packaging, including the squiggly line drawings gracing early Mac promotional materials.

But one aspect of the Mac, that squiggly line design, didn't feel as much like The Beatles to Mok as it felt like Joni Mitchell. Jobs wanted to mimic the logo for the now-defunct Ciao Restaurant in San Francisco's Financial District.

"I tried but couldn't for the life of me put it together," Mok recalled. Apple ended up hiring the man who created the Ciao logo in the first place, John Casado. What came from the team is what's known as the Macintosh Picasso logo. Some branding elements from the first Mac live on today, including the minimalist white packaging used for Apple's devices.

Find a way

Early Apple employees, most in their 20s and 30s, were given big responsibilities.

"Steve used to have a saying, 'We hire smart people to tell us what to do, not hire them to tell them what to do,'" said Susan Barnes, who joined Apple in 1981 as financial controller of the Mac division.

She worked closely with Coleman in her early days at Apple and ended up reporting directly to Jobs for a decade. Barnes co-founded NeXT Computer with Jobs in 1985 and became its CFO.

At one point in early 1985 while still at Apple, Jobs called Coleman and Barnes on a Friday night and said he wanted to buy a chunk of Adobe Systems. Apple and Adobe were closely linked in their early history, with the two working together to develop desktop publishing technology.

"It's something we really needed in the Mac days," Barnes said of Adobe's software and fonts. "Laser printing is something that really made the Mac take off."

Barnes and Coleman went to the law library late at night, trying to figure out how to buy a stake of another company. "How do we do this?" Barnes said. "This is usually what you ask senior management. And we were like, 'Oh, we are senior management.' It sort of hit you."

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Apple ended up investing $2.5 million for a 19.99 percent stake in Adobe in early 1985. In 1989, it sold the stake, which had been diluted to about 16 percent, for $84 million.

"When you're in corporations later, it's so easy to hide behind, 'Let me check with that person,'" Barnes said. At Apple, it was "No, it's you. Let's just do it. Find a way and don't be afraid of the consequences."

Orwellian 1984

Jobs recruited John Sculley in the early 1980s to help him grow Apple as a company. Sculley was CEO of Pepsi and helped it overtake Coca-Cola as the top beverage maker. Jobs famously convinced Sculley to take the CEO role at Apple in 1983 by asking if he wanted to "sell sugar water for the rest of his life" or if he wanted to "come with me and change the world." Sculley, who was close with Jobs before ousting him in 1985, served as Apple's CEO for a decade until being forced out himself.

In the fall of 1983, Sculley, Jobs, other Apple executives and two members of the Chiat/Day advertising firm -- Lee Clow and Steve Hayden -- were brainstorming about the Mac launch campaign. Business Week had run a cover story that week saying, "The winner is IBM."

"We hadn't even come out with the Mac, so we were all a little bit down in the dumps," Sculley said. "What can we do that will stop the world and get people to pay attention to the fact the game wasn't over? It hadn't even started yet."

The group started talking about the big things that would happen in 1984, and the obvious reference to George Orwell's dystopian novel, "1984," came up. They debated, thinking that many marketers might play off the "1984" reference. But they hoped to get the leap by coming out with something in January -- perfect timing with the Super Bowl.

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Steve Jobs and John Sculley worked together closely in the early years of Apple but only spoke one other time after Jobs was ousted from the company in 1985.

"If we do something absolutely heart-stopping on the launch in January, then we'll preempt it, and nobody else will want to use it because it will look like they've stolen the idea," Sculley said.

The Chiat/Day executives had a week to come up with a campaign like "no one had ever seen before." The 60-second "1984" commercial they created turned out to be one of the most celebrated ads of all time.

But Apple's board hated it. "At the end of the 60-second commercial, there was dead silence in the room," Sculley said. "Two directors put their heads on the table. Then they turned to me and said, 'You're not going to run that, are you?' I said, 'Absolutely. It's the best commercial I've ever seen.'"

The commercial cost $500,000 to produce, which was about five to 10 times the normal expense, Sculley said. And Apple paid $1 million for 2 minutes of airtime during the Super Bowl. The board told Chiat/Day to sell the time, but they could only offload 1-minute, so the commercial ran.

"We ended up getting $45 million of estimated free advertising because the networks kept running it over and over in its full length," Sculley said. "It turned out to be an amazing start for the Macintosh."

Apple is a religion

Apple knew the first Mac wouldn't succeed unless there was software for it. Getting developers to write software for the computer fell to Guy Kawasaki, who joined Apple in 1983 as the Mac's first chief evangelist.

"It was easy to get people to begin writing software because we were breaking new ground for the marketing of computers and opening a new market for computers," he said. "We provided a good alternative to the IBM PC and ... developers could write software they always dreamed about writing."

But it wasn't easy to get developers to actually finish writing their software. They were working with an immature platform and dealing with the Mac's new graphical user interface.

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Steve Jobs was ousted from Apple in 1985 but returned in 1997.

James Martin/CNET

Kawasaki avoided Jobs as much as he could because Jobs "scared the shit" out of him. One day, Jobs came to Kawasaki's cubicle to introduce him to someone and to ask Kawasaki what he thought of a company. "I say, 'It's mediocre, and the product is crap,'" Kawasaki said. "At the end of my diatribe, he says, 'This is the CEO of the company.'"

"I passed the Steve Jobs test," Kawasaki added. "Probably he knew the company was crap. If I had said it was great, it could have been my last day at Apple."

Kawasaki ended up leaving Apple in 1987 to start his own company. He returned as an Apple Fellow in 1995, "when Apple was supposed to die."

"The very fact they brought me back was because the cult was dying," Kawasaki said. Getting people excited about Apple again "wasn't easy, but it also wasn't impossible."

"There's a core of people who never lost faith in Apple," Kawasaki said. "Apple is a religion."

Bill Gates to the rescue

When Jobs left Apple in 1985, he started NeXT, a new computer company focused on workstations for universities, financial institutions and other businesses. While the computer didn't sell well (PCs running Microsoft Windows were the most popular at the time), NeXT had very interesting software.

"Steve called me and he said, 'Hey, I'm starting this new company. It's an amazing computer for education,'" said Tom Suiter, who served as Apple's first director of Creative Services and helped launch the Mac in 1984. He left Apple after Jobs' departure in 1985 but kept in touch with Apple's co-founder over the years. That included the time Jobs was setting up NeXT.

Suiter remembers his conversation with Jobs about naming the new company.

"I said, 'Congrats, it's great. What are you going to call it?'

Jobs said: 'Two.'

I said: 'What do you mean?'

Jobs said: 'It's my second company.'

I said: 'Everybody's going to go, what happened to one?'

Jobs said: 'That's exactly why I'm talking to you. I need some help.'

I said, 'Let me think about it.'"

That weekend, Suiter flew to Seattle to attend a CD-ROM conference hosted by Microsoft and keynoted by co-founder Bill Gates. "I could not believe how many times he was using 'next' in such a positive way. I counted them up and said 'next' would be a cool name for a company."

When Suiter got home on Sunday, he called Jobs and said he had the perfect name for his new company.

"He goes, 'Hey, what is it?'

I said, 'It's NeXT.' There was like this silence.

Then he said,' I love it!'

The rest is history ... The irony is it actually came from the mouth of Bill Gates to help Steve."

Suiter never told Jobs his inspiration for the NeXT name. "It probably would have diluted the brilliance of what the name was," he said, laughing.

Microsoft didn't just unwittingly help out Apple. It also invested $150 million in the company in the summer of 1997 to keep Apple afloat as it was close to going out of business. As part of the deal, Apple made Microsoft's then-underdog Internet Explorer the default browser for the Mac. And Gates agreed to develop future versions of Microsoft Office and development tools for the Mac -- an arrangement that helped Apple win over customers tied to Microsoft's software.

Jobs hired Suiter again in 1998, while Suiter was at Silicon Valley advertising agency CKS Group, to lead marketing communications for all Apple products, including the launch of the iMac.

Inventing the future

In the 1970s, Alan Kay, one of the fathers of computing, worked at Xerox PARC, the Palo Alto, California-based research group that inspired the Mac user interface and other early Apple products. Kay joined Apple in 1984, a few months after the Mac was unveiled.

Kay famously said "the best way to predict the future is to invent it."

He remembers Jobs' ouster by Apple's board of directors and the company's struggle to recover:

"It is not easy to summarize 'what could have beens' and 'what should have beens' because Steve both had some vision and was also seriously nutty along a number of lines. He and I were friends despite this -- as much as he could have a friend.

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"A few years later I was contacted by some long-standing colleagues in computer graphics -- who were then at Lucasfilm, and wanted to get out. I drove up to NeXT and briefed Steve on these folks, and then I took Steve up to Marin County to meet the people who became Pixar. The funding of Pixar and hanging in with the serious talent they had was almost certainly Steve's finest period."

Kay, however, has been critical of Apple's reinvention after Jobs returned to Apple in 1997.

"The return of Steve to Apple and his transformation of the company into one mainly aimed at consumer marketing, was only successful from a business standpoint. The ideals that Apple had in the early '80s about 'wheels for the mind' were now long gone ...

"I talked with Steve off and on since then until his death, and he would periodically send me stuff for my opinion, invite me to product openings, etc.

"I would periodically try to get him back to being 'centrally serious' about education, etc. I once tried to get him to remember what he had said to John Sculley to get him away from Pepsi ('Do you want to sell sugar water all your life, or do you want to change the world?') -- the point being that Steve's largest preoccupation after coming back was to get Apple to be a success primarily by selling 'sugar water' to consumers!"

Funny how things turn out

When Jobs and Wozniak were starting Apple, they knew they needed savvy marketing and public relations help to launch the world's first personal computer. They liked Intel's campaigns so asked the chipmaker who was doing work for it. Intel told them it was Regis McKenna.

That began a relationship between Jobs and McKenna that lasted from 1976 until Jobs' death in 2011. McKenna's firm, Regis McKenna Inc., helped launch the Mac in 1984. Though the formal relationship between the firm and Apple ended in the early 1990s, McKenna stayed close with Jobs and spoke with him about once a month for the duration of the Apple co-founder's life.

That included the period after Jobs' return to Apple. Jobs rejoined Apple in February 1997 after the company bought NeXT for $429 million and he was asked to serve as a consultant to then-CEO Gil Amelio. Less than five months later, Jobs convinced the board to fire Amelio and name him interim CEO.

"He went from when he had no position on the board and was not an adviser and ended up taking over the company," said McKenna. "Those people, Amelio and others, quite frankly, didn't know what hit them."

Jobs didn't stay interim CEO for long. But he faced a daunting task. "Apple was in horrible shape," McKenna said. Jobs "wasn't sure he could fix it. People don't realize it took several years for him to get it off the ground. It didn't just happen."

Jobs ultimately turned Apple around by dramatically cutting the company's product line and introducing one hit product after another -- the colorful iMac computers, then the iPod music player, iTunes Store, iPhone and iPad.

"They cut out 50 percent or 60 percent of the products being developed," McKenna said.

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Apple launched the iPod in October 2001, which offered "1,000 songs in your pocket." It wasn't until two years later, in October 2003, that the iTunes Music Store started working on Windows PCs.

Kim Kulish/Corbis SABA

"Steve calls me up. ... They were just about to launch their online store, just about to launch iTunes ... He was all excited. He said, 'I think these products we have coming are pretty good.' He didn't say great. He was a little bit skeptical until the first iMacs, the colorful ones, took off like crazy."

Most people involved with Apple's early years never expected it to grow as big as it is today, Jobs among them. After he returned to Apple and it was successful and growing, "one of the things he said was, 'Funny how things turn out.'" McKenna said.

"He was just reminiscent. It surprised him. He didn't expect these things...Up until a product was successful, he always questioned if it was good enough. He never felt, when he launched a product, [that it was good enough] but he would sell it as if it were. In fact, he always felt there could be more or better [features]. His comment of 'funny how things turn out' was a sort of comment by him that it all surprised him."

Concentrate on industrial design

Apple's colorful iMac line, and Jobs' close relationship with designer Jony Ive, helped the company recover from near-death. Tim Bajarin, a longtime industry analyst focused on Apple, remembers what Jobs vowed to do to save his company when he first returned to Apple.

"When Steve came back to Apple, I met with him the second day he came back," said Bajarin, who began following Apple in 1981 for the firm Creative Strategies. "I asked, 'How are you going to save Apple?' The first thing he said was, 'I'm going to go back and take care of the core needs of our customers -- engineering and graphics designers. I'm going to go back and make sure we take care of those customers.' The next generation of the Mac was more powerful and had more support for that particular group.

"Then he told me -- at the time what I thought was one of the craziest things I'd heard -- that 'I'm going to concentrate on industrial design.' I remember walking away and saying, 'How in the world is industrial design going to save Apple?' As you know, it ended up being a core tenet of Apple's success. A year later, Apple introduced the candy colored, all-in-one Apple iMacs."

Ive became the lead designer behind Apple's most important products, including the iPhone. Cook named him chief design officer a year ago. Bajarin, meanwhile, continues to follow Apple for Creative Strategies.

Will anyone show up?

Ron Johnson, the company's onetime retail chief, said one of his most notable memories at Apple was the opening of the first Apple Store in McLean, Virginia. He remembered the moment exactly: May 19, 2001, at 10 a.m.

Johnson helped dream up the concept of the stores' bright, simple look with long wooden tables holding a handful of Apple devices that people could test. The design was a departure from the typical stores, with aisles and aisles of shelves filled with products. Apple's retail approach has since been copied by others, including Microsoft.

Thirty minutes before the first store opened, Johnson got a call from Jobs, who asked how many people were in line outside. Johnson told him there were about 50 customers. Unhappy with the low turnout, Jobs said they should've marketed the opening -- the company sent out an email and press release but hadn't done any advertising. Johnson assured Jobs folks would show up.

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By the time the store opened, there were 1,500 people in line.

"It went from 50 people to 1,500 in a 30-minute period of time," Johnson said. "It was really fun."

Now with over 500 Apple Stores worldwide, Apple's stores have become hubs for fans to camp out, often waiting in long lines for the newest gadgets to go on sale. While many other retailers are closing locations amid weak store traffic, Apple Stores bring in the highest sales per square foot of any retail locations in the US, according to eMarketer.

Johnson said Jobs sought to create retail stores "so we can market innovation face-to-face" with customers. Johnson saw that mission in full effect when he witnessed the iPhone launch in 2007. He was among a huge crowd at the company's iconic Fifth Avenue store in Manhattan.

"It really showed Steve's genius at its peak," Johnson said. "It was the marriage of an incredible product strategy with the ability to communicate with an unparalleled customer experience."

That 'aha moment'

What impact has Apple had on society? You can see it when an 8-year-old boy swipes at a microwave screen, puzzled that nothing happens. You can't really fault him. After all, we all instinctively use our fingers and gestures to control our phones and computers, so why not other gadgets with big screens?

That child's uncle, AT&T Vice Chairman Ralph de la Vega, can trace our reliance on our fingers back to the first time Jobs showed him the iPhone, which he calls his "aha moment." He was one of the first people to see the device and had to sign a nondisclosure agreement, vowing not to tell anyone about the phone including the CEO and board of AT&T -- or his wife.

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De la Vega's first question when seeing the iPhone was "Where's the stylus?"

"[The iPhone] dramatically changed how users interfaced with the device," de la Vega said. "It really highlights how it changes the expectations of people."

While there had been touchscreens before the iPhone, Apple was the first to show the benefits of ditching a stylus, a move that had a massive impact on the tech industry. Without Apple, we might all still be mashing physical buttons.

"Apple accelerated the pace so dramatically it changed everything," de la Vega said.

AT&T became the first wireless carrier to sell the iPhone, something that helped the carrier attract millions of customers. And the iPhone has helped Apple become the biggest company on the planet.

On to the next 40.

CNET's Roger Cheng and Ben Fox Rubin contributed to this report.

This story was part of CNET's coverage of the 40th anniversary of Apple's founding. For more stories in this package, click here.

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