Inside Steve's Brain (20 page)

Jobs notes that before he returned, Apple had lost its product-oriented culture. In the late 1980s and early 1990s, there was great technology being developed in the company’s labs, but there wasn’t a product culture to put that technology to work. Instead, the company turned its focus to milking its key asset: the Mac user interface. Jobs noted that Apple had a monopoly on the graphical user interface for almost ten years, which sowed the seeds for its demise. Instead of trying to develop new, breakthrough products, the company concentrated on making maximum profit from its interface monopoly.

“The product people aren’t the ones that drive the company forward anymore,” Jobs said of Apple during that period. “It’s the marketing guys or the ones who expand the business into Latin America or whatever. Because what’s the point of focusing on making the product even better when the only company you can take business from is yourself?” Jobs said in situations like this, the people who built the company in the first place— the product-oriented staffers—tend to become replaced by those with a sales focus. “Who usually ends up running the show?” asked Jobs. “The sales guy.”
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Jobs cited as a good example Steve Ballmer at Microsoft, the company’s chief salesman who took over from Bill Gates, the programmer. “Then one day, the monopoly expires for whatever reason,” Jobs continued. “But by then the best product people have left, or they’re no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn’t.” Luckily for Apple, it survived.

Money isn’t the key to innovation. Apple spends a lot less than other companies on R&D, yet appears to get a lot more bang for its buck. Microsoft in 2006 spent more than $6 billion on R&D and is on track to spend $7.5 billion in 2007. Microsoft finances several large and well-funded research centers in Redmond, Silicon Valley, Cambridge in the UK, and China. There are some very impressive technologies being developed in Microsoft’s research labs. The company boasts that it is leading research in speech recognition and fast search of massive databases. Each year, Microsoft gives journalists a tour of its Redmond research facility, and it is a treat for those invited to see all the cool toys and clever technologies the researchers are developing. But it is unclear how much of Microsoft’s research is being directed toward its products. Except for speech recognition in Vista, which has been well received, there’s little evidence that the labs are leading major new product initiatives. “You know, our friends up north spent over $5 billion on R&D, but these days all they seem to be copying is Google and Apple,” Jobs said at Apple’s World Wide Developers Conference in 2006. “Shows money doesn’t buy everything.”

In 2007, the management consultancy Booz Allen Hamilton released a study of worldwide corporate R&D spending and concluded that there’s little evidence that increased R&D investment is linked to better results. “It’s the process, not the pocketbook,” Booz Allen concluded. “Superior results seem to be a function of the quality of an organization’s innovation process—the bets it makes and how it pursues them—rather than either the absolute or relative magnitude of its innovation spending.”

Booz Allen cited Apple as one of the thriftiest R&D spenders in tech, but one of the most successful. According to Booz Allen, Apple’s 2004 R&D-to-Sales ratio was 5.9 percent, compared to an industry average of 7.6 percent. “Its $489 million spent is a fraction of its larger competitors,” Booz Allen said. “But by rigorously focusing its development resources on a short list of projects with the greatest potential, the company created an innovation machine that eventually produced the iMac, iBook, iPod, and iTunes.”
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Apple’s R&D spending is like the old distinction between pure science and applied science. Pure science is the pursuit of knowledge for its own sake. Applied science is application of science to particular problems. Of course, pure science is extremely important, and will sometimes lead to the kind of fundamental breakthroughs that applied scientists don’t even look at. But applied science, like engineering, is focused on more practical, pressing problems. The former head of Microsoft’s research labs, Nathan Myhrvold, gained fame for academic papers he wrote about dinosaurs. He may have contributed to the field of paleontology, but did Microsoft invent the iPod?

Jobs uses as his inspiration Hewlett-Packard, one of the first Silicon Valley companies and one that has always had a strong engineering culture—it was driven by engineers who made products. “The older I get, the more I’m convinced that motives make so much difference,” Jobs said. “HP’s primary goal was to make great products. And our primary goal here is to make the world’s best PCs—not to be the biggest or the richest.” Jobs said Apple has a second goal, which is to make a profit—both to make money but also to keep making products. “For a time,” Jobs said, “those goals got flipped at Apple, and that subtle change made all the difference. When I got back, we had to make it a product company again.”
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Jobs keeps his eyes peeled for promising new technologies, or existing technologies that Apple can improve, like early MP3 players or, lately, smart phones. Jobs has a reputation as a seer. He seems to have a magical ability to peer into the future and know before anyone else what consumers want. Jobs downplays his reputation as an oracle: “You can’t really predict exactly what will happen, but you can feel the direction that we’re going,” Jobs told
Rolling Stone
. “And that’s about as close as you can get. Then you just stand back and get out of the way, and these things take on a life of their own.”
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Jobs has said he looks for “vectors going in time”—what new technologies are coming to market, which ones are ending their run. “You try to spot those things and how they’re going to be changing over time and which horses you want to ride at any point in time,” Jobs said. “You can’t be too far ahead, but you have to be far enough ahead, because it takes time to implement. So you have to intercept a moving train.”
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Jobs cited USB as an example. Intel invented the now-ubiquitous Universal Serial Bus (USB), and Apple was one of the first PC companies to build it into its computers. Jobs recognized its consumer-friendly potential: it wasn’t fast, but it was plug and play, and it provided power to devices, eliminating an extra wire and power brick. It seems unremarkable now that USB is wildly popular, but Apple was one of the first companies to adopt it—and it may have never reached critical mass if it hadn’t.

Innovation can—and often does—come from outside Apple. There’s a long list of technologies that weren’t developed at Apple that Jobs or his engineers recognized had innovative potential. WiFi wireless networking, developed by Lucent and Agere, didn’t get much traction until Apple used it across its entire line of computers and built it into its Airport base stations, ushering in the era of wireless laptops.

Some observers note that innovation at Apple has less to do with inventing brand-new technologies than taking existing technologies and making them easy to use. Jobs takes technologies out of the lab and puts them in the hands of ordinary users.

The first and best example is the graphical user interface, which Jobs first spotted at age twenty-four in 1979, during a paid tour of Xerox’s famed Palo Alto Research Center. During his visit, Jobs was given a demonstration of the Xerox Alto, the first computer with a mouse and point-and-click interface. “I thought it was the best thing I’d ever seen in my life. Now remember it was very flawed, what we saw was incomplete, they’d done a bunch of things wrong. But we didn’t know that at the time but still thought they had the germ of the idea there and they’d done it very well and within you know ten minutes it was obvious to me that all computers would work like this some day.”
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But Xerox’s management had no idea what its scientists had cooked up in the lab. Despite dozens of demonstrations, Xerox’s executives didn’t see its potential. “Basically they were copier heads that just had no clue about a computer or what it could do,” said Jobs. “And so they just grabbed defeat from the greatest victory in the computer industry. Xerox could have owned the entire computer industry today.”
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When it comes to innovation, Jobs is fond of quoting Picasso’s famous dictum: good artists copy, great artists steal. To which Jobs adds: “And we have always been shameless about stealing great ideas.”

For Jobs, innovation is about creativity, putting things together in unique ways. “Creativity is just connecting things,” Jobs told
Wired
magazine. “When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people.... Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.”
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Apple’s use of magnetism is a good example of how the company takes a technology—something as simple as magnets—and plays with it, putting it to different uses. The first magnets appeared in the latches of Apple’s notebooks. A magnet would pull the latch out of its housing as the lid was closed. Then Apple added magnets to its remote controls, so that they could be safely stored attached to the side of the computer. Newer MacBooks have dispensed with latches altogether in favor of stronger magnets that hold their lids closed when not in use; they also have MagSafe power adapters which stay in place thanks to magnets. They are designed to easily detach from the power cord, stopping the computer from crashing to the floor. It’s an idea Apple took from Japanese rice cookers, which have had magnetic power adapters for several years for the same reason—to prevent boiling water from being thrown across the kitchen if a child snags the power cord.

Jobs has said that everything he learned about products he learned from Heathkits as a kid. Heathkits were popular kits for building electronics like ham radios, amplifiers, and oscillators. The kits taught Jobs that products were manifestations of human ingenuity, not magical objects dropped from the sky. “It gave a tremendous level of self-confidence, that through exploration and learning one could understand seemingly very complex things in one’s environment,” he said. “My childhood was very fortunate in that way.”
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Jobs has always been a keen student of design, of architecture, and of technology. His offices would be full of electronics devices he’d dismantled to see how they worked. John Sculley remembered that Jobs was always studying other manufacturer’s products. “ . . . [E]lectronic parts and cases of products were scattered about the room,” he wrote. “It was cluttered and disorganized, with posters and pictures taped to the walls. He had just returned from Japan with a new product that he had taken apart. Pieces of it were on his desk. Whenever Steve saw something new that he was curious about, I discovered, he would buy it, take it apart and try to understand how it worked.”
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Sculley recalled a trip he and Jobs took to Japan to meet with Akio Morita, the legendary cofounder of Sony. Morita presented the pair with two of the first Walkman players off the production lines. “Steve was fascinated by it,” Sculley recalled. “So the first thing he did with his was take it apart and he looked at every single part. How the fit and finish was done. How it was built.”
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Jobs often took staff on tours of museums and to special exhibits to educate them about design or architecture. He took the Mac development team to an exhibit by the great Art Nouveau designer Louis Comfort Tiffany, because Tiffany was an artist who commercialized his work. At NeXT, Jobs took a group on a field trip to Frank Lloyd Wright’s Fallingwater house in Pennsylvania to study the great architect’s design. At NeXT, Jobs would often wander over to the Sony offices across the hall. He’d pick up Sony’s brochures, carefully examining the fonts and layouts and the weight of the paper.

On one occasion, Sculley found Jobs madly dashing around the parking lot at Apple’s HQ examining cars. He was analyzing the details of their design, looking for cues that he could use in the design of the Macintosh case. “Look at the Mercedes design,” he told Sculley, “the proportion of sharp detail to flowing lines. Over the years they’ve made the design softer but the details starker. That’s what we have to do with the Macintosh.”
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Jobs has had a long-standing interest in German design. In the eighties, his bachelor mansion was empty except for a grand piano and a big black BMW bike. He’s always greatly admired Braun, the German electronics manufacturer best known for its clean industrial design. Braun blended high technology with artistic design. Jobs has said several times that he thinks technological creativity and artistic creativity are two sides of the same coin. When asked by
Time
magazine about the difference between art and technology, Jobs said: “I’ve never believed that they’re separate. Leonardo da Vinci was a great artist and a great scientist. Michelangelo knew a tremendous amount about how to cut stone at the quarry. The finest dozen computer scientists I know are all musicians. Some are better than others, but they all consider that an important part of their life. I don’t believe that the best people in any of these fields see themselves as one branch of a forked tree. I just don’t see that. People bring these things together a lot. Dr. Land at Polaroid said, ‘I want Polaroid to stand at the intersection of art and science,’ and I’ve never forgotten that. I think that that’s possible, and I think a lot of people have tried.”
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