On Aug. 2, 2018, Apple (AAPL) made history by becoming the world's first publicly traded company to achieve a market capitalization of $1 trillion. On April 30, 2019, Microsoft (MSFT) joined Apple's exclusive club, also catapulting past the $1 trillion mark. On Jan. 16, 2020, Alphabet (GOOGL) became a $1 trillion company, followed by Amazon (AMZN) on Feb. 4.
As to be expected, the market value for each of these companies has swung up and down as prices fluctuate, and maintaining the $1 trillion valuation can be elusive. However, the fact that Apple was the first company to surpass the $1 trillion mark is in no small part connected to the legacy and lessons learned from Steve Jobs.
On Oct. 5, 2011, Steve Jobs passed away at the age of 56. He had just left the CEO post at Apple, the company he co-founded, for the second time. Jobs was an entrepreneur through and through, and the story of his rise is the story of Apple as a company, along with some very interesting twists. In this article, we'll look at the career of Steve Jobs and the company he founded, as well as some of the lessons Apple offers for potential entrepreneurs.
Steve Jobs And The Apple Story
- Steve Jobs and Steve Wozniak co-founded Apple in 1977, introducing first the Apple I and then the Apple II.
- Apple went public in 1980 with Jobs the blazing visionary and Wozniak the shy genius executing his vision.
- Executive John Scully was added in 1983; in 1985, Apple's board of directors ousted the combative Jobs in favor of Scully.
- Away from Apple, Jobs invested in and developed animation producer Pixar and then founded NeXT to create high-end computers; NeXT eventually led him back to Apple.
- Jobs returned to Apple in the late 1990s and spent the years until his death in 2011 revamping the company, introducing the iPod, iPhone, and iPad, transforming technology and communication in the process.
From Blue Boxes to Apple
Steve Jobs got his start in business with another Steve, Steve Wozniak, building the blue boxes phone phreakers used to make free calls across the nation. The two were members of the HomeBrew Computer Club, where they quickly became enamored with kit computers and left the blue boxes behind. The next product the two sold was the Apple I, which was a kit for building a PC. In order to do anything with it, the customer needed to add their own monitor and keyboard.
With Wozniak doing most of the building and Jobs handling the sales, the two made enough money off the hobbyist market to invest in the Apple II. It was the Apple II that made the company. Jobs and Wozniak created enough interest in their new product to attract venture capital. This meant they were in the big leagues and their company, Apple, was officially incorporated in 1976. Steve Jobs was a month shy of turning 22 and would be a millionaire before his next birthday.
The Roller Coaster Ride Begins
By 1978, Apple was making $2 million in profits solely on the strength of the Apple II. The Apple II wasn't state of the art, but it did allow computer enthusiasts to create and sell their own programs. Among these user-generated programs was VisiCalc, a type of proto-Excel that represented the first software with business applications.
Although Apple did not profit directly from these programs, they did see more interest as the uses for the Apple II broadened. This model of allowing users to create their own programs and sell them would reappear in the app market of the future, but with a much tighter business strategy around it.
By the time Apple went public in 1980, the dynamic of the company was more or less set. Steve Jobs was the fiery visionary, with an intense and often combative management style, and Steve Wozniak was the quiet genius who made the vision work. Apple's board of directors wasn't too fond of such a power imbalance in the company, however. Jobs and the board agreed to add John Sculley to the executive team in 1983. In 1985, the board ousted Jobs in favor of Sculley.
The Gap Years
Steve Jobs was rich and unemployed. Although he wasn't working at Apple, he was far from idle. During this time, from 1985 to 1996, Jobs was involved in two big deals; the first of which was an investment. In 1986, Jobs purchased a controlling stake in a company called Pixar from George Lucas. The company was struggling, but their eventual success in digital animation led to an initial public offering (IPO) that earned Jobs around $1 billion.
The second was a return to his old obsession with computers, founding NeXT to create high-end computers. These were expensive machines with an operating system representing the best attempt yet at making the power of UNIX fit into a graphical user interface. When Tim Berners-Lee created the World Wide Web, he did so using a NeXT machine.
Of these two deals, NeXT proved the most important, as it turned out Apple was looking to replace its operating system. Apple bought NeXT in 1996 for its operating system, bringing Steve Jobs back to the first company he founded.
The critical year in which Steve Jobs sold NeXT, the computer maker he had founded, to Apple, returning him to the company eleven years after he had been ousted.
Getting Apple Back on Track
When Jobs returned, the company wasn't in a good place. Apple had begun to flounder as cheap PCs running Windows flooded the market. Jobs found himself in the driver's seat again and took some drastic steps to turn around Apple's decline. The company asked for and received a $150 million investment from Bill Gates. Jobs used the money to ramp up advertising and highlight the products Apple already offered while choking off research and development (R&D) money in non-producing areas.
The NeXT operating system was used to create the iMac, Apple's first hit PC in a long time. Jobs followed this up with a list of successes from the iPod in 2001 to the iPad in 2010. The years between saw Apple dominate the smartphone market with the iPhone, open up an e-commerce store with iTunes, and launch branded retail outlets called, what else, the Apple Store. When Jobs stepped down as CEO, Apple was scrapping with Exxon for the world's largest market cap.
Starting with the iPod in 2001, and then continuing with the iPhone and iPad over the next decade, Jobs rejuvenated the ailing Apple, putting it at the forefront of technology and communications.
The Bottom Line
It's impossible to sum up Jobs' career in a single article, but a few lessons stick out. First, innovation counts for a lot, but innovative products fail without proper marketing. Second, there are no straight paths to success. Jobs did get wealthy very early on, but he would be a footnote today if he didn't return to Apple in the 90s. At one point, Jobs was kicked out of the company he helped create for being hard to work with. Rather than change, he bided his time, then took over again, and this time his attitude was seen as part of his genius.
There is much more to be learned from the life of Steve Jobs, as there is in the life of every successful entrepreneur. The sheer hubris of the entrepreneurial spirit, the idea you can do something bigger and better than it has ever been done before, always bears watching and studying, whether to imitate it or just to marvel at what that hubris can create.