It's crazy and impossible

I’ll tell you what our goal is. Our goal is to make the best personal computers in the world, and to make products we are proud to sell and would recommend to our family and friends. We want to do that at the lowest prices we can. But I have to tell you, there’s some stuff in our industry that we wouldn’t be proud to ship, that we wouldn’t be proud to recommend to our family and friends… And we can’t do it. We just can’t ship junk.

Today, we have a very special episode of Ship It, where I get to share my favorite learnings from Steve Jobs. If it wasn’t for his determination to build a better personal computer, I would have most likely continued with a career in physics. I know what you’re thinking, it’s crazy and impossible to interview Steve Jobs. But on his 10th Memorial anniversary, I was determined to combine the things that he said with my passion for computers, automation and infrastructure. I share some of his beliefs, and just as they’ve served me well over the years, I think that they will serve you well, too. This show is for all the crazy ones that think they can change the world. Live your life and ship your best stuff, because there’s nothing like the present.

Hi, and welcome. I want to start by thanking you for making time for this crazy idea. I appreciate you joining us on this special day, which marks 10 years since you had to shift your focus to let’s say something completely different. So how do you want to do this?

What I want to do is just chat. And so we get to spend 45 minutes or so together, and I want to talk about whatever you want to talk about. I have opinions on most things, so I figured if you just want to start asking some questions, we’ll go to some good places.

Let me start with a story that didn’t make sense to me back then, but now it explains everything. As a high school student, physics was my passion. When the opportunity presented itself to travel to the US for 100 years from Max Planck, the conference, I could not sleep for days. This was going to be my first trip to a physics conference, on a different continent, to a place where all great things appeared to be happening.

In that moment, I was convinced that I was destined to become a physicist… But life had other plans. There I was, at the University of Puget Sound in Tacoma, being blown away by these talks on quantum mechanics and Schrödinger’s cat, when chance made it that I stumbled across the brand new iMac G3 in some building which name I no longer remember. What I do remember as if it actually happened yesterday was this Bondi Blue iMac which was perfect from every angle. And the one thing that captivated my imagination like nothing else was the font. That font is the reason why I fell in love with that perfect machine. And in an instant, my heart knew what I was going to do with the rest of my life.

[04:24] To this day, for me, the font rendering on Mac devices is the perfect combination of imagination, order and passion. It’s not just technology and science; I know that there is something more to it. Can you share with us the story behind that font?

I dropped out of Reed College after the first six months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates. So everything was all set for me to be adopted at birth by a lawyer and his wife… Except that when I popped out, they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night, asking “We’ve got an unexpected baby boy. Do you want him?” They said, “Of course.”

My biological mother found out later that my mother had never graduated from college, and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later, when my parents promised that I would go to college. This was the start in my life.

And 17 years later, I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life, and no idea how college was going to help me figure it out. And here I was, spending all the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out okay. It was pretty scary at the time, but looking back, it was one of the best decisions I ever made. The minute I dropped out, I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked far more interesting. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on.

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus, every poster, every label on every drawer was beautifully hand-calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and sans-serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating. None of this had even a hope of any practical application in my life.

But 10 years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally-spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. [audience cheering]

[08:02] If I had never dropped out, I would have never dropped in on that calligraphy class, and personal computers might not have the wonderful typography that they do. Of course, it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later. Again, you can’t connect the dots looking forward, you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something - your gut, destiny, life, karma, whatever. Because believing that the dots will connect down the road will give you the confidence to follow your heart, even when it leads you off the well-worn path, and that will make all the difference.

Thank you, Steve. That was beautiful. It’s somewhat ironic, because I dropped out of university after my first six months, because it didn’t make sense to me. My heart kept telling me computers, Macs specifically, and programming, and learning on the job, and my parents kept telling me MBA. I had no idea about your experience with college until many years later. That just proves what you’ve just said, “You can only connect the dots backwards, and trusting your heart that it will all work out.”

I would like us to go all the way to the beginning now and talk about this magical box that changed everything, not just for me, but also for everyone else that is listening to us today. How did the fascination with personal computers start for you?

The question is, is really what is a personal computer? And why is it different than all the other computers that have existed throughout history? Probably the best way to explain that is through an analogy when you look at the invention of the first electric motor in the late 1800s. It was only possible to build a very large one, and it was very, very expensive, and therefore it could only be cost-justified for the most expensive or large applications. And the electric motor really took its next step in proliferation when somebody hooked a long shaft to it and ran it down the center of a factory, through series of belts and pulleys brought that power down to maybe 15 or 20 individual workstations, thereby cost-justifying sharing that horsepower among some medium-size applications.

But the electric motor really achieved a true proliferation in the society with the invention of the fractional horsepower electric motor. And at that point, the horsepower could be brought directly to where it was needed, on a personal scale, cost-justified for a small number of things. And we see the same thing, the same evolution if we examine the history of computing. The first computer, ENIAC, in 1946, was designed primarily for weather and ballistic calculations, very large tasks. And the next revolution in computing was in the 1960s, with the invention of what’s called time-sharing. In essence, sharing one of these very large computers with maybe 40 or 50 terminals scattered through a company, and thereby cost-justifying it for medium size applications.

What we think the personal computer industry is about is the invention of the fractional horsepower computer, something that can be cost-justified on the personal level; something that weighs 12 pounds, that you can throw out the window if you don’t like, and it’s really changing the way that people interact with computers. There’s a one-on-one relationship that develops between one person and one computer.

Wow, this is just as fascinating now, 40 years later, as it was the first time that you have talked about it in 1981. And this story makes me wonder - how do you see the relationship between computers and us, the people?

There was an article in Scientific American in the early ’70s, which compared the efficiency of locomotion for various species of things on the planet. In other words, they measured how much energy it took for a bird to get from point A to point B compared with the energy it took a fish to get the same distance, and a goat, and a person, and all sorts of other things… And they ranked them, and it turns out the Condor won. The Condor was the most efficient, and man came in with a rather unimpressive showing about a third of the way down the list, somewhat disappointing.

[12:03] But someone there had the insight to test the efficiency of man riding a bicycle, and man riding a bicycle was twice as good as the Condor, all the way off the end of the list. And what it really illustrated was man’s ability as a toolmaker to fashion a tool that can amplify an inherent ability that he has. And that’s exactly what we think we’re doing; we think we’re basically fashioning a 21st Century bicycle here, which can amplify an inherent intellectual ability that man has, and really take care of a lot of drudgery to free people to do much more creative work. And what we’re finding is it is enriching people’s lives, it is freeing people to do things that we think people do best.

People are freed to think about the conceptual issues involved and the creative issues involved, and use the computer actually to plow through the drudgery. And we’re actually changing job descriptions based on allowing people to do more creative work, rather than more work-work.

This made me think of something else… I know that many people still think of shipping code as an engineering activity, a byproduct of smart people brainstorming and coming up with technical solutions to business problems, then working hard on delivering all those amazing features as fast as possible. But my heart and intuition tell me something else. I think that it’s actually talking to users, and then working with them on a solution. I’m imagining the back and forth conversations over changes deployed into production or, as popularized by GitHub, a PR deployed to staging environment. What do you think?

One of the hardest things when you’re trying to affect change is how does that fit into a cohesive, larger vision that’s going to allow you to sell $8 billion, $10 billion a product a year?

And one of the things I’ve always found is, you’ve got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try to sell it. And I’ve made this mistake probably more than anybody else in this room, and I’ve got the scar tissue to prove it, and I know that it’s the case. And as we have tried to come up with a strategy and a vision for Apple, it started with what incredible benefits can we give to the customer? Where can we take the customer? Not starting with, “Let’s sit down with the engineers and figure out what awesome technology we have, and then, how are we going to market that?”

I also believe that it all starts with a vision, the Why as captured by Simon Sinek. But how do you discover that? What does it even look like?

I think every good product that I’ve ever seen in this industry and pretty much anywhere is because a group of people cared deeply about making something wonderful that they and their friends wanted. They want to use it themselves, and that’s how the Apple I came about, that’s how the Apple II came about, that’s how the Macintosh came about… That’s how almost everything I know that’s good has come about. It didn’t come about because people were trembling in the corner, worried about some big company stomping on them; because if the big company made the product that was right, then most of these things wouldn’t have happened. If Woz and I could have went out and plunked down 2,000 bucks and bought an Apple II, why would we have built one? We weren’t trying to start a company, we were trying to get a computer.

Okay. So people that cared deeply about making something wonderful, that everyone they know, including themselves, want to use. So this is a great idea. And if it was that simple, everyone would do it. I’m pretty sure that there is more to it. In my experience, one of the things that people with great ideas and passion struggle with is focus. What are your thoughts on that?

[16:07] Apple suffered for several years from lousy engineering management, I have to say it. And there were people that were going off in 18 different directions, doing arguably interesting things in each one of them. Good engineers. Lousy management. And what happened was you look at the farm that’s been created with all these different animals going in different directions, and it doesn’t add up. The total is less than the sum of the parts. And so we had to decide what are the fundamental directions we’re going in, and what makes sense and what doesn’t. And there were a bunch of things that didn’t. And microcosmically, they might have made sense. Macrocosmically, they made no sense. And the hardest thing is - when you think about focusing, right? You think, “Well, focusing is saying yes.” No, focusing is about saying no.

I understand what you mean. I also find myself saying yes to too many things. Adam keeps repeating to trick myself and go slow, and Justin in Episode 16 told us about the importance of going smooth. And by that, he meant slow. Because slow is smooth, and smooth is fast. I know that Jocko would hard-agree.

Okay, so you’ve mentioned management and engineering, and I too have seen far too many disconnects in my career to know what bad looks like. So what does good engineering management look like to you?

I’ve never believed in the theory that if we’re on the same management team and a decision has to be made, and I decide in a way that you don’t like, and I say, “Come on, buy into the decision. Buy into it. Like we’re all on the same team, you don’t agree, but buy into it. Let’s go make it happen.” Because what happens is, sooner or later you’re paying somebody to do what they think is right. But then you’re trying to get them to do what they think isn’t right. And sooner or later, it outs and you end up having that conflict.

So I’ve always felt the best way is to get everybody in a room and talk it through, until you agree. Now, that’s not everybody in the company, but that’s everybody involved in that decision that needs to execute… Because we’re paying people to tell us what to do. I don’t view that we pay people to do things. That’s easy, to find people to do things. What’s harder is to find people that tell you what should be done; that’s what we look for. So we pay people a lot of money, and we expect them to tell us what to do.

And so when you when that’s your attitude, you shouldn’t run off and do things if people don’t all feel good about them. And the key to making that work is to realize there’s not that many things that any one team really has to decide. And we might have 25 really important things we have to decide on a year. Not a lot.

I think that what you have described is a good leader, and I think that good ones are few and far between. Even few in the last 10 years. It’s mostly company politics, personal agendas, and bottom of my list, regarding people as resources, which serve the primary function of contributing the status and importance of managers or product people. But you know what? I have to admit that sometimes developers can make matters worse; they get so consumed by complexity and shipping any and every solution that they lose track of what is really important. How do you see this?

You’re developers, you know that… It’s all about managing complexity. It’s like scaffolding, right? You erect some scaffolding, and if you keep going up and up and up, eventually, the scaffolding collapses of its own weight. That’s what building software is. It’s how much scaffolding can you erect before the whole thing collapses of its own weight. It doesn’t matter how many people you have working on it, it doesn’t matter if you’re Microsoft with 300-400 people, 500 people on the team; it will collapse under its own weight.

[20:06] You’ve read The Mythical Man-Month, right? The basic premise of this is “A software development project gets to a certain size where if you add one more person, the amount of energy to communicate with that person is actually greater than their net contribution to the project, so it slows down.” So you have local maximum, and then it comes down. We all know that about software - it’s about managing complexity. These tools allow you to not have to worry about 90% of the stuff you’ve worried about, so that you can erect your five storeys of scaffolding, but starting at storey number 23 instead of starting at storey number six. And you can get a lot higher.

That’s funny, because that’s exactly how I think about Dagger, Kubernetes and Fly, as well as all the other great tooling in my toolbox. I guide myself by the following principles - do I enjoy using this? Does it make sense? Does it make my work simpler? If the answer is no to any of these, I know that I need to look elsewhere. Now I’m thinking about the teams that are so focused on shipping features so that they can make money, which in my opinion, is a bad reason to do it… But they start forgetting about end-user delight; you know, the thing which they should actually care about the most. In all this madness, the thing which keeps coming up consistently is measuring developer productivity by lines of code written, or how fast PRs get merged, or issues get closed. I always thought those were bad metrics, because they don’t capture quality or positive impact. What do you think?

The way you get programmer productivity is not by increasing the lines of code per programmer per day. That doesn’t work. The way you get programmer productivity is by eliminating lines of code you have to write. The line of code that’s the fastest to write, that never breaks, that doesn’t need maintenance is the line you never had to write. So the goal here is to eliminate 80% of the code that you have to write for your app; that’s the goal. And so along the way, if we can provide whizzy this and whizzy that, and visual this and visual that - well, that’s fine. But the high order bit is to eliminate 80% of the code.

I’ve heard many people talk about less code and no code… And the example that I keep going back to is kelseyhightower/nocode repository on GitHub, which I think is a great example of this. Perhaps taken to the extreme to prove the point, but nevertheless, worth checking out.

Before we dive deeper into code and hardware, are there any other important learnings about people that you want to share?

The greatest people are self-managing. They don’t need to be managed. Once they know what to do, they’ll go figure out how to do it, and they don’t need to be managed at all. What they need is a common vision, and that’s what leadership is - having a vision, and being able to articulate that so that people around you can understand it, and getting a consensus on a common vision. We wanted people that were insanely great at what they did, but were not necessarily those seasoned professionals, but who had at the tips of their fingers and in their passion the latest understanding of where technology was and what we could do with that technology, and wanted to bring that to lots of people.

So the neatest thing that happens is when you get a core group of ten great people, that it becomes self-policing as to who they let into that group. So I consider the most important job of someone like myself is recruiting.

This resonates with me, as I had a similar experience not that long ago. And knowing you, I know that we are still missing your high-order bit perspective on people.

[23:46] I now take a longer-term view on people. In other words, when I see something not being done right, my first reaction isn’t to go fix it. It’s to say, “We’re building a team here, and we’re going to do great stuff for the next decade, not just the next year.” And so what do I need to do to help, so that the person that’s screwing up learns? …versus, “How do I fix the problem?” And that’s painful sometimes, and I still have that first instinct to go fix the problem… But that’s taking a longer-term view on people, is probably the biggest thing that’s changed. And then I don’t know, that’s maybe the part that’s biological.

I also think that being able to make mistakes and learn from them in a safe environment, where everyone comes together and promotes sharing so that others can learn too, can be one of the most wonderful and rewarding aspects of our profession. Unfortunately, people tend to be afraid of consequences, and it’s not always clear that the best thing that they can do is to ask for help. And experience doesn’t matter because we all make mistakes, and knowing how to manage your fallibles is just as important as knowing what your strengths are, or what makes you tick.

You know, I’ve actually always found something to be very true, which is most people don’t get those experiences because they never ask. I’ve never found anybody that didn’t want to help me if I asked them for help. I always call them up – I called up… This will date me, but I called up Bill Hewlett when I was 12 years old. And he lived in Palo Alto; his number was still in the phonebook. And he answered the phone himself, he said, “Yes.” I said, “Hi, I’m Steve Jobs, I’m 12 years old. I’m a student in high school, and I want to build a frequency counter… And I was wondering if you had any spare parts I could have.” And he laughed… And he gave me the spare parts to build this frequency counter, and he gave me a job that summer in Hewlett Packard, working on the assembly line, putting nuts and bolts together on frequency counters. He got me a job in the place that built them, and I was in heaven.

And I’ve never found anyone who said, “No” or hung up the phone when I called. I just asked. And when people asked me, I try to be as responsive, and to pay that gratitude back. Most people never pick up the phone and call, most people never ask… And that’s what separate sometimes the people that do things from the people that just dream about them. You’ve got to act, and you’ve got to be willing to fail; you’ve got to be willing to crash and burn…. You know, with people on the phone, with starting a company, with whatever. If you’re afraid of failing, you won’t get very far.

That is another great story, thank you for sharing it with us. So once you have all these great people that really love what they do, self-manage and make mistakes in order to learn, how do you organize as a company?

One of the keys to Apple is Apple’s an incredibly collaborative company. Do you know how many committees we have at Apple? Zero. We have no committees. We are organized like a startup; one person is in charge of iPhone OS software, one person is in charge of Mac hardware, one person is in charge of iPhone hardware engineering, another person is in charge of worldwide marketing, another person is in charge of operations. We’re organized like a startup. We’re the biggest startup on the planet. And we all meet for three hours once a week and we talk about everything we’re doing, the whole business. And there’s tremendous teamwork at the top of the company, which filters down to tremendous teamwork throughout the company. And teamwork is dependent on trusting the other folks to come through with their part without watching them all the time, but trusting that they’re going to come through with their parts. And that’s what we do really well. We’re great at figuring out how to divide things up into these great teams that we have, and all work on the same thing, touch bases frequently, and bring it all together into a product. We do that really well.

[28:09] And so what I do all day is meet with teams of people, and work on ideas, and solve problems, to make new products, to make new marketing programs, whatever it is. If you want to hire great people and have them stay working for you, you have to let them make a lot of decisions and you have to be run by ideas, not hierarchy. The best ideas have to win, otherwise good people don’t stay.

I think that there are too many good ideas out there, but not enough people that stick with them for a few years to see them through. In other words, they never get to benefit from the compound interest of learning from a cluster of mistakes.

I think that without owning something over an extended period of time, like a few years, where one has a chance to take responsibility for one’s recommendations, where one has to see one’s recommendations through all action stages, and accumulate scar tissue for the mistakes and pick oneself up off the ground and dust oneself off, one learns a fraction of what one can. Your coming in and making recommendations and not owning the results, not owning the implementation I think is a fraction of the value and a fraction of the opportunity to learn and get better. And so you do get a broad cut at companies but it’s very thin; it’s like a picture of a banana… You might get a very accurate picture, but it’s only two-dimensional. And without the experience of actually doing it, you never get three-dimensional. So you might have a lot of pictures on your walls, you can show it off to your friends, you can say like, “I’ve worked in bananas, I’ve worked in peaches, I’ve worked in grapes…” but you never really tasted.

I have to admit that at the beginning of my career my strategy was to stay with the company for 12 months and then move. I wanted to learn and grow quickly by working with as many people as I could and explore as much as possible… And I do have to say that it worked well. But after about a decade of doing this, I realized that it was time to go deep in specific problem areas, the ones that I enjoyed the most, and that worked even better. So it is important to know when it is time to go broad and when it is time to go deep. And if you pay attention, you will know.

Okay, I would like us to go back now into the code and hardware topics. Do you think of Apple as a software or a hardware company?

We think we should be a software company and a hardware company. The charter of our hardware division is to make the best hardware; it might not be the cheapest, it might not be this, might not be that, but we think all in all we can make the best stuff. So the more innovative the product is, the more revolutionary it is and not just an incremental improvement, the more you’re stuck, because the existing channel is only fulfilling demand.

So how does one bring innovation to the marketplace?

We believe the only way we know how to do it right now is with the direct sales force, out there in front of customers, showing them the products in the environment of their own problems, and discussing how those problems can be made with these solutions.

A software-only company could never afford to feel the direct sales force. With average selling prices of $500 a software package, you could never afford professionals in the field. With an average selling price of $5,000, you can. And that’s why I don’t think we’re going to see any more system software companies succeed. I don’t think it’s possible to fund the effort to educate the market about a revolutionary product with ASPs that low. And if it’s not a revolutionary product, I don’t think the company can succeed.

[32:10] So our strategy has been that we’ve got to be a hardware company in order to make our software business succeed, and we think we can do really well at both of them. I know that’s a long answer, but it’s a complex problem, too.

With that in mind, what would you say is Apple’s greatest strength, hardware or software?

A lot of times both in people and in organizations, your greatest strength can be your greatest weakness, or your greatest weakness can be your greatest strength. Apple has been highlighted as having an incredibly great weakness of being totally vertically integrated. Well, it doesn’t make its own semiconductors, but it makes the hardware, it makes the software, it controls the user experience… Many people are constantly calling for Apple to get out of the hardware business because of that weakness that they perceive. I don’t agree with that. I perceive it as a potential weakness if not managed right. I also perceive it as Apple’s greatest strength, if managed right.

The fact that Apple controls the product design from end-to-end, hardware, software, gives Apple an incredibly unique opportunity. It’s the only company in the industry that does that… An incredibly unique opportunity to tackle some of these really gnarly, complex problems that could have enormous potential advantage in the market if we could solve them… And I think solve them literally a half a decade to a decade sooner than the 93 headed monster out there in the Wintel space. Now they have their advantages too, don’t get me wrong… But I think one of our great advantages is that we can really have the vision that spans all the disciplines, we control all the disciplines to actually implement a vision much faster if we can get ourselves all going in a few directions.

Yes, that matches my experience. Because while the font is the thing that hooked me for life, it was the iMac G3 which attracted me to that computer in the first place. And if hardware is your greatest strength, that leaves software as your competitive advantage, right? Because I think that you need to get both right to win big, as you have been winning.

A lot of times you don’t know what your competitive advantage is when you launch a new product. Some really big companies came to us and said, “You don’t understand what you’ve got. The same software that allows Lotus to create their apps 5-10 times faster, is letting us build our in-house mission-critical apps 5-10 times faster, and this is the biggest problem we’ve had. This is a huge problem for every big company and almost all medium-sized companies and you have the solution in your hands and you dummies don’t even know it.”

And it took them about three months before we finally heard it, and in last summer, we changed our whole sales and marketing strategy around to focus on that, and it’s taken off like a rocket. We grew about 4x last year and we’ll probably grow about 2x this year, and our customer list is now very strong and growing like crazy. We just got back from spending a few days in DC and in New York, and we’re talking to customers we only dreamed of talking to a year ago.

I have to ask, why not hardware as a competitive advantage?

The greatest thing is hardware is really – hardware churns every 18 months; it’s pretty impossible to get a sustainable competitive advantage from hardware. If you’re lucky, you can make something 1.5 or 2 times as good as your competitor, which probably isn’t enough to be quite a competitive advantage, and it only lasts for six months. But software seems to take a lot longer for people to catch up with. I watched Microsoft take eight or nine years to catch up with the Mac, and it’s arguable whether they’ve even caught up.

[36:02] Okay, I get it. Even though you do currently have maybe a two times advantage with your new ARM-based architecture, I don’t expect it to last long enough to make a meaningful difference. And meanwhile, for 20 years, no one has caught up with your font. So yes, it all makes sense.

Speaking about hardware, one thing that I started thinking about more and more in recent months is the possibility of doing all my coding on remote hosts. The GitHub Codespaces conversation from Changelog episode 459 is the latest nudge in that direction. And while the experience is not what I imagined - I feel at home in Vim, K9s and Tig - I really see the potential, especially with the recent shift to remote work.

Much of the great leverage of using computers these days is using them not just for computationally intensive tasks, but using them as a window into communication-intensive tasks. And never have I seen something more powerful than this computation combined with this network technology that we now have. I just want to focus on something that’s very close to my heart, which is living in a high-speed networked world to get your job done every day. Now, how many of you manage your own storage on your computers? How many of you backup your computers, as an example? How many of you have had a crash in the last three years, four years? [laughter] Right. Okay. Let me describe the world I live in. We had high-speed networking connected to our now obsolete next hardware running next at the time and because we were using NFS, we were able to take all of our personal data - our home directories we call them - off of our local machines and put them on a server. And the software made that completely transparent. And because the server had a lot of RAM on it, in some cases it was actually faster to get stuff from the server than it was to get stuff off your local hard disk, because in some cases it would be cached in the RAM of the server if it was in popular use. But what was really remarkable was that the organization could hire a professional person to backup that server every night, and could afford to spend a little bit more on that server, so maybe it had redundant disk drives, redundant power supplies.

And you know, in the last seven years, do you know how many times I have lost any personal data? Zero. Do you know how many times I’ve backed up my computer? Zero. I have computers at Apple, at NeXT, at Pixar and at home. I walk up to any of them and log in as myself, it goes over the network, finds my home directory on the server, and I’ve got my stuff wherever I am. Wherever I am. And none of that is on a local hard disk.

I can see the similarity in our thinking, and this makes me wonder about that higher-order bit. Because I think the experiences we have just shared are lower order.

[39:32] I believe that you can use the concept of technology windows opening and then eventually closing. What I mean by that is enough technology, usually from fairly diverse places, comes together and makes something that’s a quantum leap forward possible. And it doesn’t come out of nowhere; if you poke around the labs and you hang around, you can kind of get a feel for some of those things. And usually, they’re not quite possible, but all of a sudden you start to sense things coming together and the planet’s lining up to where this is now possible, or barely possible… And a window opens up. And it usually takes around - in my experience anyway - five years to create a commercial product that takes advantage of that technical window opening up. Sometimes you start before the window’s quite open and you can’t get through it, and you push it up and you push it up… Sometimes it just takes a lot of work. It took that long with the Apple II, it took that long with the Mac, it took a Lisa along the way, $100 million… It takes a while, it’s a lot expensive to push those windows open.

And in our case, our first product failed. We came out with this cube, and we sold 10,000 of them. Why? Because we weren’t quite there yet, and we made some mistakes along the way, and we had to course-correct. You know, Macintosh was a course correction off the Lisa. With Apple II and III we did it in reverse… [laughter] But it takes around five years or some number of years like that to realize that window opening, and then it seems to take about another five years to really exploit it in the marketplace. These things are hard, it’s not—they don’t last because it’s convenient or even because it’s economic. They last because this is hard stuff to do.

And so when we are pushing that window open – I think with our current generation of products, we finally got the window open. After six years, it’s open, we’ve got an extremely elegant implementation, and we’ve got five years of work to do to exploit it in the marketplace. And we’ll peak in five years. Five years, we’ll all sit around and say,” Okay, it’s time to get started on the next thing. It’s time to get going on the next thing.” Maybe four years from now. But we’ve got a lot of work ahead of us just to move this thing out and educate the market, and continue to refine it based on market feedback. So everything I know about technology windows that are open or just about open is in NeXTSTEP, where we’re working on it in the labs. And these things generally don’t come along independently; kind of clumps of them come together, has been my experience.

Even if you know about these technology windows, I suspect that none of this works without a well-oiled shipping machine, or supply chain, as some call it, and essentially going from idea, to prototype, to a final product as fast as possible. How did you manage to solve this really hard problem?

One of the key things that manufacturing can contribute to competitive advantage is time to market. Why is that? Because the way most things work is you design your product here, and after you’re done, you throw it over the wall and you design your manufacturing process here, right? Sorting out a bunch of things that maybe weren’t done right here, fixing them, changing them, and then completing the process design. What you want to do is do this and ship it right here, while your competitors are still here. And that’s what we’ve been able to do in many cases.

What we do is we suck data out of our CAD systems and engineering, we zing them around over the local network, and in our own computers we compute all of the robot placement programs fully optimized path, we compute all the vision system programs, we check it against the bill of materials in the iOS system, and we download it to the robots and we’re ready to build a board, lot size of one, in between two production CPU boards, on the line, full surface mount with all of our automation technology.

Now the key is that manufacturing did that so well for engineering that we haven’t built a prototype in engineering for two years. We haven’t built a wire wrap or any other kind of prototype in engineering for two years; everything has been built in the factory. Now, what does that mean? What that means is manufacturing gets involved from day one. Because the fact that the engineering guys call the manufacturing guys and go, “Hey, we want to build a prototype. We’re going to need these special parts in the thing. Take a look at this, tell us what you think. We’d like to do it tomorrow. Let us know if that’s okay”, blah, blah, blah. They get involved from day one.

[44:15] Secondly, a lot of times when you build prototypes, it’s not quite the same technologies you’re going to use in production. And so all the accumulated knowledge you get from building your prototypes you throw away when you change technology to go into production, and you start over in that accumulation process. Because we don’t change technology, we don’t throw anything away, we don’t waste time. And it’s led to one of the healthiest relationships between an engineering and manufacturing group I’ve ever seen in my life. They’re all working off the same databases, they’re all working on the same processes… They’re all working in a very disciplined process environment, to where when any processes are changed, they all get together and review the proposals, and all buy into it. It’s not that hard.

The key to it all though was we didn’t go out and hire a bunch of manufacturing people; we went out and hired engineers.

Whenever I hear anyone mentioned manufacturing and factories, my mind goes straight to “The Goal” and “It’s Not Luck”, both amazing books written by Goldratt. And one of the key takeaways from those books for me was the inventory and work-in-progress, or Git branches and PRs, as we know it in today’s software industry. A low work-in-progress is essential to keeping the shipping machinery running at it’s ideal capacity.

One of the things you learn when you start building factories is that warehouses are really bad, right? Warehouses are bad, because you tend to put things in them. And inventory is really bad; inventory is really bad because if it’s defective, you don’t find out about it for a while, and you don’t close the quality feedback loop with a vendor, and correct the problem till they’ve made a zillion of them. What you want to do is find a problem, the first one that comes in the door, and stop them from making more until you fix the problem. So warehouses also cost money, because you put all this stuff in them, and the stuff - you have to go borrow money from the bank or use money that could be used in a more productive purpose. So warehouses are bad, and you want to go to JIT; I’m sure you’ve studied this all, and studied examples.

I was walking through the Mac factory one day, and the two biggest pieces of automation we put in were a giant small parts storage and retrieval system; there were these totes that ran around. And the second one was this giant burn-in system at the end; a few tens of millions of dollars worth of equipment. And I realized, unfortunately too late, that both of them are warehouses. They’re just high-tech warehouses. So when we looked at NeXT, we said, “No warehouses of any kind. We have a true JIT factory. Stuff comes in and is delivered right to the point of use on the factory floor. There is no warehouse. Deliveries are made daily, sometimes more frequently than that. There is no outgoing warehouse. Everything is visible.”

And the reason that we were able to do a lot of what we’ve done is because when we were learning about manufacturing Mac, we hired a Stanford Business School professor at the time named Steven Wheelwright… And he did a neat thing, he drew on the board a chart. The first time I met him, he said, “You can view all companies from a manufacturing perspective this way. You can say – there’s five stages. Stage one is companies that view manufacturing as a necessary evil. They wish they didn’t have to do it, but damn it, they do. And all the way up through stage five, which is companies that view manufacturing as an opportunity for competitive advantage.” We can get better time to market and get new products out faster. We can get lower costs. We can get higher quality.

[47:58] And in general — you can sort of put the American flag here, and put the Japanese flag in here… [laughter] And that’s changing, however. That’s changing. And it’s changing because people like you are going into manufacturing. Big companies are starting to realize that we were great at this one time, and then we took it for granted. Ad people are starting to pay good salaries now and get good people. So we want to be one of these and we try very hard.

By the way, just going back to software for a minute… I often apply this scale to computer companies and how they look at software. See, I think most computer companies are stage one - they wish software had never been invented. I think there’s only three companies here, and that’s us, Apple and Microsoft in stage five. We start everything with the software and work back. But anyway, going back to manufacturing… We started looking at the factory as a software problem. And the first people we hired in the factory were some software engineers; we convinced them to move from R&D into software, which was not easy. We had to give them bonuses, we had to cajole them, we had to promise them they could come back if they hated it… And they went over there, and we said “This is really just a software problem with interesting I/O devices called robots, that’s all it is.” And so we started building the software first.

And our first robots that we got, we spec’d them out, and we bought them completely turnkey, with the robot arms on them and all the electronics, and the software to control them. And we spec’d it out, but we didn’t write it. And they worked okay. Some of them are still in use, but they weren’t great. And being software folks - we weren’t real happy. They weren’t elegant. We couldn’t do what we wanted with the robots. We couldn’t tie in a quality information system to them, and all this other stuff we wanted.

So the second generation, we spec’d out the hardware and had somebody build the hardware for us, but we wrote all the software on our own computers. We’re object-oriented, so we started writing robot objects, quality objects, all sorts of objects to control this factory. And we found out our computer was great for it. And so our whole factory now runs on this object-oriented factory and quality system. The last generation, our latest generation of robots, which we’ve deployed this year, we actually built the hardware.

I’ve been to Japan a lot of times, maybe 30-40 times, and I loved to tour factories over there… And they always amaze me, because they built everything themselves, they weren’t afraid of anything. They needed a robot—they’d try to buy one, but if they couldn’t, they’d actually engineer it and build it. And you’d think this was really expensive, but we found out it’s pretty cheap. It’s actually cheaper than buying them. And so we’ve actually now designed and spec’d our own robots; we don’t mill the metal or anything we get them all made we put them all together, and we do the software top to bottom, and we have now some extraordinarily advanced robots in the factory. And our computers are built start to finish on the key components, completely untouched by human hands.

Wow, this is fascinating. And I want to make sure that I understood it… So automation is key; only by understanding and owning the entire stack, can you make a meaningful difference, and using robots or automation for tasks which don’t challenge the human imagination or empathy is the way to go. This is priceless, Steve, thank you.

Now that we are preparing to wrap up, what would you like listeners to take away from this conversation?

People say, you have to have a lot of passion for what you’re doing, and it’s totally true. And the reason is because it’s so hard that if you don’t, any rational person would give up. It’s really hard, and you have to do it over a sustained period of time. So if you don’t love it, if you’re not having fun doing it, you don’t really love it, you’re going to give up. And that’s what happens to most people, actually. If you really look at the ones that ended up being successful “in the eyes of society” and the ones that didn’t, oftentimes the ones that are successful loved what they did, so they could persevere when it got really tough. And the ones that didn’t love it, quit, because they’re sane, right? Who would want to put up with this stuff if you don’t love it?! So it’s a lot of hard work, and it’s a lot of worrying constantly. And if you don’t love it, you’re going to fail. So you’ve got to love it, you’ve got to have passion, and I think that’s the high-order bit.

[52:27] The second thing is you’ve got to be a really good talent scout, because no matter how smart you are, you need a team of great people. And you’ve got to figure out how to size people up fairly quickly, make decisions without knowing people too well, and hire them, and see how you do, and refine your intuition, and be able to help build an organization that can eventually just build itself, because you need great people around you.

Thank you, Steve, for sharing so much with us, and for caring enough about personal computers. This changed my life for the better. I followed your advice, and asked for help with the ending. What Jony Ive said ten years ago at your memorial is just as meaningful today. Here it goes.

And that’s it for this special episode of Ship It, where we remembered Steve Jobs and all the learnings and special moments that he shared with us throughout his life.

I want to thank Andrew for showing me what it means to be a great friend. and a loyal Apple employee. I still have fond memories from when we used to pair at level 39, and it’s been a joy seeing you grow over the years into a great manager at Apple. Everything worked out great.