Next issue:
• Apple’s first dealer in
Japan is a textile maker
First Deal
Terrell agreed to order fifty computers.
He was willing to pay about $500 apiece,
cash on delivery. To fill the order, Jobs
tried to borrow more from a bank in Los
Altos, but the manager declined. He went
to Haltek Supply and offered an equity
stake in Apple in return for the parts, but
the owner decided they were “a couple
of young, scruffy-looking guys,” and de-
clined. Finally, Jobs was able to convince
the manager of Cramer Electronics to call
Paul Terrell to confirm that he had really
committed to a $25,000 order. Terrell con-
firmed that it was, and the store agreed to
front Jobs the parts on thirty-day credit.
The pieces were manufactured and de-
livered to Byte Shop. After thirty days
Apple was on the verge of being profit
-
able. In order to make Apple seem like a
real company, Jobs hired an answering
service, which would relay messages to
his mother.
In 2010 one of the original Apple I com-
puters was sold at auction by Christie’s
for $213,000.
Jobs and Wozniak had the chance to go
on display during Labor Day weekend of
1976, at the annual Personal Computer
Festival, held in a tired hotel on the de-
caying boardwalk of Atlantic City, New
Jersey. Jobs and Wozniak cradled one ci
-
gar box with the Apple I and another with
the prototype for the successor that Woz
was working on.
Apple II
In their hotel room on that Labor Day
weekend, Wozniak tinkered with the pro-
totype of the new machine, to be named
the Apple II. They brought the prototype
late at night, to test it in one of the confer-
ence rooms. Wozniak had come up with
an ingenious way to goose the machine’s
chips into creating color. The Personal
Computer Festival was the first chance
to establish Apple among giant computer
companies. Producing the fully packaged
Apple II would require significant capi
-
tal, so they considered selling the rights
to a larger company. Jobs went to pitch
it to Atari. He set up a meeting with the
company’s president, Joe Keenan. But
Joe couldn’t stand him. Jobs was bare
-
foot, and at one point put his feet up on
a desk. “Not only are we not going to buy
this thing,” Keenan shouted, “but get your
feet off my desk!”
While Steve Jobs was looking for some
-
one to buy the rights of the new machine
which needed around $300,000, he was
visited in the garage by Don Valentine, a
straight-shooting former marketing man-
ager at National Semiconductor who had
founded Sequoia Capital, a pioneering
venture capital firm.
“If you want me to finance you,” Valentine
told him, “you need to have one person
as a partner who understands marketing
and distribution and can write a business
plan.” Valentine suggested Mike Mark-
kula, who would end up playing a critical
role at Apple for the next two decades.
Markkula was only thirty-three, but he
had already retired after working at Fair-
child and then Intel, where he made mil-
lions on his stock options when the chip
maker went public.
Markkula excelled at figuring out pricing
strategies, distribution networks, market-
ing, and finance. Markkula made a wild
prediction: We’re going to be a Fortune
500 company in two years, he said. “This
is the start of an industry. It happens once
in a decade.” It would take Apple seven
years to break into the Fortune 500, but
the spirit of Markkula’s prediction turned
out to be true.
25
March
2014
