Steve Jobs on Apple’s Philosophy: The Bicycle for the Mind

Hi, I must apologize to all for being late. I was driving 90 miles an hour, and I couldn't find a parking place. And all the experiences you've been through this morning, I have a photographer from Scientific American who wanted to take some pictures in the last few days. So we went over to a school. We thought they decided they wanted to take some pictures of someone from Apple in an educational setting and using some computers. And we wandered over. Turns out there's a little booklet that is put out in Cupertino, and there's about 20 different schools with Apples, and we picked one out that had six Apple computers and wandered over there one afternoon, just happened to be the

afternoon. And the fourth and fifth graders were going to be there once a week. Fourth and fifth graders from this one school in a sort of an advanced learning program come over and use the Apple computers. And I had the most delightful conversation with some four- and five-year-olds. They probably know as much about the computer as I do, and they're totally fluent in it, and they're very much at home in it. And they'd be in most of the games, and it was really quite an experience because we always talked about all these things happening sort of the intellectual, herbal level. They actually got a chance to see twenty students interacting with these computers on a one-on-one basis.

And I couldn't help remembering my own school days. Well, none of these things existed. We're just giving the trouble all the time. 11:30 at night last night, a friend of mine, Bob Metcalfe, calls me up, and he's got three German friends visiting from Germany, and they want to buy twenty to thirty APPUs a month for some god-awful who knows what reason. Then they wanted in Germany, and they want to talk about 11:30 at night. You know, a guy in Nebraska is using an Apple computer to calculate soil samples to know what kind of fertilizer between the grandma. It just, it's an endless array of things

that people are doing with this. We had absolutely no idea what people were gonna do with these things when we started out. Matter of fact, the two people it was designed for was Steve Wozniak in solitary because we couldn't afford to buy a computer kit on the market. So we liberated some parts from Hewlett-Packard and Atari and worked on a design for about six months and decided that we would build our own computer. So we built and once was up till 4:00 in the morning

for many moons, and we got it working. We showed some reference. Immediately, everybody wanted it, and it turned out it took about 40 hours to build one of these things, and about another 20, 30, 40 to debug it. And we had a lot of friends at work, at similar companies who could liberate the parts, also helping our friends to build computers, and it was just getting to be a tremendous drain on our lives. So we got the idea one day that we could make a printed circuit board without the parts and sell you blank printed circuit boards to our friends and probably cut the assembly and debug time down to, you know, 5, 10 hours. So Wozel is HP-6 calculator, and I sold my van. We got 1,300 bucks together, and we pay our

friend of ours, who is this PC board layout person, 1,300 bucks to do us a layout, and decided we'd sell printed circuit boards at twice what it costs to build them and hopefully recoup our calculator and transportation at some later date. So that's what we did. Now is out peddle PC boards one day and walked into a Byte Shop, the first Byte Shop in Mountain View, and Paul Terrell, then owner of the bike shop, said he would like to take 50 of these computers. And I saw dollar signs in front of my eyes, but he had one catch, which was that he wanted them fully assembled and tested, ready to go, which is a new twist. So we spent the next five days on the phone with distributors and convinced the electronics parts distributors around here to give us about $10,000 worth of

parts on thin air this time enthusiasm. So we got the parts and we built a hundred computers and we sold 50 of them for cash in 29 days, paid off the distributors, and that's how we got started. So we got 50 computers left over while that meant we had to sell them. So then, we started worrying about marketing, worrying about distribution. Got on the phone to the other computer stores around the country, and gradually the whole thing began to build momentum. And at that point in time, we had some feeling that we were onto something, but the feeling was so different than the experience of actually seeing it happen right now. It's entirely different. And sometimes a lot of people ask, well, did you know it was gonna mushroom into this phenomenon? And you can say

yeah, you know, we planned it out, we got led on a piece of paper, but different than the experience is seeing 500 people working at Apple Computer. It's very different than the experience of seeing a five-year-old kid who really understands what he's the tool that he's gotten from. And the best analogy I've ever heard is Scientific American, I think it was, did a study in early '70s on the efficiency of locomotion, and that's what they did was for all different species of things in the plants, birds, and cats and dogs and fish, man, goats and stuff. They make her, how much energy does it take for a goat to get from here to there, right? Kilocalories per kilometer, something I don't know what.

And they ranked them. They published the list, and then the Condor won. The Condor took the least amount of energy to get from here there, and Man's didn’t do so well, carrying with a rather unimpressive showing, about a third of the way down the list. But fortunately, someone at Scientific American was insightful enough to test the Man with a bicycle, and Man with a bicycle won twice as good as the Condor, all the way off the list. And what it showed was that man is a toolmaker, has the ability to make a tool to amplify an inherent ability that he has. And that's exactly what we're doing here. It's exactly what we're doing here. We're not making bicycles to be ridden between Palo Alto, San Francisco, okay?

We're making bicycles. And yes, certain bicycles have certain generic attributes, like in general, 10 speeds are better to ride in mountains than one speeds, and other things like that. But in general, what we're doing is we're building tools that amplify a human ability. Just like, you could say that the Industrial Revolution was basically an amplification of a human ability: sweat amplified, sweat, fractional horsepower motors, etc., etc. What we're working towards now is the ability to amplify another human ability, and we're just starting to get the glimmerings of where

it's going to go. As an example, how many of you visit Hewlett-Packard? Quite a few. And Apple, every secretary now has an Apple II. It is a four-disc, and they're doing all the word processing on it. You got to give him credit for that, giving us off, that's about it. They're doing a tremendous amount of financial modeling on the thing. As an example, I have to keep a budget for about 40-50 people, and by the 10th of every month, my secretary's got all the information from accounting, put it into the BusyCalc model, and giving me the actuals

versus forecast and all the variances, and etc., etc., and we're asking what-if questions on a daily basis. I can say, "Printers path," I'd say, "What happens if I hire five more people this month? You know, what's that going to do to the budget?" An hour later, I know. It's incredible. And what's even more incredible is when you go talk to these fifth graders because they're growing up with this thing, you know, it's new for myself. I know anything about fifteen years ago, ten years ago. But these kids are growing up with it. I've seen some of the kids of people that work at Apple. I've seen them go from being one, two years old where they push the return key, you know, they sit on their father's lap, mother's laughing, what their part is, is to push the return key

to actually know how to program. In the last four years, it's remarkable. So one of the things that Apple is going to try to do over the next three or four years is to further that goal. And the key area we're focusing on is the following. Right now, if you buy a computer system and you want to solve your problems, we immediately throw a big problem right in the middle of you and your problem, which is learning how to use the computer, right? Substantial problem to overcome. Once you overcome that, it's a phenomenal tool. But there is a barrier of having to

overcome that problem. What we're trying to do, and I think there's a reasonable chance that Apple is going to make a real contribution to solving this problem in the next 36 months, is to remove that barrier so that someone can buy a computer system that knows nothing about it and directly attack their problem without learning how to program the computer. And the reason I think that has got a chance is solving that problem versus a lot of other computer companies that we all know of that are much, much larger than we are now, although we're catching up, is that our whole company, our whole philosophical base is founded on one principle. And that one principle

is that there's something very special and very historically different that takes place when you have one computer and one person, very different than if you have 10 people in one computer. And let's look at some of the things that our industry has, or our segments of the computer industry is contributing to the computer industry because of that philosophy, that underlying philosophical concept. In general, we were in retailers' channels three, four years before the rest of the computer industries were now waking up to that fact. Why? Because to serve that one-on-one relationship, it was necessary to distribute the products that way. It was necessary to have products priced so that a person one-on-one could afford the computer system and therefore was necessary to distribute them through a relatively lower cost distribution

channel rather than a direct sales force. Interactive software, interactive video—a computer system that can be sold for a few thousand dollars that can actually do some animation, that actually has the video that's so tightly coupled to the rest of the computer you can do real-time. We've got a DEC 1170 at Apple where the terminals communicate with the 1170, you know, 9,600 bits per second. That can't do anything like Visicalc yet, okay? This is a three hundred thousand dollar computer system, and yet my secretary keeps the budgets on an Apple. It's far superior. So, and again, that comes from that one-on-one interaction, and that perspective is what gives us

the feeling that we have an opportunity to really contribute to solving that problem. And that's where Apple's going. Now, we're very fortunate because the timing seems to be falling into place. In other words, as we move into the eighties, the amount of computational power, the amount of the raw horsepower we can get into a small box for a reasonable price is staggering. Even in the last three years, you know, four years since we started, it's increased a few orders of magnitude. And one of the things that people always ask me is what we got right now is just fine. Physic health runs fast enough some

Of the database stuff runs fast enough, what are we gonna do with this extra awesome power? And the answer to that is that we're gonna put it into applying, into solving that problem again. In other words, we're gonna start chewing up power specifically to help that one-on-one interaction go smoother and specifically not to actually do the number crunching and the database management and the word processing, whatever. We're actually going to start applying a lot of that power specifically to help us remove that barrier. And so, assuming that we don't get into World War Three, assuming that we're able to continue.

Recruit outstanding people. It looks like a time he's just right for that to occur. So hopefully, when we have our international Apple core meeting, you know, the third, fourth one from now, we'll all be able to talk about how we've sought that problem, because I really think it's gonna happen. And I really think it's gonna come out an industry that four years ago didn't exist, that three years ago everyone said was a flash and a flop in the frying pan. No. And, but I think right now. So thank you.

Very much. To start a company, you have to find out what's called a fictitious business name statement. And what the purpose of that statement, when it's filed with the government, is to simply tell everyone if Apple Computer. That was important. So me and everyone's.

Like Matrix Electronics or all sorts of different names and simply decided you were gonna call it Apple Computer. Suggested a better name by five o'clock that day because a lot, and we examined it on a regular basis, and we found that the juxtaposition of something that seemed to epitomize what we were going after, which was the simplicity and yet.

Very refined sophistication. See, our first brochure, probably somebody had it, but had the title, it was "Simplicity is the ultimate sophistication." And that wasn't just a slogan, it actually was really what we've been striving for. And Apple seemed to symbolize that. So, I think we're going to stick with it. Getting back to what you're talking about, about your goals, about eliminating this barrier, this obstacle of the computer. They're talking about all this basically hardware power that's available inside that little box. What sort of things you're talking about that's going to translate that hardware power in the car, that that's inside.

There into removing the obstacle of what's inside there. On a more concrete level. Well, you're asking me to talk about future products and I don't want to do this, but philosophically, philosophically, first of all, we've done an awful lot, you know. When we first started out, we didn't know how to spell the word software, and gradually we've learned. We've gone through the standard motions of setting up an internal application software department, which proceeded to fall on its face, picking it up and watching it fall on its face again. And finally, we went through a phase where we decided.

That what we were selling solutions, not hardware. And so we realized that software was a big part of the solution and therefore we better get our software act together. Matter of fact, now we have more people in software engineering than hardware engineering. You know, our engineering departments over half people are devoted to software. And a lot of times we ask ourselves what software is. Matter of fact, notice all these, every other word software atmosphere, some clue, but what, what is software? You know, I've often thought about this between software and the only way I can think of is that software is something that either is changing too rapidly, you don't exactly know what you want yet.

Or even have time to get into hardware where the technology's not there, giving the heart already. That's all I think of. So, and what I see happening is that more and more software is getting integrated into the hardware. Yesterday's software is today's hardware. So those two things are merging, I think. And the line between hardware and software is going to get finer and finer and finer and finer. And one of the ways that we're approaching the problem of how to remove the barrier is to try to look at a few years and make some, some predictions as to where the technology will be, both hardware and software technology, and how.

They're going to be merged together. And at the same time, looking at, very carefully looking at the kinds of high-level tools that our customers are going to need and trying to make those two points the same target. And I know that's very vague and I guess I'm using.

Many years to accomplish your continuing support with Apple — in other words, not roughing it like some other companies drop that should this happen. Going to start up the new and everyone's going on all (music). There's three important parts of management wanna address each one presenting some really important question but some crazy fuel even in the universe to people from lost office in Cupertino, California managed to want something that just so happened to be what about a million other people wanted.

And it's, it seems to fit the need fairly well. So, well, matter of fact, in the last two and a half years nobody else has come close. So I don't think who's ever going to be obsolete. To answer then another angle, the second annual Apple is eventually going to have a broader line of products simply because, let's look at automobiles. Compare a Volkswagen Rabbit and a dump truck and Mercedes-Benz. Let's say they all have transmissions, they all have engines, four wheels, seats, and the basic, we all perform the same basic function of transportation. What's the difference? There is an emphasis. It's a difference.

In emphasis, and I think that that's what we're going to look at doing is potentially broadening the product line with computers with a different emphasis, slightly different emphasis than the iPad. (Applause) I don't get all pleased with the many clocks that will come out with over the years, but I don't think that many of you are going to actually feel like giving up your iPad. I don't see it happening. One other thing I heard that coming up here, if you were asking your questions when they said like Apple One, right? And Apple One was an instance where we did actually Clark, we absolutely did.

Absolutely, and what we did was decide that we were going to take care of the people who bought Apple Watch, and the people that contacted us and said, "Listen, I'd really like to have an Apple." We worked out an arrangement that I think everyone is very happy with, so take care of those people. I don't think I'll ever be in a situation like that again. We obsoleted about 500 people now, and Apple will do this year is probably somewhere between 150 and 200 million dollars with the sentence. And if you actually divide the sales number by the people, who finally probably have the highest sales dollars per employee if anybody's ever.

Heard of. And the reason is because we've got the most incredible collection of people on the planet. That I, at least, the most incredible collection I've ever seen, most of the other people have ever seen. And it wasn't very, very hard. And if you actually look at why they're there, why people have come to Apple, why people came originally, it certainly wasn't for the salary. A lot of people came down, went to a 50% cut in salary initially. We picked up edited salaries now, we certainly don't attract people on the basis of salary. We track people on the basis of an opportunity to work your butt off and get something done right, shake it out the door without getting all screwed up. And an opportunity professionals are as good as you are in other different country. So what Apple's what we're gonna make, what we're going to judge ourselves by the senior.

Management. The companies can judge itself by this: can you maintain this atmosphere of creativity, tremendous productivity, and a company where it's just fine to fall on your face as long as you pick yourself up great, best, and all? In an environment where we give people enough rope to hang themselves behind and hope that they don't. If we can maintain that for the next 10 years and beyond, we will have been successful, and the rest of the stuff will take care of itself. The rest of stuff will take care Islam.