Upgrade - 609: The Origin of Apple

Episode Date: March 30, 2026

I don't want you to think of this as just a film. Some processes are converting electrons and magnetic impulses into shapes and figures and sounds. No, listen to me. We're here to make a dent in the universe. Otherwise, why even be here? We're creating a completely new consciousness, like an artist or a poet. That's how you have to think of this. We're rewriting the history of human thought with what we're doing.

That was, of course, Noah Wiley as Steve Jobs. in the 1999 film The Pirates of Silicon Valley. Why am I reading this? Why? Why? Because today we are continuing, kind of beginning our series celebrating Apple at 50

by taking a look back at how the company was founded. I am Mike Hurley, and today I am thrilled, as always, to be joined by Jason Snell, who has prepared this story for us. Hello, Jason. Hello, Mike Hurley.

How are you doing? Oh, I'm excited. I'm very excited. I should note that this episode is brought to you by Insta3 60, Claude and Century. Over the years, there have been many, many interpretations of how Apple was founded. It feels like in the last week, many more. And I guess over the next week, many, many more. So we're adding our reflection on this historic moment. And you've been researching that for us,

right, Jason? Yeah. I think it is, one of the things that I've learned is that 50 years is a long time. And it wasn't as long back when I started, right? And now I feels like this has just got. dimmer and further into the past. Fortunately, there are a lot of different books about the subject. And if we're talking about Apple at 50, we can talk about the origin of the Mac and we can talk about Apple buying Next and we can talk about all those things. But I think it is for this particular occasion, the most appropriate thing to do is talk about what happened that led to the founding of Apple in 1976.

So I thought that we would do that today. Let's do it. All right. So to get to 1976, we have to start. earlier. So I thought we would start in the 1960s because it's important to understand, especially for people who are not from or are familiar with the Bay Area to know about where this all happened because that matters. The geography and the culture matter. So in the 60s, the story starts in what we now call Silicon Valley, but back then it was just called the

Santa Clara Valley. The concept of Silicon Valley had not even been coined, let alone spread. Santa Clara Valley is 40 miles southeast of San Francisco at the southern end of San Francisco Bay. If you've been there in the 21st century, you will think, Mike, as you probably do, a freeways, strip malls, a lot of suburban sprawl. There's not a lot of city down there. It's not a lot of super tall buildings. It's a lot of kind of mid-height buildings, strip malls, office parks, and single family homes more than anything. There are more apartments there now, but like it is kind of a suburb, a crowded, car-filled California suburb.

Does that seem fair to you? Any apartments that I've seen look astoundingly new when I've been in that part of California? That's only been recently. It was a suburb and there are, even now, when I leave the Apple Park Visitors Center after an Apple event to come home, the way I need to go is I actually drive north on Tantau Boulevard and then make a left on what is that, Homestead Road, I think.

And so you're traveling alongside the north end. To your left is the north edge of Apple Park, which is just a wall of trees at this point, right? That is a privacy wall of trees. To your right, literally across the street from Apple Park, are single family homes. You would never believe it if you were from anywhere else of the world,

but it's just a bunch of single family homes across the street from Apple Park, which seems so unbelievable. And like many places like that in America, it is astoundingly unwalkable. You cannot get from place to place on foot. You just can't do it. It's impossible.

The hotel that I stay at for WWDC is walkable distance from Apple Park, believe it or not? But then they changed the entrance to a different entrance and then it wasn't walkable anymore. But walkable distance. It's not necessarily. There also has to be a sidewalk. I walked at once. Okay.

There was sidewalk. It's true. So back in the 60s, though, the Santa Clara Valley was a whole lot more rural than it is. It's so far from San Francisco. You think 40 miles away from San Francisco, it's not as if there were a lot of commuters in those days to San Francisco. I don't think you could even call it suburban at that point. It was mostly fruit orchards. But the seeds of Silicon Valley had been planted in that era.

Hewlett Packard was based in Palo Alto near Stanford University, and that had been set up by Mr. Hewlett and Mr. Packard just before World War II. In a garage by two young friends, by the way. History echoes, doesn't it? In the 60s, HP was making electronics equipment of various kinds. it would eventually get into calculators and computers, but at that point, calculators and computers were part of an entirely different sphere

than what HP was doing in electronics. Also in the Valley was Lockheed, the defense contractor, and that brought aerospace, mechanical and electrical engineers to Mountain View. And all these towns that I mentioned, they're all right next to each other. It's a bunch of fairly small towns, Mountain View, Cupertino, Sunnyvale,

Los Altos, Santa Clara, they're all right next to each other in this area that's sort of northwest of San Jose. But they're all names that people that listen

to this show are familiar with, right? Because they're now synonymous with the companies that exist, like Mountain View, Palo Alto. Mountain View is Google. Yeah.

Mountain View used to be Adobe and it used to be Facebook and now it's Google. Palo Alto is Facebook now. Cupertino obviously is synonymous with Apple. So definitely you know these names. You may not know the geography.

It doesn't really matter other than to say that they're all, I use them kind of, I'll throw out a name and you don't need to keep track of where that is on a map because they're all right next to each other. The most important part, so incubators, you know, we have Stanford and Hewlett Packard in Palo Alto. And then over in Mountain View, you have Lockheed. And one of the reasons Lockheed is there is because the Moffat, Moffat Field, we call it now. Moffat Naval Air Station is there. and the NASA Ames Research Center is there. So you've got an aerospace concentration in that part.

And then you've got this electronics concentration over by Stanford. And as a result, you've got a relatively open area near a major population center, home to a major university, some technically oriented government installations, and now at least two major corporations focused on engineering, hiring highly educated people from, all over the country and bringing them to the Santa Clara Valley. And, you know, is that simplifying it a little bit?

I guess a little bit, but like this is how Silicon Valley got started. The kids, not just their parents, not just the engineers who were brought there, the kids living in those suburban tract homes in this area, those are the ones who would power the personal computing revolution. There are so many stories about this, including some that we'll talk about, where it's Literally, your dad brought home electronics for the kid to play with, or the guy down the street would bring home excess stuff from Hewlett-Packard that the kids who are electronically inclined on the block would mess around with on the weekend. Literally, you had such an educated workforce, a technical workforce, that it wasn't just about the parents. And I'm going to say dads a lot because it's very gendered in this era.

It was mostly the dads. It was mostly men working on this, and the stories are mostly about them. But you end up with this incubator where it's not just that the dads are there, but I just want to get across that the kids on those blocks in those suburban tracts were surrounded by people, surrounded by engineers who were their mentors, their dads, their dad's friends, their neighbors. And they looked up to them and they were encouraged by them. I think that is really the story of how Silicon Valley got started.

It really feels like this is a story of a time, like this kind of beginning of computing, because so many of the stories, I mean, we've already heard it, and everybody knows we're going to talk about one, about a company being started in a garage by a couple of people. And I just feel like now, today, in like the age of co-working spaces and stuff, like, that's gone. Like, this, like, garage company, like, it felt like it was a thing that was so, common then for the companies we have now and it almost feels romantic now. Well, it was what you would expect in a suburban area.

Yeah. To work out of a garage made sense if you were living in a suburban tract home. Today, we have a lot of remote stuff. And then, yeah, there tends to be more of a culture of funding that happens sooner, that leads to office space in a way that, as we'll see with Apple Story, it was a more complex step to get there, although they did get there fairly quickly. But you have to start somewhere. And especially if you're doing hardware, you have to assemble the hardware.

And that's a big part of the Apple story. So let's start with our characters, right? We've got to meet our characters. So Steve Wozniak, Waz, Stephen Gary Wasniak. You're born in 1950 in San Jose. His dad, guess what? Engineer at Lockheed on the street Waz grew up on in Sunnyvale, which is right next to Cupertino in Mountain View.

Everybody's dad worked at Lockheed or NASA or some other electronics companies that had begun to emerge because of, again, this incubator of all these different engineers and electronics companies. And some of them beget more of them, beget more of them. And that was what was happening in the Santa Clara Valley in this period. Kids in the neighborhood would often pitch in with their dads who on the weekend were tinkering with weird electronic stuff or mechanical stuff in their garages. it had the effect of them being almost like junior electronics apprentices. Like, I'll give you an example. I have a strict no-sodering policy. You know this, Mike.

I don't want to solder things. I've done it for you, in fact, because of that. I'm terrified by it. Steve Wozniak was probably soldering things when he was like five or six. Yeah. Because that was the environment. You know, his dad was an engineer and they were surrounded by engineers. By the time, Waz was in fifth grade.

He had built a computerized tick-tac-toe game. the next year he built a hand radio. His eighth grade science project was an electronic adding machine, which I just want to read this quote from Michael S. Malone from the book Infinite Loop. He said 13-year-old Stephen Wozniak on his own from his own design had built a computer as powerful as any in the non-military world 25 years before. And it's a 13-year-old kid. Do you think for Wals, it was the life experience of like, you know,

the people around who in Woku of his dad? Or do you think he had some kind of like born extra talent? Like he was just he was just made for this. I think Steve Wozniak is a special, is a genius. And people, as we'll see, that genius was recognized really quickly. I think he absolutely was a, is a genius to this day. Yes. And a sweet guy, I think though it's that combination, right?

Not every kid on Steve Wozniak's block became Steve Wozniak or even in his neighborhood. It was him. But to be in that environment and be encouraged and be exposed to these concepts so early, it's that magical, it's like a musical, a Mozart in a period where there was lots of classical music and that was a cultural thing was the music. a Mozart is more likely to spring than in a place where music is impossible and doesn't exist and is right, it's not accessible. If you can put the, if you can couple the genius

with a, I would say, perfect environment for the incubation of that genius. I think that's what happened with Waz. I think it's both. Yeah, okay. That makes sense. So Waz goes to Homestead High in Cupertino, which had apparently legendary electronics class taught by a guy named John McCollum. And this is the moment where Waz seems to have realized what he wanted out of life. This is where he started to think about designing circuit boards.

He would look at the designs of other devices in electronics magazines and figure out how he could do them better, how he could do them better, how he could. make them more simply and elegantly, which in that days often was a game of, do I need this many computer chips? Because chips were expensive. And he would, and he would say, I don't need, I can, I can make this board with five fewer chips. And, and so he started to think in terms of like, efficiency and outdoing what, uh, what professional corporations were doing, like this high school kid was thinking, I could do better than this. So, of course, everything else in his high school career basically fell apart. He had no social life. He did a lot of pranks that got him in trouble because he has a prankster to this day. He was really only focused on his obsession. Yeah,

that's one of the key things about was that has kind of prevailed through all of the popular the culture about Apple is that the guy told pranks. Like in all of the movies and all of the TV movies and all of them, and I've seen all of them, that is kind of the thing that persists for him the whole time. Well, if you're a writer of a movie, you're trying to find a hook, right? A hook of like, who is this guy? And honestly, being a studious, well, at least in the stuff, a nerdy guy who's obsessed with looking at electronics magazines and optimizing circuit boards, probably not the most visual cue of his genius for a movie

so they make it about the pranks that was the that was kind of his outsized personality trait was he's a Mary prankster and even though that's not the part that makes him a genius that's the part that makes him interesting as a character in this period

so I see why they went with that I will say though I don't want to portray Waz as a social outcast or a nobody, everybody at Homestead High knew who Was was. And they all knew he was a genius in the making. There is no doubt about that. All the reports about this period say people knew Waws, and they knew the guy was brilliant.

You know, not doing well in some of his classes, but like he was obviously brilliant at what he cared about. He got a high school internship at an electronics company, Sylvania, which a lot of us will know as a company that made a life, light bulbs, but it was an electronics company. And this is where he started to think about the unification of hardware and software, right?

That computers could not, could be more than just simple calculating machines because they could be mediated and controlled by software. This is where he started programming in a very early programming language called Fortran. And that moment of him realizing that the software could help

control his hardware and make things that could do more than just some math for you. This is like the moment where he couldn't be stopped. Because it is important to note, right? That like at that point, computers could exist without software. They were kind of hardware things that you could program to do things. Right. There were main, obviously, because he learned Fortran, there was programming language out there,

but these were things that were happening on computers the size of rooms, right? and he was building little calculating machines. But in this moment, he had that idea of like, well, wait a second. It's that moment that you can see the incubation of the personal computer because it's like, wait a second. I can build things and there's software, put them together and what do we have? Yep, yeah. So the only question is like, okay, what's was going to do? So he goes to college at University of Colorado and Boulder.

It's unclear what happened there other than that he hacked the conference. computer system to essentially print Nixon sucks on page after page of the printer at the University Computer Center. Unclear whether he was expelled or dropped out. The sources that I've got conflicted about this. So I'm just going to say he left. He's going to see you Boulder as a Mary prankster. Came home, went to junior college.

The plan was that he was going to transfer to UC Berkeley in. in 1971. That summer, he and his neighbor and friend, high school student, so a little younger named Bill Fernandez, they built a simple computer together. This has become famous as the cream soda computer, which is not what they called it, but they drank a lot of cream soda while they were making it, I guess. And then they had a reporter come over or a photographer from the local paper to take a picture of it, and then something happened and it kind of blew out. And it was kind of a flop. But it is notable in the sense that they were building a computer They wanted to build a personal computer themselves, design and build it.

Bill Fernandez, by the way, going to Homestead High. He's a little younger than Was. He's got another friend at Homestead High who's an interesting character, but he hadn't yet introduced him to Was yet. Who could it be? Who's next in our story? What a cliffhanger, Mike? What a cliffhanger. This episode is brought to you by Claude from Anthropic.

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Not giving anything away here, but let's talk about Steve Jobs. Stephen Paul Jobs. So born in 1955 in San Francisco to, as we all know now, a Syrian PhD student named Abdul Fatah Jandali and a Wisconsin native and classmate of his at the University of Wisconsin, Joanne Sheebel. They put their baby up for adoption. And Joanne requested that he be adopted by. college graduates. These are two highly educated people and they wanted their baby. She was really, I mean, they couldn't be married. His father back in the Middle East was very opposed to the whole idea. I get the sense just in reading about it that she still held out some hope that she could keep the baby. And I think that she was kind of bargaining by putting roadblocks in like they got to be college graduates. The adoption agency finds a couple to adopt.

That falls through, and then they get placed with this different couple, neither of whom has even graduated from high school. And in the end, she only signs the adoption papers when the adoptive couple signs a pledge, signs on paper a pledge to send the baby to college. And they will immediately start saving into a college fund for him. And there are stories about how she still kind of held out hope that she would be able to, get the baby back, she does end up marrying John Dolly. And they have another child who is Mona Simpson, the novelist, for whom, by the way, Homer Simpson's mother is named because her ex-husband now was a writer on the Simpsons, writer-producer on the Simpsons. The Simpsons were named by Matt Graning, but Mona Simpson is literally Steve Jobs' sister's name. And that's how they, Richard Apple, named Homer's

mom after her. But it was not to be, and it was a closed adoption, so the family did not know where the baby went. That couple that signed that paperwork was Paul and Clara Jobs. Paul Jobs. Interesting guy, I think, Coast Guard veteran, just like the birth mother, actually, from Wisconsin, I think that's kind of a funny connection. He was a tinkerer, especially with cars, worked as a mechanic, a machinist, a realtor. At one point, a repo man, repossess.

cars. Just a lot of different jobs that Paul Jobs had. It's quite great, really. His name's Jobs. He's lots of many jobs for jobs. Yeah, I guess so. He was, it's nominative determinism at its best. He's Paul Jobs. He is. He's so many jobs. So Clara grew up in San Francisco and when they adopted Steve, she was working as a bookkeeper. Bookkeeper doing accounting and stuff for companies. Steve grew up in a typical Santa Clara Valley neighborhood of the period with engineers everywhere. Hewlett-Packard engineer lived a few doors down and would bring young Steve gadgets to play with. Again, this is that incubation that there are engineers everywhere. And even Paul Jobs, who is a more working class guy, but even he is a mechanical tinkerer. So it's just, it's everywhere around.

ultimately the family moves to Los Altos, which is in a better school district. It means Steve can go to Homestead High. Mike, you remember my story about how, like, after Apple events, I would like to, like, on the way home, I'd stop by, like, the good deli and get a sandwich on the way home. It's like four doors away from that

is where Steve Jobs grew up. I had no idea. It's unbelievable. It's right there. In fact, David Polk points out in Apple at 50 that, or sorry, Apple the first 50 years, his book. Yeah.

That, and the book opens with a map. It's like every major event in Apple history has taken place in a, like, a two-mile area. Yeah, he was talking about that in the episode that he took with you, the interview, right? I think he, Chris Esponosa kind of drew it out for him and then he had it redone. Yeah. And it's, and there's nothing. I mean, it's all very close together. In fact, this is about as far away from the story as you get, and it's not far at all.

It's one exit up the freeway. It's not far at all. Homestead, hi. So Steve Jobs, you're not going to be surprised by any of this. He also was interested in pranks, like someone else I can think of. At one point, he was working on a project. He literally called, he looked in the phone book and called Bill Hewlett, the CEO of Hewlett-Packard, co-founder of Hewlett-Packard at home and asked him for some parts for one of his projects.

And not only did Hewlett give him the parts, he got him a job at the Hewlett-Packard plant that made those parts. encouraging the youth, again, part of this incubator that's going on here in the Santa Clara Valley. Steve Jobs also took that same legendary electronics class from that legendary teacher that Waz had taken, but he only got through a single year because he was too rebellious and didn't get along with the teacher. Surprise. But he did make a good friend, Bill Fernandez, Steve Wozniak's neighbor. And Fernandez really thought Steve would get along with. with his neighbor. So maybe we got to get these two together.

It's interesting in reading through this and like hearing you talk about it. I feel like time forgets that Jobs was interested at least at one point in the physical aspect of building computers. Because it kind of feels like from the point that Apple becomes a thing, that's never mentioned for him anymore. And it's often, and potentially it's just because he's compared to was who was like a servant at it. But like it is almost considered as time goes on. Like all Jobs did was designer marketing. He had no idea about the other stuff.

It's not true. In fact, I just saw something the other way. I'm not sure if it was from David Pogue or if it was maybe somewhere else. But, oh no, was Harry McCracken wrote a great fast company kind of oral history of Apple history. And he pointed out, Harry did,

that they talk a little bit about some stuff that Steve Jobs built. And it really gets across the fact that it's not fair to say Steve Jobs wasn't actually, was kind of a poser when it comes to electronic tinkering. He did a bunch of electronic tinkering. I think, though, compared to Steve Wozniak, he was just an amateur, right? Like, and once you, once you're with Was, why would you bother, right? Like, he just is a genius. So I think that's what happened is that Steve was interested. in this stuff, but in the end,

Waz was clearly the engine that was going to drive everything creative that was happening because Waz was so brilliant at it. But yes, definitely there's evidence that Steve really was interested in this and was building his own, you know, whether it's sketching circuit boards or building other electronic gadgets. I think that's absolutely true. Yeah. But so Bill Fernandez, I'm going to read, this is from David Pogue's book.

He says, this is Bill Fernandez. telling the story. So one day, when Jobs came over to visit, I took him across the street. I saw Washing his car in front of the Wozniak family house, and I introduced them to each other on the sidewalk. And then what was told Walter Isaacson in the Steve Jobs biography, Steve and I just sat on the sidewalk in front of Bill's house for the longest time, just sharing stories, mostly about pranks we'd pulled, and also what kind of electronic designs we'd done. We had so much in common. Typically, it was really hard for me to explain to people what kind of design stuff I worked on. But Steve got it right away. And I liked him. He was kind of skinny and wiry and full of energy.

And I would say that quote suggests Steve got it right away, right? Like even if Steve, we've collapsed our conception of Steve Jobs, but he did have a technical foundation because although Waz was far and away beyond everybody else, this I think is Waus paying Steve tribute that Steve got it. He got it in a way that maybe if he didn't understand the technicalities of it, he wouldn't have gotten it. And what Steve Jobs said is, Was was the first person I met who knew more electronics than I did, which if you're thinking Steve doesn't know anything about electronics, this is a hilarious statement. But I think the evidence is that he knew more than that. But again, overshadowed by what was. Like you think you know electronics, Steve Jobs, meet Steve Wozniak. And you're like, oh, I know nothing.

this guy. Job said, I liked him right away. I was a little more mature than my years, and he was a little less mature than his, so it evened out. Was was very bright, but emotionally, he was my age, which, I mean, having tracked these guys over the years, kind of story checks out.

Yeah. Story checks out. Was did say Steve didn't know very much about electronics, but again, I think this is coming from the perspective of Steve Wozniak, that, you know, compared to what he knew, Steve Jobs didn't really know anything, but at least he got it right away. I think that is, I think that's, these are all encouraging signs that these two kids are going to do something interesting.

So that's it. They, they, sitting on the sidewalk in this street in, in front of Bill Fernandez's house, I guess, that, that's how it started. They became good friends. Yeah. Was got Steve Jobs into Bob Dylan, so I guess we know where to place that blame. You know, I today, in preparing for my. incredible reading at the beginning of the show, which I'm definitely emulated, Noah Wiley emulating Steve Jobs, I think. Oh, yeah.

I actually watched some of the iPhone keynote. I just wanted to kind of like set my time for the day, which is just truly one of the greatest. It is the greatest product introduction of all time, and it will never be beaten. But in that, when he's showing the iPod, he starts with the Beatles and then goes to Dylan. every single

iPod demo ever has Dylan in it somewhere Of course, always So Waz and Jobs One of their bonding experiences They became obsessed with bootlegs Of live shows of Dylan When Waz went to Berkeley

Because he did go in 71 What they had done is They built a blue box Which they read an article on a magazine about this That this guy with the nickname Captain Crunch had figured out the test tones that you could use in the phone system so you basically could get free long distance calls

at a time when long distance calls were incredibly expensive falling anywhere outside your local area and Jobs is the one and this is that typical like we built this thing and Jobs was like we can sell these let's make a bunch of these and we can sell them to college students.

Yeah the Blue Box thing I don't know how important this is in their history but it is always brought up as the like seed that begins to grow Apple, right? It is the data point. I think when you're trying to connect the dots,

this is a dot that you can't fail to connect, even though it's not super important, and they didn't sell very many of them. And it was not, like, the important part here is that they used Waz's technical acumen, and it's a moment where Jobs said, you know, we can make some money selling these. And because of where the story goes next,

this is that, that's why this dot is a must connect. You have to have this dot here. because it leads to everything else. Now, you know, there's a big gap here. There's like a four-year gap before things really start to kick off in terms of leading to Apple. What was going on then? Waz had went to Berkeley for a year, but then he didn't have money to keep going. So he took a year off from college, got a job at HP to earn money to go back to college.

In this period is when Steve Jobs went to read, which in Portland, which fulfilled his birth. mother's demands of his parents. Famously, he washed out, you know, stopped going or kept going, stopped paying after a year, came back home, got a job at Atari. So the steves are back after this period apart. They'd see each other like, you know,

coming back home. But then they're back both working in the valley together. This is the moment the steves are back together. What will happen? This is that moment. I think it's a little bit sad, like the irony that Jobs never got the degree that his birth mother was so desperate that he would get. Like, there is something sad in there for me. The way I read that is she wanted to, the last, her last gesture was to give him the opportunity.

Yeah. Right. And that was all you could guarantee. It wasn't like, you know, the parent, birth parents or the, you know, the parents, the adoptive parents can't guarantee that their baby will finish college. That's up to the child. But they can guarantee the opportunity to go. And in the end, Steve Jobs, if things had gone different, you know, he would have gone back to school, right?

But, like, he didn't need to. He never needed to. Even Waz, I mean, Waz ended up, beyond the scope of this story, he ended up with so much money that he was, like, learning how to fly a plane. And he crashed and he got injured. And he basically, like, took a sabbatical from Apple. and went back to Berkeley and got his degree under an assumed name. So he did eventually, but even then it was

in these weird circumstances because Apple was already a thing. And Steve Jobs never wanted or needed to do that. So I think it's a happy story in the end. It is. But because, and also that Paul and Clara Jobs

made good, right? Like, they saved up the money and sent Steve to college. And then Steve was like, no, thank you. And in fact, one of those stories is that Reed was so expensive and he said, I'm not getting anything out of this. And my parents could probably use this money for something else. But that's his decision as a almost adult. Yep. Okay. 1975. Let me tell you about computers, Mike. Please. So the first computers in the 50s and 60s were the size of the room, like I said, before, just like enormous mainframes. In the late 60s, they had the mini computer. These were. were smaller, but they were still very expensive. These computers, you could only enter programs into them by using, like, paper tape that had

punches in it, pressing physical switches in a sequence, or later you could, like, fill out a punch card that was kind of the equivalent of paper tape, and then hand it in. And then literally, you'd hand it in a queue, they would run it, and they'd send you the response back later. Like, this is how computers were back in this era. I mean hand it into a person? Like you'd go and give it to the operator essentially? I think it depends on the place. Or into a basket.

And then you come back hours or a day later and get your printout of what happened. Right. Like this is what it was. It was time sharing. These were incredibly complicated. And rare is an important point to. These were mostly found in big businesses or universities or government installations. They're basically nothing like what we think of.

when we use the computer today. Okay. That word computer doesn't mean what you think it means. But in the early 70s, personal computers started to appear. Even now, I have to say,

they weren't what we think of as personal computers. They were kind of scaled down many computers. The groundbreaking, I think everybody would say first personal computer was the Altair,

which cost more than $400 in 1970s money, so not cheap. And then here's the thing about the Altair. You had to assemble. it yourself. Like it was a kit computer.

You bought the parts and then you assembled it. That was part of the fun was you put it together. The big groundbreaking thing about the altar was that it was powered by a single chip instead of a whole bunch of different chips that did different jobs. It had a single chip at its core,

which was the Intel 8080. And if you hooked it up and turned it on, you could flip switches on the front panel and then it would reply with flashing lights. So you could be like, add these numbers together. And this is laborious to get this up and running. And to the point where it will blink a light the number of times of the answer. By the way, I worked it out. Well, say I worked it out. I just, I googled it. Yeah. $3,368 is what that would be worth in today's money. For the Altair. For the altar. So very expensive. Yeah. All of them were really expensive at the time. But this was the first personal computer. And you could actually type on a keyboard and get results set back. to you, but what you'd have to do is by a terminal, a teletype terminal. So basically, you're, going to get a screen or a printer or whatever and a keyboard and attach it to the Altair. And this was not part of the deal. The switches were part of the deal. Not the rest of the things that we think of computers

having was not part of the deal. So really, really rudimentary. You can ask a friend of the show, Kieran Healy, I believe, built an Altair replica. And, I mean, it's, It's the lights, I think Leo LePort has one too. The lights blink and you can like do the switches and all that and it just takes forever. And it, you know, again, not super practical, but kind of amazing at that period that you could make that. Like, without the keyboard, what does it actually do? Like, what do you do on it? What can it do?

You flip switches to do the input and then the light blinks to give you the output. That's it. So it's like calculation, right? Yeah. Yeah, that kind of thing. You give it a math problem or something, and then it'll give you the answer. Yeah.

Wow. Yeah. I know. It's kind of just barely, it's just barely above a calculator. Wow. It costs $4,000. Yeah.

You see why I liken the Vision Pro to the early personal computers, right? Yeah, yeah, yeah. It's amazing. It costs how much? It does nothing? What? Yeah.

Yeah. So the personal computer is here, sort of, but it's not like anything we think of as a personal computer today. But this is the moment. This is the moment where it's going to change. And that's why we have to, I guess,

famously go to the Homebrew Computer Club. In 1975, this is a gathering of electronics hobbyists who are interested in the computer and the growth of the computer and the introduction of personal computers. And in 1975, Waz seized that altar

and goes, whoa, I could make that circuit board. I don't need to buy an alter. I could make a circuit board based on that Intel chip. He's like that Intel one chip, you know, it was, right? It's like the fewer chips, the better. He's like, oh, I get rid of so many chips when I just had this Intel chip.

So he starts, he's like, I'm going to design this computer. Important moment here is, I think a year before he built a terminal, what he called a TV terminal. And so it was basically a keyboard with a bunch of video circuitry that could be attached to a television set. And then you could connect it via, I think either via a modem or serial to a remote computer, like on the ARPANET, which was like early version of the internet. So he built, he did this whole project incredibly impressive to make his own terminal that he could use that had, so it was basically a keyboard and a display. and for the display, he built the circuitry that went output to it just a TV set. Readily available, cheap, great. So this is, I think, one of the leaps that he made is he saw the Altair.

He thought about building a computer. And he realized that if he was going to build a computer, he could use the work he did on the TV terminal to build a computer that would integrate a keyboard and output to a television set. So you could have what we would all expect now, a computer that has a display and a keyboard attached to it, which is way better than the switches on the altar. What did the TV terminal do that the computer didn't?

Say like the Apple one. It was a dumb terminal. So the TV terminal, what it did was put text on a screen and take input from a keyboard and then send that over a line to a computer somewhere. Okay. Right? That was the idea.

Yeah. It's like a chat box. basically. It's a very, very simple chat bar. I mean, it's not even a, I mean, there's not even any chat, but yeah, like, it's literally like anytime, I mean, it's the equivalent today of like SSHing to a remote server. That's basically what this thing did, is it made a serial connection or modem connection to a, you know, probably Unix system at somewhere. I don't even know where. But he built that. That was a cool thing. And this is important because.

video output becomes a huge differentiator in the success of Apple down the road. The other thing that Was did, so he reuses all that circuitry from the terminal, he integrates it with this computer design that he's working on. So he creates this computer with built-in support for video output and keyboard input, big leap forward. And it starts up in less than a minute. And your thing, well, wait a second. What does that mean?

Like, the Altair didn't have ROM read-only memory. So when you turned on an alter, you had to input everything to get it to run with the little switches. Took minutes, maybe many minutes, half an hour maybe to get it up and running where you wanted it to be because it started from completely blank. And Was had a ROM chip on his computer. So it loaded, it could load the initial startup set off of a chip and get to, a point where it could accept commands immediately. So if I can simplify it, it's essentially like the Ultaire, you were basically also putting the OS in before you did anything.

You had to type, yes. You had to not even type. Flip switches to input the operating system to get it to run. Right. The concept of booting is not even the right way to put it. Booting is more of what Wasa's computer did because it was reading its operating system essentially off the ROM and getting in a point where you could start to like type commands or type in a program or whatever you could do

and the Altair didn't work like that at least not initially. So this was another breakthrough that Was had. So he built this prototype. Remember, he had this job at Hewlett Packard. So he would literally go to work all day at Heel at Packard

finish his work day, go get done, dinner and then go back to his desk. It's good that he didn't really have a social life, I guess. He'd go back to his desk at HP and then he would build this computer in his off hours at HP, which later would mean that he would feel like funny about using their facilities and wanted to offer his computer to HP. We'll get to that.

But once it was finally done, he went to HomeBrew and showed off the computer and showed off his design. Because again, the key here is the design. of the circuit board and the chips. And that's what he was proud of. And he was proud that it worked. But Homebrew was all about these enthusiasts about building computers.

So he had, he brought photocopies of the instructions and said, here. It was basically open source. Like, you can make it too if you want. Just assemble it from parts. You can just use my board and then buy all these chips and solder them on, which was like,

easier than what they had been doing. Not necessarily easy, because this is still a very hobbyist kind of thing. But, like, this was a leap, and Waz was excited to share it with everybody else. Yeah. I mean, if you're going to the Homebrew Computer Club, I'm expecting something like this could not be more exciting to you.

Like, you want to build it anyway, right? Like, that's why you're going. You are a tinkerer, right? You are someone who is going and wanting to build. And then someone is coming to you of essentially a Lego set of a personal computer. Yeah, I've made a better piece for you to use that will make it a lot easier for you to assemble a computer. Yeah. And here's what it is. Yeah. So shortly thereafter, his friend Steve Jobs pulls Waz aside and says, actually, why give away assembly instructions when we could make your printed circuit boards? Or make your circuit boards. Printed circuit boards is like we can,

we can make an order where they will print these circuit boards instead of them being handmade. So we'll make a bunch of them. And then we could sell them for a profit. This is the beginning right here, right? It would make it, and what he's appealing to Was here is like, this will make it easier for the hobbyists to assemble your computer. They're not going to have to wire that board. They just buy the chips and solder them on. Let's do that, right? Let's try that. And Was would say later, Steve didn't do one circuit designer piece of code, but it never crossed my mind to sell computers. I would love to know more, and it may we'll never know now, really, like what their kind of relationship was at this point that Jobs thought he could go to Was and suggest this, and that Was would be open to it. Again, I think maybe there's a level of maturity and emotional intelligence here, which is Steve thinking, like, Was, and you look at them in their later history, and I think that it makes sense. right. Waz to this day

just loves making stuff loves the accomplishment, loves the challenge and Jobs was always thinking there's something here that's beyond I would say beyond yourself to Waz's like Waz was not just

thinking about himself because he was distributing the plans but he was thinking very narrowly about like well I'll give these plans out and people can make their own circuit boards and it was jobs and this is one reason I think they worked well together is that jobs appealed to Waz's excitement by saying

we can reach more people with your design by mass producing it. I mean mass like 50, making 50 boards or whatever, printing 50 boards. And then we can sell them and you'll get,

we'll get money from that, which is good because, you know, it was a lot of work. They get an easier build of your computer. So it's good for them. It's good for every.

And in a real open source kind of way, it's also like, it's also, here are the plans if you want to do it yourself, but wouldn't it be easier if you could just buy this board from us? So I think that, I think that Jobs was thinking about this could be more. I think he was dazzled a little bit by the genius of Waz and thinking, this shouldn't be constrained to people who was meets who will duplicate his effort, right? This is, this is bigger than him and it's bigger than us. And so why don't we. I really my read on it is that Steve Jobs thought if I can help disseminate Was's genius, I'm doing a I'm doing a positive thing. Plus, he's looking around at businesses in Silicon Valley and saying maybe this is a business. I'm not sure he's at that point yet. But I do think it's one of those things where it appeals to everybody. They make money and the people don't have to build this board themselves because this is one of the tensions here is person computers are really hard to make at this point, incredibly hard to make. And this makes it a little bit easier. There is almost like a democratization in Jobs' plan, right? Because by doing the printing of the circuit boards, it reduces a significant part of the building process. Yeah, they were wiring boards and stuff. And like, the reduction in work of having a printed circuit board designed by WOS is major. And so, yeah, I think it is an interesting, it's a really complicated dynamic. It's not as easy as a lot of the stories make it sound. But I think that that's the dynamic is they're friends. Was doesn't feel exploited. And Steve isn't exploiting him.

Steve is, I'd say, enabling him. And once his work to reach a larger audience. And I've been in situations with friends of mine where, like, I've had friends who are like, you're an amazing writer. You should post, you know, you write these amazing funny things and send them to me an email. Maybe you should have a blog. And I'm like, I will set up your blog. for you, right? Like, I want you to be out in the world with this stuff and you can't do that part.

Or, or you are great on podcasts, but you can't make a podcast. So I will enable you. I will, I will make a podcast that we will do and I will produce it and you just get to be out there in the world. I think that is what Steve is thinking here is, yes, it's going to cost, so we'll do it and we'll maybe make it a little bit of a business because there's a lot of effort going in here. but at the same time, we're, I'm spreading the genius of Waz to people who will appreciate it, right? Like, it's a net benefit for everybody.

And I do think that that's the key of this dynamic is I think Waus, sometimes Waus gets portrayed as being kind of a bumpkin, and he's not. I think Waus cares about the work. And what Steve was doing is, let's get more people to appreciate your work. Not in an ego way even,

but like I can get, Way more people to use this cool computer you built if we print circuit boards. And I think that that was the key dynamic is Woz was not like, well, wait a second, I don't want that. He was like, yeah, more people should do this because it's cool. I think that's what was going on. You would say today, Steve was the entrepreneur, right? He had the entrepreneurial spirit of seeing a potential business, this is job, sorry, seeing a potential business to be made and was, was the product guy. That's what he did.

He could conceive of a thing and build you a thing, but that's as far as it went. Which takes me back to that quote that I read earlier that I'll say again from Woz. Steve didn't do one circuit design or piece of code, but it never crossed my mind to sell computers. And that's the dynamic right there. This episode is brought to you by Century. Logs are messy, trying to grab through them and line them up with traces and dashboards just to understand one issue. That isn't it? Century, that's S-E-N-T-R-Y, it has logs, but they've made them usable.

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That's S-E-N-T-R-Y-O and the code Upgrade-26 to get $100 in Century credits. Our thanks to Century for their support of this show and RELI. So Waz thinks he's going to get fired. was it like oh man I made a computer at my desk at HP and it was after hours we'll say that I mean was it

was he did he work a diligent day and then only work on the computer after hours that's what the story is what's just say it doesn't matter what time a day he's doing it he's doing it using HP's equipment like that is without a doubt right yeah oh yeah undoubtedly absolutely

um so and I gotta say good credit to laws here because he, I think he could have snuck out, but he is a, I think he is just a kind kind-hearted, uh, gentleman who, who believes in doing the right thing. So he goes to his boss and says, I built a computer at my desk after hours. I'm thinking, you know, we're thinking of, uh, printing up circuit boards and selling them. Uh, what do you think? Because I did it here and I work for HP, really if HP wants this, it's your, Do you want it?

And his boss is like, I get how cool this is. He's very impressed with it. I don't want to say the boss poohs it. The boss gets it. The boss is like, I don't think HP is at all interested in computers, right?

We're a Heelot and Packett. We don't care about computers. We sell calculators and electronics measuring devices and things. But he doesn't, he's like, he's like, I can't be the one to make this decision. So they get a lawyer at HP to go and ask all the divisions in HP.

So like probably there's like a little synopsis that was or his boss writes up. The lawyer goes out and canvases the whole company and says, we have an employee who built this thing. It's ours if we want it. Is there anything here? and the answer is no. Not interested. It's unbelievable.

There is no world in which these kids should have been allowed to do this, but clearly the people at HP just could not see what was coming for them. They had no idea of the future that was actually even coming for that exact company. This is so speculative and not a consumer product in any way that I understand it on that level, but you're right. I think it's probably asking too much, but I do wonder if maybe if this had reached one of the founders, for example, if they would have said, you know, and again, I think it's maybe asking too much, but they might have said, you know, this personal computer thing is interesting. This kid is really smart. What if we give some seed funding to this kid?

Maybe give him like a business manager or something. Do you know Steve Jobs? And see where it goes. Maybe we should do that. I think that's asking too much. Like, HP's just not geared to do this. And I think that there's no mindset here of like, because this is, it's not a fit with their existing business at all. And so culturally, I just think it's probably impossible that anybody at Hewlett-Packard would have said what they probably would have need to say, which was, let's set this kid up with some other people and funding and explore this. It won't cost us very much.

and this might go somewhere interesting. I think the bottom line is they're like, it's hobbyist, it's not a consumer product, it's not what we do, so it doesn't make sense. But I do think it's really telling that they did the due diligence of asking basically everybody in power at HP, is this anything?

And the answer was universally, no, this is not anything. It's unbelievable. Like, the story should have stopped there, I feel like. Yeah. Like, this is where. the story should have ended. Look, my, my, my fantasy alternate timeline here is exactly that, is that Hewlett or Packard swoops in and goes, oh my God, this guy's a genius. Let's just set

them up on the side and we're going to, and, and, um, we're going to see where this goes and maybe we can build a computer out of this and maybe there's a business here, but I just think it's too far away for them to see it. Yeah. I really, I really think so. Now, there is a moment later when maybe when Steve is still Steve Wozniak is still an HP employee there's a moment later where HP might have other than that they said

no I guess it might have said you know what actually don't set up a company we will we'll set it up for you here at HP but they never it's too late by the time that happens I guess I would say but HP doesn't deserve

all the blame here because remember Steve Jobs is working at Atari at this point and so Steve's like all right, HP doesn't want a well. Let's go, let's see. They're actively trying now to find a company that will do this thing. Like, is this a thing a company would buy? That's step one.

It's not, let's do a startup. It's, let's find somebody to buy this thing that you've invented. So Jobs goes to Atari and he's like, is this anything? And they're interested in the idea. But at this point, Atari's entire business focus is selling the home version of Pong. I feel like podcast don't have footnotes, but I feel like I almost need a footnote here.

It's like, I don't know, ask your grandparents about Pong. Pong was the first video game and they made a home version of it, which is kind of a computer, right? Yeah. That just does one thing, which is play this video game of Pong, which is two little lines that are like ping pong paddles and a dot, which is the ball. And you move them up and down.

and if it gets past the line, it scores. Like, that was Pong. It was the simplest first video game. Maybe I'm giving more credit than necessary, but I feel like Atari was really onto something here. Like, Pong was huge, right? It was. And I feel like maybe they were like,

we have not got time to look at this weird computer. That's the story. It's like they were so focused on shipping Pong for the home. Yeah. Which was, and it was all huge, right? And they would eventually get to computers, but they got there through video games. And this was a little bit of a... And again, it's a road not taken.

Like, with Steve Wozniak's genius at Atari, what would they have done? They could have done some amazing things. But again, the business... And again, I don't think HP and Atari should be thought of as lesser for turning it down. I don't think it makes sense for either of their businesses at this point. Yeah. But it's interesting that they had this opportunity. And this is going to be...

I mean, this is the story, right? Is lots of people have the opportunity and let it pass them by. because it didn't look like anything at the time. Anyway, talk to your grandparents about Pong. So to do this, to print these circuit boards, they need money. That's why they have gone to HP and Atari is that they have to go to a company that makes circuit boards, prints circuit boards, which means they need to buy 50 of them or whatever, which means they need to spend money. So Steve Jobs has a Volkswagen bus, like a minivan, basically.

He sells it. Was has an HP programmable calculator, which, although it doesn't sound like much now when calculators are a dime a dozen, was actually a very expensive electronic object. So the VW bus and the HP calculator, they sell. And with the money, by the way, the VW bus sold for a lot more than the calculator, just to be clear. so Jobs is really kind of putting in his money here. And with that money, they are able to order the printed circuit boards. It's great. So they're on their way.

They're going to make this thing. Was it still worried about HP and, you know, do they own this and all of that? And Jobs is like, we should make our own company. And he's like, oh, I don't know, I don't know. At which point I need to introduce a new character to the story, which is a guy named Ron Wayne, who is 41 years old, which, so much older than that. than these guys in their 20s. He's a designer at Atari,

so Steve knows him, Steve Jobs knows him. And Ron Wayne had already accumulated a couple of decades of rough and tumble business experience. He had businesses that succeeded. He worked for like a slot machine company at one point.

He had businesses that failed, gone bankrupt. He had seen it all. And he was working at Atari as a designer. And Steve Jobs explains to Ron Wayne, like, ah, we really need to set up a company. We sold our stuff.

We're printing some circuit boards. He's working at HP. He's afraid like he can't work at HP and start a company. But I think we really need a company and a partnership here of some kind to formalize this relationship if we're going to do this. And Ron Wayne says, why don't you boys come over to my apartment? We'll have a chat about this. And I like to imagine it was like that. You kids, you boys come to the park.

Let me teach you a thing or two. Yeah, I, I, the wise 41-year-old man who has seen it all, am going to educate you about the way of the world. Okay. I mean, that's literally what it is. It is therapy with the two steves. Work through your feelings. Where is this business partnership going to go? And in the end, Waz comes around to the idea that a new company would be formed and it would own all of his designs.

and what they decide to do, and this is not what Ron Wayne suggested, but it's what Steve and Steve decided to do, which is make the company 45, 45, 10. So if Waz and Jobs disagree on any point, Ron Wayne is the tiebreaker, but his 10%. He's the tiebreaker.

Pretty good idea. Not bad, right? And again, this is the idea. It's like, we need to formalize this, because money is changing hands and we put in our own money and all of this stuff and Ron Wayne's like

you gotta do this and he's, look, Ron Wayne, I don't know a lot of detail. He's still around. He was actually at David Pogue's Computer History Museum event claiming he still owns 10% of Apple by the way,

which is like, okay. All right, we can talk about that. How's that going? Have you cashed that in yet, Wayne? I mean,

I think he's just leaving it out there. Like, maybe, maybe. Because they keep, look, I'm jumping ahead here, but they keep sending him checks to buy them out and he never caches them. So he says...

Interesting. So this is what they set up. And the whole point here is Ron Wayne has undoubtedly seen some stuff, right? Like, if you've been involved in companies that have succeeded wildly and failed wildly, he has seen all of the scenarios where people turn on each other, where there are lawsuits, where there's questions of who owns the intellectual property. And I think that's what's motivating Ron Wayne here is you got to do this and put it all in this. Because otherwise, there are so many potential downsides here.

What if you walk away with the intellectual property? You can't, you know, you can't build a company on, you know, on nothing. You have to have skin in the game. You've got to put your intellectual property in the game. That's what Ron Wayne is saying here in this therapy session. And so they agree to it, which is great. What's it going to be called, Mike? That's the question, right?

That is the hard. Names. Names for companies? Very difficult. Yeah. Yeah. Yeah. I mean, so they're throwing around names for it. We'll get to some of them in a minute. Suffice it to say they're all bad. Yeah. They're all terrible. And one day, Steve Jobs has been up in Oregon visiting his friends on a communal farm. Steve Jobs, everybody. He's doing his thing, man. He's just a cool man. We're just growing fruit out here. Oregon and Waus picks him up from the airport because they are friends. Picks them up at the San Jose airport. We're on the drive back from the airport.

Steve Jobs says to Waz, I've got a great name. Apple Computer. And Waz is like, what? What are you talking about? Super out of left field. But this is what Waz said later. He said, both of us tried to think of technical sounding mixtures.

of words like Executec and Matrix Electronics. I'm surprised I didn't just call it Steve. Two Steve's Incorporated. SNS computers. Oh man. So, Waz says after 10 minutes of trying, we both realized we weren't going to beat Apple computer. And that was it.

It's a pretty good name, right? Like, I know it's one of these things that we're too far into it now. We cannot judge it accurately. But I think that it is a good name. Like Apple, it's just, it's nice enough. It's soft and it's human sounding. And like, it's not Executech. Like, I think they did a good job of it.

It is better than Executek. We can all agree on that. So, okay, so I am slightly older than Apple. I was a kid when I was first exposed to Apple computers in probably like, 1980, maybe, 81, 80, something like that. Not the first computer, a personal computer I saw and used, but it was soon thereafter. My best friend and his, my best friend's dad was a teacher at my elementary school. Shout out to Chuck and Crispin Holland.

They, and Chuck was kind of a hippie, but also a school teacher. And he loved computers. He got into that scene. And they bought an Apple 2 plus at one point. And before that, we had like Commodore Pet in the school. And like, it blew my mind. And I say this because when I saw the Apple 2 and in that era and thinking about it, that brand resonated for exactly what you said, which is it's organic.

It's simple. Apple. Like, it is the simplest thing. Like, it is just, it's not executech. It's just Apple. It's like, it does so much to demystify technology. It's like, I know it's a high tech product, but it's just an Apple. And we'll talk about the branding, but the ultimate Apple branding of the bite out of the Apple, which also implies it's biblical.

It implies knowledge, not just forbidden fruit, but knowledge. Like, it's a good idea. And again, you know this, and I know this. Naming things is hard. And sometimes you get a name and you're like, oh. Or you get a name and you go, I guess we'll go with it. And then it becomes rapidly clear that it's the right name. And you picked a good name.

And it doesn't always happen. Or even exactly what, I mean, in naming relay, very similar to this of like, the suggestion was made and we couldn't think of anything better. Like we got to that point of like we've run this through. long. I have no better ideas, so this has to be the one that we go with. I mean, that is the basic due diligence of any of this stuff, right? There's very rarely like a beam of light that comes out and makes you realize you've got the right answer. It's more like, this is the best one, and it's been undefeated by other challengers. So at this point, I think it's the winner.

And then over time, you're like, yeah, that's because, honestly, that's because it was the best one. But in the moment, it's more like you're picking from a group and you're like, well, this one, I can't think of anything better. And that's true with like, let me tell you, for over the years, like headlines, cover lines on magazine covers, all that. It's the exact same process where you have like a list of 10 and then it's down to three and then you're like, you know, it's never like, I love this one.

This is the best one. It's very clear. It's more like, I can't think of anything better. Let's go with that one. And that's what happened with Apple Computer. They couldn't think of anything better. Now, I said Ron Wayne was a designer at Atari. Boy, was he.

He was a designer and an artist. And so for his 10%, he made a super sweet logo for Apple. Yes, he made a thing. I mean, people have probably seen this, right? Yes. It's more like a family crest or a coat of arms than a logo as we think of it today.

But it was something that they created. So it was Isaac Newton sitting under the apple tree with a glowing apple sitting over his head, ready to drop. And then in letters that appear almost like they're embossed on a flowing banner. A ribbon, yeah, banner. Banner, scarf, ribbon, yeah.

The words Apple Computer Co. Around the border were words from the poet Wordsworth, Newton, a mind forever voyaging through strange seas of thought alone. That's the original Apple logo. Again, it's almost like a stained glass window more than a logo.

But that's what Ron Wayne, with his sweet design skills came up with and what were the Steve's going to do? They're like, cool, man. I mean, it was the 70s. Yeah. These were, you know, kind of hippie, hippie thoughts going on here. So, great. It only lasted about a year, but it is the original Apple logo.

And most importantly, on the very next day, Ron Wayne went down to the Santa Clara County registrar and took out a certificate that recognized. their business partnership. This is filing the first paperwork. And that was April 1st, 1976, and Apple Computer Company was official. This episode is brought to you by Insta 360. You may know Insta 360 for their action and 360 cameras. Well, they've taken that imaging experience and brought it to a webcam and all of their expertise into the world of the newest conferencing products. That is the new Insta 360 Wave and Link 2 Pro, which is their flagship 4K AI webcam. The Link 2 Pro has a large 1 over 1.3 inch sensor with dual native ISO and HDR,

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That's Insta360.com. I'll just click the link in the show notes. Thanks to Insta 360 for their support of this show and Relay. All right. So now they're official. We need to talk about what happened after that, right? So the original business goal, remember, the business goal here was to sell 50 printed circuit boards. That was the goal.

They needed money. They sold stuff to get the money to order the printed circuit boards. And what they decided to do is sell them at $50 each. And this would make it slightly easier for people at the Homebrew Computer Club to assemble a computer with only a bunch of chips and soldering, like lots of soldering. But not what it was. Easier, personal computer. So they go to the Homebrew Computer Club and Jobs is selling these boards there talking to them and saying, oh, look at this. You can get this.

It's Waz's computer. and it's an easier computer kit. And one of the people at the home brew club is a guy named Paul Terrell, or Terrell, I don't know. Paul Terrell, we'll say. He owns a store called the Bight Shop, which is possibly the first computer store. His business at this time was

to buy Altair computer kits and assemble them and then sell those ready to use computers at a profit. It reminds me of how, like, even now on the internet, you can buy, like, you can buy certain kind of products. You can buy in parts or spend an extra $100 and buy it assembled. Keyboards, right?

Like custom mechanics and cables. Yeah. Yeah, exactly like that. That's the thing that it reminds me the most of, honestly, is the mechanical keyboard scene. So that's the Biteshop's business model is, and perfect synergy with Steve Jobs, I would say. And I wonder how much Steve Jobs kind of like vibe with this guy or got some of his thoughts by watching Paul Terrell because the whole idea here is your addressable market for a board, a circuit board, well, let's start even back that. Jobs knew the addressable market, so to speak,

for Waz's photocopied circuit board plan is tiny. It's some people at the homebrew club who want to do that level of work. And Jobs realized if we print the circuit boards, our addressable market, the number of people at the club or elsewhere, who will do this project, who will embark on this building this computer, increases a lot because we've done the circuit board for you. You don't need to do that. You just need to get the chips and do the soldering. Okay.

Paul Terrell has built a business on the idea that there is an even larger addressable market. And keep in mind, this is the Altair that doesn't really do anything but blink lights. If we assemble it for them, right? This is like, I don't want to build a kit. I just want to have a computer. I just want to buy the computer. They're like, we can do that. We will sell you a fully assembled computer, an Altair,

and we make a profit because we sell it to you for more than the kit costs, and that covers our labor and a profit. Okay. This is a very Steve Jobs kind of like, how do you reach? Because it's not just about building a business. It's about reaching more people. It's your business is healthier because you're addressing a larger market segment. That's what's going on here.

So Paul Terrell says, this Apple computer is really interesting. And at this point, I think it's just called the Apple computer, right? Really interesting. But he presumably already has a setup where he's got people assembling altars. And he's like, I'm interested in this thing. I don't want to assemble it. So he says to Jobs and Woz, he says, I'll make you a deal. You build it for me.

Take 50. You know, you're going to do 50 printed circuit boards. Build them out into fully assembled Apple computers. And I'll buy them for $500. That's the goal achieved, right? Because they wanted to do 50 and sell them for $50. This is Paul Terrell saying, I will pay you $25,000. Yeah.

And I'm sure. I'm sure Terrell or Terrell was going to make a profit reselling those, right? He was going to sell them for more than $500. That is what would end up being what Apple would call the wholesale price of these computers. Once they sold them themselves, this was the wholesale price. But it's a huge opportunity for Apple, this entity, this partnership, to make money. except to get that $25,000, they calculated that to buy all the parts, to assemble all the boards into computers, they'd need $15,000.

Now, keep in mind, these guys just sold their van and calculator to make 50 circuit boards. They sold like, goodbye van, goodbye calculator. They're in a cash crisis here. And a van, quite frankly, and a calculator. crisis. They got nothing. Exactly. None of them. And I just plugged all these numbers in again. It's $126,000 in today's money. So it's huge, a huge amount of money. Obviously, they were going to make a lot of money, right? But they needed a huge amount of money to be able to get started. Right. Now, there's some

reasonable ways you handle this in business, and they will find them. Yeah. But they had no idea at this point, right? No idea. And so here, so Ron Wayne, Mr. 10%. He, he, he's been through the wars, right? The advantage of him is that he's seen everything. The disadvantage of him is that he's seen some terrible business situations. This is less than two weeks after he has filed the paperwork in Santa Clara. It's like 11 days later. He's been around a bunch of failed businesses. He is terrified about ending up having to like owe lots of money as a part of Apple going into debt

and these kids failing to do what they're saying. or getting involved in bankruptcy or whatever else. And so he says, I'm out. He literally, less than two weeks later, he goes back to Santa Clara County and files an amendment to the partnership agreement saying he is no longer a partner. And a few months later, Apple computer company

sends him a check for $1,500 as an acknowledgement that he is no longer a 10% investor in Apple, which, again, I will point out, he does not care. I would say if you're a lot of, a partner and then say I don't want to be a partner anymore. From my perspective, you're done. Like, you're out.

You're done. And you go. Yes. To the courthouse or whatever and say, I'm not a part of this anymore. Yeah, it's not like they said you can't be a partner this anymore. He's like, I don't want it. They can do it. This is too risky. So he got cold feet. Sorry, Ron Wayne. Anyway, I mean, this is how they saw the crisis.

They contacted the company that they'd have to buy the parts from. It's like an electronics parts distributor in the valley, presumably. and ask for a line of credit. And the guy at the supplier basically calls Paul Terrell at the bite shop. And he says, yeah, they're legit. That order, my $25,000 order is legitimate. And they're like, okay, we will sell this to you net 30 credit.

So basically the idea here, and this is not a non-standard business thing at all, is like you don't have to pay us right away. You seem good for it because the bite shop confirms you're good for it. So we're going to sell you the $15,000 in parts. You can have the parts now, and you owe us $15,000 in 30 days. That's it. Great. Well, now you have 30 days.

You have a ticking clock and you have to assemble 50 computers out of circuit boards in 30 days. Let me say, though. I think Terrell seems like a good guy because he could also net 30 Apple, right? Like from when he receives the finished product. he doesn't have to pay them on that day, right? No, no, right. And then they would be destroyed. But he obviously decided he would do that.

I think there is a level with a lot of these people, there's a level of let's help these kids out. They're doing something interesting. Not like let's exploit them, but it's like let's help them out. They're doing something interesting. And we benefit, right? Everyone else is like,

to our benefiting here, right? He's going to have a new interesting product to selling his shop. And he clearly can't get what this from Altaire. He has to assemble them. But this new company coming along, he's going to make them assemble them. It's going to be easier for him. The electronics,

if this works out, the electronics people are going to be able to make way more sales to this. It's a single $15,000 order. If this goes well for 50, how much more will they order? So they're like, let's take a chance on these kids and do it this way. And then this is the point where in some movies

there would be like a montage. Because they've got 30 days to build this. This is a legendary story. This is the, I keep thinking this would be a great Steven Spielberg movie scene, this montage,

because it's in the suburbs, it's very E.T. It's a bunch of teenagers, kind of, you know, hairy 70s teenagers. They use, so Steve Jobs' sister

isn't living at home at this moment. So they use her bedroom to start, assembling these computers. They get in all the parts. They recruit a bunch of friends. So again, it's just like a bunch of teenagers and 20-somethings in this house, in a bedroom with all this electronics equipment.

Which is why David Poe pointed this out in his Apple book that Apple, it's not technically correct to say Apple started in a garage. Technically, it started in Steve Jobs' sister's bedroom. But very rapidly, it was too much. so they moved it to the garage. It was too much in the bedroom. Not enough room.

Moved it to the garage. So obviously Paul Jobs is like, all right, I'll move my leaf blower and you can, right, it's fine, whatever. You crazy kids can go out to the garage.

These kids. Well, it is. I mean, imagine all of these, like, young characters doing, and the music,

you know, of the montage is playing as they put the things in and, oh, I didn't get that right, and I've got to do that again. And then eventually,

like, Waz has to test them at the end, and figure out what's wrong with the ones that don't work. And it's just, this is not only part of the legend, it is like an 80s movie montage happening. Pirates of Silicon Valley does a good job with this part. I was like, I love that movie, by the way. Like, I think it is an absolute classic,

which is really underrated. And if you listen to the show and you've not seen the Pirates of Silicon Valley, you should treat yourself to watching that movie. And I think if I'm remembering, right, there's like people smoking. And I think someone's pregnant and do it. Like, it's like a whole, like, rabble of kids. right so all of those things all of those things exactly right um all hands on deck like literally uh patty comes back and helps jobs a sister uh their friends from friends from college waz's friends from college jobs is friends from college maybe they got some people off the um off the apple orchard organic farm in oregon and they came down i don't know friends from high school are there it literally is like we gotta assemble these things in 30 days or we're bankrupt help and so they do it and they delay

Liber 50 boards to the bite shop. Which leads to another amazing twist in this story, Mike. Amazing, absolute scenes happening at the bite shop right now. Because Terrell says, wait a second. When I said I wanted a fully assembled Apple computer, I meant a case, a power supply, a monitor, and a keyboard. Now, I don't know if I believe this. I don't think I believe it either.

I don't know if I believe this. Why would you think they could do that? And the best analogy I can say is this is like Nigel Tufnell in this is Spinal Tap, drawing Stonehenge on the back of a napkin and using the symbol for inches instead of feet. This is the, get it in writing, dude. Yeah. So I think he was hoping. Yes.

I think there's a lot of hope going on here. I think he was hoping that it would be, because again, this guy doesn't want to assemble anything, that it would be a whole computer. And what they got is the fully assembled circuit boards with the chips on them.

But to his credit, he paid them. He paid the $25,000. They made that money. That's $10,000 in profit less whatever they were paying their friends to assemble them in the garage. And

that's Apple's big sale. That's, Apple's first big sale is 50 fully assembled circuit boards to the bite shop. And if you're the steves at this point, you are on top of the world. Your company's like six weeks old at this point. Yeah. And they've just made an obscene amount of money. And your product, Waz's design is now a finished product of a sort in a store.

That they know how to build now as well, right? Like they've built enough of them. They know how to do it. Well, I mean, step three. profit, right? Now they've got this success. What does Steve Jobs do? He's like, let's order more printed circuit boards. Let's make more of these. We can sell them to electronic stores. We can sell the pre. Now that we know how to assemble these things, and they're probably a lot faster and they've learned because it's production, right? This is the part of the story that makes Tim Cook's heart warm, right? Is the is the, oh, you can optimize the production now. You know what all the bugaboo's are. You can figure it out. Now you can make them much faster. and more profitably, and they're like, we can sell them

to the people at the Homebrew Club, anyone else who wants to buy them, all told, they sold about 175 of them, which doesn't seem like a lot,

but remember, 50 was the beginning of this, and they made $10,000 on those. So you can do the math there, but they made a lot of money. And now, some people were like, the bite shop,

who were like, it would be nice if it was in a case. There was a local cabinet maker who designed a wooden case that you could put it in, Um, was designed an interface where you could plug in a cassette tape player and load, load and save programs off of a cassette tape rather than typing them in by hand every time you, because remember, there's no storage. So you turn it on and it boots because was put ROM in it.

But then if you want to write a program, you have to write it and run it. And then when you turn it off, it's gone, right? There's no way to save it. So he designed a cassette tape interface that you could use, uh, that would save that out. And so this is, and I haven't said it yet. So I'll say it here. This is what we now think of as the Apple One. Right. It's in the one 175 box too, right? Like that if you Google Apple One, usually it's in a wooden case.

Right. But there were only a few that were actually in the wooden case. That's the thing. Maybe those are the ones that survived because they were protected because they were in a case. But like it was it was sold as just this board. And then you bring your own case and TV and keyboard. Those were all extra. and storage eventually.

That was all extra. So it was a super rudimentary product, but still very transformational at the time because it was so much more capable than others. And they sold, I should say also, the 500 was the wholesale price. The retail price they decided on was $66.66, which got a lot of people who thought it was the mark of the devil,

angry at them. But I think Steve Jobs and Steve Wozniak didn't care there. They just thought it was funny. They thought it was a funny price. That's what I did it. There's no reason to set it at the 66 cents. No. Tee. Nope.

Nope. Just funny. So, wrapping up this kind of like this Genesis, because they've, they've filed the paperwork, runway left. They've shipped the Apple one.

But it really is a proof of concept. And obviously, Laws, you know, was thinking, he's always thinking. This is his old design. And they've been making it.

But like, what is Was doing? Was is thinking about what he's going to do next? And Steve is thinking, how are we going to sell whatever Waz does next? What's the next thing here? Because this is the start. But what are we going to do? They only sell 175 Apple ones, right? So Steve knows, sorry, Jobs knows they're going to need more net 30 credit agreements, right, for a bigger

product from a parts supplier. And they're like, we need money. We need investors. So he starts asking around. The net 30 is not going to, like, lost them over a long period of time. They need more than that. They're going to need to make an investment if they're going to make a better product here. So Steve goes, again, using his Atari connections. He goes and talks to

Nolan Bushnell, the Atari guy and says, will you invest in my little computer company? And he says, no, again, another missed opportunity that Nolan Bushnell talked about afterward as being like, well, blew that one. But he recommended

a venture capitalist who also didn't want to invest in it. But that venture capital recommended a tech executive named Mike Markilla. Mike Markola had made a killing in tech and had retired. He's almost like the mirror image of Ron Wayne. Ron Wade had been through the wars. Mike Markala had been through the wars and made a lot of money. I think actually Markle might be a guy who did the slot machines, not Ron Wayne.

And it doesn't matter. But it's another person who, again, when we're talking, when we talk about these wise men of Silicon Valley, Ron Wayne was 42 or whatever, Mike Markala is 34. He's not that much older, but he is literally retired. Yeah.

Because he's made so much money. Yeah. In, in the electronics industry at this point. But he wants to keep a skin in the game, right? Keep a hand in the game. He love mentoring younger business people. about what he had learned, obviously,

and been successful at. So it's November of 76. It's literally five months after the papers were filed. This all happened so fast in 76. It's all in 76. Unbelievable. Mike Marklea sees something in these two guys.

He gets a demo of the computer that Waaz is working on, which is what's going to become the Apple 2. And it's going to have just a little spoiler, it's going to have all those things that the Byte Shop wanted that they didn't get. They're going to have a case. It's going to have a keyboard.

It's going to have available storage. It's going to be the next step, a computer that more people would buy and use than the hobbyist thing that they were selling before. You can easily plug in a screen, right? Like it's made for a screen, really. Because it's got the video circuitry, but now it's just you plug that in

and the keyboard. You won't have to find a keyboard and attach it. It'll come with a keyboard in a case, all very important. He gets a demo of this, which is not with all those pieces intact, but it's what Waz is working on. It's much more advanced than the original Apple. And Markella's like,

yeah, let's do a business plan. Let's set sales goals. He invest some of his own money. He gets the company a line of credit. It's unclear how much of his money he invest versus what the line of credit is from the Bank of America. But basically, they end up with like a quarter of a million dollars to play with here.

Wow. Okay. So it's a real company with a real line of credit. And I think this is a very important for us to remember as we celebrate Apple's 50th anniversary that on January the 3rd, 1977, they officially file incorporation papers for Apple Computer Incorporated. Bambam! Surprise everybody! We may be celebrating the wrong. anniversary after all. In fact, just to make sure that everything is on the up and up,

in March of 1977, Apple Computer Incorporated, buys the assets of Apple Computer Company for $5,300. And then Ron Wayne, you know, gets his check for his 11 days based on that valuation, because they're like, you don't actually own this. We bought that and you get your $53, which he doesn't, he doesn't cash the check. It's like, no, no, no, I still own 10%. I think this is where the court would say you don't actually, because they bought the partnership out with this new corporation. But Apple Computer Inc. is January 1970. So, you know, I guess stay tuned for all the Apple 50 celebrations to happen again in early next year. Yeah. Anything we don't get to, we can just move it to January. Recycle it, run those stories again.

Such a good factoid. I love this so much. It's like this actually isn't the 50th anniversary of Apple, the company that became Apple Link. The corporation. Yeah. It's based on the filing of the partnership papers, not the actual continues to exist corporation, which didn't, didn't get created until January of 77. Very funny. So, yeah, anyway, here we are. We got our, we got our characters to take Apple, the corporation forward. Mike Markela is the adult supervision. Steve Jobs is hungry to take over the world. Steve Wozniak has finally quit his job at HP. I guess he had to do it at some point. Yeah, and he's working on that new computer, the Apple 2, that's going to change everything. They've rented an office.

They're out of the garage. They moved all the workbenches they had been using to assemble the Apple One in Steve's parents' garage over to this new office. The only thing left to do, Mike, is hire a CEO. This is going to be an ongoing issue with Apple, right? Who's going to run this? Steve Jobs is too young and too inexperienced. Mike Markala could do it, but he really likes being the Jedi Master. who's like, oh, yes, let me tell you my wisdom.

But doesn't really want to do the day-to-day thing anymore. He has too much money for that. He wants to be a mentor. He doesn't want to get his hands dirty. But Mike Markel is like, I know a guy. I know a guy. He's an executive over at National Semiconductor. He might be persuaded to take the job,

which brings us momentously to the arrival of Apple's very first chief executive officer. You know him. You love him. He's the famous, the irreplaceable. Mike Scott. everybody. Welcome Mike Scott to the story. Scotty. This is the first time I have heard of this man. Let's roll. Mike Scott is here. Who is this man? I don't know him. I also love this is the name of Steve

Coral's character in the office. Yeah. Michael Scott. Yeah. Anyway, the, the, what can I say? On that bombshell, Mike, we are done with the first chapter. least in the story of Apple, how they got to where they were going. Maybe we'll tell more of the story down the road somewhere, but that is my story from here. And obviously, I think we both need to shout out our favorite podcast for inspiring this episode, which is The Rest is History. This is basically my The Rest is Apple History. I hope people enjoyed.

The leap back in time to the actual story of what we're celebrating this week, which is the 50th anniversary with a big asterisk. of Apple. Let me say shout out to the rest of history, of course. But Jason, shout out to you. You had this idea. You said to me, I got a thing. I'm going to do it. And then you delivered this script to me. And this has been a joy. So thank you so much for doing this. Yeah. A lot of fun. I went through a lot of books. So many, I have a continuing to grow Apple collection of books,

some of which are in print and some of which are very, very, very out of print. But it was fun to do it. And this has also gone three times as long as we thought it would. So that is the episode for this week. We have things that we'll get to next week.

I guess we can eulogize the MacPro next week, maybe. RIP just do it now. Rest of the piece, MacPro. Yeah. There's probably going to be about nine hours of other podcasts about the MacPro this week, so people can go get those in other places. If you would like to send us your feedback, follow-up and questions for this show, please go to UpgradeFeedback.com.

I want to thank our members who support us of UpgradePlus. You can go to GetUpgradeplus.com and you'll get longer ad-free episodes each and every week. This time we're going to talk a little bit about how this episode came together and exactly what we did to try and make this a reality. If you would like to see a video version of the show, please search for the upgrade podcast on YouTube. Thank you to our sponsors this week. That is the fine folk over at Claude Century and Insta 360.

But most of all, thank you for listening. Happy birthday, Apple Computer Corporation. Until next time, say goodbye, Jason Snow. Goodbye, Mike Hurley.