Back in 1976 Steve Jobs co-founded Apple.
And during his time at the company, he built an incredible legacy that continues to be
admired today.
But things weren’t always smooth sailing for Steve Jobs.
In fact he was fired from Apple in 1985, only nine years after starting the company.
So in this video we’re going to take a closer look at the events leading up to his removal,
and investigate why it happened.
This is Greg with Apple Explained, and I want to thank Squarespace for sponsoring this video.
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So you may be wondering, how can Steve Jobs be fired from his own company if he’s the
one in charge?
And the truth is, he wasn’t in charge.
Jobs was just 21 years old when he co-founded Apple.
And that earned him a lot of skepticism over whether he was mature enough to successfully
operate a multi-million dollar company.
So to put those concerns to rest, a more experienced businessman named Michael Scott joined Apple
to serve as their CEO.
Steve Jobs never actually had that title until his return to the company in 1997.
And while it freed up his time to lead product development projects like the LISA and Macintosh,
it also mean he didn’t have as much decision-making power, and that’s a big reason why he was
able to be forced out of Apple to begin with.
But the biggest irony is that the man who allegedly fired Steve Jobs, was someone Jobs
himself set out to hire.
That man was John Sculley, and he actually played a very active role at Pepsi.
Where he turned around their food operations division from losses of $70 million a year,
to profits of 40 million.
He also led research that resulted in Pepsi creating the first two-liter bottle in 1970.
And he created the Pepsi Challenge ad campaign, which was very successful in stealing market
share away from Coke.
So because of his impressive performance at Pepsi, Jobs poached him very aggressively
for Apple’s CEO position.
Sculley was initially reluctant, but that changed when Jobs asked him, "Do you want
to sell sugared water for the rest of your life?
Or do you want to come with me and change the world?"
That sealed the deal, and John Sculley became Apple’s CEO in 1983.
Now during this time the company wasn’t doing very well.
They’d gone through two CEOs already, Michael Scott and Mike Markkula, and neither were
able to create a follow up computer to the wildly successful Apple II.
The company was simply selling iterations of that product, while trying to figure out
what the next big thing might be.
Jobs thought the future of computing would be based upon a graphical user interface.
Which features a mouse, cursor, and virtual desktop with icons and folders.
Jobs led the effort to create Apple’s first computer with a graphical user interface,
and it was called LISA.
Which he claimed stood for Local Integrated Systems Architecture, but later admitted was
named after his daughter Lisa.
The computer was praise for being a technical marvel, but those advanced technologies came
at a cost of $10,000.
And that price tag alone put the LISA out of reach for everyday consumers, and resulted
in just 10,000 sales over its two year lifespan.
The LISA was a commercial flop, and Apple’s leadership was getting nervous.
Although the Apple II was still a big seller, it’s days were numbered.
And Apple needed a successful followup machine before the competition beat them to it.
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Again, Steve Jobs led the effort on a new machine with a graphical user interface called
the Macintosh.
It combined the low production costs of the Apple II with the advanced technology of the
LISA, and was expected to be a hit with customers and businesses alike.
But there was one area of debate: it’s price.
Jobs wanted to sell the Macintosh for $2,000.
This would put it in a very competitive position against other retailers like IBM, who sold
PCs for around $1,600.
But Apple’s CEO John Sculley disagreed.
He told Jobs the price of Macintosh should be $2,500 in order to recoup all the development
and marketing costs that were incurred before its release.
The two argued over this detail for months, and marked the beginning of a war that would
end their friendship for good.
Because when Apple’s board of director’s agreed with Sculley, that the Macintosh should
sell for $2,500, it gave Jobs a convenient excuse to give if the product failed.
He could simply say, “well of course it failed, because priced it too high.”
And that’s exactly what happened.
Despite the Macintosh being extremely well received by consumers and critics, and experiencing
promising sales for its first few months, demand quickly tapered off.
And again consumers were flocking to IBM machines for the biggest bang for their buck, rather
than buying a radically new and expensive machine from Apple that didn’t even have
much support from software developers since writing applications for a graphical user
interface was troublesome and time-consuming.
This is when tensions between Sculley and Jobs reached an all-time high.
The board of directors wanted Sculley to exercise more control over Jobs, who was spending his
time on expensive projects that amounted in zero commercially successful products.
The Apple II was still paying the company’s bills, and that machine was technically created
by Steve Wozniak.
So Jobs really was looking to create his own hit product, but hadn’t found right recipe.
The problem was, Apple’s leadership wasn’t going to sit around and watch him drain their
bank accounts waiting for that happen.
So Sculley made the tough decision to reduce Job’s roles and responsibilities within
the company.
But Jobs himself found out about this plan before he was supposed to.
And he used that time to put together a plan of his own.
He formed an alliance with other employees and tried organizing at coup to take over
the leadership roles at Apple and force the existing members out.
But it was too little too late, Sculley caught wind of this effort and called for an emergency
board meeting to address the issue.
And it was at this meeting when Steve Jobs was told that his day-to-day decision making
power within the company would be removed.
And that he’d have his own corner office with the freedom to experiment with emerging
technology as he wished, except he wouldn’t be able to lead any projects and no one would
report to him.
Jobs didn’t accept this offer, and instead forced the board to vote on who they’d prefer
as Apple’s leader: Himself, or Sculley.
But this is where Jobs made a fatal mistake.
He genuinely believed that the board was on his side.
So when they unanimously voted in support of Sculley, Jobs was stunned.
And he stormed out of the meeting in anger.
So that means technically, no one fired Jobs, but he lost so much control of his own company
that he preferred to leave and start a new one.
That’s exactly why NeXT Computer was founded, as well as PIXAR, but that’s a completely
different story for another time.
Also, the saga of Steve Jobs return to Apple is just as epic so make sure you’re subscribed
because I’ll definitely include that topic in a future voting poll.
Alright guys thanks for watching till the end, don’t forget I do have a podcast channel
that I upload to every Friday if you’d like to hear my thoughts on more current Apple
topics, and I’ll see you in the next video.