Video: How Steve Jobs's Early Vision For Apple Inspired A Decade Of Innovation

Steve Jobs's return to Apple in 1997 is often referred to as the greatest second act in business history. He had been ousted more than a decade earlier in 1985, and was forced to watch helplessly as the company he built tumbled toward bankruptcy, hampered by poor management, a weak product line, and a dearth of innovation.

That all changed when Jobs came back, and breathed new life into the struggling company. We know how the story goes from there: Apple unveiled revolutionary products--the iMac, Mac OS X, iTunes, the iPod, iPad, and iPad--which led to unprecedented growth. When Jobs returned in 1997, Apple shares were being traded for barely a couple dollars; today, Apple stock hovers around $380 a share, and recently shot passed $400, briefly making Apple the most valuable brand and company in the world.

But to get to that point, Jobs had to do more than introduce flashy products. He had to define Apple's future. And he did so over the years, fighting off skeptics, refocusing the company, and most importantly, giving Apple a long-term vision.

Responding To Critics

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Steve Jobs's return was never a cakewalk--many were skeptical that Jobs would be able to rebuild Apple. After all, NeXT, the ultra-high end computer company he started while away, failed to crack the mainstream market (though Apple ended up acquiring the startup for $400 million). In this rare Q&A session at 1997's Worldwide Developers Conferences (WWDC), an audience member takes Jobs to task, angrily questioning his technical understanding and telling Jobs that he doesn't know "what he's talking about."

Jobs responds calmly to the question, even going so far as to say, "People like this gentleman are right." He apologizes for his mistakes in the past, acknowledges there will likely be more mistakes in the future, and admits he does not have all the answers. However, he says, "We've tried to come up with a strategy and vision for Apple--it started with: 'What incredible benefits can we give the customer?' [And did] not start with: 'Let's sit down with the engineers, and figure out what awesome technology we have and then figure out how to market that.'"

Jobs goes on to cite the reaction consumers had when first seeing the laser printer. "People went, 'Wow, yes!'" Jobs said. "That's where Apple has to get back to."

Focusing On Saying No

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Apple in the 1990s had a lot more products than the Apple of the aughts. QuickTake digital cameras, LaserWriter printers, Newton PDAs--all of these product lines were discontinued when Jobs came back. And Jobs's thinking can be found at WWDC 1997, when he explained how Apple had lost its way.

"Apple suffered for several years from lousy engineering management," he said. "There were people that were going off in 18 different directions…What happened was that you looked at the farm that's been created with all these different animals going in all different directions, and it doesn't add up--the total is less than the sum of the parts. We had to decide: What are the fundamental directions we are going in? What makes sense and what doesn't? And there were a bunch of things that didn't."

"Focusing is saying yes, right? No. Focusing is about saying no. You've got to say, no, no, no," Jobs continued. "The result of that focus is going to be some really great products where the total is much greater than the sum of the parts."

Burying The Hatchet, Letting Apple Be Apple

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Microsoft is likely the main reason Apple had lost its way. The bitter battle between the two companies--for market share, over operating system superiority and patent issues--ended with Apple in a significant hole, trying to bite off more than it could chew.

Steve Jobs--who probably more than anyone had the right to be bitter about Microsoft--decided on his return to put the intense rivalry to rest. "Relationships that are destructive don't help anyone," Jobs said at MacWorld in 1997. "I'd like to announce one of our first partnerships today, and a very, very meaningful one, and that is with Microsoft."

Predictably, the crowd groaned and booed--even more so when Bill Gates made a cameo appearance via satellite. But the partnership showed just how far Jobs had come, and just how much he and his vision for Apple had matured. The deal proved incredibly important for the company: Microsoft injected $150 million into Apple; agreed to provide Macs with Microsoft Office; and agreed to patent cross-licensing and Java collaboration.

But most important was just how much Jobs dramatically changed the direction of his company, during one 12-minute speech. "If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose," Jobs said. "We have to embrace the notion that for Apple to win, Apple has to do a really good job. If others are going to help us, that's great. Because we need all the help we can get…The era of setting this up as a competition between Apple and Microsoft is over."

The Apple Hierarchy Of Skepticism, Redefining Product Strategy

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At MacWorld 1998, Steve Jobs finally got the chance to silence a few skeptics. After the release of the iMac, he had the facts to back up his success. Profits were surging, to $47 million his first quarter, and to $55 million during his second. He had launched Apple.com, which he refers to here at the "gold standard of e-commerce," a site that rocketed from 1 million hits per day to more than 10 million. And Apple's market value had quadrupled to roughly $4 billion.

"This went a long way to convince a lot of the skeptics," Jobs said. "When I came to Apple a year ago, all I heard was that Apple is dying, that Apple can't survive. Turns out that every time we convince people that we've accomplished something at one level, they come up with something new. I used to think this was a bad thing. I thought, 'When are they ever going to believe that we're going to turn this thing around?' But actually now I think it's great."

In what he calls the "Apple Hierarchy of Skepticism," Jobs lays out all the ways critics will be skeptical going forward--in many ways, the critics would never be silenced, and as Jobs said at the time, that's a good thing. It meant Apple was ahead of the curve--that it was taking risks, and trying to innovate.

One of the riskier moves Jobs also took that year was to redefine Apple's product strategy. At the time, most other OEMs were spitting out dozens of products into the market--Apple was no different. "When we got to the company a year ago, there were a lot of products--15 product platforms with a zillion variants of each one," Jobs said. "I couldn't even figure this out myself, after about three weeks: How are we going to explain this to others when we don't even know which products to recommend to our friends?"

Jobs dramatically changed and streamlined Apple's product roadmap. The company, he said, would now just offer four products, a simple offering plan that has allowed Apple to differentiate itself over the years from the endless options available from competitors such as HP, Dell, and others.

The Big Picture: Vertical Integration = Customer Experience

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"I remember two-and-a-half years ago when I got back to Apple, there were people throwing spears, saying, 'Apple is the last vertically integrated PC manufacturer. It should be broken up into a hardware company, a software company, what have you,'" Jobs said in 2000 at MacWorld. "And it's true, Apple is the last company in our industry [that's vertically integrated]. What that also means if managed properly is that it's the last company that can take responsibility for customer experience--there's nobody left."

That strategy--to keep Apple a hardware-software integrated company--has allowed Apple to thrive in recent years. It was the opposite approach as the one taken by Microsoft, which licensed its OS, Windows, to device makers. And even with critics arguing that Apple should follow suit, Jobs resisted--in fact, Apple pre-Jobs-comeback had tried (and failed) to license its operating system to OEMs such as Gateway. Jobs devotion to hardware-software interplay led to breakthroughs with the Mac/OS X and iPhone/iPad/iOS.

"There's no other company left in this industry that can bring innovation to the marketplace like Apple can. It means that we don't have to get 10 companies in a room to agree on everything to innovate--we can decide ourselves to place our bets," Jobs said at the time. "We're going to integrate these things together in ways that no else in this industry can to provide a seamless user experience where the whole is greater than the sum of the parts. We're the last guys left in this industry than can do it. And that's what we're about."

The Digital Hub

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At MacWorld 2001, Jobs began by looking backward to describe what he called the golden ages of the PC, from the age of productivity to the age of the Internet. He then spoke at length about what the next golden era would be.  

"I'd like to tell you where we are going," Jobs said. "What is our vision?"

Describing the "explosion of new digital devices" such as cell phones and music players, Jobs said he envisions Apple (the Mac, specifically) to become the new "digital hub for our emerging digital lifestyle." While he didn't explicity say what products were likely to come from Apple--Jobs would never do such a thing--he described a future very much like the one we're living today, where Macs, iPods, iPhones, and iPads are central to our digital media experience.  

"We don't think the PC is dying," Jobs said. "We think it's evolving."  

In the decade that lay ahead, traces of Apple's products and innovations can be traced back to this talk, and speeches Jobs had delivered in the years prior--to what Jobs had envisioned for the company all the way back in 1997.

And in true Jobsian style, he concluded his 2001 MacWorld address with what is now justified hyperbole. 

"We think this is going to be huge," Jobs said.

And he was right.

[Image: Flickr user Mathieu Thouvenin]

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