Steve Jobs

futuristic factory, just as he had for the Macintosh; he had not been chastened by that experience. This time too he made the same mistakes, only more excessively. Machines and robots were painted and repainted as he compulsively revised his color scheme. The walls were museum white, as they had been at the Macintosh factory, and there were $20,000 black leather chairs and a custom-made staircase, just as in the corporate headquarters. He insisted that the machinery on the 165-foot assembly line be configured to move the circuit boards from right to left as they got built, so that the process would look better to visitors who watched from the viewing gallery. Empty circuit boards were fed in at one end and twenty minutes later, untouched by humans, came out the other end as completed boards. The process followed the Japanese principle known as
kanban
, in which each machine performs its task only when the next machine is ready to receive another part.
    Jobs had not tempered his way of dealing with employees. “He applied charm or public humiliation in a way that in most cases proved to be pretty effective,” Tribble recalled. But sometimes it wasn’t. One engineer, David Paulsen, put in ninety-hour weeks for the first ten months at NeXT. He quit when “Steve walked in one Friday afternoon and told us how unimpressed he was with what we were doing.” When
Business Week
asked him why he treated employees so harshly, Jobs said it made the company better. “Part of my responsibility is to be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” But he still had his spirit and charisma. There were plenty of field trips, visits by akido masters, and off-site retreats. And he still exuded the pirate flag spunkiness. When Applefired Chiat/Day, the ad firm that had done the “1984” ad and taken out the newspaper ad saying “Welcome IBM—seriously,” Jobs took out a full-page ad in the
Wall Street Journal
proclaiming, “Congratulations Chiat/Day—Seriously . . . Because I can guarantee you: there is life after Apple.”
    Perhaps the greatest similarity to his days at Apple was that Jobs brought with him his reality distortion field. It was on display at the company’s first retreat at Pebble Beach in late 1985. There Jobs pronounced that the first NeXT computer would be shipped in just eighteen months. It was already clear that this date was impossible, but he blew off a suggestion from one engineer that they be realistic and plan on shipping in 1988. “If we do that, the world isn’t standing still, the technology window passes us by, and all the work we’ve done we have to throw down the toilet,” he argued.
    Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge Jobs, did so. “Reality distortion has motivational value, and I think that’s fine,” she said as Jobs stood at a whiteboard. “However, when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.” Jobs didn’t agree: “I think we have to drive a stake in the ground somewhere, and I think if we miss this window, then our credibility starts to erode.” What he did not say, even though it was suspected by all, was that if their targets slipped they might run out of money. Jobs had pledged $7 million of his own funds, but at their current burn rate that would run out in eighteen months if they didn’t start getting some revenue from shipped products.
    Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his list of maxims with “The honeymoon is over.” By the time of the third retreat, in Sonoma in September 1986, the timetable was gone, and it looked as though the company would hit a financial wall.
    Perot to the Rescue
    In late 1986 Jobs sent out a proposal to venture capital firms offering a 10% stake in NeXT for $3 million. That put a valuation on the entire company of $30 million, a number that Jobs had pulled out of thin air. Less than $7 million had gone into the company thus far, and there was little to show for it other than a neat logo and some snazzy offices. It had no revenue or products, nor any on the horizon. Not surprisingly, the venture capitalists all passed on the offer to invest.
    There was, however, one cowboy who was dazzled. Ross Perot, the bantam Texan who had founded Electronic Data Systems, then sold it to General Motors for $2.4 billion,