Eyewitness Report

When investigators interview witnesses of car accidents, particularly at busy intersections, the reports are often contradictory. Yet each person interviewed swears that his or her eyewitness report is true and accurate. It’s all a matter of where one was standing and his/her perspective.

And this story – the last of my Mac stories - is my eyewitness report of Apple’s train wreck in mid-1985 in which Steve Jobs was kicked out of the company he co-founded.

As exciting as 1984 was with the launch of the Mac, 1985 was proving to be the opposite. The original Mac, though innovative and fun to use, lacked many essential features and functions required in large corporations. And it lacked robust accounting software for small businesses. As such, the IBM PC continued to dominate. To provide necessary revenue and profit for Apple, we needed to sell 80,000 Macs per month.

But Mac sales in early 1985 were only 10-20% of the forecast. This created a strategic, financial and leadership crisis at the highest levels of Apple. It was an epic trifecta, a disaster in the making.

Fingers were being pointed in all directions. Much of it was focused on the marketing of the Mac. This was an easy target for blame. The product itself (the Mac) was deemed by Steve to be “insanely great” and was immune from prosecution. Many concluded it had to be a failure in marketing and advertising. And that was my fault.

Imagine that you were the inventor of the first light bulb. But it was only 15 watts. And you didn’t have a brighter version. By the end of the first year you would have sold a light bulb for every refrigerator and electric garage door in the world. And then what? A few consumers would buy them for their living rooms and bedside tables. But they would quickly realize that they simply weren’t bright enough for the intended usage. No amount of creative advertising can turn a 15-watt into a 100-watt light bulb. But details like these didn’t seem to matter in early 1985.

By this time, the Lisa Division had merged into the Mac Division. As such, the team I was now managing had become very large. And now I was being asked by Steve to create marketing campaigns that promised products for corporate America that simply didn’t exist. The effort was called the “Macintosh Office” and was an exaggerated exercise in promoting vaporware. But I couldn’t tell lies to the public. I wrote several hard-edged strategy memos to Apple’s executive leadership team stressing the need for clear leadership during this period of pending crisis. And then I concluded that I could no longer work for Steve. 

Sculley directly intervened, telling me that he didn’t want me to leave Apple and that he wanted me to report to him in a new unspecified corporate marketing role.

At the same time, pressure from the Board was being placed on Steve to step aside as the general manager of the Mac division. A plan was hastily hatched of putting me into the newly created corporate marketing role reporting directly to Sculley, and bringing in Jean Louie Gassée, Apple’s country manager in France, to run the Mac marketing team, and eventually replace Steve. But the execution and communication of this plan was very clumsy. And Steve certainly didn’t agree with the second step of the Gassée plan. 

What had been smoldering soon exploded into out and out war between Steve and John Sculley. Only one could survive. The other would have to leave Apple. The details of the war are described quite accurately in Walter Issacson’s 2011 biography of Steve. It was full of intrigue, conflict, deception, betrayal, emotion and a surprise ending.

I was naïve about corporate warfare and wrongly assumed that people with whom I had worked closely for 2-3 years were being straight with me. Why would they lie to me? Why would they try to stab me in the back? Aren’t we all on the same team? I was unaware that all kinds of things were being planned and executed surreptitiously, to the detriment of others and myself.
Gassée arrived and I was told to move into an empty office directly adjacent to Sculley’s office. I was given a big fancy job title. But I had no job description, no projects and the bombs were beginning to drop. 

Amidst the chaos and confusion, I still liked Steve personally and cared greatly for Apple. As such, he invited me to top-secret meetings where we would strategize on a new high-level organization for Apple. The charts always had Steve at the top as the CEO and John Sculley’s name was not to be found. On one such day I attended a meeting with Steve in the morning, and then an identical top-secret meeting in the afternoon in John Sculley’s office where he showed me “his” chart. It had John at the top as the CEO and Steve’s name was not to be found. 

Was I now a double agent? If so, I had forgotten to take this course while getting my Stanford MBA.

And then I sat at my new desk, directly next to Sculley’s office, with nothing to do. No meetings. No memos. No projects. Nothing on my calendar.  
Early the next morning, the two most senior members of John’s executive team barged into my small office while I was sitting at my desk. We all knew each other well. But they were angry and offered no greeting. They were on a military mission.

They filled the doorframe and glared down at me. One of them angrily pointed his finger in my face and shouted, “We know that you’ve been calling the Los Angeles Times (newspaper) and giving them all the secret confidential information about what’s going on at Apple. And you’re intentionally spreading false and damaging rumors about John Sculley. We know this is true and you can’t deny it.”

This stunned me. I had absolutely no idea what they were talking about. I would never consider doing such a thing. I was loyal to Apple. But these two men were not interested in a response from me. In their uninformed zeal, they knew that they were right and they had busted me – though their accusations were completely false and without merit. 

Then the storm troopers left as abruptly as they had arrived.

And in that moment I realized that I was toast. I was persona non grata. It was over.

From that point on I was never included in any meetings or anything else. No one talked to me or acknowledged me. I was completely ostracized. And because Gassée had replaced me in the Mac group, I couldn’t go back there. Yet the rest of the company viewed me as one of Steve’s guys, even though I had stopped working for him several weeks before all of this. I was neither fish nor foul. 

If no man is an island entire of itself, I came pretty darn close. The bells that were tolling, were tolling for me. (See John Donne, 1573-1631) 

On May 24, 1985 the Apple board held a crucial meeting where they decided to keep John Sculley and effectively fired Steve. That night Steve called me at home. My wife was on a long distance phone call with one of her sisters, and Steve had the operator interrupt the call. He sounded so despondent and empty that I got in my car and drove to his dark house. I let myself in and found him in his bedroom. He was laying on his bed and was deeply depressed – as he should have been. Worried for his well being, I spent the night watching over him.

A day or two later, John Sculley held a meeting for all the senior managers, striving to reassure them that the company would be fine. I attended this meeting. I don’t remember anything he said, but I do remember carefully studying him as he gave his speech. The room had a number of large structural interior columns. John started his speech standing a couple feet away from one of the columns. Eventually he moved over to the column and was leaning against it. And by the end of his speech, part of his body had actually moved behind it. You didn’t need a degree in psychology to assess his lack of confidence. I felt sorry for him and sorry for Apple. He was in way over his head. This was never what he expected or wanted when he came to Apple in 1983.

A few days later, I moved out of the small office next to Sculley’s and walked across Bandley Drive to an empty building (due to lay offs) and selected an vacant desk. I was the only person in this large building. I sat there for two weeks. No one contacted me. Ever.

Eventually I negotiated a modest severance package and left. There were no good bys. No hand shakes. No thank yous. 

While at Apple I never answered any phone calls from headhunters. I considered this to be disloyal. I wanted to spend my entire career at Apple. And I expected to. I loved that company and resonated deeply with what it stood for. I went home to Joyce and the children, and didn’t know what to do. I was emotionally unprepared for this unscripted ending. I had just turned 30.

We had four children and our youngest were twin boys. They were one years old. Alex and Blake became my focus. We had a side-by-side twin stroller and we lived in a very flat area of Los Altos where most homes were single level ranch style. The weather was almost always nice. Everyday I would take the boys for a 1-2 hour walk in the morning and then another 1-2 hour walk in the afternoon. We walked and we walked and we walked. I was depressed, but I didn’t know it. 

This pattern went on for several months. I was stuck in a dark rut. By now my severance was running out and I never made any money on Apple stock options (they were under water). I needed a job. 

By coincidence, the newly hired CEO and chairman of Convergent Technologies contacted me and offered me an unusual job. Paul Ely (now deceased) hired the former CFO of 3Com and me to buy, as quickly as possible, 10-12 smaller niche computer companies, in an effort to broaden the footprint of the parent company. With my partner John Celii, we were running an in-house M&A (merger and acquisition) function. Within a year we had purchased 10 companies located throughout the U.S.  They each specialized in a “vertical market” – such as automating automobile dealerships; lumberyards; CPA offices; etc.

We wouldn’t be democratizing technology or changing the world, but I would have the opportunity to learn some new things and the mortgage would get paid. And I had my wife and children, whom I loved so deeply. And, I needed a job.

This is my eyewitness report.