I Took a Job at Hewlett Packard

It is now the spring of 1981, my final year of the Stanford Graduate School of Business (GSB), and I was spending about half of my time attending classes and doing homework and the other half interviewing for a fulltime job. Even though I had spent my first year summer internship at Apple, there was no guarantee of a forthcoming fulltime job offer.

My GSB classmate Steve Ballmer had quit the GSB after his first year and had moved up to Seattle to help his former Harvard undergraduate classmate Bill Gates run a rapidly growing personal computer software company called Microsoft. This sounded interesting to me so I flew up to Seattle for a job interview. I can remember meeting in Bill’s first house and he, Steve and I talked vigorously about the emerging personal computer industry. Unfortunately I did not get a job offer. I later learned that Bill told Steve that they already had one non-technical person (this being Ballmer himself) and that they would never need another one.

I also interviewed for a very interesting job with Intel in the Portland, Oregon area.

The worst interview was with a tech company in Silicon Valley whose name I fortunately no longer remember. I had a couple interviews in the morning and then they were going to take me out to lunch. But a preplanned birthday party interrupted our lunch. It’s the only time in my life that I’ve ever seen such a thing. A gigantic fake birthday cake was wheeled into a large room full of excited employees. And out popped a semi-naked woman. Everyone (but me) cheered and hooted and hollered. The interview ended right then and there for me. 

During my first year summer internship at Apple, I had met Steve Jobs a couple times. And at the end of that summer Apple had provided me with a free Apple II computer to do the books of the GSB delicatessen, affectionately known as Fast Gas, that my friend Mike Levinthal and I ran during our second year. Towards the latter part of the spring, Steve contacted me and asked me to come in for an interview. I learned that he had taken over the management and leadership from Jef Raskin of a top-secret new product called the Macintosh. The team was located off-campus in a small room above a Texaco gas station. It was start-up within Apple. They flew a pirate's flag off the roof.

The Mac would be a low-cost, high volume consumer version of the Xerox Alto and Star products. It would also be a dramatic improvement of another computer already being developed by Apple called the Lisa. It would become the future of the company. I was familiar with Xerox’s technology as a result of visiting the Xerox Palo Alto Research Center (PARC) while taking Professor Bernie Roth’s computer programming class as an engineering undergrad at Stanford. I instantly understood the significance and potential of the Mac. I passionately wanted to be part of the Mac team. And, a couple weeks later, Steve made me an offer to join this group and work for him.

But the salary was woefully low, not just compared to MBA salaries from consulting firms like McKinsey, but low compared to traditional Silicon Valley mainstays. It was depressing and unacceptable. Even on a frugal budget we couldn’t make it work with two little kids, plus we were looking forward to moving out of a tiny apartment and moving forward with life. Housing in Silicon Valley was already escalating and, if I accepted Steve’s offer, it would require us to live far from the Apple campus and endure a very long daily commute. Joyce and I discussed it, slept on it, prayed about it and ultimately turned it down, albeit with a pit in my stomach.

Then I had an interview with Hewlett Packard, a conservative tech company with an excellent reputation for integrity and good values. They already had a personal computer in the marketplace called the HP-85 (see photo). It wasn’t a clear winner, but it wasn’t a loser either. I was hesitant to interview with HP because, by coincidence, my uncle John Young was their CEO. I didn’t want any nepotism or favoritism to impact a hiring decision. I needed to do it 100% on my own and the HP recruiter promised that this would be the case. 

HP offered me a very exciting job. They had a top-secret project in Corvallis, Oregon for a new personal computer also based on Xerox PARC ideas, utilizing a graphical user interface, a mouse and the Smalltalk computer programming language. They didn’t know about the Mac, and Apple didn't know about this project. The race was on! I would be the lead product manager. The salary was acceptable, the cost of living in Corvallis was a fraction of that in Silicon Valley and both Joyce and I had grown up in Oregon. Although my heart wanted to be with Steve Jobs and the nascent Mac project, we took the job at HP.

Life in Corvallis was idyllic. We were able to move into a brand new home. I took the HP bus to work. They had several busses that drove through the various housing developments and picked up dozens of workers. My colleagues, including recently hired Harvard MBA Mike Boich, were congenial and highly collaborative. But the intensity of the work was not like that of Apple. In those days the HP “plant” had a tall barbed wired fence surrounding the entire property. The front gates were guarded. And the place was locked down and closed for the weekend – there was no way to get in even if you wanted to.

To get home each night there were two company busses. The first one left at 4:30pm and the second one left at 5:30. Nobody stayed later than this, and most left on the 4:30 bus.
I joined HP in late June of 1981. All was going well. Then in February 1982 I saw a phone message slip on my desk. None of us had private offices. All desks were out in the open, side by side, very egalitarian, very HP. I looked at the phone message and couldn’t believe what I was seeing. It was from Steve Jobs. Luckily the group secretary had no idea who he was. Steve wanted me to call him asap. There were no cell phones in those days, so I had to find a landline phone with some privacy. 

Once I got in touch with him, he said, “I made a mistake. I should have hired you. What will it take for you to come work for me?” 

I went home with this amazingly good news and was excited to share it with Joyce. She was anything but excited. She loved living in Corvallis. She was just settling in – we had only been there for 8 months. We had two children, ages 3 ½ and an infant. After some marital negotiations, we agreed that I would meet Steve in Cupertino and insist upon a salary that most likely he would reject because it was so high. My salary at HP was $33,000 per year. Joyce and I decided that we could move back to the Bay Area only if Steve would agree to a salary of $45,000. I was not optimistic.

By coincidence I was required to fly to the Bay Area for a meeting at another HP division. This allowed me to sneak over to Apple in Cupertino to meet with Steve. Our interview and negotiation was conducted in an Apple parking lot, leaning on the trunk of his car. Prior to this he gave me a brief demo of a prototype Mac. I was blown away. They were so far ahead of our Corvallis project. Apple understood this space 100 times better than HP – especially regarding the software. How could I go back to Corvallis and resume my duties on a product that would be mediocre at best? So I had to screw up my courage and lay out my salary demand to Steve. 

“Steve, I need a salary of $45,000.”

“Fine. Anything else?”

And the deal was done. (Note to self – what else should have you asked for?)

I flew back to HP and informed the General Manager. He told me to wait at his desk for just a moment. And then two very large security guards appeared and immediately escorted me out of the building. I was not allowed to retrieve any personal items from my desk nor to say good by to any of my friends and co-workers. I was a traitor and a cancer and had to be removed immediately. I guess HP wasn’t so kind and gentle after all at times like this!

So we sold our new house and quickly moved to Los Altos where Apple agreed to provide me with a large bridge loan so that we could buy a 30 year old, 1,900 square foot, single level home for $265,000. It was old, smokey and, well, not like our nice new Corvallis house. And the price – in those days – was simply staggering. This same house today, would sell for 10x that amount. I would be required to repay this very large bridge loan in one balloon payment in 5 years. I had no idea how this would ever happen, but I was wiling to role the dice. 

Half way through this 5-year period I received a surprise letter in the mail from Apple’s legal department asking me to sign an enclosed document so that they could wipe the loan off their books and compensate me for any incremental income tax issues. 

Apparently the loan was not done correctly and they had to get it fixed. The only way to fix it was to forgive it. I don't know if Steve ever knew about this. Sometimes you’re in the right place at the right time!

I arrived at Texaco Towers in March 1982. The Mac team had 18 people in it. Names of exceptionally talented people that you may already know from books and movies were already there: Johanna Hoffman, Andy Hertzfeld, Burrell Smith, Chris Espinosa, Rod Holt, George Crow, and others. 

My desk consisted of the eraser tray of a white board. The white board was already claimed by someone else, but I got the tray. I had no chair and no place to sit. Nobody knew who I was or why I was there. But I was there and that’s all that mattered!