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After losing a boardroom power struggle with Apple CEO John Sculley, Steve Jobs was exiled to a small building across the street from Apple\u2019s headquarters. It was May 1985. He and his colleagues called his new office \u201cSiberia.\u201d<\/p>\n
Corporate reports stopped flowing to his desk, and executives stopped calling, leaving him bored and lonely. \u201cIt was amazing to see how ostracized he was in the Valley,\u201d recalled Susan Barnes, a Macintosh financial controller who had previously reported to him. \u201cIt was really cruel.\u201d<\/p>\n
Jobs is remembered as the visionary who returned to Apple, the company he cofounded, in 1997, and saved it from near-bankruptcy. But before the comeback, he made a series of leadership decisions that destabilized the company and left it drifting toward death.<\/p>\n
An overlooked truth: the instincts that made Jobs extraordinary, his perfectionism, his force of will, his refusal to compromise, also nearly destroyed Apple in its early years. After he left, Jobs spent twelve years failing at a company called NeXT, and those failures laid the foundation for Apple\u2019s resurgence with the iPod, iPhone, and iPad.<\/p>\n
Here are five times Steve was wrong and learned from his mistakes:<\/p>\n
By early 1985, Apple had splintered into warring factions. Jobs undermined Sculley to colleagues and challenged his every decision. \u201cI am the board,\u201d Jobs, Apple\u2019s chairman, told one executive. Sculley\u2019s supporters stormed the human resources department to complain. As one executive observed, no one knew who was really running the company.<\/p>\n
The civil war paralyzed Apple at the worst moment. Macintosh sales were declining, IBM and its clones were eating market share, and for the first time in its history Apple laid off employees, more than 1,200 of them, and announced its first-ever quarterly loss. The company secretly entered talks to sell itself to General Electric.<\/p>\n
By the time the board sided with Sculley and stripped Jobs of his authority, the internal war had already cost Apple months of progress.<\/p>\n
That autumn, Jobs left Apple and started a new computer company, NeXT. The pattern followed him. Ignoring the warnings of his cofounders, Jobs rushed out the first NeXT computer, called the Cube, in October 1988 with an unfinished operating system. The price was more than double what its target customers said they could pay. Selling only a few dozen computers a month, the company eventually laid off half its workforce and abandoned hardware entirely.<\/p>\n
When the founder becomes the only voice in the room, the company has nothing to fall back on when the voice is wrong.<\/p>\n
Between the Super Bowl commercial, the famous keynote, and the promise of a \u201ccomputer for the rest of us,\u201d the Macintosh launch in January 1984 became one of the most mythologized product launches in American business. For the first hundred days, shipments were strong and the Mac looked poised to succeed.<\/p>\n
But the machine had no hard drive, extremely limited functionality, and a price tag of $2,495, almost $8,000 in today\u2019s dollars. The first wave of buyers loved it. At that price, there was no second wave. The Mac was a beautiful machine that regular customers simply couldn\u2019t justify buying.<\/p>\n
The commercial disappointment helped trigger the power struggle with Sculley, Jobs\u2019s ouster, and twelve years of strategic drift that nearly killed Apple.<\/p>\n
In early 1985, Jobs pushed Apple to release the Macintosh Office, a version of the Mac aimed at corporate buyers. Its technical heart, a device for sharing files across office computers, was severely delayed and not ready to ship. The product landed to weak sales, accelerating the internal crisis that would end with Jobs’s removal months later.<\/p>\n
At NeXT, he repeated the pattern. After the Cube was released, NeXT cofounder Dan\u2019l Lewin presented Jobs with a list of problems piling up. Rather than fix them, Jobs blamed the sales team. \u201cWe\u2019re so far away from selling anybody anything right now,\u201d Lewin pushed back. \u201cYou don\u2019t want to hear it, but this is not a problem in sales.\u201d So Jobs demoted Lewin and announced it in an email to the entire company.<\/p>\n
When Gil Amelio became Apple\u2019s CEO in 1996, he kept hearing the same phrase from engineers: \u201cSteve Jobs can get away with whatever he wants, so I\u2019m going to do whatever I want.\u201d<\/p>\n
By then, Apple had lost all focus. The company had released more than seventy products in a single year, including a $6,500 laptop that caught fire and had to be recalled. Apple had poured $500 million into a new operating system called Copland that never shipped. Nobody could decide when to cut their losses.<\/p>\n
Jobs spent a decade at NeXT making the same mistake, refusing to abandon his hardware business long after his advisors told him it was finished. But when he returned to Apple in 1997, he killed 70 percent of the product portfolio. The visionary who once couldn\u2019t let go of the beautiful black Cube had learned, at enormous cost, that survival sometimes means letting go of the product you love.<\/p>\n
On Super Bowl Sunday in January 1985, Apple aired a follow-up to its iconic \u201c1984\u201d commercial. Called \u201cLemmings,\u201d the ad depicted blindfolded businesspeople marching off a cliff. The message to corporate customers: you\u2019re idiots if you don\u2019t buy our product.<\/p>\n
At NeXT, Jobs called his distribution partner\u2019s stores \u201cugly.\u201d He blew off lucrative meetings arranged by his biggest investor, Ross Perot, the Texas billionaire and soon-to-be presidential candidate.<\/p>\n
So Perot delivered the lesson himself. At a dinner with NeXT executives and corporate customers in San Francisco, Perot asked all the customers to stand. Then he turned to everyone still sitting, Jobs included: \u201cNow, everybody who\u2019s sitting down, applaud these people who are standing up, because that\u2019s why we\u2019re here.\u201d<\/p>\n
It took twelve years of humbling for Jobs to absorb these lessons. By 1997, he had learned to step back, delegate, and let go. He chose his battles instead of fighting every one. The tantrums that had defined his management style ebbed, and instead he listened to his lieutenants in Monday morning staff meetings, implemented their advice, and built an executive team at Apple that held together for eight years.<\/p>\n
\u201cSometimes I go for \u2018best\u2019 when I should go for \u2018better,\u2019\u201d he later admitted, \u201cand end up going nowhere or backwards.\u201d It was the kind of admission the younger Steve could never have made.<\/p>\n