Think Big but
Start Small
“Woz and I started Apple in my parents’ garage when I was 20.”
As Jobs told Stanford’s graduates, Apple started in a garage in 1976 with just himself and Steve Wozniak,1 but over the next decade it grew into a $2 billion company with over four thousand employees.
Apple I
Consider an apple tree: Germinating from a single seed, it can grow into a tree twenty feet high; one seed, one tree, and bushels of apples. Similarly, the Apple Computer germinated from a single seed planted in Steve Jobs’ fertile mind. When he saw Wozniak’s elegantly designed circuit board, he knew he could sell it to electronic hobbyists, so why not make money by starting their own computer company?
They came up with a company name (Apple Computer) and dubbed the PC board Apple I, which they advertised in Interface Age, a computer magazine. The ad tempted hobbyists to “Byte into an Apple” for $666.66,2 which at first glance appears to be an arbitrarily arrived price, but in fact was the result of number-crunching. According to Owen Linzmayer, who has written extensively about Apple Computer for over twenty years,
Jobs set the list price of the original 4K Apple I at $666.66 by doubling the cost of manufacturing, allowing dealers a 33.3 percent markup on the wholesale price of $500. Fundamentalist Christians were quick to complain that 666 was the “mark of the beast.” Jobs blew these people off by explaining he had taken 7 (a so-called mystical number), subtracted 1 (another mystical number), and arrived at a perfectly innocent price.3
The headline for the ad in Interface Age read: “Apple Introduces the First Low Cost Microcomputer System with a Video Terminal and 8K Bytes of RAM on a Single PC Card.”
The Apple I was clearly not a computer for the rest of us. It was for hardcore electronic hobbyists only, who’d have to add peripherals to make it truly useful: a power supply, keyboard, case, monitor, and cassette tape recorder to run its Apple Basic software.
According to Apple’s ad, it was “a truly complete microcomputer system on a single PC board” and promised to be “essentially ‘hassle free’ and you can be running within minutes. . . . The Apple Computer makes it possible for many people with limited budgets to step up to a video terminal as an I/O [input/output] device for their computer.”4
Apple’s first bulk order for fifty computers from the Byte Shop in Mountain View was an unforseen financial windfall—$500 per computer, or $25,000. Steve Wozniak recalled that it was “the biggest single episode in the company’s history. Nothing in subsequent years was so great and so unexpected. It was not what we had intended to do.”5
Jobs and Wozniak originally had intended to sell a handful to fellow hobbyists at the gathering hole for fellow geeks, the Homebrew Club.
Apple Computer
Starting a computer company certainly wasn’t what Woz had intended to do, but it was what Steve Jobs intended to do. However, it would require more than a handful of small orders from local computer stores to go national. Apple would need proper funding and to be properly set up as a business, which happened in November 1976, when former Intel executive Armas “Mike” Markkula, Jr., came out of retirement to help Apple get on its feet by investing $92,000 of his own money and securing $250,000 in a line of credit from Bank of America.
Apple II
Apple Computer filed incorporation papers on January 3, 1977, and in the subsequent year, Apple released the Apple II, which sold for $1,298. Unlike the Apple I, the Apple II was more customer-friendly, with an integrated keyboard, case, dual disc drives, and a monitor.
The Apple II was the firm foundation on which Apple was built, paying for and paving the way for the Macintosh in 1984.
And it all began in a one-car garage at a ranch-style home in Los Altos, California.
The House that Built Apple
The house at 2066 Crist Drive in Los Altos, California, was built in 1952, on the site of a former apricot orchard. The house, bought for $21,000 by Paul and Clara Jobs, is the official birthplace of Apple Computer.
Designated by the Los Altos Historical Commission as a “historic resource,” the 1,793-square-foot, three-bedroom ranch-style house is now worth an estimated $1.5 million; its current owner is Steve Jobs’ adoptive sister, Patty.
But in 1976 it was Apple Computer headquarters, to the surprise of some of its early investors. It was there that Steve Jobs, his sister, and Steve Wozniak laboriously hand-assembled the first Apple “computers”—in fact, just circuit boards. But that wasn’t what Apple’s first customer, Byte Shop’s owner Paul Terrell, had ordered. He had made it clear that he expected fully assembled, complete computers ready to plug in for use. As Owen Linzmayer wrote in Apple Confidential 2.0, “Terrell was a bit dismayed when Jobs showed up to deliver a batch of motherboards stuffed with components. Nonetheless, Terrell kept his word and handed over the cash, allowing Apple to pay off its parts suppliers with just one day to spare.”6
Patty Jobs recalled that, even back then, her brother was a harsh taskmaster. He supervised her installation of computer chips on circuit boards. She recalled, “I’d get yelled at if I bent a prong.”7
Originally, Paul Jobs had part of the garage set aside to rebuild cars for resale, but Apple took it over as well as a bedroom.
Apple Computer Moves On
Steve Jobs never thought it was odd to have his bootstrapped company operating out of a suburban garage. He knew of another start-up from Palo Alto, at 367 Addison Avenue, that went on to great success: industry giant Hewlett-Packard. (Years later, a garage in a residential home at Menlo Park would house another start-up called Google.)
Soon Apple outgrew the garage and rented suite B at an office building at 20833 Stevens Creek Boulevard, in Cupertino.
Apple moved again in 1978 to 10260 Bandley Drive.
Apple’s current location is One Infinite Loop, also in Cupertino. Comprised of six buildings, the campus encompasses 850,000 square feet, with additional leased buildings throughout the city, bringing the total to 3.3 million square feet. The campus is affectionately called the Mothership. (Apple’s gift shop is open to the public, unlike some companies that allow access only to employees. An Apple store favorite: a t-shirt that proudly proclaims, “I visited the Mothership.”)
The Spaceship
Looking toward the future, Apple is building a new campus called Apple 2 one mile east of its current location to consolidate its offices and modernize in the process. It’s anchored by an elegant glass structure designed by Norman Foster. When it’s completed in 2016, the estimated $5 billion circular building with 2.82 million square feet will house thirteen thousand employees.
“It’s a little like a spaceship,” Steve Jobs recalled.8
Dan Whisenhunt, Apple’s senior director of real estate and facilities, said of the spaceship, “You can be sure that, following Steve’s lead, we’ve used the same care and the same meticulous attention to detail we put into every Apple product.”9
Where you start doesn’t matter; what matters is where you end up.