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The Founder's Notes

Founder index · Apple · 1955–2011

Steve Jobs

The lesson that travels

The scarcest executive skill is subtraction. Jobs is remembered for what Apple launched; he was better at what he cancelled.

Jobs co-founded Apple at twenty-one, was removed from it at thirty, and returned at forty-two to a company with roughly ninety days of cash. The standard telling makes the second act a story of taste. The financial record makes it a story of ruthless narrowing: on returning in 1997 he cut Apple's product line from dozens of SKUs to four quadrants — consumer and professional, desktop and portable — killed the Newton, ended the Mac clone licensing programme, and accepted a $150M investment and an Office commitment from Microsoft, the company Apple had spent a decade defining itself against.

His genuine competitive insight was not design as decoration. It was that controlling the full stack — silicon, operating system, hardware, retail, and eventually the payment relationship — lets you deliver an experience an assembler of other people's components cannot match, and lets you price it accordingly. Every profitable thing Apple does today sits downstream of that conviction.

His costs were real and should not be laundered. He denied paternity of his daughter for years, treated colleagues cruelly by the account of nearly everyone who worked closely with him, and delayed surgery for a treatable pancreatic tumour in favour of alternative medicine. A case study that only reports the wins is a press release.

§01The hard calls

  1. 1997

    Take $150M from Microsoft and cut 70% of the product line

    The Macworld crowd booed. Apple survived, and the four surviving product categories became the iMac, which funded everything after it.

  2. 2001

    Open physical retail stores while Gateway was closing its own

    Apple Stores became the highest revenue per square foot in American retail and gave Apple control of the moment a customer first touches the product.

  3. 2005

    Put a music player inside the phone, knowing it would destroy the iPod

    The iPod was roughly half of Apple's revenue and still growing. The iPhone is now approximately 50% of a $416B company. Nobody forced this call.

  4. 2007

    Refuse to let outside developers write native iPhone apps

    Wrong, and reversed within a year. The App Store he resisted became the foundation of a Services business now worth more than most public companies.

One of these is set up as a tutorial — you make the call before you find out what Steve did.

Face the decision