The time Apple lost $708M in 3 months | Sidebean

0:00This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. College football is back. So, Hilton called to me the superstition concierge to make your fan rituals a reality. Need a room to match your lucky number? We got you. Want to make sure our team doesn't wash your lucky jersey? Oh, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching bandwicker call at 555 and 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for this day. Good things come in force. Like ukulele strings, boy band members, and PayPal payin' for.

1:05No fees, no interest, no impact on your credit score. Just the flexibility to pay the way that works for you. Strum it, hum it, pay it in for. Download the PayPal app to get started. Subject to approval. Learn more at paypal.com-payin-for. Paypalling NMLS 910457. Apple might be the archetype of a rags-to-riches story. From headmaid computers to iPhones and iPods, Apple seems to have done it all. In 2018, it became the first trillion-dollar company in a long the way it has reached cult-like status. But the story is much more than just technology. There are enough Apple stories to fill books, feature films, and YouTube channels. But this is company forensics. And today, we are going to talk about that time when Apple almost went out of business. In the late 90s, Apple was a ship without a captain. Close the first quarter of 97 with $708 million in burn-ring.

2:08It was a defining moment in the story of the company. And seeing the way products like the iPhone have transformed the world, a defining moment in our history. Apple became what it is today because of visionaries who clashed with one another. Egos that fought against reality and sometimes won. Stolen ideas and rivalries that have spanned for decades. But that also came in to save the company at some point. So let's dive into Apple's story in this very special episode of company forensics. The Two Steves Like I said, we don't have time to tell the whole Apple story. But there are parts of their story that we just can't ignore. Steve Jobs and Steve Bosnian met in 1971,

3:10a time in which computers were at a molecular stage of their evolution. They met through a mutual front, Bill Fernandez. The two headed off as both of them shared a passion for technology and computers. Shortly after meeting, they became more active around social circles and Bosnian Jobs, a project he was working on. It was called a blue box. This device allowed Bosnian to have three long-distance calls. We spent some money in this new forensics studio, but the reason we don't have a blue box is because they are a collectible item these days worth well over $50,000. Old phones like this one would use tones to direct calls. The blue box would ring those tones allowing the caller to bypass official cold-riding systems. Letting you make long-distance calls without paying the fees. Jobs saw potential in the device and started selling it around California. And the blue box wasn't a technological marvel by any means.

4:13What mattered here was that both Steve's meshed together effortlessly. Bosnian was the tech-wiz-well jobs, also technologically adept, was a marketing genius. Simple as it was, this gadget was vital in Apple's development. Jobs once said, if it hadn't been for the blue boxes, there would be no Apple. I am 100% sure of that. Meanwhile, at the club, that's the computer club. Bosnian was drawing inspiration to make his computer, one that would eventually become the Apple One. Nowadays, this doesn't look like a computer at all. And the first version was more of a PC board than a complete device. But back then, it was eye-catching and people wanted it. Bosnian wasn't about making millions of dollars or changing the world. His dream was inspiring and educating others so much so that initially he gave those designs away for free. He wanted to show the world that it was possible to build an inexpensive computer.

5:20Jobs, on the other hand, saw a different path. He took the product to a computer store and tried to sell the boards. But the owner said people would rather have a complete computer. And this is another defining moment for the company. It connects to a story from Steve Jobs' childhood when his adopted father, Paul Jobs, took into the family's dairy farm in Wisconsin. Steve recalled to Walter Isaacson that he wasn't a fan of rural life, but one image stuck with him. He saw a calf being born and he was amazed when the tiny animal struggled up and within minutes began to walk. It wasn't something she had learned, but it was instead hardwired into her. That right there was the premise of Apple, this integration of hardware and software. Hardware built with the software in mind and software built for a specific part of hardware. Translating that into today's terms, this is the reason why you're probably not going to see a PC running macOS or a Samsung phone running iOS. Apple designs and

6:22seamlessly integrates both of them. This is what we'll call a closed architecture. So Jobs and Vosnick said about making them. They didn't have any money, so Jobs sold his VW camper van and then convinced Vosnick to sell his HP calculator for $500. It's around this time where history associates the steves with the famous garage. According to Vosnick himself, the garage wasn't that important and it wasn't that a place where they would test products and hang out. In a very start-upy story, Vosnick had ties with he lit Packard and he recalls trying to sell them his prototypes to multiple rejections. Around this time, Jobs managed to reel in Mark Cula who invested $250,000 and became a critical part of the company. The fall of Steve Jobs. The Apple 2 was Apple's first true successful computer. The end-

7:51Superstition concierge to make your fan rituals a reality. Need a room to match your lucky number? We got you. Want to make sure our team doesn't wash your lucky jersey? Oh that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching bandwink up call it $55.55. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for this day. Good things coming for us. Like ukulele strings, boy band members, and PayPal payin' for. No fees, no interest, no impact on your credit score. Just the flexibility to pay the way that works for you. Strument, hum it, pay it in for. Download the PayPal app to get started. Subject to approval. Learn more at paypal.com-payin-for. Paypalling NMLS 910457. The sets contained Bosnian technological prowess but the outside, the shell, was now the results of jobs' obsession with aesthetics.

8:53The Apple 2 drove a big part of Apple's initial success. Part of that success is attributed to the fact that the Apple 2 was an open architecture computer which meant it was sold to education, small business, and home markets. Neither of these markets was interesting to IBM, who was their biggest competitor at the time. Steve Jobs, who since the very beginning had passed the CEO had to someone else, a guy named Michael Scott, took on the project of Apple's future computer. The Lisa, named after his daughter. The project was visionary. The first GUI computer aimed at personal business users, but Lisa suffered delays and ran over budget. It brought out the worst part of Steve Jobs and many of the engineers who worked on the Lisa team. Remember Steve Jobs with Passionate Hate. Eventually, Steve was removed from the project altogether. It might have been the first glimpse of Steve's peculiar character. In 1983, another important person in the history of Apple came in,

10:02John Scully. Jobs convinced the former Pepsi CEO with a pretty memorable quote. Do you want to sell sugar water for the rest of your life? Or do you want to come with me and change the world? But Steve Jobs and Scully would clash big time. The Macintosh was selling well, but it couldn't de-throw in notable brands like IBM, and the new windows was now a threat. The Macintosh was a closed architecture computer by the way. This meant that the market was more limited. And this is part of that philosophical clash, you see. Steve Jobs continued to believe in hardware software integration, closed architecture. Scully believed they should sell computers built on an open architecture. In 1985, Steve Jobs attempted what can only be described as a coup. He tried to get the board to oust Scully, but the move backfired. The board ended up removing Steve Jobs,

11:02who ended up leaving the company through the back door. He sold off all of his 6.5 million shares in the company, keeping only one so that he could still receive company reports and attend shareholder meetings. Apple was a public company in 1985. Those 6.5 million shares Steve Jobs sold netted him some 70 million dollars. He used five of those to acquire a small, visual effects company called Pixar. That Pixar. Then he started another company. Next, Steve Bosnick also left around the same time. He didn't believe in Apple's new direction and also sold almost all of his shares. And with these two gone, Scully had a free hand of Apple. The Apple Falls. Apple's strongest suit was always their GUI, the graphic user interface. It's what made them better than IBM at the time, but IBM started to catch up in the early 90s, partly because of Windows and OAS that could run on multiple computers. Once again, an open architecture. Apple also struggled by launching products that were too similar to each other

12:07and not marketing them well. They became such an underdog that both IBM and Sun Microsystems made bids to acquire Apple. And neither deal happened. Scully was also removed from the company around this time. In a desperate effort to generate revenue, Apple began licensing macOS, so it could be installed on any computer. That's right. In 1985, you could purchase macOS to install it on your non-Apple computer. By 1986, Apple changed CEO's once again, Jill Amilio and well-known corporate rehabilitator came in. He fired a lot of people in an attempt to reach profitability, but it was also not enough. Weeks from bankruptcy. While Apple struggled, Steve Jobs did as well. Pixar was on the verge of bankruptcy many times, and that's a story for another day. And next was originally a hardware company making work stations for higher education and for the business market, failed on that approach and had to pivot

13:08to software. Next focused on operating systems, an innovative object-oriented OS called Next Step, which is highly influential to the software we use today. Next step ended up being the operating system for the Swiss bank organization and for the NSA, but most importantly, it caught the attention of Apple itself. You see, Apple was looking to replace and now dated macOS and aims to acquire third-party software to do so. Plan B was a BOS, an operating system developed by a company called Coplin. But there was little BOS could do against Next Step, because acquiring Next had an extra bonus for Apple. Steve Jobs himself. Apple purchased Next in 1997 for $429 million and $1.5 million shares of Apple's stock.

14:14Very intentionally, Steve Jobs didn't get any cash out of this deal. All of his compensation was in company stock. While Emilio the CEO at the time intended to remain a CEO after Jobs returned, the board ended up citing with Steve. It was very clear to him that Apple was to be saved, it was him the one to do it. A more mature jobs returning to the company he founded, it's the corporate fairy tale, isn't it? It's around this time that he- This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. Callers football is back, so Hilton called to me the superstition concierge to make your fan rituals

15:16a reality. Need a room to match your lucky number? We got you. Want to make sure our team doesn't wash your lucky jersey? Oh, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching bandwink up call it 555 and 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton for this day. NMLS 910457. It discovered another iconic talent inside the company ranks, an aluminum lover British industrial designer called Jonathan Ive. And Apple was still struggling though, cash was

16:16short and jobs turned to his frenemy Bill Gates for help. We need all the help we can get, he said. And Apple took a $150 million investment in non-voting stock from Microsoft. Not everybody at Microsoft agreed though. Delceo and founder Michael Dell went to Microsoft's biggest partners. Famously said. They also partnered to bring Microsoft Office to the Mac, a key integration that led to the success of the iMac which was released one year later. That colorful iMac is the first computer released under Steve's new leadership. By the way, Steve's original name for the Mac was MacMac. It was

17:18their marketing team that suggested going to the Nye, which was to stand for the ease of access to the internet. Behind the scenes, some changes also happened to the company culture, from much better food at the cafeteria to banning pets. He wanted everybody focused on Apple, a guy named Tim Cook was also hired this year. In 1998, Steve Jobs stood at the Macworld Expo in San Francisco and famously announced his first one more thing line. It wasn't a sexy product, but $45 million in profits. The first profits Apple had seen in years. The rest is not history. It's the story that we live today. It's the story of my generations first Apple device, an iPod. It's the story of a revolution in how we interact with our day-to-day

18:18lives. It's the story of millions of developers building software for a product that didn't exist 15 years ago. It's the stories of other unicorns built on the backbone of a fundamental transformation in the way hardware and software interact together. It's the story of the crazy ones at Apple that inspired most of us entrepreneurs to become who we are today. Thanks a lot for watching guys. We worked very passionately in this video. I've been dying to have the experience, the team, the know-how to make a proper video about one of my favorite stories. Certainly one that inspired me. We poured our hearts into the production of this video and if you enjoyed it, please share it around or take a look at the other videos in our channels. We have over 50 stories of failed and successful companies and we intend to keep making them. Thanks a lot for watching and we'll see you next week.

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