Replaying the founding of Apple


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Gender Inclusive Game Design by Sheri Granar RayAfter recently finishing the Austin Grossman novel You, which featured many references to classic computers such as the Apple II and Commodore 64, I moved onto the 1986 novel Replay, a time travel tale by Ken Grimwood. It's a bit like Groundhog Day, except instead of the main character repeating the same day, he's reliving the same 25 years. As in the 1989 film Back to the Future II, he naturally uses his future knowledge to ensure his financial security — except where Biff Tannen relied solely on sporting events, Jeff Winston also plays the stock market, making investments in companies he knows are bound to succeed.

At one point, his wife laments to him a recent business meeting:

"Hippies, that's all they were. That tall boy was barefoot, for God's sake, and the other one looked like a…a Neanderthal!"

"Their idea has a lot of potential; it doesn't matter what they looked like."

"Well, somebody ought to tell them the sixties are over, if they want to do anything with that silly idea of theirs. I just don't believe you fell for it, and gave them all that money!"

He couldn't really blame her for the way she'd reacted; without benefit of foresight, the two young men and their garageful of secondhand electronic components would indeed seem unlikely candidates for a spot on the Fortune 500. But within five years that garage in Cupertino, California would be famous, and Steve Jobs and Steve Wozniak would prove to be the soundest investment of 1976. Jeff had given them half a million dollars, insisted they follow the advice of a retired young marketing executive from Intel they had recently met, and told them to make whatever they wanted as long as they continued to call it "Apple." He had let them keep forty-nine percent of the new enterprise.

"Who in the world would want a computer in their house? And what makes you think those scruffy boys really know how to make one, anyway?"

The ability of Grimwood's protagonist to meddle with history is inconsistent. In this particular 25-year bounce, all the hero's investments accomplish is to funnel various companies' profits into his bank account. But Steve Weyhrich of Sophistication & Simplicity points out how dramatically the above cash influx would alter Apple's evolution: "This person who invested $500,000 in Apple before Mike Markkula came around would potentially have made it unnecessary for Markkula, regardless of this investor’s recommendation. Markkula's personal involvement in the company would possibly have been diluted, since it was not his cash that was at risk. The outcome of the early days of Apple could have been quite different with a large, non-Markkula-based capital investment. Jobs would probably have decided he didn’t need some old-school business person telling him what to do, which could have removed the adult supervision they needed in those early days."

However, Steve and I disagree over whether such startup capital would've even been welcome. Mike Markkula had invested $250,000 in Apple in exchange for becoming a one-third owner of Apple, this being after Ron Wayne had temporarily owned 10% of the company. In neither case did Jobs or Wozniak relinquish majority control of their fledgling company. Last summer's Jobs film suggested Jobs was a shrewd businessman in his negotiations with Markkula, and while I suspect that particular scene was exaggerated, I absolutely believe Jobs as a man insisting on being in control. For him to settle for keeping only 49% of his company, even in exchange for a half-million dollars, is unbelievable.

But Steve points out, "Remember that before Markkula came along to invest, Jobs was willing to sell the Apple II to Chuck Peddle and Jack Tramiel of Commodore in exchange for jobs with that company and a specific salary. With an offer of $500,000, he would have probably been willing to [settle for a] 49% or less share."

What do you think? Would Woz and Jobs have taken this offer? And, if so, how would it have affected Apple's development?