Steve Jobs

Woolard was thrilled, and he suggested that the board was willing to give him a massive stock grant. “Let me be straight with you,” Jobs replied. “What I’d rather have is an airplane. We just had a third kid. I don’t like flying commercial. I like to take my family to Hawaii. When I go east, I’d like to have pilots I know.” He was never the type of person who could display grace and patience in a commercial airplane or terminal, even before the days of the TSA. Board member Larry Ellison, whose plane Jobs sometimes used (Apple paid $102,000 to Ellison in 1999 for Jobs’s use of it), had no qualms. “Given what he’s accomplished, we should give him five airplanes!” Ellison argued. He later said, “It was the perfect thank-you gift for Steve, who had saved Apple and gotten nothing in return.”

So Woolard happily granted Jobs’s wish, with a Gulfstream V, and also offered him fourteen million stock options. Jobs gave an unexpected response. He wanted more: twenty million options. Woolard was baffled and upset. The board had authority from the stockholders to give out only fourteen million. “You said you didn’t want any, and we gave you a plane, which you did want,” Woolard said.

“I hadn’t been insisting on options before,” Jobs replied, “but you suggested it could be up to 5% of the company in options, and that’s what I now want.” It was an awkward tiff in what should have been a celebratory period. In the end, a complex solution was worked out that granted him ten million shares in January 2000 that were valued at the current price but timed to vest as if granted in 1997, plus another grant due in 2001. Making matters worse, the stock fell with the burst of the Internet bubble. Jobs never exercised the options, and at the end of 2001 he asked that they be replaced by a new grant with a lower strike price. The wrestling over options would come back to haunt the company.

Even if he didn’t profit from the options, at least he got to enjoy the airplane. Not surprisingly he fretted over how the interior would be designed. It took him more than a year. He used Ellison’s plane as a starting point and hired his designer. Pretty soon he was driving her crazy. For example, Ellison’s had a door between cabins with an open button and a close button. Jobs insisted that his have a single button that toggled. He didn’t like the polished stainless steel of the buttons, so he had them replaced with brushed metal ones. But in the end he got the plane he wanted, and he loved it. “I look at his airplane and mine, and everything he changed was better,” said Ellison.

At the January 2000 Macworld in San Francisco, Jobs rolled out the new Macintosh operating system, OSX, which used some of the software that Apple had bought from NeXT three years earlier. It was fitting, and not entirely coincidental, that he was willing to incorporate himself back at Apple at the same moment as the NeXT OS was incorporated into Apple’s. Avie Tevanian had taken the UNIX-related Mach kernel of the NeXT operating system and turned it into the Mac OS kernel, known as Darwin. It offered protected memory, advanced networking, and preemptive multitasking. It was precisely what the Macintosh needed, and it would be the foundation of the Mac OS henceforth. Some critics, including Bill Gates, noted that Apple ended up not adopting the entire NeXT operating system. There’s some truth to that, because Apple decided not to leap into a completely new system but instead to evolve the existing one. Application software written for the old Macintosh system was generally compatible with or easy to port to the new one, and a Mac user who upgraded would notice a lot of new features but not a whole new interface.

The fans at Macworld received the news with enthusiasm, of course, and they especially cheered when Jobs showed off the dock and how the icons in it could be magnified by passing the cursor over them. But the biggest applause came for the announcement he reserved for his “Oh, and one more thing” coda. He spoke about his duties at both Pixar and Apple, and said that he had become comfortable that the situation could work. “So I am pleased to announce today that I’m going to drop the interim title,” he said with a big smile. The crowd jumped to its feet, screaming as if the Beatles had reunited. Jobs bit his lip, adjusted his wire rims, and put on a graceful show of humility. “You guys are making me feel funny now. I get to come to work every day and work with the most talented people on the planet, at Apple and Pixar. But these jobs are team sports. I accept your thanks on behalf of everybody at Apple.”

CHAPTER TWENTY-NINE

APPLE STORES

Genius Bars and Siena Sandstone

New York’s Fifth Avenue store

The Customer Experience

Jobs hated to cede control of anything, especially when it might affect the customer experience. But he faced a problem. There was one part of the process he didn’t control: the experience of buying an Apple product in a store.

The days of the Byte Shop were over. Industry sales were shifting from local computer specialty shops to megachains and big box stores, where most clerks had neither the knowledge nor the incentive to explain the distinctive nature of Apple products. “All that the salesman cared about was a $50 spiff,” Jobs said. Other computers were pretty generic, but Apple’s had innovative features and a higher price tag. He didn’t want an iMac to sit on a shelf between a Dell and a Compaq while an uninformed clerk recited the specs of each. “Unless we could find ways to get our message to customers at the store, we were screwed.”

In great secrecy, Jobs began in late 1999 to interview executives who might be able to develop a string of Apple retail stores. One of the candidates had a passion for design and the boyish enthusiasm of a natural-born retailer: Ron Johnson, the vice president for merchandising at Target, who was responsible for launching distinctive-looking products, such as a teakettle designed by Michael Graves. “Steve is very easy to talk to,” said Johnson in recalling their first meeting. “All of a sudden there’s a torn pair of jeans and turtleneck, and he’s off and running about why he needed great stores. If Apple is going to succeed, he told me, we’re going to win on innovation. And you can’t win on innovation unless you have a way to communicate to customers.”

When Johnson came back in January 2000 to be interviewed again, Jobs suggested that they take a walk. They went to the sprawling 140-store Stanford Shopping Mall at 8:30 a.m. The stores weren’t open yet, so they walked up and down the entire mall repeatedly and discussed how it was organized, what role the big department stores played relative to the other stores, and why certain specialty shops were successful.