Steve Jobs' Wilderness Years: NeXT and Pixar

In 1986, a year after losing his job at the company he co-founded, Steve Jobs paid graphic designer Paul Rand $100,000 for a single logo for his new startup, NeXT. Rand's terms were blunt: one design, no revisions, use it or not (10:25). It is a strange opening image for the man who would later become famous for ruthless simplicity, the same man who, once he returned to Apple, would kill 70 percent of its product lines in a single stroke (56:15). The years between those two moments are the part of the Steve Jobs story that rarely gets told: not the garage, not the black turtleneck keynote, but twelve years of expensive, humbling, occasionally humiliating failure.

Jobs did not leave Apple as its chief executive. He ran the Macintosh division, one unit among many, and by 1985 he had become impossible to manage (02:32). The Macintosh, released in 1984, was a cultural sensation and a commercial disappointment (00:55). Sales were weak, layoffs followed, and Jobs tried to force the issue by staging a coup against CEO John Sculley, luring him toward a trip to China so the board would be free to install Jobs in his place (03:18). The plan collapsed when a rival tipped off Sculley. Jobs left Apple that fall with over $100 million and, by his own account, no real friends and no identity outside the company (05:52)(06:15).

What he built next reveals exactly what he had not yet learned. NeXT Computer was going to be the perfect machine: hardware, software, even the casing, all controlled by one vision. Jobs insisted the computer be a literal cube, ninety-degree angles, which required a specialized $500,000 sanding line just to manufacture (12:06). The resulting machine cost around $10,000 (13:27), while Jobs himself projected 25,000 units a year despite his own executives warning they had no distribution network to sell them (16:20). Actual sales ran to a few dozen machines a month (18:00). Every expense at the company had been calibrated, unconsciously, to the logo's price tag: if $100,000 was normal spending for a design, it became normal spending for everything.

Jobs' hiring style during this period is more interesting than his balance sheet. He wanted people who would fight him. Interview candidates who hesitated when asked if they were the best in their field were sent away to find someone who was (14:08). At company retreats, engineers and marketers were made to stand and defend their ideas in front of him, and if he thought they weren't pushing hard enough, he pushed them harder (15:09). The catch was that all this intellectual combat did not always change his mind. Told repeatedly that the Cube's sales projections were fantasy, he kept insisting the market would come around, because the product was good and therefore, in his mind, it had to work.

"His biggest fault was building a monument to his own genius, his own vision, and thinking that that would be enough for the market and enough to beat Apple and get revenge on Apple." — Guest, Jobs historian [17:40]

By 1993, NeXT was one weekend from closing its doors (19:08), sitting on roughly $400 million in debt after nine straight years without a profit (31:40). Along the way, Jobs had managed to blow up a near-signed deal with the federal government, walking away from what could have been hundreds of millions in contracts because he refused, on principle, to sell to intelligence agencies, even after his own investor Ross Perot had lined up the paperwork (26:44). Fortune magazine, around the same time, called him a snake oil salesman (28:22). This is the Steve Jobs that history mostly skipped over: broke, alienated from his co-founders, and publicly humiliated.

Learning to Let Go

The turnaround did not come from a better idea. It came from Jobs backing off. At Pixar, which he was funding alongside NeXT out of his own pocket (28:48), the deal he struck when he bought the studio was that he would stay out of creative decisions entirely, leaving Ed Catmull and John Lasseter to run the actual filmmaking (30:37). Toy Story became a hit, Pixar went public in late 1995, and the IPO made Jobs a billionaire, solving the personal cash crunch that a decade of funding two struggling companies had created (29:17). At NeXT, a new chief financial officer, Dominique Trampot, forced the company to abandon its dream of selling to Nobel-winning scientists and pivot to enterprise software instead. NeXT posted its first-ever profit in 1994 (32:03), nine years after Jobs founded it, and only after he had largely stepped aside.

NeXT's hardware died with the company's ambitions. Its software did not. Years before anyone at Apple needed it, Jobs had bet on object-oriented programming, a way of building software out of reusable pieces, buttons, images, and other "objects", that he had first seen demonstrated at Xerox PARC (22:11). The operating system built on that idea, NeXTSTEP, had almost no market because it only ran on NeXT's unaffordable hardware. But when Apple, drowning in its own crisis of bloated product lines (35:00) and crashing operating systems, went looking for new software to buy, a NeXT middle manager named Garrett Rice made a cold call that led to a voicemail, a callback from Apple's chief technology officer, and eventually the acquisition that brought NeXTSTEP, and Steve Jobs, back into the company (40:00).

The Pragmatist Returns

Jobs did not come back as a conquering hero. He came back reluctantly, first as an unpaid advisor, insisting he could walk away at any time (41:17). He had, in a fit of frustration, already sold nearly all his Apple stock (42:48). What pulled him in fully was a phone call to Andy Grove, the CEO of Intel and one of his oldest mentors.

"Andy Grove has a reputation for being a straight shooter, and he literally told Steve, 'Steve, I don't give a shit about Apple.'" — Guest, Jobs historian [54:52]

Jobs later said that exchange was the moment he realized he did care. In October 1997 he became interim CEO, a title he shortened to iCEO, the first use of the "i" prefix at Apple that would later name the iPod and iPhone (56:15). He killed 70 percent of the company's projects almost immediately. He also did something the younger Jobs would have refused on principle: he called his rival Bill Gates and accepted a $150 million investment from Microsoft, along with a commitment to keep making Word for Apple computers (49:00)(49:20). That money kept Apple solvent. It is hard to picture the Jobs of the Cube-era NeXT making that call. His public war with Gates had been personal and constant; Gates had once told the press he'd rather "piss on" the Cube than write software for it (52:15). The deal was so unpopular with Apple's own employees that some saw it as a betrayal of everything the company stood for.

What changed between the man who lost hundreds of millions in government contracts on principle and the man who partnered with his "archenemy" to save the company was not his taste or his temper. Colleagues from this later period still describe him as exhausting to work for. What changed was his sense of where control needed to end. In a 1996 interview, reflecting on his years running NeXT and Pixar, Jobs described leadership as an inverted pyramid: once real talent is in the room, the job of the person at the top is to serve that talent, not command it, because good people can leave for another job any time they choose (47:25). It is a strange line coming from a man famous for towering over meetings and calling people's ideas stupid to their faces, but it maps onto what actually happened. Pixar thrived once he left the creative decisions to Catmull and Lasseter. NeXT turned its first profit once he let a CFO run the numbers. Apple stabilized once he put his own former lieutenants, John Rubinstein and Avie Tevanian, in charge of hardware and software and largely let them work.

There is a limit to how much he actually changed, and it is worth naming plainly. Years later, facing a cancer diagnosis, Jobs consulted a psychic and leaned on holistic diets rather than following conventional medical treatment (61:33). He had learned to extend trust and empathy to employees, arranging top medical care for people who worked for him, but he never extended the same trust to himself (60:40). The reality distortion field that once convinced him NeXT would sell 25,000 cubes a year never fully switched off; it simply got redirected, from business plans to his own body.

What the wilderness years actually produced was not a smarter Steve Jobs so much as a more useful one. He kept his stubbornness, his taste, his belief that hardware and software should be built together. What he added was the willingness to bend around a market and a willingness to hand real authority to people better suited to a given job than he was. Asked, near the end of the conversation, what success actually meant to him, the guest offered something quieter than any of the business lessons: waking up with family and friends nearby, sitting in a coffee shop, being able to enjoy whatever is in front of you, whether it's writing a book, building a company, or making a movie (63:07). Twelve years of expensive failure is a strange path to that kind of answer. It is also, apparently, the one Jobs took.