The Machine That Changed The World; Interview with Mike Markkula

Oh yes. Well while I was going to school at USC I got a job Hughes Aircraft and as part of that I ended up managing the stores there. And. I was working on a lot of. Pretty advanced electronics systems and because of that I learned a lot about the semiconductors that were available and I often knew a lot of the reps the sales guys and. I just learned more and more and more about it and ended up. After about four years of it he was going to work at Fairchild Semiconductor marketing. It was great. I was. Wild and woolly and hard work really being on the

forefront of technology it was great. It was. Time we went to Intel and. Late 69 or early 70 and. It was really interesting because Intel was a very small company at that time my offices in the shipping cage and. No one had. Kept track of the inventory or that the order backlog or any of those things. Because really there weren't very many orders they were just beginning to to ship their first product which was a 256 bit memory. And. So that was the early days of Intel. What you heard as. Well it was very exciting to me. I first heard about it as part of

a development contract that Intel had with data point and data point 1 and. Intel to make a single chip which would replace the circuit board in their dumb terminal. Really. So we did a design to do that. And as part of that. Contract. A guy named Ted HOF. So let's not just design what they had and put that in the on the chip. Let's design a more general purpose machine and put that on a chip and then make sure that we can configure it so it'll do what data point we want and. Oh about a year into it. Datapoint decided they no longer were interested in doing that. And we had a thing that we called the 12 0 1. That was the internal number of it and that's what eventually became the eight thousand eight.

But in in between. Since we didn't have any paying customers to help us on that development we used the same idea to try and do a single chip actually with a chipset for a company in Japan who wanted to make a calculator programmable calculator and we did and only that was a four bit machine we call that the four thousand and four so those were the first two. Commercially available computers on a chip. What do you think this is doing. Just think. I was one of those things where the technology came together. We did we were coming down the learning curve and we really couldn't build an eight thousand eight on a chip. When we tried tried it first because the line which were too large but you knew it was coming.

And five years earlier you wouldn't have considered trying to do a design like that because it was just too soon you'd have to wait too long for you could make one. And then as you get closer and closer you said well I'll now's the time now we can get it all in one chip. There are a lot of other considerations like the number of input and output pins that you need and how you partition the system and all those things it's a it sounds easy when I say it but it wasn't easy to make all of those myriad of decisions in order to end up with something that you actually could build on one chip. OK. What was your vision. Yes. Well first I was a marketing manager at Intel. I ran all the marketing

and the microprocessor to me. I said before it's really exciting really was exciting when I was still in college. Two other of my classmates and I decided we wanted to design an electronic slide rule which was essentially a personal computer and in a box that big. And of course we were able to do it. And we actually did the designs. At that time there were no integrated circuits. So we did a lot of calculations using mixers and analog tech geeks. We did have some transistors in there. And when we it ended up building one and then calculating what it would cost to manufacture and then there were about 300 bucks just for the parts. And we figured since you could buy a slide rule for 2095 that

we might as well give that idea. But the whole idea of having a computer that you could use to do things like calculations and math and all that sort of stuff had been with me all those years and seeing the microprocessor come along or compute on a chip. Even though when we introduced them there were several hundred dollars. You know it was obvious to everyone that they would eventually be $5 and $4 and $2 and $1 and when they got down to those kind of prices then you'd be able to do those. Really great things. So I just couldn't wait to see CEOs move down the learning curve and watch what people would do with with that technology. 30 too much research to tell you that. Oh yeah.

Actually not a research project but I'd always planned on becoming financially independent by age 35 and turned out that I met all the goals to do that. At about age 30 and. I decided that I didn't know what I would do with myself if I wasn't working and I was really enjoying. What I didn't tell it was. It was a great company and a good job and I really liked what I was doing. So I spent about two years just planning and thinking about what would I do if I didn't have to go to work every day and some of the boring results of that where I decided I had to do some estate planning and write a will. And so when I did retire I spent about six months getting rid of all the boring stuff and getting our family finances organized which you never had time to do when you're working. You just

you know do those things and then it took a good good year or two to figure out how to spend that time. Best I had a long list of things I wanted to learn how to read music I've been playing a guitar for 20 years and never learned how to read music. Things like that. It took a while to adjust to not working. And. Retired isn't really the right word. You know you actually work harder when you don't have to go to work every day but you're working at things that you want to do when you want to do it. And so. The fun quotient of life goes up but so does the work quotient. So what was your situation. Oh yeah. Well one of the things that I found out about not not working was

that I really really missed the interaction with bright motivated people. And so after I'd been retired for a while I started taking every Monday to help people write business plans start companies do things like that. And I only did on Mondays if you needed some help on Tuesday I was not available Monday Monday and was my day. And so I helped a lot of people put plans together and get contacts and get financing that sort of thing. And I never charge for that I wasn't a consultant I didn't want to be a console I just want to have fun and see people succeed which I was it was a great thing to do and I enjoyed it. And Don Valentine and known each other for a number of years because he was at Fairchild in the early days in the international and you know this is a everybody knows everybody. Situation and he knew that I was doing that

and I didn't charge people and he had met the two Steves and he said well here's a here's a job for help and they are going to pay for it because they didn't have any money. So he called me up and said I want to go see these guys. I don't think I'll put down a camera. For years. You're too really young guys who had a real passion for building a computer that they could afford to own and once had done what I thought was and Meghna FSN job. The architecture and the design and they actually have the product definition of what turned out to be an Apple 2.

He'd already done the Apple one and it was it had some problems. And so he took that information and made the corrections and develop the apple too. And I looked at it and I said this was the first affordable useful computer for people. And the two guys really didn't have the background and experience to start a company and make it successful. So I agreed to help. I had no intention of going back to work. So I stepped on your hands that way. Yeah yeah yeah yeah. Well what I said I would do for on this to show them how to write a business plan get it written introduce them to some venture capital people so they could get the funding needed

and probably find them some additional people that could help them manage the business get a team together and still be started out to do just that. And during the process it became obvious that. Neither of the Steves was really the kind of person who could get things down on a piece of paper and present them in a way that. Would accomplish what they wanted to do. And the more I got involved with it the more I started to write parts of the plan and ended up. Basically writing a business plan and that was my mistake because it was really an exciting proposition when I got through it and. So I decided I would finance it and go hire somebody to run the company

and put it together. Yeah yeah. And I was just too big an opportunity. You know we could change the way people live. That was on the plate and build a Fortune 500 company in less than five years. That had never been done before. There were just lots of reasons to. To offset my desire not to go back to work and. Just became overwhelming the way we want it. You know your kiddos. Just. Yeah. That's right. You read this.

Are you so sure. I guess I've been thinking about those kind of things. For 15 years at that point in time. And to me it was obvious. And people said well you can't you know that was really a big leap. It wasn't a leap for me at all. It was just how can you not see this is going to happen. You know it's just it's completely a given then and this company doesn't do it another one will or another one will. It's bound to happen. Now I didn't have any any concern at all that there wasn't going to happen. If I did have a concern and it was well on our way you're too early. How are we going to educate the general public that there is such a thing as a personal computer and it's actually worth a thousand dollars. You know if you walk up and down the street in 1076 and ask a hundred people would you

like to have a personal computer. They'd say what. Ninety nine out of a hundred would say what. Two years later you could walk up and down the same street as the same hundred people if they'd like to have a personal computer and they'd say I don't know what do you do with it. They've maybe heard of it. And at that same time you said well what do you think one might be worth. They really wouldn't have any idea but it wasn't you know maybe 50 bucks to try one. Well I don't anywhere near a perceived value of a thousand dollars. Two years after that maybe 20 out of 100 people would say yes I'd like to have a personal computer and I might spend I don't know maybe over 500. So you know trying to get that.

The general public to know that there were such things as personal computers and they could afford them and they were worth what you had to pay was a big job. It is just what you hear. Let's make this work for Apple. Yeah well the business plan said we'd need about one hundred forty thousand dollars to get the company off the ground and from that point I figured we could have positive cash flow and a profitable situation. And I didn't want Apple to be begin as a company that didn't have relationships with the banks didn't have a credit line didn't operate like a

real company. So I went down to the Bank of America and I said Look I'll guarantee a loan and I want you to loan these guys are getting a credit line up to one hundred forty thousand dollars and here's our business plan here's how we expect to use the money here's our drawdown here's I will pay it back. And assumes we've gotten to a point where we've paid back most of that I want you to take me off of the loan guarantee so that you you have the relationship with the company not with me because it's the company we're trying to build. And we hit that plan to within a thousand dollars month by month. So the whole thing we spent exactly exactly one hundred forty thousand dollars negative before we started going back up. And after that was all over the guys from Bank of America said it's the first

time ever that they've had a relationship with a new company that they met their plan at all. And more and more over met their plan on a month by month basis. So you know we paid the money back and we were we had net retained earnings by September of 77. We started in January 77.