Just the week before, he had invited Jobs to bring his girlfriend up to San Francisco so that he and his wife could meet her, and the four had a nice dinner in Rock’s Pacific Heights home. Jobs had not mentioned the new company he was forming, so Rock felt betrayed when he heard about it from Sculley. “He came to the board and lied to us,” Rock growled later. “He told us he was thinking of forming a company when in fact he had already formed it. He said he was going to take a few middle-level people. It turned out to be five senior people.” Markkula, in his subdued way, was also offended. “He took some top executives he had secretly lined up before he left. That’s not the way you do things.
It was ungentlemanly.”
Over the weekend both the board and the executive staff convinced Sculley that Apple would have to declare war on its cofounder. Markkula issued a formal statement accusing Jobs of acting “in direct contradiction to his statements that he wouldn’t recruit any key Apple personnel for his company.” He added
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ominously, “We are evaluating what possible actions should be taken.” Campbell was quoted in the Wall Street Journal as saying he “was stunned and shocked”
by Jobs’s behavior.
Jobs had left his meeting with Sculley thinking that things might proceed smoothly, so he had kept quiet.
But after reading the newspapers, he felt that he had to respond. He phoned a few favored reporters and invited them to his home for private briefings the next day. Then he called Andy Cunningham, who had handled his publicity at Regis McKenna. “I went over to his unfurnished mansiony place in Woodside,” she recalled, “and I found him huddled in the kitchen with his five colleagues and a few reporters hanging outside on the lawn.” Jobs told her that he was going to do a full-fledged press conference and started spewing some of the derogatory things he was going to say.
Cunningham was appalled. “This is going to reflect badly on you,” she told him. Finally he backed down.
He decided that he would give the reporters a copy of the resignation letter and limit any on-the-record comments to a few bland statements.
Jobs had considered just mailing in his letter of resignation, but Susan Barnes convinced him that this would be too contemptuous. Instead he drove it to Markkula’s house, where he also found Al Eisenstat.
There was a tense conversation for about fifteen minutes; then Barnes, who had been waiting outside, came to the door to retrieve him before he said anything he would regret. He left behind the letter, which he had composed on a Macintosh and printed on the new LaserWriter:
September 17, 1985
Dear Mike:
This morning’s papers carried suggestions that
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Apple is considering removing me as Chairman. I don’tknow the source of these reports but they are bothmisleading to the public and unfair to me.
You will recall that at last Thursday’s Boardmeeting I stated I had decided to start a new ventureand I tendered my resignation as Chairman.
The Board declined to accept my resignation andasked me to defer it for a week. I agreed to do so in lightof the encouragement the Board offered with regard tothe proposed new venture and the indications thatApple would invest in it. On Friday, after I told JohnSculley who would be joining me, he confirmed Apple’swillingness to discuss areas of possible collaborationbetween Apple and my new venture.
Subsequently the Company appears to beadopting a hostile posture toward me and the newventure. Accordingly, I must insist upon the immediateacceptance of my resignation. . . .
As you know, the company’s recent reorganizationleft me with no work to do and no access even toregular management reports. I am but 30 and want stillto contribute and achieve.
After what we have accomplished together, Iwould wish our parting to be both amicable anddignified.
Yours sincerely, steven p. jobs When a guy from the facilities team went to Jobs’s office to pack up his belongings, he saw a picture frame on the floor. It contained a photograph of Jobs and Sculley in warm conversation, with an inscription from seven months earlier: “Here’s to Great Ideas, Great Experiences, and a Great Friendship! John.” The glass frame was shattered. Jobs had hurled it across the room before leaving. From that day, he never spoke to Sculley again.
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Apple’s stock went up a full point, or almost 7%, when Jobs’s resignation was announced. “East Coast stockholders always worried about California flakes running the company,” explained the editor of a tech stock newsletter. “Now with both Wozniak and Jobs out, those shareholders are relieved.” But Nolan Bushnell, the Atari founder who had been an amused mentor ten years earlier, told Time that Jobs would be badly missed. “Where is Apple’s inspiration going to come from? Is Apple going to have all the romance of a new brand of Pepsi?”
After a few days of failed efforts to reach a settlement with Jobs, Sculley and the Apple board decided to sue him “for breaches of fiduciary obligations.” The suit spelled out his alleged transgressions:
Notwithstanding his fiduciary obligations to Apple, Jobs, while serving as the Chairman of Apple’s Board of Directors and an officer of Apple and pretending loyalty to the interests of Apple . . .
(a) secretly planned the formation of an enterprise to compete with Apple;
(b) secretly schemed that his competing enterprise would wrongfully take advantage of and utilize Apple’s plan to design, develop and market the Next Generation Product . . .
(c) secretly lured away key employees of Apple.
At the time, Jobs owned 6.5 million shares of Apple stock, 11% of the company, worth more than $100 million. He began to sell his shares, and within five months had dumped them all, retaining only one share so he could attend shareholder meetings if he wanted. He was furious, and that was reflected in his passion to start what was, no matter how he spun it, a rival company. “He was angry at Apple,” said Joanna Hoffman, who briefly went to work for the new company.
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“Aiming at the educational market, where Apple was strong, was simply Steve being vengeful. He was doing it for revenge.”
Jobs, of course, didn’t see it that way. “I haven’t got any sort of odd chip on my shoulder,” he told Newsweek. Once again he invited his favorite reporters over to his Woodside home, and this time he did not have Andy Cunningham there urging him to be circumspect. He dismissed the allegation that he had improperly lured the five colleagues from Apple. “These people all called me,” he told the gaggle of journalists who were milling around in his unfurnished living room.
“They were thinking of leaving the company. Apple has a way of neglecting people.”
He decided to cooperate with a Newsweek cover in order to get his version of the story out, and the interview he gave was revealing. “What I’m best at doing is finding a group of talented people and making things with them,” he told the magazine. He said that he would always harbor affection for Apple. “I’ll always remember Apple like any man remembers the first woman he’s fallen in love with.” But he was also willing to fight with its management if need be. “When someone calls you a thief in public, you have to respond.” Apple’s threat to sue him was outrageous. It was also sad. It showed that Apple was no longer a confident, rebellious company. “It’s hard to think that a $2 billion company with 4,300 employees couldn’t compete with six people in blue jeans.”
To try to counter Jobs’s spin, Sculley called Wozniak and urged him to speak out. “Steve can be an insulting and hurtful guy,” he told Time that week. He revealed that Jobs had asked him to join his new firm—
it would have been a sly way to land another blow against Apple’s current management—but he wanted no part of such games and had not returned Jobs’s
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phone call. To the San Francisco Chronicle, he recounted how Jobs had blocked frogdesign from working on his remote control under the pretense that it might compete with Apple products. “I look forward to a great product and I wish him success, but his integrity I cannot trust,” Wozniak said.
