Copyright 1992 by John Perry Barlow and MicroTimes magazine. All rights reserved.

At Last, NeXT Sells The Dream...To MIS
The MicroTimes Interview with Steve Jobs, Part One
By John Perry Barlow

One does not encounter many published interviews with Steve Jobs.
Indeed, I've seen his picture on a number of magazine covers, only to
find the lead articles within them barren of a single word directly
from Himself.
	There is a reason for this. While he is not quite yet the Howard
Hughes of computing, it is easier to get an audience with the Pope
than an interview with Steve Jobs. Nor is there any point in the
process when one might feel he's got it nailed.
	I can't blame him for being wary of the press. He is a Mick
Jagger-class celebrity, and Global Villagers of this magnitude usually
go a bit south. You would too if everyone you met focused not on you
but on some virtual image, floating vastly above you like a Macy's
parade balloon. (As Bob Dylan sang in "Idiot Wind": "People see me all
the time and they just can't remember how to act. Their minds are
filled with big ideas, images, and distorted facts.")
	This problem is exacerbated in Jobs's case by the fact that there
really is something compellingly, well, different, about him. For the
last decade, the workings of his complex personality have been like an
Exploratorium exhibit on monomania; highly visible, well-annotated,
and endlessly fascinating to gawking legions who have never actually
met the guy.
	Of course, Jobs would prefer these people look upon his works rather
than whatever personal demons might drive him, and those around him,
to produce them. After all, no one sits around psychoanalyzing
SPARCstations for insights into Bill Joy's mind, nor have I ever heard
a portentous word spoken about Ken Olsen's childhood.
	But unfortunately for all concerned, it has become difficult to
discuss either his companies or their products without talking about
Jobs on a fairly personal level. In the past, this was not such a bad
thing. What separated Apple from its many early competitors was
largely a mystique based on the showier of its Steves. Both the
Macintosh and the NeXT originally became objects of obscure desire due
to something not unlike a personality cult.
	But the mystique which once served him has lately been his principal
liability. NeXT appears dominated by true believers whose devotion
takes the form of creating products, the greatness of which may be
literally a bit insane. But in the process, they devote to the cult a
lot of the attention which would better be directed at customers. Dale
Carnegie would not dig this. And neither has the marketplace.
	Which is a damned shame. In my opinion, the NeXT is simply the most
powerful, versatile, and deep digital engine you can put on a desk. It
is years ahead of its competitors in every area where they are
devoting so many of their R & D resources: object-orientation,
operating system, ease of programming, graphical interface design,
interoperability, connectivity, and stability. It is unbelievably
cool.
	And that's the problem. A lot of people haven't  believed it. NeXT,
however committed to Steve's dream, has been unable to reveal it
convincingly to the rest of the world. And so it is that the world's
most elegant computer has only shipped some 36,000 units since 1988.
	Lately, as you will read in the following, this has begun to change.
Sales have started to pick up. Corporations have discovered NeXTs and
are beginning to use them to write the custom applications they once
wrote on mainframes and then on the PC.
	The swift spread of such news could make a big difference to NeXT.
But Jobs's cavalier treatment of the press, however understandable,
has earned him ill will of the sort they usually reserve for such as
Richard Nixon. Most of the journalists who might otherwise carry the
new message are too irritated to give him the satisfaction.
	By the time the following conversation took place, I was in a pretty
dyspeptic mood myself. Nor was Jobs all that happy with me. Frustrated
by the apparent absence of any coherent approach to marketing and
sales at NeXT, I had electronically circulated several rants on the
subject, elevating temperatures inside and outside NeXT.
	He emailed me, telling me that I was "all wet" but failing to
elucidate further. I told him that the best way to set me (and other
similarly wet individuals) straight would be to give me an interview.
To my surprise, he agreed.
	Two days before the interview, after I had bought a non-refundable
ticket from Wyoming, he cancelled. Then he changed his mind again and
I flew to Redwood City. There he kept me and my "second," MicroTimes
editor Mary Eisenhart, waiting for 40 minutes before he bounced in and
told us that he could only spare us 20 of the 90 minutes we'd been
promised. But not to worry. He could "talk real fast." (Which he most
assuredly can.) As it turned out, he stayed put for nearly an hour,
but, by this opening gambit of evasive zigs and zags, he managed to
put me irretrievably off balance.
	So there was little I could do to prevent him from "playing his
tapes" at me. This was unfortunate, because much of what he says about
changing NeXT fortunes is more plausible than it may sound in the
following...or would have sounded if he'd been speaking less
automatically.
	I think he has re-discovered a huge market: Son of dBASE, custom
workstation apps for MIS. Like Jobs, I imagine small groups of
networked guerrillas roaming the corporate steppes of Cyberspace,
continuously conjuring up new tools of the moment from their NeXTs.
While he may be, as usual, dangerously ahead of the curve, Steve Jobs
is once again onto something. I'm not surprised.
	Whatever his personal wrinkles, I think this guy really is a genius.
Difficult and elusive, there remains something quite winsome about
Steve Jobs. He can make you nuts, but this is not entirely unpleasant.
	The interview is printed in two parts, the second to appear next
month. In the first part, we primarily discuss NeXT's brand-new
marketing strategy, arguably the first credible one it has ever had.
While there may be some perils to their their new approach, I do
believe that they are at last about to move a lot of boxes.

Radiating energy, Jobs plants one bobbing knee on a chair across from
me and begins:
	You want to talk about our marketing strategy? Good. I want to talk
about that too, since you're confused.

I want to start out by telling you that I'm on your side.
	Oh, I know that. Even if you're kicking us in the butt, I know it's
because you want us to win.

But I have questions that I get asked all the time, and rather than
putting myself in the position of trying to second-guess what your
answers would be...
	The only thing I would say is... since we don't have the largest
marketing budgets in the world to run advertisements, there are a lot
of times when we learn something, and we shift our strategy, and it
actually will be working in the marketplace, but there's a lag of
several months before people catch on. So sometimes people's
impressions are a little out of date with what's really going on. We
can use this as an opportunity, I can tell you what we think's going
on.


Well, all right, since we're already there, let's talk about current
marketing strategy at NeXT.
	Maybe the best way to explain it is with an analogy I've used before
that seemed to work: Believe it or not, when we did the Macintosh, we
never anticipated desktop publishing. We didn't. We put the bit-mapped
display in place, we put the printer in place, but we never
anticipated PageMaker.
	We weren't smart enough. But we were smart enough to see it
happening
nine or twelve months later. We seized that, and we changed our whole
business strategy to focus on desktop publishing, even though the Mac
was quite good at other things too. Desktop publishing became the
Trojan Horse that got Macs into corporate America, and it was
successful.
	Jump to when we created the NeXT computer. When we created our
computer, we did not initially view it as a workstation because of the
blinders of our history. We viewed it as more of a PC on steroids, if
you will, than a workstation. Maybe more important, evenQwhen we
created NeXTstep, the goal was to make it be five to ten times faster
to create applications on NeXTstep than anything else.

[Someone once compared conversing with Steve Jobs to sipping from a
fire hose. At this point, I began to see what they meant.]

That was clear at the time.
	That was clear, and I think we succeeded at that. But the target
customer for NeXTstep, the beneficiary, was the shrink-wrap third
party software developer. The Lotuses, the WordPerfects, the Adobes.
And indeed it worked. We have a joke: the good news is we have the
third-best suite of productivity apps in the world. The bad news is we
have the third-best suite of productivity apps in the world. [laughs]
	But we really have an incredible investment in software. And tons of
packages shipping, two hundred and something of them now. Much more so
than any other workstation. We blow Sun's productivity software suite
away. Even if you compare us to the PC and the Mac, we now actually
have best-of-breed apps in most categories. We have the best version
of WordPerfect, and yet compatible with all the others. We have the
best version of Adobe Illustrator. We have the best version of this
and that. With Concurrence we have the best presentation program now.
So we're not doing bad.


You have other applications that don't exist anywhere, like Diagram,
which is an extraordinary piece of work.
	Or like the Boss Logic stuff.
	So, anyway, it basically worked...
	But an interesting thing happened. When we started selling a lot of
our second-generation product, the NeXTstations, this year, we turned
around in June and said, "Who's buying all these?" Because remember
last year we were eighty percent higher education. When we turned
around in June, the majority of our customers were large- and
medium-sized corporations.
	And we said, "Why are they buying it?" We went and asked them, and
it
was very clear. They'd discovered NeXTstep. And they were using it to
write their in-house mission-critical custom apps five to ten times
faster.


This was a discovery, not a plan? Really?
	Oh yeah, absolutely. It was not a planned thing.
	The concept that all big companies have a ton of mission-critical
custom apps they want to writeQthat they're all downsizing off of
mainframes and that they all want to write them on these desktop
platforms nowQwas something that never occurred to us.


Well, gee, there's been a hell of a dBASE market for a long time
now...
	Right. Well, when we started thinking about it, within a month it
became obvious.  People used to write custom apps on their mainframes
and their minis. Along came the personal computer, and rather than
wait three years for your MIS  Department to write something, you
could write a little bit of it yourself, using 1-2-3 macros and dBASE.
The problem was that kind of ran out of gas a few years ago, topped
out. And one could ask the question now, "What do you do now to get
competitive advantage when all your competitors have PCs on their desk
too, and they can buy the same shrink-wrapped stuff you can?"
	The answer is to write a mission-critical custom app!
	We weren't smart enough to see this. Our customers taught us this.
We
have redone our entire marketing strategy this summer, the
August-September timeframe, to focus on mission-critical custom apps.
And that is our Trojan Horse that is getting us into corporate
America.
	Now when we first explained this to our third-party application
developers, their initial reaction was to freak. They thought, "Oh my
God, you're abandoning productivity!" Turned out that it couldn't have
been further from the truth. What happens is that we're now selling
NeXT computers in clumpsQthe smallest clumps are usually like
twenty-five, the largest clumps, we just closed our first order for
over a thousand systems. And we have a lot of clumps that we sold for
hundreds of systems, one to five hundred. We get orders for one to
five hundred systems now, routinely.
	Well, guess what? All these customers want a bag of productivity
apps
to go on those several hundred systems, which can interoperate with
their custom apps. We've got one customer down in LA who's buying a
thousand copies of about six or seven apps. You should see all the
developers lining upQ"What do you need to do to make mine one of
them?" So our app developers have been more successful in the last six
months than they've ever been. Jumping out of this Trojan Horse, if
you will, once we get it in there.
	What we've seen is that even though our apps may be fifty percent,
even a hundred percent,  better than what you can get on a PC, you
need something that's even more of a compelling advantage to get
people to switch. Being twice as good ain't good enough.


People are willing to go on dancing with the devil they know for a
long time, or DOS would not still be the standard.
	Right. And they're willing to listen to how this other company's
going to have this in two years, why not wait, blah-blah-blah.
	So what we found is that with mission-critical custom apps,we're not
fifty percent or a hundred percent better, we're like a thousand
percent better. And it's over that threshold where somebody's willing
to take a gamble on us as a young company, because we're five to ten
times better. And that's what's getting us into these big accounts,
and that's who's then buying all the productivity software.
	So our business has flip-flopped. We're only about twenty-five
percent higher ed now. We're seventy-five percent commercial and
government.

 Okay, but I guess I still have a couple of concerns here. I agree
with you that this is a good way to go, it makes a lot of sense, and
it has the advantage of being a Trojan Horse that heads in through the
front office rather than the art department.
	That's right. We're getting called in by the CIOs of these
companies.
Which is a new experience. [laughs]

Right. But I'm trying to figure  out where that's going to leave the
individual customer. There are a lot of people who are disaffected
with IBM's latest Macintosh, and are really anxious to try something
else. I feel that this is a market that is not being addressed at this
point.
	WelllllII think you're right.
	We saw Apple start off with individuals and then pound on the door
of
corporate America and gradually get in a little bit through the back
door. They're not even in that far now. But they got in through the
back door.
	We saw IBM walk in the front door of corporate America and not pay
any attention to individuals, and gradually over time grab the
dominant share of individual use.
	So our path, for good or bad, is going to be more like IBM's. We're
going to get our company very successful  by selling to corporations.
And then hopefully as we can drive the prices of our products down
over time, we can become more desirable for individuals.
	We still do have a very strong commitment to higher education,
however, and we still do sell our products at a pretty deep discount
to higher ed. We're doing very well there.
	The other thing that's happened in that in our industry we've seen
radical changes in the distribution channel. What happened was that
the dealers...

Which are a moribund species, I think.
	It's over. What happened, though, if you go back and analyze it, was
that corporate America needed the dealers five or six years ago. They
didn't know much about PCs, they didn't know much about networking.
The dealers helped them a lot, and the dealers, you know, charged for
that. And there were some companies like Businessland that even built
their whole business  just focusing on that.


They didn't actually add much value.
	Oh, I think they did, five or six years ago. I think they did. What
happened was, the MIS departments started hiring really smart people.
I used to joke about how bad they were. You go to them nowQthey're
full of really bright people.
	These people had the advantage that they were paid a little more
than
the dealers, so they didn't turn over much. They knew a lot about the
internal workings of the companies, and the dealers didn't, and they
were generally quite smart. So one day the purchasing manager at a big
company woke up for the first time and said, "Why are we paying for
support twice? We're paying our internal group, and we're paying this
dealer." And they changed their priorities for purchasing PCs to
price, price, price.
	And all of the margin got driven out of the dealer channel, which
meant that all the people who knew how to create demandQlike go give a
good demo, tell you how to make it work when you had a problemQthese
people left, because the channel couldn't afford them. The channel
became demand fulfillment, versus demand creation and fulfillment.
	What's happened now is, since the channel's become just fulfillment,
somebody woke up one day and said "Why can't we do this over the phone
with Federal Express?" And in my opinion, all of the demand
fulfillment is headed towards mail order.

So why can't NeXT do that?
	Well, let me keep going.
	All the demand fulfillment is going to be in the Dell model.
Telebusiness. In my opinion, superstores are just a pit stop on the
way to telemarketing. I don't even see a reason to have a superstore.
Why get in my car and drive somewhere and pick it up when I can have
it delivered to my house tomorrow?
	So I think that the channel has been decimated, and that all
commodity products will be fulfilled through telebusiness.
	Now the big question is, what about innovative new products, where
demand still needs to be created? You can't create demand through
telemarketing. You can't create demand in a superstore. You can't even
create demand much in the existing few dealers that are left.

Especially for a product like yours, which is an environment. You have
to actually experience that environment.
	You have to have somebody show you.


And you have to be there for a while.
	Right. Yes. I agree. And you have to have a little hand-holding
while
you make the transition.

The learning curve has a cliff right at the bottom, but it's actually
pretty smooth climb after that.
	Right. I agree. But how do you create demand in a channel that's
purely optimizing for demand fulfillment? We saw Compaq come out with
their SystemPros and fall right on their face. Because even their
dealers, which were some of the best ones, couldn't create demand any
more.
	Well, I think the answer, for good or bad, is a direct sales force.
We saw Sun grow a three billion dollar company in the last five-six
years, off a direct sales force creating demand for their products.
And our model of selling has changedQwe are selling our products
primarily with our direct sales force. We have 120 professionals in
the field.

So it sounds as if I've been trying to get you to do something you're
already doing. I'm trying to convince you to sell direct, and you're
going to direct sales.
	We are. We have fifty reps, fifty SEs, and twenty management people
and support people in the field. And that's how we are selling most of
our product today.
	Now the direct sales people don't all have to work for us, so we're
signing on VARs,who have direct sales forces, to augment our direct
sales forces. And we then have some high-end dealers, almost VADs more
than VARs.
	We did a really smart thing. We commission our direct sales people
for any product that lands in their territory, no matter what channel
it came through. So they can sell it themselves, a VAR can sell it, or
a dealer can sell it. They make the same amount of money. So when they
get an order for ten, twenty systems, they call up the dealer and give
it to them. Because they don't want to take their expensive time,
they'd rather go focus on a hundred-unit order.
	So it's actually working pretty well between the dealers and the
VARs
and our direct sales people, because we eliminated channel conflict.


Okay, but what happens if somebody calls me up--as they do like every
other day--and says "Where do I buy a NeXT?" And they're calling from
Pittsburgh, and I don't know if there's a dealer in Pittsburgh, and
chances are if there is, he doesn't know what the NeXT he's selling
really is...
	I guess the corollary to this question is: what does somebody who is
a devout NeXT user and advocate do to help NeXT? I see a great deal of
frustration and disaffection in the NeXT user community, which is
about as rabidly devoted as anything IUve seen outside a religious
group, and they just donUt feel like thereUs anything they can do.
	Well, to make NeXT successful, weUve got to make NeXT successful in
corporate America.

You're probably quite right about that, but I have one caveat. As
Mitch Kapor [founder of Lotus] learned, eventually a company resembles
its market more than its maker.
	[Long pause. He smiles thoughtfully.]
	We'll see.
	We'll see.
	And I guess I've met a lot of people in corporate America that I
wouldn't mind NeXT resembling. There's a lot of good people out there.
As an example, there's a company called O'Connor that has hundreds of
our machines; they're in Chicago. These are a bunch of young bright
kids who have gone and outperformed almost every old-line firm in the
financial services industry. They are great. They come to workQthey
look like us, they talk like us, they live in Chicago, they started
this commodities trading firm, and they cleaned up in their industry
by bringing technology into that.


Well, look, I'm a Republican. I don't have a knee-jerk reaction to
business, but there are  elements of the corporate environment that...
Look, you actually led a revolution  that empowered individuals in
corporate America...
	Mm-hm.

...And I keep worrying about the possibility that the network is the
mainframe's revenge. That you're going to be leading the
counter-revolution whether you want to or not.
	No, I don't see it that way. We make computers that you can
disconnect from the network any time you want.
	But I guess I view the network as so important now, that it's just
becoming ubiquitous. And the reason is because computers are being
used more and more to communicate than they are to compute. Just like
we burned a ton of CPU cycles to make the user interface great on
Macintosh, we're burning a ton of CPU cycles now to help people
communicate. That's profound to me, and I don't think it's bad.
	I mean, I subscribe to a lot of your ideas. [Referring to the
Electronic Frontier Foundation.] It's got to be open, it's got to be
pervasive, and there can't be economic barriers to people hooking onto
this network. But I think the network, the concept of the network to
connect us all together with the right tools, is definitely the next
big step in our industry.


Well, I agree. I suppose my main mission is to connect everything to
everything else.
	Right.
	So I don't see that as the mainframe's revenge. I don't.


But there remains a sort of totalitarian potential in networked
computing that concerns me...
	Well, I view it as very important that you always ought to be able
to
go off under a tree by yourself with your computer and do something.
But I don't think it's going to be very long before your computer's
got  to have some radio net or something in it, because it's going to
be impossible to do anything without being hooked to that net. Sort of
like having a telephone that's not plugged in, that's not a cellular
phone, and going out and sitting under that tree. It's just not going
to be too useful.


Another aspect of your marketing strategy which concerns me is that I
wouldn't want to see the SIGGRAPH bunch left out. Or the music types.
There's a wonderful hybridization that takes place between the nerds
and the artists--more juice there than anyplace else in this culture.
	Well, look at our actions, and I think you'll see we're not leaving
any of that stuff behind. I think Wall Street's going to love
[PixarUs] RenderMan, but we're doing it for a lot of other reasons
than that.


Still, I wouldn't want to see this elegant thing become the faithful
servant of MIS and nothing else.
	Right. But you should see the people buying these things. Let me
give
you an example that's kind of not too traditional.
	Bozell Jacobs is about the tenth-largest ad agency in the country;
their biggest customers are Chrysler and American Airlines. They
bought several hundred of our computers, and we figured they were just
using them for productivity until we met the art director down there,
who was one of the key people that made the decision to go with NeXT.
	He said, "Well, that's one of the things, but that's not why we
bought them." We said, "Why did you buy them?" He said, "Well, did you
ever see these ads for American Airlines in the newspaper that list
all the flights and the prices for the next day?"
	"Yeah..."
	"Well, there's 150 of those that run every night around the country,
and they're all different because of different cities. You know how we
make those? We get onto the SABRE system manually every night, we
typeset them all manually. We're writing a custom NeXTstep app that
logs onto the SABRE system automatically, grabs the data, typesets it
automatically into the app, sends them onto the network around the
country, and prints them locally at the local cities."
	There's an art director writing this app. This is because of
PostScript and because of your database stuff. We used to think about
art directors getting competitive advantage by getting a Macintosh and
some page layout program. The world's moving beyond that.
	So I think we've got to be careful when we say "Let's not lose
traditional multifaceted markets." Those multifaceted markets tomorrow
are not what they were yesterday. And that's why we think we are able
to give some of them what they need to take the next step.

This is especially true in multimedia, where a lot of people who have
never given the Mac much thought are suddenly going to find themselves
trying to send video postcards.
	Hey, I'll give you an example of multimedia. You know, one of our
most multimedia-intensive customers is the Canadian Mounted Police in
Toronto.  [laughs] They're using NeXT systems to manage their whole
police department. Multimedia out the wazoo.

This is another one of these areas where I worry about the maker and
the market.
	Yeah, I know. [laughs] I know. It's funny, though.


Actually, the Mounted Police don't bother me anything like as much as
my recent discovery that the CIA is one of your biggest customers.
	I can't comment on that.z

---
This interview will be completed in NeXT month's issue. Jobs will
discuss chip choices, operating systems, standardization, multimedia,
and what he considers to be his personal mission in life.
	If youUd like to hear him in person, he will be delivering the
Keynote Address at NeXTworld Expo at the San Francisco Civic Center on
January 22, 1991.



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