The Disruptors

The Disruptors Steve and Elon

            Over the last decade two men have created disruptions in their chosen industries. These two men, Steve Jobs and Elon Musk have challenged the existing technologies and succeeded in creating new and exciting products. Although they are compared to each other they really are quite different regarding their life styles and goals.

            Jobs created the first successful personal computer, the first bit mapped mouse driven computer,  he changed the way music is sold, and listened to, the way animation is created, the most successful computer stores, and the greatest commercial of all time.

            Musk, still in his prime has participated in the development of Pay Pal, awakened the auto industry to the Electric Vehicle as a superior means of transportation, and is presently attempting to create reusable rockets for space flights. His future plans include manned flights to Mars.

 

Steve Jobs

Steve Jobs, the adopted son of a California family of modest means, graduated high school in 1972. Jobs next attended Reed college, a very expensive liberal arts college in Portland Oregon.

            Jobs became influenced by the book "Be Here Now by Baba Ram Dass (Richard Alpert). "It was profound" Jobs said. "It transformed me and many of my friends."   Jobs became a vegetarian, and a Zen follower. "I came of age at a magical time. Our consciousness was raised by Zen and also LSD. Taking LSD was a profound experience, one of the most important things in my life."

    Jobs felt guilty attending a very expensive college on his parents only savings. He decided to drop out after the first year, but remained living in other students dorm rooms, and auditing classes that interested him, such as dance and calligraphy. He always walked around barefoot.

            In February 1974 Jobs returned to Los Altos and got a job as a technician, working at Atari for $5 an hour. After six  months he left Atari and went to India, seeking enlightenment. He spent seven months in India, returning in January 1975. He also returned to Atari working the night shift.

            Steve Wozniak a friend of Jobs  was a design engineer at HP. As a hobby he  had designed a computer board that took advantage of the new microprocessors that had just come out, and it could be programmed with a keyboard not switches.

           Jobs convinced Wozniak that they could build and sell the boards.They set up and built the boards in the Jobs family garage. Jobs purchased the components and sold the boards to Home-brew Computer people.


Apple Computer

            Jobs convinced Wozniak that they should form a company. They did and called it Apple Computer. The boards they sold were called "The Apple 1".


The Apple 2

            Jobs realized that although he could sell hundreds of assemble it yourself computer boards for geeks, he could sell thousands if the computer came integrated in one package. Jobs decided that their next product, the Apple 2, would be an integrated package, it would contain the main computer board with display driver, a power supply and the keyboard.

Wozniak would design the new computer and Jobs would take the responsibility for the rest of the design, which he soon found out would cost about $200,000 with tooling.

Jobs found Mike Markkula to provide a $250K loan guarantee for one third of the company and also be a mentor to Jobs.

.           The Apple 2 became a big hit. Wozniak's superior design which now included color and Jobs integrated package which included a switching power supply, eliminating the need for a noisy fan, presented a much more sophisticated design than the competition. Apple was on its way. Apple would sell close to 6 million Apple 2s over the next 16 years. The  Apple 2, launched the personal computer industry more than any other machine.

        Wozniak continued to work on improving the Apple 2 design while Jobs tried to develop new products.

Going Public

In December 1980 Apple Computer went public and Steve Jobs found himself worth $265 million dollars.

The Macintosh

            In the spring of 1981 Jobs started the development of the Macintosh.

Apple management was happy to give him his own skunkworks in a building off the Apple campus.        

            Jobs insistence on having the best designers and programmers he could find and then with his "Reality Distortion Field" and his obsession with perfection, his "band of pirates" produced the Macintosh by the end of 1983. It was to be a game changer, as it was the first personal computer to utilize a bit mapped screen, enabling it to display and print different fonts, photographs and spreadsheets. It also used a mouse. It would take Microsoft  years before Windows would compete.

 

Super Bowl XVIII

            Jobs next move was to introduce the Mac to the world.  He worked with his agency Chiat/Day to create a one minute commercial to be shown in the third quarter of Super Bowl XVIII on Sunday, January 22, 1984.

It can be seen here.    http://youtu.be/2zfqw8nhUwA

            That evening all the networks and 50 independent TV stations were showing the ad, it went viral before the Internet. The ad won TV Guides and Advertising Age award for "Greatest Commercial of all time!"

The Fall

            The Macintosh sales were excellent for the first half of the year, however the original Mac was not without problems. Although it could do custom fonts, graphic images and photos, they took a longtime due to the slow CPU. The Macs also were overheating without an internal fan.

            Although Jobs enjoyed success with the  Macintosh, his relationship with Apple's then president John Skulley and the board soured until he was stripped of all responsibility.

NeXT

            In mid 1985 Jobs quit Apple.and formed NeXT Computer. Jobs realized that workstations were too costly to be used as personal computers. So he decided to design and build a cost effective personal workstation for academics, engineers and scientists.

             Jobs plan was to develop a high performance computer using a stable Unix base but embellished with object oriented software and a graphic interface.

            In October 1988, Jobs announced the NeXT computer. He held a very impressive demonstration of its abilities and at the end he announced the price $6,500. The associated printer was an additional $2,000. This and the fact that the computer             wouldn't be available till early 1989 were disappointing.

             When the NeXT computer finally shipped I'm mid 1989, the highly robotic factory Jobs had built could produce 10,000 computers a month, but sales  were averaging only about 400 a month. Sales lagged but Jobs kept improving the NeXT computer and although it was one the most advanced in the industry its price took its toll.

            One scientist who purchased one, was Tim Burners-Lee. Tim Burners-Lee

 was a software engineer at CERN, the large particle physics laboratory near Geneva, Switzerland. He used the NeXT computer to develop a method of communication for scientists to transfer documents and share conversations. That development was the Internet.

            In 1993, due to slow sales, Jobs quit manufacturing the NeXT computer, and

 NeXT became a software only company. The product was called NeXTSTEP and consisted of the operating system and an object oriented development environment.

 

Pixar

            In January 1986, Jobs was given the opportunity to buy Pixar, a company making  high level graphics computers for animation Pixar also had an animator (John Lasseter) who made animated shorts to demonstrate the computers ability. Pixar's largest customer to date was Disney. Jobs bought Pixar from its owner George Lucas for ten million dollars

            Jobs recognized that John Lasseter was an exceptionally gifted person and encouraged him to work on a full length film he called Toy Story.  At the same time Jobs convinced Ira Katzenberg, Disney's president, to partner with Pixar on the film. Katzenberg agreed to handle the movies rollout and advertising for Toy story.

            By the time Toy Story premiered in November 1995, Jobs had put $50 million of his own money into Pixar. He was not happy that he was not in charge, Disney was able to call the shots because they were spending the money.

            Jobs took a gamble and arranged for Pixar to go public a week after Toy Story premiered. Pixar had been hemorrhaging  money and Wall Street recommended an opening bid of $14, Jobs insisted on $22.

            Toy Story opened to rave reviews and recouped Disney's money with a $30 million weekend. That week Pixar went public the stock rose from $22 to $49 before closing at $39.

This gave Jobs $2.1 billion dollars for his 80% stake in Pixar.  It also allowed Pixar to provide half the funding for future movies with Disney, and reap half the profits.

     The relationship between Disney and Pixar continued for another 10 years, until in Jan 2006, Disney bought Pixar for $7.4 billion. Pixar by this time had won 7 academy awards for best animated picture. Jobs received payment in Disney stock, making him the largest stockholder in Disney.

 Apple Again

            By December 1996 Apple sales had fallen 30%, the company had failed to produce an up to date operating system and windows computers now had started to take over.

Jobs sold his company NeXT for four hundred million dollars to Apple, providing them with a team of programmers and a new operating system and also Jobs!

            In January 1997 Jobs went back to Apple as an "advisor," but he soon ended up running the company, by July 1997, Gil Amelio the then president at Apple resigned and Jobs took over.

            His leadership from that day on brought about major changes in the world of computers and more. Jobs recognized that the personal computer should be the hub of a series of devices it serves.  Below is a chronological list of Apples accomplishments upon his return.

 On August 1998 the iMac went on sale and sold over 800,000 units by the end of the year, making it the fastest selling Apple computer ever.

 January 2001,    Apple introduces iTunes at the Macworld conference. The advertising slogan was "Rip,Mix and Burn.

  May 2001, Apple opened their first retail store. Today there are well over three hundred Apple stores that sell more dollars per square foot than any other retail stores. Second is Tiffany's which sells about half.

 October 2001 Apple introduces the iPod. A music player holding 1000 songs, that integrates with the iMac and iTunes music store.

 April 2003 Apple opens the iTunes Store selling single songs for $0.99

 January 2007 Jobs introduces the iPhone,the first truly smart phone at the time.

January 2010 Apple introduces the iPad.

 

October 5, 2011 Steve Jobs left his moral coil.

Elon Musk

            Elon Musk grew up the son of a wealthy family in South Africa, He attended high school in Pretoria and then migrated to Canada where he obtained a Canadian citizenship, (his mother was Canadian), hoping to enter the US. In 1992 Musk attended the Queens School of Business in Kingston Ontario for two years, before transferring to the University of Pennsylvania. There he received a bachelors degree in economics from the Wharton School. Musk stayed on for an additional year receiving a degree in physics.

Musk then moved to Palo Alto California where he and his brother started their first business.

            Very Talented, (at the age of 12 he designed and sold a software game for $500). In Palo Alto he and his brother developed  a  mapping software program called Zip2. In 1999 Compaq purchased  Zip2 for $307 million. Musk received 7% or $22 million. Musk then formed a new company called X.com which was an online financial services and email payment company. X.com merged with Confinity (which owned Pay Pal) in 2000, and soon Musk was part of Pay Pal, which in 2002 was sold to eBay for $1.5 billion dollars.

           

Space X,      in 2002 Musk received $165 million for his 11% share of Pay Pal and  immediately took $100 million of it and co-founded Space X  with rocket propulsion engineer Tom Mueller.

Wikipedia:      "Tom Mueller is an American rocket engineer and rocket engine designer. He is considered one of the world's leading propulsion experts and holds several United States patents for propulsion technology."

            In 2008 Space X was awarded a $1.6 billion contract  to supply 12 launchings to the International SpaceStation. It has successfully launched four so far and is in the process of designing recoverable rockets and a launch vehicle to shuttle astronauts to the Station.

            Presently Space X is suing the Air Force to be able to bid on Satellite launchings. The Air Force has resisted claiming that Tesla rockets have only demonstrated a 67% launch success and must keep changing their design, which requires additional rockets to be added each time the payload is increased. The Air Force is evaluating SpaceX for future launches.

  Tesla,                      

          In 2004 Musk was asked to join the Tesla company. Its founders Martin Eberhard and Marc Tarpenning in concert with AC Propulsion had designed the Tesla Roadster and were in need of financing to continue. As a condition of his financing, Musk was appointed chairman of the company. Musk obtained rounds of financing with help from Google's Sergey Brin and Larry Page and eBay's Jeff Skoll. Problems with the Roadster development caused large losses and finally In 2006 Eberhard and Tarpenning left. Musk continued running the company and developed the Model S, which is now in production. The Model S has received stunning reviews and competes very well in the $100K  plus market. Tesla is expected to ship 35,000 in 2014.

            The Model X SUV is scheduled to start shipping in2015, and a $35,000 Model 3, EV  with a 200 mile range is promised by 2018.

 Solar  City,

            Musk was very impressed at the energy storage  level achieved  by the Tesla battery pack. He envisioned that the battery packs could also be a means of storing solar energy during the day to use at night. Musk helped his cousins to financeSolar City, holding about 25% of the stock and is Chairman. Solar City installs solar panels on your roof and the electrical system for feeding back on the grid, for a fixed price which is cheaper than grid power.

 

The Disruptions        

Steve Jobs: Jobs' was a person who demanded perfection his presence permeated all phases of a company.

            The Apple 2 was the most successful personal computer.

            The Macintosh was the first mouse, bit screen computer.

            His Mac ad was awarded "The Greatest of Commercial of all time."

            His NeXT computer was used to design the Internet.

            He converted Pixar from a computer company to an animated movie                     company, and won more academy awards than Disney and SKG combined.

            The entire music industry has been upended by the $0.99 song on the iTunes Music store easily downloaded to a Mac or iPod.

            The cell phone became Apple's in 2007 when Jobs introduced the iPhone.

           

           

 

Elon Musk: Musk is a more disciplined person, getting degrees in Economics and Physics before entering the business world,

            He then capitalized on his programming genius to develop a mapping program which he sold to Dell. He next used his economic knowledge with his programming ability to develop many of the features of Pay Pal.

Musk disrupted Space exploration by being the first private company to launch to the space station. He is attempting to develop reusable rockets which will save a fortune. His vision is to put men on Mars.

            At Tesla Musk developed the first world class electric automobile. The Model S is the standard from which all future EVs will be judged.

            Musk is only 42 years old, the same age Jobs was when he returned to Apple in 1997, so we can expect more to come. Especially trips to Mars.