Why was the Apple company founded?

Birth of a Myth: The Creation of Apple

Apple History - history

Chapter 01

2nd edition from December 2009

According to the myth, Apple Computer, the company with the bitten apple as its logo, was founded on April 1, 1976 by 21-year-old Steven Paul Jobs and almost five years older than Stephen Gary Wozniak in the garage of Job's childhood home in Los Altos near San Francisco founded. Apple's founding story tells of a typical garage company as there were thousands of them in Silicon Valley in the 1970s, and is now widely regarded as the truth about Apple's legendary origins. There's only one catch to this story: it's wrong. In fact, that day in April 1976, Apple was founded by three partners in a bedroom. In addition to the two Steves, Jobs and Woz, a third person was also involved: Ronald Gerald Wayne, a 41-year-old graphic designer who, like Jobs, worked for the game manufacturer Atari.
Jobs brought his friend Wayne on board in the hope that he would have an advantage over Wozniak in important decisions. So it happened that Wayne owned ten percent and the two Steves each owned 45 percent of the shares in their newly founded company. With that Apple was born.

Steve Jobs and Stephen Wozniak met several years before Apple was founded. Jobs grew up with his adoptive parents Paul and Clara Jobs in Mountain View and later in Los Altos, two small towns in Silicon Valley. The area was known for its high density of companies in the electronics industry, companies such as Hewlett-Packard and IBM were based there.
It didn't take long before Silicon Valley developed into a paradise for passionate hobbyists and tinkerers who dedicated their lives to electronics. Shaped by the work of their parents in the electronics departments of large companies and thanks to the numerous electronics dealers and production facilities, young hobbyists found ideal conditions in Silicon Valley to pursue their hobby. One of these hobbyists was Stephen Wozniak, always called Woz by his friends, the neighbor of Bill Fernandez, a classmate of Jobs. Woz, who already noticed his teachers as a great electronics talent when he was still at school, constructed his first computer together with Fernandez in his garage at the age of 21. The computer already had a few switches and LEDs, Woz called it the Cream Soda Calculator. One day Fernandez invited his schoolmate Jobs to the garage to show him the computer. This led to the first meeting between Jobs and Woz. Steve Jobs was deeply impressed with that computer. After this first meeting, the two Steves lost sight of each other for a while. It wasn't until Jobs was able to work at Hewlett-Packard, Woz's employer, for a few weeks during his school vacation, that the two met again and became friends.
At that time Woz was working on the construction of a so-called blue box. This device allowed free long distance calls by emulating the telephone company signals. Jobs procured the components for the blue boxes at a price of just 40 dollars, had the devices assembled by Woz and then sold them to students for 150 dollars. The two shared the income among themselves. When the controls were massively tightened in 1972, they had to stop selling their blue boxes.

In the years that followed, Jobs turned his back on Silicon Valley and studied at Reed College in Oregon, but dropped out early to travel to India with his friend Daniel Kottke in search of spiritual enlightenment. It wasn't until 1974, after a two-year absence, that Jobs returned to his parents' home in Silicon Valley. There he found a job as a technician at the game manufacturer Atari.
Shortly before that, Atari had launched the first video game in history, an electronic table tennis game called Pong. Pong hit the gambling palaces like a bomb, and the sales figures exceeded all expectations. Steve Jobs was given the task of developing the electronics for the successor product. In this game, which was called Breakout, the player had to hit a ball on the bricks above with the help of a bat at the bottom of the screen. Jobs soon realized that he was mercilessly overwhelmed by the task and turned to his old friend Wozniak for help. He worked four nights in a row on a draft for Breakout. Stephen Wozniak's version of Breakout took only 42 chips and was so good that no Atari technician could understand how the circuitry worked. In order to deliver the game, Atari had to redesign it internally. Wozniak received $ 350 from Steve Jobs for his help, half of what he received for the development of Breakout, according to Jobs. It wasn't until years later that Woz found out that Atari had paid $ 5,000 in Jobs and that Jobs had cheated on him.

In 1975, MITS launched the first computer kit, the $ 397 Altair. This started the age of the personal computer. Inspired by the Altair, more and more hobbyists began building their own computers in Silicon Valley. Some fanatical inventors then founded the Homebrew Computer Club, which gave them the opportunity to present their own designs and to discuss new ideas and concepts. Wozniak was there from the start, and Jobs soon took part in the meetings on a regular basis. One day Woz unveiled his latest design, a powerful computer with a television connection. The computer had a keyboard and could be programmed in BASIC.

Jobs recognized the potential of this computer at first glance and proposed to found a company to sell the computer constructed by Woz commercially. Wozniak, who preferred to design rather than sell computers, did not want to jeopardize his job at HP for no reason. Only when Jobs promised him that setting up his own company would finance the development of a successor to the computer and that he also landed a third partner in Ronald Wayne did Woz finally agree. The three named their company Apple Computer and named Wozniak's computer Apple I. Wayne, who kept his job at Atari, designed a company logo for Apple in his spare time. His design showed Isaac Newton sitting under an apple tree, on the frame read “Newton… A mind forever voyaging through strange seas of thought… alone”, a quote from a poem by William Wordsworth.

After it was founded, Apple needed as much capital as possible to finance the production of the Apple I. For this reason, Jobs sold his red VW bus for $ 1,500 and Wozniak received $ 250 for his HP 65 programmable calculator. Apple soon had its first success when Paul Terrell, the owner of the Byte Shop, launched the Apple I. saw at a homebrew computer club meeting and ordered 50 copies priced at $ 550 each. But Terrell wanted to sell the Apple I as a complete computer and not just a circuit board. So Apple not only had to find the financial means to build the computers, they also had to design a case and a cassette drive. While Woz took care of the technical problems, Jobs was able to negotiate a loan of $ 5,000 and a deferred payment for the purchased components in the amount of $ 15,000. In order to finally assemble the computers, Bill Fernandez and Daniel Kottke helped at times.

While Woz and Jobs worked around the clock on the computers for the Byte Shop and were ready to go into debt, the risk became too great for Wayne. He wasn't sure if Terrell would really pay for the computers he ordered. Wayne could be made indefinitely liable for Apple's debts through the founding contract and therefore decided to get out of the contract. Twelve days after Apple was founded, Wayne sold his shares to Jobs and Wozniak for $ 800, leaving the two of them on their own again.
In retrospect, Wayne's concerns proved false. Terrell paid for the devices on time so that Apple could settle its debts. With this first order, Apple made almost $ 8,000 in profit, and Jobs wanted to increase production. So in August 1976 he reached out to Armas Clifford ‘Mike’ Markkula, a wealthy stockholder in numerous electronics companies who had retired early at the age of 34. A quarter of a year after meeting Jobs, Markkula gave up his retirement, invested $ 92,000 in Apple and also got Apple a quarter of a million in a loan from Bank of America. On January 3, 1977, Jobs, Woz and Markkula jointly applied for Apple Computer to be incorporated, thus laying the foundation for later success.