We had the great opportunity of hosting Adam Lashinsky, editor @ Fortune and author of Inside Apple, come and speak at Startup Grind shortly after the death of Steve Jobs and with Tim Cook only a few months as CEO. During this interview Adam shares an inside look at how Apple really works, the everyday secrecy surrounding it, and his insight on what direction he believes the company will go in. Be sure to watch and learn about what really goes in inside the most valuable company in the world.
[00:03:15.55] DEREK: So let me introduce Adam Lashinsky. Adam, we are so fortunate to have him here tonight. Adam is the senior editor of Fortune. He’s the author of Inside Apple. He’s written about basically every major company here in the valley, from HP to Oracle to Twitter to, obviously, Apple and Google. Previous to Fortune, he was at the San Jose Mercury News and The Street. Let’s give him a big Startup Grind welcome. Adam Lashinsky. Here we go! Welcome!
[00:03:58.23] ADAM: Thank you.
[00:03:59.52] QUESTION: I don’t have to tell you – I know you’re good at speaking into mics, so we will…please speak in if you can. Welcome to Startup Grind! All the way from San Francisco?
[00:04:13.74] ADAM: All the way from Potrero Hill.
[00:04:15.79] QUESTION: Okay. Wow. Well, to get started, we always like to find out a little bit about our speakers. I know you hail from Chicago. So tell us a little bit about growing up in Chicago, and about your family – your parents and your sisters.
[00:04:35.00] ADAM: Okay! I was born and raised in a suburb of Chicago called Skokie. It’s most famous for where the American Nazi Party tried marching in 1978 or 1979 to try and piss off all the retired Jews who were concentration camp survivors, which was really nice of them. They didn’t end up marching in Skokie – they only marched in the movie The Blues Brothers instead. You asked me about my parents. My father is from Omaha, Nebraska, and is a retired corporate economist. He worked for a steel company for almost 30 years. When I was a little boy and I would visit him in his office in the Loop in Chicago, people would look at me strangely and say, “Are you going to be an economist, too, someday?” Because they thought he was strange, as the economist at a company. My mother, who passed away five years ago, right after my five year-old daughter was born, raised three children. I have a sister in London, and another sister in New York.
[00:06:00.674] QUESTION: So you didn’t become an economist. But you went to school in Illinois. Was your plan from the beginning to be a journalist? What was your thought? What did you want to be when you grew up?
[00:06:13.32] ADAM: No, it wasn’t my plan. I was a political science and then history major, and was headed toward going to law school. I met a lot of miserable law students and decided that I didn’t really want to be a law student – or a lawyer. I got really lucky toward the end of college. The summer before my senior year, I was dating a girl who worked for the Daily Illini (the very fine student newspaper at the University of Illinois at Urbana-Champaign) and I contributed some political columns from Washington, where I was doing a summer internship with a Congressional Caucus. I really liked seeing my name in the newspaper. I talked my way into a regular column the following semester and really enjoyed that. I thought I wanted to be William Safire at the New York Times (if anyone remembers who he was.) It dawned on me that the New York Times would not be giving me a column the following year when I graduated from college, so spring term, I became a reporter for the paper, and I would take any assignment that the editors would give me. I was older than the editors, so I could do what I wanted. And I fell in love.
[00:07:32.40] QUESTION: What were you writing about initially? What were some of your stories that got the most page views back then?
[00:07:39.92] ADAM: (laughs) Thank you for pointing out my age, since there weren’t page views at the time, obviously. So, my column was about politics: Campus politics, national politics, international politics. I was hungry for bylines (that’s the way journalists think – you want more bylines, more clips to show future employers) so I covered a protest at the local dry cleaner, because the animal rights activists were upset that they were storing fur coats. I covered telephone company rate commission hearings, I covered a very controversial topic which was an effort by the federal government to close a local Air Force base. I went to Washington to cover that and also a womens’ march for equality on Capitol Hill. I took everything I could get.
[00:08:30.03] QUESTION: Wow. Did you have a love for tech? Or was that something that materialized later? Did you grow up with a computer in the home?
[00:08:41.68] ADAM: No. To this day, I’m not a techie per se. I took a handful of business classes in college, because my father really insisted that I do, so I took a couple econ classes, an accounting class, a finance class…so I graduated being comfortable with the lingo of business. I went to Washington because I was interested in politics, but the first job I got was in business journalism. So I just became a business generalist over the first ten or so years of my career. I did cover technology in Chicago, which, when I applied for a job at The San Jose Mercury News, they said, “You covered technology in Chicago – what is that good for?” Not much. But I talked my way into the job. I’ve always billed myself as a business journalist covering the technology industry, not a technology journalist covering the technology industry. That turned out to be really useful when I started this tech stocks column at The Mercury News in ’97, because really, all the emphasis had been on technology. And I showed up in the offices of analysts, investment bankers and chief financial officers who were delighted to see someone at The Mercury News who gave a shit about finance. Because everybody else wanted to talk about the “important topics” that weren’t my topics.
[00:10:06.68] QUESTION: So that was a really fresh take. That was ’97, you said? That you got to San Jose Mercury News?
[00:10:15.53] ADAM: As the first bubble was inflating, yeah. And the year that Steve Jobs came back to Apple.
[00:10:20:44] QUESTION: Before you got to The Mercury you spent time in Tokyo, and you said earlier you spent time in Washington, D.C. Tell us a little about what you were doing there, and what your experience was there.
[00:10:31.93] ADAM: In Tokyo?
[00:10:32:81] DEREK: Yeah.
[00:10:33.35] ADAM: I was a recipient of a fellowship from the Henry Loose Scholars Program, which sends a group of young Americans, young being under the age of 30, but college graduates, to Asia for one academic year, even though it’s not an academic fellowship – it’s a work fellowship. And the only requirement other than the age is that you not have any significant Asia experience before winning. They wanted to send, each year (it’s still ongoing) a group of promising – their definition – young Americans to experience Asia. It started 30 years ago on the assumption that not enough Americans knew enough about Asia. So they found me a position at The Nikkei Weekly which is the English-language weekly edition of the Nihon Keizai Shimbun which is Japan’s Wall Street Journal, and I hung out with a bunch of Japanese journalists and wrote some stories as best I could, since I didn’t speak Japanese very well -
[00:11:29:71] QUESTION: You wrote in Japanese?
[00:11:31.55] ADAM: No, it was an English-language weekly, so I wrote in English. I traveled all over Japan, all over Asia – drank a lot of beer and ate a lot of noodles.
[00:11:40:92] QUESTION: Awesome. Let’s talk a little about journalism. As you said, you almost fell into it. But what about your profession, and what about being a journalist, do you really love? And also tell us, what makes for a great writer? Is that something you can kind of check boxes on? Is it different all across the board?
[00:12:08.89] ADAM: So if you ask any professional journalist if they identify as a writer or as a reporter, most of them will be able to answer that question one way or the other. They’ll either say – so, for the first fifteen or so years of my career, I would have told you I was a reporter. What I loved was going out, meeting people, talking to them, hearing their stories, synthesizing their stories, networking, putting people together, piecing together the story, and so on. I was a news guy for the beginning of my career. When I got to Fortune – Fortune values writers. People who can craft stories. I was already in my thirties at that point. And I worked really hard at becoming a writer. I’ve come to appreciate the value of writing long form narrative stories. It did not come naturally to me. I’m really proud of my writing today, but it’s something I worked at the way – you know, you hear even gifted professional golfers work for hours at their swing? I worked really hard at my style as a writer. You ask me what I love about being a journalist? It’s really the reporting that I love. No two days are the same for me. I don’t spend all day any day in the office. Some days I’m in the office – most day’s I’m not. I love being out talking to people.
[00:13:26.45] QUESTION: How have the cycles changed in the last 20 years? You know, it’s easy for us to recognize today this 24-hour news cycle. And with tech, you know, even in the three years since I left my corporate job with EA, it has sped up dramatically since then. Tell us, looking back ten, fifteen years, how has technology and how it’s been reported – how has that morphed and changed?
[00:13:53.29] ADAM: So, I’m not the best one to ask, and here’s why: When I worked thestreet.com, I tended not to watch CNBC, I didn’t like CNBC, and I don’t object to CNBC per se, but I didn’t want to watch CNBC because I found that it polluted my thinking. I didn’t need all that noise. If I had all that noise, how was I going to do my own thing and come up with my own ideas? So, similarly today, I’m not a habitual reader of the tech blogs, for example. Of course I see things. But it’s not my destination. Because I feel – I read a lot of things. What I read happens to be fairly traditional. But I don’t feel like I need to know every little thing. Because if I know every little thing, it’s going to be crowding out my own ability to analyze and synthesize and come up with the really important things. So to me, yes. I understand things have sped up. But I think it’s something of a pendulum, and I think the pendulum swings and it will continue to swing. You know, before there were blogs, there were newsletter writers. Some crackpot – everything from some crackpot cranking out something in his basement on some conspiracy theory up to people writing really valuable newsletters about, say, the stock market for thousands of dollars a month. And everything in between. Blogs replaced newsletters; there’s really high-quality blogs and really low-quality blogs. There’s really high-quality journalism and there’s crap journalism. And my point is, there always has been.
[00:15:38.99] QUESTION: Yeah. In terms of print media, you know, do you think our grandkids will know what magazines are? What is your take on the evolution of the magazine?
[00:15:49.86] ADAM: They probably won’t. Because print probably isn’t going to be around at some point when our grandchildren are consuming the news – or consuming information. You know, I personally have gone from being upset about that to – what is it, the twelve stages of denial? I think it’s a happier ending than that. I don’t think information and storytelling are dying. And so we professionals get really hung up about print or digital or broadcast – but I’ve come to understand that I don’t really care about that. I’m really confident that people are going to continue to want high-quality journalism. And I’m somewhat confident – or resigned to the fact – that the smart people on the business side will figure out how to sell it. And you know, they’ll keep paying me to create it.
[00:16:52.81] QUESTION: What publications do you read, do you respect, outside of your own?
[00:16:57.56] ADAM: So like I said, I’m really traditional in my appetites. I read, every morning – I love the Onion, I’m not a regular, but they’re awesome. No sarcasm there. But every morning I read The San Francisco Chronicle, The Wall Street Journal and The New York Times in print. I love to then go to their websites and send out stories whether to friends or on Twitter or Facebook. I like grazing both ways, if you will. For fun, for my own enjoyment, I read The New Yorker, Vanity Fair, and I get The Economist which I think is phenomenal, and so on. I’m personally very traditional in my media tastes. And I believe more than ever that I like reading newspapers. Now, if newspapers go away, I’ll survive. I’ll suffer through it.
[00:17:52.83] DEREK: Save some old ones, and just…
[00:17:54.56] ADAM: I’ve saved some, yeah, I have.
[00:17:56.95] QUESTION: It’s funny, actually, you mention that. I remember – Sunday morning as a kid, that was a highlight of the week, right? Getting a newspaper, sitting down and just going through it. That was, you know, ten, fifteen years ago. Well, not ten, but fifteen.
[00:17:54.56] ADAM: Yeah, it was a big deal around my house. Absolutely. This sounds sort of corny, but I can smell the coffee and taste the bagels with lox and cream cheese and the Sunday paper and classical music playing – I mean, that was our Sunday morning routine as a family.
[00:18:31.48] DEREK: Yeah. Let me just make one quick announcement I forgot to make – can I grab that from you, Erica? We’ve got a couple of books we’re going to be giving away to some of the people on Twitter. So, @StartupGrind and also put @RingCentral in there – we’ve got some books here that Adam’s already signed, so, take pictures, tweet out and please tag Adam in there as well. Big thanks to Don – what happened to Don? He just went on a goose chase and got this drink. Can we just give Don a round of applause real quick? I don’t know what he’s doing. Oh, there you are, right there. I can’t see you, sorry.
[00:19:10.09] QUESTION: So, talk to us a little bit about Inside Apple. This is a really, absolutely fascinating book. Apple had, kind of, so much press at the end of the year, and then into the beginning of the year – and as I was reading it, I was just… it was so valuable to me to just listen to some of these lessons and go through them again. And that’s why we really wanted to have you hear, and why we’re so excited to have you. But talk just a little about the process of coming up with the idea. Where did it come from, and how did that all kind of materialize?
[00:19:50.97] ADAM: Sure. So I’ll try to be concise, and you can guide me if I’m saying too little or too much on this, because this is my life’s work for the last year and a half or so, so it’s something I’m passionate about, excited about. The genesis of…well, there’s a couple of genesises, if that’s a word – of, this book…the first is, I was never “The Apple Guy” for Fortune, other people were the Apple guys and gals, but for a variety of reasons in 2008, one of my editors said to me (this was during one of Steve Jobs’ illnesses or medical leaves) “If Steve were to not make it, who would be the next CEO of Apple?” And I said, “Well, you know, obviously it would be Tim Cook.” And he said, “Why is that so obvious? I’ve never heard of that guy.” And so I said, “That’s a good story, if you’ve never heard of that guy.” So I did a profile in 2008 – the cover story in Fortune was called “The Genius Behind Steve: Meet The Operations Whiz Who Could Be The Next CEO of Apple.” And I quoted people who said – and it was a widely held opinion at the time – “No way is Tim Cook going to be the next CEO of Apple! Not that guy! He’s so different from Steve Jobs in so many ways.” So that was a really interesting story.
[00:21:03.09] QUESTION: Well, that was from some sources. You’re saying – you got both sides.
[00:21:06.36] ADAM: Well, I believed from focusing on what was going on at Apple, and talking to Apple people, that he absolutely was going to be the CEO. It was obvious to me at the time. You talk to people at the time, they’d tell you, “Well, Tim’s already running the company, with the exception of the things that Steve does.” And that was my first big Apple story, and that kind of made me the Apple Guy. Since then, I’ve only – well, including the one that’s on newsstands right now, I’ve only done three since. One was when we made Steve Jobs “CEO of the decade.” I did that story. And then a year ago, I did a story in the magazine called “Inside Apple” and our working title was “How Apple Works.” The operating idea behind the story – and this started with one of my editors as well – was, you know, we know everything (or, we think we know everything) about Apple. We know about its products. But what do we know about how this amazing, successful, phenomenal company actually operates? Well, not much. Why? Because they won’t tell us. Now, half a step back, this grew out of a meeting that Steve Jobs did with a bunch of Time, Inc. editors in New York, where they got to talking, and he said, “We don’t have committees at Apple. We don’t believe in committees. We behave like a startup.” And my editor, Andy Serwer, the editor of Fortune magazine, said, “Oh, really? That’s interesting. Tell us more about that.” And you know, he talked about it a little bit. And Andy said, “We’d love to do that story.” And Steve said, “Yeah, you know, maybe we will.” Which was his way of saying no. That was his brush-off. But Andy didn’t forget that. He said, “That’s our story. Let’s do that story.” That was the genesis. And that’s what I spent a lot of time on first doing that story in Fortune. We could talk about what was in that story – there were a whole bunch of things that were well known in the community of Apple employees that had never been reported before: The DFI, the top 100, the VP and the janitor…
[00:23:03.83] QUESTION: That’s where the top 100 came out? I didn’t realize that.
[00:23:05.20] ADAM: Yeah. And then, very shortly after that article appeared, I sold it as a book.
[00:23:13.02] QUESTION: Okay. So talk to us a little about the process of creating the book. In terms of some of the logistics of that. Like, so you have this great success with the story – it’s widely liked, it’s a topic people are interested in hearing more about, and you decide, “I’m going to write a book.” And then what? What happens the next morning?
[00:23:36.00] ADAM: (laughs) It almost was like that. Just by way of interest, I’l take a half a step back. We did an experiment with this story. We knew it was going to be a hot story, so we didn’t put it on our website. We created it as an E-single at Amazon for purchase. I’m forgetting the exact lingo because at Amazon there’s a different between a Kindle single and an E-single. A Kindle single is an original work of art so I think this was an E-single. And we sold it for – I think – 99 cents. It was an interesting experiment. It was successful. But people were very frustrated that they couldn’t get it for free, which we were amused by. And we were frustrated too that they were frustrated, and all that. But that’s not what you asked me about. My editor at my publishing house and I agreed that we need to move quickly. We knew Walter Isaacson’s book was coming out and we didn’t want to lag his book by a whole lot. At the time – this was in June of 2011 and Walter Isaacson’s book was scheduled for March of 2012 – people forget that. We wanted to beat him to market. I want to be clear that was the primary reason behind the timing. The secondary reason for the timing was that we knew Steve Jobs wasn’t going to live forever. We had no idea what the timetable would be, and very few people did. Right down to the point where – a lot of people deluded themselves, in retrospect, in thinking that when he resigned in August of last year that he was going to live a lot longer than six weeks. But anyway, we knew it would be a good idea to move faster rather than slower. So, I spent some period of last summer doing additional reporting, some period of last summer attending to Fortune Brainstorm Tech, which is the conference that I co-run at Fortune, and then some period of time on vacation, which was very stressful being on vacation on the East Coast knowing this was hanging over me. And then I took off the month of September last year and wrote a rough draft of the book, and I spent the next several months revising it.
[00:25:51.92] QUESTION: Had you done all of your research and all of your interviews, primarily, before that?
[00:25:57.46] ADAM: I took work…yes. But I really kept reporting while I was writing because of the time sensitivity. I kept gathering more information – buttressing things I’d already done.
[00:26:08.92] QUESTION: How many people did you interview?
[00:26:10.68] ADAM: I don’t know the answer and I guess I should – I haven’t had a spare moment to sit down and count, but I need to do that. It was, you know, dozens.
[00:26:20.41] QUESTION: Do you know how many hours – have you figured that out? How many hours? Hundreds? Thousands?
[00:26:25.83] ADAM: Well, you could do the math. You could help me; there’s probably a mathematician or an engineer in the room. I mean, I spent, you know, from about mid-July through the end of the year – you know, I spent most 40-hour workweeks on it, and I’ve taken a lot of time since the book’s been done going out and promoting it.
[00:26:47.54] QUESTION: Yeah. And did you, in terms of that first draft, how different on a percentage basis was the first draft versus the version we’ve read?
[00:26:56.59] ADAM: About consistent with the magazine article – the essence of what you read is what I filed on the first day. But it was missing things. It was missing whole chapters, and it was missing parts of chapters. And everything in it became better. My editor, whose name is John Brody, who was an editor at Fortune magazine, is a fantastic book editor. And he’s a collaborator and a friend, and he knows when he reads the book which parts he was responsible for. And so do I.
[00:27:29.60] QUESTION: Do you – when you actually sit down to write – do you have a specific pattern that you follow in terms of either your book writing or also just your magazine writing? Do you write in the morning? Do you write with your cell phone off? Are there certain things you do?
[00:27:50.56] ADAM: Yeah, first I procrastinate. I heard a real giant in the writing field speak last weekend – Aaron Sorkin – talked about the same thing. He said the beginning of the writing process doesn’t look like writing – it looks like watching college sports on TV. And I can really relate to that. Now, I didn’t have a lot of time on this book to mess around, so I got down to business pretty quickly. And what I did is, there’s a university library near where I live that has high-speed internet and a pub with food and coffee – I don’t mean, I mean I would have an occasional beer, but more the fact that there’s food and drinks to be had – and my gym is nearby…so, when I wasn’t going to work at Fortune, I would go to this library all day. And I would take out time to eat and work out. And that was my way of not having the distractions of the office or of home.
[00:28:42.83] QUESTION: Did you write in the pub?
[00:28:42.83] ADAM: Not much. I mostly wrote in the library and late at night.
[00:28:49.63] QUESTION: Did you write it on a MacBook?
[00:28:51.81] ADAM: I wrote this book – I’m not embarrassed to tell you I wrote this book on an HP Latitude laptop. You don’t want to know why.
[00:29:02.54] QUESTION: Tell us, why?
[00:29:03.69] ADAM: It’s my work-issued computer and it’s smaller than my MacBook Pro, so it’s easier to carry around. I know, I threw you with that, didn’t I?
[00:29:15.71] QUESTION: I mean, that’s – do they know that? Do people ask, I mean…?
[00:29:19.21] ADAM: Yeah, some people know. Some fanboys are really pissed off about that.
[00:29:25.71] DEREK: (laughs) As eight people walk out. We want refunds!
[00:29:30.66] QUESTION: So, tell us a little bit – let’s talk about the internal secrecy of Apple. One really interesting comment I thought that I had never heard before was how some of the meetings began with the employees, “If you say anything about what we’re about to talk about, you will be fired, and you will be prosecuted.”
[00:29:51.27] ADAM: You’re referring to the New Employee Orientation Security Briefing that happens for all new employees every Monday on the Apple campus. Yeah, they – security, secrecy is an important part of the Apple culture. It’s an important part of the way of doing things at Apple. It’s not left to the employee’s imagination what the repercussions will be for divulging secrets. You know, Apple people are really good at it. They don’t just sort of keep things close to the vest, they totally keep things close to the vest. To the point where – right, it’s obnoxious to talk to them. You know, I’ve written about this and I analyze it in as non-judgmental a way as I can. I don’t disagree with you that it’s obnoxious, but I respect them for it. If I’m not going to talk about my work, I’m not going to talk about my work. That’s the Apple mindset.
[00:30:52.48] QUESTION: Right. That line – have we got a couple Apple employees in here? Do you remember that line from the orientation? Was that – you do? Raising your hands? Can’t talk about it? You’re going to work it out for me Alex – or Spencer. So, how is it successful at Apple? How does it seem to work? How do they get – what is the psychology of that? Is it indoctrination? Is it fear? What is it that drives people to keep that oath from their new orientation meeting?
[00:31:32.94] ADAM: Well, I think it’s all of those things in different measures at different times. So metaphorically speaking, it’s not unfair to compare Apple to a military organization or to a religious institution. It has a hierarchy, it has rules, it has a very strong sense of mission. And it has a tremendous sense of accomplishment. So people dream about working at Apple. Once you’re there, if you’re successful – and if you’re not successful, you’ll be gone pretty quickly – but you know, once you’re there, you sort of see the evidence of your success. And you see reasons for being proud of your accomplishments. And so you know, you buy in. It’s voluntary, obviously, right? It’s a free country. No one is forcing you to go to work there.
[00:32:25.59] QUESTION: It’s almost like an honor to go and work there, right?
[00:32:26.90] ADAM: Very much so. So, you know, look. The Apple people – the Apple PR apparatus gets very upset with me – not upset, but annoyed – when I liken the company to a terrorist organization or to a resistance cell. I didn’t originate either one of those. But all of these things are metaphors, but if you think about them, people in these secretive organizations believe. That’s the initial premise. They believe. So you say, “how is it successful?” Well, because they’re believers. If they saw this as a job, then it would be a lot harder.
[00:33:10.95] QUESTION: I mean, with that – well, we’ll come back to that. Tell us about the top 100. Tell us what it is, and tell us how in the world – you were able to, you know – how did you get that out? How did that just come out? How were you able to break that story, basically?
[00:33:30.31] ADAM: So you know, I tried to make the top 100 as dramatic as possible because I think it is dramatic. Someone could say, “Look, dude. It’s a corporate offsite.” It’s true. It’s a high-level corporate offsite but what it is, is, when Steve Jobs was alive he would select approximately the top 100 people in the company by his definition of the top 100 most important people – not according to their rank, necessarily. And there would be hurt feelings –
[00:33:59.43] QUESTION: Did it cause people to leave? You talk about that, that it caused hurt feelings. But was it so bad that people would leave?
[00:34:05.25] ADAM: No. Well, no, but, it would – you know, people in corporations get upset about being included or not being included or getting this assignment or not getting this assignment. He knew – he wanted you to be upset if you were at this year’s top 100 and not next year’s top 100. There was a reason why Steve excluded you and that’s not good. But generally this was very high-level. It would be – they would go to one of a couple of resorts in the Carmel or Monterey Bay area and they would have presentations by Steve Jobs and other Apple executives and a few outsiders over the years about what was coming down the pipe at Apple. Now, this was important, because for such a secretive company, generally, very few people would know about all of the products that were coming down the pipe. The top 100 meeting would be an opportunity for the executive management team to show a larger group of still very senior people things like, the Ipod for the first time. The Iphone for the first time. So it was an opportunity for people who didn’t ordinarily work with each other to meet each other The secrecy was extreme. Steve wanted people to take buses down from Cupertino, not to drive themselves. He didn’t want people putting it on their calendar, he didn’t want people doing e-mail or making phone calls from the event, which of course they did because they’re very busy Apple executives, so they’re going to do that. They swept the room for bugs, to make sure that no one – that the competition wasn’t spying.
[00:35.42.81] QUESTION: Like a security force would come in? Dogs and stuff?
[00:35:44.31] ADAM: Yes. Yes. I don’t know about dogs. But whatever the state of the art is. If dogs were state of the art, they would have used it. And I do know that the last Top 100 that Steve Jobs was alive for, he prohibited conversations to go on while food servers were in the room, because those food servers could be a Samsung executive in a server’s uniform. I found out about it the same way I found out about everything else in the book: By interviewing people and talking about it. I’m sure the first time somebody mentioned it to me, they assumed it wasn’t particularly interesting, or they assumed that it was known. But I knew it wasn’t. And once I had that kernel of information, I was able to ask other people, “Hey, what’s this top 100 thing?”
[00:36.41.75] QUESTION: I mean, it seems – it’s so interesting, it’s so typical of Apple it seems, but it’s brilliant, because these 100 people are probably the most sought after people in the whole company right? These are the rockstars – the rockstars’ rockstars. And I’m sure that – and please tell us – bringing these guys in only deepened that loyalty. Showing them the IPod before everyone else, or showing them the IPad or whatever he showed them – I mean, that had to create just so much more loyalty among those top-top-tier, triple-A guys.
[00:37:21.76] ADAM: Yeah. I think – you know, one comment I got: If you were in the audience, you considered it a privilege. If you were asked to present, you considered it terrifying. Because the presentations had to be the same quality that Steve Jobs would do for a public keynote. So, but yeah, you know, I think people had a metaphorical gold star, or gold leaf on their lapel for attending a top 100.
[00:37:47.67] QUESTION: You talk a lot about the culture in the book – and we’ve talked about it tonight – one thing I thought was fascinating was how you talked about work. At Apple, work is basically life. Right? When you come back from the weekend, it seems there’s no standing around the water cooler and talking about what you did. It’s very much It’s business all the time, you know, every time.
[00:38:10.22] ADAM: Right. And these are – some of these are anecdotes and they become generalizations that, by and large, when I talk to Apple people, nobody challenges me on. And so the high-level takeaway is that Apple, unlike certain other companies, doesn’t approach work to be a subject of play. YOU know, they don’t feel that they need to entertain their employees. They think work is serious stuff. That doesn’t mean that it’s drudgery. That doesn’t mean that it needs to be painful. But it’s not to be confused with your social life. You’re here to do something important and we don’t have a lot of time, so let’s not waste it talking about something that’s not germane.
[00:38:58.32] QUESTION: Yeah. Talk to us a little bit about – focus. Especially as it relates – because this is one of my favorite takeaways from Steve Jobs as a founder – was this incredible focus that he had, and he, you know, really directed the company with. This afternoon I was talking with Francisco, our community manager, and he said, “I vividly remember the experience of opening my first IPod. And that’s had an incredible impression on him. The packaging, how he felt, how it looked. Where did that focus on design come from at Apple? Was it there at the beginning? Did it come when Steve came back?
[00:39:37.36] ADAM: I’m purposely not an expert on the pre-1997 era. I covered a little bit in the book, but I decided that if I was going to write about how Apple works, I was going to focus professionally on the 1997 and forward period. So I don’t know where the focus came from. From my reading, there was certainly this attention to detail and attention to design almost from the very, very beginning from the Apple II, and from the first Macintosh. David Kelly at Ideal tells the story about getting a call at 3 in the morning from Steve wanting to argue about the composition of the screws on the inside of the original Macintosh. And this has become a metaphor for his obsession with things – not only the things that you could see, but the things you couldn’t see. And write about the attention that Apple gives to packaging design. And most people think, well, that’s number 17 on the list of important things to deal with, and they take it very seriously because we all remember opening the box and seeing the device placed beautifully inside, and so on. And so this notion of focus and simplicity is – what’s so fascinating to me about Apple is it’s not any one thing. It’s not focus on the features of the product – it’s focus on, “well, we’re not going to get into to many products, we’re not going to get into too many verticals…” It’s really interesting to me and I don’t think it’s been discussed enough that Apple, this giant company, is extremely headquarters-centric around Cupertino. They don’t hve regional offices. Yes, they have retail stores, and yes, they have these factory relationships in China. But the important meetings take place in Cupertino. Face to face. The same way that I read a physical newspaper in the morning? Apple people talk to each other to do the important work of Apple. It’s not to say it doesn’t happen, but it’s not a videoconferencing culture, it’s not a teleconference culture – it’s not a virtual commuting culture, either.
[00:42:03.40] QUESTION: Would you tell the story about Yahoo? It’s a really interesting story.
[00:42:09.74] ADAM: Sure. And this story in my book had been told before, to be clear. But – you have to help me – it was in 2007, I think, right? The year that Jerry Yang became interim CEO of Yahoo again. Or maybe – I think he was interim first, and then he became permanent for a while. And he invited Steve Jobs to speak to a group of 150 or so top Yahoo executives. They were having an offsite at – I want to say (INAUDIBLE) at Redwood shores, and they got – essentially, they asked Steve Jobs the question that Yahoo was asking everybody and still is, which is, “What should we do?” And he said, “I can’t tell you what to do. But I can tell you how we thought about what we did when I came back to the company in 1997. Putting it simply, we asked, ‘What are we good at?’ And I knew the answer. We were good at making Macintosh computers. So we stopped doing all the other stuff.” Did you know that Apple made a digital camera in 1997? Can’t remember what it was called, but they were selling a digital camera, and they were also selling printers, and the Newton, and many different skews of computers. And Jobs said, we’re going to make two desktops and two laptops for the time being. This was before the IMac. Actually, the way I tell the story is, he did say, “I know what I would choose, but I’m not going to tell you. That’s your problem.” And you know, I think he didn’t tell them for a reason. Because he was teaching a lesson about his approach to running a company – his approach to entrepreneurialism, which was (and it’s cliché, except they did it at Apple) know what you’re good at. Do that. Focus obsessively on it. And work really hard and not do all that other crap that you’re not good at. And by the way, work really hard not to do even things you are good at, at the expense of the things that are the most important things.
[00:44:10.90] QUESTION: Do you think that ability – and a lot of that, a lot of that came from – or the result of that was a lot of “no’s” right? I mean, he was saying “no” to a lot of things, he was cutting things… Do you feel like that culture of saying “no” and the ability to focus – was the majority of it driven by Steve, or has that permeated through the rest of the executives in the company?
[00:44:31.83] ADAM: Well, those are two questions, and I think the answer to both is “Yes.” This was – this did come from Steve, as far as I can tell. This was his concept and he inculcated that into the culture of Apple. So, Tim Cook references this in every public speech that he makes: “We’re going to continue to say no to things that we don’t have the time or the ability or what have you to do.” So, yeah, I think it is part of the Apple culture. That doesn’t mean they’re going to be able to execute it without him. But I think they’ll continue to try to think that way.
[00:45:05.86] QUESTION: Talk – tell us about…this is a great line in the book where you talk about how Apple employees – they almost act like teenagers of wealthy people.
[00:45:19.77] ADAM: Yeah. So you’re referring to a part where I describe the way that Apple despite its size and success is able to emulate a start-up selectively. So it will create a physical area where a special project is going on and work in ways that sort of physically and emotionally separate the people working on that project from the rest of the company. Not a new concept in Silicon Valley: You know, there was SkunkWorks and other names for this type of thing. But the metaphor that I’m using is – it’s a young product. It’s not necessarily young people, but it’s young in the sense that it’s immature, it’s nascent. And I said that these are like rich kids because they don’t have the baggage of life and of a larger organization, but they do have access to the resources of very rich parents – in this case, Apple’s $110 billion balance sheet.
[00:46:17]QUESTION: What startups that you see right now sort of emulate Apple’s culture, and what Apple did? Are there any?
[00:46:26.56] ADAM: Well, rather than…I’m often really deficient in my knowledge of Silicon Valley startups, because I don’t have time to pay attention to many of them. And I think to be an expert on startups, you have to sort of – you have to at least approach having an encyclopedic knowledge of what’s going on the way a venture capitalist would, for example. But I’ll tell you about some that I’ve written about, because there’s some that are being obvious about it. One is Square, which has hired a lot of Apple people. Jack Dorsey didn’t work at Square – he didn’t work at Apple, thank you, but he’s made no secret of the fact that he emulates and revered Steve Jobs, so he’s doing two jobs, and he’s doing keynotes, and the design of the device is overtly Apple-like. So you know, that’s one example. My favorite example, and it’s a different story (and a controversial topic) which is “Why are there so few former Apple executives out there running companies?” And I’ve got a bunch of reasons why. We can talk about it if you like. One, that is happening, is Nest, which is run by Tony Fidel, who was a senior executive…you know, the Nest Device, the smart thermostat, if you haven’t seen it, looks like it could easily fit in an Apple store. I have a little section on Nest and Tony in the book, and Tony was really interesting. He shared with me his thinking, at this stage of his company’s career, or life, which is, I think, two years old. What he’s trying to take from Apple and what he isn’t. What he’s trying to take is this design aesthetic, this focus on the customer, this willingness to spend money on things that are really important to serve the product, to serve the customer. What he’s not taking – you now, he makes a very good observation that it’s important to this group of people that think to have Apple’s success they have to be just like Steve. So – Apple is very difficult with the press, they don’t speak freely – that wasn’t always the case. Years ago, Steve did speak very freely, and sought after coverage. And so Tony’s out there talking to the press, telling Nest’s story, and he’s also humbler with their channel partners – Best Buy for example. He doesn’t come right out and say this, but he basically implies, you know, “We don’t tell Best Buy what to do the way Apple does, because we’re a lot younger and humbler.” And his line is, he likens his company to where Apple was with the IPod in 2001 and 2002.
[00:49:14.46] QUESTION: Looking a little bit at the psychology of Steve Jobs, and…
[00:49:19.50] ADAM: This your shout out to your psychology club members?
[00:49:20.49] QUESTION: This is my psychology club right here. And a big thanks to Jenny, who we’re going to bring up at the end, who really spearheaded getting Adam here…but talk a little bit about this idea – sometimes when the employees would meet with Steve…you know, he’s legendary for just berating people, ripping into them, you know for the sake of the product. And, did that – I can read your exact line, here: “There’s a mentality that it’s okay to shred somebody in the spirit of making the best products.” How do you think – do you think that this affected job performance? Did this affect – Was the effect completely positive? And I’d say post-1997, we don’t need to go into the past. Post-1997, was that in the end a positive thing for the company?
[00:50:14.29] ADAM: Well. So first of all, the passage you read wasn’t about Jobs. It’s about the corporate culture, about the behavior generally, not specifically. And was it successful? I think there’s plenty of – there’s only evidence to suggest that it has been successful. The question in a variety of measures, whether it’s market capitalization, profits, number of units sold, leadership in markets – it’s been almost completely successful. So the question becomes, “Is it sustainable?” Did they succeed because of this behavior or in spite of this behavior? Because reasonable people will find this type of behavior repugnant. Someone said to me – I have a five year-old daughter – “How would you feel if, when she grows up, she went to work at Apple?” And people assume I’m going to say, “Oh, God, I wouldn’t want that.” And I don’t think anything of the sort. If it was her dream to work in that environment, to create those types of things – I’d say, “I’m so proud of you.” I think we all make trade-offs in our careers and in our lives. And if Apple people view it as a trade-off that you’re going to be on the receiving end of a really unpleasant conversation for a variety of reasons and the flip side of that is “I’m going to contribute to greatness,” then you know, I’m not judging that decision on their part. But you raised something interesting I mean, yeah, I’m told the conversations get nasty, and they get personal, and even petty. But the way the arguments are won is on what’s best for the product. What’s best for serving the customer? I believe – I know it sounds corny. I believe Apple really believes that. And – no, I don’t believe you have to be a jerk to accomplish that. As I mentioned, a I run a conference, and running a conference requires a lot of decisions about what’s going to go in what slot, who’s going to go on what stage, who’s going to get to moderate it, and we disagree all the time. We bend over backwards to disagree amicably and respectfully. I think we’re really successful at it.
[00:52:30.28] QUESTION: So like you say, it was successful from a market-cap perspective, it was successful from a product perspective. What about from a people perspective? You spoke with these people – you had all these people telling you the truth. Did it affect them in negative ways? I mean, it affected their work in positive ways but personally…
[00:52:55.74] ADAM: Sure. Yeah. There’s a few issues here. I don’t write this in the book, but anecdotally, you hear about Apple people being under a severe amount of stress. In some cases, a debilitating amount of stress. And these are generalizations, so they don’t apply everywhere, and it varies by job function and by level. But these are anecdotes and it’s not the only company where people are under a ton of stress. But it is a place where you’re expected to give your all. Again, that’s cliché in a lot of places, but in Apple they mean it. They use it in a little handout they use – that they give in their New Employee Orientation. They say something along the lines of “You can expect to do your life’s best work here, but you’re going to be swimming in the deep end. This is going to be a place that you’re going to want to work weekends because it’s that hard. You’re going to be out of your comfort zone.” So I think I veered away a little bit from your question, you know, does it affect people? Yeah. But they have incredible longevity, too. Not just at the top, but at all levels of the company, people tend to stick around for a really long time. I’ll give you a slightly different observation that you didn’t ask, but another fascinating characteristic of the psychological culture of Apple is that it’s understood not only that you’re going to keep secrets, but that you’re going to devote all your time and energy to Apple at work. To Apple. None of this “brand of you” bullshit that’s so popular. It’s the brand of Apple. Full stop. You don’t like that? You don’t have to work here. Now, it’s obvious why that’s good for shareholders and why that’s good for customers and why that’s good for the company. But I have heard people say, you know, having said that, “I toiled for all these years and I came out and nobody knew who the hell I was.” But I think on balance it’s working out pretty well, because I may not know who the hell you are, but I know you worked at Apple for ten years, and you couldn’t be a moron if you worked at Apple for ten years – that’s my assumption. Yeah. So, again. Trade-offs.
[00:55:11.51] QUESTION: Okay. Talk – tell us about – jut talking about the future of Apple. You just heard Tim Cook speak and you’ve just written about them recently. Tell us a little bit about his role going forward in terms of – is he there to stay? Is he…you know, you talked about his, where he’s got a ten-year stock vest. The way things have gone the last six or eight months – has it gone great? Has it gone as expected? What’s your take?
[00:55:44.94] ADAM: So you know, first of all, by any reasonable measure, it’s too early to tell. And in the book, I say, you know, Tim Cook may be a caretaker CEO of Apple, but it could be a very long caretaker period. I mean that. I think he’s – as far as I can tell – he may be the CEO that Apple needs right now. This is a big company with a lot of complex operations and things going on, and he’s somebody that’s on top of that. Let me tell you about the exchange that I had with him at the All Things D Conference last week, it was because, it was fascinating and entertaining as well – I stepped up to the microphone and identified myself, and then I said, “It’s nice to be able to ask you a question, Tim.” Because I hadn’t had that opportunity yet. And I asked him what his strengths and weaknesses were as a CEO and as a person. And he declined to answer my question. At first he said, “Well, I think you could answer that question.” And I basically, without saying, I sort of stepped back from the microphone. And my attitude was, “I know I could answer that question, I have answered it, but I want you to answer it.” So he didn’t. And then there was this pause, and Walt Mossberg and Carrie Swisher seemed content for the moment to let me continue to do the interview, so I continued, and I said, “All right. We know Steve Jobs paid a lot of attention to design and marketing. Are you paying that kind of attention to design and marketing?” So I’m getting around to answering your question. And you know, he gave me – if you go back and look at his exact words, which I haven’t gone back and done yet, he gave sort of a thoughtful answer: “Well, Steve spent considerably all of his time on those two areas. And I’m spending my time on all the areas that are of interest to the company.” Now, that’s exactly what those of us looking in from the outside suspected – that’s what we expected. That he wouldn’t have the same focus on design and marketing that Steve Jobs had. But, you know, he gave some color on that. So, you know, I have no evidence that he’s not going to be the CEO for the foreseeable future.
[00:57:58.77] QUESTION: When do you think Apple will have its first real post-Steve Jobs test? At what point does the caretaking – is it when they introduce a new product? Is it as the tablet market evolves? What do you think it is?
[00:58:14.72] ADAM: Well, we’re going to need true insider knowledge to comment on – there’s a very small handful of people that will be able to say, “Well, this product Steve had no influence on.” And you’re going to have to have great insider knowledge to be able to speak authoritatively on that because Apple plans really far ahead. They work on things for a long time – and some of those things never see the light of day. So Steve Jobs would have been aware of things that were in the works for a very long time. Having said that, you know, when Apple comes out with its first revolutionary product, its next revolutionary product – and I would say that the last revolutionary product was the IPad and the one before that was the IPhone – when they come out with their next revolutionary product, we’ll be able to begin to judge the new regime. You know, I don’t think the same was true for the IPhone 4S or the new IPad. The current IPad, I think we’ll just start saying.
[00:59:16.67] QUESTION: Do you believe that product line – is that something – do you think Steve may have had specific products in mind that may go for the next five or ten years…or beyond?
[00:59:39.63] ADAM: Well, let me share like another – and this isn’t in my book – but it’s…it’s becoming clearer to me. But the language at Apple is very important. One of the words that Apple uses to describe – to describe itself – Apple people talk about the cadence of Apple. Apple has a cadence to it. We see that cadence from the now-predictable schedule of product announcements, right? So we’ll see something next week at the Worldwide Developer’s Conference. We’ll see something at a music event in September or a Mac event in October. And there was an IPad event in March. They mix it up a little, but that’s the template. But behind the scenes, there’s a cadence going on where they are working on things with a very detailed plan. A written-down plan. And they know what the plan is. That’s not to say they don’t deviate from the plan; they do. Sure. And Steve Jobs intimated to Walter Isaacson that “We’ve got this TV thing figured” so everyone thinks they know what that means, but they don’t know what that means. It could mean several things. And that’s where – to an extent, yes. He would have been knowledgeable about many of the things that were coming. But the other thing he was famous for was changing what was coming based on what he saw. He would say, “Okay. We’re not going to do that.” Or, “We are going to do this.” Well if they continue to operate that way, they’re going to make changes that he wouldn’t have foreseen.
[01:01:21.86] QUESTION: Do you – and this is the last question, we’ll open it up to everyone else. In the time that Steve has left, have you seen from any of the internal people…is there any…is this magic that Apple had six or eight months ago…is it just as strong? Is there any evidence that it’s less strong? Has the fairy dust left?
[01:01:50.25] ADAM: Yeah, I don’t personally have any evidence one way or another. But some people do, right? Some people have opinions. In my experience, you have to take those opinions with a grain of salt. Some of those might be very good observations, some of those may be garbage observations, because this company’s under so much scrutiny – I’m struggling for metaphors. But people – they’re like a painting that’s a masterpiece and people are analyzing every little brushstroke. Is there a fleck of dust under that brushstroke, and did the artist smooth it out properly? That’s the level of scrutiny. Some of that is important, some of it isn’t. I’ll give you a superficial example that people are talking about very seriously. Was it a good idea or a bad idea to go the direction of marketing the IPad more like the IMac? They don’t have the IMac 4, the IMac 5, IMac 7, they have the IMac. And when they come out with a new IMac, it’s the IMac. But that isn’t the naming scheme that they take for the IPhone. Was it the right move or the wrong move to call it the IPad instead of the IPad 3? Well, we know when Steve was alive, they called the second generation the IPad “2.” And so it’s this sort of thing that the people who care – and it’s a lot of people – debate ad nauseam. Is it an important debate? I don’t know.
[01:03:21.88] QUESTION: You don’t have an opinion on it?
[01:03:23.22] ADAM: I don’t yet. You know? Was Tim Cook less charismatic and entertaining and brilliant onstage than Steve Jobs? Yes. Does that mean there’s less magic? Maybe? I’m not sure.