Wayne then got cold feet. As Jobs started planning to borrow and spend more money, he recalled the failure of his own company. He didn’t want to go through that again. Jobs and Wozniak had no personal assets, but Wayne (who worried about a global financial Armageddon) kept gold coins hidden in his mattress. Because they had structured Apple as a simple partnership rather than a corporation, the partners would be personally liable for the debts, and Wayne was afraid potential creditors would go after him. So he returned to the Santa Clara County office just eleven days later with a “statement of withdrawal” and an amendment to the partnership agreement. “By virtue of a re-assessment of understandings by and between all parties,” it began, “Wayne shall hereinafter cease to function in the status of ‘Partner.’” It noted that in payment for his 10% of the company, he received $800, and shortly afterward $1,500 more.
Had he stayed on and kept his 10% stake, at the end of 2010 it would have been worth approximately $2.6 billion. Instead he was then living alone in a small home in Pahrump, Nevada, where he played the penny slot machines and lived off his social security check. He later claimed he had no regrets. “I made the best decision for me at the time. Both of them were real whirlwinds, and I knew my stomach and it wasn’t ready for such a ride.”
Jobs and Wozniak took the stage together for a presentation to the Homebrew Computer Club shortly after they signed Apple into existence. Wozniak held up one of their newly produced circuit boards and described the microprocessor, the eight kilobytes of memory, and the version of BASIC he had written. He also emphasized what he called the main thing: “a human-typable keyboard instead of a stupid, cryptic front panel with a bunch of lights and switches.” Then it was Jobs’s turn. He pointed out that the Apple, unlike the Altair, had all the essential components built in. Then he challenged them with a question: How much would people be willing to pay for such a wonderful machine? He was trying to get them to see the amazing value of the Apple. It was a rhetorical flourish he would use at product presentations over the ensuing decades.
The audience was not very impressed. The Apple had a cut-rate microprocessor, not the Intel 8080. But one important person stayed behind to hear more. His name was Paul Terrell, and in 1975 he had opened a computer store, which he dubbed the Byte Shop, on Camino Real in Menlo Park. Now, a year later, he had three stores and visions of building a national chain. Jobs was thrilled to give him a private demo. “Take a look at this,” he said. “You’re going to like what you see.” Terrell was impressed enough to hand Jobs and Woz his card. “Keep in touch,” he said.
“I’m keeping in touch,” Jobs announced the next day when he walked barefoot into the Byte Shop. He made the sale. Terrell agreed to order fifty computers. But there was a condition: He didn’t want just $50 printed circuit boards, for which customers would then have to buy all the chips and do the assembly. That might appeal to a few hard-core hobbyists, but not to most customers. Instead he wanted the boards to be fully assembled. For that he was willing to pay about $500 apiece, cash on delivery.
Jobs immediately called Wozniak at HP. “Are you sitting down?” he asked. Wozniak said he wasn’t. Jobs nevertheless proceeded to give him the news. “I was shocked, just completely shocked,” Wozniak recalled. “I will never forget that moment.”
To fill the order, they needed about $15,000 worth of parts. Allen Baum, the third prankster from Homestead High, and his father agreed to loan them $5,000. Jobs tried to borrow more from a bank in Los Altos, but the manager looked at him and, not surprisingly, declined. He went to Haltek Supply and offered an equity stake in Apple in return for the parts, but the owner decided they were “a couple of young, scruffy-looking guys,” and declined. Alcorn at Atari would sell them chips only if they paid cash up front. Finally, Jobs was able to convince the manager of Cramer Electronics to call Paul Terrell to confirm that he had really committed to a $25,000 order. Terrell was at a conference when he heard over a loudspeaker that he had an emergency call (Jobs had been persistent). The Cramer manager told him that two scruffy kids had just walked in waving an order from the Byte Shop. Was it real? Terrell confirmed that it was, and the store agreed to front Jobs the parts on thirty-day credit.
Garage Band
The Jobs house in Los Altos became the assembly point for the fifty Apple I boards that had to be delivered to the Byte Shop within thirty days, when the payment for the parts would come due. All available hands were enlisted: Jobs and Wozniak, plus Daniel Kottke, his ex-girlfriend Elizabeth Holmes (who had broken away from the cult she’d joined), and Jobs’s pregnant sister, Patty. Her vacated bedroom as well as the kitchen table and garage were commandeered as work space. Holmes, who had taken jewelry classes, was given the task of soldering chips. “Most I did well, but I got flux on a few of them,” she recalled. This didn’t please Jobs. “We don’t have a chip to spare,” he railed, correctly. He shifted her to bookkeeping and paperwork at the kitchen table, and he did the soldering himself. When they completed a board, they would hand it off to Wozniak. “I would plug each assembled board into the TV and keyboard to test it to see if it worked,” he said. “If it did, I put it in a box. If it didn’t, I’d figure what pin hadn’t gotten into the socket right.”
Paul Jobs suspended his sideline of repairing old cars so that the Apple team could have the whole garage. He put in a long old workbench, hung a schematic of the computer on the new plasterboard wall he built, and set up rows of labeled drawers for the components. He also built a burn box bathed in heat lamps so the computer boards could be tested by running overnight at high temperatures. When there was the occasional eruption of temper, an occurrence not uncommon around his son, Paul would impart some of his calm. “What’s the matter?” he would say. “You got a feather up your ass?” In return he occasionally asked to borrow back the TV set so he could watch the end of a football game. During some of these breaks, Jobs and Kottke would go outside and play guitar on the lawn.
Clara Jobs didn’t mind losing most of her house to piles of parts and houseguests, but she was frustrated by her son’s increasingly quirky diets. “She would roll her eyes at his latest eating obsessions,” recalled Holmes. “She just wanted him to be healthy, and he would be making weird pronouncements like, ‘I’m a fruitarian and I will only eat leaves picked by virgins in the moonlight.’”