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Recalling Apple’s early days

01:00 AM EST on Sunday, February 25, 2007

By Timothy C. Barmann

Journal Staff Writer

PROVIDENCE — The man who guided Apple Computer through its early glory years offered a group of Brown University entrepreneurs some advice, and anecdotes, and even some brutally honest self-criticism.

“I’m a terrible manager,” said John Sculley, 67, a former chief executive officer of Apple Computer, who ran the company from 1983 until 1993.

His remark was met by silence by the 250 students and visitors in the audience, who came to participate in Brown’s 10th Annual Entrepreneurship Forum, held yesterday at the university’s Faunce Hall.

Sculley’s keynote address capped an afternoon of talks and round-table discussions about entrepreneurship among Brown students and company executives, many of whom attended Brown. Earlier, another keynote address was given by Debra Lee, the chairwoman and chief executive officer of Black Entertainment Television, and a 1976 graduate of Brown.

Sculley, a 1961 Brown graduate, broke the silence. “But I’m a half-decent idea person, and so I try to match myself up with people who complement the areas I’m not particularly strong in.”

His 52-minute talk was filled with blunt evaluations of himself, as well as summaries of the lessons he learned, first as chief executive officer of PepsiCo., and later as CEO of Apple.

Sculley heaped praise on Apple cofounder Steve Jobs, despite having ousted Jobs from the company in 1985.

“Real genius is seeing something that is totally obvious, maybe 20 years ahead of anybody else,” Sculley said. “Steve Jobs would be a real example of that. Steve saw where all of this was going long before any of this existed.”

Jobs, as chairman of Apple, recruited Sculley from Pepsi. Jobs reportedly asked Sculley, “Do you want to sell sugar water for the rest of your life, or do you want to change the world?”

Sculley, with virtually no technology background, took the job. A year later, in 1984, Apple unveiled Macintosh, one of the first personal computers to use a mouse and a graphical interface. The Mac was a technological leap forward and Jobs and Sculley were dubbed the Dynamic Duo by Business Week, which featured the executives on the magazine cover.

But a lack of software and difficulties in adding memory and a hard drive hobbled the Mac early on, according to Apple — The Inside Story of Intrigue, Egomania and Business Blunders by Jim Carlton.

In 1985, infighting and personality conflicts within the company made matters worse, according to Carlton, and that eventually led to a power struggle between Sculley and Jobs. Sculley won the support of the company’s board, and Jobs quit.

At yesterday’s forum, Sculley spoke in generalities about his time at Apple.

“When I went to Apple — and I take no credit for any of the vision at Apple, this was purely Steve Jobs’ vision — my job was to help bring big brand marketing to Silicon Valley” and to get people to think of a computer as something they needed.

Sculley and his team at Apple succeeded. During his 10-year tenure, Apple’s sales rose from $1 billion a year to $10 billion. The company went from being a maker of a hobbyist’s toy to a powerhouse in the desktop publishing industry that attained a near religious following among customers.

But what he didn’t see coming, he said, was a new model for making and selling computers, pioneered by a student at a Texas university — Michael Dell.

Dell undercut Apple’s prices by building computers from easily attainable components. He sold them directly to customers, customized with the features they wanted.

“What we entirely missed — my watch, I missed it — was that someone else could innovate around the intangibles of the supply chain.”

Apple was instead focusing on “cool stuff,” such as the design of its computers, desktop publishing systems, and its new laptop computer.

Sculley said he was ousted from Apple after he refused to license the Mac technology to other companies. He is now a venture capitalist.

“Life doesn’t always work out the way you planned,” he said. “That’s why I say it’s OK to make mistakes. Just try to go back and understand it.”

In a brief interview, he was asked what he thought about Apple’s current success with its iPod and its music sales under the leadership of Jobs, who returned to the company in 1997.

“The credit goes to Steve Jobs,” he said. “It’s the same brilliance and vision that he had when I worked with him back in the early ’80s of starting with the customer … and never compromising.”

Asked whether he is still in touch with Jobs, Sculley declined to answer.

“I don’t discuss anything about personal relationships,” he said.

tbarmann@projo.com