Chapter 1: What is the main topic discussed in this episode?
In 1976, Steve Wozniak offered his personal computer design to Hewlett Packard, where he worked as an engineer.
Chapter 2: What inspired Steve Wozniak to create the first personal computer?
HP said no, so he and Steve Jobs started Apple. Four years later, Wozniak was worth $88 million. Then he did something that Silicon Valley still doesn't quite understand. Something that violated every rule of how you're supposed to win in the Valley. The man who created the computer that built Apple into a Fortune 500 company never wanted to run a company at all.
He just wanted to stay at the bottom of the org chart, building cool stuff. This is the story of the founder who won by refusing to play the game everyone else was playing.
Welcome to Outliers. I'm your host, Shane Parrish. This show is all about learning from others, mastering the best of what they've figured out so you can use their lessons in your life.
While Steve Jobs was building a mythology, Wozniak was in his HP cubicle designing computers on paper because he couldn't afford the parts. While Jobs dreamed of changing the world, Wozniak just wanted to impress the homebrew computing club. But here's what almost no one understands.
Wozniak's radical openness, the philosophy Jobs fought against, is the exact reason that Apple survived long enough for Steve Jobs to become Steve Jobs. There's a lesson here about what happens when you refuse to compromise, even when it costs you billions. It's time to listen and learn. Silicon Valley didn't exist in 1957.
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Chapter 3: How did Wozniak and Jobs establish Apple Computer Corporation?
The place that would birth Apple and Google was still called Santa Clara Valley. It smelled like apricots. Seven-year-old Steve Wozniak had just moved to Sunnyvale with his family. Their street was bordered by orchards on three sides. But Steve wasn't thinking about fruit trees at all. He was thinking about electrons.
His father, Jerry, worked at Lockheed on military projects so secret he couldn't mention them at dinner. But the physics behind them? That was fair game. When Steve asked questions, his dad didn't brush him off. He pulled out a blackboard and started from the beginning.
Wozniak would later write, The way my dad taught me was not to rote memorize how parts are connected to form a gate, but to learn where the electrons flowed to make the gate do its job.
Chapter 4: How did Wozniak's philosophy of open architecture differ from Jobs' vision?
To truly internalize and understand what is going on, not just read some stuff off some blueprint or out of some book. His dad taught him to see the invisible, to understand not just what electrons did, but why. Steve's IQ tested over 200. Everyone knew he was gifted. But Jerry never pushed. Steve was in charge of his own learning. The most important lesson came wrapped in a simple statement.
Engineering, Wozniak's dad told his son, is the highest level of importance you could reach in the world. Someone who can make electrical devices do something good for people takes society to a new level. Wozniak absorbed this like gospel. While other kids had no idea what they wanted to be, Wozniak knew exactly what he wanted to be.
Chapter 5: What were the challenges faced during Apple's decline?
He would be an engineer's engineer, what his dad called a serious engineer. The neighborhood boys called themselves the electronics kids. Their fathers worked at Fairchild Semiconductor or other companies sprouting up along the valley. They had access to transistors when most of America was still using vacuum tubes. They had spools of telephone wire donated? by friendly utility workers.
They had fathers who could explain it all at dinner. Steve became their unofficial leader, painfully shy, zero charisma. But when the electronics kids decided to build a house-to-house intercom, Steve designed it. He strung wire along wooden fences, connected their bedrooms. After dark, they'd signal each other while their parents slept. But Wozniak wanted more.
He didn't want to build what others had. He wanted to create what no one else had thought of yet. This obsession started early. At six, his father gave him a crystal radio kit. When voices came through the earphones, something shifted inside him. I had actually built something, he'd later write, something they didn't have. He told his classmates about it, and he explained how it worked.
They had no idea what he was talking about. None of them could do what he'd done. He liked that feeling, but he quickly moved on to the next thing, writing, "'Okay, that's done. What else can I do?' By sixth grade, he'd found his hero, Tom Swift Jr., a fictional boy inventor who built submarines and spaceships, solving global crises with cutting-edge technology."
Steve would lie on his bedroom floor each night imagining himself as Tom Swift, building machines that would change the world. One day in 1960, flipping through his father's engineering journal, 10-year-old Wozniak found an article about Enoch, the world's first computer. A room-sized monster with thousands of vacuum tubes. But what captivated him was a single paragraph of boolean algebra.
building thinking into machines using only ones and zeros. What happened next, Wozniak called the dream. He realized that computers might soon fit in your house. Not yet, but soon. That vision became the driving force behind everything. The math was simple, so simple a high schooler could learn it.
He started drawing logic gates obsessively, staying up all night, half moons with dots, triangles with circles. These symbols became his alphabet. He was obsessed. He decided to build a machine for the science fair that could never lose at tic-tac-toe. He programmed it to know every possible move, every possible outcome. But the night before the science fair, the transistors blew up in smoke.
Wozniak was competitive. He loved to win, but he also realized something. The lesson he wrote down, the most important thing is that you've done the learning on your own to figure out how to do it. He was still proud of it, but for him, it's the engineering, not the glory, that's really important. The famous physicist Richard Feynman said something similar. I don't like honors.
I've already got the prize. The prize is the pleasure of finding the thing out. The kick in the discovery, the observation that other people use it. Those are the real things. By eighth grade, Wozniak built what he called his masterpiece, the Adder Subtractor. It was the closest thing to a computer he'd ever designed, capable of adding and subtracting numbers up to 1,023 using binary.
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Chapter 6: How did Wozniak's engineering decisions impact Apple's early growth?
I grabbed Steve and nearly screamed in excitement that I'd found it. We both stared at the list, rushing with adrenaline. We kept saying things like, oh shit, and wow, this thing is for real. I was practically shaking with goosebumps and everything. It was such a eureka moment. We couldn't stop talking all the way home. We were so excited.
They bought the parts and went to Jobs' house, but they couldn't get it to work. Wozniak writes, we played the tones from our tape recording, but we weren't able to get the call to go through. Man, it was so frustrating. No matter how hard we tried to get the frequencies right, they wavered. I just couldn't make them accurate. I kept trying, but I just couldn't perfect this thing.
I realized I didn't have a good enough tone generator to prove the article true or false, one way or the other. But I was not about to give up. Woz ends up creating a digital blue box using crystals, which are far more reliable. He didn't get it to work right away. That's not what happens in engineering, but he plugged away at it for months and eventually got it to work.
The part in the story that I have to mention is not only did their parents know what they were working on, they didn't try to stop them. Woz writes, we had promised our parents we'd never do it from our home. The blue box changed everything. Then Jobs had an idea. Hey, let's sell these. So they started selling these little blue boxes for $150 each, splitting the revenue.
It was their first business together. In 1973, Wozniak landed his dream job at Hewlett Packard designing calculators.
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Chapter 7: What role did VisiCalc play in the success of the Apple II?
This was the company for me, he'd write, because I'd already decided I wanted to be an engineer for life. HP was different from other tech companies. It was run by engineers for engineers. During a recession, instead of layoffs, HP cut everyone's salary by 10% so no one would lose their job. To Wozniak, that's how a company should work, like a family, where everyone takes care of each other.
I never agreed with the normal thinking, he writes, where a company is more competition driven and the poorest, youngest, or most recently hired workers are always the first to go. At home, he worked on side projects constantly. When coworkers asked him to build something for them, he never charged. It didn't feel right to charge for something he loved doing.
Then one day at the bowling alley, he saw Pong, the first successful video game. He stood there staring at it, mesmerized. I could design one of these, he thought. And he realized something crucial. While he'd been contentedly designing calculators at HP, the field had advanced beyond what he thought was possible. He didn't wait. He decided to build his own version immediately.
Not just to have it, but to be the only person in the world with their own version of Pong at home. And he'd do it his way with just 28 chips. He completed this a year before Atari released their home version. When he showed it to Steve Jobs, who was working at Atari at the time, the engineers were so impressed they offered Wozniak a job on the spot.
Chapter 8: What ethical dilemma did Wozniak face regarding his shares after Apple's IPO?
He refused. He could never leave HP. But Jobs wouldn't let his friend disappear into the comfortable world of calculators. Atari's games were bloating to 200 chips each. They needed someone who could do more with less. Jobs wanted Wozniak to redesign their new single-player version of Pong. A brief aside here just to answer the question why the number of chips matter so much.
Not only were they expensive, but they were necessary. Back in the days before a CPU, the entire game had to be implemented in hardware. There was no game program. It was all hardwired. So the fewer the chips, the cheaper it was to make, the easier it was to test. But WoW is one of fewer chips because more chips was just unnecessary complexity. It wasn't simple. It wasn't elegant.
Seeing Wozniak had built Pong with just 28 chips, one of the Atari founders desperately wanted him to do it for a single player game of Pong. Jobs approached him and Wozniak agreed immediately. Then Jobs did what Steve Jobs does and dropped the bomb. It has to be done in four days. four days for what would take a normal team months. The game was called Breakout. They didn't sleep for four days.
Wozniak would draw the design on paper. Jobs would wire the chips together then bring it back for testing. Somehow they finished it. Woz writes, the whole thing used 45 chips and Steve paid me half the 700 bucks he said they paid him. They were paying us based on how few chips I could do it in. Later, I found out he got paid a bit more for it, like a few thousand dollars than he said at the time.
But we were just kids, you know? He got paid one amount and told me he got paid another. He wasn't honest with me and I was hurt, but I didn't make a big deal about it or anything. To Woz, the most important thing in life was happiness.
There's a passage in another part of the book, which I think relates to this part, where he writes, I was just starting to figure out that the secret to life, and this is still true for me, is to find a way to be happy and satisfied with your life and also to make other people happy and satisfied with theirs. March 5th, 1975.
It's a cold, drizzly evening in Menlo Park where 30 men are gathered in Gordon French's garage pulling up folding chair, their breath visible in the chilly air. That was the day the computer revolution started. It was the very first meeting of the Homebrew Computer Club. Wozniak sat among them, regretting his decision to come. His friend Alan had said, this was about TV terminals.
But when the men around him were throwing around terms he'd never heard, Intel 8080, 8008, 4004, they were waving around a magazine with something called the Altair on the cover. These weren't TV terminal people. These were computer people. Wozniak, an HP calculator designer who built games on the side, felt completely out of place. I felt so out of it, Woz remembered.
Under my breath, I'm cursing Alan. I don't belong here. When the introductions came around, he mumbled something about working at HP on calculators. He stayed only because he was too shy to leave. But at the end, someone passed around data sheets for a microprocessor, the Intel 8008. Wozniak took one home, figuring he'd at least learn something from this awkward evening.
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