This is how Steve Jobs thanked him for his 150 million

There was a time when Apple and Microsoft were like Sega and Nintendo or like Tom and Jerry: declared enemies. Rivals competing for the same piece of the pie. Or because they both wanted to eat the whole cake, more precisely. And, opposite, two potential enemies: Steve Jobs and Bill Gates.

On June 28, 1997, Steve Jobs gave the opening speech the most shocking of his career, the one where he showed up without having slept and not precisely because he was partying. Colin Crawford, Chairman and CEO of Mac Publications, opened this unique event in history, where the Big Apple had just suffered year-over-year profit losses of a dizzying 31%.

The most tense speech in Apple history

Maningful Partners can be considered one of the darkest and most tense episodes in Apple’s history. Or on the contrary. The reason is obvious: the brand was in its lowest hours and I needed two things: cash and a new approach. And from this event, Steve Jobs and his entourage emerged stronger, enriched, but feeling somewhat “dirty”.

Let’s put ourselves in context and focus on Gates and Jobs. We could even make an analogy between Shakespeare and Cervantes: Steve Jobs was born on February 24, 1955; The same year, on October 28, Bill Gates would be born. The two met early on, in the late ’70s, and both met during their careers until the end of Gates’ days.

But rather than uniting, they clashed. Bill Gates always considered Steve Jobs to be a sort of wizard who hypnotized people. A showman with a unique talent to summon the talent of others, to convince. Jobs, for his part, always viewed Gates as someone without taste, style, or imagination, going so far as to say that “he just blatantly stole other people’s ideas”.

For years, the cross-statements were dynamite and this was extrapolated to the mindsets of their respective companies. Jobs systematically excluded Microsoft engineers and brand enthusiasts in favor of those more inclined to Apple. Gates, with more protocol and elegance, although identical intentions, He has devoted more effort than he would like to admit to defenestrating the genius of San Francisco..

Boos and dirty looks are worth $150 million

Let’s go back to June 28, 1997. Faced with already tense prospects and previous speculations, Steve Jobs had to face boos from the public the day when, at MacWorld in Boston in 1997, said Microsoft had just invested $150 million in it.

Jobs stopped briefly, turned to the table, took a sip of water and began to say:

“I’m talking about important partners. Apple needs help from some partners and offers help to other partners. And destructive relationships don’t help anyone in this industry.” “So over the last few weeks we looked at some relationships and one of them turned out to not be going very well but to have the potential, I guess, to be great for both companies.”

It is said that then some faces fell and there was a slow round of applause. Even if there was no shortage of whistles and boos, or directly, as shown in the opening speech which you can see in its entirety, a frontal opposition among many people present to the idea of ​​sketching the minimum gesture of celebration. For them, it was crossing a red line, selling themselves for a few dollars, betraying their internal values ​​and breaking at all costs with the philosophy of innovation.

Steve Jobs was quick to point out that “we must forget this idea that for Apple to win, Microsoft must lose.” A war that he himself fueled. However, the interests were common. Microsoft suffered from a lack of creativity and Internet Explorer had not taken off, facing a young Google born to take its place. From that day until the introduction of Safari in 2003, Every Mac in the world would arrive with Explorer preinstalled.

In fact, we can summarize this agreement in these five points:

• Licenses for the use of its own patents.
• Microsoft Office on all Macintosh systems.
• Internet Explorer browser preinstalled.
• Collaboration and use of Java.
• Investment of 150 million dollars by Microsoft.

The reality is that a patent guerrilla movement exhausted both companies and they were no longer able to continue fighting. The agreement, signed in a “narrow office” at “2 a.m. the day before”, gave Apple the urgent boost of oxygen it needed. Wildly, because its shares skyrocketed: 30% at the end of the day and up to 50% two days after the keynote.

Wasted money?

And Microsoft, against all expectations, did not maintain its investment: the purchase of preferred shares was converted into common shares – the preferred ones are long-term, Apple has demonstrated solvency and, therefore, the creditors do not have assumed more risk in the event of possible bankruptcy – devaluation. Bill Gates and company therefore found themselves with a balance valued at $18.3 million and decided to liquidate it on the common market – to whoever wanted it. Big mistake: today they would be worth between 80,000 and 100,000 million dollars.

Since then, Apple has only grown to the top, becoming the most valuable company on the planet. In fact, Apple’s strategy has paid off more than expected: by acting as a commission agent, by granting authorization to exploit patents – provided there is no plagiarism in the design -, It’s very lucrative. Microsoft’s Surface or certain Samsung Galaxy have suffered this fate.

If Microsoft had not invested and, instead of taking a friendly stance, had besieged potential investors and suppliers with aggressive deals, maybe Apple wouldn’t exist. Analysts like David Wu even said that “Apple had no future in sight until last Friday.”. However, this was not the first time that Microsoft acted like a fairy godmother without asking (almost) anything in return. For example, he cleaned up Wikipedia’s accounts, even though WiKi was indirectly responsible for the sinking of the Encarta encyclopedia.

I have rewatched this conference several times because summarizes many of the most important business lessons of our modern history. It is in the lowest hours that the deities are most vulnerable. The Jobs of firm gestures are now hesitant. Was it a forced decision, a gesture against his natural will?

It does not matter. Shortly after, Gates logged in remotely, waited a moment for the audience to finish clapping while flashing a not-so-disguised smile, and began his rehearsed speech to reiterate the same thing: confrontations do not lead to progress. And they were both absolutely right.: In January 1998, Jobs reported profits of more than $45 million for the first fiscal quarter alone. “Think Different” had become a reality.

An older version of this article was originally published on 04/28/2023.

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