Founders at Work.pdf

Charles Geschke 285
Equipment and was running research and development for the company. He
said, “I hear you started a business and I want to come out and talk to you about
what you’re doing.” So he came out and we showed him. We explained our
business plan about building the computers and the printers and putting it all
together in a package and he said, “That all sounds great, but I don’t need computers.
I’m Digital Equipment. I already have a deal with Ricoh for laser
printers, so I don’t need the printers. My problem is that I’ve got several development
teams trying to build the software to interface between the two of them
and they’re getting nowhere. That’s very frustrating to me. Why don’t you just
sell me the software?”—which we had already shown him, the precursor of
what became PostScript—“That’s what I need.”
We said, “Well, Gordon, we raised $2.5 million and this is our business plan
and that’s what we’re going to do.” He said, “I’m disappointed, but if you
change your mind, give me a call.”
About 2 months later we got a call from a fellow by the name of Bob
Belleville, who had been at Xerox and then had moved on to Apple and was
responsible for the overall engineering management for the Macintosh. He
said, “I want to bring Steve Jobs over and see what you guys are doing.” So they
came over, we went through the same spiel, and Steve said, “I’ve got this computer
coming out called the Macintosh,” which he showed us, and he said, “so I
don’t need a computer. And I have a deal with Canon on the laser printer. But
the development team trying to interface between the computer and printer is
just failing miserably. Why don’t you sell me your company?” We said, “Steve,
we’re not for sale, we’re really out to build a business on our own.” He said, “All
right, why don’t you just sell me the software?” We said, “We have this business
plan, we raised $2.5 million, and this is what we said we’re going to do.” He
said, “I think you guys are crazy. Think about it a little bit and I’ll call you back.”
So John and I went to talk to the fellow that Bill Hambrecht had asked to
chair our board, named Q.T. Wiles. He’d been in business for a long time and,
when we described what had happened with both of these episodes, he said,
“You guys are nuts. Throw out your business plan. Your customers—or potential
customers—are telling you what your business should be. The business plan
was only used to get you the money. Why don’t you rewrite a business plan that
is focused just on providing what your customers want?”
We called back Steve Jobs and he said, “Great! Sell me your company.” We
said, “Steve, we’re not for sale.” He said, “Well, all right.” And basically he helped
construct a proposal for how we would license him this software. We agreed on
a royalty per printer. We also closed a deal shortly after that with Digital
Equipment.
We began developing the laser printer for Apple, which eventually became
the LaserWriter. We signed an agreement with Apple in December 1983,
roughly a year after we went into business (we incorporated in December
1982). Unlike any startups that I’m aware of, we turned a profit within our first
12 months, as a result of that contract with Apple. So it’s a very atypical story.
Steve did a prepayment on royalties to make sure we had the resources to stay
in business, and Apple also bought a little less than 20 percent of the company,