Founders at Work.pdf

286 Founders at Work
which quintupled the value of the original investors’ money. Steve wanted to
make sure that we would finish this product, because it was critical for him that
he have the LaserWriter.
In the meantime, we were talking to other companies—IBM and other
folks. We had deliberately not gone to IBM early because we knew that, if we
didn’t have a couple of business deals in hand, they would be extremely difficult,
if not impossible, to negotiate with.
We found that we were outgrowing our facilities in Mountain View, so after
about a year, we moved into a larger building on Embarcadero across from the
Palo Alto Golf Club. By about the fall of 1984, we had the LaserWriter pretty
well completed and we ran into a hiccup. Steve had gone to his annual sales
meeting in Hawaii with the senior sales management at Apple, and it was the
first time that he really spent time talking to them about this new product, the
LaserWriter. They all got very upset. They said, “We can’t possibly sell a printer
that costs more than the computer!” (In fact, inside of this printer was a more
powerful computer than the Macintosh.)
Livingston: Because that’s where all the pages were actually rendered?
Geschke: That’s where the pages were rendered, and that’s where all of the type
was generated. It was a sophisticated computer and so it cost a lot of money.
RAM prices had just gone up the preceding year. Fortunately, right before the
product hit the market, RAM prices came back down. It had to have 1.5 MB of
RAM, which seems tiny today, but in those days it was a lot of memory.
So he came back from that meeting and sent his marketing guy and Bob
Belleville to talk to us and they said, “We think we may end up canceling this
product if we can’t do something about this.”
John and I called up Steve and we sat down with him and said, “This will be
a disaster. You really have got to get this product out because it’s the only thing
that’s going to differentiate you from IBM.” He agreed, and then he told us that
RAM prices had just dipped again. So it didn’t matter what his salespeople said;
he said, “I’m going to put this machine out.”
So he did, and it got a great deal of fanfare when it was introduced—people
really loved it. There were industry analysts like Jonathan Seybold, who were
very in touch with the publishing industry and were following computers’ influence
and the changes going on. As soon as he saw it, he completely got it and
understood what was happening.
At the same time the LaserWriter was introduced, we introduced a piece of
typesetting equipment, which was a full image setter, with Linotype Corporation,
and announced that we had licensed the Linotype typeface library. It was
extremely important for the publishing customers to know that they had the
trade names of the original type vendors in the products and in the technology
that we developed.
So the product launch went out and it was very well received, but as we
began to track sales, while there was the initial pent-up demand, as it got
toward summer, the sales began to drop off. Everybody got pretty worried
about what was happening. At that time, Apple was marketing their computers