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Triumph of the Nerds
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00:13Hi, I'm Bob Cringley, and I'm here to tell you the incredible story of how personal computers
00:17took over the world. Why am I telling you this at a basketball game? Well, I like the
00:21game, but mainly it's because of that guy down there.
00:30His name is Paul Allen, and everything you see here belongs to him. The Portland Trailblazers
00:35basketball team, their arena, even the dancers. Thanks to personal computers, he has $8 billion
00:43to spend on such toys. Twenty years ago, Allen and his high school friend Bill Gates were
00:50running a two-man software company called Microsoft. Today, Allen is richer than God, and Gates
00:58is richer than Allen.
01:02Twenty years ago, young men like Paul Allen and Bill Gates invented the personal computer,
01:06and in doing so, launched a revolution that's changed the way we live, work, and communicate.
01:11It's hard to believe that 20 years ago, there were no personal computers. Now it's the third
01:15largest industry in the world, somewhere between energy production and illegal drugs. But the
01:19most amazing thing of all is that it happened by accident, because a bunch of disenfranchised
01:24nerds wanted to impress their friends.
01:27telewoofines
01:29teleclouds
01:45teleproductive
01:45teleg civilian
01:46tele cupcakes
01:47teledir
01:47telebung
01:48teleATHER
01:48telegram
01:48telegram
01:56telegram
02:02This is the story of how a handful of guys launched an industrial revolution, how they
02:08changed the culture of business, how they made history.
02:12I feel incredibly lucky to be at exactly the right place in Silicon Valley, at exactly
02:19the right time historically where this invention has taken form.
02:26It wasn't like we both thought it was going to go a long ways.
02:29It was like we both do it for fun, and even though we're going to lose some money probably,
02:34we'll just have been able to say we had a company.
02:37All of us would get together and just hope we were right that the PC would become a big
02:42thing.
02:44You know, I stop and say, wow, the PC really has become part of the very fabric of the way
02:49people live.
02:50And we certainly surged with it, and I just stop and say, hmm, pretty incredible ride.
03:02Most of these people come from the place I call home, the Silicon Valley south of San Francisco,
03:08California.
03:09Growing up here near the electronics companies that give the place its name, these founders
03:14of the PC revolution were, for the most part, middle-class white kids from good suburban homes.
03:19But it's not their homes we're interested in, it's their garages.
03:29This is my garage and this is all my junk.
03:33I'm probably one of the few guys in Silicon Valley who actually has room in his garage
03:37for a car.
03:38Most everyone else seems to use theirs to start computer companies and create great fortunes.
03:43But I don't have a fortune.
03:44I'm a failure.
03:46I've written computer programs that almost ran, and I've designed and built hardware devices
03:50that frankly didn't work at all.
03:52But I'm the ideal guy to tell the story of the personal computer business because I'm
03:56from its premier gossip columnists, and everyone tells me all their secrets.
04:03And this is my home, where I write a gossip column for a computing magazine.
04:07Sorry about the mess.
04:10Institutions in constant change, like the PC industry, are driven by rumor and gossip,
04:15and I thrive on both.
04:17My electronic mail address is deluged with inside information about everything from product
04:22flaws, to who's sleeping with whom.
04:26What ties these gossipers together is a desire for truth.
04:30These people and their love of technology have fueled the PC revolution.
04:34To understand them is to understand that revolution.
04:37So let's go find some.
04:48Meet Edwin Chin on a Saturday morning at the Weird Stuff
04:52Warehouse.
04:55This could be 1976 or 1996, because there is always a new generation of techies like Edwin
05:01who hear the calling.
05:02Most other kids are watching TV, but not Edwin.
05:06You know, I'm interested in electronics and technologies and a hobby since I started when
05:11I was like six or seven, you know.
05:14How old are you now, Edwin?
05:16Ten right now.
05:19It's no coincidence that the only woman in the vicinity looks bored.
05:24Because this is a boy thing.
05:25The obsession of a particular type of boy who would rather struggle with an electronic
05:29box than with a world of unpredictable people.
05:32We call them engineers, programmers, hackers and techies.
05:35But mainly, we call them nerds.
05:38I think a nerd is a person who uses the telephone to talk to other people about telephones.
05:46And a computer nerd, therefore, is somebody who uses a computer in order to use a computer.
05:55And people have like different degrees of passion, different types of passion, you know, some
05:59people like they just like live databases and like fifth normal form is just like Nirvana
06:03and like they just quest for it, you know, like that's like what gets them up in the morning.
06:10What do your friends think of you?
06:12Boy, he's a nerd.
06:15Yeah.
06:17But I don't mind.
06:18I'm used to being called a nerd.
06:20You can't have other people stop your dreams.
06:23Because you've got a very wide wire.
06:25And in Silicon Valley, the dream is to grow up to become a boy like this.
06:29It doesn't make any difference in the world for you whether it's on one of this machine.
06:32Graham Spencer is chief programmer for Architects Software.
06:36Six guys who graduated from Stanford University and started a company just because they like
06:42each other.
06:45This is a modern day startup.
06:46But at heart, it's no different from PC pioneers like Apple or Microsoft.
06:52Nerds who share a dream.
06:54Their hobby is their business and the culture they've created is identical to that of a thousand
06:59other technology companies.
07:01First, they dumped the idea of nine to five.
07:05In this industry, you can work any 80 hours per week you like.
07:09And then I've got my cap which I use to cover my eyes and sleep in the early morning while
07:15everybody's coming in.
07:16We didn't even obey a 24-hour clock.
07:19We'd come in and program for a couple days straight.
07:22We'd, you know, four or five of us, when it was time to eat, we'd all get in our cars
07:26and
07:26kind of race over to the restaurant and sit and talk about what we were doing.
07:30Sometimes I'd get excited talking about things I'd forget to eat.
07:33But then, you know, we'd just go back and program some more.
07:36It was us and our friends.
07:37Those were fun days.
07:50Let's look in the refrigerator.
07:52Whoa!
07:54We have Coke and cold pizza.
07:56I drink about two liters of Coke a day, I guess.
07:59Two liters of Coke a day?
08:00Yeah.
08:00And do you think of it like as brain food?
08:03That keeps me going.
08:05That and, you know, listen to heavy metal and get caffeinated and hack.
08:13I'd sit down in my room on the floor with sheets of paper spread all around with my computer design
08:18I was working on and always I noticed that I was up pretty late at night and I had lots
08:22of Cokes.
08:22It's just part of that life.
08:26A combination of stale pizza and body odor and sort of spilt cola kind of ground into the rug.
08:35I had brought some spaghetti to work and then forgot to wash out the container for the last
08:40couple of days.
08:41Maybe six or seven if I had to be honest.
08:44Oh, that smells bad.
08:47Eating, bathing, having a girlfriend, having an active social life.
08:53It's incidental.
08:54It gets in the way of code time.
08:56You know, writing code is the primary force that drives our lives, so anything that interrupts
09:02that is wasteful.
09:08What is it about the internal logic of a computer that's so enticing?
09:12For one thing, such logic can be understood, as opposed to things that can't be understood
09:17at all, like the motivations of young women, say, or of the French.
09:22Let me explain.
09:25Time for the cringely crash course in basic computers, part one.
09:29This is a mainframe computer.
09:31All of these cabinets are one machine.
09:34In the old days, all computers were this size.
09:36They were tended by engineers in white coats, a kind of priesthood who took their jobs very
09:40seriously.
09:41Now, all computers work pretty much the same, whether it's a giant that serves 2,000 users
09:46like this one, or a little notebook that serves only me.
09:48They process numerical data, adding, multiplying, comparing.
09:53Fact is, if you can quantify it, a computer can handle it.
09:56It's the emotional stuff they don't know what to do with.
09:58The data must be put into a special binary code consisting only of ones and zeros.
10:05And you have to give the computer instructions, also in code, to tell it exactly what to do
10:09with the data and in what order.
10:11These instructions are called a program.
10:14In the early days, you put in the instructions by flipping switches or loaded them from paper tape.
10:20This was called machine language.
10:22It made computers a pain to use.
10:24Even worse, every type of computer spoke a different machine language.
10:28While the ENIAC could compute the 30-second trajectory of a shell in 20 seconds,
10:34operators required two days to program it to do so.
10:39Then, a U.S. Navy captain named Grace Hopper solved the problem.
10:43She invented a computer language.
10:45English words that the computer itself could translate into binary code.
10:49Now, users could type whole lists of instructions into a computer
10:53rather than flipping those damn switches.
10:55Like most things having to do with computers, that first language had a silly name, COBOL.
11:00It was followed by other languages like FORTRAN and BASIC,
11:03and they all made computing just a bit more user-friendly.
11:05So, when some nerd tells you he's been up all night programming or writing software or hacking code,
11:10what he really means is he's been typing long lists of instructions into his computer.
11:18Mainframe computers were far from personal.
11:20They sat in big, air-conditioned rooms at insurance companies, phone companies, and the bank,
11:25and their main function was to get us confused with some other guy named Cringely,
11:29who was a deadbeat and had a criminal record.
11:33Eventually, computer terminals did begin to appear in some schools, but most of us paid no attention.
11:39But there was usually one kid who did pay attention,
11:41falling in love with the digital purity of those ones and zeros.
11:46He was the nerd.
11:47And I took this book home that described the PDP-8 computer,
11:50and it just, oh, it was just like a Bible to me.
11:54I mean, all these things that for some reason I'd fallen in love with,
11:56like you might fall in love with a card game called Magic,
11:59or you might fall in love with doing crossword puzzles or something else,
12:02or playing a musical instrument.
12:04I fell in love with these little descriptions of computers on their inside,
12:08and it was a little mathematics.
12:09I could work out some problems on paper and solve it and see how it's done,
12:13and I could come up with my own solutions and feel good inside.
12:17So you would keyboard these commands in, and then you would wait for a while,
12:20and then the thing would go da-da-da-da-da-da-da-da-da-da-da-da-da,
12:22and it would tell you something out.
12:25But even with that, it was still remarkable, especially for a 10-year-old,
12:30that you could write a program in BASIC, let's say, or FORTRAN,
12:33and actually this machine would sort of take your idea,
12:40and it would sort of execute your idea and give you back some results,
12:47and if they were the results that you predicted, your program really worked,
12:51it was an incredibly thrilling experience.
12:54Nerds wanted their own computers right from the beginning,
12:57but it took a technological breakthrough to make that possible.
13:01This is it, the chip, the microprocessor.
13:04This is what allows you to have a mainframe computer on your desk.
13:08In the 1950s, mainframes were as big as this garage,
13:11and that's because they were filled with thousands of these vacuum tubes or valves.
13:16Eventually, the valves were made much smaller and replaced with transistors.
13:20Still too big, however, to make a computer that could fit on your desk.
13:23What that took was further miniaturization.
13:25Here we have a single piece of silicon etched with thousands of transistors.
13:29This microprocessor holds more than a million transistors,
13:32and that's the secret of the personal computer,
13:34and that's why they call it Silicon Valley, not Computer Valley.
13:41These are the people who invented the microprocessor, Intel.
13:48Intel was started 28 years ago by a handful of guys after a row with their old boss.
13:53Their microprocessors today power 85% of the world's computers.
14:01Intel not only invented the chip, they are responsible for the laid-back Silicon Valley working style.
14:07Everyone was on a first-name basis.
14:09There were no reserved parking places, no offices, only cubicles.
14:13It's still true today.
14:15Here's the chairman's cubicle.
14:18Knock, knock.
14:19I've knocked on the door, but there's no door.
14:22Gordon Moore is one of the Intel founders worth $3 billion.
14:26With money like that, I'd have a door.
14:28In a business like this, the people with the power are the ones that have the understanding of what's going
14:34on,
14:34not necessarily the ones on top.
14:36It's very important that those people that have the knowledge are the ones that make the decisions.
14:41So we set up something where everyone who had the knowledge had an equal say in what was going on.
14:50Intel's microprocessors kept getting more powerful.
14:53They soon had enough horsepower to run a whole computer.
14:56Only Intel didn't appreciate the brilliance of their own product,
15:00seeing it as useful mainly for calculators or traffic lights.
15:04Intel had all the elements necessary to invent the PC business, but they just didn't get it.
15:10Lucky for us, someone did.
15:15This is the chip that launched the personal computer revolution.
15:26This is the magazine that announced it.
15:30In January 1975, featured on the cover was the world's first personal computer, the Altair 8800.
15:38It was the crazy idea of an ex-Air Force officer from Georgia, Ed Roberts.
15:44If you look at it, you know, it was kind of a grandiose, almost megalomaniac kind of scheme, you know.
15:50And right now I couldn't do it because I could see right off there's no way you could do this.
15:54There isn't any way you could do this.
15:57But at that time, you know, we just lacked the benefits of age and experience.
16:03We didn't know we couldn't do it.
16:07Twenty years after Ed Roberts' flash of brilliance, this exhibit is being held to celebrate the anniversary of the Altair.
16:15Like every other PC pioneer, Ed built his computer just because he wanted one to play with.
16:20There were some of us that lusted after computers, really, at that time.
16:25All the computers in the world tended to be in big centers and you had to get permission to get
16:29close to them.
16:30And it was, you know, you just, nobody could, nobody had access to computers then.
16:34And the idea that you could have your own computer and do whatever you wanted to with it whenever you
16:37wanted to, was fantastic.
16:44And where was all this happening? It was far from Silicon Valley, Intel or IBM.
16:50Out in the desert near the airport in Albuquerque, New Mexico, Ed Roberts ran a calculator company called MITS.
16:57Having an ugly building wasn't its only problem. MITS was going bankrupt.
17:02Nobody was buying calculators and Ed needed $65,000 just to stay afloat.
17:07And we went to the bank and had a late night meeting.
17:11And the issue was whether we closed MITS down or kept, or they loaned us an additional $65,000.
17:16And I was asked how many machines that I think we would sell in the next, in the next year
17:20after it was introduced.
17:22And I said 800. It was considered a wild-eyed optimist at that.
17:26Within a month after it was introduced, we were getting 250 orders a day.
17:30The Altair wasn't even a computer. It was a computer kit.
17:34Whoa, this is a pretty well-equipped machine.
17:38You had to build it yourself, and even then it usually didn't work.
17:43Still, the demand was amazing.
17:45And there were actually people that came to MITS, a couple people with camper trailers,
17:50and camped out in the parking lot waiting for their machines. I mean, they were so eager.
17:56I mean, I think everybody had sort of daydreamed, or Walter admitted, about owning a computer.
18:01The surprise was that it would be possible for the average college student, for example,
18:06who was living on bare subsistence, to actually buy a computer.
18:11This is what really amazed me, was that people were so...
18:15There was a sort of a pent-up demand for having your own computer.
18:20And if it could be that cheap, what a wonderful thing.
18:29This is an Altair computer, the first personal computer.
18:33And not just any Altair, this is Altair serial number two, the second one made.
18:39The first Altair made was sent off to be photographed at a magazine and was lost in the mail.
18:45So this is the oldest personal computer in the world.
18:50Pretty historic junk. But the question is, what do you do with it?
18:54I mean, it has a front panel with switches that you can click back and forth and some lights.
18:59But in the back, there's no place to connect a keyboard.
19:02There's no place to connect a monitor.
19:04There's no place to connect a printer.
19:07In fact, there's practically nothing at all that you can really do with this thing.
19:11But back then, 1975, the people who had it were thrilled.
19:23The nerds formed clubs to talk about their new toy.
19:26One of the first was the Homebrew Computer Club, which met on Wednesday evenings
19:30in a hall rented from Stanford University in Silicon Valley.
19:34Presiding over near anarchy was Lee Felsenstein, who pretended to be in charge.
19:39I would start the meeting by making a horrendous loud noise because everyone was talking
19:44and I had to get some attention somehow.
19:46And I would use it to call on the person in question.
19:50I'd make threatening gestures with it.
19:55Most of us were in the electronics industry to a certain extent.
19:59There was also a stratum of physicians.
20:01And there were a lot of radio amateurs, for instance, finding a new technology that wasn't stale.
20:06But most of us were at a sort of middle-level downbursts.
20:12We saw ourselves as crazed, ignored geniuses, or possibly geniuses,
20:18but at least we could each hope to get our hands on a computer of our own.
20:23Not much in them.
20:25The very uselessness of the Altair is what drove the hobbyists together.
20:30Roger Mellon and Harry Garland started an early computer company.
20:34They came here to meet others and to figure out just what the heck could be done with this new
20:38toy.
20:38A solution in search of a problem.
20:41There's no keyboard that I can see.
20:42The Altair was tedious to use.
20:44At first, the only way that data and instructions could be given to the computer was by flipping switches.
20:50Take something trivial, like two plus two.
20:53Each two needed eight different switches to be flipped.
20:56Then a ninth switch was used to load them all.
20:58Add required another nine switches.
21:00The answer four was if the third light from the left turned on.
21:05Eureka!
21:05So if you had a program that was 100 bytes long, you had to go through this procedure 100 times
21:10to load that into memory.
21:12It took a long time.
21:13I bet it did.
21:14And what happened if you lost power or you lost your way in the middle?
21:18You cried.
21:20The Altair may have been frustrating, but it drove the nerds to experiment,
21:24finding real uses for the useless box, turning it from a curiosity to a computer.
21:30Steve Dompier set up an Altair, laboriously keyed a program into it.
21:37Somebody knocked the plug out of the wall, and he had to do that all over again.
21:41But nobody knew what this was about.
21:44After all, was it just going to sit and flash its lights?
21:47No.
21:48You put a little transistor radio next to the Altair,
21:51and he would, by manipulating the length of loops in the software, could play tunes.
21:56The radio began playing The Fool on the Hill.
21:59Da-da-da-da, da-da-da-da, in the tinny little tunes that you could tell were coming from
22:05the noise
22:06that the computer was generated being picked up by the radio.
22:10Everybody rose and applauded.
22:13I proposed that he receive the Stripped Phillips Screw Award for finding a use for something previously thought useless.
22:20But I think everyone was too busy applauding to even hear me.
22:23It was a very exciting thing.
22:25It was probably the first thing the Altair actually did.
22:30Turning the Altair into a useful tool required a programming language
22:35so users could type their programs in rather than flipping switches.
22:39What it needed was a version of some big computer language like BASIC, only modified for the PC.
22:45This was called a BASIC interpreter.
22:47But it didn't yet exist because the experts all thought that not even BASIC was BASIC enough to fit inside
22:53the tiny Altair memory.
22:55Yet again, the experts were wrong.
22:59Here comes the guy who solved the problem.
23:01Twenty years after finishing the first Microcomputer BASIC, Paul Allen is returning to Albuquerque for a celebration of that event,
23:08this time with his $15 million jet and three-foot red carpet.
23:15At a time when I was killing brain cells, this guy was founding an empire.
23:23He has come to eat rubber chicken in honor of the Altair's 20th anniversary.
23:28I'd like to introduce to you Paul Allen.
23:38Allen co-founded Microsoft with his younger buddy from high school, Bill Gates.
23:43One day in Boston, I was in Harvard Square, and I covered popular electronics with this thing that looked like
23:48what I'd been imagining.
23:50And so I grabbed it off the shelf, and I looked at it, and I bought it, and I ran
23:54back to Bill's dorm.
23:55And I think he was probably playing poker that night and usually losing money at that point.
24:01One of the few times when that's been the case.
24:05Paul showed that to me.
24:07Then, okay, here was a company that would be needing software.
24:12And he said, okay, well, we've got to call these guys up and see if this thing is for real.
24:16We realized that things were starting to happen.
24:18And just because we'd had a vision for a long time of where this chip could go, what it could
24:24mean,
24:24that didn't mean the industry was going to wait for us while I stayed and finished my degree at Harvard.
24:30So, called up, and, you know, we told him, we've got this basic, and it's just, you know, for your
24:35machine,
24:35it's, you know, it's not that far from being done, and we'd like to come out and show it to
24:39you.
24:39So we created this basic interpreter.
24:41Paul took the paper tape and flew out.
24:46In fact, the night before, he got some sleep while I double-checked everything to make sure that we had
24:52it all right.
24:54But I had no idea what it was really going to be like to try to run the software.
24:57It had never been run on an actual computer before.
25:00He was very nervous about whether this would actually work.
25:04And he got to the office, and we all gathered around, and he put his fingers on the switches,
25:10and he loaded basic in with paper tape into the Altair.
25:14You know, I was just, I was so nervous. I just, this is just, it's not going to work. It
25:19worked.
25:19And it came up, and it could do a few little simple things.
25:23And it was amazing when Paul called me up and said the thing had worked the first time.
25:26And, of course, it was incredibly fast.
25:29And it printed out memory size, and I think Bill said, well, it printed something.
25:33So I said, yeah, yeah.
25:35Oh, that was, that was unbelievable. The fact that it really worked was, was a breakthrough.
25:42Maybe there wouldn't be a Microsoft if it hadn't, if the screen hadn't come alive.
25:46Who knows? It might all be quite different.
25:55After the demo succeeded, Bill forgot about finishing university.
25:59Afraid of missing his chance to dominate the new industry,
26:02he joined Allen in what was then the center of world microcomputing research
26:06among the sleazy bars and gas stations of Albuquerque, New Mexico.
26:14And they lived across the street from Mitts in the Sundowner Motel.
26:18And the, the prostitutes and the drug dealers are out on the corner.
26:22And, and they were, uh, writing basic for the Altair computer.
26:26And, uh, gradually they actually started Microsoft here in Albuquerque.
26:31So.
26:31We hired, uh, some, some of our, uh, high school friends basically to come down and, uh, uh,
26:37stay with us in our apartment, which became very crowded.
26:40We were pretty young.
26:42We started when I was 19.
26:44And so we just had a lot of, a lot of energy.
26:47They worked really hard.
26:48They, uh, listened to really loud music.
26:51I could hardly stand to go in the software room sometimes
26:54because the music would be banging off the walls, mostly acid rock.
27:02You know, we'd usually go out, eat, eat pizzas, and then go out and watch, uh, action movies.
27:08Uh, they would work all night long.
27:14And there were days when Bill Gates would be sleeping on the floor in the software, uh, lab.
27:19And sometimes it would be Bill and these two other guys all, you know, sitting on tables around the apartment,
27:25uh, with, with stacks and stacks of paper writing, converting to BASIC for the 8080.
27:30I still know the source code by heart.
27:33And that was, uh, uh, a work of, of love.
27:37You know, we just kept tuning and tuning that thing.
27:39And, and so that kind of craftsmanship paid off.
27:47BASIC let the Altair be used for both fun stuff and real work.
27:51People attached terminals to the computer and began writing games, word processors, and accounting programs.
27:58Most of us didn't notice, but soon there was a thriving industry for enthusiasts.
28:03By the end of 1975, dozens of other companies were building microcomputers.
28:10We created an industry, and I think that goes completely unnoticed.
28:14I mean, there was nothing, every aspect of the industry,
28:16when you talk about software, hardware, application stuff, dealerships, you, you name it, was all done at minutes.
28:21It was a wild time. It was a very exciting time.
28:24And the, the first user convention, where we got people to come in and tell us what they were doing,
28:30what they were excited about.
28:31And other companies, like Processor Technology or MSI or Commemco, got going as add-on companies.
28:39These companies are long forgotten, but they were the, the humble beginnings of the, of the PC industry.
28:46Left in the hands of those early hobbyists, the PC might have never made it to the shopping mall.
28:52Reaching the wider market required a different type of vision.
28:56Enter the flower children of California, who thought the PC was, well, groovy.
29:05From the safety of secret committees, they talk about the danger of war.
29:13Remember that the 60s happened in the early 70s, right?
29:15So we have to remember that. And that's sort of when I came of age.
29:17So I saw a lot of this. And to me, the spark of that was that there was something beyond
29:27sort of what you see every day.
29:30Far from the smell of the gun.
29:33It's the same thing that causes people to want to be poets instead of bankers.
29:38And I think that's a wonderful thing.
29:41And I think that that same spirit can be put into products.
29:46And those products can be manufactured and given to people, and they can sense that spirit.
29:50To help you understand all this, I will now take off my clothes.
29:55Why? And he says, well, frame relay is scalable.
29:58Jim Warren knows better than most what the hippie movement did for the PC.
30:03A 60s radical himself, he staged the West Coast Computer Fair for a time the biggest computer show in the
30:09world.
30:10The fair was where the PC really arrived. It's also where Jim got rich.
30:15So, Jim, is this where you hold all your meetings?
30:19As many as possible. Sure. Why not?
30:24This is how Silicon Valley entrepreneurs conduct business?
30:26I don't know whether it's how entrepreneurs conduct.
30:28Believe it or not, Jim once taught mathematics at a Catholic girls' school.
30:33Bubbles, Bob? Sure. Okay.
30:36Jim was immediately fascinated by the PC, like many Bay Area hippies.
30:40The California counterculture was crucial to the PC's development.
30:44And the whole spirit there was working together, was sharing.
30:49You shared your dope, you shared your bed, you shared your life, you shared your hopes.
30:57And a whole bunch of us had the same community spirit.
31:00And that permeated the whole Homebrew Computer Club.
31:04As soon as somebody would solve a problem, they'd come running down to the Homebrew Computer Club's next meeting,
31:09say, hey everybody, you know that problem that all of us have been trying to figure out how to solve?
31:13Here's the solution. Isn't this wonderful? Aren't I a great guy?
31:16And it's my contention that that is a major component of why Silicon Valley was able to develop the technology
31:23as rapidly as it did,
31:24because we were all sharing. Everybody won.
31:28Out of this creative show-and-tell came Apple Computer, the first mass-market PC company.
31:34The Apple founders, a couple of recent graduates from Homestead High, were regulars at Homebrew meetings.
31:41Steve Wozniak was the technical wizard, and Steve Jobs was the visionary who saw microcomputers as a possible business.
31:49The first Apple Computer was primitive.
31:51It was cobbled together by Woz to impress his friends at the Homebrew meetings.
31:56Everybody was interested in computers, so I started getting a crowd around me,
31:59because even though I was too shy to raise my hand and say anything in a club meeting,
32:03after the club meetings, I would put my computer that I had built,
32:07and every week it had a little bit more working on it, too.
32:09But I would set it down and let people type on the keyboard. I would explain what's in it.
32:13If they come up to me and ask a question, I can answer.
32:16You know, nowadays, I would have the ability to tell them what it is, you know,
32:20and be a little bit more promotional, but back then I could only answer questions that they asked me.
32:24But I got a group that started gathering around me.
32:26And Steve Jobs saw that I had a lot of interest around me at the club, and he said,
32:29let's start selling it, and let's make this company.
32:33Came up with the name Apple, and that's how it started.
32:42Apple was at best a funky company, started by a couple of teenage hackers
32:46who previously had been working as Alice in Wonderland characters in a local shopping mall.
32:51And they started it in this garage right here.
32:54The first Apple Computer was built here.
32:56Now there are more than 10 million in use around the world.
32:59And I was there.
33:00Well, for a short time, I was an employee at Apple Computer, employee number 12,
33:04and one day I helped move materials out of this garage.
33:07At the time, Steve Jobs said the company was short of loot,
33:11so he offered to pay me in company shares, but I held out for the money.
33:15My mother still reminds me of that incident.
33:19The Apple I was even less of a computer than the Altair,
33:23a single circuit board that came with neither a case nor a keyboard.
33:28Still, Steve Jobs managed to sell 50 Apple I's.
33:32That experience showed Jobs that there was a market for a real computer, the Apple II.
33:37It was very clear to me that while there were a bunch of hardware hobbyists
33:43that could assemble their own computers or at least take our board
33:45and add the transformers for the power supply and the case and the keyboard
33:49and go get, you know, et cetera, go get the rest of the stuff.
33:51For every one of those, there were a thousand people that couldn't do that
33:56but wanted to mess around with programming.
33:59Software hobbyists.
34:00Just like I had been when I was, you know, 10, discovering that computer.
34:05And so my dream for the Apple II was to sell the first real packaged computer.
34:11Steve Jobs' dream was impossible.
34:14It needed too many chips making the product too complicated and expensive to build.
34:19But Waz didn't know it was impossible.
34:23And then I got into a way of why have memory for your TV screen
34:27and memory for your computer make them one?
34:29And that shrunk the chips down and I shrunk the chips here
34:32and why not take all these timing circuits?
34:34I looked through manuals and found a chip that did it in one chip instead of five
34:37and reduced that.
34:38And one thing after another after another happened.
34:41I wound up with so few chips.
34:43When I was done, I said, hey,
34:44a computer that you could program to generate colored patterns on a screen
34:48or data or words or play games or anything.
34:51And it was just the computer I wanted, you know, for myself pretty much.
34:55And, but it had turned out so good.
34:57He said, I think we have a computer we could sell a thousand a month of.
35:01How can you sell a thousand a month, you know?
35:03But we needed some money for tooling the case and things like that.
35:06We needed, we needed a few hundred thousand dollars.
35:08That was a lot of money for two people who had nothing in their lives to speak of,
35:13didn't have a $400 bank account.
35:14So I went looking for some venture capital.
35:17The scruffy 19 year old seduced the conservative world of venture capitalists.
35:22The man Jobs persuaded to part with his cash was Arthur Rock,
35:26the inventor of venture capital and the man who had originally funded Intel.
35:30At least the Intel boys had graduated from university and owned suits.
35:35Well, he wore sandals and he had long, very long hair and beard and mustache.
35:43But very articulate.
35:47He was, I think he, at one time in his life,
35:51and it was probably when I first met him that he ate nothing but fruit.
35:57So as a mainline venture capitalist, is this, is this?
36:01This is not the norm.
36:03This is not the norm.
36:09With money in hand and under occasional adult supervision
36:12from an ex-Intel manager named Mike Markala,
36:15Waz and Jobs finished the Apple II and ordered a local factory to build 1,000 machines.
36:22Two years passed between the Altair and the Apple II.
36:26And in that time, a lot of things changed.
36:28We went from a computer that was designed for hobbyists and engineers
36:32and certainly looked like a piece of test equipment
36:34to a computer that looked like a piece of consumer electronics.
36:38And we can thank Steve Jobs for that.
36:40His sense of design demanded that this structural phone case be used for the Apple II,
36:45the first case of its type, on a personal computer.
36:48And not that there wasn't good engineering inside, either.
36:50The Apple II was a model of efficient engineering.
36:53Here's the floppy disk drive controller, for example.
36:56There are eight chips here where previously there would have been 35.
36:59This is an amazing bit of engineering that we can attribute to Steve Wozniak,
37:03who was certainly the Mozart of digital design.
37:06And all told, it turned the Apple II into a sensation.
37:14The Apple II was launched at Jim Warren's West Coast Computer Fair,
37:18one of the first big microcomputer shows.
37:21The 1978 show drew thousands of attendees and dozens of exhibitors,
37:25many of them members of the Homebrew Computer Club,
37:28which spawned most of the early microcomputer companies.
37:30But there was only one company showing something that looked like a modern personal computer.
37:36Right by the entrance, in a prime spot negotiated by Steve Jobs, sat the Apple II.
37:42It mesmerized all who saw it.
37:45My recollection is we stole the show.
37:47And a lot of dealers and distributors started lining up,
37:51and we were off and running.
37:53How old were you?
37:5621.
37:5721?
37:58Yeah.
38:03Following the West Coast Computer Fair, the next two years were ones of explosive growth for Apple,
38:09with thousands of customers arriving on the doorstep of the tiny office in Cupertino, California.
38:15Sales and profits grew so quickly that Apple had more money than the company could spend.
38:20And the company was very young.
38:23The founders were in their twenties, and some employees were even younger,
38:26like 14-year-old Chris Espinoza, who never left.
38:30He still works at Apple almost 20 years later.
38:33There would be public demonstrations of our product
38:35every Tuesday and Thursday afternoon at 3 o'clock.
38:39That was good because it was after school.
38:41So I would get out of my sophomore, junior year of high school,
38:46I would ride my little moped down to the Apple offices,
38:49and at 3 o'clock I'd give the demonstrations of the Apple II.
38:53When we were in the office, it was, hey, jokes and wiring up people's phones,
38:56to do weird things, just every one of us.
38:59I mean, there wasn't a person in Apple, I don't think,
39:01for a couple of years that was, you know, super serious.
39:04We were lucky.
39:05We had, like, the hot product of its day.
39:08And some of the people that I did original demos to came up to me years later
39:12and said, you know, I founded a $100 million chain of computer stores
39:16based on the demo you showed me one Tuesday afternoon at Apple.
39:20It was really fun.
39:21It went so successful that all of a sudden,
39:23Steve and I wouldn't have to worry about work for the rest of our lives.
39:27And then it got even more successful and more successful after that.
39:32And it was sort of a shock.
39:36The Apple II set a new standard for personal computers
39:39and showed there was some real money to be made.
39:41Rival companies popped up all over, but the market was still hobbyists,
39:45guys with big beards who thought a good use for their computer
39:48was controlling a model train set.
39:51...loads in the actual program.
39:53But for microcomputers to be taken seriously,
39:56they had to start doing things that needed doing,
39:59functions that were useful, not just for fun.
40:04Over 2,000 programs...
40:05The enthusiast market had its limits.
40:07To reach the rest of us,
40:09the Apple II needed what nerds call a killer application,
40:12software that's so useful
40:14that people will buy computers just to run it.
40:17For the Apple II, this application was called VisiCalc.
40:20It came straight from the blackboards of the Harvard Business School.
40:26Invented by a graduate student, Dan Bricklin,
40:29with his programmer friend, Bob Frankston,
40:31VisiCalc was the first electronic spreadsheet.
40:35A spreadsheet is a tool for financial planning,
40:38bringing together for the first time
40:40the seduction of money with the power of microcomputing.
40:45Dan Bricklin's professor at Harvard
40:46showed how companies used a grid of numbers on a blackboard
40:49to work out profits and expenses.
40:5260 down here,
40:53and your profit would be this minus this,
40:56which gives you 40.
40:58And then, well, let's see, what's the sales growth?
41:01The trick to a spreadsheet
41:03is that all the values in the table
41:05are related to the others.
41:07So changes in one year would ripple through the table,
41:09affecting prices and profits in subsequent years.
41:13Students were asked to calculate
41:14how future profits would be affected
41:16by various business scenarios.
41:18It was called running the numbers,
41:19and they did it laboriously, by hand.
41:22Well, let's say your initial costs
41:25have 100 fixed costs at the beginning,
41:28so now you have a minus 20
41:29is how much you make the first year.
41:31And then the second year you have 100,
41:33but your variable, let's say, is 25.
41:37So now you're losing, what is it?
41:40There's a pain in the neck
41:41I wasn't very good at this stuff.
41:4280, what?
41:43No, no, no.
41:45We failed.
41:46We just lost it.
41:46Minus 15, right?
41:47And then eventually you're making money.
41:49What year do we make money?
41:50And how much does the cost of money?
41:52That's what running the numbers was.
41:54Because each value was linked to the others,
41:57one mistake could mean disaster.
41:59It blows all your numbers afterwards
42:01because you make all your calculations
42:02based on other numbers before them.
42:04If I had miscalculated...
42:05Dan, who had worked as a programmer,
42:07started daydreaming about how he could use a computer
42:10to replace the tedious hand calculations.
42:13I imagine that there was this magic blackboard
42:15that did like word processing does word wrapping.
42:18If you make a change to a word,
42:19it automatically pulls everything back.
42:21Well, why not recalculate the same way?
42:22So that if I changed my number,
42:25you know, I should have used 10% instead of 12%.
42:27I could just put it in
42:28and it would recalculate everything, go through it.
42:30You know, and that would be this idea
42:33of an electronic spreadsheet.
42:35Following a model that's common today,
42:37Dan Bricklin designed the program
42:39but got his friend Bob Frankston
42:41to write the actual computer code.
42:43After months of programming late at night
42:46when computer time was cheaper,
42:47the Harvard Business School blackboard came to life.
42:51Now we've set this up, okay?
42:52Then we type a new value in, okay?
42:54Here I'm going to take that 100
42:55and I'm going to change it, right?
42:57And here, recalculate.
42:58Whoa!
42:59That saved me so much time.
43:01People who saw it and went and got it,
43:03like an accountant,
43:04I remember showing it to one around here,
43:07and he started shaking and said,
43:08that's what I do all week.
43:10I could do it in an hour.
43:12What I could do, you know,
43:13and they would take their credit cards
43:14and shove them in your face.
43:15I meet these people now,
43:16they come up to me and say,
43:18I've got to tell you, you know,
43:19it's...
43:19You changed my life.
43:20You changed my life.
43:21You made accounting fun.
43:22And...
43:23You have to remember
43:23what it was like in those days.
43:25We didn't want...
43:25We did not use the word spreadsheet
43:27because nobody knew what a spreadsheet was.
43:29I came up with the name
43:30Visible Calculator or Visicalc
43:33because he wanted to emphasize that aspect.
43:36Visicalc hit the market in October 1979,
43:39selling for $100.
43:41Marv Goldschmidt sold the first copies
43:43from his computer store
43:44in Bedford, Massachusetts.
43:46After a slow start,
43:48Visicalc took off.
43:49What it did in our society,
43:51it gave people who were obsessed with numbers,
43:53whether they're in business or at home,
43:55how much am I worth today?
43:56What's my stock portfolio worth?
43:57How am I doing against budget on this project?
44:01It gave them the ability to
44:03play with scenarios and change it
44:05and say, well, what if I do this?
44:07So put people, in a sense, in control
44:10of the thing that lots of people
44:12in our society feel is driving,
44:13and that's numbers.
44:18The spreadsheet was
44:19every businessman's crystal ball.
44:21It answered all those what-if questions.
44:24What if I fire the engineering department?
44:26What if I invest $10 million
44:28in patty-hose futures?
44:31Look, I'll be rich in under a year
44:33and have slimmer thighs at the same time.
44:35The computer says so.
44:44The effect of the spreadsheet was enormous.
44:47Armed with an Apple II running Visicalc,
44:49a 24-year-old NBA with two pieces of dubious data
44:53could convince his corporate managers
44:54to allow him to loot the corporate pension fund
44:57and do a leverage file.
44:58It was the perfect tool for the 80s,
45:00the mead day,
45:01when money was everything,
45:03and greed was good.
45:08The money seemed limitless.
45:10Investments, cash flow.
45:11The whiskies, many fresh out of college,
45:14drawn here by the lure of big money.
45:16He'd made millions for himself
45:18and double-selling junk books.
45:20Forecasts or plans.
45:21A group that has been motivated by greed.
45:24The account can help you work faster.
45:26The money, my mind, my mind, my mind.
45:30In five years,
45:31the PC had gone from a hobbyist's toy
45:33to an engine that shaped the times we lived in.
45:37Thanks to Visicalc,
45:38the Apple II made history.
45:41Everybody you talked to
45:42just seemed excited about
45:43talking about what we were doing.
45:46And there was this huge media explosion,
45:48kind of like the Internet is receiving today,
45:50of this is the happening thing.
45:52You read about it over and over and over,
45:54and every time you took an airplane flight,
45:55you read about it.
45:56In every newspaper, every week,
45:57you'd read something
45:58about small computers coming,
45:59and Apple was one of the highlight companies.
46:01So we were being portrayed
46:02as a leader of a revolution,
46:05and we really felt
46:06that we were a leader of a revolution.
46:07We were going to change life a lot.
46:10Pretty good for a company
46:12started in a garage three years before.
46:15But not all the PC pioneers
46:17made great fortunes.
46:19Dan Bricklin decided
46:20not to patent his spreadsheet idea.
46:22Though more than 100 million spreadsheets
46:24have been sold since 1979,
46:26Bricklin and Frankston
46:27haven't earned VisiCalc royalties in years.
46:30You know, looking back
46:31at how successful a lot of other people have been,
46:33it's kind of sad
46:33that we weren't as successful.
46:35It would be very nice
46:36to be gazillionaires,
46:39but it can also understand
46:41that part of the reason
46:43was that that's not
46:44who we're trying to be.
46:45We're a kid to the 60s,
46:47and what did you want to do?
46:48You wanted to make the world better,
46:49and you wanted to make your mark on the world
46:52and improve things,
46:53and we did it.
46:54So by the mark
46:55of what we would measure ourselves by,
46:57we're very successful.
46:58Yes.
47:01And what about Ed Roberts?
47:03Three years and 40,000 computers
47:05after assembling that first Altair,
47:07the fun was over for Ed.
47:10Mitts was just another player
47:11in what had become
47:12a competitive market
47:13for personal computers.
47:14Roberts sold his company in 1978
47:17and started a new life.
47:19He went back to his native Georgia
47:20and retrained as a doctor.
47:23I hadn't really thought anything at all
47:25about it until the last few years
47:26when people started taking credit
47:27for things that we did at MEDS.
47:29And that's the only thing I think about.
47:31It irritates me,
47:32the things that we did at MEDS
47:33that we took all the heat for
47:35that other people have tried
47:36to take credit for,
47:37and that frustrates me.
47:40While Ed Roberts
47:41invented the personal computer,
47:43it was the founders of Apple
47:44who got rich.
47:45When Apple went public
47:46in spectacular fashion in 1980,
47:49Jobs and Woz became multi-millionaires.
47:52The nerds had inherited the earth.
47:54I was worth
47:58about over a million dollars
48:00when I was 23,
48:02and over $10 million
48:04when I was 24,
48:05and over $100 million
48:06when I was 25.
48:11And it wasn't that important.
48:15because I never did it for the money.
48:18It was just a little hobby company
48:19like a lot of people do,
48:20not thinking anything of it.
48:22I mean, it wasn't like
48:24we both thought
48:25it was going to go a long ways.
48:26It was like,
48:27we'll both do it for fun,
48:29but back then,
48:30there was a short window in time
48:31where one person
48:32who could sit down
48:33and do some neat, good designs
48:34could turn them into
48:36a huge thing
48:37like the Apple II.
48:53It's astonishing
48:54that at the beginning of 1975,
48:56nobody owned a personal computer.
48:58All there was
48:59was a mock-up
49:00on a magazine cover.
49:02Yet, within five years,
49:03there had emerged here
49:04in Silicon Valley
49:05a billion-dollar industry.
49:07An unhealthy fascination
49:08with technology
49:09on the part of a few adolescents
49:10had awakened
49:11the nerd within us all.
49:13PC companies
49:14were sprouting like mushrooms
49:15to meet the enormous demand.
49:17Apple had emerged
49:18as the top fungus
49:19and had taken
49:2050% of the market.
49:22To the boys in Cupertino,
49:24every day seemed like Christmas,
49:25but Scrooge
49:26was around the corner.
49:27There was a company
49:28that everyone associated
49:29with the word computer,
49:31a company that expected,
49:32no, demanded
49:33to dominate its market,
49:35IBM.
49:36Big Blue was on the move
49:37and Silicon Valley
49:39would soon be feeling
49:40the reverberations.
49:51We'll see you next time.
50:11A-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a
50:17-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a
50:18-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a
50:18-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a
50:21-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a
50:23-a-a-a-a-a-a-a-a-a-a-a
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