Apple 2.0

Covering the business that Steve Jobs built

Steve Jobs as Scarlett O'Hara

October 3, 2010: 11:36 AM ET

What did Apple's CEO really learn during those 12 years in the wilderness?

According to Randall Stross, who addressed the question in a guest article in the Sunday New York Times, what Steve Jobs learned from his mistakes at NeXT -- the company he founded in 1985 after he was stripped of his authority at Apple (AAPL) -- was to retain talent and to delegate.

"Almost every aspect of the [NeXT computer] — including the finish on interior screws — was his domain," Stross writes. "According to one [former colleague], while a delegation of visiting executives waited on the sidewalk, Mr. Jobs spent 20 minutes directing the landscaping crew on the exact placement of the sprinkler heads."

Jobs delegates plenty now, says Daring Fireball's John Gruber, who talked about Jobs' years in the wilderness in his keynote at Macworld 2010 last February (see YouTube video excerpt here and below the fold). Jobs doesn't write code or design iPhones.

"But I do think there is one product that Jobs designed himself, personally, and that's Apple, the company," Gruber said. "What I think he did in the aftermath was to sit back and figure out how a large company should be structured."

Specifically, Gruber suggests, Jobs may have figured out how to structure Apple Inc. so that it can survive and thrive when its co-founder is no longer around to run it.

But I believe there may be an even more pressing lesson that Jobs learned from Apple and NeXT, one that says as much about how he has managed Apple since his return in 1997 as his need to delegate, hold on to key employees and prepare for his succession.

Jobs proved with the original Mac and the NeXT machine that he's a brilliant product guy. But neither product made enough money to keep the business side at bay. His failure to think about the bottom line -- about profit margins -- cost him both Apple and NeXT.

I always imagined Jobs coming out of those wrenching experiences with an epiphany something like Scarlett O'Hara's in Gone with the Wind:

"I'll never be hungry again," Scarlett shouts into an orange sky amid the ruins of her beloved Tara. "No, nor any of my folk. If I have to lie, steal, cheat or kill. As God is my witness, I'll never be hungry again!"

You can be sure that with gross margins in the 30% to 40% range and a cash hoard approaching $50 billion, Steve Jobs will never lose a company again.

Below: Scarlett O'Hara's famous vow and that six-minute John Gruber clip. Gruber's full one-hour Macworld keynote is available here. For $2.99, can rent Gone with the Wind on iTunes.

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[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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