Something Ventured Page #6

succeeded in making the gene,

and then we transported

the gene-

Bob had it in his pocket-

up to University of California.

And Herb Boyer

inserted it into the bacterial host.

Then it worked.

So we had our breakthrough.

That was the first time

in history...

that, uh, mankind

had ever made an artificial, um-

Well, let's just say

an artificial bacteria.

Most doctors agree that

genetic engineering..

Will be the source of most drugs

in the next decade.

As scientists look ahead, they see

a myriad of products. New vaccines-

We haven't

scratched the surface yet,

in terms of, uh,

new hormones and molecules...

that the body produces itself

to keep itself healthy.

The next step, of course-

You know, it wasn't my goal

to start an industry.

My goal was to, um,

make sure the science got translated...

into an endeavor

that would be useful to people.

In all the things I've done,

I think I'm most proud of Genentech,

because it, uh, Well, saved hundreds

of thousands of people's lives.

Well, isn't it great if you can

make money...

and change the world for the better

at the same time?

We are now entering our

fourth generation of computers.

Difficult problems which once required 30 hours

of work by a computer as large as a house...

can now be solved in 12 seconds by a

computer no bigger than a bathtub.

In 1976, the computer was

about to get personal,

expanding beyond the government, institutions

and businesses to enter the home.

For venture capitalists, this represented

the opportunity of a lifetime.

We turned down Apple Computer.

We didn't-

We didn't even turn it down.

We didn't agree to meet

with Jobs and Wozniak.

Oh, that would have been a fabulous

investment if we had made it,

but we didn't.

We said, "Oh, no,

we're not really in that business."

I thought, "How can you use a computer at

home? You're gonna put recipes on it?"

I sent my partner down

to look at Apple.

He came back and he said, "Guy kept me waiting

for an hour, and he's very arrogant."

And, of course, that's Steve Jobs!

I said, "Well, let's let it go."

That was a big mistake.

In 1976, the only people who

believed in the personal computer...

were the geeks and nerds who

gathered at Home brew Computer Clubs.

At one such club, 21-year-old Steve Jobs

had partnered with Steve Wozniak...

to create a circuit board kit

they called...

The Apple I.

Steve Jobs was

working at Atari at the time,

so the most obvious person to ask for

start-up money was his boss, Nolan Bushnell.

They needed an investment,

and, uh, they offered me a third

of Apple Computer for $50,000...

and I said,

"Gee, I don't think so."

I could have owned a third

of Apple Computer for $50'000.

A big mistake.

But I said, "Call Don Valentine."

'Cause Don had a high probability

of seeing the opportunity.

So we had our meeting.

I went to Steve's house.

And we talked,

and I was convinced

it was a big market...

just embryonic ally beginning.

Steve was in his Fu Manchu look,

and his question for me-

"Tell me what I have to do

to have you finance me."

I said, "We have to have someone

in the company...

who has some sense of management and

marketing and channels of distribution."

He said, "Fine.

Send me three people."

I sent him three candidates.

One he didn't like.

One didn't like him.

And the third one

was Mike Markkula.

Mike Markkula worked for me at

Fairchild before he went to Intel.

He called me up and said, "There's

two guys over in Los Altos that, uh,

could really use your help,

and you ought to go see'em."

I said, "Okay."

'Cause that's what I did on Mondays.

I was retired.

I think I was 32

when I retired from Intel.

But one day a week, I would help people

start companies and write business plans.

I did it for free, just for the

interaction with bright, uh, people...

that had a lot of

fire in their belly.

So I went

over and talked to the boys.

The two of them did not make

a good impression on people.

They were bearded.

They didn't smell good.

They dressed funny.

Young, naive.

But Woz had designed a really wonderful,

wonderful computer.

Technology that was

really advanced.

The problem was,

you could walk down the street in 1976...

and talk to a hundred people and say,

"Would you like a personal computer?"

And they'd go, "What's that?"

And so I told them.

I said I'd help them write a business plan.

So I got to working on it,

and I'd say, "Gosh", you know'

"the opportunity here is just too great."

The business plan said that, uh' with $142'000

we could be cash-flow positive in nine months.

And I came to the conclusion that we could build

a Fortune 500 company in less than five years.

I said I'd put up the money

that was needed.

Not only did he write the check,

Mike Markkula

came out of retirement,

becoming the president

and C.E.O. of Apple.

His first order of business,

build a board of directors.

And the first call he made

was to Arthur Rock.

Arthur would have missed Apple

if it weren't for Mike Markkula.

Jobs and Wozniak

came up to see me,

and they were very unappealing.

Goatee, long hair-

Markkula said, "Well,

before you make up your mind,

there's a computer show.

You ought to come down

and see what's going on."

And he did. He thought somethin'

was happenin'. He wasn't quite sure what.

There was this huge auditorium,

and there was this booth

with everybody around it.

I couldn't even get next to it.

And it was the Apple booth.

And it turned out

that I sure made an investment.

Then I got a call

from Don Valentine.

"I want to put

some money in that compa-"

I said, "Okay, you gotta

come on the board then."

Don's background is sales and

distribution and customer satisfaction.

Arthur's expertise comes from

the way financial markets work,

and, uh, how to choose people.

I don't think

there's a company today...

that could say that they had

a better board than that.

I mean, we couldn't-

We couldn't lose.

Taking his place alongside

the venture capital luminaries...

was the young Steve Jobs,

who had never even seen

the inside of a board room.

There was one board meeting

that he took his shoes off...

and put his bare feet up

on the-on the table.

And I said, "You're excused

until you can come back here...

and act like a board member."

He put his shoe back on

and everything was fine.

He just needed some training

and some direction...

and some, um, manners.

You know, in the venture capital business,

if you look at 200 deals,

and you-you might do

10 of'em,

and you will think they're all great,

and if one of'em is great,

then you're in the hall of fame.

If you make 10 deals,

you know, if you do it well,

some of them are gonna succeed,

some are going to fail.

There's usually one in there

we call the living dead.

Living dead, living dead, living dead.

They don't succeed, they don't fail.

They just sit there and lap up your time.

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