Creation myth Par 1: Xerox PARC, Apple, and the truth about innovation

In late 1979, a 24-four-year-old entrepreneur paid a visit to a research centre in Silicon Valley called Xerox PARC. He was the co-founder of a small computer startup down the road, in Cupertino. His name was Steve Jobs. Xerox PARC was the innovation arm of the Xerox Corporation. It was, and remains, on Coyote Hill Road, in Palo Alto, nestled in the foothills on the edge of town, in a long, low concrete building, with enormous terraces looking out over the jewels of Silicon Valley. To the northwest was Stanford University’s Hoover Tower. To the north was Hewlett-Packard’s sprawling campus. All around were scores of the other chip designers, software firms, venture capitalists, and hardware-makers. A visitor to PARC, taking in that view, could easily imagine that it was the computer world’s castle, lording over the valley below-and, at the time, this wasn’t far from the truth. In 1970, Xerox had assembled the world’s greatest computer engineers and programmers, and for the next ten years they had an unparalleled run of innovation and invention. If you were obsessed with the future in the seventies, you were obsessed with Xerox PARC, which was why the young Steve Jobs had driven to Coyote Hill Road.

Apple was already one of the hot¬test tech firms in the country. Everyone in the Valley wanted a piece of it. So Jobs proposed a deal: he would allow Xerox to buy 100,000 shares of his company for a million dollars—it’s highly anticipated initial public offering (IPO) was just a year away—if PARC would “open its kimono.” A lot of haggling ensued. Jobs was the fox, after all, and PARC was the henhouse. What would he be allowed to see? What wouldn’t he be allowed to see? Some at PARC thought that the whole idea was lunacy, but, in the end, Xerox went ahead with it. One PARC scientist recalls Jobs as “rambunctious”—a fresh-cheeked, caffeinated version of today’s austere digital emperor. He was given a couple of tours, and he ended up standing in front of a Xerox Alto, PARC’s prized personal computer. An engineer named Larry Tesler conducted the demonstration. He moved the cursor across the screen with the aid of a “mouse.” Directing a conventional computer, in those days, meant typing in a command on the keyboard. Tesler just clicked on one of the icons on the screen. He opened and closed “windows,” deftly moving from one task to another. He wrote on an elegant word-processing programme, and exchanged e-mails with other people at PARC, on the world’s first Ethernet network. 

Jobs had come with one of his software engineers, Bill Atkinson, and Atkinson moved in as close as he could, his nose almost touching the screen. “Jobs was pacing around the room, acting up the whole time,” Tesler recalled. “He was very excited. Then, when he began seeing the things I could do onscreen, he watched for about a minute and started jumping around the room, shouting, ‘Why aren’t you doing anything with this? This is the greatest thing. This is revolutionary!’ ” Xerox began selling a successor to the Alto in 1981. It was slow and under-powered-and Xerox ultimately withdrew from personal computers altogether. Jobs, meanwhile, raced back to Apple, and demanded that the team working on the company’s next generation of personal computers change course. He wanted menus on the screen. He wanted windows. He wanted a mouse. The result was the MacIntosh, perhaps the most famous product in the history of Silicon Valley. “If Xerox had known what it had and had taken advantage of its real opportunities,” Jobs said, years later, “it could have been as big as IBM plus Microsoft plus Xerox combined—and the largest high-technology company in the world.”

This is the legend of Xerox PARC. Jobs is the Biblical Jacob and Xerox is Esau, squandering his birthright for a pittance. In the past 30 years, the legend has been vindicated by history. Xerox, once the darling of the American high-technology community, slipped from its former dominance. Apple is now ascendant, and the demonstration in that room in Palo Alto has come to symbolise the vision and ruthlessness that separate true innovators from also-rans. As with all legends, however, the truth is a bit more complicated. After Jobs returned from PARC, he met with a man named Dean Hovey, who was one of the founders of the industrial-design firm that would become known as IDEO. “Jobs went to Xerox PARC on a Wednesday or a Thursday, and I saw him on the Friday afternoon,” Hovey recalled. “I had a series of ideas that I wanted to bounce off him, and I barely got two words out of my mouth when he said, ‘No, no, no, you’ve got to do a mouse.’ I was, like, ‘What’s a mouse?’ I didn’t have a clue. So he explains it, and he says, ‘You know, (the Xerox mouse) is a mouse that cost US$300 to build and it breaks within two weeks. “Here’s your design spec: Our mouse needs to be manufacturable for less than US$15. It needs to not fail for a couple of years, and I want to be able to use it on Formica and my blue jeans.’ From that meeting, I went to Walgreens, which is still there, at the corner of Grant and El Camino in Mountain View, and I wandered around and bought all the underarm deodorants that I could find, because they had that ball in them. I bought a butter dish. That was the beginnings of the mouse.”

I spoke with Hovey in a ramshackle building in downtown Palo Alto, where his firm had started out. He had asked the current tenant if he could borrow his old office for the morning, just for the fun of telling the story of the Apple mouse in the place where it was invented. The room was the size of someone’s bedroom. It looked as if it had last been painted in the Coolidge Administration. Hovey, who is lean and healthy in a Northern California yoga-and-yogurt sort of way, sat uncomfortably at a rickety desk in a corner of the room. “Our first machine shop was literally out on the roof,” he said, pointing out the window to a little narrow strip of rooftop, covered in green outdoor carpeting. “We didn’t tell the planning commission. We went and got that clear corrugated stuff and put it across the top for a roof. We got out through the window.”

He had brought a big plastic bag full of the artifacts of that moment: diagrams scribbled on lined paper, dozens of differently sized plastic mouse shells, a spool of guitar wire, a tiny set of wheels from a toy train set, and the metal lid from a jar of Ralph’s preserves. He turned the lid over. It was filled with a wax-like substance, the middle of which had a round indentation, in the shape of a small ball. “It’s epoxy casting resin,” he said. “You pour it, and then I put Vaseline on a smooth steel ball, and set it in the resin, and it hardens around it.” He tucked the steel ball underneath the lid and rolled it around the tabletop. “It’s a kind of mouse.”

The hard part was that the roller ball needed to be connected to the housing of the mouse, so that it didn’t fall out, and so that it could transmit information about its movements to the cursor on the screen. But if the friction created by those connections was greater than the friction between the tabletop and the roller ball, the mouse would skip. And the more the mouse was used the more dust it would pick up off the tabletop, and the more it would skip. The Xerox PARC mouse was an elaborate affair, with an array of ball bearings supporting the roller ball. But there was too much friction on the top of the ball, and it couldn’t deal with dust and grime. At first, Hovey set to work with various arrangements of ball bearings, but nothing quite worked. “This was the ‘aha’ moment,” Hovey said, placing his fingers loosely around the sides of the ball, so that they barely touched its surface. “So the ball’s sitting here. And it rolls. I attribute that not to the table, but to the oldness of the building. The floor’s not level. So I started playing with it, and that’s when I realised: I want it to roll. I don’t want it to be supported by all kinds of ball bearings. I want to just barely touch it.”

The trick was to connect the ball to the rest of the mouse at the two points where there was the least friction-right where his fingertips had been, dead centre on either side of the ball. “If it’s right at mid-point, there’s no force causing it to rotate. So it rolls.” Hovey estimated their consulting fee at US$35 an hour; the whole project cost perhaps US$100,000. “I originally pitched Apple on doing this mostly for royalties, as opposed to a consulting job,” he recalled. “I said, ‘I’m thinking 50 cents a piece,’ because I was thinking that they’d sell 50,000, maybe 100,000 of them.” He burst out laughing, because of how far off his estimates ended up being. “Steve’s pretty savvy. He said no. Maybe if I’d asked for a nickel, I would have been fine.”

Continued next week.

Malcolm Gladwell will be the keynote speaker at the Arthur Lok Jack Graduate School of Business’ Distinguised Leadership and Innovation Conference, (DLIC) 2012 on March 29. conferencing@lokjackgsb.edu.tt, or call us at: 645-6700, ext 329.