Apple went from Bankruptcy to $3 Trillion: Steve Jobs Engineered the Greatest Comeback

0:06 you can't connect the dots looking forward you can only connect them looking backwards great you've got to be uh willing to um fail you've got to be willing to crash and burn starting a company with whatever if you're afraid of failing uh you won't get very far the year is 1997 and Apple is dying the company is hurting laying off workers one of Silicon Valley's brightest stars may soon be history executives are leaving the product line is bloated and the leadership vacuum is widening 12 years ago Apple was known as a company that put a dent in the universe hello I am Macintosh

0:51 people love him hate him often at the same time for 10 years by sheer force of will he made the personal computer industry follow his direction but now the condition of Apple is so bad that Apple's market value has dropped by 80% between 1992 to the end of 1997 financial difficulties layoffs buyout rumors once a mighty giant in the industry now Apple computers are given little shelf space in most stores investors have completely lost hope their computers are collecting dust at the retailers and employees are abandoning Apple and nobody wants to buy an Apple computer i've always grown up around IBM compatibles my dad had one and IBM I was familiar with it i knew how to move it you could expand on it a

1:38 little bit more a company that was once known as a pioneer in computers was now drowning in debt and Apple is bleeding with more than a billion dollars of losses every single year apple's financials are deep in the red with losses surpassing $1 billion this year once a pioneer in computing now on the brink of bankruptcy but but but in 1997 just when Apple was about to go bankrupt something crazy happened one man came back the man who created Apple the man who was fired from his own company and now he's here to change Apple's fortune forever and now after 12 long years the auditorium is packed reporters are swarming the entrance the cameras are flashing and the journalists are eagerly holding their notepad for the next big

2:24 headline because today it isn't just another product launch today is the beginning of the greatest corporate comeback in history and this man is about to transform a dying company into a trillion giant we're talking about a guy who sees the personal computer as his tool for changing the world we're talking about Steve Jobs becoming the fastest growing company in American business history every once in a while a revolutionary product comes along that changes everything apple the first company ever to be worth more than $3 trillion it is mindboggling the company has proven its ability to reinvent itself and push boundaries this is the first $3 trillion company trading in the US probably trading in the

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4:44 clients all in just one place plus ODO CRM provides accurate revenue forecast and customizable dashboards to keep you in control of your business and the best part the first app is free for life with hosting and support so click the link in the description to check out ODO CRM today the story of Steve Jobs in Apple began in 1976 a time when computers were massive expensive and intimidating machines these machines were used only by big corporations research institutions and the government in the 1970s computers were colossal machines towering cabinets filled with wires and worring parts they cost a fortunes and were operated only by trained experts at trade shows across the country when

5:30 manufacturers show off their wares the house is usually packed the big difference when he grows up in fact we wanted to wait till the year 2001 is that he will have in his own house not a computer as big as this but at least a console through which he can talk this is when the world discovered the magic of something called microchips and suddenly everything that required a giant console it could be compressed in a small chip that could fit in your pumps a computer chip that holds more information than any other of its type each of these memory circuits can store one bit of information and there are over 64,000 on the chip but what's really remarkable this is its real size this quarterin chip can hold the names of about as many blood donors or bank

6:17 accounts as a roomsized computer of 25 years ago and the king of these pioneering inventions was a company called International Business Machine or IBM ibm was so big that in 1984 they generated a revenue of $ 31.44 billion they were supplying computers to giants like NASA and Boeing but this is when two kids in a garage decided to challenge the godfather of computers w and I uh had known each other since I was about 12 or 13 years old he said "Why don't we make a PC board where every chip goes and they'll plug the parts in solder it together and it will only take them a couple hours to make." In 1977 Apple a young fledgling company on the West Coast invents the Apple 2 the first personal computer as we know

7:03 it today now imagine this guys you are 21 years old and you suddenly decide that you are going to kill a trillion dollar company like Apple or a billiond dollar company like OpenAI now when you think of this it sounds crazy right well that's exactly what everybody thought when Steve Jobs and Steve Wnjak thought of killing IBM but Steve Jobs and Steve Wnjak did something so breathtaking that in the first year that is in 1977 they sold their computers and made $775,000 in the second year they made 10 times more money to hit $7.9 million in the third year they made seven times more to hit $47 million and in the fourth year they doubled their revenue to hit $117 million and by the fifth

7:50 year Apple had already gone public to result into a historic $334 million in revenue by this time Apple was valued at $1.7 billion and Steve Jobs was a millionaire we are delivering today iMac they had a revolutionary new computer he was one of the most creative and daring CEOs steven Jobs helped build the first Apple computer in his garage he is now 26 years old and is chairman of the board a global icon who shaped the worlds of technology and media now as Apple was growing Steve Jobs found himself drowning in the very thing that he hated instead of creating designing and innovating he was stuck in meaningless meetings accounting procedures and corporate management and

8:36 for a man like Steve Jobs this was soul crushing and one day he decided to do something that would change his life forever steve Jobs decided to hire a CEO and his name was John Scullin while Jobs pursued his Mac mission he needed a more orthodox chief executive to run the company a respectable face who could sell to corporate America he chose Pepsicola executive John Scully when John came to Apple he thought Steve Jobs was a charismatic visionary and a brilliant designer and he was but then after some time John saw something that nobody had ever seen before john saw the dark side of Steve Jobs steve Jobs was such a lunatic that if you met him at the elevator and told him something that he wasn't impressed by he would simply

9:23 fire you so employees at Apple would literally avoid him out of fear of being fired and if you told Steve Jobs a brilliant idea he would first scream at you call you dumb and then he would walk into a room the next day and present the exact same idea as his revolutionary idea and Steve Jobs was so insensitive that he parked his Mercedes in handicap spots not because he was handicapped but simply because he did not like walking far he got mad at me and he said "Uh you forced me to price it too high i want to lower the price." I witnessed his incremental changes from sweet super bright goofy guy into a ruthless stunningly successful business tycoon but even this behavior was tolerable to Scully because Steve Jobs was a genius but after some time Steve Jobs madness

10:10 turned into such a nightmare for the company that Apple started bleeding take Lisa for example while IBM was selling their PCs for $1,565 Apple's Lisa cost a mindblowing $10,000 why because Steve Jobs crammed it with unnecessary overengineered features that nobody needed lisa wasn't a computer for the people it was a machine built for Steve Jobs own ego and I'll tell you how IBM played it smart they licensed PC DOS from Microsoft for a small fee and they encouraged third party developers to provide softwares like Word and Excel but Apple on the other hand did things differently instead of licensing existing softwares Steve Jobs insisted on Apple engineers developing everything in-house which cost them millions of

10:57 dollars took longer and only ended up adding a few features extra but that was nothing compared to his insanity about cooling and if you have a person like Steve Jobs in your company guys listen to this very very carefully because it's absolutely scary you see back then fans were essential for cooling in any computer right back then every engineer knew that and every competitor used them but then Steve Jobs somehow thought that fans were ugly and they made a lot of noise so you know what he did he ordered his team to come up with a silent cooling system this was the reason why within just 2 days of purchase the Max started to overheat and they started crashing so Apple again spent millions of dollars only to make an overheating machine that got heated like a freaking toaster and John Scully was seeing all

11:42 of this and he was shocked to know that while IBM focused on building powerful computers Steve Jobs was just obsessed with something most people would just throw away in seconds you know what that was it was a freaking box yes Apple spent a fortune on just the packaging of the Macintosh just because Steve Jobs wanted the customers to have a dramatic experience of opening the bloody Macintosh box and the result of this was a nightmare for Apple while IBM's PC sold for $1,565 the Macintosh became so costly that it costed $2,500 and you know what was the worst part it barely did anything significantly useful for the customers it had a lot of features but not so many that it could justify a

12:29 $440% premium on Lisa or a 59% premium on the Macintosh and when Jon started interrupting the procedures of Steve Jobs Steve Jobs was so annoyed at Jon that when Jon Scully was leaving for China Steve Jobs secretly went behind his back to get him ousted as the CEO of Apple and this is when Jon lost his temper after this incident John aggressively convinced the board to get Steve Jobs fired from Apple steve Apple is collapsing the Mac is a financial failure we are losing market share we are losing credibility and we are burning millions our engineers are defecting and investors have completely lost faith the company is burning Steve and you are holding the

13:15 match you are blaming me maybe if we stopped hiring idiots and actually pushed innovation we would be in a better place John oh give it a rest Steve we have heard it all before your vision your perfectionism it's not vision it's madness you bleed money like it's endless you belittle the very people building your machines and worst of all you refuse to listen to anyone but your own ego steve I am sorry to say but you have turned Apple into dictatorship you humiliate employees you scream at engineers and you fire people just for looking at you the wrong way that's not genius steve without me none of you would be sitting here without me Apple wouldn't exist i created this company with my bare hands while you people were pushing paper you don't get to decide my fate you're right about one thing Steve you don't get to decide we

14:02 do and we just did you're fired enjoy your little empire John because when this ship sinks you'll be the one drowning i am Apple and you just babysitting it and eventually the biggest breaking news in the tech industry came out steve Jobs was fired from Apple and while most people thought Scully could bring Apple back to track what happened next was the complete opposite apple started to go bankrupt the company is hurting laying off workers and scaling back production just today Apple took out full page ads in newspapers across the country explaining its problems and asking customers to be patient now think about this guys apple was a perfect company

14:47 steve Jobs had already hired the most talented people to work on Macintosh they were sitting on millions of dollars of cash and they also had a wonderful CEO who had a solid reputation in marketing and corporate management then the question over here is where did Apple go wrong and here's where you have a very very important lesson to learn about leadership you see guys there were three very very critical mistakes that John Skully made which turned Apple into a bleeding company firstly John Skully was the perfect CEO not for his customers but for his shareholders now what is the difference a CEO who's truly focused on customers will push the boundaries of product innovation with the understanding that profit is merely the natural byproduct of meeting and exceeding customer expectations now in

15:32 contrast a CEO who's laser focused on shareholders will always prioritize short-term profits stock prices and quarterly results and look at this under Scully's leadership Apple experienced a significant revenue growth and if you looked at Apple's P&L back then you would say that Apple was doing phenomenally well with revenues increasing from 1.9 billion in 1985 to $8 billion in 1993 apple was doing very well on paper but you know at what cost when Macintosh released in 1984 Skully raised its price from $1,995 to $2,495 this decision aimed to boost profit margins and fund extensive advertising campaigns launched by Apple but at $2,495 the Macintosh was no longer an

16:19 accessible machine it was a luxury with no justification at all it was like Apple launching the iPhone 14 and iPhone 15 with almost no significant difference but with a 20% increase in price just because they could so consumers started asking why should I pay a premium for something that doesn't even offer significantly more value in fact he was so focused on business that even though the Macintosh was revolutionary in 1984 with a great user interface a mouse and so many other tools Skully forgot that Apple was a tech company that needs to innovate and not a soda company that can sell the same sugared water for 100 years and guess what by 1990 Microsoft launched Windows 3.0 and along with that the final blow came in with Windows 95

17:05 microsoft Corporation today officially unveiled its Windows 95 computer program never has a piece of software been given such a hard sale the hype has reached new heights the cyber hype has been relentless go for it it's been worldwide there's never been any cell like it ever and it's paying off let's experience the world of Windows 95 remember a good operating system is kind of like a good date smart userfriendly and under $100 so now suddenly Windows PCs could do everything an Apple computer could do but faster better and cheaper and Windows was so successful that by 1995 Microsoft Windows had captured over 90% of the OS market whereas Apple's market

17:53 share fell below 10% in fact Windows 1995 sold 40 million copies in its first year which was more than all the Macs Apple sold in a decade from Newfoundland to New York and New Zealand millions of computer buffs swarmed into stores to buy the software package that's described as the dawn of a new era in personal computing about 4 fifths of the world's 200 million PCs are fitted with a Microsoft system of which Windows 95 is the latest version secondly Apple launched too many products with absolutely confusing offerings almost like Samsung does for phones today in India now you tell me guys today Samsung in India has over 50 plus smartphone models it has Galaxy M Galaxy F Galaxy A

18:39 Galaxy S and Galaxy Z series and each series then has multiple variants like M14 M13 A15 F15 and F14 so it's confusing right you have no idea which is better and why is it better just like this John's Khali transformed Apple into a department store you know at one time Apple had Power Mac series the performer series the Quadra series and the Centric series then under each series they had variants named Power Macintosh 6100 series Power Macintosh 7100 series and Power Mac 8100 series and then you had Perform 5200 CD 6200 CD and 6400 CD they had 50 models like these yes 50 models

19:28 so obviously customers didn't know which Mac to buy in fact the retailers themselves did not know which Mac was the best and Apple didn't know what the hell they were selling so with so much confusion Apple did so bad that by 1996 Apple had 70 plus product variants and 1 billion in unsold inventory so Apple wasn't competing with Microsoft anymore at all it was competing with its own products in a losing battle and lastly under John Scully Apple became a product graveyard they had pointless halfpin products that nobody wanted look at this they launched something called the Newton personal digital assistant and this product was supposed to be a

20:14 game-changing handheld computer instead it was a $100 million joke its handwriting recognition was so bad that it almost felt like a dyslexic computer and the worst part it cost $1,000 and then came the biggest embarrassment of all apple launched a gaming console called Pepin it was twice the price of a PlayStation it had very few games and it was a terrible console to play in so with this stupid optimization for quarterly results confusing products and more importantly terrible products by 1997 Apple was in such a pathetic state that the stock price was down by 80% since 1984 on top of that they were drowning with $1 billion of unsold inventory and they lost $1 billion in a single year and

21:01 eventually Apple was just 90 days away from bankruptcy but that's when the legend returned and to start us off in the right direction is a individual who really needs little introduction steve Jobs returned to the company he helped create and became interim CEO and so there began what I think is the greatest turnaround once back at Apple Jobs characteristic flare for marketing came back in full force ken Seagull worked with Jobs on a breakthrough advertising campaign that defined their new direction think different became the line that launched Apple's rebirth you know just to show you how revolutionary Steve Jobs was

21:47 look at this between September 1997 and 2011 Apple's stock price surged from $0.2 to $12.45 per share this represents an extraordinary increase of 6,125% in 1997 while Apple had a market cap of 1.5 billion by 2011 Apple had a market cap of $321.3 billion in 1997 while Apple generated a revenue of $6.53 billion by 2008 they were touching $34.75 billion a year and by the time Steve left he left a foundation so strong that Apple eventually became a $3 trillion company so the trillion dollar

22:33 question over here is what on earth did Steve Jobs do the first step that Steve Jobs took was to raise money for Apple and he did the unthinkable you know what Steve Jobs did he partnered with a company that he once absolutely hated this company was Microsoft and Apple sold $150 million of state to Microsoft and turned Internet Explorer i repeat Internet Explorer into the default browser in Macintosh now you might ask why why the hell did Microsoft invest in Apple they were both competitors right well yes microsoft invested in Apple because Bill Gates and Microsoft they were facing a court charge for monopolizing the entire American market

23:18 and the allegation stated that Bill Gates used unethical means to kill their competition by the mid '90s Windows quickly takes the computer business by storm by the end of the 1980s 80% of the world's computers use Microsoft's operating systems now anyone who buys a PC automatically gets Microsoft spreadsheets and other programs whether they want them or not since the day this trial began they are currently over 95% market share in both of those markets their profit margin for Windows alone is an astounding 78% microsoft's aggressive tactics begin to backfire competitors accused the software giant of monopolizing the industry so long story short Microsoft invested in Apple because they wanted to show the code that they were supporting competition and not killing them the second thing

24:05 that Steve Jobs did was to kill all the ridiculous products that Apple had in just one meeting he killed 70% of all Apple products and after cutting out everything they boiled it down to just four products so he drew a 2x2 quadrant on a whiteboard and he split Apple's future into four products consumer desktop called iMac which was stylish easy to use all-in-one desktop for everyday users number two was a professional desktop called Power Mac which was a high performance machine for designers developers and businesses number three then came a consumer laptop called iBook which was a portable fun laptop built for students and casual users and then they had a professional laptop called PowerBook which was a powerhouse laptop designed only for creative professionals and business

24:51 leaders so if you see it was just a desktop for pros and consumers and a laptop for pros and consumers that's it no clutter no confusion just four incredible products and this insane clarity ladies and gentlemen gave Apple three instant powers firstly it gave absolute clarity for the customers now customers were no longer confused about which Mac to buy they had a desktop for pros and customers a laptop for pros and customers that's it this simplicity made Apple's marketing so powerful and so effective that within just 5 months of launch iMac alone sold 800,000 units secondly the Apple engineers could push their boundaries designers could make each product more beautiful and the marketeers could tell a compelling story

25:38 so instead of many many mediocre products across multiple categories Apple built four industrydefining devices and last and most importantly it gave Apple the power of operational and financial discipline so no more excessive inventory no more supply chain nightmares and no money wasted on unnecessary R&D this by itself was so powerful that Apple went from $1 billion in losses in 1997 to becoming profitable in 1998 this is how ladies and gentlemen Steve Jobs did the basics right he built great products he channelized his resources efficiently and he reduced wastage by the way all of this was done by a genius that Steve Jobs himself handpicked who went by the name Tim Cook

26:24 and then came phase two which was hyperrowth in 2001 Steve Jobs introduced the iPod the 22nd of October 2001 saw the launch of the iPod and this is what the front looks like this amazing little device holds a thousand songs that's iPod i happen to have one right here in my pocket designed by Apple this small white oblong piece of plastic could carry thousands of tunes a revolution was underway in the music industry that would have a greater impact and it became such a revolution that within just 5 and 1/2 years Apple sold over 100 million iPods and this made iPod the fastests selling music player in history and then he introduced the iPhone ipod a phone and an internet communicator are

27:10 you getting it these are not three separate devices this is one device iPhone today Apple is going to reinvent the phone hundreds of Apple fans lined up to buy the iPhone when it was released on June 29th 2007 which again sold 1.4 million units in its first year itself and you know what guys by January 2024 Apple has sold 2.3 billion units of iPhones and even today it is a revolution and Steve Jobs did the same revolutionary act over and over again he did it with the iPad with MacBook and MacBook Air and every time Steve Jobs

27:55 made an announcement it almost felt like he had a magic wand to just mesmerize people this is the new MacBook Air and you can get a feel for how thin it is yeah there it is and we call it the iPad ipad 2 the second generation iPad so you're going to see the product line get much simpler and you're going to see the product line get much better that's what a lot of customers pay us to do is to try to make the best products we can and if we succeed they'll buy them so every industry expert and entrepreneur

28:41 had the same question how on earth can somebody build a billion-doll company twice and how can someone turn every product into a revolutionary product well as it turns out Steve Jobs had a straightforward approach it is just that it's very difficult to execute now look at this his procedure was pretty straightforward find an industry in chaos oversimplify and over complicated process and lock people into the ecosystem so let's understand this before launching any product Steve looked for industries that were outdated inefficient or frustrating for example in 2001 the music industry of America was broken and there was a company called a Napster that had disrupted the entire music industry by getting people to download free music from the internet

29:26 but music labels got so angry that they killed Napster just with lawsuits from heavy metal band Metallica that accused Napster of copyright infringement popular internet sites for downloading music a federal court ruled Monday Napster must stop allowing music fans to swap copyrighted material it's time for Napster to stand down and build their business the oldfashioned way they must seek permission first following a major ruling against the company in court Napster was forced to shut down its service in 2001 but while this was going on on one side of the world on the other side MP3 players were clunky CD players were bulky and people wanted music on the go but the problem was that there was no simple elegant solution and hence Steve Jobs introduced the iPod which came in with no extra buttons no

30:13 complexity just a scroll wheel and a screen similarly in 2007 the mobile phones had tiny keyboards the internet experience on phones was terrible and every phone had physical buttons making them very less adaptable so Steve Jobs introduced the iPhone no more buttons no more stylus just one full touchcreen with multi-touch gestures along with that he also had a fully functioning internet browser which is why when Steve Jobs introduced the iPhone he said that today I am about to introduce an iPod an internet browser and a phone and all of this was put together into the concept of an iPhone and now you already know the pattern for iPad and other products right but here's where the third step

30:58 comes in and this step is by far the most important step in the framework which is to lock in customers into an ecosystem you see guys Apple never just sold a product it built an ecosystem that made switching to another device absolutely impossible and by now you already know how powerful the Apple ecosystem is so all of this put together gave Apple such a powerful framework that by 2011 Steve Jobs took Apple to such insane heights that in 2011 Apple was valued at $378 billion and today it's valued at $3 trillion apple the first company ever be worth more than $3 trillion it is mindboggling this is the first $3

31:45 trillion company trading in the US probably trading in the world and finally after a memerizing journey of building Apple for 23 years Steve Jobs passed away in 2011 sometimes life's going to hit you in the head with a brick don't lose faith i'm convinced that the only thing that kept me going was that I loved what I did you've got to find what you love and that is as true for work as it is for your lovers your work is going to fill a large part of your life and the only way to be truly satisfied is to do what you believe is great work and the only way to do great work is to love what you do