There is no guarantee that things would have worked out exactly as it did. Maybe, Steve would not have bought Next or Pixar, which means that maybe there would not have been OS X. Maybe what happened made Steve Jobs even more determined to be successful.
Successful people sometimes fail, but they never give up. They handle this type of thing better than the average person. It makes success even that much more sweeter.
You are wrong, or at least misrepresenting what I said, with your very first word. I never said "given" I said "made available." Big difference. To exercise any option, the holder must pay the strike price. Those dollars go to the company issuing the IPO, which is why they are issuing an IPO in the first place, to raise capital. In fact, even when a company grants options to employees as a form of bonus or incentive, the recipient still has to pay the strike price to exercise them, and those dollars still go to the company issuing the stock.
As for the Xerox situation, we've heard various stories but none are corroborated, which is really all I'm saying about that. Even if the story is true that Apple gave Xerox the opportunity to buy $1 million in pre-IPO options, it's still small change to them, and of no immediate value. More importantly, many others were given the same opportunity in exchange for nothing but having the cash to invest. Incidentally, the minimum investment in a pre-IPO is still $1 million, which is why they are still only offered to people and companies with that kind of dough to throw around. Some think it's wrong that only high rollers get shots a pre-IPO shares, but that's how the system has operated for a long time.
You really ought to read up on IPOs. I'm pretty sure you don't know how they work.
Anyway, at least this is more relevant to discuss than the various types of sweeteners.
We may be having some miscommunication, but it's clear to me now that you have conflated aspects of the nature, function, and relationship between options and IPOs. No offense intended. It is a complex area and options awards can be used in myriad ways.
As far as the Xerox thing, you are correct that until we see an on the record statement about the nature of the agreement, we can only speculate about it.
That's not always true. I worked for a large company as an executive and had Options and left and I had to sell within a certain time frame (I think within six months of leaving with the date chosen three months in advance.) The stock happened to be down substantially on the sale date and while I still achieved a gain, it wasn't all that much. I could not hold the Options and I certainly could not sell them to anyone else. And Options are usually a separate class of non-voting stock.
I assume you are referring to this:
" . . . once they have the options, they can sell them for cash at any time without having to exercise them."
Option agreements vary and in the last few years they have become more restrictive. But my point was that you can't lose money on them. Even underwater options can have some value in the future (you don't have to exercise them when they vest.) In your case you left the company, so of course you had to sell them. Options are an employee retention strategy. You were paying the price for leaving (and you still made money.)
We may be having some miscommunication, but it's clear to me now that you have conflated aspects of the nature, function, and relationship between options and IPOs. No offense intended. It is a complex area and options awards can be used in myriad ways.
As far as the Xerox thing, you are correct that until we see an on the record statement about the nature of the agreement, we can only speculate about it.
No offense taken. No problems with speculation either, when labeled as such. So much of this early tech history is known in various forms only by folklore, because the people who actually know aren't talking. As another example, those who know precisely how Microsoft was hired to supply DOS to IBM have never said anything about it publicly. One of the most momentous decisions in tech history, and we still don't know how it really happened!
This sounds like a company which had already gone public, meaning that the options could be converted into tradable shares and then sold. What we're talking about here is pre-IPO options, which give the holder the opportunity to be the first in line to buy shares before public trading begins. A somewhat different animal. My understanding is that these options are not supposed to be traded because no regulated market exists for doing so, but that they often get traded privately anyway.
Dr. Millmoss, I think you are talking about pre-IPO placements which are not options but stocks discounted from the IPO price. They are paid for up front and do require that the stock not be sold within a certain lock-in period after the IPO. Pre-IPO options very similar to what zoetmb is describing except they are the offered to employees before the company goes public so the strike price is equal to the IPO price (unless the company pulls a revers split which devalues the options.)
Exactly. It's easy to believe that a product "sells itself" when you've already been sold on it. In any event, Sculley wasn't brought on at Apple to be a marketer, he was there to run the company, to bring order to the big hairy ball of chaos that was Apple at that time.
Say what you will, but I've always H-A-T-E-D Coke's ads. I drink it everyday because it is TASTY, nothing else.
Dr. Millmoss, I think you are talking about pre-IPO placements which are not options but stocks discounted from the IPO price. They are paid for up front and do require that the stock not be sold within a certain lock-in period after the IPO. Pre-IPO options very similar to what zoetmb is describing except they are the offered to employees before the company goes public so the strike price is equal to the IPO price (unless the company pulls a revers split which devalues the options.)
No, I don't think that's what I mean. Large investors get the option to buy blocks of shares at the IPO price. It's only a discount on price the shares often trade at on the first day of the public offering. Underpricing of IPOs is a common issue, and can be a boon for those who have access to the IPO offering price.
No, I don't think that's what I mean. Large investors get the option to buy blocks of shares at the IPO price. It's only a discount on price the shares often trade at on the first day of the public offering. Underpricing of IPOs is a common issue, and can be a boon for those who have access to the IPO offering price.
All Steve was doing was based on the original model of the Mac: get the best engineers you can, kick their butts, and bring out the best damn thing you can. If you do, people will spend more for it.
Steve and the original Mac team actually fought for lower prices, but they were overridden by Sculley. By advocating higher prices, are Apple fans admitting that Sculley was right? And by continuing to defend Apple's price premium even though he is CEO now and can do something about it, is Steve admitting that Sculley was right?
Although not a success, it does give Apple the bragging right for creating the first ever tablet/PDA.
Actually Sculley was the reason newton failed, this was a skunk works type of project at apple, It was group of people in the ATG working on this technology and Sculley did not know anything about it until they showed off their concept to management. All of a sudden this was the next greatest thing Apple was going to mass market and Sculley was the brain child or so he let the markets think. In reality the group who came up with the idea said it was not ready there was lots of work that need to happen before this was remotely ready. Sculley did not want to hear that, over period of 6 months they put every resource they could find and hire on this program to get it into the market, Sculley thought they would sell millions, well we know what happen there.
Basically the newton is the case study of what happen when you put a product in the market before it is ready and over promise and under deliver.
Which goes to the point Sculley seems to point as Apples/Jobs success, which he obvious did not understand while he was there.
Quote:
Originally Posted by AppleInsider
Sculley, who is impressed with how Jobs "sticks to his same first principles years later," shared 11 of those principles: beautiful design; customer experience; no focus groups; perfectionism; vision; minimalism; hire the best; sweat the details; keep it small; reject bad work; perfection and systems thinker.
Sculley used focus groups all the time, it was like those soda tastes tests you saw in the 80's all the time. Jobs and many people at apple said most consumer had no clue what they want, so why even ask them, they will just buy a good product if you give it to them at the right price.
The other thing he did was fail to minimalize, he over complicated things, because of the focus groups he wanted segment the market so much and make products for each of those markets so they could target market to all of them. They complicate everything they did.
Lastly, to show how full of himself Sculley was, he wrote a book and had it given to all new employees when they were hired.
Steve and the original Mac team actually fought for lower prices, but they were overridden by Sculley. By advocating higher prices, are Apple fans admitting that Sculley was right? And by continuing to defend Apple's price premium even though he is CEO now and can do something about it, is Steve admitting that Sculley was right?
Well interesting and probably part truth there, but if Steve was that set on selling low cost products why doesn't he do that today, he is not, he understands the value proposition. Maybe he felt like most of the idealist engineer that work for Apples at the time, but in the end he values higher profits over selling lots of something for less.
Yes he wants to change the world, but he is not interested in giving it away either, if you want his view of how things should work you need to pay for it.
Yeah he was a moron then and still is one. Even Pepsi did badly under him.
Yeah. I'd like to be the moron that increased a company's revenues 7x and its profits 9x in nine years.
And Pepsi? He's ONLY the guy that created the Pepsi Challenge, started the Cola Wars, and brought Pepsi from a minor player to a real competitor to Coke.
And to the other poster, Sculley never agreed to give Microsoft any part of the Macintosh interface.
I'm not a Sculley apologist, only met the man a couple of times, but I get really tired of ridiculous comments from completely uninformed individuals.
Comments
Successful people sometimes fail, but they never give up. They handle this type of thing better than the average person. It makes success even that much more sweeter.
You are wrong, or at least misrepresenting what I said, with your very first word. I never said "given" I said "made available." Big difference. To exercise any option, the holder must pay the strike price. Those dollars go to the company issuing the IPO, which is why they are issuing an IPO in the first place, to raise capital. In fact, even when a company grants options to employees as a form of bonus or incentive, the recipient still has to pay the strike price to exercise them, and those dollars still go to the company issuing the stock.
As for the Xerox situation, we've heard various stories but none are corroborated, which is really all I'm saying about that. Even if the story is true that Apple gave Xerox the opportunity to buy $1 million in pre-IPO options, it's still small change to them, and of no immediate value. More importantly, many others were given the same opportunity in exchange for nothing but having the cash to invest. Incidentally, the minimum investment in a pre-IPO is still $1 million, which is why they are still only offered to people and companies with that kind of dough to throw around. Some think it's wrong that only high rollers get shots a pre-IPO shares, but that's how the system has operated for a long time.
You really ought to read up on IPOs. I'm pretty sure you don't know how they work.
Anyway, at least this is more relevant to discuss than the various types of sweeteners.
We may be having some miscommunication, but it's clear to me now that you have conflated aspects of the nature, function, and relationship between options and IPOs. No offense intended. It is a complex area and options awards can be used in myriad ways.
As far as the Xerox thing, you are correct that until we see an on the record statement about the nature of the agreement, we can only speculate about it.
That's not always true. I worked for a large company as an executive and had Options and left and I had to sell within a certain time frame (I think within six months of leaving with the date chosen three months in advance.) The stock happened to be down substantially on the sale date and while I still achieved a gain, it wasn't all that much. I could not hold the Options and I certainly could not sell them to anyone else. And Options are usually a separate class of non-voting stock.
I assume you are referring to this:
" . . . once they have the options, they can sell them for cash at any time without having to exercise them."
Option agreements vary and in the last few years they have become more restrictive. But my point was that you can't lose money on them. Even underwater options can have some value in the future (you don't have to exercise them when they vest.) In your case you left the company, so of course you had to sell them. Options are an employee retention strategy. You were paying the price for leaving (and you still made money.)
We may be having some miscommunication, but it's clear to me now that you have conflated aspects of the nature, function, and relationship between options and IPOs. No offense intended. It is a complex area and options awards can be used in myriad ways.
As far as the Xerox thing, you are correct that until we see an on the record statement about the nature of the agreement, we can only speculate about it.
No offense taken. No problems with speculation either, when labeled as such. So much of this early tech history is known in various forms only by folklore, because the people who actually know aren't talking. As another example, those who know precisely how Microsoft was hired to supply DOS to IBM have never said anything about it publicly. One of the most momentous decisions in tech history, and we still don't know how it really happened!
This sounds like a company which had already gone public, meaning that the options could be converted into tradable shares and then sold. What we're talking about here is pre-IPO options, which give the holder the opportunity to be the first in line to buy shares before public trading begins. A somewhat different animal. My understanding is that these options are not supposed to be traded because no regulated market exists for doing so, but that they often get traded privately anyway.
Dr. Millmoss, I think you are talking about pre-IPO placements which are not options but stocks discounted from the IPO price. They are paid for up front and do require that the stock not be sold within a certain lock-in period after the IPO. Pre-IPO options very similar to what zoetmb is describing except they are the offered to employees before the company goes public so the strike price is equal to the IPO price (unless the company pulls a revers split which devalues the options.)
Exactly. It's easy to believe that a product "sells itself" when you've already been sold on it. In any event, Sculley wasn't brought on at Apple to be a marketer, he was there to run the company, to bring order to the big hairy ball of chaos that was Apple at that time.
Say what you will, but I've always H-A-T-E-D Coke's ads. I drink it everyday because it is TASTY, nothing else.
Dr. Millmoss, I think you are talking about pre-IPO placements which are not options but stocks discounted from the IPO price. They are paid for up front and do require that the stock not be sold within a certain lock-in period after the IPO. Pre-IPO options very similar to what zoetmb is describing except they are the offered to employees before the company goes public so the strike price is equal to the IPO price (unless the company pulls a revers split which devalues the options.)
No, I don't think that's what I mean. Large investors get the option to buy blocks of shares at the IPO price. It's only a discount on price the shares often trade at on the first day of the public offering. Underpricing of IPOs is a common issue, and can be a boon for those who have access to the IPO offering price.
No, I don't think that's what I mean. Large investors get the option to buy blocks of shares at the IPO price. It's only a discount on price the shares often trade at on the first day of the public offering. Underpricing of IPOs is a common issue, and can be a boon for those who have access to the IPO offering price.
http://www.investopedia.com/terms/p/...-placement.asp
http://www.bargaineering.com/article...k-options.html
All Steve was doing was based on the original model of the Mac: get the best engineers you can, kick their butts, and bring out the best damn thing you can. If you do, people will spend more for it.
Here's an interesting story about Mac pricing:
http://www.folklore.org/StoryView.py...rice_Fight.txt
Steve and the original Mac team actually fought for lower prices, but they were overridden by Sculley. By advocating higher prices, are Apple fans admitting that Sculley was right? And by continuing to defend Apple's price premium even though he is CEO now and can do something about it, is Steve admitting that Sculley was right?
http://www.investopedia.com/terms/p/...-placement.asp
http://www.bargaineering.com/article...k-options.html
Not what I was talking about.
Apple did create the Newton when he was CEO.
Although not a success, it does give Apple the bragging right for creating the first ever tablet/PDA.
Actually Sculley was the reason newton failed, this was a skunk works type of project at apple, It was group of people in the ATG working on this technology and Sculley did not know anything about it until they showed off their concept to management. All of a sudden this was the next greatest thing Apple was going to mass market and Sculley was the brain child or so he let the markets think. In reality the group who came up with the idea said it was not ready there was lots of work that need to happen before this was remotely ready. Sculley did not want to hear that, over period of 6 months they put every resource they could find and hire on this program to get it into the market, Sculley thought they would sell millions, well we know what happen there.
Basically the newton is the case study of what happen when you put a product in the market before it is ready and over promise and under deliver.
Which goes to the point Sculley seems to point as Apples/Jobs success, which he obvious did not understand while he was there.
Sculley, who is impressed with how Jobs "sticks to his same first principles years later," shared 11 of those principles: beautiful design; customer experience; no focus groups; perfectionism; vision; minimalism; hire the best; sweat the details; keep it small; reject bad work; perfection and systems thinker.
Sculley used focus groups all the time, it was like those soda tastes tests you saw in the 80's all the time. Jobs and many people at apple said most consumer had no clue what they want, so why even ask them, they will just buy a good product if you give it to them at the right price.
The other thing he did was fail to minimalize, he over complicated things, because of the focus groups he wanted segment the market so much and make products for each of those markets so they could target market to all of them. They complicate everything they did.
Lastly, to show how full of himself Sculley was, he wrote a book and had it given to all new employees when they were hired.
Here's an interesting story about Mac pricing:
http://www.folklore.org/StoryView.py...rice_Fight.txt
Steve and the original Mac team actually fought for lower prices, but they were overridden by Sculley. By advocating higher prices, are Apple fans admitting that Sculley was right? And by continuing to defend Apple's price premium even though he is CEO now and can do something about it, is Steve admitting that Sculley was right?
Well interesting and probably part truth there, but if Steve was that set on selling low cost products why doesn't he do that today, he is not, he understands the value proposition. Maybe he felt like most of the idealist engineer that work for Apples at the time, but in the end he values higher profits over selling lots of something for less.
Yes he wants to change the world, but he is not interested in giving it away either, if you want his view of how things should work you need to pay for it.
Say what you will, but I've always H-A-T-E-D Coke's ads. I drink it everyday because it is TASTY, nothing else.
Recruit both your friends. Have them do a double-blind with a few other colas on you.
Prepare to be shocked. Modern marketing is crazy good at influencing our perceptions.
Yeah he was a moron then and still is one. Even Pepsi did badly under him.
Yeah. I'd like to be the moron that increased a company's revenues 7x and its profits 9x in nine years.
And Pepsi? He's ONLY the guy that created the Pepsi Challenge, started the Cola Wars, and brought Pepsi from a minor player to a real competitor to Coke.
And to the other poster, Sculley never agreed to give Microsoft any part of the Macintosh interface.
I'm not a Sculley apologist, only met the man a couple of times, but I get really tired of ridiculous comments from completely uninformed individuals.