Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [142]
Daniel Kottke remained a technician and wasn’t given any shares before the company went public. Holt offered to make some amends by giving Kottke some of his own shares and proposed to Jobs, “How about we each chip in? You give him some stock and I’ll match it.” Jobs replied, “Great! I’ll give him zero.” Jobs, always more emotionally attached to Apple than Kottke, was torn. Part of him mourned the loss of a friendship but he also deeply resented Kottke’s lack of visible appreciation. “Daniel generally tends to overrate his contributions. He just did a lot of work that we could have hired anybody to do and he learned an awful lot.”
Bill Fernandez, the first person hired by Apple, was also disappointed, and though he later rejoined Apple, he quit in 1978. “I felt I was doing all the donkeywork and that I was going to be a technician forever. It didn’t seem that I would get stock. I didn’t think the company was loyal to me.” Elmer Baum, who had lent Jobs and Wozniak some money while they were making the Apple Is, was informed that the company couldn’t sell him stock. Chris Espinosa, by then a student at the University of California at Berkeley, also came up empty-handed. “We missed out on the American dream because we were too nice to grab a part of it. Kottke was too nice. Fernandez was too Buddhist and I was too young. Don Bruener was screwed twice. He was in manufacturing and also a college student. We all realized to some degree that we weren’t heavy enough. We weren’t obnoxious enough to make ourselves millionaires.”
The size of stock distributions was distorted by gossip and scuttlebutt. A few bragged about the size of their holdings while others were embarrassed and tried to exercise their options discreetly. When freshly recruited middle managers discovered their subordinates were far wealthier, the jealousy wasn’t easily concealed. Similarly Sherry Livingston found that other secretaries, who were paid by the hour, made her life increasingly uncomfortable after they discovered she owned some shares. One clerk who handled the paperwork for the stock options became so distraught at the size of the sums involved that she left the company.
Though Markkula fended off people who made it their business to speculate in private companies, it was certainly far easier for well-connected outsiders to obtain shares than it was for diligent workers. Knowing the right people, lunching with the proper crowd, placing the appropriate telephone calls, all paid off. The occasional privately arranged stock sale reflected the importance of personal contacts and the claustrophobic sense of community. The venture-capital firms that managed to get their hands on stock had usually done business together, were used to tipping each other off about hot deals, and were at pains to repay past favors.
The few individuals who acquired Apple stock before the company went public also had the proper pals. At the beginning of 1979, for example, Wozniak sold some stock to the Egyptian-born financier Fayez Sarofim, who had been a friend of Arthur Rock’s since the early fifties when both had attended the Harvard Business School. Sarofim managed a portfolio worth well over $1 billion from an unmarked Houston office suite that was draped in modern art. Wozniak also sold stock to Richard Kramlich, a partner in Rock’s venture-capital firm, and to Ann Bowers, the wife of the vice-chairman of Intel who became head of Apple’s human resources department.
In the summer of 1979, when Apple raised $7,273,801