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By Root 571 0

interested them. I’m no different. But a couple of years after I finished writing this book I found myself, thanks to some twists of fates, working at Sequoia Capital, the private investment partnership whose founder, Don Valentine, had helped assemble some of the formative blocks on which Apple was built. Since then, as an investor in young technology and growth private companies in China, India, Israel and the U.S., I have developed a keener sense for the massive gulf that separates the few astonishing enterprises from the thousands that are lucky to scratch out an asterisk in the footnotes of history books.

In 1984, if most consumers had been asked to predict which company—SONY or Apple—would play a greater role in their lives, I wager most would have voted for the former. SONY’s success rested on two powerful forces: the restless drive of its founder, Akio Morita, and the miniaturization of electronics and products consumers yearned for. The Japanese company, which had been formed in 1946, had built up a following as a designer and maker of imaginative and reliable consumer electronic products: transistor radios, televisions, tape recorders and, in the 1970s and 1980s, video recorders, video cameras and the WalkMan, the first portable device to make music available anywhere at any time of day. Like the iPod, a generation later, the Walkman bore the stamp of the company’s founder. It was created in a few months during 1979, it built its following largely by word of mouth and in the two decades prior to the advent of mp3 players sold over 250 million units. Now, as everyone knows, the tables have been turned and some years ago a cruel joke circulated which spelled out the change in circumstances, “How do you spell SONY?” The answer: “A-P-P-L-E.”

This begs the question of how Apple came to outrun SONY, but the more interesting topic is how the company came to rattle the bones of mighty industries and has forced music impresarios, movie producers, cable television owners, newspaper proprietors, printers, telephone operators, yellow page publishers and old line retailers to quaver. None of this seemed possible in 1984 when Ronald Reagan was President, half of American households tuned into the three television networks, U.S. morning newspaper circulation peaked at 63 million; LPs and cassette tapes outsold CDs by a margin of ninety to one; the Motorola DynaTAC 8000x cell phone weighed two pounds had thirty minutes of talk time and cost almost $4,000; Japan’s MITI was feared in the West; and the home of advanced manufacturing was Singapore.

Three mighty currents have flowed in Apple’s favor, but these waters were also navigable by other crews. The first swept electronics deeper into every nook and cranny of daily life so that now there is almost no place on earth beyond the reach of a computer or the bewildering collection of phones and entertainment devices with which we are surrounded. The second has made it possible for companies born in the era of the personal computer to develop consumer products. It has been far easier for computer companies with refined software sensibilities to design consumer products than for those whose lineage was consumer electronics and whose expertise lay largely in hardware design and manufacturing prowess. It’s not a coincidence that some of the companies with the acutest envy towards Apple have names like Samsung, Panasonic, LG, Dell, Motorola and, of course, SONY. The third current was “cloud computing”—the idea that much of the computation, storage and security associated with popular software sits in hundreds of thousands of machines in factory-sized data centers. This is the computer architecture that, in the mid 1990s, supported services such as Amazon, Yahoo! eBay, Hotmail and Expedia and later came to underpin Google and the Apple services that light up Macs, iPods and iPhones. Today, for the first time, consumers—not businesses or governments—enjoy the fastest, most reliable and most secure computer services.

In 1984 more immediate and mundane challenges confronted Apple. Faced