After returning from India, Steve Jobs settled into the culture of computing in a burgeoning Silicon Valley. Steve Wozniak had taken a job at Hewlett-Packard (HP), while simultaneously working on his design for a new computer that would become the Apple I. Both Jobs and Woz were attending meetings at the Homebrew Computer Club at Stanford’s Linear Accelerator Center auditorium.
Wozniak showed Jobs his new prototype- a personal computer that utilized an MOS Technology 502 microprocessor. The computer differed from other hobby computers at the time – it had a keyboard and a screen, and there was a surprisingly limited chipset.
They decided to show off the new prototype at the meetings. The positive feedback and admiration of the Homebrew meetings led Jobs to believe they should form a business and start selling the computers. As Steve Wozniak recalled in iWoz:
“Steve had a good argument. We were in his car and he said — and I can remember him saying this like it was yesterday: “Well, even if we lose money, we’ll have a company. For once in our lives, we’ll have a company.” That convinced me. And I was excited to think about us like that. To be two best friends starting a company.”
They set up production in the Jobs’ family garage, creating the computers to sell at Homebrew meetings. To raise the initial $1000 of capital investment, Jobs sold his Volkswagon van and Woz sold his HP 65 calculator.
The name Apple seems to derive from a flippant comment that Jobs made to Woz after returning from an apple-picking trip to the All-One Farm commune in Oregon (if a popturf user can find this location, much respect). The commune was run by an acid guru named Robert Friedland, a former colleague of Jobs’ at Reed College, whose charismatic nature Jobs studied. Although Jobs became disenchanted with the commune itself, the name of Apple stuck. As Jobs put it in Isaacson’s biography :
“I had just come back from the apple farm. It sounded fun, spirited, and not intimidating. Apple took the edge off the word ‘computer.’ ”
The first major retailer for Apple Computers came from The Byte Shop in nearby Mountain View. Run by Paul Terrel, another member of the Homebrew Computing Club, he put in an order for 50 Apple I’s at $500 a piece. This was a $25,000 order, and the tenacious Jobs negotiated a line of credit with the computer parts supplier to cover their costs until they received payment from The Byte Shop.
Jobs and Woz hired friends and neighborhood kids to assemble the computers in the garage, paying them $1 a completed board. The order was completed on time and up to specifications.
By the end of 1976, Apple had found their first major investor in Mike Markkula, a former Intel employee who had made millions and retired by the age of 34. Markkula invested $250,000 in Apple to make 1,000 machines. They hired Rob Holt to work on the power supply and to create a mold for the plastic shell (as a contrast to the wood shells up to that point), and also hired a manager in Mike Scott. With the addition of these new employees, the company moved into their first office in Cupertino.