What Steve Wozniak Learned From Failure

The Apple II was a hit. The Cloud Nine universal remote was not. Here’s what Steve Wozniak learned about creativity, and what it means for his latest venture. An excerpt from Juice: The Creative Fuel that Drives World-Class Inventors.

by Evan I. Schwartz

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Failure is the rule rather than the exception, and every failure contains information. One of the most misleading lessons imparted by those who have reached their goal is that the ones who win are the ones who persevere. Not always. If you keep trying without learning why you failed, you’ll probably fail again and again. Perseverance must be accompanied by the embrace of failure. Failure is what moves you forward. Listen to failure.

But there are different kinds of failure. Sometimes, failure tells you to give up and do something else entirely. Other times, it tells you to try a different approach, a new route to the top of the mountain. Or it may tell you to make a detour. Sometimes, it tells you that you need help. Sometimes, it doesn’t seem to tell you anything. Linda Stone, a former executive at both Apple Computer and Microsoft, recalls a conversation she participated in with Steve Wozniak and Dean Kamen, perhaps the two best-known living inventors.

"I’ll never forget it," Stone says. "They just were talking about all their failures, and how they both felt like failures."1 They were almost bragging about various laboratory fiascoes and catastrophes. Given their success, this seemed extraordinary. According to Stone, the conversation occurred just before an awards ceremony. "They were both being celebrated," she says. So Wozniak and Kamen clearly weren’t talking about their failures as a way of feeling sorry for themselves. Rather, they were identifying with a thinking strategy they both had in common. "Every failure is a learning experience," concludes Stone, "and it should be seen as part of progress, rather than seeing it as the enemy."

Trying this, this, and this
You wouldn’t normally associate Steve Wozniak with failure. His early career has often been described as a rocket ride. Born in San Jose, California, in 1950, the son of a teacher and a Lockheed engineer, Woz played with surplus transistors that his father brought home from work, making his own walkie-talkies and intercoms. Woz was operating ham radios by age eleven and designing computers by age thirteen, but mostly on paper. A habitual prankster, in high school he built "blue boxes": devices that patched into phone company switches, enabling the user to make free calls and redirect other people’s lines.2 As he was creating these things, Woz learned about tinkering—trying something, learning why it doesn’t work, recovering from that small misdirection, and then using the resulting knowledge to try something else. "I’d scrap things together—try this, try this, try this," Woz has said.3 He was embracing failure iteration. "Another way of looking at failure is learning the ability to iterate," says Linda Stone.
Juice: The Creative Fuel That Drives World-Class Inventors

Through a common friend at Homestead High School in Santa Clara, Woz was introduced to Steve Jobs, an ambitious hippie and fellow prankster who later ended up getting a gig as a technician at Atari Inc., maker of computer games. "He could persuade people to do things that normally couldn’t get done," Woz recalls. After graduating from college in Boulder, Colorado, Woz worked as an engineer with Hewlett-Packard, designing handheld calculators. There he learned from the failures of others. He recalls being able to walk around to various workbenches and quickly tell when his colleagues were crafting designs that wouldn’t pan out. He enjoyed the job, but Woz has repeatedly speculated that if he had tried to create a personal computer at H-P, it would have failed. "We probably would have made the wrong decisions technically and built the wrong product," he has said. With the future demand for individual desktop computers clear to both of them (but not to their bosses at Atari and H-P), the two Steves went into business together in 1976, setting up shop in Jobs’s garage.

Many times, Woz would induce his own failures by reviewing work he had already done. "I once laid out the whole board, and then I got an idea to save one feed-through [circuit]," he recalled in an interview some ten years later. "So I took the board apart, I trashed maybe a week’s worth of work, and then I started over."4 The Apple I computer featured eight kilobytes of random access memory. While Woz did the inventing and the engineering, Jobs typically was out making sales pitches and raising money. The Steves built 200 machines and sold 175 of them to hobbyists over ten months.

With the modest success of the Apple I under their belts, Jobs convinced Woz to quit H-P and form Apple Computer, with $3 million in backing from local venture capitalists. Wozniak then created the Apple II, the last personal computer to be designed entirely by a single human being. It contained dozens of innovations, including support for color graphics, word processing, and games, and it, too, was the product of rapid failure iteration. For example, in creating the disk drive Woz began with a design based on fifty chips. In a frantic engineering zigzag that featured dozens of false starts, he managed to reduce the number of chips to three. The result of all this iterative failure, the Apple II, was so clearly superior to any other personal computer then on the market that it dominated the field for three years. By 1980, Apple Computer was a public company, with revenues exceeding $100 million. The Apple II architecture managed to hold onto a small piece of the personal computer market even after IBM introduced its famed PC in 1981 and Apple unveiled the Macintosh in 1984.

But looking back on his career, Woz remembers far more failure than success. He didn’t cope well at Apple as the company grew. He felt that the talent-rich Macintosh team needed him less and less. He resisted being a manager or a businessperson. He was distracted by his wealth. After he became successful, he has said, "I wound up trapped by the world."5 He left Apple in 1985 and immediately went searching for something new to invent, hoping to duplicate his earlier success.

Every failure should be seen as part of progress.
— Linda Stone

Instead, Woz made new mistakes. His next company, Cloud Nine, was a failure in many respects. He pinpointed a problem: that the average consumer had too many poorly designed remote controls. But Woz’s invention, a programmable remote control designed to work with any TV or other consumer electronics device, didn’t work well with some equipment, and it was not embraced by manufacturers or consumers. His failure was so complete that he felt as if his artist-like ability to connect different ideas in his head was gone. He felt that he couldn’t program software anymore. "It gets to the point where you can’t tell where the inventiveness was lost," he said not long after the Cloud Nine dream died. He lost most of his Apple fortune, and he became disillusioned by the entire industry.

Faced with failure, Woz seemed to give up. He became one of the world’s most famous teachers, holding classes in computer graphics for elementary school kids in his own garage. His former partner, Steve Jobs, soon moved on to learn a fantastic set of lessons from his own "failure," Next Computer Inc. But Woz seemed content to sit on the sidelines. "He’s uniquely undriven," said industry pundit Stuart Alsop.6

But maybe Woz was just responding to failure in his own way. His style of inventing complex electronics all by himself was no longer applicable in a world made infinitely more complex by his own invention. He decided to specialize, to immerse himself in the one component of the computer that was most prone to failure, the only part he still found interesting: the user, particularly the young user, the kid in school. He was taking a giant detour. While dabbling in philanthropy, he delved into the practice of teaching and the study of learning, more specifically how children use computers to learn. He did this for nearly fifteen years, during which time more of his fortune evaporated.

Then, in January 2001, gathering all he had learned, Wozniak got back into the game of invention. Now in his early fifties, he started a company called WOZ (for Wheels of Zeus) and secretly began building prototypes and showing them to potential investors. He called WOZ "a new wireless products company to help everyday people do everyday things." He was inspired by his dog outsmarting and escaping the electric fence in the yard one too many times. He raised $6 million in venture capital, to back his prototype of developing a set of cheap radio-frequency chips that communicated with Global Positioning System satellites, so people could keep tabs on the whereabouts of their kids, pets, or other valuables. He called the network that would send location data to end users wOzNet. "The goal is doing something neat and fun," he said.7 Was Woz about to capitalize on his past failures? Or was he going to make a new set of mistakes? Knowing the history of Woz, he was about to do both, and that’s the way it should be.

Excerpted with permission of Harvard Business School Press from Juice: The Creative Fuel that Drives World-Class Investors. Copyright 2004 by Evan I. Schwartz; All rights reserved. To order, please call (800) 988-0886.

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Evan I. Schwartz is a contributing writer for MIT’s Technology Review and a former editor at BusinessWeek. He is the author of The Lone Inventor, Digital Darwinism, and Webonmics.