Perot to the Rescue
In late 1986 Jobs sent out a proposal to venture capital firms offering a 10% stake in NeXT for $3 million. That put a
valuation on the entire company of $30 million, a number that Jobs had pulled out of thin air.
NeXT computer would be shipped in just eighteen months. It was already clear that this date was impossible, but he blew off a
suggestion from one engineer that they be realistic and plan on shipping in 1988. “If we do that,
the world isn’t standing still, the technology window passes us by, and all the work we’ve done we have to throw down the toilet,” he argued.
Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge Jobs, did so. “Reality
distortion has motivational value, and I think that’s fine,” she said as Jobs stood at a whiteboard. “However,
when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.” Jobs
didn’t agree: “I think we have to drive a stake in the ground somewhere, and I think if we miss this window, then our
credibility starts to erode.” What he did not say, even though it was suspected by all, was that if their targets slipped they might run out of money. Jobs had
pledged $7 million of his own funds, but at their current burn rate that would run out in eighteen months if they didn’t start getting some revenue from shipped products.
Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his list of maxims with “The
honeymoon is over.” By the time of the third retreat, in Sonoma in September 1986, the timetable
was gone, and it
looked as though the
company would hit
a financial wall.