Mike Markkula

Former CEO of Apple

• Born: February 11, 1942
• Place of Birth: Los Angeles, California

Primary Company/Organization: Apple

Introduction

Mike Markkula is best known as the second chief executive officer (CEO) of Apple, a position he held for only two years, between 1981 and 1983. He served the company for twenty years, working as vice president of marketing and as a company director. He was chairman of Apple's board from 1985 to 1997, but his most important contribution to the company was the financing he provided during the formation of Apple in 1977, a total of $250,000 in equity investment and loans. A dozen years older than Steve Jobs and seven years senior to Steve Wozniak, Markkula, who became Apple's third employee, is often described as having provided the adult supervision the young visionaries required in the company's early years. Wozniak credits Markkula with much of Apple's success. In 1986, Markkula and his wife provided $3.5 million as a seed grant for Santa Clara University's Markkula Center for Applied Ethics.

Early Life

Mike Markkula was born February 11, 1942, in Los Angeles, California. Christened Armas Clifford Markkula, he grew up in southern California. He received both B.S. and M.S. degrees in electrical engineering from the University of Southern California. His first job was as a member of the technical staff in the research and development laboratory at Hughes Aircraft Company. He left Hughes for Fairchild Semiconductor, where he became marketing director for integrated circuits.

When Robert Noyce and Gordon E. Moore left Fairchild to found Intel Corporation in 1968, Markkula followed them. He worked at Intel from 1970 to 1974. At Intel, he guided the development of the computer system for processing customer orders and eventually became product marketing manager for memory chips.

He was considered a steady and reliable employee, but he lacked the genius and charisma that marked the stars of the industry. However, he developed a reputation for hating both his given names (and hence came to be known as Mike) and for his skills at the marketing.

Markkula set a goal of becoming a millionaire by the age of thirty, and Intel made it possible for him to achieve that goal. He bought Intel stock before it went public in 1971. When a colleague was promoted over him as vice president of marketing, he retired. At thirty-two, he was a “small multimillionaire” who could live comfortably and never work again. A dedicated family man, he seemed content to spend time at his home in Cupertino, California, building cabinets for his stereo system and strumming a guitar. His life changed dramatically in 1976, however, when Don Valentine, an investor at Atari, urged him to talk with two young men building computers in a garage a few miles from his house.

Life's Work

Markkula may have met with Steve Jobs and Steve Wozniak originally at the request of Valentine, but he was soon captivated by the possibilities of the business the two were building. He began meeting with them regularly, helping them to draw up a business plan that predicted their fledgling company, Apple Computer, would be a Fortune 500 company within five years. After talking the situation over with his wife, Markkula agreed to give Apple four years. He also agreed to invest a quarter of a million dollars. He offered $91,000 of his own money and underwrote a bank loan for the remainder. His investment was crucial in launching Apple.

As important as Markkula's financial contribution was, his business experience may have been more valuable. He brought organizational skills, marketing strategies, and a stabilizing influence to the mercurial Jobs. He also seems to have understood the vital roles of both Jobs and Wozniak. Markkula made Wozniak's quitting his job at Hewlett-Packard and committing to Apple full-time a condition of his investment. Wozniak was reluctant, since he was skeptical of Markkula's optimistic view of what Apple could achieve, but once assured that he could remain an engineer, he agreed to the stipulation. Markkula's appreciation for the genius of Jobs did not blind him to the weaknesses of the man. Acting as mentor in the early years, Markkula penned the famous Apple marketing philosophy in a memo to Jobs. His use of the terms empathy, focus, and the awkward impute—which stressed the importance of how a product looked to the consumer—served the company well long after Markkula left.

On January 3, 1977, Apple Computer was officially formed. Markkula was given one-third of the company for his investment and became the third employee of the new company. Knowing his dislike of conflict, he decided that his strengths at diplomacy, business planning, and market strategy could be utilized more effectively if someone else were responsible for the day-to-day workings of the company. He suggested Michael Scott, a friend since their days at Fairchild, for the position of president. With Scott running the company, Markkula could turn his attention to other matters.

The first priority was investors. In the fall of 1977, a crisis brought on by problems with the plastic cases that housed the computers left the company's cash reserves so low that Markkula and Scott underwrote loans of $200,000 to meet immediate needs. It was clear that Apple needed venture capitalists, but Markkula was determined that investment would come from those respected and influential enough to catch the attention of Wall Street while at the same time minimizing the amount of control that the company's executives would lose.

With these goals in mind, he contacted Hank Smith, an acquaintance from his days at Fairchild and Intel, who was a general partner at Venrock, the venture capital wing of the Rockefeller family. The firm had a reputation for making smart investments. Moreover, Venrock had yet to invest in a personal computer company. The round of investments completed in January 1978 totaled more than $500,000; Venrock invested $288,000. Smith later admitted that had he not known Markkula, he probably would never have looked at Apple. Markkula was only partially successful with another contact. He wanted the highly respected Andy Grove, president of Intel, on Apple's board. Grove bought fifteen thousand shares of Apple, but he refused a seat on the board. However, Markkula's demonstration of the Apple II for Grove and Intel's board yielded an unexpected dividend. One of the Intel directors, Arthur Rock, who had backed both Fairchild and Intel when they started, contacted Apple to express his interest in investing. By the end of its first year as an incorporated company, Apple was valued at $3 million.

With the company flourishing, Markkula began looking toward the time he could be less engaged at Apple. He had promised his wife to limit his term of service to four years, and, as the end of that period drew near, he was eager to enjoy a second retirement. When Scott, overwhelmed by his responsibilities as president and CEO, asked Markkula to split those responsibilities with him, Markkula refused. A few months later, in April 1981, the beleaguered Scott was forced out. Markkula handed his position as chairman of the board over to Jobs and took over as president and CEO, a position he held until April 8, 1983, when John Sculley was named CEO. During Markkula's tenure, Apple went public and became the first personal computer company whose sales reached $1 billion. Markkula's own share in the company was valued at $239 million.

With Sculley in charge, Markkula withdrew from the day-to-day operations of Apple, but he was pulled back as conflict escalated between Sculley and Jobs. Markkula had been mentor and even father figure to Jobs, but he acquiesced as the Apple board removed Jobs as head of the Macintosh division, as he had acquiesced when Jobs pushed Jef Raskin out of the Macintosh project earlier. When the showdown came on September 16, 1985, and Jobs looked to his old mentor for assistance in retaining control of Apple, Markkula, whose net worth had dropped $200 million during the company's internecine wars, sided with Sculley. Jobs felt betrayed and the relationship between the two men was never the same.

Markkula returned as chairman of the board when Sculley resigned under pressure in 1993 and continued in that position through the brief tenure of Michael Spindler (1993–96) and the even briefer one of Gil Amelio (1996–97). Jobs had returned as special adviser to Amelio shortly before the board demanded Amelio's resignation, and he was named interim CEO in the wake of the resignation. On August 6, 1997, Jobs announced the reorganization of Apple's board. Only two members retained their seats. Markkula was not one of them. After twenty years as a power functioning largely out of the spotlight, Markkula no longer had a place at Apple. Years later, Wozniak commented that, although Markkula rarely received credit, without his contributions Apple would never have achieved its success.

After leaving Apple, Markkula worked at Echelon Coporation. The company was acquired by Adesto Technologies in 2018. He owned the 14,000-acre Rana Creek Ranch from 1982 to 2023, when he sold it to the Wildlands Conservatory for $35 million.

Personal Life

Markkula, with entrepreneur Ken Oshman, founded Echelon, a company that develops smart chips that can automate devices for homes and offices, in 1988 and served as vice chairman of the board of directors beginning in 1989. A certified pilot, he owned the ACM jet center in San Jose for a time. His contributions to technology were recognized by his alma mater in 1983, when the University of Southern California (USC) School of Engineering named him Outstanding Alumnus. USC awarded him an honorary doctorate in 2012, and in 2018 he received the Lifetime Achievement Award at the Viterbi School of Engineering's Viterbi Awards.

Markkula has been associated with Santa Clara University since 1984. The university awarded him an honorary doctorate in 1992. He served as chairman of the board of trustees from 2003 through 2009. He and his wife, Linda, provided initial funding for the university's Center for Applied Ethics in 1986 and launched the center's endowment with a $5 million contribution in the mid-1990s. The Markkulas are the parents of two children.

Bibliography

Caraccio, David. "Apple Co-Founder Sells Giant Central California Ranch for $35 Million--Nature Preserve Planned." The Sacramento Bee, 17 Aug. 2023, www.sacbee.com/article278342099.html. Accessed 7 Mar. 2023.

Isaacson, Walter. Steve Jobs. New York: Simon, 2011. Print.

Malone, Michael S. Infinite Loop: How the World's Most Insanely Great Computer Company Went Insane. New York: Doubleday, 1999. Print.

Markoff, John. “The Apple World According to Markkula: An ‘Unknown’ Cofounder Leaves After 20 Years Of Glory and Turmoil.” 1 Sept. 1997. New York Times. Web. 2 Sept. 2012.

O'Grady, Jason D. Apple, Inc. Corporations That Changed the World. Westport: Greenwood, 2009. Print.