The ‘Unknown’ Financier of Apple

In the first week of April 1976, exactly 40 years ago, an ordinary house at Crist Drive in Los Altos, California, was the starting point of an extra-ordinary journey. Steve Jobs and Steve Wozniak built the first 50 ‘Apple I’ personal-computers there.

The rather unusual name for the company had its roots in Steve Jobs fruitarian diet. He had just come back from an apple farm, and thought the name sounded fun, spirited and not intimidating. This is also a reminder, that it’s not necessary to spend too much time and energy for the ‘right’ name of a new company but to focus on the product and nothing else but the product.

But even Apple suffered big time during its 40-year-journey from a two men start-up to the most valuable company in the world. Money – what else? – was a major issue in Apple’s early days. In the fall of 1976, six months after he and Wozniak started the company, Steve Jobs was in desperate need of cash to finance the production of the follow-up model, the ‘Apple II’. He was looking for 200’000 USD or they would be out of business very soon.

The term ‘venture capital’ was not yet very well known then, but to Steve Jobs luck, one of the first business-hubs of ‘venture capital funds’ who provided money to early-stage or emerging growth companies in exchange for equity, was at Sand Hill Road in Menlo Park, only a 15-minute-drive from his home.

Jobs contacted the venture capital fund Sequoia, but didn’t get the cash he had hoped for, instead he was given the name of the 34-year old Mike Markkula. 

The former manager of Fairchild Semiconductor and Intel made a fortune via stock-options of these two companies and ‘retired’ at the age of 32. In order not just to sit around and scratch his belly, Markkula started to provide free consulting to struggling start-ups, one day per week, usually on Mondays. 

So one Monday in November 1976, Markkula visited Apple in Los Altos for the first time. Jobs and Wozniak immediately presented him the ‘Apple II’ and Mike Markkula had two thoughts: first, these guys could use a shower and a haircut and second, the product is fantastic.

With his experience, Markkula created a solid business-plan for Apple to become cash-flow-positive in 9 months with an initial investment of 142’000 USD. He wrote a check, became Apple-employee number 3, a mayor shareholder and the ‘Apple II’ came on the market in April 1977. 

With Markkula pouring in more money into advertising and laying the groundwork for success, the company went from 2 million USD in sales in 1977 to 15 million USD the following year. The ‘Apple II’ lived up to Markkula’s expectations and he helped oversee the further developments with the Macintosh (1984) and Macintosh II (1987), because Markkula was much more than just a simple ‘financier’. It was Markkula who instructed Wozniak to design the ‘floppy disk drive’ for the ‘Apple II’, a completly new approach that helped Apple differentiate its early computer from competitors.  

And it was also Markkula who wrote several of the early software programs under the name Johnny Appleseed. Later he became Apple’s best product tester, often finding dozens of flaws in hard- or software that was supposedly ready to ship to customers.

The 40th birthday of Apple this week is a good opportunity to recall, that without the almost unknown financier and consultant Mike Markkula, the Apple-story from a garage-start-up to a global-tech-darling (see chart) could be a completely different one.

1976: Steve Jobs receives the check from financier Mike Markkula, who was ”the one man and one person who made Apple a successful company” according to co-founder Steve Wozniak.