"Dear Steve, Thank You"

By David Gardner | More Articles
February 24, 2013 | Comments (10)

Dear Steve,

I never got to write you to say goodbye.

At the time of your death in October 2011, and for many months after, so much was written and said about you that I didn't want to join the bandwagon. I wanted to let some time pass, to watch and learn, and to collect my thoughts. I'd always meant to write you, though, and now that things are much quieter -- and at an interesting place in history -- well, I wanted to thank you, and to convey a few thoughts.

First off, I always was, am, and always will be a fan. In our 1999 book, The Motley Fool's Rule Breakers, Rule Makers, on page 84 I wrote: "But before I even start, I want to make a confession: I'm a Steve Jobs guy."

(I didn't know that nine years later you would kick off the "I'm a PC/I'm a Mac" campaign with very similar language -- while I wasn't "a Mac" till 2008, I was a Jobs guy from much earlier.)

I closed that section with the following:

Relevant aftermath: Jobs is currently back at Apple (NASDAQ: AAPL ) as interim CEO. ... Since the resignation of the last official CEO, Gil Amelio, in July 1997, Apple's stock has as of fall 1998 risen from $14 to $37, an increase of 164% that outperforms the S&P 500 by a factor of five. Whatever happens -- and I'm actually a bull here because I believe in The Man -- it's a darned interesting story to follow.

I didn't know at the time that your stock, when split-adjusted, would rise 4,800% from there to today -- a 49-bagger, and that's even after Apple shares are down 36% from their 52-week high. I didn't actually get around to recommending your stock to our membership until January 2008, which means I personally have enjoyed only a 181% return on my belief in Apple -- which is still 153 percentage points ahead of the S&P 500. (I know I'm talking about the stock a lot, but in addition to being a Jobs guy, I'm even more a stocks guy.)

I wanted to thank you for a story you told my brother and me at the Businessweek conference we also spoke at in the 1990s. You were talking about criticism you were taking for spending one full day out of every week -- despite being CEO of both Apple and Pixar -- just doing job interviews for new hires. You asked the audience why you did it. I will always remember your answer.

Paraphrased, you said that most of the world thinks that someone who's "really good" is about 3 times as good as an average employee. You said you disagreed. You said someone who's "really good" is actually about 60 times as good as an average employee. And that's why you spent 20% of your time just interviewing people. Because you believed that finding awesome people was a huge catalyst for the success of your companies.

I know you weren't easy to work for; lots of people have written about that. But the value you created for all your stakeholders -- customers, employees, shareholders -- tells me you were right. I learned, from that day forward -- it's an anecdote I've told many times at Fool HQ and in speeches over the years -- to apply that same thinking to my investment research and selection. Because finding the people who are awesome is a far more reliable route to beating the stock market than any other that I know.

On another note, I love Dickensian names, and you certainly had one. You created a ton of jobs. In the world swirling around me in my native city of Washington, D.C. -- a world that swirls without me because I'm (shall we say?) "politically uninterested" -- a lot of people think that politicians and bills create jobs. I think that's mistaken, having seen it firsthand. I mean, I guess anyone can tax people, raise money, and then use it to pay salaries ... and have thus "created" jobs. But while others may credit that, I won't. I believe that what actually creates jobs -- rather than redistributes, creates -- is innovation, and specifically innovation driven by a persistent ability to attract and please customers. Outcomes that truly make the world a better place. Outcomes that create new things. My friend Roy Spence once said the greatest pleasure in life is "creating something there that wasn't there before." Few people -- although I can think of just a few people -- have done this as well as you. So yes, very Dickensian: Jobs showed how to create jobs.

I want to thank you for Pixar. Not just for me and my family -- though that would be enough on its own, as our family grew up with your movies -- but for many Motley Fool members. Thousands of us bought Pixar stock in 2003, and those shares today -- now part of Disney (NYSE: DIS ) , which bought your Pixar out -- are up 5 times in value when the market over the same period merely doubled. I am truly amazed to think that, beyond creating and then reinvigorating Apple into becoming one of the great big companies of all time, you could "on the side" be leading Pixar, too. Pixar! How wonderfully innovative and charming and wholesome. I never got a chance to interview you and ask how satisfying it was to become Disney's largest shareholder. I suspect the answer was "very" -- and that it wasn't about the money, either.

I want you to know that Apple's stock is up from when you left us. You might have been surprised to know that from the day of your death, one year later, Apple's stock was actually 75% higher without you. At that point -- October 2012 -- your company had earned the highest capitalization in the history of our U.S. public markets. Since then, a lot of that gain has washed away -- and shares are now underperforming the S&P 500 since your death. I want you to know that in contrast perhaps to many, I continue to believe you built a culture and put your company in a position to keep winning. I don't believe things will slide away from here, and I certainly don't believe pundits who might say your company is moribund or lost. My money's where my mouth is. (Sorry I keep talking about the stock market. It's not my ultimate point, but it's very often how I see things.)

I wanted to thank you, finally, for the often-quoted Stanford graduation speech you gave in 2005. Your message -- timeless and now much watched by millions of people worldwide -- was and has always been our message. You put it this way: "Stay Hungry, Stay Foolish." When I first watched the YouTube video sent to me in 2005 by an excited Motley Fool member (who said, "Look, Jobs is a Fool, too!"), I couldn't believe my eyes. Now watching it once again recently, it ages well -- the message just keeps getting stronger, and I want you to know we are going to drive a huge wedge of Foolishness into this world before we're done. Thank you most of all for that.

You would have turned 58 today. You are missed, but like the few great people of every era, your legacy will successively instruct and positively influence millions of people well into the future -- it already is.

Thank you, Steve.

Love,
David Gardner

For those who took time to read my piece, I thank you, fellow Fools, and point you toward Steve Jobs' 2005 Stanford graduation speech and a memorable CAPS blog posting titled "Steve Jobs, American Hero."

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On February 24, 2013, at 10:30 AM, TMFBoomer wrote:

Great article, David! My personal favorite part of the speech – a part that I think resonates with most everyone during their career – is the paragraph that reads:
“Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”
Fascinating insight into Steve's career that other CEOs like Mickey Drexler, CEO of JCrew (and Apple director), have oft-repeated about their own experiences.
Thanks for taking a step back and commemorating an amazing leader.
Isaac
Report this Comment On February 24, 2013, at 11:12 AM, Awebb30 wrote:

Although I'm not a huge PE ratio watcher, I think it's also interesting to note that the current PE ratio (10.22 TTM) is below the lowest PE ratio achieved during the depths of the financial crisis in 2009 which occurred on January 20th, 2009 (10.40). Lots of things have happened, but have to think Apple has more in the tank and lots more upside from here.
Report this Comment On February 24, 2013, at 12:11 PM, TMFSun wrote:

David, it was a joy to read your thoughts again; thank you so much for sharing them.
-Sean
Report this Comment On February 24, 2013, at 1:56 PM, pat84 wrote:

Thanks David. Well done. I appreciate the link to the speech. It was inspirational. He was such a brilliant and insightful man.
Spending the time to look for and hire other brilliant people was obviously a key to his success.
"...you said that most of the world thinks that someone who's "really good" is about 3 times as good as an average employee. You said you disagreed. You said someone who's "really good" is actually about 60 times as good as an average employee. And that's why you spent 20% of your time just interviewing people. Because you believed that finding awesome people was a huge catalyst for the success of your companies."
Warren Buffett has the same philosophy, but applies it in a different way. He acquires well managed companies, and then lets management continue to run their companies with minimal interference.
Pat
Report this Comment On February 24, 2013, at 11:00 PM, Gordogato wrote:

Why diverge from your otherwise moving tribute to Jobs to take unnecessary pot shots at the federal government?
The naive view that government raises taxes to pay more government salaries, and that redistributing wealth in this manner is the only way that the government creates jobs, is dishonest. Spreading simplistic myths about how government spending and investment affects the economy discredits and insults thousands of hard-working federal employees.
You say innovation is the key to our economy, but you refuse to acknowledge that the federal government plays a huge role in the research that provides the bedrock for high tech innovation in America. Federal tax dollars spent on research come back to America in the form of greater economic activity and non-government jobs. Agencies like DARPA, NASA, NIH, the Department of Energy, the National Science Foundation, and others have all laid the groundwork of innovation over the past century that American businesses like Apple take advantage of (and take for granted) today.
Report this Comment On February 25, 2013, at 7:09 AM, bamasaba wrote:

Good article, but like the poster above me said, I'm not really sure that the snide political remarks are appropriate in a eulogy.
Furthermore, are you aware that Google was created in a University Lab by PhD students working on a Federal research grant? Are you aware that the first computer network was also created using Federal research money? Please explain to me how those projects didn't help create jobs.
Report this Comment On February 25, 2013, at 8:22 AM, devoish wrote:

As someone who has become used to having marketing e-mails that are directed to me and personalized with the use of my first name, let me just say that reading the opening few lines of this one was a very unique experience and certainly got my interest quickly.
It was nice to learn in the second paragraph that it was not me who had passed away in October 2011.
Like others I also think you blew it with the "potshot" paragraph but if this was really written by you personally then I am inclined to believe that paragraph as being a well intended but poorly written attempt to credit Steve Jobs rather than a general bashing of all things Government, because I have heard you defend Government.
I also feel like you had some help with writing this article because I am sure you know about FoxConn and the working conditions there that have driven employees to suicide. I feel like in the past you have been thoughtful enough not to imagine the Chinese employees are not also "stakeholders" and are possibly the most significant reason for the prevalence of all things electronic, including Apple products, in our American society today, and the most significant source of investors profit.
Best wishes,
Steven
Report this Comment On February 25, 2013, at 3:15 PM, JULPAC wrote:

hmm its evident that a life long, nation wide consumption of fluoride has manifested itself in the previous posts. Even more incredible is the fact that such posts were written while tightly gripping a sickle & hammer.
What anger's me the most about the rubbish garbage posted in the last previous comments to this article is that people have the audacity to compare Steve Jobs passionate pursuit of innovation to that of government funded agencies - DARPA, NASA, NIH - really?
Innovation from the private sector FAR OUTWEIGHS any government funded project. Can people easily dismiss the private sector's push to have a living person on Mars by 2018? Can they dismiss the results from the Pennsylvanian Rifle men in the Revolutionary war who brought superior weaponry against the Brits?
The pursuit of private innovation is done so at the risk of capital - the potential value of a product/outcome increases the starting cash of the project. If the project fails - the money stops.
Government funded projects on the other hand have the ability to exist far beyond failure. When the expected outcome doesn't come to fruition more money is then dumped on the project at the expense of the tax payer.
Report this Comment On February 26, 2013, at 1:40 AM, devoish wrote:

"The pursuit of private innovation is done so at the risk of capital"
And that is exactly why Government funding provides the vast majority of cutting edge research. It can afford to experiment and take risks.
Best wishes,
Steven
Report this Comment On February 26, 2013, at 2:27 AM, NOTvuffett wrote:

devoish says, "And that is exactly why Government funding provides the vast majority of cutting edge research. It can afford to experiment and take risks."
I am doubled over in laughter. How much can we afford while we spend beyond our revenues by over a trillion dollars a year?
Tell me if I am wrong, but weren't the two initial guys in AAPL just a couple guys in their garage screwing around with stuff, not sucking on the govt. teat? Didn't one of them even sell his van to get money to buy chips and stuff for the project?
If today somebody came up with a visionary project like that, do you think it would be impossible to get venture capital for it, or would it have to be govt. funded devoish?