One of the most touching tributes to the late Apple founder Steve Jobs has come from the mysterious “third” founder of the company, a septuagenarian named Ron Wayne.
Wayne helped steer the company in its early years, advising on strategy and contributing to the design of the famous original Apple logo.
“They were absolute whirlwinds aside from the fact they were intellectual giants, which I recognised, and it was like having a tiger by the tail; you can’t hang on and you can’t let go,” Wayne said of Jobs and his co-founder, Steve Wozniak.
Many would consider Wayne to have been exceptionally lucky to have worked with Jobs and Wozniak during the formative years of what has become one of the world’s great companies.
But Wayne is arguably one of the biggest losers in the history of business.
When Jobs and Wozniak started Apple, the two would regularly clash over business and technical decisions and they brought the older Wayne in as a “tiebreaker”.
“He had more of a mature, adult mentality and he had strong formulas of how things go and how companies are run and how they go right and how they go wrong,” Wozniak said of Wayne in an interview in August.
As recognition of his role, Wayne received 10% of the company, with the two Steves getting 45% each.
But less than two weeks after signing up for the company, Wayne decided to hand back his stake.
Wayne says he was nervous. Jobs had borrowed $15,000 to fund the business and as Apple had been registered as a company rather than a corporation, Wayne would be liable for part of that $15,000 if the business went under.
He’d been involved in a failed business before and he had no idea how he would find the money should Apple go bust.
“They understood why I was pulling out, I had other interests and there was a modest question of liability,” Wayne told Bloomberg last week.
“I was very, very happy to participate with him for the thrill and excitement of being part of something that was really possessed of enormous promise and something that I felt was going to be very, very successful,” Wayne said of Jobs.
“I also felt it was going to be something of a rollercoaster which, since I was 20 years older than these guys I felt I was perhaps getting a little too old for.”
Wayne would go on to work as a consultant for Apple, but the cost of that decision to back out of Apple after just two weeks has been incredible – based on Apple’s current market capitalisation, Wayne’s 10% stake would be worth more than $37 billion.
“I made my decision on the information I had at the time and it was the correct one. Hindsight is a wonderful thing, but I have no regrets,” he said last year.
“I could be wealthy. People are always asking me, ‘What if?’ But life is too short. I’ve got my health, my family and integrity – and that is the best fortune you could ask for.”
It’s a very philosophical attitude, but if Wayne really has no regrets he is an extremely strong person. There would be few business people who could simply accept the loss of so much money with such grace – indeed, there are many wealthy entrepreneurs who have regrets over much lower amounts than Wayne has missed out on.
Here are a few of the mistakes, misjudgements and missed opportunities that plague the wealthy.
In 1998 the founder of Hungry Jacks, Jack Cowin, tried to get veteran advertising man John Singleton to invest in an odd concept: a business that would let tourists walk across the Sydney Harbour Bridge. Singleton told Cowin the concept would fail and didn’t invest – and he’s regretted it ever since.
Back in 2005 Singleton told me that he’d become so upset at his missed opportunity that he once asked a journalist to ring Cowin and tell him a tourist had fallen off the bridge during a climb. According to Singleton, Cowin retaliated by sending him the brilliant looking financial accounts from BridgeClimb every month. Cowin denied the story, but we hope he found some way of reminding Singleton of his misjudgement.
One of the endearing qualities of Warren Buffett is that he admits to his mistakes, usually in his annual letter to shareholders. Back in 2008, he wrote to shareholders that his worst ever deal involved a shoe company called Dexter Shoe Company. In 1993, Berkshire paid $US433 million for the company using Berkshire Hathaway stock. But within eight years, the company had stopped shoe production and had been folded into another shoe company within Berkshire.
“What I had assessed as durable competitive advantage vanished within a few years,” Buffett wrote. “By using Berkshire stock, I compounded this error hugely. That move made the cost to Berkshire shareholders not $400 million, but rather $3.5 billion. In essence, I gave away 1.6 % of a wonderful business – one now valued at $220 billion – to buy a worthless business.”
LinkedIn co-founder Reid Hoffman has emerged as one of the savviest tech billionaires in the world, thanks to investments in PayPal, Facebook, Zynga, Groupon and, of course, LinkedIn. But there was one that got away. When YouTube was founded in 2005, Hoffman was preparing to make an investment, when venture capital firm, Sequoia Capital, edged him out by offering better terms.
When Google bought YouTube in late 2006, Hoffman missed a windfall of $US500 million. “My only real regret is I didn’t go back and say, ‘Hey, let me in at least a little bit,’” he told the New York Times in 2006.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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