Macworld‘s founder David Bunnell’s first meeting with Steve Jobs is surprisingly genial. This time he gets to meet the REAL Steve Jobs. Plus he has one of the best ideas of his magazine career.
Normally, I would have waited until I got back to my office to call Pat McGovern, Chairman of IDG, our parent company and my boss. But, it was too exciting and I couldn’t wait.
So I pulled out my clunky, brick-like Motorola “DynaTac” cell phone from my briefcase, attached the 10-inch antenna and place a call to McGovern’s office in Framingham, Massachusetts. Most of the time he was out traveling to the far corners of the globe to checkup on some of the computer magazine companies he then had in virtually every modern country in the world and even in some unlikely developing countries such as Brazil and Uganda.
I didn’t expect to talk to him, just leave a message, but much to my surprise, he was actually there.
“Uncle Pat,” I said as this is what we all affectionately called him, “Uncle Pat, this is David Bunnell and I’m here in the car with Andrew coming back from Cupertino where we met with Steve Jobs. Yeah, the real Steve Jobs and he actually showed us the Macintosh! It was just great, the best computer I’ve ever seen, beats the PC hands down.”
“How do you know they can deliver,” McGovern asked, “they didn’t deliver on the Apple III and the Lisa was way late.”
“This time Steve says it will be different. They will have Macs in 10,000 retail computer stores on the very morning of the announcement. And he expects to sell 600,000 of them during the first year, minimum.”
“What about the IBM home computer? You’ve have an IBM franchise with PC World, why not build upon this?”
“Don’t worry Uncle Pat,” I replied, “we’ll do a Peanut magazine too.”
At this point, Andrew gave me the finger. He hated the whole idea of another IBM magazine. Just doing Macworld was challenging enough.
PC World was in its infancy and we were in a fiercely competitive battle with a much larger company called Ziff-Davis, publishers of PC Magazine. I must admit, looking back, I was the manic one who thought we could do anything and everything. Andrew was more selective and more methodical.
Andrew was conservative but he had massively creative thoughts–one day while riding over the Golden Gate Bridge he came up with the idea for “freeware,” which was software that was “free” to users as long as the people who found it useful mailed a donation to the programmer.
Freeware, also know as “shareware,” subsequently became a gigantic force in the computer world as thousands of programmers, who would have otherwise found it nearly impossible to distribute their programs adapted Andrew’s model. This made him a celebrity in personal computing circles and I was very fortunate he was my partner—I was conscious Andrew could go off and do other things anytime he wanted.
So, I winked back at Andrew as if to convey he needn’t take my promises too literally. And I spoke into the phone, “Seriously, Uncle Pat, we can create more than one new magazine.”
“Well, OK,” McGovern replied, “as long as you get Apple to buy a subscription for each of the new users, I’ll be happy to have you publish Macworld. Good luck to you,” and then he hung up.
“What’s wrong?” Andrew wanted to know.
“Oh, you know Uncle Pat. He’ll let us do it, but not before we jump through a few tiny hoops,” I replied, thinking, “this is fucking crazy.” Apple could just as easily be asking us to pay them. It’s a wonder Steve Jobs hadn’t thought of this.
Needless to say, that night was a sleepless one as I tossed and turned, replaying the McGovern phone call in my head, and trying to come up with a creative solution whereby Apple could somehow be talked into helping us fund Macworld in a way that would hoodwink McGovern into thinking they were buying subscriptions.
Around 6 a.m., I had one of my all time greatest epiphanies. The warranty cards!
I immediately woke up my wife, Jackie, who happened to also work at the PC World. “The warranty cards, can you believe it? Apple wants people to turn in the warranty cards when they buy a computer so they can capture the names and addresses of their users and then sell them other stuff. Only a small percentage of people return the cards. If they got something for turning in a card, say a subscription to a new magazine called Macworld, you get it, then a much higher percentage of people would return the damn cards–maybe even 100%!”
She somehow pried her eyes open long enough to look at me and say, “What, you lunatic, what the hell are you talking about so crazy this early in the morning?”
I was already up, throwing my clothes on, “never mind, sorry honey, go back to sleep, I’ve got to get the office early, see you later.”
As things would turn out, my warranty card idea not only what gave us a reason to ask Apple for money, but it ended up driving Macworld‘s circulation. Because we didn’t have to spend massive chunks of money to acquire subscriptions through direct mail as do most magazines, we turned a profit during our first year.
Selling the warranty card idea to Mike Murray was easy enough–during the entire history of the Apple II, the percentage of warranty cards coming was always less than half the number of machines sold. Because the after-market of hardware and software add-ons in the personal computer market was very profitable, Apple would like to see a much higher return–it had real value for them.
“Steve has been demanding the Mac warranty card program work better than the Apple II program,” Mike confided.
I figured Apple would never pay full price for these subscriptions so I asked them to pay $3 for each warranty cards that came in the first year–if we captured 600,000 which was the “conservative number” of sales Steve Jobs predicted, we’d have $1.8 million, more than enough to offset our startup costs.
Working on the phones that day with our lawyer, Jim Robertson, Murray and Apple’s lawyer, David Koff, I was actually able to get a draft publishing agreement. Now all I had to do was get Steve Jobs and Pat McGovern to sign it. Murray arranged for me to have my second meeting with Steve the following Monday.
Tune in tomorrow for Part Four: Steve Jobs Tells Pat McGovern to “Belly up to the bar”
Copyright 2010 by David Bunnell. All Rights Reserved.
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