In the pantheon of apocryphal computer industry legends there are a few stories that form the “Mt. Rushmore” of the genre: Alan Turing and the cyanide-laced apple, Grace Hopper and the moth she called the first computer “bug,” Ken Olsen’s 1977 proclamation that "there is no reason for any individual to have a computer in his home"--these have all become foundational in the mythos of the modern-day technosphere. Equally as fabled as any of these stories however, and perhaps even more misunderstood and misrepresented, is the story of Steve Jobs’ visit to Xerox’s PARC (Palo Alto Research Center) laboratory in 1979.

As some retellings would have it, Jobs’ visit to PARC in 1979 was his Saul-on-the-road-to-Damascus moment—struck blind by the wonders of the mouse-driven graphical user interface and instantaneously converted into the most fervent of true-believers dedicated to the One True Cause of the GUI. Other incarnations of the story cast Jobs and his Apple cohorts as Promethean pirates stealing technology from the staid and out-of-touch academics at PARC in order to give it to the people! Still others paint Jobs as the ultimate pillaging capitalist, looting Xerox’s brilliant techno-creations only to profane them in the—ugh—consumer marketplace.

None of these accounts are true.

As with most cases of mythmaking, the real story is much subtler and more complicated.

The first myth that needs to be punctured is that PARC’s mouse-driven GUI was a secret. It was not. Thousands of computer industry professionals had come to PARC throughout the 70s for tours and demos. Exact numbers are not available, but in 1975 alone, the groundbreaking Xerox Alto and its GUI were demonstrated for about 2,000 visitors. Furthermore, Apple was already aware of the concept and two projects for mouse-driven GUI personal computers were already underway by the fall of ‘79, prior to the PARC visit: the Lisa and the Macintosh.

Also, there were, in fact, two visits rather than one. And the seeds for those visits had been planted much earlier in the year. Despite having been in business for just two years and having fewer than forty employees in 1978, Apple Computer was rapidly becoming one of the most sought-after investments in the shadowy world of venture capital. Apple was primed for its big IPO in 1980, and the VCs were practically tripping over themselves trying get in on the ground floor. Xerox’s VC unit, Xerox Development Corporation (XDC), was no different, but lacked the prestige, finance industry connections, and deep pockets of some of the high-powered VC firms then courting Apple. XDC however, had a man on the inside: Apple engineer and Jobs advisor Jef Raskin. Raskin had friends at PARC who had already dazzled him with their technology, and Raskin was itching to have Jobs sit for a demo.

Working against him was Woz and Jobs’ rabid mistrust of big corporations. While working at Hewlett-Packard, Woz had repeatedly proposed a personal computer project to his bosses only to be rebuffed every time. After this experience, Raskin recalls that “Jobs repeatedly told me (and anybody else he could get a hold of) that a large corporation like Xerox couldn’t do anything interesting.” But Raskin, having been to PARC, knew that Xerox was, in fact, doing something very interesting, and he eventually won Jobs over to his point of view. As a result, XDC was cut in on this early round of investing. They were allowed to purchase 100,000 private shares of Apple at $10.50 each with the stipulation that Jobs be invited to PARC for a demo.

The demo occurred in early December 1979. According to Jobs, “I thought it would be an interesting afternoon, but I had no real concept of what I’d see.” What he and his Apple engineers did see was the Alto with its bitmapped display and mouse-driven GUI, the graphical word processor, Bravo, and a few demo applications in Smalltalk, PARC’s revolutionary object-oriented programming language. This was a carefully curated demonstration created by PARC’s researchers to give a taste of what they had created without giving away any secrets deemed too precious. “It was very much a here’s-a-word-processor-there's-a-drawing-tool demo of what was working at the time,” according to PARC researcher Adele Goldberg. “What they saw everyone had seen.”
 
(PARC researcher Larry Tesler working at his Xerox Alto. Tesler would later be poached by Apple and go on to become their Chief Scientist.)

Jobs left PARC that day apparently satisfied. A few days later he found out the truth: that what he’d been shown had been a sanitized demonstration carefully shorn of all the really interesting stuff the PARC researchers had not wanted to divulge to him. Jobs was incensed. Two days after the first demo, Jobs and his team stormed back into PARC and insisted on being shown everything. Harold Hall, PARC’s System Science Lab chief tried to placate Jobs, but he would not be calmed. “Let’s stop this bullshit,” yelled Jobs, “there’s no point trying to keep all these secrets!” Back and forth it went like this for a few tense moments while Hall tried to mollify his obstreperous visitor. Finally it was decided to show Jobs and his team the next level of Alto demonstrations.

There were two different levels of demos the Alto team delivered to curious visitors. Corporate executives and bigwigs got to see the classified demo. Regular visitors and guests at PARC got the unclassified demo. Jobs and his engineers had gotten the regular unclassified show during his first visit a few days prior, now they agreed to show him the classified stuff. Adele Goldberg protested vociferously. The classified demo had never been given to another company’s engineering team before. But while Goldberg protested, Jobs, leveraging his company’s newfound status as Xerox’s most prized investment, went over her head. When Hall returned to his office, Bill Souders, the head of Xerox’s business planning group, was on the phone and, in no uncertain terms, ordered that Jobs and his team be shown whatever they wanted to see.

That day Jobs and his engineers sat in awe as Goldberg and the Alto team demoed the intricacies of the mouse-driven GUI, Smalltalk, as well as the Ethernet technology they had developed to network their Altos together. Jobs was so blown away by the details of the GUI, the rest passed over him like a fog. “It was one of those apocalyptic moments,” Jobs said. “I remember within ten minutes of seeing the graphical user interface stuff, just knowing that every computer would work this way someday. It was obvious.”

But the engineers paid very close attention to the Smalltalk demo and left PARC that day with a renewed conviction that they were on the right track with their Lisa and Macintosh projects. But what they had seen at PARC was so much more advanced and showed them that what they had considered intractable problems were in fact quite solvable. The Apple team left PARC that day taking no code or hardware with them. In a sense, all they “stole” from PARC were ideas. But those ideas, along with the demonstration that those ideas were actually possible to implement, changed the trajectory of Apple. No longer were the Lisa and the Macintosh speculative projects under constant threat of being cancelled, now they were the future and everyone at Apple knew it.

Post-script: Whatever happened to Xerox’s $1.05 million dollar investment in Apple in 1979? Had Xerox held onto this stake of the company, approximately 5-8% of the total outstanding equity in Apple at that time, their investment could be worth tens of billions of dollars today. Famously however, Xerox did not even retain their stake until Apple’s 1980 IPO. Instead, they almost immediately turned around and sold their shares for approximately $1.2 million, netting a return on their investment of around $200,000. Apple and their competitors, inspired by PARC’s inventions, would go on to generate trillions of dollars of revenue over the coming decades selling desktop personal computers with bitmapped displays and mouse-driven GUIs just like the Xerox Alto.