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Meet Apple’s Honorary Fourth Co-Founder

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Paul Terrell might not be a name you recognize, but he’s a technology pioneer. In December of 1975, Terrell opened The Byte Shop in Mountain View, California. At the time, Terrell’s shop was one of the first computer stores in the world.

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A year later, two 20-something tech geeks approached Terrell trying to get him be a dealer for their new product. It was a DIY computer kit that allowed consumers to assemble their own computer using included tools and soldering equipment.

The computer Terrell was being pitched was the Apple I, and the two ambitious tech geeks were none other than 21-year-old Steve Jobs and 26-year-old Steve Wozniak. While thought of as tech titans today, they were then simply two young and hungry entrepreneurs. As Apple’s third co-founder Ron Wayne told NextShark: “These guys were whirlwinds.”

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Although Terrell was interested in Jobs and Wozniak’s product, he wasn’t entirely sold. Their machine was powerful, but it was no different than other computers sold at the time, which came as kits requiring assembly. He then suggested to the pair that they should sell the computer fully assembled.

That single suggestion would essentially put Apple on the path to becoming one of the most innovative and valuable companies in the world. Terrell promised Jobs and Wozniak that if the machines came assembled, he’d order 50 of them at $500 each to be paid upon delivery. Terrell told NextShark:

“In the early days, [Steve Jobs] was more arrogant: he had a pretty good-sized ego, so it was tough to get Steve to listen to you. The big thing that I did for him was convince him when he was trying to sell just a circuit board for 35 bucks that he ought to actually assemble and test it and put it all together, then sell it for $500. That was one of the things that he did listen to.”

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Jobs and Wozniak didn’t have the money to pay for the parts to assemble their computers, however. According to Wozniak’s autobiography, they went to a local creditor where Jobs promised the following: “I have this purchase order from The Byte Shop chain of computer stores for 50 of my computers and the payment terms are COD. If you give me the parts on a net 30 day terms I can build and deliver the computers in that time frame, collect my money from Terrell at The Byte Shop and pay you.”

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Here’s an Apple-1 that’s naked, but fully assembled. It’s connected to an uncased keyboard and a monitor.

Jobs and Wozniak delivered the computers on time, thereby finding a creative way to fund their new startup without giving away any equity. However, the Apple I, which was famously sold then for $666.66, was just the beginning of their success. Although it was technically a fully assembled computer, it lacked a power supply, a keyboard and a monitor, so it still wasn’t a machine that could be used out of the box. Jobs remembered Terrell’s words:

“What I needed was an assembled and tested unit that could sell to people that really just wanted to use them and not just to the technical audience.”

Jobs had an epiphany. Taking Terrell’s advice, he and his team created the Apple II, arguably the world’s first all-in-one computer targeting the general consumer and not tech geeks. Terrell explained:

“The Apple II was really the first fully assembled computer that I considered a personal computer rather than a hobby computer, which is what I would call the Apple I because it still didn’t have a case or power supply. I believe Apple takes credit as being the first personal computer, and then came Tandy TRS-80 and Commodore Pet and of course my Sorcerer Computer from Exidy.”

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The Apple II sold 210,000 units in 1981 starting at $1,298 apiece, which made it one of the first examples of a successful mass-produced personal computer. Byte magazine predicted in its April 1977 issue that the Apple II “may be the first product to fully qualify as the ‘appliance computer’ […] a completed system which is purchased off the retail shelf, taken home, plugged in and used.”

Terrell’s simple suggestion ended up being so critical to Apple’s success that, in 1984, when Apple was about to launch the Apple IIc, Jobs invited him to the Mac Building to check it out with him and Wozniak. Terrell said:

“They were going to launch the Apple IIc, and they were putting together a program that they were calling Apple II Forever. They had Woz and Jobs there, and they wanted me to do an interview. So I said, ‘Sure, I’ll come down.’ It was the first time that Jobs actually admitted to me — I could remember the expression on Wozniak’s face when he admitted: ‘Paul, if you hadn’t pushed us into assembling and testing computers then we wouldn’t be where we are today. Look at this new Apple IIc we’re launching.’ ”

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An Apple IIc

Steve Wozniak even went as far as calling Terrell an honorary co-founder. Terrell explained:

“When [Steve Jobs] died, I sent an email to Woz and I wanted to know about funeral arrangements because I was actually on the West Coast at the time. I said I could fly down to the Bay Area because I’d like to go to that funeral.

“Woz told me, ‘Paul, I don’t even know what’s going on; the family is keeping it pretty closed.’

“Then he said, ‘You know, I’ve always considered you to be the fourth founder of Apple Computer. You gave us some really good advice back in the day, and we wouldn’t have been successful without doing that; we would have just been another one of those guys with boards and kits, and it really made a difference.’ That was nice to hear. I really appreciated that.”

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Paul Terrell with Steve Wozniak and former Apple CEO John Sculley 

According to Terrell, Jobs had a special ability to lead and recruit, much like himself. He told NextShark:

“Steve Jobs was a charismatic guy, and you have to have that. I was one of those kind of people back in the day. When I was talking to people and making a presentation, I could get people really focused on me to the point of following me. It’s really interesting if you have that ability; people would work for me for nothing just to be part of The Byte [Shop].

Steve Jobs was that way too, and you have to have people like that to get this thing down the road to make this company happen. That’s why I say about myself that I am a startup kind of guy. I can make people enthusiastic about my product and business and what I am doing, and want to be involved in it in the sense of ‘I want to work for you’ kind of thing and whatever it is going to take. Once again, in those days, we did not have a lot of money. It was like, ‘How the hell am I going to get these guys to leave a serious job and come to work for me?’ That’s who Steve Jobs was; he could make people believe in what he was doing.”

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On Steve Wozniak, Terrell said:

“Wozniak had none of those characteristics. He wasn’t that kind of person. Woz is a private guy and extremely intelligent. I never realized how smart he really was and what he was doing over there. He was definitely a major player, but Jobs was the kind of guy who could gather people around and get them to work for the company and believe in his vision, that it was going to be great and that people were going to make a lot of money — ‘stick with me’ sort of thing.

Woz is such an intelligent guy, and what he was able to do was with as little education as he had, he was very, very smart. He would sit there when he was telling me about designing the Apple I — and I mentioned the Data General Nova minicomputer because I knew that one pretty well — and he said that he re-designed it three times and that he was able to reduce the chip count on the Data General Nova by half. That’s the kind of guy he was, and he never did anything with the design.

But when he was at HP he would do those things as a fun kind of project — that’s what he is, a fun guy. He was doing it for his own gratification to see if he could do that kind of thing. It just amazes me, and that’s when I understood how the Apple I came about.

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Terrell dove more into Jobs’ ability to innovate:

“What Steve Jobs did with the mouse, for instance. The guys at Xerox did all the research with the mouse. But, what [Steve] did with the mouse was put it into a product for people to use them. People can have great ideas, but somebody else has to implement them. Let’s face it: we all prefer to point and click than we do to type. We can get through documents and things like that. Steve Jobs was a kid when he started out, but he was brash and charismatic.”

Since Terrell interacted with many early tech pioneers, including Intel founder Bob Noyce aka “the Mayor of Silicon Valley,” he was privy to conversations about one of the big issues that faced founders of rising tech companies:

“I would talk to these guys as they were starting their companies and what they needed to do. At some point you will have to deal with the growth factors and maybe even sell your company or go public — even at Microsoft and Apple. One of the messages was that you are going to have to be able to turn it over to the next guy coming in, who is going to take your company to the next level of success. One of Microsoft’s first experiences was when they hired Jon Shirley to come in and be president. These companies were trying to figure out how to do that and who to bring in as the next level guy.

“Of course, today, the way business is growing and the world is changing, I look at both of those companies and I think that they are both in good hands. Microsoft’s new guy is in there, Apple’s new guy is in there. We don’t need  to worry that Steve Jobs is not there anymore, that Bill Gates is in the background somewhere. Let them go off and do the other things.”

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Even with his important mark on Apple’s history, Terrell admits that he’s still a PC guy:

“I’m really a PC guy. I’m on the Android smartphone. I never really embraced the Mac and made that transition. I’ve pretty much all my life been an Intel/PC type of person.  That may have been a reason why I never really stayed connected to Jobs and Woz. I was more in the Gates and Allen side of the house.”

Today, Terrell enjoys retired life and is finding time to work on his yet-to-be-released book, “Nothing Happens ‘Till There is a Sale.” Terrell said of the subject of his book:

“The message in my book is that I want to tell the story of everything that I know and getting started. When you think about it, nothing really happens until there is a sale.  When Apple first started and I bought their Apple Is, that sale started something.

When people really think about it and the success rates of startups and whether you’re at the stage of thinking about making a product or performing a service, you have to focus on the selling aspect of it — that you can sell it and that somebody is going to buy it.  There are so many times that people start companies or create products that they really do not think about ‘Who is going to buy this?’ and ‘What are you going to do with it?’ My whole life has been on the selling side of things, and I think that it is important to get that message out.”

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Terrell also has a final wish he hopes Apple will grant one day.

“I’m impressed with Tim Cook. I don’t know him at all, I’ve never met him.  One of the things I’m hoping to do is to live long enough for Tim Cook to invite me to the opening of the new campus in Cupertino.”

Hopefully, Apple will fulfill that wish someday.

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