Stephen Sinofsky (3:04)

Well, between Apple and Microsoft. You know, there's a very famous moment late in both Bill Gates career and in Steve Jobs career where they were being interviewed on stage at a conference together. And it was the first time they'd ever been interviewed on stage, which is kind of a bookend to one of the very earliest times they were together was on an Apple PR event that was called the PC Dating Game. And there was Bill and Steve and a bunch of other original OG PC people. And they were asked all these trivia questions about the industry. And that was, I think, like in 1982 or 81. Unbelievable. And then you fast forward, I don't remember the year. I think it was about 2005 or so that, that they interviewed together. And it was a, a super touching 2007 super touching interview by Walt Mossberg then of the Wall Street Journal and the All Things D conference.

Theo Jaffe (4:05)

Iconic.

Stephen Sinofsky (4:07)

It was iconic. And, and the photos by Asa Mata, the Silicon Valley photographer, also iconic. And one of the things that, that question was actually asked about to each of them about what they saw as the differences. And, and Bill, Bill looked at Steve and just said, you know, I, I wish, I wish we had your taste. And I, I thought that was, I mean, it was an amazing moment. Like everybody in the audience sort of froze and only maybe 200, 300 people in the audience. And. But that probably is the, the biggest difference between the companies. And you know, Steve made this famous saying back when they were building the Macintosh real artists ship, which is sort of a play on a famous Picasso thing about real artists steel. And it was actually in the movie the Pirates of Silicon Valley and there was a famous, there was a pirate flag atop the Apple building where Macintosh was originally conceived. And I think that Steve created a culture of artists and they thought of themselves that way. And in many ways, Microsoft was a culture of technologists solving technology problems. And it led to very, very different products, but also very, very different scale, at least until the iPhone came out. And I think those two things about being artists and about the taste involved in making products are really what separated the companies. Of course, they were organized differently. You know, they. Hardware versus software are very different timelines. I would say the thing as an engineer that I constantly made, I even talked to him about this to Scott Forstall, who was at Apple at next with Steve and then the original developer on the iPhone operating system. You know, they, when they, when, when Scott was working on Mac OS and porting it from next to the Mac. They went on a tear from 2000 until today, where macOS was updated every single year without fail. And sometimes it was great, other times it wasn't great. But the fact that they released a new product every single year from the time it was OS version 10 or OS X, as some people, you know, Microsoft never pulled that off. In fact, Microsoft has had only two releases of Windows that you could even call shipped on time. Three of them out of all of them from 1983. The first one was announced in 1983 and shipped two years late in 1985. And it was all horrible. And then everyone after that was late and it was always this waiting for Godot kind of thing. And Apple, starting in 1999, like clockwork, shipped every year. And Scott was the champion of that. And he really. We talked about it and we talked about how nobody in the world understands how difficult that is, that two of us talking about it. Because I was working on Windows and it was really that incredible accomplishment which, considering they were artists, was itself kind of an amazing thing, because you would think the artist people are the ones who can't ever figure out how to ship. Nothing's ever perfect. But it wasn't like that at all.

Theo Jaffe (7:34)

So do you think this distinction still captures it 20 years after this Gates Jobs interview? Is Apple still artists and indie hacker people?

Stephen Sinofsky (7:43)

Absolutely. And I think it's probably one of the things that surprised people the most about the expectations they had for how Tim Cook would run Apple and, and how things ended up. I mean, I'm on this Gatorade Zeo right now, and, you know, it is relatively art. And, you know, there's obviously a huge discussion going on on X right now about, you know, can there really be a PC that's $600? Which is super weird because that's literally a conversation we had, you know, 12 or whatever years ago, building Windows 8. And it's just, it's a fascinating thing. People thought the company would become much more mechanical, much less focused on the supply chain and things, but it really kept it. You know, you look at the iPhone X, you look at the Neo, you look at Vision Pro, you look at AirPods, you look at the watch. I mean, these are really just stunning, stunning products.

Theo Jaffe (8:45)

Yeah, I, I agree. That's why I use them. And I'm curious, actually, what, like, what is your personal tech stack like? Do you just, like, Daily Drive, Apple, everything?

Stephen Sinofsky (8:55)

I actually, you know, it's very interesting. Yes, I, I do. And, and it bugs me for the first few years I really used only Surface, which is a thing that I worked on and helped, you know, release, which was the whole story into itself. But what really happened is of course, you know, you're in a community in Silicon Valley and most of my energy was working with founders. And so a lot of stuff, you know, was shows up on the Mac first and people share things that are sort of Mac native and things. So for a long time I was using, still using Microsoft Office on the Mac, another product I worked on for a very long time. But, but now, you know, like Windows is definitely in another world and I have one machine that I keep running Windows that I do Windows specific things on. But by and large I sort of joined the rest of the bleeding edge of our industry on Mac. And the share numbers in the real world really show that I lived through Apple getting down in 1997 to less than 3% share of new computers sold. And then for a while, if you measured share by laptops over $2,000 or something like that, you would see it be like 10% in the US and in North America. And now you're looking at 30 plus percent on the global share. And it's just really incredible, especially if you measure consumer versus enterprise share. In the business world they have a whole bunch of different requirements and the PC is very much part of that. But in the home PC, if you go to Best Buy and what their run rate is and they still serve a significant business community there, but the share number, I mean considering it was less than 3% when Microsoft basically rescued Apple from certain bankruptcy in 1997, right when Steve came back to the company, this gradual climb, like first with the imac and then a series of products that follow that, including the ipod which threw people into the ecosystem, was, was really, really something. And you can see that rise right there. And then of course in 2008 they, they had the MacBook Air, which was really as innovative then as the Neo is now. In a similar way it was $1,000, it ran intel chips and it was just something that the PC industry couldn't deliver. And it took three years for the PC industry to sort of respond and it never really did. And the Neo is the response to something that was happening in 2007, 2008 in the PC world called Netbooks, which were like these $400 computers that were horrible, but they sold in a lot of, a lot of numbers because people really wanted a cheap computer. And like the Asus EPC is the original down in the middle Right. And if they were, they were kind of cruddy. In fact, they were like a Hail Mary project, a salvage product for intel where they basically made those just because they had built these phone chips that they couldn't sell to any phone maker. And so they were stuck trying to figure out how to sell these chips that were supposed to be for phones. They ran the intel instruction set. People put Windows xp, which was the current version of Windows, on it. Then Windows Vista shipped. But Windows Vista didn't run on those machines because they only had four gigabytes of storage and one gigabyte of ram and Vista just couldn't run. And so we had to do these emergency deals and projects to try to prevent people from shipping Vista or shipping Windows xp. Again, it was a crazy time. And the neo really what happened was the iPad ended up being the response to that. And the iPad today sells more units than North America laptops. It's kind of a crazy success that most people in the Valley don't see as the success that it is. But it's actually very much like the watch, which is they ship the watch, but nobody knew what it was for. And then everybody discovered that it was for health. And now it has its place. It's the health device. And yeah, it does notifications and stuff, but it's really about health and fitness. And the thing with the iPad was at first people just wanted to replace their computer, but then they found out like, oh my God, it's like point of sale, it's signage, it's for kids in the backseat, it's for airplane seats, it's for reading books. All these things that weren't even part of the original demo. And so it made a whole new market. Now the original demo was, it's all in, in portrait mode. And it's all about basically reading books and magazines and, and consumption. And so it's, you know, there was actually a very famous keyboard that they showed that was only useful on a desk. So it was like a docking station that had a keyboard attached to. And so it's really unbelievable. I mean, that product. And of course, what's fascinating is we did Surface at roughly the same time. So you can see it only worked in portrait mode.

Theo Jaffe (14:08)

Never seen that.

Stephen Sinofsky (14:09)

It was like this weird dock. And it was really.

Theo Jaffe (14:13)

They used ones for 10 bucks.

Stephen Sinofsky (14:15)

Yeah. Oh, they're all over ebay. But it was sort of an objection handler. The company just didn't believe in it. And it took a long time before there was sort of a blessed, you know, keyboard that you could really use all the time. You had the squishy keys for a long time. But you know, it's super interesting because we were working on porting Windows to the ARM processor at the same time as they were working on the iPad. And so it was a very interesting thing. And it was, you know, people will say that the Surface hardware was the only time Apple really paid attention to something Microsoft did and that they really actually thought we had done a good job on the. The Surface hardware, which was quite the high praise at the time.

Theo Jaffe (14:58)

So I daily drive Apple everything. I used to be like the Android kid in middle school. I was such an Android loyalist. And then over time it just became inevitable. I had to have find my. I had to have FaceTime. And so I had to switch over to all Apple. But the one Windows device I still own is my gaming PC. Because you still can't really game on Macs. So like, why not? That seems like a pretty obvious market segment for Apple. And if they got that, then I can't think of anything I wouldn't use a Mac for.

Stephen Sinofsky (15:32)

Yeah, so gaming has a super interesting history at Microsoft. You know, the key technology for gaming are these graphics APIs called DirectX. And they were really the things that gave hardware access to graphics hardware on the PC. And so all the games got written to these DirectX APIs. These are the tier one AAA FPS, those kind of games where frame rate is everything. And part of those games are that the people own them really want to mod and tweak every aspect of the hardware. Like they want the fastest LAN car, they want the fastest gpu, they want the most current device drivers, they want all of these things. The Mac sort of made those pretty difficult. Like you, you know, they provide most of the drivers. You know, most Macs don't have extensible graphics cards. You know, you have to buy the desktop Mac. And then only certain ones work lots of those constraints. And so the gamer people are sort of one and the same as, as like modders or tuners. And. And so they are really into what you can do with a PC and they sort of compete not just on the games, but on whose PC has the lowest network latency, whose game controller can fire the fastest over wired connections and using the latest USB3 drivers or whatever for the stuff. And so that's what sort of kept the game world rooted on Windows. But the problem is that a lot of the game world then moved to consoles. Of course, Microsoft and Xbox itself based on DirectX. That's actually the X But, but really the, the, the, the challenge there was you, you couldn't do the modding and everything. And then the, the, the interesting thing that really happened is the most recent which is, which is AI compute on the device. And so suddenly these companion processors like on, on the Mac are, are the thing that everybody cares about. Now on the PC you have access to Nvidia cards. Now the most interesting thing about that is that these DirectX APIs were a competitor to the Nvidia graphics APIs and called CUDA and the whole suite of APIs around Nvidia. And so Microsoft and Nvidia were kind of at loggerheads for a long time over support of each other's APIs. And that in a sense held Microsoft back from AI on the desktop, which is now sort of Linux or Mac centric. And it's a very interesting, from a developer perspective, Microsoft not really hosting those APIs themselves is super challenging. And that was one of the reasons we bet on Nvidia with Surface. So when we built the first Surface for ARM was used Nvidia chips and that was because the graphics were so much better than anything from Intel. And so the game thing is still on PCs and I don't see the Macs really taking over, but it's just not, it's big, but it's not giant and it's not growing. And where Apple has an advantage is the ecosystem of what they call casual gaming. Like all the stuff that you see people on subways and stuff playing on their phone, gargantuan amounts of performance that aren't needed for those. And any kids games and stuff are all. Apple's ecosystem is fantastic for those. It's just those tier one AAA things that you don't really see.

Theo Jaffe (19:08)

Yeah. So going Back to the MacBook Neo, do you think Windows laptops are just kind of cooked now? Like what will they be able to do to counteract the $600 totally great General purpose computing device that Apple just came up with?

Stephen Sinofsky (19:26)

The challenge here is that Microsoft just hasn't really made a ton of progress in the past more than decade, almost 15 years. And, and so that means you're really, really far behind. There's really two giant problems. One of them is that the Windows APIs themselves, Windows is really caught in this conundrum of the value that corporations and enterprises see in Windows is compatibility. And the levels of compatibility that Windows has are, are legendary. I mean the only thing that comes close is our like IBM mainframes running like these, the 360 instruction set which you know, runs banks and stuff like that. But the, the PC, you know, you could take, you know, a Windows 11 machine and you could run the original versions of Word and excel from like 1990 with, with no problem. And it's just insane. And you can run every device driver, all these things. And the reason enterprises like that is because they always have some weird smart card reader, some gadget, some sensor, some factory automation thing that relies on that compatibility. But that compatibility also means you're vulnerable to security problems, you're vulnerable to fragility and conflicts between devices and you're just broadly insecure and have really bad battery life because all those things run in kernel mode. It's just a mess. What Apple has been doing in those year releases that I talked about earlier, they've been like basically saying these APIs don't exist anymore and you have to use these new ones. And they do that and they're on this continual renewal where they just obsolete things. And that really ran against everything that was about Windows. And so that's one big problem. So even if you have Windows, the APIs and the apps, all that compatibility just will make it a non competitive device with Neo. And that's what you get on Windows on ARM today. Like you don't have any of the benefits. It's not more secure, it's not more reliable, it's not faster, it's not cleaner, it, it's just get the battery life, the power management. The other side of it is the, the OEM model and that means the model where you have Multiple vendors making PCs really works against having high quality and low price. And you can, you can see that they really want to do either low quality and low price or different levels of quality at higher prices. See like this is this, this device, it's just non competitive. First eight gig on a PC is, is really marginal. The AMD chipset you're going to get, you know what is that, that that machine's gonna get like four hours of battery life, five hours. I don't know what they Best Buy says, but that's about four or five hours of battery life plus all the viruses, everything run on it. So like every piece of malware in the history of malware runs nine. Not a chance. It gets no way. I mean even the Neo 9 hours is pushing it. And so, and so that, and also it has a fan and it's super loud and it's made of plastic. So you drop it once and it's doomed. All of these things are problematic and. And the 1080p speed. Yeah. So. Oh, and it weighs a ton. It. Like, what is it? Does that go down to the weight and the physical spec? I mean, because it's gonna. Yeah, three and a half pounds. Like, that's a. A tank. And. And so almost a pound heavier than the. Yeah, yeah, than the neo. And so the PC model just. It doesn't lend itself to that. They. They have to build it because the reason is, is because they're all buying the parts from the same place. Like, the brilliance of the NEO is it's running a chip that's terrible. That it's. Oh, God. Well, that's a Chromebook. So it's $80 cheaper. That's. But the Neo, the beauty of it, of course, is it's running a phone chip that's been paid for 100,000 times over by the sales of all the phones. So there's not even any, what you call NRE non recurring engineering costs baked into neo. It. It's really just pay for. It's like all. It's like literally the. The actual physical marginal cost to produce another, you know, a 18 chip, which is almost nothing. And so it's a very, very tough compete. All of this was obvious in 2007 with netbooks. It was obvious when we built Surface. I had a giant. Two giant blog posts, one from 2011 and one that I wrote when the NEO came out about it. And it's really interesting.

Theo Jaffe (24:15)

So also in new Apple products we have the Apple Vision Pro. The infamous Apple Vision Pro, which has. I actually used to have one. I didn't pay for it. It was a school club. I was not going to spend $3,500 on that when I was in college. It was very cool, but it was kind of useless and I ended up not really using it. It didn't sell as much as people anticipated. The chat is asking did I get motion sick? And no, I didn't. Luckily I also had to wear contacts because it didn't work with glasses. So what's going on with this? Is this a big failure? Is this salvageable?

Stephen Sinofsky (24:54)

This is what I saw someone on X say something that I really hate to agree with because it's such a kind of a weird, creepy kind of discussion, but it was just sort of speculating what would Apple be like if Steve Jobs were still running it. And one of the things that was on the bullet list was that they would have been crushing it with. With AR glasses as opposed to VR goggles. And I have to say, the one thing I would say about AVP is it has this feel of like it was a huge risk to put it out there. You know, Apple putting a risky product out is such a big deal. But also you had to sort of go, maybe they, they were just, they, they didn't quite know where it was going and they just didn't need to take the risk. And if they would have waited a year, they would have done AR glasses and those I'm positive they could really nail. And so that's. I think I have them. And, you know, I took them on a trip to Tokyo and I walked around, I put. I wore them on the plane. I watched all the movies on the plane with them. I walked around the Tokyo metro station, made videos, spatial videos of the sub. They were incredible. I mean, the technology was. And recording the videos was just, it was just unbelievable. But there's only so many things to do like that, you know, and it felt, it had that feel that frankly, VR has always had. You know, A good friend of mine was the originator of VR, Jaron Lanier, way, way back in the, in the early 1980s. And it's always sort of been this technology searching for, you know, the use case that really works. And of course, it had a lot of uses back in the early 80s. You know, the, the Air Force and pilots were using it for training in the military. And it was a huge deal. I once did like a, a thing just to make some cash at school where like the mechanical engineering department was testing out, like, the interiors of tanks. And part of it was they gave you these crazy VR goggles to pretend you were driving a tank so that they could just measure you in the seat. And I was like the right height for a tank commander. And I got like $6 an hour to pretend to drive a tank.

Theo Jaffe (27:07)

That's pretty cool. Final question. You helped oversee the development of Windows 7, which was not only my favorite version of Windows ever, but, but was probably my favorite design of any OS ever, with the whole, like, Windows Aero vibe, the skeuomorphism and the glass and the transparency. So, like, why, why did we ever move away from that towards the like, sort of flat minimalism? And are we coming back to it?

Stephen Sinofsky (27:37)

Well, you know, everything with graphics goes in these cycles where, where, you know something is new. A bunch of people criticize it when it's new and then you like it, and then it gets a little tired and then people criticize you when you move away from it, and then people get nostalgic and you return and I think we'll see a return. I mean Apple certainly drove a return to some transparency, some rounded corners and things like that. I think that it's really important. The most interesting reason going back to DirectX why Microsoft introduced Arrow first with, with, with vista and Windows 7 and stuff was it was because DirectX was built into the operating system. So even though DirectX was first released in, in the 1990s, actually wasn't part of the Windows operating system from the get go and until Windows Vista in, in 2006 and it part of making it required in Windows Vista allowed Vista to have this transparency because that, that rendering engine of DirectX is how you could do all those things. It's another thing that Mac has always had high performance graphics as part of the os and so that's why media people were always using the Mac because it always had that with no fuss, no muss, no no crazy drivers to worry about. Whereas on Windows you always had to putz. And it was only with Windows 7 that we really finished baking it in and it always worked and, and, and then you could really rely on it. So I think, but I do think so. So the, the way to always think about anything aesthetic with computing is that the tools and the capabilities of the underlying hardware end up dictating the appearance of the, the software. So for example, like a lot of people are into dark mode and you know, part of the lore of dark mode was that the reason it became so popular was because on phones and watches and things like that, the it uses slightly less power when you're in this dark on light version of the screen. So then all of a sudden dark mode becomes like a thing. And even though it's rooted in these physical capabilities, the transparency, translucency, rounded corners, all part of the underlying rendering engine that, that made those possible. When we switched to the stark sort of primary color solid that was really for speed and battery life. And that's what we did on Windows 8 and that was the, that sort of look was to actually be more efficient.

Theo Jaffe (30:14)

Wow. Well, that's about all the time we have. So.

Stephen Sinofsky (30:17)

Stephen, awesome, we're super excited for you.

Podcast Host / Narrator (30:22)

Thanks for listening to this episode of the A16Z podcast. If you like this episode, be sure to like, comment, subscribe, leave us a rating or review and share it with your friends and family. For more episodes go to YouTube, Apple Podcasts and Spotify. Follow us on X16Z and subscribe to our substack@a16z.substack.com thanks again for listening and I'LL see you in the next episode. This information is for educational purposes only and is not a recommendation to buy, hold, or sell any investment or financial product. This podcast has been produced by a third party and may include paid promotional advertisements, other company references, and individuals unaffiliated with A16Z. Such advertisements, companies and individuals are not endorsed by AH Capital Management, LLC, A16Z or any of its affiliates. Information is from sources deemed reliable on the date of publication, but A16Z does not guarantee its accuracy.