*Your iPhone Was Stolen*

Copy this...

Posted July 3, 2023

“Good artists copy; great artists steal.”

— Pablo Picasso

You know a company has “made it” when it becomes part of the vernacular.

For example, you don’t look something up on the internet — you Google it.

You don’t ship a package — you FedEx it.

You don’t ride-share — you Uber.

And for a very long time, if you made copies of a document, you Xeroxed it.

Xerox became a household name and an industry standard for businesses and offices in the 1960s.

But in an ironic twist of fate, the company’s technology itself would be copied in one of the greatest and most important heists in human history.

It all started when the company invented the first commercially sold copy machine in 1959. From then on, Xerox became an industry powerhouse and ran a virtual monopoly on the copying and printing business. But just a decade later, many of its patents ran out, causing a vacuum of competition. Xerox knew it needed to stay ahead of the game to maintain its dominance.

So in a move that was well ahead of its time, the top brass at Xerox decided to create a research center for cutting-edge technology called the Palo Alto Research Center (PARC) in California. It was the precursor to the modern Silicon Valley tech workplace. It became a hub for the top computer science nerds and genius inventors. And what they created is essentially what we still use today, but there’s a reason you don’t see the Xerox name on any of your modern tech products.

When the PARC research team presented Xerox executives with what they’d created, including a graphical user interface (GUI) and a little something called a mouse, the ideas were rejected. They were only interested in copy machines.

The problem was the company executives didn’t have a vision for the future. At the time, only a few people understood the potential of a GUI and mouse, including two up-and-coming entrepreneurs in the space: Steve Jobs and Bill Gates. 

Both men were working on “the next big thing” in computers but just couldn’t crack the code. Apple had two computers in the works, the LISA and the Macintosh, but they were missing the crucial components that Xerox had invented. Gates was busy developing (and repurposing) a computer language for what would eventually become Microsoft Windows, but he didn’t have the right piece of hardware for it to run on. It turned out Xerox had everything the two needed to take their companies to the next level.

But they needed to get inside.

So Jobs planned an elaborate scheme akin to Mission Impossible or Oceans Eleven.

In an ill-fated move that would cost the company dearly in terms of market share, Xerox struck a deal with Jobs and invited him and the Apple team to visit the PARC offices to play with Xerox's new toys in exchange for 100,000 shares of Apple stock. Xerox let the Trojan horse in, and Jobs dissected everything the PARC team had been working on.

Jobs recalled seeing the GUI for the first time in a later interview:

I was so blinded by the first thing they showed me, which was the graphical user interface. I thought it was the best thing I’d ever seen in my life… And within, you know, 10 minutes, it was obvious to me that all computers would work like this someday.

The mouse in particular was key because it opened up computing to the masses, which is exactly what Jobs needed. In a 1985 interview in Playboy magazine, he said if there's a spot on your shirt, pointing is the easiest way to show you where it is:

If I want to tell you there is a spot on your shirt, I’m not going to do it linguistically: "There’s a spot on your shirt 14 centimeters down from the collar and three centimeters to the left of your button." If you have a spot — "There!" [he points] — I’ll point to it. Pointing is a metaphor we all know.

We can also see the impact of Apple's computers on the masses in a 1985 Consumer Reports review:

The Apple Macintosh is far and away the easiest computer to learn and use that we have ever seen. The combination of a mouse, pull-down menus, windows, and icons is more than a dazzling display of technical wizardry.

The problem is that Jobs essentially stole this technology. He even reportedly cited Pablo Picasso in a company meeting, saying that “good artists copy; great artists steal.”

The one person who knew this better than anyone was Bill Gates, and he was waiting in the wings for his chance to do the same. Gates was invited to Apple’s headquarters sometime in the late 1970s or early 1980s, where he made a deal with Jobs to help write a language for Apple computers. Gates did so but not before repurposing some of Apple's code to run on his own Windows machines.

In another strange twist, Apple delayed its Macintosh release, opening the door for Microsoft to release the first personal computer and mouse combo to the public in 1983, just eight months before Apple’s release.

So what’s the takeaway here?

Don’t trust the competition?

Steal trade secrets and make millions?

That’s one way to look at it. But it’s also a story of seeing well into the future and getting ahead of the crowd. When you have a vision that no one else understands yet, it’s probably going to make a boatload of money for you and your investors.

The new vision in the realm of computers is artificial intelligence, and Bill Gates has been dropping massive hints about AI's impact.

In a 2017 Reddit post, Gates fielded questions about the future of computers and said:

The big milestone is when computers can read and understand information like humans do... Right now, computers don’t know how to represent knowledge, so they can’t read a textbook and pass a test.

As we all know, with ChatGPT and Bard, we are right at the big milestone he's referring to.

But there's a new AI tech that's set to be even bigger than a search engine or ChatGPT.

Bill Gates himself even plopped down $20 billion on this new AI tech.

That's because this AI tech will be adopted by 94% of corporations, 9 in 10 vehicles, and 80% of hospitals.

No industry will escape disruption.

We're truly at the tipping point, and those who can see AI's potential stand to make millions.

Investing in AI is like buying Apple back in the 1980s — don't miss out.

Stay frosty,

Alexander Boulden
Editor, Outsider Club

After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing. Check out his editor's page here.

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