In 2018, Apple became the first company to surpass a valuation of $1 trillion. Just over three years later in January, it made history again when it briefly became the first firm to hit a of $3 trillion.
Today’s Apple is a far cry from what Steve Wozniak and Steve Jobs built 46 years ago.
“Our story may not have appealed to a lot of the investment community when we started Apple,” Wozniak said in an exclusive interview with Insider. “The big computer companies said we were going to turn out to be nothing big.”
After leaving Apple in the mid-1980s, Wozniak embarked on a series of other business ventures, both as a founder and an investor. Now, the tech luminary has added yet another line to his lengthy résumé — investing panelist on the reality show “Unicorn Hunters.”
“Unicorn Hunters” features hopeful entrepreneurs who pitch their businesses, which are mostly skewed toward the health-tech sector, to a panel of seasoned investors such as Wozniak, ‘N Sync’s Lance Bass, former US Treasurer Rosa Rios, and the tech mogul Alex Konanykhin. The panel then asks the founders questions to uncover any risks or weaknesses before determining whether the idea is worthy of investment.
For Wozniak, who draws much of his investment criteria from his experiences founding Apple, the role of panelist is one he takes seriously.
“I’m very skeptical,” he said. “I want to ask the questions that investors have asked me when I had small startups.”
On the business side, Wozniak examines a slew of technical and operational factors, like the fairness of the product’s pricing or how the number of shares offered translates to percentage ownership. More importantly, Wozniak prefers to analyze the engineering behind the inventions.
Fundamentally, Wozniak said he looked at two things when investing: “the product and the people.”
Wozniak said Hewlett Packard rejected his pioneering idea of a personal computer five times before he finally left the company and cofounded Apple. But his determination never wavered because he knew the idea was revolutionary.
“It hadn’t existed before, that market — small computers people could own. We had a product that was maybe five years ahead of what other people were trying to do with microprocessors,” Wozniak said. “This was a singular product I would’ve built on my own, with or without a company.”
Today, he still emphasizes the importance of having a high-quality product that fits people’s needs. Only when those criteria are met does he dive into the details.
“I look at the technology and say, ‘Based on the state-of-the-art technology in the world today, is this thing really going to be producible? Or is it going to run into some problems with materials that are almost unattainable?'” Wozniak said.
But sometimes, having a good product that meets a need is not enough, and it can be hard for even seasoned entrepreneurs like Wozniak to spot success before everyone else. One investment opportunity Wozniak missed out on was Uber, while he said he believed that the Segway was an invention that “didn’t turn the world over, but it should have.”
“Segway was a big part of my life. A great thing — but for the cost,” Wozniak said. “You see, you have to compare that to the alternatives.”
He added: “Every product you ever create is good, is better. It does some good for somebody. But if it doesn’t do enough good for enough people, or the alternatives are too easy, it never really goes anywhere.”
Wozniak also places importance on finding new products that simplify and fit into everyday life, such as UDP Labs, which creates sleep-monitoring, pressure-sensing pads. While the pads can deliver complex readings on things like sleep patterns and heartbeat, Wozniak likes them for their simplicity and because they don’t have to be physically attached to the user.
“It’s like the old hardware days where you actually owned something when you bought it, not the people who supplied the service through a cloud,” Wozniak said.
Moral considerations can also come into play when Wozniak is investing, as was the case with GeneproDX, a Chilean startup featured in the latest “Unicorn Hunters” episode.
GeneproDX’s business centered around developing life-saving thyroid-cancer-detection kits, which cost between $100 and $200 to make but sold for $4,000 — a markup between 2,400 and 4,900%. After the seven panelists debated about ethical concerns, Wozniak was the only investor to bow out, citing “uncertainties” and “personal feelings.”
“The fact that this company is building something for a hundred bucks and selling for $4,000, it did bother me ethically. It’s not the way I would’ve approached things,” said Wozniak, who also cited the product’s pending Food and Drug Administration approval as another reason he passed on the investment.
The most important driver for Apple’s success, Wozniak said, was “we were the company that didn’t stay two young people.”
“We had really good professional people in all the categories as we grew, and people were so important,” he said. “So I look at these companies that are pitching us the same way and ask, ‘Are these people going to really go somewhere?'”
On the surface, Wozniak looks for founders with good business acumen, like deep market knowledge. He also believes founders should be “good technologists” who understand where their products will succeed or fail, he said.
But sometimes, Wozniak added, startup founders fail to fully convey their potential through their pitches. When that happens, he urges investors to keep “a side of optimism.”
“They might be another Apple, and you can’t see it yet,” he said. “There’s no way to calculate it in a spreadsheet.”
That’s why Wozniak doesn’t base his investments solely on his analysis of the product — he also emphasizes the importance of applying pathos.
“It’s very subjective and very interpersonal in that sense. It comes from the human side of things,” he said. “A lot of it comes even from emotions, how you feel about what they’re doing — and the people themselves have to be good enough.”
According to Wozniak, considering the emotional aspect is even more necessary in today’s startup ecosystem to separate the entrepreneurs with “intent” from the opportunists.
Nowadays, Wozniak said very few newly launched apps and products had the potential to make a “life-changing difference” — a problem he attributed to a society that had cultivated a culture of founders with no passion or who start a company for the wrong reasons. In those cases, engineers are often “hired after the fact” — which compromises the quality of the product.
“An awful lot of people out there think, ‘I’ve got to start a company in the tech business. The business is what’s important, not the engineering,'” Wozniak said. “It doesn’t work that way in reality, in life. To me, you’re in a place and, by accident, some idea stumbles into your head, and you have the right skills to maybe turn it into something real.”
Keeping this wariness in mind, Wozniak said he scrutinized founders for not only “internal self-confidence” but also the main selling point — “that they deeply believe in what they’re doing and that it can be done.” Possessing this internal driving passion for one’s product is crucial, Wozniak said, to transform entrepreneurship into “the hardest, hardest, hardest fun.”
“People who think well and fail at one startup still have their minds, and they can come up with other ideas later in life,” he added. “I don’t like to see people forcing themselves to do something because this is the route to making a ton of money. I don’t buy into that.”
The motivation that pushes an entrepreneur, Wozniak said, is an inspiration to anyone who watches them — “even other young people, even if they’re unsuccessful.” For that reason, he said he was particularly “disturbed” by the Theranos fiasco.
“It’s going to discourage a lot of young 19-year-olds that have a great idea and might go somewhere,” Wozniak said. “That, I’m against. I’m for trying the impossible.”
Cryptos are not trustworthy, he says
As a self-proclaimed geek, Wozniak is a longtime fan of the metaverse. But he’s less convinced of the merits of non-fungible tokens and cryptocurrencies, which, for the most part, are “so up in the air” and untrustworthy and have a track record of being “rip-offs,” he said.
“There’s so many cryptocurrencies that come out now; everybody has a way to create a new one, and you have a celebrity star with it. It seems like they’re just collecting a bunch of money from people who want to invest at the very earliest stage, when it’s worth pennies,” said Wozniak, who also suggested that people often buy the coins simply because they’re blinded by the potential windfalls. “Then they just fold.”
“Unicorn Hunters” recently introduced its own cryptocurrency, unicoin, which provides holders with dividends and equity positions from the portfolio of startups that the show invests in — not unlike a stock or an exchange-traded fund.
“It’s really opening up the world of startup investment to the masses,” Wozniak said. But unicoin is more conservative than other cryptocurrencies, he added, because it’s backed by investment decisions made by professionals.
“A token’s flaky on its own. It could even be worth zero,” Wozniak said. “I’m hoping unicoin’s very successful, but at least it’s not based on zero, just based on words and talk. It’s really based on the outcome of investments.”
As for the rest of the cryptocurrency market, Wozniak said he believed there were a few larger players that were acceptable to an economically conservative strategy but called bitcoin the “only one that’s pure-gold mathematics.”
Besides its “mathematical purity,” Wozniak also likes the coin because of its embedded “science, math, logic, and computer programming” and supply cap, he told Yahoo Finance in an interview in October.