I can supply a few comments to highlight just how little attention is paid in the media, histories, and by most people to find out what actually happened. For example, I was present at the visit and demo, and it was the work of my group and myself that Steve saw, yet the Quora question is the first time that anyone has asked me what happened. (Worth pondering that interesting fact!)
.. First, it’s worth understanding that many people (perhaps even a thousand or more) had seen live demos of the Alto and Smalltalk before Steve. This is because Steve showed up in 1979, and the Alto and Smalltalk had been running for 6 years (starting in the first half of 1973), and we were a relatively open lab for visiting colleagues and other interested people (like Herbie Hancock and Al Gore).
Many more people had read articles that I’d written (e.g. in Scientific American, Sept 1977), and one with Adele Goldberg (in IEEE Computer March 1977).
.. Steve, after praising the GUI to the skies, realizes what he’s saying and immediately says “but it was flawed and incomplete”, etc. This was his way of trying to be “top gun” when in a room where he wasn’t the smartest person.
.. One of Steve’s ways to feel in control was to object to things that were actually OK, and he did this a few times — but in each case Dan and Larry were able to make the changes to meet the objections on the fly because Smalltalk was not only the most advanced programming language of its time, it was also live at every level, and no change required more than 1/4 second to take effect.
.. One objection was that the text scrolling was line by line and Steve said “Can’t this be smooth?”. In a few seconds Dan made the change.
.. Another more interesting objection was to the complementation of the text that was used (as today) to indicate a selection. Steve said “Can’t that be an outline?”. Standing in the back of the room, I held my breath a bit (this seemed hard to fix on the fly). But again, Dan Ingalls instantly saw a very clever way to do this (by selecting the text as usual, then doing this again with the selection displaced by a few pixels — this left a dark outline around the selection and made the interior clear). Again this was done in a few seconds, and voila!
What made Xerox PARC special? Who else today is like them?
Parc was the last of these “ARPA Projects” to be created, and because of funding changes from the Vietnam war, got its funding from a corporation rather than from ARPA-IPTO. But pretty much all of the computer people at Parc had grown up in ARPA projects in the 60s, and Bob Taylor, who set up the computing research at Parc, had been the 3rd director of ARPA-IPTO.
.. There was no real management structure, so things were organized to allow researchers to “suggest” and “commit” and “decommit” in a more or less orderly fashion.
.. Quite a lot of the inventions Parc is most known for were done in the first 5 years by a rather small pool of researchers (Butler Lampson estimates about 25 people, and that seems about right).