Gates How Microsofts Mogul Reinvented an Industry and Made Himself the Richest Man in America


Authors: Stephen Manes and Paul Andrews

Release: December 1, 1992

Tagline: How Microsoft’s Mogul Reinvented an Industry and Made Himself the Richest Man in America

Publisher: Doubleday

Genre: Biography

ISBN-10: 0385420757
ISBN-13: 978-0385420754

Declassified by Agent Palmer: Charming, rude, sometimes clairvoyant: 1992 biography gives broad – albeit incomplete – look at Bill Gates

Quotes and Lines

The computer programmer . . . is a creator of universes for which he alone is the lawgiver. . . . No playwright, no stage director, no emperor, however powerful, has ever exercised such absolute authority to arrange a stage or a field of battle and to command such unswervingly dutiful actors or troops. – Joseph Weizenbaum, Computer Power and Human Reason

Charming on minute, rude the next, Gates was hard to sum up in a sound bite, a Binary Bill of polar contradictions beginning with public shyness and private aggressiveness–some said ruthlessness–that even longtime associates found difficult to reconcile.

No matter how successful or wealthy he would become, the storytelling and self-inflation would remain a part of his vaguely insecure personality, as if his actual achievements were somehow not significant enough.

…for the first standards conference in the new microcomputer industry. “Those in attendance,” reported Computer Notes, “included representatives of Byte magazine, Popular Electronics, MITS, Processor Technology, SWTP, Godbout, The Computer Hobbyist, Pronetics, LGS, and Sphere”–in other words, virtually the entire known microcomputer universe of 1975.

…immediately Bill bought his first car–a used dark-green Porsche 911. Finally he had a vehicle that liked to move as fast as he did–way beyond the speed limit.

The Gates motivational method: You yell, you holler, you point out how stupid something is; the chastened subject goes back and redoubles his efforts to do a better job.

Smith quickly learned that it was just the way Bill Gates did business. “We could sell a promise and pull it off, because we had the money and the smart technical people and the commitment. And virtually everything that we sold was not a product when we sold it. We sold promises.”

That phrase–“drinking out of the fire hose”–would eventually come to be a catchword at Microsoft, symbolizing both the CEO’s “bandwidth” and the rigors of the company work ethic.

Watanabe later said, “I always felt that only young people could develop software for personal computers–people with no tie, working with a Coke and a hamburger–only such people could make a personal computer adequate for other young people.”

Perot wound up kicking himself over the deal. “I should have just said, no Bill, you set the price, and I’ll take it,” Perot said. “That’s what I should have done, and I’ve always regretted that we didn’t get together… I consider it one of the biggest business mistakes I’ve ever made.” Gates “has never kidded me about that, but I think if the show were on the other foot, I’d probably needle him.”

“It all boils down to this,” Nishi said, writing his summation on an overhead projector. “Act quickly and make no mistakes.”

“How can an ugly little guy who isn’t even really French manage to rise up and rewrite the laws of Europe so that even today the Code Napoleon is a big thing? And the way he recognized scientific and artistic leaders of the time: That’s a pretty unusual thing.” Yet with his customary pessimism, Gates didn’t flinch from the downside of Napoleon’s life: “At a time when there was no opportunity for leadership, most leaders were killed or overthrown, he put himself into such an incredible position and yet ruined his own success. The thing that’s incredible about it is that at the end of his life he sat on an island and he dictated his thoughts. This is on smart guy.” In the Gates argot, that was the ultimate compliment.

But Xerox PARC was like the nutty professor who never makes a dime off his brilliant inventions. To this day some hackers claim that PARC’s Alto, initially demonstrated in 1973, was the first true “personal computer.”

“From the top you saw Bill working really hard, and there was kind of an expectation. And a lot of it was just we had deadlines, and we needed to ship, and if you cared about your project, you worked on it. So it’s not like I can ever recall anyone ever saying ‘Well, you need to show up this weekend, all day and all night.’ But it came to the point that you did. – Klunder

“That was in fact what made the partnership between Bill and Paul so brilliant,” Vern Raburn observed. “Paul is very intuitive in his thinking. . . . And yet it was Bill’s kind of just almost anal-retentive, pure-logic approach to things that would take Paul’s sometimes random ideas and turn ’em into brilliant projects.”

As Ida Cole, who worked at both companies, would put it, Microsoft was “a technological company. And it’s run by a technoid. Apple was very much a marketing company. Steve Jobs was the most prominent person at Apple, and he was not a technology guy.”

Years later Gates would admit that “I probably should have hired people faster and gotten into the applications business sooner” when asked about his greatest mistakes.

“Basic Strategy: The IBM Strategy. Don’t be the first to introduce technology. Be second, and make money on it.”

Natural monopoly? That sounded fine to Bill Gates. The way to get there in operating systems, clearly, was to use the IBM deal as the fulcrum for enormous leverage. But a decade later, the “M” word would come back to haunt him. As usual, Gates was right: He shouldn’t have said it.

Years afterward, Digital Research stalwarts would swear that Bill Gates had an intelligence network. And he did: The relationships Microsoft had developed over years of OEM dealings had given him thousands of connections in the industry. The Microsoft OEM sales force was the company’s eyes and ears, its CIA, the instrument that enabled Bill Gates to see he future as clearly as anyone in the business and to make alliances with the most important players.

At one point, Jobs tried to give Bill Gates a lesson in business, to convince him that too much of his resources were being squandered on low-profit operating systems when they’d be better spend on high-profit applications. “It’s not that I don’t trust you,” Jobs added, “but I can’t get my people to trust your people, and that makes it hard for us to really give you all the information we’d like to. If you big brother punched my big brother in the nose, people wouldn’t say your big brother bunched my big brother. They’d say the Gateses are beating up on the Jobses.”

As Vern Raburn would put it, “Microsoft has been the single greatest beneficiary of inept competition of any company in the world.”

“As delays kept pushing Windows farther into the future, the text in the Word pane gained Delphic proportions:

Heuristic reasoning is reasoning not regarded as final and strict but as provisional and plausible only, whose purpose is to discover the solution of the present problem. We are often obliged to use heuristic reasoning. We shall attain complete certainty when we shall have obtained the complete solution, but before obtaining certainty we must often be satisfied with a more or less plausible guess. We may need the provisional before we attain the final.”

By that definition, Windows circa 1984 was nothing if not heuristic.

“Bill Gates is the leader of the parade,” said one industry veteran, “because he sees where the parade is going and gets in front of it.”

As he would later put it: “This is engineering, not politics. In politics, the goal is to convince the other guy you’re right. In engineering, the goal is to find out what’s right.” – Gordon Letwin

On a flight to Apple with Macintosh managers Mike Slade and Valerie Houtchens, Gates put things in perspective. As Slade recalled it, Houtchens asked Bill about a rumor that he was going to split the stock. “So Bill just sort of rolls his eyes and says, ‘Give me a pencil.’ So she does. And he breaks it in two and he gives it back to her. And he goes ‘There: I just split the stock.’ That’s classic Bill Gates. It’s a putdown, you learn something from it, and you’re a dumb shit and I’m not.”

The sport of Bill-bashing had spread from Cupertino to the industry at large. All of a sudden the skinny naïf with oversized glasses had become the PC equivalent of a cigar-chomping railroad or oil baron, cutting deals, forging alliances, manipulating the market. How else could he have become the microcomputer industry’s first billionaire? How else could Microsoft have marshalled such control over both major platforms–the operating system for IBM and compatibles, applications for the Macintosh? There was the suggestion that Bill had somehow broken the rules, played unfairly, Gatesed the deck.

It was survival of the smartest, Smart Guyism triuphant–as Gates enthused, “the idea of ideas, that the human mind is sort of the host for those ideas and there’s a competition for which ideas work well, are effective, and so those ideas contain within them the seeds that allow them to be passed along to other humans and therefore survive.”

Vern Raburn would later say that “Microsoft, with a couple of exceptions, has always introduced really crappy products. . . . And ultimately they turn into good products.”

Ann Winblad saw that as a secret weapon. “Hey, talk about willingness to take risks! The company gets a rev one out there, lets all this stuff come back, thinks about how crummy this stuff is, and then goes after the right stuff.”

And Gates was Hood’s kind of guy too. “I’d rank Bill as one of the most interesting people I’ve ever met,” he said, citing Gates’s “unusual combination of abilities: business on the one hand and computation on the other, plus this incredibly bright, inquisitive mind that is interested in all sorts of things.” – Caltech’s Leroy Hood

Fear of the fall, fear of the fall: Despite Bill Gates’s stunning successes, the history of the company was a procession of stumbles, blind alleys, bad bets forgotten elsewhere amid the euphoria of the bottom line but remembered all too well in Redmond. Despite the company’s public arrogance and braggadocio, that fear of the fall at the top had become internalized at every echelon below. “We’ve always had an inferiority complex,” said the thoughtful Jeff Harbers. “We always believed that we could have done it better. . . . We have low confidence that we’re the best guys. We always believed that somebody is over the horizon doing it ten times better, and that philosophy still carries.”

Gates had not worked for a boss since his days at RODS. Given his dim view of the other companies he saw, he had adopted for his company the model and knew and loved best: the extended family.

Ross Perot agreed. “His is an industry where the faster you run the faster you have to run. If he could create software and sit on it for twenty years, he’d probably be bored. But the minute it hits the market shrinkwrapped he’d better be on the next one, right? There is not halftime in his business. You don’t even get to go to the locker room and rest. So I think that helps keep a person like Bill motivated.”

“Former executive Alan Boyd put it this way:

Does Bill have vision? No. Has he done it the right way? Yes. He’s done it by being conservative. I mean, Bill used to say to me that his job is to say no: That’s his job.

Which is why I can understand he’s real sensitive about that. Is Bill innovative? Yes. Does he appear innovative? No. Bill personally is a lot more innovative than Microsoft ever could be, simply because his way of doing business is to do it very steadfastly and very conservatively. So that’s where there’s an internal clash in Bill: between his ability to innovate and his need to innovate. The need to innovate isn’t there, because Microsoft is doing so well. And innovation–you get a lot of arrows in your back. He lets things get out in the market and be tried first before he moves into them. And that’s valid. It’s like IBM.”

Bill Gates saw himself as a “technologist.”

Feynman, as Gates put it, “had his own way of thinking about things. He was his own guy who decided what counted and what did not, built his values around what he understood and not some artificial way of looking at things.”

“I admired FDR,” said Gates. “I’ve read even more books about him than about Napoleon, and if there were more Feynman books to read I would have.” Still, heroes were hard to find. “I admire lots of people. But it’s hard to have this totally pristine way of looking at things unless you’re a scientist.”

“Do you ever wish you were back programming on your own again?” Gates had been asked for a Microsoft Press book. “Oh, sure, absolutely,” he had replied. “Then you control everything. There’s no compromise. Every line is yours and you feel good about every line. It’s kind of selfish, but it’s like being allowed to do pure mathematics, and yet you have the feedback of making something really work. I sometimes envy my colleagues who get to focus just on the program they’re writing.”

A friend from Harvard put it in starker terms: “From my experience, I think Bill is one of the very few CEOs in a corporation that size in America who actually do anything. The average CEO tends not to have hands-on involvement in anything other than negotiating executive compensation.” Perot agreed: “Most corporate executives in the United States don’t understand their product at all. Guys running huge companies don’t understand their product: They’re financial men, they’re lawyers, you name it. Bill Gates is a guy who knows his product. He can get right down there on the floor with his best programmers and mix it up.”

Yet despite his ability to do a quick read, to grasp things faster than his colleagues thought possible, the possibility that he might not be the Smartest Guy after all was his Achilles’ heel. Gates had an excellent memory, but it certainly wasn’t the “photographic” version countless articles had claimed. As smart as he was, he had a longstanding problem with completion: The near-miss Eagle Scout badge, the Lakeside war game program, the Harvard baseball game, APL–and, you could argue, Cashmere, Omega, multimedia, and even the first version of Windows–all smacked of a certain technical dilettantism.

A close friend would put it another way: “He doesn’t like the theological. He’s not into ghosts, superstition, and the unknown. He has not interest in that. He’s a scientist. If you can’t touch it and logically and rationally figure it out, he’s not interested.”

…an idea humanist computer scientist Joseph Weizenbaum had treated skeptically back in 1974: “One would have to be astonished,” he wrote, “if Lord Acton’s observation that power corrupts were not to apply in an environment in which omnipotence is so easily achievable. It does apply. And the corruption evoked by the computer programmer’s omnipotence manifests itself in a form that is instructive in a domain far larger than the immediate environment of the computer.” Meaning? “The compulsive programmer is convinced that life is nothing but a program running on an enormous computer, and that therefore every aspect of life can ultimately be explained in programming terms.”

“It was an idea that had captured the imagination of Bill Gates, Technologist:

The most interesting thing to me is not sequencing the data. It’s understanding the program. How does it work? How does evolution and the instructions for the creation of the body, how does all that stuff work? It’s there, it’s not just a matter of getting the numbers, it’s a matter of–like a program. You gotta understand the logic in it: Not just the constants, not just the protein instructions, but the branching, the enforcement, copying. It’s the most interesting program there is. It created itself. It solves the problems we don’t understand.”

. . . The compulsive programmer’s pride and elation are very brief. His success consists of his having shown the computer who its master is. And having demonstrated that he can make it do this much, he immediately sets out to make it do eve more. Thus the entire cycle begins again. – Joseph Weisenbaum, Computer Power and Human Reason