Bill Gates Read online

  “He [Ballmer] was the opposite of me,” recalls Gates. “I didn’t go to classes much, wasn’t involved in campus activities. Steve was involved in everything, knew everyone. Steve was general manager of the football team, head of the lit[erary] magazine, ad manager of the Crimson [newspaper]. He got me to join the Fox Club, a men’s club where you put on tuxedos, smoke cigars, drink too much, stand up on chairs and tell stories, play pool. Very old school.”17

  BORN AT THE RIGHT TIME

  Was Bill Gates born at precisely the right time to become a leader in the computing revolution? Malcolm Gladwell suggests that he was. Gates and Allen had acquired a tremendous amount of expertise in computers that only the largest firms would possess, knew how to write programs, and had solved problems for other companies in exchange for computer access. In addition, Allen had figured out emulation—how to write software for a computer he did not own (and often had never even seen).

  And at the time the story of the Altair 8800 was published in late December 1974 (although listed as the January 1975 issue of Popular Electronics), the names that became preeminent in computing—both at Microsoft and at Apple—were all between the ages of 18 and 21. Bill Gates and Steve Jobs were 19, Paul Allen was 21, and Gates’s good friend at Harvard University (and his one-day successor at Microsoft) Steve Ballmer was 18, coming off of those fanatical high school years described by Gates:

  Bill Gates: October 28, 1955

  Paul Allen: January 21, 1953

  Steve Ballmer: March 24, 1956

  Steve Jobs: February 24, 1955

  Malcolm Gladwell also wrote about Gates’s good fortune throughout his life, suggesting the combination of Gates’s skill and luck could have been replicated if resources were allocated differently. Gates readily admits that he encountered more “luck” than anyone should expect in life. Gladwell noted that “our world only allowed one thirteen-year-old unlimited access to a time-sharing terminal in 1968. If a million teenagers have been given the same opportunity, how many more Microsofts would we have today?”

  Nathan Myhrvold, one of Gates’s future collaborators at Microsoft and in both versions of The Road Ahead, is quoted of the opportunity to pursue writing Altair BASIC:

  “If you’re too old in nineteen seventy-five, then you’d already have a job at IBM out of college, and once people started at IBM, they had a real hard time making the transition to the new world,” says Nathan Myhrvold, who was a top executive at Microsoft for many years. “You had this multibillion-dollar company making mainframes, and if you were part of that, you’d think, Why screw around with these little pathetic computers?”18

  Along with close partner Paul Allen, Gates had to make a choice when the MITS Altair was introduced, along with the 8088 chip that was inexpensive and was capable of allowing home computers, first among smaller groups of users called “hobbyists.”

  At the time, the Altair 8800 was designed to just show results in a series of 16 LED lights and had 16 switches to enter data. That Altair qualified as a computer in 1974/1975, even without an operating system or programming language available. Users had the opportunity to purchase external terminals (or build their own) to operate like rudimentary monitors for the products, or even use a telephone to connect directly to a more powerful, time-sharing computer.

  If an individual were to purchase the Altair 8800 Minicomputer in 1975, the first step would have been to assemble the parts of the computer itself. No monitor, keyboard, or mouse; the assembly process would have included the individual boards, connectors, and switches within the case. The next step would have been to either test the computer or begin to write programs in the language of the time. Using only zeroes or ones to type in the entire computer program, this was not a user-friendly process. For instance, the following steps were listed in the February 1975 issue of Popular Electronics to tell the computer how to take two numbers (one from input channel 6 and one from input channel 30), add those two numbers, and then return the sum result in output channel 128.

  Table 2.1—published in Popular Electronics—was to suggest that the revolutionary Altair was user-friendly in allowing one to add two numbers. In fact, one of the proposed uses for the Altair was to build one’s own scientific calculator, a device that costs a few dollars now without the need for programming expertise. In 1975, a device that was solely used for scientific calculation was very expensive.

  Table 2.1 Machine Instructions

  Source: Re-created from Popular Electronics, February 1975, p. 58.19

  In order to see the potential for widespread use of a system such as this, one had to be a very clear visionary. There were multiple people who saw the potential of this system, including Bill Gates, Paul Allen, and the early employees of Microsoft (originally called Micro-Soft) who were willing to work for Gates’s upstart firm. The system and chip also drew the attention of Steve Jobs, who went on to become a founder of Apple with Steve Wozniak using different hardware.

  So why was the Altair so important for early computing? In January 1975, the minimum wage increased to $2.10 per hour.20 A basic minicomputer like the Altair 8800 was still rather expensive as a discretionary purchase at $397. However, this was a major jump in affordability in terms of computing, and individuals could have their own computer at home for the very first time. The Altair cost less than $397 and could fit on a desk, the PDP-10 was the size of a refrigerator and cost almost $20,000, and the early teletypes Gates and Allen had used required leasing time at $40 per hour. Comparatively, the Altair was extremely affordable.

  DROPPING OUT OF HARVARD TO WORK ON THE ALTAIR

  Although it is common knowledge that Gates dropped out of Harvard to work on the MITS Altair, he did not drop out until his partner Paul Allen had demonstrated that the Altair BASIC worked and had secured a contract from MITS. With the benefit of hindsight, Gates was able to admit that the company he and Allen founded could have been delayed, probably for another year or so. Of the fear of missing out on the opportunity presented by the Altair:

  In our case, Paul Allen and I were afraid somebody else might get there before us. It turned out we probably could’ve waited another year, in fact, because things were a little slow to start out, but being on the ground floor seemed very important to us.21

  However, Gates and Allen did not know at the turn of 1975 that the early days of their firm would be slow. So why did Gates and Allen feel that immediate action was required? The founder of MITS had been hearing from a lot of people about developing a version of the BASIC programming language that was a small enough file that it would function on the Altair’s limited memory. Like most items Gates was able to commercialize over his life, the concept of the BASIC programming language already existed; someone just had to figure out how to make it work on the limited space available on the Altair and be the first to do so:

  He (Ed Roberts of MITS) was getting ten calls a day from people who had a BASIC “almost ready,” and his stock response was, “The first person who shows up with a working BASIC gets the contract.”

  Gates and Allen had never seen an Altair; they had never even seen the Intel 8080 microprocessor at the heart of the Altair. But a couple of years earlier Allen had written a program on a mainframe computer that emulated the operation of a previous Intel microprocessor, and this time around they did the same thing.

  With an Intel 8080 manual at his side, Allen sat down at a Harvard PDP-10 computer and wrote the emulator and software tools necessary to do the programming. Meanwhile Gates stopped going to classes and devoted himself to designing the BASIC, using every trick he knew to get the size down below four kilobytes.22

  With this urgency placed, Gates and Allen were now attempting to rush through the development of a programming language for a computer neither had seen, for a processor they had never touched, without the ability to test on that computer model or processor along the way. Writing the software based upon Allen’s emulator skills alone—without the ability to test—was a large leap of faith
but necessary in the minds of the two young developers. If others were actively working on Altair BASIC, their opportunity would be gone if their project was not finished first. Eventually—in the coming days or the very near future—someone was going to develop Altair BASIC, and the first one to the finish line would benefit.

  Why was the 4-kilobyte restriction so necessary for the Altair? In the early days of computing, processor power and speed were far below even basic electronic devices we see today. Four kilobytes was the technical limitation of the computer chip. In order to first run the BASIC programming language and then any program written in BASIC, there had to be space left in what was a very limited memory capacity. The 4-kilobyte restriction would require writing all parts of the BASIC programming language in under 4,000 characters, where letters, numbers, spaces, and punctuation marks all counted as characters. And the Altair 8800 had no operating system, so the BASIC had to function as both the operating system and the programming language: “At the time Altair BASIC was written no operating systems, good or bad, existed so it had to be stand-alone.”23

  As a point of reference on the limited amount of characters Gates could use, imagine typing an essay today with a total of about 50 lines of text; that’s how much space Gates had to write his version of the entire programming language that also served the function of the operating system (like Windows today): “The finest pieces of software are those where one individual has a complete sense of exactly how the program works. To have that, you have to really love the program and concentrate on keeping it simple, to an incredible degree.”24

  As Gates mentioned himself in The Road Ahead, second edition, the combination of having a microcomputer available, at a reasonably affordable price, with an acceptable chip but no software was an opportunity he did not see lasting very long. With no programming languages available, it was not a useful tool although Gates and Allen saw the potential future. He even went so far as to suggest that he and Allen had a bit of panic at the time:

  What the Altair did have was an Intel 8080 microprocessor chip as its brain. When we saw that, panic set in. “Oh no! It’s happening without us! People are going to go write software for this chip.” The future was staring us in the face from the cover of a magazine. It wasn’t going to wait for us. Getting in on the first stages of the PC revolution looked like the opportunity of a lifetime, and we seized it.25

  Actually, Gates and Allen—the pair—had to seize the opportunity, although the part about Allen was omitted in the first edition of The Road Ahead but was “corrected” for the second edition. Others suggest there was more than a fear about the development of the Altair. In fact, Gates was described in Microsoft Rebooted as paranoid someone else would take the lead on writing a version of BASIC for Altair, noting:

  Lacking software, the Altair could not be programmed, depriving it of practical value. To perform more complicated tasks, the Altair needed a user-friendly programming language. Gates and Allen decided to pursue the writing of such a language even though one mini-computer firm had argued that it was impossible to write a high-level language that would run on a personal computer.26

  Once Allen had demonstrated the Altair BASIC and the software worked, the pair had a choice. Gates realized that if his company were to grow once the Altair BASIC was available, he would have to leave Harvard, and soon:

  We realized that things were starting to happen, and just because we’d had a vision for a long time of where this chip could go and what it could mean didn’t mean the industry was going to wait for us while I stayed and finished my degree at Harvard.27

  Allen was already living near his friend Gates in Boston but was not a student at Harvard. He was working as a programmer at Honeywell after dropping out of college himself; he had already completed two years of college and entered the workforce as he was two years older than Gates. By the standards of an era, Allen had landed a job with an industry giant:

  Drifting at Washington State, I was ready to take a flier. I mailed my résumé to a dozen computer companies in the Boston area and got a $12,500 job offer from Honeywell.28

  A move to support their version of Altair BASIC would impact both, and the way to support the Altair would most likely require a move to be near MITS. Bill Gates decided to take a leap of faith, although a very difficult choice. In 1975, at the age of 19, he stopped out of Harvard to cofound Micro-Soft, dropping out completely the next year. As a result of this choice, Gates took control of the company from the first day. According to Gates, Allen’s money for the startup came from working at Honeywell, while some of his own money to fund the start-up company had come from playing poker at Harvard.29

  FAMILY PERCEPTIONS OF THE COLLEGE DROPOUT

  “Gates’s parents were devastated. His mother was ‘very, very apprehensive’ about his future, says his father.”30 In his own book, Bill Gates Sr. noted, “Of course, Mary and I were sick when Trey told us he planned to leave college to take advantage of a window of opportunity he believed would be long gone by the time he graduated from Harvard. However, he promised us that he would go back to Harvard, ‘later’ to get his degree.”31

  The precise circumstances of Gates’s final departure from Harvard are a little unclear, and some have suggested the true reason for Gates’s departure was disciplinary rather than willing choice. While it is well known that Gates and Allen worked on their Altair BASIC during Gates’s time at Harvard, there is some debate as to whether Gates left the school voluntarily or was subject to administrative pressure, discipline, or reprimand from the university. Given the U.S. federal law that protects student records (FERPA, or Family Educational Records and Privacy Act) passed in 1974, the university will never be able to state whether Gates was subject to any form of discipline.

  At question was the use of the computers at Harvard by Gates and Allen for a potential commercial purpose. The question is whether the pair was indeed using a computer paid for by the government in an attempt to make a personal profit. Given the cost of using computers at the time—$40 an hour—and that the funding for the computer time was coming from the federal government, this could be seen as an inappropriate use of a government resource.

  In an 1998 article by Golden and Yemma for The Boston Globe32 about fund-raising efforts that resulted in a donation of $15 million from Gates to put his mother’s name on a new facility (she had passed in 1994), the writers even quoted Gates’s father as suggesting that there was some form of conflict between Gates and the administration of Harvard:

  Gates has said that he withdrew from Harvard to pursue his career. However, according to interviews, he left after a dispute over alleged rules violations at the Aiken lab, including using its computers for private business.

  “There was a flap, no question about it,” says his father, William Gates Sr., who now runs his son’s charitable foundation. “My son felt a little put upon by the Harvard administration’s attitude.”

  Gates lived in Currier House at Radcliffe, but the Aiken lab was his true Harvard home, where he often worked through the night. His troubles began when a lab administrator discovered that Gates was using the Aiken computer to write computer code for a New Mexico company. Because the federal government was funding the computer time, the administrator felt that Gates was misusing not just a Harvard facility but also public funds.

  Later in their article, they describe much of the motivation that Gates would possess to continue involvement with Harvard in the future, despite never earning a degree from the institution. While Gates had become widely successful and grown a company from the beginning of an industry into a name known around the world, he always understood failing to meet his family expectations of completing his degree. The desire to name a facility after his mother was initiated out of his acute awareness of that perceived failing: “After Gates’s mother, Mary Maxwell Gates, died in June 1994, Rudenstine (Harvard official) sent a sympathy note. According to sources, Gates responded that his mother’s greatest disappointment was tha
t he had not graduated from Harvard.”33

  Gates never did earn a degree at Harvard, although he returned to the university on two very notable occasions. The first time was in a speech to a group in 2004, when he inspired Facebook cofounder Mark Zuckerberg, in the audience. The second time was when he gave the Commencement Speech in 2007 and was awarded an honorary doctorate by the university. Although his mother had passed away 13 years before and his degree was honorary rather than earned, he was able to joke about the “promise” he had made to his father: “I’ve been waiting more than 30 years to say this: ‘Dad, I always told you I’d come back and get my degree.’”34

  For a college dropout, Bill Gates believes extensively in the value of a college education as a basic credential needed to succeed in the workplace today. While he indeed never finished college, he does believe that a college degree today is a basic requirement for employment, much like a high school diploma was at one time. His success as a billionaire entrepreneur without a college degree is not easily copied, although there are a limited number of individuals—including in the technology sector—who meet that characteristic (Paul Allen of Microsoft, Steve Jobs of Apple, and Mark Zuckerberg of Facebook are examples). Later in life, he would get involved in educational initiatives at all grade levels through a charitable foundation, always stressing that he had received an exceptional education despite leaving college early and that a college degree was a minimum credential to promote future success.

  Chapter 3

  EARLY DAYS OF MICROSOFT

  Gates would not have been able to succeed at Microsoft without his partnerships and talented people. He confirmed that in a talk much later in life, when he said that the single best business decision he had ever made was going into business with Paul Allen in 1975, followed by hiring his Harvard friend Steve Ballmer. Gates and Ballmer—who joined the company in 1980—pushed Allen out of the firm by early 1983: “In my case, I’d have to say my best business decisions have had to do with picking people. Deciding to go into business with Paul Allen is probably at the top of the list, and subsequently, hiring a friend—Steve Ballmer—who has been my primary business partner ever since.”1