By the same author:

How to Think Like Sherlock

How to Think Like Steve Jobs

How to Think Like Mandela

How to Think Like Einstein

How to Think Like Churchill

For Mum

First published in Great Britain in 2015 by

Michael O’Mara Books Limited

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Copyright © Michael O’Mara Books Limited 2015

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Contents

Introduction

Landmarks in a Remarkable Life

Engage Your Brain

Gates’s Heroes

Friend and Role Model

Find Your True Calling

The Birth of the Microcomputer Age

Embrace Your Inner Geek

Keep an Eye on the Big Chance

Find Your Comrades-in-Arms

Profile: Paul Allen

Profile: Steve Ballmer

Profiles: Charles Simonyi, Nathan Myhrvold and Kazuhiko Nishi Employ the Best

Sleep is for Wimps

Dare to Dream

Microsoft’s Big Deal

Innovate, Innovate, Innovate

Stress-Test Your Ideas

Gates and Intellectual Property

Lead from the Front

Learn from Your Mistakes

The Internet: The One That Nearly Got Away

Keep Track of the Competition

Microsoft vs. Apple

Business is Business

Microsoft and Monopolies

Realize That No Man is an Island

Profile: Melinda Gates

Enjoy the Trappings of Your Success

The Richest Man in the World

Take Time to Reboot

Read Like Bill Gates

Gates’s Favourite Business Book

Give Something Back

Redefining Philanthropy

The Bill and Melinda Gates Foundation

Creative Capitalism

Bring Your Celebrity to Bear

Philanthropic Aims: Providing Education and Equality of Opportunity Philanthropic Aims: Combating Disease

The Fight Against Polio

Gates and God

The Gates Legacy

Selected Bibliography

Introduction

‘He had both the technical smarts to understand what’s just around the corner, and the commercial smarts to sell it to the rest of us. This combination of talents makes Bill Gates one of a very rare breed of entrepreneurs.’

DES DEARLOVE, 1999

Bill Gates is many things to many people. To some he is an IT genius whose software has powered global business for over three decades. To others, he is the geek who conquered the world. His detractors see instead an icon of capitalist excess – a man who became the richest individual in the world before he was forty. Then, in the past few years and perhaps against expectations, Gates has been held up as the ultimate ‘do-gooder’, helping to redefine philanthropy for the modern age.

His is an extraordinary CV that reveals a man of great complexity. Born into a comfortable middle-class American family, it was soon evident that he was something of a prodigy when it came to computers. The first decades of his life were engaged in the insular business of writing code and developing his business empire. By the 1980s he had turned his company, Microsoft, into one of the most successful firms on the planet. He was one of the two great behemoths of the technological age, but where his great rival

(and sometimes friend), Steve Jobs, brought an air of bohemian rebellion to the computer business, the bespectacled Gates came to be a figurehead of the staid but booming corporate America.

As a businessman, he garnered a reputation for ruthlessness. He not only knew how to develop a product for market, but he was great at selling it there, too. Indeed, some have accused him of being overly concerned with getting one over on his business rivals, accusations that led to years of litigation over the legitimacy of a few of Microsoft’s business practices. Such has been the dominance of Gates-originated software driving the world’s PCs that other developers have understandably felt there has been little room left for them. Gates in turn argued that Microsoft merely reaped the rewards for being great innovators.

Having started his business out of his bedroom, Gates found himself transformed from the plucky little guy that people liked to back to the head of a global empire that many had come to loathe. Once your personal wealth dwarfs the GDP of most of the world’s countries, it is difficult to cast yourself as a ‘man of the people’. Although hugely intelligent and articulate, Gates also lacks that natural charisma that won Jobs pop star-like popularity even as the billions rolled into his bank account. By the mid-1990s, though, it was evident that Gates was changing. The nerdy techie guy who spent days and nights at a time refining computer software was entering middle age. He married and had kids and, crucially, turned away from his monitor to look out at the world. The injustices he saw shocked and appalled him. That your chances of a good education and even a decently long life are so intrinsically linked to the lottery of where you happen to be born came as a revelation.

Having spent the first few decades of his life capitalizing on his talents to make himself absurdly rich, he decided it was time to give something back. In a gradual process, he stepped away from the day-to-day running of Microsoft and put his energies instead into philanthropy. Nor did his wish to improve the world prove to be a passing fad. The Bill and Melinda Gates Foundation, which he established in 2000 with his wife, is now one of the richest charitable organizations in the world. Perhaps even more importantly, the way it operates is heavily influencing how the sector as a whole goes about its business. Naturally, not everyone is a fan of the ways the foundation generates capital or how it disperses it – Gates himself acknowledges that not all of its operations have achieved what he desired. But few argue that it hasn’t had an enormous impact, both within the USA and in the wider developing world. If, as many expect, polio is wiped out as a killer disease within the next few years, the Gates Foundation must be given a great deal of credit for its part in the fight.

Gates, then, has entirely reinvented himself. A man who for many represented the ‘take, take, take’ culture of Western capitalism in the 1980s and 1990s has become the leading figure of the ‘give, give, give’ movement in the twenty-first century. Time magazine named him one of the 100 people who most influenced the twentieth century. Now we struggle to know whether his greatest legacy will be his contribution to the development of computing or his reconfiguration of what we think of as charity. How to Think Like Bill Gates is designed to take a look at key aspects of his character and ideology, as well as to consider some of the most important influences on him at the different stages of his life. If the How to Think Like series proves anything, it is that great figures are rarely straightforward, and Gates is no less nuanced than any of the other subjects covered. He is a man of prodigious talent, pugnacious in his business dealings and sometimes, necessarily, ruthless. He is at heart a problem-solver (whether it be how to make a spreadsheet work better or how to reduce global poverty) who in his early years was driven in no small part by a desire for personal recognition and material gain. The older Gates, though, is less interested in accumulating personal wealth than in figuring out how to best make use of it. That transition is a fascinating one and each chapter of his life offers lessons of enduring relevance.

Landmarks in a Remarkable Life

1955

William Henry Gates III is born on 28 October to William and Mary Gates in Seattle, Washington. He becomes known as Trey by his family and as Bill to the wider world.

1967 Bill begins attending an exclusive private preparatory school, Lakeside, in the Haller Lake neighbourhood of north Seattle.

1968

A member of the school’s computing club, he writes his first program, using the BASIC language on a Teletype Model 33 terminal linked to a remote mainframe computer. A fellow club member is Paul Allen, with whom Gates will eventually found Microsoft.

1970 Gates and Allen write a traffic-surveillance program that they call Traf-O-Data, which earns the teenagers several thousand dollars. 1972 Gates works as a congressional page (an assistant to a member) in the US House of Representatives for the summer.

1973 After acing his high-school SATs, Gates enrols on Harvard’s pre-law programme. There he befriends Steve Ballmer.

1974 Gates and Allen spend the summer working for Honeywell, a New Jersey-based technology company.

1975

Gates and Allen produce a BASIC software package for the Altair 8800, a landmark personal computer produced by MITS. Gates drops out of Harvard to join Allen in Albuquerque, New Mexico, in order to work for the company. The two co-found Micro-soft.

1976 Microsoft (as it is now known) is formally registered as a company. Gates publishes an open letter condemning software theft by computer hobbyists. 1977

The relationship with MITS breaks down over commercial disagreements. Meanwhile, Gates is introduced to Kazuhiko Nishi, who helps launch Microsoft in Japan.

1978

The company opens a Japanese sales office. Microsoft’s revenues top US$1 million for the year.

1979 The company relocates its US base to Gates and Allen’s hometown, Seattle. 1980 Microsoft agrees to provide an operating system for the personal computer being developed by industry giants, IBM.

1981

Microsoft is incorporated, with Gates assuming the posts of CEO and chairman. He takes a 53% stake in the company. Steve Jobs, boss of Apple, approaches Gates about designing software for the imminent Apple Macintosh. 1983 Time names the computer as its Machine of the Year. Paul Allen leaves Microsoft, having been diagnosed with Hodgkin’s disease. 1985 Microsoft launches its Windows operating system, which employs a graphical user interface.

1986 Microsoft goes public. Gates’s shareholding is valued at hundreds of millions of dollars.

1987 Gates becomes the youngest billionaire in history. At an event in New York, he meets Melinda French, an employee who will become his wife. 1988 Apple unsuccessfully sues Microsoft, with Jobs accusing Gates of plundering Macintosh innovations in the creation of Windows.

1989 Gates establishes the Corbis digital image archive. Microsoft launches Office, a suite of applications including Word and Excel.

1990 Buoyed by the release of Windows 3.0, company revenues top $1 billion for the first time.

1992 Gates is named by Forbes as the richest person in the United States. 1993 The Department of Justice begins investigating Microsoft for anti-trust practices. 1994 Gates marries Melinda French. He also founds the William H. Gates Foundation. 1995

Windows 95 launches, along with Microsoft’s own web browser, Internet Explorer. Gates releases his first book, The Road Ahead. Forbes names him the richest person in the world for the first time, with a fortune just short of $13 billion.

1996

Melinda Gates gives birth to a daughter, Jennifer. Netscape, an internet browser company, requests the Department of Justice investigate the bundling of Windows and Internet Explorer.

1997 Gates and his family move into their custom-built Lake Washington estate. 1998 The Department of Justice charges Microsoft with anti-competitive practices. 1999 Melinda gives birth to a son, Rory. Gates publishes a second book, Business @ the Speed of Thought. Microsoft stock reaches an all-time high. 2000

Gates is replaced as Microsoft CEO by his old college friend, Steve Ballmer. Gates takes the title Chief Software Architect. A judge rules the company should be split in two – one part dealing with the Windows operating system, and another part with all other software. The decision is overturned a year later. Meanwhile, the William H. Gates Foundation is subsumed into the newly established Bill and Melinda Gates Foundation.

2001 Windows XP is launched, as is the Xbox games console. 2002 Melinda gives birth to another daughter, Phoebe. 2004 The European Commission launches an antitrust case against Microsoft. 2005

Time names Bill and Melinda Gates as its Persons of the Year, alongside Bono, in recognition of their philanthropic work. Bill also receives an honorary knighthood from the UK.

2006

Billionaire investor Warren Buffett commits the majority of his wealth to the Bill and Melinda Gates Foundation. Microsoft announce that Gates will end his full-time role with the company in 2008.

2007 Microsoft launches Windows Vista. Gates receives an honorary degree from Harvard, thirty-two years after dropping out.

2008

The European Commission imposes a record fine of $1.4 billion on Microsoft. Gates leaves his full-time position as scheduled in June to devote more time to his foundation. At a meeting of the World Economic Forum in Davos, he introduces his philosophy of ‘creative capitalism’. 2010 The foundation pledges $10 billion over ten years to help research, develop, and deliver vaccines for the world’s poorest countries. 2011

The foundation launches the ‘Reinvent the Toilet Challenge’, an initiative to encourage innovation in the interests of the 2.5 billion people without access to safe sanitation.

Polio is declared no longer endemic to India, a milestone in Gates’s mission to 2012 rid the world of the disease.

2013 The Gates Foundation links up with the Bill, Hillary & Chelsea Clinton Foundation to assess the progress of women and girls around the world. 2014

Gates leaves his role as Microsoft chairman. He agrees to become a special adviser to new company CEO, Satya Nadella. He is also once again named by Forbes as the world’s richest person, after a hiatus from the top spot dating back to 2010.

2015 An opinion poll conducted for The Times newspaper finds Gates is the most admired person in the world.

Engage Your Brain

‘Life’s a lot more fun if you treat its challenges in creative ways.’ BILL GATES IN INTERVIEW WITH AUTHOR JANET LOWE, 1998 No one can say that Bill Gates’s story is one of rags to riches. There was no need for him to fight his way out of the ghetto or pull himself up by his bootstraps. Nonetheless, his early life is an object lesson in making the most of the advantages bestowed upon you. William Henry Gates III was born in Seattle, Washington state, on 28 October 1955. His parents were William Gates, Sr, a lawyer, and Mary, a teacher and businesswoman, and Bill would be their middle child and only son. The family was keen on card games and so Bill came to be known as Trey, a card-player’s term for a ‘Three’ that reflected his ‘III’ designation.

Both parents were thoughtful and well educated, and wished the same for their offspring. From his youngest days, Bill was encouraged to occupy himself with interests that would stretch the mind. So, for instance, television was banned on school nights – a rule with which Gates was relatively easily reconciled. As he would tell an interviewer in 1986, ‘I’m not one of those people who hates TV, but I don’t think it exercises your mind much.’ Instead of being glued to the screen, the Gates family instead indulged their passion for, among other pastimes, conversation, games and reading. This latter activity fundamentally moulded Gates’s life through its many and varied phases, and we shall look at his relationship with books in more depth later (see ‘Read Like Bill Gates’, here). Meanwhile, family discussions on everything from current affairs to culture, sport and the trivia of everyday life ensured that the young Bill had a broad base of interests and the ability to articulate his opinions. Contrary to the popular image of the average trailblazing techno-geek, Bill was never the introverted little boy who found comfort behind the protection of a computer screen. In fact, he was something of an extrovert, and a highly competitive one at that. As might be expected in a family that awarded him a nickname related to card playing, the Gates clan encouraged competitiveness. As an example, each year the family holidayed in an area by the Hood Canal, near Puget Sound. The Gateses would go with several other young families and the highlight of the vacation was always a mini-Olympics in which they all competed. Although Bill was quite a small physical specimen, he was doughty and determined. Only the foolhardy underestimated him as an opponent. Speaking to author Janet Lowe in 1998, he revealed, ‘In the summer, we’d … play a lot of competitive games – relay races, egg tosses, Capture the Flag. It was always a great time, and it gave all of us a sense that we could compete and succeed.’ In retrospect, it should come as little surprise that Bill was particularly keen on games of strategy, especially chess (in which he desired to be a Grandmaster) and ‘Go’. His performance benefitted from his natural grasp of logic and a seriously impressive memory. On one occasion, the minister at the family church offered a prize to anyone who could learn the Sermon on the Mount off by heart. Gates was, of course, word perfect when he came to deliver it. His youthfully exuberant explanation when the minister asked how he had managed such a feat: ‘I can do any-thing I set my mind to.’ His ability to memorize is further evidenced by the fact that well into adulthood he was able to reel off his lines from a high-school play in which he appeared. Such perfect recall proved most useful as his passion for computer programming grew, with his ability to remember great expanses of computer code putting him ahead of the game. Growing up in an era of Boys’ Own-tales of space exploration, Gates was also open to the technological possibilities of the future. When he was six, he visited the world’s fair in Seattle, the centrepiece of which was an awesomely tall observation tower known as the Space Needle. In America in the early 1960s, the future was a place in which everything was possible and he bought into the idea wholeheartedly. In Gates’s case, the boy really was the father of the man, as it is a dream that he has never let go of. Gates showed promise in his early years at school but his attention was prone to wander, so in sixth grade (around the age of eleven) his parents moved him to a private school, Lakeside, where they hoped he would be given work to challenge his burgeoning intellect. He demonstrated particular potential in the areas of mathematics and science – when he took his SATs in 1973 he scored a perfect 800 on the maths component. Not that he was a one-trick pony, though: he continued to nurture a broad range of interests, showing a liking for drama and politics in his senior years. Many years later he would acknowledge that his teens were pivotal in his development, declaring to Steven Levy, author of Hackers: Heroes of the Computer Revolution, that his ‘software mind’ was shaped by the time he was seventeen.

Others were quick to see his promise. Several Ivy League universities came calling and he chose Harvard. However, like his great rival-to-be, Steve Jobs, he skipped a lot of classes once he was in college. He continued to excel in those subjects that interested him but simply disengaged with those that did not. He did, though, make full use of the computer labs, undertaking his own projects and sometimes spending days at a time there. And when he got bored, he filled his hours with poker marathons. Gates was born into an environment where lively intellect was not only admired but actively encouraged. Quick-witted, thoughtful and excited by what the world had to offer, he thrived. He may not have been the model student – especially in those areas that captured his imagination less – but he embraced his own intelligence and never felt the need, as so many children do, to hide it from the world. In a 2000 book by Cynthia Crossen, The Rich and How They Got That Way, Gates is quoted as saying: ‘Smartness is an ability to absorb new facts. To ask an insightful question. To absorb it in real time. A capacity to remember. To relate to domains that may not seem connected at first.’ It is a credo that has served him well. Gates’s Heroes

‘How can an ugly little guy who isn’t even really French manage to rise up and rewrite the laws of Europe … This is one smart guy.’

BILL GATES, QUOTED IN GATES: HOW MICROSOFT’S MOGUL REINVENTED AN INDUSTRY – AND MADE HIMSELF THE RICHEST MAN IN AMERICA (1993)

Gates was never one for hero-worship, even as a teen, when most of us adorn our walls with images of sportspeople, pop stars, movie icons or political revolutionaries, to whom our devotion may or may not stand the test of time. Nonetheless, he developed a small coterie of figures whom he admired, including some of the greatest figures in history. He was, for instance, a great fan of Sir Isaac Newton, the seventeenth- to eighteenth- century natural philosopher best remembered for his formulation of the laws of gravity. As a fellow mathematician and physicist, Gates of course aspired only to the very best. Also deemed worthy of his adulation was Leonardo da Vinci, the Italian polymath whose varied achievements (from painting the Mona Lisa to designing a prototype flying machine centuries before human flight was achieved) made him the archetypal ‘Renaissance Man’. Leonardo has continued to cast a spell on Gates into adulthood, and an expensive one at that, as we shall see in the chapter ‘Enjoy the Trappings of Your Success’ (here). As he said in The New York Times in 1995: ‘Leonardo was one of the most amazing people who ever lived. He was a genius in more fields than any scientist of any age, and an astounding painter and sculptor.’

LEADERS OF MEN

It is telling that one historical character to have piqued Gates’s fascination was Napoleon Bonaparte, the great French general-turned-dictator. Both relatively diminutive of stature, they each set out to conquer the world through a mix of cool calculation and audacity. They mastered the skill of sniffing out the weaknesses of their rivals too, and earned reputations for a sometimes abrasive leadership style. It does not take much to reimagine Gates as the Napoleon of the technological age. Other ‘heroes’ came on to the Gates radar later in life, although it has not been easy to meet his exacting criteria. Henry Ford, for example, failed to make the grade, serving as a role model when it came to attaining success but letting him down by his relative failure to retain it. Nelson Mandela, by contrast, won Gates’s admiration for his almost unworldly magnanimity and his ability to maintain a cool rationale even in the face of extreme provocation. While parallels between the great anti-apartheid leader and the software wizard might have been hard to discern in Gates’s younger days, it is much easier to see the influence of Mandela in his reincarnation as a global philanthropist. Perhaps a more obvious subject of esteem for the early period Gates was Tiger Woods, who came from nowhere to set new standards in the golfing world not long after Gates had made a similar impact on the computing industry. Both achieved much while still very young and brought a focus to their respective fields that few others, if any, have matched. Gates turned his attention to the modern scientific community for another favourite – the physics Nobel laureate, Richard Feynman. He was crestfallen when Feynman died in 1988, shortly after Gates had determined to meet him in person. Born in 1918, Feynman was an American theoretical physicist best known for his work in quantum mechanics

(including quantum computing) and particle physics, and shared the 1965 Nobel Prize in Physics for his efforts in quantum electrodynamics. He also sought out innovative ways to present his discoveries, creating a pictorial system that came to be known as Feynman diagrams. Gates no doubt appreciated his grasp of the importance of both substance and style. But perhaps his appeal to the Microsoft supremo is best summed up in a couple of lines Feynman once wrote to one of his students: ‘The worthwhile problems are the ones you can really solve or help solve, the ones you can really contribute something to … No problem is too small or too trivial if we can really do something about it.’ They are words that could easily have tumbled from Gates’s own mouth. FRIEND AND ROLE MODEL

‘Don’t compare yourself with anyone in the world. If you do so, you are insulting yourself.’

BILL GATES

Arguably the person who Gates most looks up to is a man who by his own admission has little feel for the technological world that Gates inhabits. Warren Buffett, however, is a fellow self-made multi-billionaire and one of Gate’s chief rivals to the title of richest man in the world. He has also exerted enormous influence on Gates’s philanthropic adventures. Born in Omaha, Nebraska, in 1930, Buffett is the head of Berkshire Hathaway and widely regarded as among the most wily investors who has ever lived. His fortune, which was estimated at $73 billion in 2015, came virtually exclusively from his knack of backing the right commercial horse. Known as the ‘Oracle of Omaha’, Buffett credits much of his success to following the principles espoused by the professional investor Benjamin Graham, whose works Buffett began studying in the late 1940s. To give an idea of Buffett’s skills in making money out of money, a $10,000 investment in Berkshire Hathaway in 1965 was worth in excess of $50 million in 2014. Gates met Buffett for the first time in 1991 at an event arranged by Bill’s mother, Mary. They instantly hit it off. In 2006, the Guardian newspaper quoted Gates as saying Buffett

‘has this very refreshing, simple way of looking at things’. It helped that they shared a sense of humour and the same broad political affiliations – both tend toward the Democratic party. They even have similar taste in food: despite their vast wealth and their regular attendance at grand banquets, both still enjoy the humble hamburger. Both also have an instinct for frugality so that on one occasion when the pair had travelled to China together, they opted to eat at a McDonald’s and Buffett paid for the meal using money-off vouchers that he had made a point of carrying with him. Buffett’s influence on his young protégé extends much further, though.

He was, for instance, responsible for Gates taking up the game of bridge with some seriousness. (For a man who had long enjoyed playing games, it is somewhat surprising that he had not come to bridge – the tactician’s ultimate card game – earlier.) More significantly, Gates credits Buffett with fundamentally influencing the way he approaches commerce. In a speech at San Jose University in 1998, he said, ‘I think Warren has had more effect on the way I think about my business and the way I think about running it than any business leader.’ Buffett himself notably did not put his money in Microsoft but only because he makes it a rule to only invest in sectors he is confident he understands. The computer business does not fit that bill. He has, though, freely acknowledged Gates’s entrepreneurial flair, saying in 1992, ‘I’m not competent to judge his technical ability, but I regard his business savvy as extraordinary.’

However, surely posterity will regard Buffett’s impact on Gates’s philanthropy – in terms of financial backing, strategy formulation and moral support – as the most important fruit of their friendship (see here). In 2008, Gates said on the Charlie Rose show: Warren Buffet is the closest thing I have to a role model because of the integrity and thoughtfulness and joy he brings to everything he does. I’m continuing to learn from my dad, I’m continuing to learn from Warren and many times when I’m making decisions, I try and model how they’d approach a problem. Find Your True Calling

‘I was lucky enough, at a young age, to discover something that I loved and that fascinated me – and still fascinates me.’

BILL GATES IN INDUSTRY WEEK, 1996

In 1986, a feature in the Wall Street Journal painted a picture of Bill Gates’s life as a Harvard student in terms that could apply to millions of other naval-gazing undergraduates facing up to impending adulthood. Gates described himself ‘sitting in my room being a philosophical depressed guy, trying to figure out what I was doing with my life’. Doubtless, this is a broadly accurate depiction, in that the exact path of his life was yet to be laid out. However, whereas many students literally have not a clue about what will come after their carefree university days draw to a close, Gates was all but destined to make his mark in the computing industry. After all, he spent swathes of his waking hours honing his programming skills and had done for years. When Gates first got serious with a computer, he was only thirteen, but very quickly it was evident that it was a relationship built on firm foundations. He had found his love and was intent on nurturing it. The ‘first date’ occurred around 1968 at Lakeside school, although it was something of a blind date. That is because Lakeside did not have a computer of its own. Such things were too large and much too expensive for a school to possess in those days. To own a mainframe computer – the cutting-edge machines of the time – you needed a budget of millions and acres of air-conditioned space in which the banks of equipment could be kept at a suitable temperature. Nonetheless, Lakeside did have a teletype machine, which could be connected to a mainframe housed elsewhere. Lakeside paid to use the mainframe on a time-share deal alongside numerous

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