Inteview with Bill Gates

The 'Microsoft Way'
DA: What would be the two or three things that would characterize the Microsoft way of computer software?

BG: The key for us, number one, has always been hiring very smart people. There is no way of getting around, that in terms of I.Q., you've got to be very elitist in picking the people who deserve to write software. Ninety-five percent of the people shouldn't write complex software. And using small teams helps a lot.

You've got to give great tools to those small teams. So, pick good people, use small teams, give them excellent tools; vast compilation, debugging, lots of machines, profiling technology, so that they are very productive in terms of what they are doing. Make it very clear what they can do to change the spec. Make them feel like they are very much in control of it.

Have lots of people read the code so that you don't end up with one person who is kind of hiding the fact that they can't solve a problem. Design speed in from the beginning. A lot of things that have helped us, even as the project teams have become larger, and the company has become a lot larger than it was. It is not some methodology where there is a lot of funny documentation. Source code itself is where you should put all your thoughts, not in any other thing. So, our source codes, all though there are a few exceptions, tend to be very well commented in a very structured way.


TO CONTENTS

Early Failures--and Lessons
DA: We talked a lot about some of your earlier successes. What were some of the early things that didn't go well? And what did you learn from them?

BG: There were a lot of mis-steps in the early days, but because we got in early we got to make more mistakes than other people. I had customers who went bankrupt and didn't pay us. Customers who we spent a lot of time with who never built microcomputer-based machines.

I worked for a long time on an APL Interpreter and I almost got that done, but then it looked like it wasn't going to have much of a market and I was too busy doing other things. We actually never shipped an APL that we had talked to people, that we were working on.

There was another interpretive language called FOCAL that we'd written a version of for the 8080 and 6502. Having two interpretive languages like that was not a good approach. That was a dead-end project. Everything else, COBOL, FORTRAN, the way we selected the various chips. A big project we did for Texas Instruments where we wrote a product for their machines which eventually, they failed in the personal computer market, but they shipped a lot of machines in the meantime.

Multiplan, targeting the 8-bit machines instead of just relying on the next generation to come, the IBM PC generation, that was a huge error. When we talk about, "Are we aiming too low, in terms of system requirements, we often think, is this another case like Multiplan?" Because it was a great product, but it was the basic strategy that was wrong. And, in fact, to some degree that allowed me to make one of the best decisions I ever did, which was later, when we had to compete with 1-2-3. There was a question of whether to do it in the character-mode environment, or whether to move up to the next generation, which was graphical. And we said, "Okay, we'll let them dominate the DOS-character world. We are going after Mac and Windows. We are going to be a generation ahead." And that worked out very well. Multiplan was certainly an experience that was helpful there.

In Retail Marketing, we made a number of mistakes that were important for us to learn from. We had in a few countries, agents. And you really don't want to use agents. You want to have your own people. If you are going to be a serious company, take a long-term approach. You should hire people in all the countries you are going to be in and make sure they are there cementing long-term relationships -- not just generating short-term commissions. I think we learned that one pretty quickly. We did hire in some very sharp business people, and got them to share their experience so it wasn't just us technical guys and the other people. We were very young. I mean, Steve and I were kind of driving the business and Paul and I were driving the technology. We were optimistic in thinking we could get things done sometimes faster than what we did. The project of the moment always seemed very exciting. And some of them never generated much in the way of royalties. But all correctable stuff as long as we sort of wake up and see what the results were.


TO CONTENTS

Relations with Paul Allen and Steve Ballmer
DA: You mentioned your relationships with Steve and with Paul. How did that set of relationships shape and change as the company grew and spread?

BG: Well Paul, of course, was my friend from the early Lakeside days. And we are very close friends today and I'm sure we will always will be[Bill laughs]. He is very idea-oriented. He and I would brainstorm about things. So even though I was running the business, it was a partnership. His role was very, very critical to so many of the transitions that we made. There was always some strain because I was pushing people to work hard, including Paul. That wasn't really a big problem.

When Steve came in, I was spending more time with him because the business side was important; managing and organizing, and (deciding) what we were going to do about international. So, it was great that Steve was smart enough and personal enough, that even though he didn't have a technical background, the programmers accepted him. That was very rare. We didn't really believe non-programmers should manage programmers. And we didn't do that until I think about 1983 before Steve actually directly managed developers. But the developers accepted him early on because he was smart, he would sit and listen to them, understand the things that they really liked to do. And so that fit in. I got a lot of benefit out of Steve going around and always knowing what people were thinking about.


TO CONTENTS

Mazuhiko Nishi
And there were other people. Kazuhiko Nishi, who is a very close friend of mine from Japan, really taught me about the Japanese market. He got us doing the very first Japanese personal computer that any NEC PC-8000 and many of those other projects. He is a visionary, very energetic, almost overly optimistic about where things can go. He started a lot of the early computer magazines in Japan, and worked with us for a long time.

Because it was a fast moving business, although we worked very long hours, we'd go out to movies together. Everybody knew each other awfully well. Up until 1981, Paul and I had owned the whole company, except that we'd shared a little bit of it with Steve. There wasn't much pressure to do anything differently than that, but then around 1981 we decided to share some of the ownership in the form of options. And actually brought some of the really strong contributors into that program.


TO CONTENTS

Vision for Spread of Personal Computers
DA: Bill, you're famous for a vision that you had about personal computers. Can you tell us about the vision?

BG: The vision is really that in the information age that the microprocessor-based machine, the PC, along with great software, can become sort of the ultimate tool dealing with not just text, but numbers and pictures, and eventually, even difficult things like motion video. And that is something that when Paul and I would go around speaking about computers, we would always say that there were no limits. We used to call it the "MiPs to the Moon" speech. That performance would be unbounded and that all of these incredible things would happen. We were never too specific about exactly when various things would happen. And, of course, when we went back to our business we had to decide what our priorities were. But, the frontiers were sort of wide open. It was that sense of excitement that we really wanted to spark in everybody else wherever we went.


TO CONTENTS

Keeping up with the Comptetition
DA: Well, you were both a visionary and a pragmatic business person. How did the competition rank in these early days? And how did you manage to continue to make the progress against your competition?

BG: Well, there certainly were a lot of other software companies. Within two or three years of our being started, there were dozens of companies. Some of them tried to do better BASICs. And we made darn sure they never came near to what we had done. There were competitors in other languages. There was Digital Research, VisiCorp with VisiCalc, MicroPro with WordStar, Ashton-Tate with dBase. And each of those companies made some huge contributions, very innovative things. Lots of game software companies and that was an area we chose not to get into. Lots of people doing applications packages like payroll. We'd toyed with getting into that, but decided that it just didn't leverage what we were good at well enough. And that we should probably let other people do those things. There were many fine companies. I'm probably skipping over hundreds of huge contributors in the software arena. They didn't take quite the same long-term approach that we did. Doing multiple products, really being able to hire people and train them to come in and do great work, taking a worldwide approach, thinking of how the various products could work together.

So, we were more comprehensive. We weren't the largest. There was a time that MicroPro with WordStar was bigger. There was a time when Visicorp was bigger. There was a time when Lotus, with the early years of 1-2-3s incredible success, was bigger than we were. But we were always the most technical. Whenever anybody else in the software industry wanted to know where we thought things were going, they'd come and talk to us. Because our vision, we shared; we didn't view that as some competitive edge. We just wanted to talk about it and get other people to share the same ideas so that they would help make it all come true.


TO CONTENTS

The TRS-80 Model 100
DA: One of the most interesting machines that came out of this area was the TRS-80 Model 100. Do you want to say a few words about Microsoft's role with that machine?

BG: Yes. This is in a sense my favorite machine, I mean by today's standards it is kind of a pathetic machine. But what happened was Kazuhiko Nishi, my friend from Japan, came over and said that we could have an 8-line LCD with 40 characters. And up to then all we had was four lines by 20 characters. I didn't think using 4 by 20 you could do much that was interesting. But, when he said we could go 8 by 40, then I got to be pretty fascinated with the idea of a portable machine. It wasn't just taking your desktop machine and trying to shrink it down, because battery life would be a problem, and ease of use would be a problem. But just taking the things you want as you move around and making it pretty inexpensive. So, this machine came out for $500. Jey Suzuki, from Japan, and I, wrote the ROM in this machine. It is a 32K ROM.

Part of my nostalgia about this machine is this was the last machine where I wrote a very high percentage of the code in the product. I did all the design and debugging along with Jey. And it is a cool user interface, because although most of the code is a BASIC Interpreter, we did this little file system where you never had to think about saving anything. You just had this menu where you pointed to things. It was a great little editor and scheduler. We crammed it all into a 32K ROM. And really designed it in an easy to use way around these special keys up here. This machine was incredibly popular with journalists. Even though it came out over 11 years ago now, it was out by 1982. You still see some journalists using this, although the technology has gone way beyond it.

We had some great things here like we had a way that you could add a bar code reader to this. We thought maybe people would distribute software on bar codes. In fact, Byte Magazine got into that for a while. We had a lot of ways you could extend this by putting a new ROM in the bottom. And it was sold not only in the U.S. by Radio Shack, but NEC sold it in Japan, and Olivetti sold it in Europe. And the company who made it, Kyrocera, became a good partner of ours for lots of future projects.

DA: You may actually want to turn it on so that we can show it