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LESSONS FROM BILL GATES,

MICROSOFT FOUNDER

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Our original buyers were corporate

clients

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We sold our software to hundreds of companies allover the world, including microprocessormanufacturers and controller chip manufacturers.

We knew that in the long run we would be selling

our products to the general public, which we startedto do in the 1980s.

BILL GATES, LECTURE 1

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A computer on every desk and in

every home was not the idea we

started with

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We first talked about this in an article in 1977, whenwe put in print our idea of a computer on every deskand in every home.

It was a crazy and wild idea at that time. Even thesmartest people were wondering why someonewould need a computer.


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We sent IBM to our competitor

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When IBM ordered an operating system for its newprocessor we sent them to a competitor, DigitalResearch, because it had almost completed work onan OS, which became CP/M OS, and we couldnt

meet IBMs deadline. In the end, IBM came back to us because the

competitor wasnt willing to meet IBMs non-disclosure terms.


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We sent IBM to our competitor

(contd)

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Eventually, weve decided to develop the OS ourself, but to meet IBMs deadline we had to license

the original code from another company. That OSbecame the core of MS DOS.

MS DOS and Digital Researchs CP/M competed for2-3 years, but MS DOS became much morepopular.


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IBM refused to pay a royalty

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Our original deal with IBM was a flat-fee deal.However, it allowed us to work with IBMs

competitors directly, which was an upside for us.

The deal was very complicated, but it allowed us to

benefit from the rising popularity of personalcomputers.


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We realized the potential of the

business at the very beginning

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We threw numbers around. We multiplied thenumber of homes and number of desks in the worldby the $20 we figured we could make on eachcomputer and got huge numbers.

However, we were very focused on the here andnow. Our concerns included: do we have enoughmoney to pay the bills? Can we hire one moreperson? We never focused on how big we could get.


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We realized the potential of the

business at the very beginning

(contd)

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When Intel executives began appearing on some ofthe lists of wealthy people, we thought about thepossibility of software guys making big money, but

that was never our focus. We were focused onmaking great software.

It wasnt until 1995-1997 that we recognized we

were the company that revolutionized software.


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Growing up I wasnt sure what my

career would be

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I loved math and was an avid reader. The first time Iused a computer was when I was 12 years old and Iwas fascinated with it.

My friends and I were curious about what computers

could and couldnt do. What caused us to create a software company was

when we saw that computers could be cheap andaffordable.


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Math came naturally

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My success at math gave me some confidence.Teachers encouraged me to take advanced courses.

If you are comfortable with math it is extremelyhelpful across a wide range of interests, particularly

when looking at economics, statistics, and cause-and-effect.


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Our first programs were typed on

paper

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Computers were extremely expensive. A machinefar less powerful than what is in a mobile phonetoday costs millions of dollars.

We would share a machine with others (time

sharing), but even sharing a computer was veryexpensive. So we typed our programs on paper wecould feed into the computer to optimize our onlinetime and keep costs down.

The idea of computers being used 24/7 lasted forabout 10 years. This changed in the 1970s when thecost of a computer fell dramatically and mini

computers became more available to individuals.


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My parents supported me when I left

Harvard

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My parents were a little surprised, but supported mebecause Harvard had a very flexible policy forstudents taking leaves. So if my business failed Icould have returned.

My parents view was it would be OK if the companywas a success and OK if the company failed.However, the real challenge for them was if thecompany was a mediocre success and I found

myself stuck in it.


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The American dream is a global

dream now

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Today young people can come up with ideas andcreate companies that make contributions, not justjobs, but innovations.

Capitalism is an open system, so when you combine

it with good education and creativity the results willbe surprising.


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Microsoft was at the center of

personal computer and software

revolution

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How about addingMicrosoft believed in a softwaremarket when no one else did.

The whole industry was built around Microsoft.

Weve encouraged other companies and people towrite software.


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