Bill Gates

William Henry Gates III

by Roy Posner

Overview

William Henry Gates III (born October 28, 1955) is an American business magnate, philanthropist, the world's third richest person (as of 2008), and chairman of Microsoft, the software company he founded with Paul Allen. During his career at Microsoft, Gates held the positions of CEO and chief software architect, and remains the individual shareholder with the most shares, with more than 9 percent of the common stock. He has also authored or co-authored several books.

Gates was born in Seattle, Washington and excelled in school. He enrolled at Harvard College in 1973, where he met Steve Ballmer, who would later become CEO of Microsoft. After reading the January 1975 issue of Popular Electronics, Gates contacted Micro Instrumentation and Telemetry Systems and provided them with the Altair BASIC, and thus Microsoft was formed. This led to a partnership with IBM that required Microsoft to make the BASIC interpreter for the IBM PC. Later on, Gates struck another deal with IBM, allowing IBM to package Microsoft's PC-DOS software with IBM's personal computers in exchange for a fee paid to Microsoft for every computer sold. This deal established Microsoft as a major player in the software industry. Out of this eventually came the Windows operating system, which serves 90% of the personal computers of the world.

Microsoft under his auspices went on to develop hundreds of applications software programs for the enterprise, business, and the individual, most famously the Windows Office Suite that included word processing (Word), spreadsheet (Excel), database (Access), presentation (PowerPoint), and email communications (Outlook) amongst others. Microsoft also developed enterprise versions of Windows (Windows Server) as well as other centralized tools including Microsoft Exchange and SharePoint. Microsoft also sold many applications for entertainment and has sold hardware products from mice to keyboards to the X Box. Under Gates Microsoft also developed products for the web including Internet Explorer (a part of Windows), the MSN network, as operating system software for other types of computers, including Windows Mobile for Smartphones.

Gates is one of the best-known entrepreneurs of the personal computer revolution. Although he is admired by many, a large number of industry insiders criticize his business tactics, which they consider anti-competitive, an opinion which has in some cases been upheld by the courts. In the later stages of his career, Gates has pursued a number of philanthropic endeavors, donating large amounts of money to various charitable organizations and scientific research programs through the Bill & Melinda Gates Foundation, established in 2000.

Bill Gates stepped down from most of his duties on June 27, 2008. Over a span of several years, Ray Ozzie took over as chief software architect, Craig Mundie as chief research and strategy officer, and Steve Ballmer as chief executive officer. Gates remains the chairman of Microsoft's board of directors.

Achievements

• helped launch the personal computer revolution
• provided the operating system software and applications software standard for 25+ years for billions of personal computers around the world
• Created (as of 2008) the dominating personal computer-oriented company in the world with 60B per year in sales with almost 25% level of profitability ($15B), unprecedented for that size company
• empowered hundreds of millions of user around the world through their use of personal computer OS and applications software; leading to massive improvements in business and personal productivity.
• created software that greatly facilitated the organizational and creative processes of life
• gained 90% market share of operating system software, and large percentage of application software market
• world’s richest man for a period
• legitimized the concept of software for the masses
• Practiced modern, progressive, innovative "Silicon Valley" type techniques in business that others imitated
• Influenced others that they can rise to the pinnacles of success by doing something innovative and timely
• showed that even a very young person can succeed

Personal Qualities

ASPIRATION EFFORT, DRIVE

• wanted to change the world through the personal computer and software.
• passion for computers as teenager
• ambitious
• a desire to know
• worked hard
• devoted full concentration to his work
• very persistent
• very aggressive

BELIEF IN SELF; SELF-DRIVEN

• unswerving self-belief
• was self confident; believed in himself
• confident he could be a big success
• believed in the inevitability in the outcome of his pursuits
• had confidence in what he was doing
• became what he wanted to become
• did not listen to the herd; thought for himself
• self-learned a great deal as a child (which influence him dropping out of Harvard)
• thought he could accomplish more without going to college (Harvard)
• believed that if you are intelligent and know how to apply it, you can accomplish anything
• believed he could solve problems by exercising your mind
• passion for ongoing learning

PSYCHOLOGICAL STRENGTH

• no fear of anyone
• not afraid of forces, companies much bigger than his
• took on and embraced great challenges

MENTAL CAPACITY

• highly intelligent
• highly creative mind
• grasp of detail
• good mind for figures
• excellent memory/retention
• aptitude for learning
• educated
• significant background in math and science
• insatiable curiosity

SKILLS

• programming skills
• interpersonal skills

PRAGMATIC

• pragmatic
• common sense approaches to life, business

MODEST, LOW KEY

• not boastful or boisterous

ABILITY TO CHANGE

• learned from his past mistakes

ENDOWMENTS

• parents were positive role models
• had money at the outset

TO BE CATEGORIZED

• timing/awareness -- understanding that the time was right to move technology forward
• very conscious of his time

Business Qualities

The process of creation and accomplishment is to have a vision of what you want to accomplish, develop that into a passion, work on the details, and then execute with drive, determination, persistence, consummate skills, and positive attitude. Gates followed that process continually, whether or not he was fully conscious of the fact.

PROCESS OF ACCOMPLISHMENT

• examined changes in society; what people wanted; could use
• Studied promising technologies in great detail
• Discovered opportunities; one that differentiates him from others
• Envisioned the possibility
• Had a clear plan to succeed
• Developed powerful strategies to achieve goal
• Plan expressed in considerable details
• Created great relationships
• Able to sell the opportunity to others
• Executed with consummate skill; e.g. had the right people for success
• Had positive attitudes at each point
• Executed with drive, determination, persistence
• Focused yet patient in execution
• ”His genius was to understand what he needed and work out how to obtain it, however long it took.” (The Economist)

5 Engines Analysis: One way to evaluate a business – and in this case expressed through Bill Gates, who founded and ran it – is to look at its five core engines – technology, market, organization, people, and finance. The following business analysis incorporates these five, plus other elements.

TECHNOLOGY

Technology + Business

• ability to identify the software needs of the average person and business
• ability to blend the technical and business side; a technologist who also had great business sense

Accessibility, Ease of Use, Standardization

• brought legacy systems forward; (i.e. he did not abandon them) to new technologies
• made software that was easy to use
• bet on the graphical user interface paid off
• created a common look and feel across products
• standardized across product lines wherever possible

Comprehensive

• made software that tried to solve as many user needs as possible
• had product line that appealed to a wide spectrum of interests, including business and the general public
• integrated features from other companies, sources to create standard, simplified approach
• incorporated innovations from competitors
• selected the promising ideas that are over the horizon but not too far over

Research and Development

• understood the importance of investing in research
• studies promising technologies in great detail

MARKET

OVERVIEW

Market Opportunities

• spotted opportunities and challenges, and pushed company toward them.
• vigilant about and aware of emerging opportunities; didn’t want competition to get there first
• saw where the market was going and got ahead of it
• ability to identify the software needs of the average person and business

Problem Solving

• tried to solve every conceivable business problem

View of Market

• saw that he could sell computers and software to masses, not just the few as in mainframes
• identified core software needs of the average person and business and built upon that an integrated suite of applications
• saw that the company that won a large market share would prevail
• wanted to dominate markets entered
• saw that profit would come from selling a lot of personal computers and software cheaply, rather than few as in mainframes

Use of Power

• made tactical use of his advantage (e.g. DOS)
• used the force and power of business's who used his products

Use of Relationships”

• wide array of partnerships and relationships
• realized that making hardware and writing software could be stronger as separate businesses
• saw that hardware and software companies could innovate and prosper in the controlled Wintel ecosystem that had vast economies of scale.

Tactics

• Sold its OS to IBM to create a standard, but to many IBM rivals as well creating the standard

ASPIRATIONS OF SOCIETY

• in tune with the emerging needs of society. People, including individuals and businesses were ready for personal computers to organize their lives
• understood that there were certain essential software that everyone, including businesses needs, such as word processing, spreadsheet, email, and integrated them into a whole for easy access and integration. In other words, he was in tune with the practical needs of the society. THIS IS KEY (This focus on their needs attracted the world to Microsoft through the universal adoption of Windows and Office.)
• part of a group of individuals at the time who were eager to bring the PC to business and the general public
• blended technology with needs of the people

COMPETITION

• very aware and tactical in dealing with the competition
• vigilant in watching emerging opportunities; didn’t want competition to get there first
• took advantage of poorly run rivals
• incorporated innovations from competitors, overcoming their advantage
• squashed competitors through various methods
• encourages many companies to blossom, let one survive, and then overwhelms them

COLLABORATION

• wide array of partnerships and relationships
• company collaborated well with others
• created relationships wherever possible
• willing player with his technology (variety of vendors who built PCs off of Dos and Windows)
• established powerful relationships
• beta tested all products through business; sought feedback from business about his products
• communicates new technologies very effectively to his people
• had similar quality to main character of film Guru to share in the prosperity with others through partners, (Guru through company’s shareholders), while being very tough in rising to the top and affecting competitors.

MARKETING

• outstanding marketer
• wide array of partnerships and relationships
• used initial low price approach to lure in customers
• beta tested all products through business; sought feedback from business about his products
• brought developers into the fold through generous offerings

ORGANIZATION

• simplified business practices that had been complicated
• standardized business organization and practices
• communicates new technologies very effectively to his people

PEOPLE

• used growing crew of technical and business smart people
• hired smart people
• created dynamic small group culture
• deemphasized status symbols. Respect had to be earned
• valued training and education in his company and society
• communicates new technologies very effectively to his people
• demanded intelligent people. Would not put up with those who weren’t
• communicates new technologies very effectively to his people

FINANCE

• financially conservative; conservative financial practices
• saw software’s economic value
• saw that profit would come from selling a lot of personal computers and software cheaply, rather than few as in mainframes
• saw that the company that won a large market share would prevail

MISC. PSYCHOLOGICAL

• was vigilant of emerging opportunities; didn’t want competition to get there first
• tried to avoid complacency
• was a hungry company, always thinking of possibilities.
• Adjusted to change; was willing to make a u-turn to improve things; i.e. was willing to change
• took chances
• was somewhat ruthless
• was generally forthcoming
• abused competitors to a degree with company’s power, strength, financial resources
• occasionally squashed competitors to the point of ruthlessness
• had no qualms about dominating others

BUSINESS VALUES

LUCK

• had luck, destiny on his side; right place at the right time
• luck is the product of following the process and catching the wave

Miscellaneous

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