William H. Gates III isn’t always the first to see the future.But when he finally zeroes in on what’s important, his combination of vision, conviction, and stubborn tenacity make him unstoppable. It’s what makes him a visionary.
As his former partner Paul Allen explains in his recent memoir, they weren’t the first people to recognise the potential of microprocessors to bring hardcore computing power to the masses. People like Intel founder Gordon Moore had been thinking along those lines since the 1960s.
But when Allen showed Gates an advertisement for the Intel 8080 in a magazine in 1974, Gates knew immediately that it was time to strike: this was the first microprocessor powerful enough to run a full computer programming language like BASIC.
It was the 19-year-old Gates who made the phone call to tell Ed Roberts in Albuquerque that they had a version of BASIC ready to go for the Altair, the first 8080-powered computer.
He was bluffing.
But he dropped out of Harvard and worked around the clock with Allen and another programmer, Monte Davidoff, to get it done.
A couple years later, as the fledgling microcomputing industry began to take off, Gates took what was then an unpopular stance: software has value and the people who create it should be paid.
As he wrote in “An Open Letter To Hobbyists” in February 1976:
As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid?
Is this fair?…. One thing you do do is prevent good software from being written. Who can afford to do professional work for nothing? What hobbyist can put 3 man years into programming, finding all bugs, documenting his product and distribute for free? … Most directly, the thing you do is theft.
This seems like common sense now that computer software is a $300 billion industry, but at the time few others saw that software — not hardware — would drive computers forward. In fact, it wasn’t until 1981 that the Supreme Court clearly ruled that software could be patented. (The other side argued that software is a collection of mathematical algorithms and therefore can’t be owned.)
Almost two decades later, after Microsoft had become a global powerhouse, Gates came under a lot of criticism for being late to understand the importance of the Internet.
His book “The Road Ahead,” which was written in 1994 but not published until November 1995, mentions the Internet and World Wide Web a few times, but mostly as subsets of a more generic “Information Superhighway.”
But Gates was quick to correct — a month after the book was published, he wrote an internal memo to Microsoft employees called “The Internet Tidal Wave.”(PDF here.)
Reading it 16 years later, it’s amazing how accurate it was — even if Microsoft didn’t capitalise on all the opportunities he laid out. By December 1995, Bill Gates was sure that:
- The Internet would dominate computing: “The Internet is the most important single development to come along since the IBM PC was introduced in 1981. It is even more important than the graphical user interface.”
- The open Web would kill services like AOL and MSN: “The On-line services business and the Internet business have merged….every On-line service has to simply be a place on the Internet with extra value added.”
- Free ad-funded content would win, but would be a hard business: “Although there is room to use brand names and quality to differentiate from free content, this will not be easy and puts a lot of pressure to figure out how to get advertiser funding….The challenge of becoming a leader in any subject area in terms of quality, depth, and price will be far more brutal than today’s CD[-ROM] market. For each category we will have to decide if we can be #1 or #2 in that category or get out.”
- A cheap portable Web browsing device would threaten Windows/Intel: “One scary possibility being discussed by Internet fans is whether they should get together and create something far less expensive than a PC which is powerful enough for Web browsing….Gordon Bell and others approached Intel on this and decided Intel didn’t care about a low cost device so they started suggesting General Magic or another operating system with a non-Intel chip is the best solution.”
- Microsoft needed to do way better in search. ” Of particular interest are sites such as YAHOO! which provide subject catalogues and searching….Amazingly, it is easier to find information on the Web than on the Microsoft corporate network….[Our products] do not support text indexing as part of their queries today which is a major hole. Only when we have an integrated strategy will we be able to determine if our in-house efforts are adequate or to what degree we need to work with outside companies like Verity.”
- Peer-to-peer communication would be important: “Eventually you will be able to find the name of someone or a service you want to connect to on the Internet and rerouting your call to temporarily be a point-to-point connection will happen automatically.”
Imagine if Microsoft had executed on all of these ideas back in 1995. Instead of throwing money into ad-supported content on MSN, Microsoft could have invented Google. And smartphones. And Skype. The ideas were all in there.
There were some wrong assumptions as well. Quality-of-service guarantees and online virtual reality still haven’t happened, for instance.
Microsoft did execute on a lot of the other parts of the memo, including — fatefully — integrating the Internet Explorer Web browser into Windows.
Photo: National Portrait Gallery
That eventually led to the Department of Justice antitrust trial, which burned Gates out and soured him on the business world. He never understood how the U.S. government would want to crack down on a company that had contributed so much to the economy and society at large. He handed the reins over to Steve Ballmer in 2000.
But instead of retiring, Gates put his mind to work on an even bigger challenge: saving the world’s population from preventable diseases. He pursues his work at the Gates Foundation with the same vision and tenacity that he built and guided Microsoft for 25 years.
Now, don’t miss: 10 Crazy Stories About Bill Gates From Paul Allen’s New Book.
Business Insider Emails & Alerts
Site highlights each day to your inbox.