Bill Gates: How to accelerate history (Part 1)

The very best founders I know are brilliant at building systems. They connect teams, they remove bottlenecks, and they eliminate single points of failure. And yet When it comes to their own wealth. Most are running a disconnected stack. A tax accountant here and a state attorney there, a wealth manager who doesn't talk to either one of them.

Creative planning was built to fix exactly that. One integrated team of tax professionals, state planners, investment specialists, all coordinated by a dedicated wealth manager who sees your full financial picture and keeps every piece working together. Proactive tax efficiency, state strategy, investments all under one roof. Creative planning where wealth works together. Learn more at creative planning dot com slash masters of scale.

Global hiring is such a headache when you're building fast, but companies like Eleven Labs are scaling effortlessly with deal. They quadrupled their workforce in twenty twenty five. Without hiring an HR team. Build your global team with deal. Visit deal.com slash MOS and start expanding your business today. That's D E L

dot com. Slash M O S. Hey, folks, Jeff Berman here. I am thrilled to share some of the new names who will be joining us at this year's Masters of Scale summit. This may be our biggest stage yet. Reed Hastings, Meredith Whitaker, Van Jones, Amjad Masad, and more.

Will be there with us October 20th through 22nd in San Francisco. If you're building something great, or you want to build something great, We want you there with us too. Join us at masters of scale dot com slash apply twenty six. That's mastersofscot com slash apply. Twenty six.

Six thousand four hundred. Yeah. You have a hose across the road. And every time a car goes over it. Six years.

It counts. That's the unmistakable voice of Bill Gates. Whose name? is as entry of computing as Neil Armstrong's is with a history.

A space flight. Bill is the person who brought us Microsoft. Windows. PowerPoint. Excel.

Xbox. And of course. Craf O data? Okay.

didn't have the name recognition. of Microsoft. But it is catchy. Like Phileo Fish. Or Wonderama.

Bill. is taking us back. to his high school days. Like many teenagers. Bill and his best friend Paul Allen.

That spilled into obsession. The object of their affection. The computer. Which had not yet.

become a household object. When Paul and I were just messing around with computers We were looking for computer time, so we'd sneak into labs up the University of Washington day and night. During one of these covert ops. Bill and Paul were introduced.

to the intricacies of counting traffic. The technology was a bit primitive. You have a hose across the road. And every time a car goes over it.

It counts. There's a sixteen channel paper tape that's punched out in those metal boxes. Bill and Paul saw an opportunity. Strangely, we found this guy who took the tapes.

And this guy was looking for a cheap way to get the graphs made that showed The traffic patterns. So we volunteer to do it super, super cheaply, first by hiring kids to literally visually read and write down the numbers, and then we would go and key punch it in. The key punching gave way to a high-tech solution.

for traffic counting. Well, high tech by early 70s standards. The big innovation of Bill and Paul's first company, TrafoData. was doing away with that paper tape. In favor of A cutting edge home computer.

Then our company Traffidated, we actually created a machine With the eight zero zero eight microprocessor. So the largest eight zero zero eight program ever written. Was the one I wrote. to do the traff of data work.

The early microprocessors are very very limited You couldn't do general software. But you could do this Traffho data thing.

That Limited. Microprocessor. Game Bill and Paul. Unlimited riches.

At least. Unlimited from the point of view of a pair of high school kids. So we made you know like ten thousand dollars Which at the time seemed like a lot by

Processing These funny tapes through our little machine. Trafo data would run its course. But it opened Bill and Paul's eyes. to a new microprocessor that could change everything.

The Intel 8080. Paul hands me the eighty eighty manual. And that was better than this mini computer called the PDP eight. It was way easier to program. I look at I say, Hey. We can do anything you want with this. This is the revolution.

You can just picture the gleeful face of of the young Bill Gates looking up from that manual. This was a time. When computers Улифор the most ardent.

Hobbyists. They came as kids. You had to build them for yourself. It was more single lane dirt track. than information superhighway.

But Bill's mind. Was already leeping. Decades into the future. So we sit there Expecting everybody to

You know, go out in the streets and go, Oh my god, the revolution has come. But actually Nobody pays much attention at all. Bill had spotted this critical inflection point. But he was still in high school.

He wasn't in a position to accelerate the digital revolution he could picture so clearly. So he set his fever dream aside. And enrolled at Harvard. But it's time there. would be short lived.

We're thinking, Oh my God. The revolution could happen without us. And so that's when Paul's plea that I should drop out and we should get out there and become та software suppliers to this

kit first personal computer, which was a kit with almost no memory, but I had managed to squeeze a basic interpreter. Into that. Okay, so there's going to be a little more technical jargon in this episode than usual. For anyone not familiar with the vagaries of computer memory, and the role of an interpreter in software development.

All you need to know is This was a start. Of something big. and Bill could see exactly what role he and Paul could play. So that's where Microsoft gets started.

We're watching the chip revolution and it finally delivers a microprocessor that is beyond a mini computer. Bill and Paul saw that this new microprocessor was more than a sea change in the computer industry. It was an inflection point.

That would change the way. Everyone. Thought about technology. But just spotting that inflection point wouldn't be enough. Bill knows it.

Full well. When you do get there three months earlier and get more people and get the better customers, the mythology is like Oh my god, nobody ever thought of that. Nobody ever did anything like that. Well, it's bullsh. Actually probably some guy did it years before you did, but he was just didn't get all these these pieces right. I couldn't agree more.

Which is why I believe It's not enough. Just to take advantage of of inflection points. You have to accelerate.

Those inflections if you want to achieve Huge scale. You gotta have incredible talent at every position. There are fires burning when you're going out. Can you believe that? And then you go back to this is totally gonna be amazing. There are so many easy ways. So I have no idea what to do. Sorry, we made a mistake. But you have to time it right. We haven't made it. Just how you do it.

This is masters of scale. I'm Reed Hoffman. Co-founder of LinkedIn. Partner at Greylock.

And your host. And I believe It's not enough to just take advantage of inflection points. You have to accelerate. Those inflections if you want to achieve huge scale.

Inflection points are more than Than big changes. their orders of magnitude bigger. True inflection points. have far reaching effects.

That change how people work. and how they live. Think. The printing press. The internet.

Or the laserdis player. Okay, maybe just two of those three. companies that effectively harness an inflection point. can ride a wave of changes to massive scale. But it's not enough to be the first to see an inflection point.

you have to actively accelerate the inflection. You can't just ride the waves. You have to make them. Bill Gates has proven again and again his ability to identify inflection points before anyone else and then play a central role in and accelerating them. He did this in both technology and philanthropy.

In fact When you think of the people who've achieved huge scale. In both. Global business.

And Global Philanthropy Is literally One person.

Bill Gates. So in this special two part episode. I talked to Bill about how we accelerated inflection points Both in technology at Microsoft. And in philanthropy.

at the Bill and Melinda Gates Foundation. Which has become one of the largest. And most impactful. private philanthropies in the world. The thing that intrigued me the most about this interview was discovering how

Which of Bill's learnings from Microsoft Worked in non profits. And which fell flat. So in this episode. we'll hear Bill describe the lessons that truly allowed Microsoft to scale.

And later this season, in part two. We'll hear how we applied those lessons to global challenges at the Foundation. And also how they compare. But first Let's dig into Microsoft.

which remains among the most fascinating. And often misunderstood. Accomplishments. In business history. Bill founded Microsoft with Paul Allen.

Forty four years ago. When Silicon Valley was still only The Santa Clara Valley. And tech geeks. or more about ham radios than home computers.

Bill and Paul both love computers. And they continually Sparked each other's interest. And this is one of the first things I want to call out in Bill's story. He didn't do it alone.

I asked him. How he reflects on the co founder. He had in Paul Allen. One of the things that in venture capital we've noticed is that Companies that actually have two or three co-founders generally do better than one. So let's start with actually Paul Allen.

What was the way that co founding actually was better than one plus one equals two? Well, Paul. Was Totally critical to their Paul read about hardware.

I didn't kinda like hardware. You know, he drew me into that. You know, what was going on with chips. He got me to read about that. Paul's two years older than I.

You need to say I was kinda hyper energetic and Paul wanted me. to think about the microprocessum where it would go. Go to Harvard.

Hm. Takes a job back in Boston. He'd be back there telling me all the time. We've got to get going. Notice how in the early days

Paul was the one Keeping tabs on the newest developments and stoking Bill's interest. But Bill's insights. Shape the direction. they took. Now he wanted us to actually build a personal computer.

Uh I said no no we're just gonna do software. This interplay. Between Bill and Paul is a fine example. On why having a co founder is powerful. To successfully accelerate an inflection point on a global scale.

Even Bill Gates. had a co-founder. Two people can always see farther and clearer than one. Shoes.

Could clearly see an inflection point on the horizon. And the role. They'd play in accelerating it. We're gonna do platforms computer on every desk. Bill is a famously fast talker.

Let's rewind. And hear that again. We're gonna do platforms, computer on every desk. Today. When there's a computer in every pocket.

That prediction seems a bit quaint. But back then It was the stuff. A futuristic fantasy. They'll might as well.

Have been imagining a robot butler for every home. But notice. Bill wasn't simply predicting That there would be a computer on every desk. He was thinking about how people would interact with them.

and what role he might play. And that one thought. Bill identified the precise opportunity that would let his company scale. Well the key thing was that we saw The importance of software.

When coupled with the miracle of the microprocessor and that there would be Platforms. Initially, although it seems quite limited in today's view.

The platforms Are there programming languages? And the operating systems that let people make use of the raw technology. If Bill and Paul did it right.

Microsoft platform. Would be indispensable. Not just to users and computer makers, but But other software developers as well. A handful of you might remember that Microsoft's

Very first platform. Wasn't its operating system Windows or Or even dos. It's earliest platform. was basic.

The computer language that early PCs used to run software. There were almost as many basics as as there were computers. Bill still remembers them well. Including the rival basic.

Created by Apple co founder. Steve Wozniak. There were other basics, like Waz did an integer basic, but He never did floating point. There was a thing called 4K Basic on the T S eighty, but it wasn't any good. So we did, you know, Commodore Pat TR CD.

Nobody knows these things anymore. Apple to We did basics for everything. And We knew from the beginning we weren't the basic company, we were going to be a software company.

Notice. In that one sentence lies the insight that would allow Microsoft to scale. We knew from the beginning we weren't the basic company, we were going to be a software company. Bill saw if they could make a basic that was common across multiple machines, then Microsoft would be the common denominator across the entire emerging and fractured world of home computing.

It was an inflection point that Bill spotted before most others. Computers were on the way to becoming an everyday tool. And Microsoft. Could provide the means. For using those tools.

If our basic was on every machine, a library of basic programs, various applications Games to business applications would be written in our basic Which had Une proprietary aspects to it.

than anybody doing a new computer would want. Microsoft Basic Mastering an inflect. Is different. From launching a single great product.

It's like the difference. Between lobbing a stone into a lake And watching it sink without a trace. Versus twisting your wrist and angling your throw. So the stone skips multiple times across the clear blue water.

Basic. Was the first splash. of Bill Skipping Stone. Then it became DOS.

Then it became Windows, but the economic model Was the same. That economic model. Starting with basic.

was to partner with computer makers and offer them a key component. Better and cheaper software than they could make on their own. Bill and Paul started weaving Microsoft into the history of home computing. They're basic.

That held together the patchwork quilt of competing hardware manufacturers. This helped the industry move more rapidly toward that hallowed inflection point. of having a computer on every desk. The lesson here. You have to make yourself an integral part.

of the brave new future that's about to dawn. Don't you sit there. Waiting for inflection points to happen. Spot the unique role. That you can play.

and accelerate the inflection. Excel In nineteen seventy five. Basic deal made.

Bill and Paul founded Microsoft. And they didn't lose sight of a new inflection point. On the horizon. The sixteen bit computer. We don't need to get into the technical details about this leap in technology.

All we need to know is Is the writing was on the wall. for the older eight bit machines that Bill and Paul had been working with. And they saw it. Immediately.

All the machines, the eight bit machines, the Radio Shack, the Commodore Pet, the Apple II, we did the basic interpreter software for. But there was going to be a next generation That was disk based. Where the breadth of software, including things that businesses would use, would just be light years ahead.

of that first wave of personal computing. Microsoft needed. to find a way to forge ahead of his upcoming inflection point. They needed to become The platform.

For the new sixteen bit machines. But to do that They'd need a partner with a leverage. to drive this new inflection point. Ford.

What kind of partner? Could Microsoft find? that would accelerate the inflection point. of the sixteen bit era. I'll give you a hint.

They're big and they're blue. and we'll hear all about it. Right after the break. When you build substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious.

Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years building. Creative planning where wealth works together. Learn more at creative plating dot com slash masters of scale. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show.

Because every Friday we release a second rapid response exclusively in the rapid response feed. The guests and topics are just as compelling and timely from Ford CEO to NAS administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Humans will never be more intelligent than AI. There's gonna be two types of companies. Those were great at AI and those that went out of business because they weren't. How do we build a future?

That is human centered. I'm Rana El Calyubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in.

Before the break. Bill Gates and his partner Paul Allen could see the sixteen bit era. At their doorstep. They knew they needed a partner to truly accelerate this inflection point. How important was it?

Well, it's hard to say what the history of personal computing would look like if I B. IBM. At this point in nineteen eighty the IBM had been around for seven decades. although was better known for its mainframe computers.

IBM wanted Microsoft. To provide the operating system for their new sixteen bit home computer. The IBM PC. I asked Bill. how he reflects on that critical partnership now.

So one of the early major strategic decisions with Microsoft. was how do you work with IBM? And it was obviously a kind of a bet the company. Kind of decision.

What went into that decision, what parts of it were strategy, what parts of it were luck. How did that decision play out? Well when IBM first comes to us, it's actually a small group at IBM at their Bokerton Laboratory. So they had kind of spare capacity and the board

had asked them to figure out how to do something quickly and in a lean sort of way. And it was just kind of viewed as this experiment. For IBM. The Microsoft Partnership. wasn't essential to their business plan.

But for Microsoft It was another inflection point. So we jumped on that opportunity. We saw this a chance to get from eight bit computers. to sixteen bit computers.

We put so much energy. Into this thing. Then they introduced the PC. it becomes kinda the model and other people like compact build compatible machines. So IBM's new computer

becomes the model for the industry. A new inflection point begins. What I want you to notice from this critical step in Bill Story is Із за пау. Of a partner.

It's hard to underestimate the importance of this point. Even when you're Bill Gates. You don't go it alone. The IBM partnership gave Microsoft the leverage it needed to accelerate this inflection point. But it also gave them something else.

The skills they'd need to traverse the multiple inflection points. Ahead. As the industry moved up. To that next generation. Because of our partnership with IBM, we were there.

And we learned a lot from IBM. IBM. Was really good at sales. They had multiple labs, multiple locations, which I thought, oh my God, am I gonna have to do that someday? And they were really good at quality, particularly IBM Japan was so picky.

About quality, at first we were like Well, these guys are crazy. But then we realized actually they're not that crazy. They're just disciplined and oh God, we're gonna have to learn how to do that. So having IBM Japan as a customer was incredibly Help for us. Helpful But not easy.

We spent two years just in total pain where The Japanese guys were flying in and they would sit there all day and night even though they didn't even know how to fix the thing, but they were gonna show that We must fix this thing. That was great. To see all that.

Seeing all that From IBM Japan. That he's fallen back on. Repeatedly.

It's invaluable for anyone who wants to scale fast. But it's not. For the faint of heart. So if you can pick these toughest customers and meet their needs

Then you can sit back and wait. You're gonna be fine. And you have to pick the ones that are highly visible and tough. And you can mess up either of those. If they're highly visible but they don't ask you to do enough or they ask you to do stuff other people don't want, that's very hard. Pick tough customers.

Pick. Tough partners. By tough. Bill doesn't mean seek out partners who dislike you. or who are willfully difficult to work with.

He means you need to pick partners whose standards are so high they'll push you beyond your current definition of your best work. You'll only have two options. Get markedly better or fail. The IBM Partnership. Was making Microsoft.

Markedly better. In the case of IBM There were years where Steve Ballmer would take the Red Eye down to Boca where you had to go through Atlanta at three in the morning, spend a day there. And fly back.

That was the right thing to do. to get things done. Partnerships really are so understated in terms of their key role. Partnerships. are typically understated. Which is why I don't think I can overstate it here.

This is something that Bill has applied to great effect. At the Gates Foundation. Which we'll hear about in part two of this episode later this season. It's something Bill first learned at Microsoft. And something we can all learn.

From his experience. Bill had powerful partners, both at IBM and in his co-founders. Paul Allen was key to getting Microsoft started. Sachanadella has famously stewarded the company in recent years. And Steve Ballmer was key to accelerating them midstream.

Steve was Microsoft's thirtieth hire and he became CO in the year two thousand. Because I'm innovation engineering oriented Certainly with Steve.

I needed a partner who thought about comp structure organizational structure Go out and have lunch with fifty people. Better at that stuff. I was always just because of time allocation and

Lack of skill or whatever. Gonna be a little more death about that stuff than I expected my Partner to be. Those frequent flights of Steve's helped the demanding relationship between IBM and Microsoft thrive. This meant

Microsoft was ready for the next inflection point. And you always have to be ready. For what's next. But Bill knew the IBM partnership. Wasn't a safe harbor.

He always had his eye. On the next leap. As we're doing our quarterly retreats, which are always over weekends. The what do we do in IBM?

Divorces us always a topic that people had to present on. And so when it finally came, we had had By then about six years of really good preparation. And IBM wasn't thinking about us as much as we were thinking about them, believe me. You know, they weren't doing weekend retreats and all these things. Microsoft developed an operating system for IBM that would become MS DOS.

Microsoft licensed MS Dos To other PC manufacturers. It soon became the dominant platform. The operating system that allowed people to use their computers and and developers to write software for them.

By the time the nineties came around, MS Toss. Every home. And office computer.

was the virtuous cycle that the cheaper the PC was, the more bond there was for PCs, the more software for our platform there was, the more people would want to buy those PCs. Part. Of staying ahead. is sensing the next inflection points. And Bill could see two inflection points coming.

The first Was the graphical user interface. M Stars. Was totally text based.

User had to remember Text commands and enter them with the keyboard. The graphical interfaces popularized by Apple were winning consumers hearts and minds. In nineteen eighty five Microsoft and IBM began to work on a graphical interface named

OS two. But Bill could see another inflection point coming. One in which IBM was no longer the dominant player. So Microsoft developed another little project.

A graphical interface they could license. to other computer manufacturers should they part ways with IBM. They called it Windows. We kept the Windows thing alive.

During all of that. Internally I was under a lot of pressure about Why do you have good people working on OS two? Instead of Windows and then there was two people, why do you have people working on that? Windows thing.

But it was Viewed as a kind of necessary strategy. This is an example of the counterintuit moves you sometimes need to make to prepare for future inflection points. Normally the mantra is

Focus? Focus focus. Developing two similar products. in parallel means splitting your team and duplicating work. But Bill knew he had to hedge his bets.

Based on a future with Or without. IBM. When IBM and Microsoft parted ways in nineteen ninety.

Bill's strategy was proven out. Microsoft's aim. To be the platform. With both DOS and Windows.

But Bill's ambition for Microsoft as a software company was expanding. I mean we faced ironically in the DOS world, we were not the first party productivity application leader. Even though they were the main platform. They weren't the main software developer. Third party software from companies like Lotus dominated the business market.

Microsoft was losing. On every front. Word perfect and multi mate dominated. Word processors and there was also Seymour, which was Word Star. We were like number four with word'cause we came in

Fairly late. And then Lotus. Did one two three. So one two three dominated spreadsheets. One of the slogans I had inside Microsoft was there is no spreadsheet market, there's a one two three market. So we have to make a secure form of one, two, three. It turned out that controlling the operating system was not enough.

To give Microsoft the lead in software. Something. was missing from the puzzle. We understood the notion that you know our file formats or users using our software would be valuable. There were many different file formats.

As there were software packages. If you wrote your recipe column for the church newsletter in Word Star. But your pastor used word perfect, the congregation was gonna have to wait to get your famous Fruitcake recipe.

We decided you had to do first party applications Yeah. So that business model really get se full proof. In the late nineties as Windows ninety five ships. And we do

off a soft around it. So they launched Microsoft Office Ninety Five at the same time as they launched a new operating system. Windows ninety five. They're focused on separate, specialized applications combined with the fact they control the platform, let them dominate the market. Excel

Leads one two three as Windows catches on. Or Beats multimate word perfect as Windows catches on. Microsoft Access. Be tasting T.

Which you know, PC Week had this uh calm set. was announced by Microsoft today that Ashen Tate never existed. That was one of my favorite Things. And it was just funny. If you don't recognize the names of any of those competitors,

Well That's the point. Many of them. didn't see their own demise coming. This inflection point of Microsoft's making

Took them unawares. It was this great panel. Where Mitch Kapoor disagreed with me, he ran Lotus, very important company. And I was promoting graphics interface at the end of the panel, he said well, Bill is wrong. But he worked so hard

He probably will succeed even though he's wrong in this case. And I I viewed that as quite a compliment that my hard corners could bend the even the outcome of what was the right approach. I love this quote from Mitch. Bill is wrong. But he worked so hard He probably will succeed even though he's wrong in this case.

And I love it for two reasons. First, it makes clear a first principle about success. You need a great idea. And you need great timing. But you also need

Hard work. And if you have Bill Gates's work ethic. it can make up for a lot. But I also love this quote. Because it captures a truth.

About inflection points. They can build on each other like that stone skipping across the water. You can take the momentum from one well harnessed inflection point. In this case, the operating system. and use it to propel you to success when the next inflection point

Turns the world on its side. With hard work. And grit. You can bend an inflection point. Your way.

At that time Microsoft had a smaller team than a lot of its competitors. But what they had learned about efficiency and engineering from IBM meant they could outpace them. All of the software. Was designed to work together.

Creating an inflection point. Of its own. So we could do Word and Excel and Access and A variety of products without slowing down. And because our strategy of

building these Windows office things that would integrate together. Required excellent execution. And in the end The fact that we bet on graphics interface and the fact that our Excel worked better with PowerPoint work better with Word, which is this office concept. The traditional competitors load a sash and tate word perfect.

completely failed. to achieve that kind of product. Bill. Does not hold back. When talking about the importance of office.

And to this day that Achievement of office. Which is now Switch to online. That is Microsoft's

Greatest asset. And that brings us To the biggest inflection point in the history of technology. The internet. It was a tidal wave that threatened to wipe out

Microsoft's platform advantages. Bill had seen the writing on the wall at sixteen bit computing. overtook eight bit machines. But he misread the signs when it came to the internet. The thing that the internet fulfilled in terms of

information at your fingertips. was in the vision of the company, but the particular protocols And the particular representation, so HTML, T C P I P Those Most people including us or me

Had expected to stay In a niche And there were a whole other set of protocols and representations, including some that were ours. We expect it to be mainstream.

Microsoft. tried to promote its own internet standards. But the inflection point had already passed. Open standards like HTML and

H C D P TCP IP had caught on. The new wave of internet startups. We're running with them. One of these startups was Netscape.

Which created the most popular version of a new kind of software. The web browser. We won't follow all the twists of the Netscape story here. The important thing to note is you're not always gonna see inflection points ahead of your competitors. In the new web era.

Windows was starting to look obsolete. As our competition said. you know, Windows had the risk of just becoming a set of poorly debugged device drivers. That's a direct quote. Which is great, you know, when your competition motivates you. So eloquently. And it was true that that was a an actual risk. Let's rewind a moment.

To hear how Bill responds to this criticism. Which is great, you know, when your competition motivates you. So Eloquently. There's a lot of wisdom. In listening to where Bill draws his motivation.

When his competitors throw shade. He finds to thrive in it. And what happens next proves You can recover from missing an inflection point. Even one as big as the internet.

But you'll need to take drastic action. Work out how to get on that boat you've missed. or overtake it with a bigger and better boat of your own making. This is exactly What Bill did.

Then I decided okay. We have to pivot to these standards and build on these standards. So I wrote the Internet Tideweight memo that says look I wanna overdo the internet. If anything new is happening now other than the internet

We're screwed because we are gonna throw all our energy into the internet. And if it if I'm missing some you know AI thing that's happening in parallel, too bad for us. We are g just gonna go do this thing. Bill put a torch on all those in-house standards and concentrated on beating Netscape at its own game. with a new project called Internet Explorer. Netscape.

was still nascent enough that as soon as we got as many design wins as they did And had some features aid in everything. We were golden. The features in Internet Explorer.

Helped it gain on Netscape. But there was one more piece of drastic action. Bill Chuck to make up for missing the internet inflection point. For Microsoft, it was a return to a strategy that had served it well in its early days with IBM. Find a tough partner.

who's a leader in its field. This company. Also had three initials. AOL. This was nineteen ninety six, the heyday of AOL as an internet service provider.

So popular. that it's email notification message. You've got mail. became a catchphrase and even the title of a movie. And it's sign up CD ROMs.

clogged mailboxes across the land. Netscape had just lined up a deal to be bundled as the browser of choice on those AOL C D ROMs. But with some fast sweet talking. And a hundred million dollar contract.

Microsoft. Convinced AOL to drop Netscape. in favor of Internet Explorer. It was the beginning of the end. For Netscape.

So now it's game. Did they ever get bought by anyone? That's one of the great ironies of all time. Yes, exactly. It's Microsoft. beat Netscape in the first major battle of the long running browser wars.

But Internet Explorer. ultimately lost out to Chrome, which was built by Google. There have been many inflection points since. And many that Microsoft admittedly missed. Here's Bill.

wistfully recounting them. The fact that Google got so far hadn't searched. They were sort of born on search, but we didn't do the right things. Catch up. The fact we didn't get the phone or tablet stuff right. Economically, the phone one is the most egregious thing in the whole history of the company. The tablet one actually bothers me the most For a lot of reasons in terms of mistakes I shouldn't have made.

And for the tablet or the phone or both. If you were to be able to again call your younger self, what would you tell yourself? To do differently. In order to not have the frustrating result. Well, don't spend three years being distracted by the DOJ lawsuit. That would be one thing.

Yeah,'cause that was a key period and I just wasn't hands on enough and I allowed us to set our sights too low, which is not a typical mistake. But I absolutely made that mistake. When Bill references the DOJ lawsuit He's talking about the famous antitrust lawsuit that the US Department of Justice brought against Microsoft in nineteen ninety eight and settled in two thousand and one.

The company was a victim of the success of its Windows operating system and faced accusations that Windows gave it an unfair advantage over other software developers. It was a fascinating period. That will speed through here. The big takeaway is that the lawsuit distracted Bill from these key inflection points. Search.

Mobile. tablets that were coming faster than many companies could keep up with. Netscape. Nokia. A O L Yahoo.

The list of giants in their field that started to fall by the wayside at this time is long. But Microsoft. is not among them. Why? I'd argue it's thanks to the people and processes that Bill put in place to

While accelerating inflection point After inflection point in the computing revolution. Around the same time that Bill started to shift his own attention. To the wider world.

Beyond technology. He had become one of the world's richest individuals, and he wanted to put that personal fortune to bear against some of the world's Greatest problems. He saw another inflection point. And he set out to accelerate it.

We'll pick up there. In the coming weeks in part two. For now. I'm Reid Hoffman. Thank you for listening.

Masters of Scale is a Waitewater original. The show is recorded on site in California and produced at the studio inside SY Partners in New York. Our executive producers are June Cohen and Darren Triff. Our producers are Chris McLeod, Adam Skuse, Jenny Cataldo. Jordan McLeod.

Catherine Clark Gray. Halibondi. and Ben Manilla. Our supervising producer is Jay Punjabi. Music and Sound Design by Ryan Holliday and Daniel Nissenbaum.

Mixing and Mastering by Brian Pew. Special thanks. Chris Yay. Alicia Schreiber David Sanford Say it Sapia.

Bob Safia. Christian Gonzales And Sarah Sandman. Is it? Masters of Scale dot com to find a transcript.

For this episode. And be sure. to subscribe to our email newsletter.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.