Bill Gates: Starting the Digital Revolution

0:00Back in my youth, you know, hearing, oh, some lab had a computer that wasn't being used from midnight to 3 a.m, you know, I would get up and try to get in there and get access. Now when I say a computer on every desk and in every home, people are like, well, what's so revolutionary about that? And it's crazy that the dream came true. That's Bill Gates, Microsoft's co-founder and someone I've known for more than 30 years. As Microsoft prepares to celebrate its 50th anniversary, Bill and I sat down to talk about his new book, Source Code. From Bill's early days in Seattle to the rise of the software industry today, his journey has been nothing short of remarkable.

0:40My conversation with Bill Gates, up next on Tools and Weapons. Great. Well, Bill, thank you for being here. This is a great opportunity to catch up. Here we are, approaching the 50th anniversary of the company that you started when you were a student. And when you think back to those days as a kid, did you ever dream that you could create a company that would survive for 50 years producing software? No, I was worried about, you know, surviving to the next year. And I think that was part of our strength is we always thought, you know, what happened to companies like Digital or Wing that were the great ones as I was growing up and how they lost their way.

1:26And so we were always running scared. We knew the dream of personal computer computing was going to be gigantic and was going to change the world. But whether or not year by year we could say on top of that, I was always pretty modest and able to worry a lot. You've added yet another great book to the list of things that you've done over your career. Source code, my beginnings, your beginnings, Microsoft's beginnings, really the software industry's beginnings as well. But it's actually a story that starts with you as a kid. Yeah, I was 13 in eighth grade out at this private, at the time, boys' school, Lakeside.

2:12And the mother's club put outside some money to get us a terminal so we could dial in to a big General Electric computer that ran the basic language. That was a fairly new thing. And I was good at math. And so Paul Allen, you know, kind of challenged me to come down and see if I could work with him to figure it out. And two other kids, Kent and Rick, really got obsessed. The teachers found it intimidating. So they kind of left us alone. In fact, at one point they had us teach computer programming in one of the math classes. and although the programs back then, you know, were so simple, Tic-Tac-Toe was one of my first, the idea that it would work or not work and thinking, okay, what can we get it to do and how do these computers work?

3:05How good are they going to get? Just was so fascinating that, you know, that was my childhood was thinking about software. One of the interesting things I find about your book because it captures not just the state of technology, but some call it the state of the world and call it the late 60s, early 70s. It really was a world before software. Everything was managed on paper, processed by hand, including how people got paid. And you went out and you got a contract to create a software program called payroll. You really were kids working in an adult world. Yeah, the exposure we had to adults writing software who would give us feedback, it was really pretty phenomenal.

3:57And each project we did, we got a little more sophisticated until the one I was able to take time off my senior high school and do, which was a very complex project where Digital Equipment and TRW had sent some of their very best people to do this power grid control. And that's where I really got sort of the final help of what it meant to be a very good programmer. TRW had bid the project and had missed the deadline. So they were paying penalties. And they were saying to Digital Equipment, whose computers PDP-10s were being used, find us everybody who's good at these computers. And one of the people, Bud Pembroke, who worked with us on that payroll project, knew that we knew that PDP-10 very well.

4:45So he said to them, OK, you're desperate. There's Allen and Gates. And they're like, there's somebody you haven't mentioned. Oh, my God, go get them. And he said, but they are kids. They said, we don't care. You know, so I go down there. You know, I'm like 16, but I look about 13. They hire us. They pay us. It's a really amazing project to try and get it to be reliable enough and how you process the data. And so many good people were there that, you know, they got a kick out of how quickly I could write code and then telling me where I wasn't doing it well. And that was a really maturing project.

5:29Now, one of the interesting sort of recurring storylines from Lakeside and then your student years at Harvard was computer time was scarce. It was controlled. It wasn't even necessarily for sale. So you all are always scrounging around one way or another. Even at Harvard, you're sneaking Paul Allen, who's not a student at Harvard, into the Harvard Computer Lab. You get in a little bit of trouble. Yeah, it's hard to think now when you let your personal computer sit there idle. You know, all those processing cycles. Back in my youth, you know, hearing, oh, some lab had a computer that wasn't being used from midnight to 3 a.m., You know, I would get up and, you know, try to get in there and get access.

6:14So we did anything because they were kind of expensive. But that's, you know, what we needed computer time to try out our software development. And so that's when the microprocessor comes along. We say, wait a minute, this whole thing about computing being expensive is going to come to an end. And maybe because we were so young or just the mathematical concept of exponential improvement, Somehow we saw that in a way, and Paul deserves credit because he was the one reading all the hardware and chip things and telling me that Moore's Law was doubling every two years. And I was the one who said, wait a minute, you know, that's like the grains of sand on the chessboard.

6:55The numbers get very big very quickly. That's, and I literally used the word, free computing, which will mean it'll be used millions of times more. And the only thing that will limit that is what kind of software is available to help you get jobs done. And that's where we thought we could come in. What is the essence of Microsoft? I think there's a lot of elements that go into it. A vision of what software could do. What was your vision? Well, a computer on every desk and in every home. Right. I don't have one on my home or in my desk. We're working on that. Vice versa. You and Paul founded this company, Micro-Soft, micro for the microcomputer, soft for software.

7:39As you said earlier, on a dream. How would you define looking back the way you all thought of that dream? Well, it's crazy that the dream came true. I mean, now when I say a computer on every desk and in every home, people are like, well, what's so revolutionary about that? But that was the original tagline, the original mission statement. Yeah, and we made it – we actually made it come true. No, it's wild that – take the seven most valuable companies in the world. I know all these people. It was car companies and oil companies. And now they're way down the list. and, you know, the company Steve Jobs built or, you know, Mark Zuckerberg, Jeff Bezos, people who came in a little later but had this same dream that something magical was happening with software.

8:31And before you could make the dream come true, you did have to build a company that would last week by week, quarter by quarter. Paul was focused on hardware. You were focused on software and the business. but you also understood there were certain skills that you needed help in addressing. Yeah, in the early days, I tried doing everything. And I was so worried about having enough revenue that even products that weren't done, I would go to these Japanese companies and say, hey, we'll do this and we'll customize it for that. And we were falling behind. And so the ability to hire enough people. And I thought back to the great friendship I had with Steve Ballmer at Harvard, where we talked about the world.

9:17And Steve, although different than me, also has an amazing amount of energy. And so I knew I needed Steve to come. It was a tough recruitment. My parents helped me out. But then he drops out of business school. And that's a huge milestone for Microsoft because his ability to think about how we organized and how we hired people and then later bringing in some adults like John Shirley, Frank Cadet, Mike Maples. Steve is key to letting us really scale up. And so he and I, you know, kind of day and night, I'm bringing kind of a technical view. He's bringing a people view. And that works phenomenally.

10:00And the dream did come true. And totally. I mean, I remember when the Forbes 400 list came out and I saw, you know, like Gordon Moore from Intel was on there and thinking, well, I'm saying a computer on every desk and there are a lot of desks. I don't have to make that much money per desk. And, you know, so then it's bizarre. We go public, you know, that we use that as sort of a way to even increase the visibility of the company. And next thing we know, you know, Microsoft's an incredibly valuable company. I think around 2000 as we became the world's most valuable company. Mr. Chairman, the software industry, which contributed over$100 billion to the national economy last year, is an open economic opportunity for any entrepreneur in America.

10:48I believe the American people are bursting with a natural curiosity and energy that will keep this revolution going well into the next century. Here we are at the 50-year mark of what you created. When you look at the next quarter century for, say, the world of technology, what's the next great dream that we all should be thinking about? Well, amazingly, I would still say that the progress of the digital revolution as we enter this next phase is the biggest change agent in the world, even more than insights in biology and energy. And in fact, it'll be at the center of accelerating those things.

11:29And so, you know, computing did become free and a lot of great software was written. The Internet connects all these things. Mobile phones come along. But here now we're talking about real deep intelligence. And it's early days in the world of intelligence. But as we improve the accuracy, as we get the memory done properly, we are going to go from intelligence being a very scarce thing, you know, medical diagnosis, you know, enough personal tutors for all the kids in the world, to where that becomes abundant. And so it's even more profound than computing becoming free. and so it's, I'm so excited because, you know, if you think of any specific problem, drugs or malaria or cancer or Alzheimer's, we're going to have it.

12:23I also, like many observers, worry that it's pretty disruptive because it's so novel, it's, you know, moving quickly and there's no upper bound to how good it gets. But, you know, this is the most important thing going on born out of that digital revolution. One of the things that I think is so interesting about the course of your career is you have never separated yourself from the world of technology, but you've progressively added a real focus on more and more other fields. I still remember, I think the day I saw this for the first time, you gave a talk to our employees back in the early 2000s.

13:07You were still an employee, but you were spending more time on foundation work as well. And I went home and told my wife, Bill can go as deep about a mosquito as he can about code and software. So you see perhaps better than most people how to use this technology to address all of these fields. It's become a catalyst. But how do we bring people together to really master what is now very much a multidisciplinary quest? Yeah, I've been fascinated to go out to like Newark schools and see Khan Amigo that Khan Academy saw built on top of the partnership Microsoft has with OpenAI and to see, OK, how is it being used?

13:53You know, can this tutor help with motivation? Can it help with the fact that five kids are behind, five kids are ahead and, you know, they're going to be bored if we don't do it really well? We're doing medical diagnosis work in Africa where you have such a shortage of doctors that most people never meet one. And we're helping pregnant women get advice. We're helping farmers get advice. And so it's really cool to see how we take the cost, the accuracy, the memory, all those things, and really turn it into practical applications. And it's great progress. And so the time I spent with Microsoft on the, you know, horizontal technology, you know, giving a little advice, hearing where we're making progress, really helps my foundation work, which is health and education and some agriculture are the big things that we do.

14:49And so it's really fun going back and forth across those things. I did during 1975 to 2000 suppress my sort of polymathic instincts and said, no, I just have to do software or else somebody is going to get ahead of me. And it's when Steve agreed to step up a CEO that I went back. You know, I created the Gates Foundation there in 2000. I was part time, but I had to study, you know, why kids die and biology and mosquitoes. and then in 2008 is when I shifted to be full-time foundation and only part-time since then to help Microsoft. We're working in Southern Africa, moving the malaria border up so that Mozambique and Zambia become malaria-free.

15:37And so project by project, the Malaria Map will shrink and shrink and shrink. One of the other interesting things about your post-Microsoft focus has been not only this diversity of fields, but you have always focused so much on the needs of the developing world, the global South. I remember when you were first saying, I'm not going to be traveling to the same place as you guys anymore. I'm going to Africa. You all are going to these other places. You know, 25 years later, we're all sort of going to Africa frequently. But in some ways, I think the history of technology has not been kind to the global South, especially if you look at electricity as this great general purpose technology that 700 million people still don't have, including 43 % of the people in Africa.

16:29How do you think about AI in this context? Yeah, historically, it's been very slow trickle down. You know, so even on medicines that are more necessary in these countries, you can have a 20-year leg. And the foundation needed to say, OK, the private markets do very, very well at many things. But let's find a few things where philanthropy is unique. You know, a disease like malaria where there is no market because the people who have it are very poor. So their voice in the marketplace is muted. And let's take this wealth that Microsoft success created and give it back to those most in need. The kind of value of looking out for inequality, that's really my parents and their, you know, very community-driven values.

17:22And then you apply my sort of numeric thing of, okay, you know, how do you save children's lives? And are the very important things being done? And that led me to learn about nutrition and infectious disease and get out there in the field. And it's been very successful. You know, child to death went from 10 million year to 5 million year. But we still have a lot more to do. For technology, it's always been a little tough because you've got to make it super, super cheap. Now, with AI, the fact that a cell phone, now that those networks are getting out there, you can have the cloud taking your native language and even a feature phone.

18:08We're just calling a funny phone number. You know, behind it, there will be a cloud service giving you agricultural advice or telling a pregnant woman about her antenatal checkups. Now, getting those cloud capacities available, you know, I'm sure I'll be coming to Microsoft and my friends in the Middle East and saying, okay, a form of foreign aid will be to set aside some of that capacity for these very basic kind of health and education. things. And, you know, we're doing the experiments and, you know, even this idea of gathering the linguistic data and getting it into all the models, the cooperation has been fantastic.

18:52One of the things that I find interesting in the book and that I also see just in knowing you and talking with you is you see in the book, the success of Microsoft as a company was more than a business. It was personal to you. I mean, you poured your heart and soul every day into the success of this company. And in a very similar way, when you deal on a daily basis today with the fact that there may be a million people in Africa who would lose access to an HIV drug or to a vaccine or to food, That feels as personal to you now as Microsoft did then. Is that a fair statement? Absolutely. I love the work I'm doing at the foundation.

19:44You know, I'm backing innovations like I did at Microsoft. Now it's some are things like vaccines, but picking the right team of people, putting them together, you know, figuring out the odds of success. Okay, what should the backup plans be? And then go out into the field and seeing, okay, this thing is working, this thing is not working. So everything I learned at Microsoft, plus some additional things, have put me in, which for my second career, has been amazingly fulfilling. It's exceeded my dreams as well. So, you know, talk about lucky. I've had two careers that have gone miraculously well.

20:23But yes, being a student, being curious over time, learning how to build teams and relationships, you know, I couldn't be doing what I'm doing today without the, you know, the mistakes and the things I did well that I learned so much at Microsoft. Windows 95 is so easy, even a talk show host can figure it out.

20:51One of the other things I found working with you in the early 2000s, you know, intense days of antitrust cases and the like. Everybody said, Bill Gates, he must be intense. You always had a sense of humor. This ability in the middle of an intense conversation to step back and just laugh at what was going on in the right way. Where did that come from? Yeah, the lawyer who was deposing me, David Boies, he didn't appreciate my sense of humor. So I need to turn it off sometimes. You know, I think that was such an intense situation, you know, and, you know, we did some of our best work was, you know, to really tell our story there and having you help with that.

21:39I mean, when I write my second book, really talking about the emotional and the challenge. I mean, I'm not trying to get anyone to feel sorry for me. My life is not what anybody should feel sorry for. But I think there are some lessons out of how we went through what felt to me like it could have killed the company altogether. And there were literally proposed remedies that would have eviscerated Microsoft altogether. And so through that intensity, you know, you've got to have a sense of humor. You know, there was that time when I was testifying and during the break, the clerk comes up to me and says, oh, Mr.

22:24Gates, I know people who have your scholarship. And what are you doing in D.C.? And, you know, all my complex testimony that day, the press covered that. Yes. coming up to me, and it made me seem at least a tiny bit more human than my image at the time was. And if we look at the Microsoft today and where we're going the next several years, you know, it's a product of some big bets and lots of little decisions as well. One of the biggest bets, I would say, that you were involved in making, Steve was involved in making our board. I was there in the room was the choice of Satya Nadella. It was announced 11 years ago now.

23:10Looking back, how do you think about that day and that decision? Well, I'll cheer up on this because it meant a lot to me. I've had two successors. And boy, do I feel lucky because as I went off to do the foundation work, the one thing that plagued me was, was I going to see the company fade in terms of its excellence? And would I be haunted by should I go back? Should I not go back? So the fact that Steve took us to new heights and the fact that through a process that almost made the wrong decision, although you and Steve and I never wavered from knowing Satya would be good, And he's been even better at navigating what even today remains one of the most complex CEO jobs in the world.

24:03You know, it makes me feel so good that I get to just come in and play a very bit role of doing product reviews, learning about AI, you know, getting some help from Microsoft on the work that I'm doing. And it's allowed me, you know, to throw everything in and to have the incredible resources that my Microsoft ownership created. So as we draw to a close, I want you to think back a little bit to these 50 years and where you started and where you are. And, you know, there are people who are listening to this who used to work at Microsoft, who do work at Microsoft, work somewhere in the world of technology or just use our products every day.

24:44what would you wish for all of us to think about as a parting thought? Well, 50 years is a long time. And it's so weird that in my 20s, you know, we considered people in our 40s and 50s to be kind of old people who sort of didn't get what was going on, but maybe they could help us a little bit. The idea that, you know, I'm 69 turning 70, and I'm still, you know, trying to help out and getting to do amazing forward-looking projects, you know, it's wild. We have come so far and always trying to adjust, okay, this is the new world where even intelligence is coming and can we, you know, how do you, you know, shape that in the right way, you know, which will be super important.

25:32So I'm very proud of Microsoft. We've had amazing people, you know, Paul, Steve, Satya, high up, but so many incredible people. And it's so cool that it's still an amazing company all these years. It's not like some other industry came along. We've managed to stay at the forefront. Well, it's a company that started with a dream from kids who were accepted into an adult world because of what they could do. rather than how old they were or mastering all the other skills of adults, I still think we're an industry that has a lot of dreams ahead of us. Thank you for trying to help out, as you put out.

26:21You accomplish more in a day by trying than a lot of people do in a lifetime, and I hope you will keep at it. Well, thanks. I'm still a student and working with Microsoft helps me learn a lot. I think we all are forever. So, Bill Gates, thanks for joining me. Thank you. See you.