The David Rubenstein Show: Microsoft Co-Founder Bill Gates

So what did your family think. Did they say there's something wrong with this young man. He wants to just do computers. I was kind of considered a little strange. Have you ever thought how your life could be better off if you had gotten your Harvard degree. I'm a weird dropout because I take college courses all the time. What about Steve Jobs in those days. What was your relationship with him. We were both there at the very beginning. You're the wealthiest man in the world for 20 years or more. Is that more of a burden than a pleasure to be the wealthiest man in the world. Would you fix your tie please. Well people wouldn't recognize me if my tie was fixed. Just leave it this way. All right. I don't consider myself a journalist. Nobody else would consider myself a journalist. I began to take on the life of being an interviewer even though I have a day job of running a private equity firm. How do you define leadership. What is it that makes somebody tick. You built one of the great technology companies in the world and one of the great companies in the world. And now you're building and operating one of the great foundations in the world. How do you compare the challenge of building Microsoft to the challenge of now running the Bill and Melinda Gates Foundation. I think they have more in common than people might expect. You know the idea that you find what an innovation is going to be really stick to it build a team behind that have some setbacks and success is a kind of a theory of change. Now my Microsoft work was when I was very young. I started when I was 17 and that was my primary focus until I was 53 when I made the transition. And for the early part of that I was kind of maniacal. I wasn't married no kids I didn't believe in weekends until I was about 30 I didn't believe in vacations at all. So it was incredibly fulfilling to write the code and be hands on stay up all night for my 20s and 30s. I think the Microsoft thing was perfect. I didn't have the breadth of knowledge that would let me play my role at the foundation. I think it was good preparation. And then after I met Melinda got married started the kids I was looking at the world more broadly thinking about where the wealth should go. And I'd say they're equally difficult. You always know you could be doing better but you should learn more that getting building the team and thinking about things in a better way. So you see the positive results that you always want to do even better. So let's talk about Microsoft for a moment. So you started that when you were in high school and you were driven to be involved with computers. Were you alone. Were that many people knew about computers in those days. It's a fairly special time because computers when I was young were super expensive. And my friend Paul Allen and I actually snuck into places at the University of Washington where they had computers that weren't being used at night. And so we were fascinated by what the computer could do. But very few people were getting exposure. We had to go out of our way and we were lucky that we did it all. And so then when the idea of moving the computer on to a chip that Intel would make and that would make the computer literally millions of times cheaper than the ones we were using. So both more powerful and available to people on a personal level. Then the idea of OK it would be very different. The software you needed the way the industry would work. We were super lucky to be there when that was happening. So what did your family think. Did they say there's something wrong with this young man. He wants to just do computers. They knew I was obsessed with computers that I would skip athletics that I going overnight that I leave the house sometimes when they prefer I wouldn't go work at night. On these things. And so it was kind of considered a little strange. And the big moment was when I said instead of going to part of my senior year that I wanted to go work for a company writing software. So they were great about allowing that to be my hobby. You went to Harvard and you dropped out. Have you ever thought how your life could be better off if you had gotten your Harvard degree. Well I I'm a weird dropout because I take college courses all the time. I love learning company courses and things so I love being a student. And there were smart people around and they fed you and they gave you these nice grades that made you feel smart. So I I feel it was unfortunate that I didn't get to stay there. But I don't think I missed any knowledge because you know whatever I needed to learn I would I was still in a learning mode. So in the early days you know you were just a college dropout. You were very young looking. Did you get taken seriously by businessmen who are much older. For some people that you and geekiness it's like hey should we trust them. You know that's so weird. We've never seen something like that before. So yes we had to fight for acceptance. I couldn't rent cars. So I had to take cabs around because I was too young and you know probably some people were a little tough. But then as we got a little bit of success people were fascinated by this deep belief we had in in software. OK. So when Microsoft is moving forward you decide to take the company public in 1986 six. And at that point you are a billionaire. Close to it. Pretty close to it. Within a year of going public I think there's some fortune cover that says the deal that made Bill Gates 360 million or some weird thing like that. Right. How did it change your life or it didn't change your life at all. Well that whole period of time was amazing because I was hiring people as fast as I could. I brought in Steve Ballmer who was very good at that and he was helping out. You know we had a sense of urgency that we wanted to lead the way. There was this graphics interface thing with Windows that we wanted to do. So I was super busy. And the idea that I could hire so quickly and invest and build this worldwide company was fascinating to me. But I was really busy. So you know if some friend had tried to call me you know I I wouldn't have had too much time for that. I was really into building this company. And I was going out and telling people about the magic of software which was good for Microsoft but also helping them understand the opportunities and the huge change agent that software and eventually software plus the Internet would would become. So I was having fun. It was amazing. But I always thought hey you know we're one step away from not leading here. We got to got to keep doing better. When you had the famous IBM contract you won the contract to produce their operating system. Why did they let you in effect own it. And they had to license it. Was that a mistake on their part. Yeah this is before graphics interface when you still just have text on the screen. And so the software MS-DOS was a key thing. So it got to be more of a high end machine including this MS-DOS. They didn't see how big this machine would be. And they their legal department didn't want to take responsibility for the source code. They had a fairly limited license and that we understood that this was a seminal machine and other people would do similar machines. So that was fairly advantageous to us. They didn't see the values being in the software. They thought that the hardware was the key and software was just a sort of necessary thing. So they had realized the vision we had which was that software over time would be way more important than hardware. They would have negotiated probably a different deal. You have a fair amount of money for anybody your age at that time certainly. Did you say I'll go splurge and buy a nice car I'll buy an airplane I'll buy a boat or you just didn't really care about that. I bought one thing that was a tiny bit of a splurge was that my first car that I owned was a Porsche 911. It was used but it was an incredible car and that was actually when I was down in Albuquerque. And sometimes when I would want to think at night I'd just go out and drive around at high speed. Unfortunately I I didn't kill myself doing that. And what about Steve Jobs in those days. What was your relationship with him in the early days and how did it change. Well we were both there at the very beginning. The Apple one was a kid computer that Steve Wozniak designed and he worked with Steve and they came and offered it at various of these computer club meetings and we went to lots of computer club meetings. So we were sort of colleagues and pitching the gospel of personal computing. We were kind of competitors. The time we worked together most intensely was after the IBM PC came out. Steve had a group actually a small group at Apple that was doing the Macintosh and he came to us early on and asked us if we'd commit resources. We actually put more people on the project than Apple did and did the early application software that used that mouse graphics interface. And so it was a huge win both for Microsoft and for Apple when the Macintosh became so successful. When your mother first said I'd like you to come and have dinner with me and Warren Buffett will be here you should meet him. You didn't seem that interested. Why was that. Well Warren I thought of as somebody who bought and sold security which is a very zero sum thing. That's not curing disease or a cool piece of software. And the idea of you know kind of looking at volume curves and that's why it was so shocking when I met him. So your company grows it becomes successful becomes the most valuable company in the world at one point. At what point do you say I've made a fair amount of money. I don't need to do this anymore. I want to do something else with my life. 1995 is a big year where we ship a product called Windows 95 and our software is doing well and we emerged. We had always had the greatest depth of engineering and we were slightly the biggest but we really emerged as the successful company. And and so I started thinking about wow you know there's a lot of value here at Microsoft. What have other philanthropists done historically. So during the 90s I'm thinking about that. My mom tragically passes away in the same year as I get married in 1994. My dad is volunteering to help out. Think about the philanthropy piece. So it was in the year 2000 that I put 20 billion dollars into the foundation and then it became the biggest foundation at that point. You mentioned you got married in 1994. You married a Duke graduate. How did you have time to woo somebody when you're running your company and how how much time did that take. Well she was an employee of Microsoft and we'd run into each other at New York City City. We ended up sitting together in a dinner and she's an amazing person and you know kind of caught me by surprise how much that engaged my attention even versus all this exciting Microsoft stuff I was doing. So we you know dated on and off for about five years and then decided to get married. So you have decided that your foundation would focus principally but other things as well but principally on health in Africa and K to 12 education United States. Is that right. Yeah. Health of all the poorest. But after this paradigmatic. So how did you come to those conclusions that those were the two things you wanted to work on as opposed to everything else. We talked about it a lot. So that's the decision that Melinda and I made. We wanted to take the greatest injustice in the world something that we could make a huge difference in and that's health. Now we brought that a bit by doing agriculture and sanitation and other things. And then we wanted to take a cause that would help the US be as strong as it could. And in that case trying to help improve educational opportunity is our big thing. You and Melinda go into the field. Why do you feel you need to go into the field in Africa or Latin America any part of the world where you're giving away money and actually meet people that you're giving money to and learn. Well I've chosen to spend my time and Melinda spends her time building the foundation as an institution that really has an impact and I get a lot of enjoyment. This is how I've taken everything I've learned from Microsoft and the position I'm in and helping to drive the strategy and go out and see what's going on with this work. That's my full time job and it's a wonderful job. Your foundation has a certain life. It's not a perpetual foundation. Is it. I think it's a 20 years after either you or your wife the last one to live dies that it would end. Is that how it works. That's right. The way that we're managing the institution and keeping it excellent and designing it to solve problems that can be totally solved. So we work on malaria. This foundation should be able to participate in getting rid of that. All these infectious diseases that so disproportionately hurt the poor and really explain most the difference between why a poor child has a 50 times greater chance of dying than a child in a wealthy country. In 30 or 40 years those problems should have been brought to an end. And whatever the new problems you should go after the people who are alive then and picking great executives and building institutions to solve. They'll do a much better job than than we can. Just writing down a little guidance. So it is a limited time foundation. It's so difficult the way he lets there be a dialogue. When your mother first said I'd like you to come and have dinner with me and Warren Buffett will be here. You should meet him. You didn't seem that interested. Why was that. Well Warren I thought of as somebody who bought and sold securities which is a very zero sum thing. That's not curing disease or a cool piece of software. And the idea of you know kind of looking at volume curves and it doesn't invent anything. And so I thought my way of looking at the world what I wanted to figure out and do and what he looked at that there wouldn't be much intersection. And that's why it was so shocking when I met him. He was the first person to really ask me about software and software pricing and why wasn't IBM with all of their strength able to overwhelm Microsoft. And what what was going to happen in terms of how software would change the world. And you know he let me ask him about OK well why do you invest in certain industries and why are some banks more profitable than others. And he was clearly a broad systems thinker. And so it started a conversation that has been fun and enriching and you know an incredible friendship that was completely unexpected. And he taught you how to play bridge or did you already know. I knew how to play bridge but I had done it just our family had done it. And then because Warren it was a chance to spend time more and I renewed my bridge skill at first very poorly. But both golf and bridge were things that we did in our hours that we got to goof off together. You've given up on golf. Well Warren gave up on golf a few years ago. And so my primary excuse to play golf has gone away. So I'm I'm golfing not much now. Tennis has become my my primary sport. Warren Buffett called you one day and said by the way I'm going to give you most of my money. Were you surprised when he said he wanted to give you all this money from his wealth to your foundation. That was a a complete surprise because Warren is the best investor and he's built this unbelievable company. And he was giving me advice about all the things I was doing. I was learning so much from him. But his wealth was devoted to a foundation that his wife was in charge of. And so tragically she passed away. And so then he had to think that is his initial plan wouldn't make sense. And much to my surprise he decided that a part of the wealth a little over 80 percent of it would come to our foundation. So it was a huge honor. A huge responsibility. You know an incredible thing because it let us raise our level of ambition even beyond what we would have done without that. That you know in my most definitions the most generous gift of all time. And you started with Warren and Melinda the Giving Pledge. What is that about and how has that worked. Well Warren was brainstorming with us about how did philanthropists figure out what to do and what how could they kind of help share with each other without giving up the diversity of what they did. So he got us to do some dinners with people who were already doing amazing philanthropy and talk about how they built staff and picked causes. And not that they would give to the same things but that they would the quality and even the how early people get engaged would be enhanced by the people getting together and making a public commitment to give the majority of their wealth away. And so that's become the Giving Pledge group. You're the wealthiest man in the world for 20 years or more. How does it affect your life daily. People come up to you all the time and ask for money or they expect you to buy them things. You got tired of it. When you were doing Microsoft the beginning you were doing the coding yourself and you would presumably know more than coding just about anybody. But now you have so many other responsibilities. When Microsoft develops a new piece of software are you able to really talk to the software engineers in the same level that you could 20 years ago. Well I'm certainly nowhere near as hands on as I was when I would either write the code or look it over and hire all the programmers. In my career this evolution of being an individual performer then a manager, a manager of managers and then setting broad strategy you have to get used to the fact you don't have as much control. But I try and understand enough about software that the tradeoffs we're making about what features should we put in, what the basic design should be. I still enjoy those discussions. And even today over at Microsoft we get to talk about OK what should the next office do. How can Windows be better. How's the user interface going to change when we have speech and handwriting and those things. So I'm able to participate but it is a way more complex field and I couldn't actually write all the code myself anymore. When somebody turns on their computer today they have to have three fingers usually and they put a finger on control alt and delete. And it seems a little awkward to do that. Why did you do that and why did people have to have that mechanism to turn on the computer. Well fortunately most machines nowadays have moved away from that. But the idea that we knew that there was logic in the keyboard that could detect a truly unique single. That would bypass the software that was running so you could know it was really starting over. Clearly that ended up being an awkward piece of user interface. If we had to do it over again we wouldn't do it. It sort of was in the chasm between Microsoft and IBM that it ended up being that way. And you know it's kind of become the poster child of hey couldn't you have made this stuff a little simpler. So you're the wealthiest man in the world for 20 years or more. How does it affect your life daily. People come up to you all the time and ask for money or they expect you to buy them things. Fortunately people know that that wealth is dedicated to the foundation. And so they have ideas that are in the foundation's area infectious disease improving education. Then it's super interesting to have them talk to me or talk to those people. I have the benefit of being well known so I can go out and meet interesting people and share my views and get a lot of attention. I'd say net that's a benefit. When I'm out with the kids then it can be a tiny bit of a drawback that you may not get as much privacy as you'd like. But overall it you know I I my success has allowed me to get more done build partnerships you know meet great people. How do you deal with it when you want to go shopping or you don't don't go to shop shop. I go out to the theater. People don't come up to you or selfies or something. They can. Yeah. But that's that's pretty quick. And people are usually very nice about it. What about your children. Everybody who's wealthy who has children has to deal with how do you train your children to live with the wealth. How much do you give them and how do you get them involved in philanthropy. Well our kids are young enough that the key focus is helping them enjoy learning get a great education. All of them will pick careers that aren't related to software philanthropy. They will strike out in their own direction and be great you know in their own way. Whatever it is they pick to do. So we've chosen that they'll have enough wealth that they'll never be poor or anything. But we're not going to take billions of dollars and have that define their life. The vast majority of the wealth is dedicated to the foundation. And so far you know they're they're great kids and you know they they enjoy learning about what we're doing in Africa and you know that may shape where they go with their lives but it'll be up to them. When people look back on what you've done 20 years from now 30 years from now what would you like to have people say Bill Gates achieved. I don't think it's important for me to be remembered specifically. I do hope that infectious disease is largely eliminated as a problem so that nobody's having to talk about it and people can focus on other issues. That would be a huge great thing. If our work has helped improve U.S. education that would be a huge great thing. Most importantly the people who really know me my kids that you know they feel I was a good father gave them an opportunity to go create their own own life.