Whatever uncertainty Gates felt about his future at Harvard, he seized his opportunities with vigour when they arose – just as he has continued to do throughout his life. Where a more cautious spirit might have held back and risk-assessed an opportunity, Gates demonstrated from a young age a sound instinct for making the right choices.
1975 was the year everything changed for Gates, in no small part down to Paul Allen and the Altair 8800. It was Allen who first saw an article in the magazine Popular Mechanics detailing the release of the groundbreaking new machine. He got in touch with Gates at Harvard and suggested the two work together to develop a language for it. The 8800 in its raw form was, to all intents and purposes, a box with some blinking lights, but Allen was convinced they could make it do so much more. As Gates told it years later, Allen implored him to join their fortunes together and form a company. They threw a few names around for the nascent enterprise. Allen & Gates (in that order) was one option, but they settled on Micro-soft (since they were anticipating creating software for microcomputers). The hyphen would be dropped within a few months.
There is a vast chasm between giving your theoretical business a name and breathing life into it. But Gates and Allen had the tenacity and audacity to make things work. They also had the fear – a fear that a software revolution was about to start and they might miss out on it. Now was their time to seize the moment and if they missed it, it might never return. Working on the principle of ‘nothing ventured, nothing gained’, Gates made an extraordinary approach to Ed Roberts, the founder of MITS.
He told Roberts that he and Allen (virtual unknowns, let it be remembered) had created an interpreter for the 8800 that would allow the machine to run programs written in BASIC – Beginner’s All-purpose Symbolic Instruction Code, a computer language in popular use since the mid-1960s. Roberts was intrigued and arranged for a demonstration at the company’s offices in Albuquerque, New Mexico, for six weeks later. Success! Except, of course, Gates and Allen did not yet have anything to show MITS. But cometh the hour, cometh the men.
The greatest problem they faced was that they did not have access to an 8800, nor did they have the resources to purchase one. They did, however, have their acumen. Gates secured access to the mainframe computer at Harvard’s Aiken Computer Center and he and Allen used the information available in the Popular Mechanics piece to create a simulation. They spent most of February and March working like dervishes, much of it in Gates’s dorm room, and gradually created a suitable piece of software. Expending enormous energy, they strove to make it as neat, simple and elegant as possible. In their 1992 book Hard Drive, authors James Wallace and Jim Erickson quoted Gates thus: ‘It was the coolest program I ever wrote.’
In the event, Allen was chosen to go to Albuquerque to demonstrate it, and continued to refine it even as he travelled to meet the MITS boss. Roberts was suitably impressed with what he saw (and entirely unaware of the circumstances of its rapid creation). He agreed to buy the package for $3,000 plus royalties. It would go on to become the industrystandard program for the next six years, fuelling Gates’s determination that Microsoft should provide industry-standard software for evermore.
As a result of their success, Allen was recruited by MITS to be the company’s software director. Gates took a brief sojourn from his Harvard studies to join him in Albuquerque, working as a contractor. Not long after his return to Massachusetts, he decided to make the move permanent. So it was that he dropped out of Harvard in June 1975. He and Allen decided to give Microsoft a real go in a bid to become leaders in an industry – the software business – that did not yet meaningfully exist. They could feel which way the wind was blowing, though. The age of the personal computer was looming and virtually no one (save for another hopeful start-up called Apple) was producing computers with their own software. That meant there were a lot of manufacturers in need of software to run on their machines. Steve Jobs neatly summed up the scenario in which Microsoft was born: ‘Bill started a software company before anyone even knew what a software company was.’
The founding partners agreed that Gates should be president and Allen vice president. Furthermore, since Allen was receiving a salary from MITS, Gates persuaded him that he should have a 60 per cent stake and Allen 40 per cent. From the outset, Gates held to the notion that all is fair in love, war and business.
Buoyed by the MITS deal, Microsoft soon had a roster of other customers. Gates, meanwhile, was unstinting in his efforts to drive the company on. Not only did he play his part in coding, but he looked after the administrative side of things and hit the road in search of new work. When the relationship with MITS came to an end in 1977, Microsoft no longer had a pressing reason to be in the relative technological backwater of Albuquerque. Gates and Allen were ready to go back home, so relocated the company to Bellevue, Seattle, in 1979. By then, they had thirteen employees. And within two years, the workforce had grown tenfold. By 1983 it had reached almost 500 (and would hover around 90,000 when Gates left his full-time post with the company in 2008). Gates had always prided himself on knowing every member of staff by name, but those days were soon over. Microsoft was in the big league and Gates could rest easy that the opportunity had assuredly been seized.
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