Both went to the same high school. One was 13 and in grade 8, the other two years older. Both had a passion for computers and programming. The young one asked, “Do you know how to run a Fortune 500 company?”. When the older said, “I have no idea.” the 13-year-old said, “We may have to do that some day.” As the young one finished high school and headed for Harvard, they stayed in touch. Eventually the older one convinced the young fellow to quit school and start a new software company in New Mexico. The company was Microsoft and the two co-founders were Paul Allen and Bill Gates. The rest is history.
Paul expected to have equal partnership of 50-50. But Bill suggested 60-40, because of his greater contribution to writing the BASIC code. Both agreed to that split. Then they hired Steve Balmer and the new location became Seattle, where both Paul and Bill grew up and met at the private school years earlier. Soon after, Bill Gates changed the ownership to a 64-36 split to which Paul agreed to.
In a new book by Paul Allen to be released in April, some interesting facts have come out on their “relationship” during the early years. For example, after Paul was diagnosed with cancer, he overheard a conversation between Bill and Steve about reducing his ownership shares at Microsoft due to his lower contribution at work. He confronted them and both backed out of the idea. Paul paints a picture of Bill as a highly self-centered and confrontational person compared to his milder low-key nature. Paul Allen left Microsoft in 1982. His 36% ownership started growing multi-fold in subsequent years and at one time he was 59th. in the Forbes richest 500 list. Of course, Gates became the richest person in the world for almost 20 years. Allen’s stocks at Microsoft is worth over 13 billion dollars.
Paul started investing in several technology companies plus he bought sports companies. Bill Gates kept in touch and invited him to Microsoft’s board. They occasionally meet with families and Gates went to visit him when he was sick. Paul kind of describes his frustration that he deserved more than what he got, which one could debate. Most of Paul’s wealth grew after his departure from Microsoft.
Companies in technology arena are many times driven by one passionate leader. There are many examples of co-founders leaving the company after their relationship gets sour. We have seen that at Apple, Facebook, Twitter in recent times. Now that we see Bill Gates in his new philanthropic role, it is hard to believe that he is extremely greedy and self-centric. He is always driven and works very hard to get his goal accomplished, sign of a strong leader. But it is an interesting narration of how these two friends marched on a “bumpy” road to achieve such great success.