Bill Gates is retiring from the business he built to devote his full attention to his philanthropic activities. Let’s hope he has the same results there as he did in business.
Given that he is one of the greatest of the billion-dollar entrepreneurs, and that he will be remembered by history in the same breath as Andrew Carnegie, John D. Rockefeller, Henry Ford, Steve Jobs and Jeff Bezos, it is worth noting a few lessons from his illustrious life.
#1. Learn emerging technologies when you are young
Gates’s private school was one of the first to get a computer terminal and time on a computer. Along with a school mate, Paul Allen, Gates worked on the computer and became one of the first to gain expertise in this new emerging trend, incidentally at the same time as another entrepreneur named Steve Jobs was doing the same in Silicon Valley. Get expertise in emerging technologies.
#2. Enter emerging trends before take off
When Gates was at Harvard, he and Allen discussed the personal computer industry that was emerging. Gates left Harvard and moved to New Mexico to start his venture with Allen. One common strategy of many billion-dollar entrepreneurs was to enter a high-potential emerging industry before it took off. Enter an emerging industry after the launch and before the take-off.
#3. Pivot to the fulcrum of an emerging industry
When Gates and Allen started Microsoft, they were initially writing programs for other computers. The PC world at that time, like many industries in the emerging stage, was chaotic and needed a standard. IBM was the 600-pound gorilla in the computing industry and IBM’s entry could make its format the standard. Gates realized this and it was this insight that put Microsoft at the center of the PC world. Of all the geniuses in the industry, Gates deduced that control of the industry would go to the person who controlled its brains, not the one who made the hardware. And the industry’s brains would be the one in IBM personal computers. Find the fulcrum of an emerging industry and dominate it.
#4. Imitate and improve
The biggest con foisted on the entrepreneurs of today by business schools, incubators, and highly paid consultants is to innovate in the product and be the “first-mover.” Luckily for Gates, he dropped out of Harvard before he was taught this lie. Gates has not innovated anything. He bought the operating system which became MS-DOS and built Microsoft. He imitated and improved Word and Excel and bundled them with MS-DOS to make Microsoft the controller of the personal computer industry. He imitated Netscape. Entrepreneurs, stop trying to innovate in the product. Do what most billion-dollar entrepreneurs do. Imitate and improve emerging products and get your edge in the strategy.
#5. Make the deal of the century
When Gates realized that IBM was seeking an operating system, Gates found one, bought it and offered to license it to IBM. In one of the greatest deals of the last 100 years, and this should be a lesson for all future negotiators, he outsmarted IBM. He offered them a license for the operating system at a great price – but on a non-exclusive basis. When IBM accepted this deal, the Microsoft operating system became the industry standard due to IBM’s dominating position in the industry. This was the deal that helped Microsoft end IBM’s domination of the computing world. Learn how to make a great deal.
#6. Use your dominating position to get rid of your competitors
After Gates licensed his operating system to most personal computer manufacturers, he then set out to dominate the world of personal computer software by developing Word and Excel. After taking off, find out how you can dominate the emerging industry.
#7 Adjust your business to revolutionary innovations that can threaten your company
One criticism leveled at Gates, especially by many information technology professionals, is that Microsoft used its dominance to stifle many evolutionary innovations. This criticism is valid but does not reflect the nature of evolutionary innovations. A dominant company can acquire an evolutionary innovation (as Facebook has done with WhatsApp), imitate it (as Microsoft did with Excel and Word) or do nothing because the innovation does not have the firepower to be threatening. The evolutionary innovation may be like developing a better knife for a gunfight. It may work if you also have developed a better strategy (as is done in many Western movies). But revolutionary innovations like the Internet may require a massive response. The emergence of the Internet and the launch of Netscape threatened Microsoft’s dominance. By adjusting to the Internet and destroying Netscape, Gates kept Microsoft in the game and in the lead. Jump on new emerging trends when they threaten your existence and dominate them.
#8. Invest to make history
Gates and Jobs brought personal computers into the modern age when they used the graphic user interface (the mouse) that was originally developed by Xerox. This innovation made personal computers easier to use and allowed all of us who know how to click to use it. Jobs introduced the Macintosh. Gates prevailed with Windows. This took him to the top of the computer world and hurt both IBM and Apple. Jobs was kicked out and built Pixar. When he returned after four failing CEOs at Apple, and Apple was on its last legs, Gates invested in Jobs (Apple). This enabled Jobs to turn Apple into one of the world’s great companies. Invest in great people – after Aha!
#9. Leave on top when your legacy beckons
Gates left Microsoft in 2006 to devote more attention to his foundation. He did not leave when Microsoft was struggling with the emergence of the Internet. He saved it and brought it back to its old position of dominance. Leave on top. Don’t overstay your welcome. There is a time to be born, and a time to exit. Gates has always demonstrated impeccable timing.
#10. Pick a great family and make great friends.
Gates’s father was one of the most successful lawyers in Seattle. He helped a young Howard Schulze buy Starbucks. When a rich investor wanted to steal the deal away from Schulze, he pointed out to the investor that the “young guy” deserved his chance. He then helped to finance the acquisition of Starbucks. That’s how history is made, ethically. Gates’s mom knew the CEO of IBM because they sat on a board together. That’s how Gates knew IBM’s plan. And one of Gates’s closest friends is Warren Buffett. If a person is known by his family and friends, we don’t need to know much about Gates other than that his father had great character and Warren Buffett is a close friend. Create and attract great karma.
#11. Leave a great legacy
Gates will be remembered in a league with one of the greatest philanthropists of history – Andrew Carnegie who gave his fortune to education and other good causes. With his foundation, Gates is doing the same and is encouraging other billionaires to follow him. More power to him. There should be a limit to greed.
MY TAKE: All I feel is admiration.