Apr 22, 2024 · 4h 23m · acquired
Microsoft Volume I: The Complete History and Strategy of founding through Windows 95 (Audio) · Acquired
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In this comprehensive historical deep dive, Acquired explores Microsoft's first twenty years from its 1975 founding through the watershed launch of Windows 95. Hosts Ben Gilbert and David Rosenthal analyze how Bill Gates and Paul Allen leveraged non-exclusive OEM software licensing, strategic agility, and platform network effects to build the most valuable software franchise in history.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ben and David hold 99.6% of the talking time here. How this is scored →
Ben and David as informed peer 8.3 Guest teaching 0.0 Guest disagreement 0.0 Ben and David pushing back 0.0
speaking balance: gold is Ben and David, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 2:43:30 Ballmer describing riding the IBM bear
David quotes Steve Ballmer on the intense coercive pressure Microsoft faced navigating IBM's attempt to force OS/2 dominance.
Hardest push from Ben and David ▶ 3:51:50 Pushback on copycat narrative versus paradigm shiftDavid pushes back on Ben's premise that Microsoft merely copied apps, arguing Microsoft only won when capitalizing on fundamental platform shifts.
Biggest teaching moment ▶ 1:00:00 1980 Copyright Act statutory breakdownBen explains to David the exact legal evolution under Title 17 that established computer programs as copyrightable creative works.
Ben and David hold their own ▶ 1:49:40 Strategic analysis of the non-exclusive IBM dealBen and David demonstrate deep strategic expertise analyzing how Microsoft turned IBM into a commodity distribution channel while capturing clone market value.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ben and David as informed peer | Guest teaching | Guest disagreement | Ben and David pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Microsoft and the Personal Computer Era | 8 | 0 | 0 | 0 | Ben and David introduce Microsoft's origin, detailing Bill Gates's family background, his mother Mary Gates's board positions, and Bill Gates Sr.'s prominent law firm. | |
| Lakeside School and First Contact with Mainframe Computing | 8 | 0 | 0 | 0 | David and Ben discuss Lakeside School renting time on a DEC PDP-10 in 1968, contrasting the mainframe era dominated by IBM with early minicomputers. | |
| The Lakeside Programmers Group and C-Cubed Mentorship | 9 | 0 | 0 | 0 | The hosts explain the Lakeside Programmers Group working at C-Cubed, learning machine code from Steve Russell, writing Traf-O-Data, and discovering Moore's Law. | |
| Harvard, Steve Ballmer, and the Altair Breakthrough | 8 | 0 | 0 | 0 | Covers Gates's time at Harvard meeting Steve Ballmer, the launch of Intel 8080, and Paul Allen spotting the Altair 8800 on the cover of Popular Electronics. | |
| Building Altair BASIC and the Albuquerque Flight Demo | 9 | 0 | 0 | 0 | David and Ben detail writing the Altair BASIC interpreter on an emulator, Paul Allen hand-coding the bootloader in octal on the plane, and the live demo in Albuquerque. | |
| The Flawed MITS Contract and the Piracy Crisis | 8 | 0 | 0 | 0 | The hosts analyze the original flawed MITS licensing contract, which capped royalties at $180,000, and the initial wave of hobbyist software piracy. | |
| An Open Letter to Hobbyists and Defining Software Law | 9 | 0 | 0 | 0 | Ben gives an in-depth legal breakdown of how software copyright law evolved leading up to the 1980 Congressional Copyright Act defining computer programs. | |
| Setting the Standard: The Positive Spiral Business Model | 8 | 0 | 0 | 0 | The hosts discuss Microsoft winning the MITS arbitration, licensing BASIC to the 1977 Trinity (Apple, Commodore, Tandy), expanding to Japan with Kay Nishi, and moving to Seattle. | |
| Steve Ballmer Joins Microsoft as the 16-Bit Era Begins | 8 | 0 | 0 | 0 | David and Ben detail Steve Ballmer joining Microsoft as employee 30, the shift to 16-bit chips (Intel 8086), and IBM launching Project Chess in Boca Raton. | |
| The Gary Kildall and Digital Research Opportunity Lost | 8 | 0 | 0 | 0 | Explores the botched Digital Research meeting in Monterey with Gary Kildall, and Microsoft acquiring QDOS from Tim Paterson at Seattle Computer Products for $75,000. | |
| The Landmark IBM Deal and Non-Exclusive Software Licensing | 9 | 0 | 0 | 0 | Ben and David dissect the landmark IBM PC contract where Microsoft accepted a fixed fee in exchange for retaining non-exclusive licensing rights to DOS. | |
| Compaq Clean-Room Reverse Engineering and the Clone Revolution | 8 | 0 | 0 | 0 | The hosts explain Compaq's clean-room reverse engineering of the IBM BIOS, sparking the PC clone boom where Microsoft collected per-unit DOS royalties. | |
| Corporate Restructuring, TVI Investment, and Tech Market Multiples | 8 | 0 | 0 | 0 | Covers Microsoft's restructuring into a C-Corp, Dave Marquardt's TVI investment, and historical tech valuation multiples compared to modern standards. | |
| Charles Simonyi, Xerox PARC, and Lotus 1-2-3 Dominance | 8 | 0 | 0 | 0 | David and Ben discuss Charles Simonyi bringing Xerox PARC GUI concepts to Microsoft, the development of Word, and Lotus 1-2-3 crushing Multiplan. | |
| Counter-Positioning for the Future: The Killer App Strategy | 8 | 0 | 0 | 0 | The hosts explain how Microsoft decided to build GUI-first applications, making Excel the killer app for the Apple Macintosh in 1984. | |
| Bundling Microsoft Office and the Birth of Windows | 8 | 0 | 0 | 0 | David and Ben detail the bundling of Microsoft Office in 1985 and the difficult development of Windows 1.0 as a graphical operating environment over DOS. | |
| Riding the IBM Bear: The OS/2 Strategic Dilemma | 9 | 0 | 0 | 0 | Covers Microsoft riding the IBM bear with OS/2 development while secretly hedging with Windows, culminating in the breakout success of Windows 3.0 in 1990. | |
| Microsoft Surpasses IBM: Legal Triumphs and Market Dominance | 8 | 0 | 0 | 0 | David and Ben discuss Microsoft defeating Apple's GUI copyright lawsuit, surpassing IBM in market cap in 1993, and OEM per-processor licensing agreements. | |
| Enterprise Transformation and Steve Ballmer's Office Strategy | 8 | 0 | 0 | 0 | The hosts analyze Steve Ballmer building Microsoft's enterprise sales capability from scratch using Office's bottoms-up adoption in corporate environments. | |
| The Two Tracks: Dave Cutler's Windows NT and Gates's Strategy Memo | 9 | 0 | 0 | 0 | Details hiring Dave Cutler from DEC to build Windows NT, alongside Bill Gates's 1991 memo establishing the dual-track Windows architecture. | |
| The Windows 95 Revolution: Project Chicago to Global Launch | 9 | 0 | 0 | 0 | Ben and David recount the Windows 95 launch with Jay Leno, Rolling Stones' Start Me Up, international rollouts, and the 32-bit architecture upgrade. | |
| Concluding Chapter One: 20 Years of Dominance and Microsoft Research | 8 | 0 | 0 | 0 | The hosts recap Microsoft's first 20 years, the founding of Microsoft Research by Nathan Myhrvold, and the immense capital efficiency of early software. | |
| Evaluating Microsoft Through Hamilton Helmer's 7 Powers | 9 | 0 | 0 | 0 | Ben and David evaluate Microsoft against Hamilton Helmer's 7 Powers framework, demonstrating how Microsoft possessed all seven powers during this era. | |
| Homebrew Club Trivia and Personal Carve-Outs | 7 | 0 | 0 | 0 | The hosts share trivia about Dave Marquardt meeting Gates at Homebrew Computer Club and offer personal carve-outs on vintage tech restoration and audio gear. |
Statements from this episode (93)
Microsoft is the world's most valuable company at over $3 trillion
“It is the world's most valuable company worth over three trillion dollars.”
Mary Gates was a powerful Pacific Northwest business figure
“It is not an overstatement at all to say that Mary Gates became one of the most powerful business people in the Pacific Northwest, period.”
Bill Gates Sr. co-founded the predecessor to K&L Gates
“He becomes a co-founding partner of the firm Preston, Gates & Ellis, which today, I didn't even realize this until I dug in the research, that is K&L Gates today, one of the largest law firms in the world.”
Bill Gates was Washington state's top math student
“He was the number one math student in the state of Washington.”
IBM unbundled hardware and software in 1968 amid antitrust scrutiny
“But an important thing that was also happening this year, in 1968, was that IBM was undergoing some antitrust scrutiny over that huge bundle that I just told you about. I mean, doesn't it smell like antitrust? They do everything from the hardware to the softwa…”
DEC priced the PDP-1 at $120,000, far below IBM mainframes
“So the first deck machine, when it comes out, the PDP one a few years before this time, it was priced at a 120,000 dollars. So like an order of magnitude, maybe two below a system that you would buy from IBM.”
In the late 1960s, every computer user wrote their own software
“There was no package software that you bought. The software that IBM was selling was the operating system to make the machines actually function, and it was the programming languages that you could then Program on, but you weren't clicking around and using Exc…”
BASIC was the Python of its day for accessibility
“It's sort of the Python of its day. I think the way Python is now, where you sort of joke that Python is so flexible, you know, you can, like, accidentally write a program by writing English, and it can kind of forgive a lot of mistakes, and it reads kind of l…”
Bill Gates negotiated a $10,000 software royalty deal as a teenager
“And Bill now, who's the de facto leader of this group, he negotiates a deal with the help of his dad, Bill Gates Sr., prolific corporate attorney in Seattle, that rather than just being paid hourly for their time, they're gonna get a royalty on the revenue tha…”
Traf-O-Data generated approximately $20,000 in total revenue
“I think I read a few places they make about 20,000 dollars in revenue from it.”
Microsoft dropped 'running Microsoft software' from its vision due to DOJ scrutiny
“And then the part that got left off later when the DOJ started sniffing around was running Microsoft software, but that is the vision here.”
Steve Ballmer outscored Bill Gates on the Putnam math exam
“Steve is the guy that outscored Bill Gates on the Putnam exam.”
The Altair 8800 was the first commercially available microcomputer
“On whose cover is the Altair, 8800. The world's first real, honest to God, commercially available for sale microcomputer.”
The original Altair shipped with no keyboard, screen, or software
“Does not have a screen, does not have a keyboard, doesn't have a display of any kind. What it does have is it has a set of 16 lights on the front of the machine, like Christmas lights, and 16 switches. And you can flip the switches to flip bits, and then the m…”
Paul Allen wrote the Altair BASIC bootloader on a plane
“Paul gets on a plane, flies from Boston to Albuquerque, and, you know, in a total, like, epic legend moment, they didn't have a bootloader written for the basic interpreter. So they had the basic, it was all written, they'd done it on the emulator, and Paul's …”
Paul Allen hand-coded the Altair BASIC bootloader in pure octal
“On paper, by hand, he is hand-coding octal, not even assembly language instructions, like he's hand-coding in pure octal the instructions to load their basic interpreter program into memory.”
MITS negotiated Intel's 8080 chip price down from $360 to $75
“The list price from Intel for the 8080 chip was 360 dollars... He managed to negotiate a volume deal with Intel to get eighty-eighty chips at 75 bucks a pop.”
MITS received 4,000 Altair pre-orders and $1.5 million upfront
“After the Popular Electronics article comes out, they get 4000 pre-orders in the first month or two, which is one and a half million dollars in Revenue. Cash paid up front.”
Bill Gates and Paul Allen's founding equity split was 60/40
“Initially, it's sixty-forty ownership. Bill is 60%. Paul is 40%. Later, it gets changed to Bill is 64%, and Paul is 36%.”
Microsoft's MITS deal paid $30 per copy plus 50% sublicense revenue
“And the terms of the deal are Microsoft is to get 30 dollars for each copy of BASIC that MITS sells, plus 50% of the revenue that comes from These sub-licensing deals that MITS may or may not do with other companies who want to use the BASIC.”
Microsoft's lifetime BASIC revenue from MITS was capped at $180,000
“And the kicker on this contract is that the total Amount of lifetime revenue that Microsoft can make from the Basic. From MITS is capped at a 180,000 dollars.”
Microsoft's MITS contract required best efforts to commercialize BASIC
“And that clause is that MITS must use its best efforts to license, promote, And commercialize the basic broadly in the marketplace, and that any failure to do so by MITS would be grounds for termination of the contract by Microsoft.”
Microsoft generated $16,000 in 1975 and $22,000 in 1976
“Microsoft does 16,000 dollars in revenue that year from their 30 dollars a pop the basics that are getting sold with the Altair, which is great, especially the first year that they're starting. And the next year in 1976, everybody's so excited about this new m…”
MITS sold thousands of Altairs but only hundreds of BASIC copies
“Despite MITS selling thousands of computers a month, only a few hundred copies of BASIC are selling per month.”
Software copyright was not codified in US law until 1980
“And so with software, it actually took until 1980. Congress changed the law. We'll put a link in the show notes to like the literal congressional change that happened. And it is in Title 17, Copyrights, Chapter One, Subject Matter and Scope of Copyright. In 19…”
Microsoft's Altair BASIC was the first commercial software product ever sold
“This is the first time software has ever been sold. Other than the IBM accounting machinations to protect themselves from antitrust, which was just accounting, nobody had ever sold software before. This is the first time.”
Altair manufacturer MITS was acquired for $6.5 million in 1977
“So in May of 1977, MITS gets acquired by the tape drive manufacturer Pertek for six and a half million dollars”
A 1977 arbitration dispute was Microsoft's only period of cash constraint
“The interim months while this arbitration is happening are the only moment in Microsoft's history where, like, cash gets tight. They're sort of running out of money because they can't really make any sales here.”
Apple licensing Microsoft BASIC in 1977 was their first commercial deal
“And that's the first deal that happens between the companies. I mean, there's so many deals done both directions, commercial deals, equity deals, legal disputes in both directions. And this is the very first time that they do something together.”
Microsoft licensed BASIC to Apple for $31,000 over eight years
“So like the Apple deal is 31,000 dollars for eight years. Of access for Apple, for the Apple II to Microsoft's BASIC.”
Microsoft generated $381,000 in revenue in 1977
“They end in 1977 with 381,000 dollars in revenue, despite zero for the first, like, 11 months of the year.”
Half of Microsoft's revenue came from Japan by 1979
“And by the next year, in 1979, half of Microsoft's revenue is coming from Japan, which is wild.”
The Microsoft-IBM PC partnership was tech history's most important deal
“I think you can make a very strong argument, the single most important deal ever done in the history of technology.”
IBM's market cap in 1980 was $34 billion
“Thirty four billion dollars. That was the most valuable company.”
IBM mandated the Project Chess team to ship a PC within one year
“IBM leadership tells this team in Boca They have to ship the PC to customers within one year.”
Microsoft's 30-person staff outnumbered IBM's entire Project Chess team
“The Microsoft team of 30, which the whole company of Microsoft pivots to, like, work on the IBM PC Partnership is bigger than the project chess team in Boca.”
Bill Gates personally absorbed 3.5% equity dilution to hire Steve Ballmer
“In fact, it created some tension with Paul Allen, where Bill asked Paul if they could go to five percent. Paul said sure, and then Bill actually offered him eight and a half percent, and Paul got upset, and Bill said, I'll eat the three and a half percent. It …”
Digital Research missing the IBM PC OS deal was a historic blunder
“What is clear is, however it goes down, this is one of, if not the biggest Business blunder in history”
Microsoft bought full rights to QDOS for $75,000
“Later on, before this all gets announced and the PC ships, Microsoft would pay Seattle computer products another 50,000 dollars for full rights to own 86 QDOS, sell and license it to anybody else indefinitely. So I believe the total amount of dollars that chan…”
All Windows operating systems released prior to Windows 95 were DOS-based
“Until Windows 95, all of the Windows operating systems were DOS based.”
IBM paid Microsoft a $430,000 fixed fee for DOS with no royalties
“IBM paid Microsoft 75,000 dollars for testing and consultation. 45,000 dollars for DOS. 45. And 310,000 dollars for an array of sixteen-bit language interpreters and compilers. So all told, bundled together, that is 430,000 dollars fixed that IBM paid Microsof…”
Microsoft retained full non-exclusive licensing rights to DOS from IBM
“Microsoft retained the rights To own DOS and to own their languages and license it and them to anyone else they wanted at any price on any terms.”
IBM sold 500,000 PCs within two years of launch
“They sell 13,500 IBM PCs within the first couple months after they announce it. Over the next two years, they sell half a million of them.”
Compaq set multiple rapid growth records and became the largest PC maker
“Compaq was the fastest startup to ever hit a hundred million in revenue, then the youngest firm to break into the Fortune 500, then the fastest company to hit a billion in revenue, and by 1994, Compaq was the largest PC maker in the world.”
Compaq reached $111 million in revenue in its first year
“They start the company in 1982, and within the first year, they do a hundred and eleven million dollars of revenue of selling IBM PC clone hardware.”
Microsoft used IBM for demand creation and PC clones for value capture
“Microsoft used IBM to generate demand for their software, and then they used every other PC manufacturer to capture the value. That all that demand created.”
Microsoft revenue jumped from $25M in 1982 to $98M in FY1984
“I believe that for calendar year, 1982, Microsoft's revenue was twenty five million dollars, and I think this must have been when they switched to fiscal year end and June 30th. So Microsoft's fiscal year end starting then and up through now is June 30th. So t…”
Technology Venture Investors provided Microsoft's only external equity dilution
“Spoiler alert, this is the only dilution that they would ever take.”
Microsoft IPO'd at a $750M market cap with $200M in revenue
“When Microsoft itself would go public a few years later in 1986, they actually go public the same week that they moved to the big campus in Redmond, where they are to this day. Their market cap at IPO is only seven hundred and fifty million dollars, despite ha…”
Microsoft generated $5M in revenue and $2M–$3M profit in 1980
“And Dave's remarking at this point in 1980, they're doing five million in revenue, two to three million in profit.”
Don Valentine refused to invest beyond a bicycle ride from Sand Hill Road
“Oh, Don Valentine famously had the rule, they didn't invest in any company that you couldn't bicycle to from Sand Hill Road.”
TVI's Microsoft deal produced one of VC history's best returns
“And that resulted in, depending how long TVI held, one of, if not the best venture capital return in history.”
Lotus generated more revenue than Microsoft in the late 1980s
“There are a couple of years in the late eighties where Lotus has more revenue than Microsoft. And is valued higher.”
Software makers must target platform shifts rather than fight entrenched incumbents
“You kind of have to counter position. If one, two, three is the best spreadsheet out there for the current technology generation, you just can't compete with them. You need to wait for the next big leap forward in order to find a new competitive vector.”
The first version of Microsoft Excel was built for the Macintosh
“Far and away, the first thing to point out is the first version of Microsoft Excel was for the Mac.”
Microsoft Excel was the world's first graphical spreadsheet program
“Excel is the world's first graphical spreadsheet program, and that's why it wins, and that's why it's so important.”
Apple matched Microsoft's marketing spend for the launch of Excel
“And so I'm not sure this has ever been publicly disclosed before, but Apple spent just as much marketing Excel as Microsoft did. They matched Microsoft's marketing spend with their own campaign for it and split the bill.”
Steve Jobs showed Bill Gates the Mac project in 1981
“Steve Jobs Shows Bill Gates the Mac project in 1981. Three years before it ships. And Microsoft and Apple signed an agreement to work together on applications for it in 1982.”
Microsoft's first application bundle launched on the Mac in 1985
“So in 1985, in January, the bundle is released, and it was originally called the Business Pack for Microsoft. And it started on the Mac.”
Lotus Notes pursued a dead-end path trying to be an operating system
“Lotus would really go down a dead-end evolutionary path with notes, you know, later in its life, in its final chapter, where the application was going to be the operating system.”
Microsoft announced Windows in 1983 prior to the Mac's launch
“Starting in 1983, they're like, we gotta Do our own graphical operating system, or at least user interface, and this is the origins of the Windows product, and they actually announced it in November of 1983 before the Mac ends up shipping, which their partner …”
Steve Ballmer took over engineering management to ship Windows 1.0
“Steve Bomber gets drafted to come in and be the dev manager for the final push to release Windows one point out, which is hilarious.”
Apple's 1985 intellectual property license covered all future versions of Windows
“Apple does do a deal to license a lot of quote unquote their intellectual property, which of course came from Xerox, to Microsoft. Apple, I think, was under the impression that it was just for Windows one point oh, but the actual terms of the agreement are thi…”
Windows was merely a graphical shell over DOS until Windows 95
“And actually, it was not until Windows 95 that Windows was its own operating system. It was in Windows one, two, three, three dot one, and Windows for Workgroups, it was a graphical operating environment.”
Microsoft generated $600M in FY1988 with almost nothing from OS/2
“Fiscal 88, they do six hundred million in revenue. Basically none of this is from OS two and the IBM world.”
Windows 3.0 doubled previous versions' DOS penetration in six months
“Windows one point O and Windows two point O only ever achieved five percent penetration of the DOS installed base. Windows three point O doubles that in the first six months.”
A team of only 65 people shipped Microsoft Windows 3.1
“I mean, it was 65 people that shipped Windows 3.1.”
Microsoft became the first software company to pass $1 billion in revenue
“In fiscal, 1990, the year that Windows three point O shipped, Microsoft does 1.2 billion dollars in revenue, making them the first software company ever to pass a billion dollars in revenue.”
Bill Gates became the wealthiest person in America in October 1992
“And that year, 1992, in October, is when Gates finally passes John Kluge, acquired OG fans. Back to the LVMH episode. Gates passes John Kluge of Metro Media fame. Media mogul to become the wealthiest person in America”
Microsoft surpassed IBM in market capitalization in January 1993
“January, 93, the crowning moment, it happens, Microsoft passes IBM in market cap”
Regulators forced Microsoft to end per-processor OEM licensing in 1994
“Now, this is, of course, the way that regulators would look at it in 1994, and that would get Microsoft in some hot water, and they had to agree to stop doing this practice.”
Microsoft had no enterprise software sales experience until the mid-1990s
“The Microsoft you know today, as late as the mid-nineties, really had no idea how to sell or build software for businesses.”
IBM and Microsoft officially dissolved their OS/2 partnership by late 1990
“By the end of 1990, the Microsoft IBM divorce is official. IBM takes full control of OS two development back from Microsoft. Microsoft ceases involvement.”
Microsoft pioneered product-led enterprise growth decades before SaaS startups
“Everyone loves to talk about product-led growth, and how it's this new thing in the late twenty-tens, and how Slack, and Atlassian, and Trello, everyone figured out PLG in this bottoms-up, workforce-adopted way, rather than selling to procurement, or IT, or th…”
Dave Cutler is still writing code at Microsoft today
“Like, he's still writing code at Microsoft today, which is amazing.”
Microsoft had 75 million Windows users before Windows 95 shipped
“I mean, even before Windows 95 shipped, they had seventy five million Windows users.”
Only 14% of Americans had internet access in 1995
“Right at this point in history, only 14% of Americans had internet access.”
Only 360 people built Microsoft Windows 95
“There's only 360 people that built Windows 95, so it's still kind of a small team”
Windows 95 sold 7 million copies in its first month
“Windows 95 comes out, sells a million copies in the first week, seven million copies in the first month.”
Microsoft was the first software firm to reach $10 billion in revenue
“Fiscal 95. So this is the 12 months ending in June before Windows 95 comes out. Microsoft did 5.9 billion dollars in revenue. Fiscal 96, they did 8.7. Fiscal 97, when Windows 95 is really going, they do twelve billion dollars in revenue. First software company…”
Nathan Myhrvold founded Microsoft Research in 1991
“In 91, Nathan Mirvold started Microsoft Research”
The PC market grew at a 98% CAGR from 1975 to 1986
“From 1975 to 1986, 11 years prior to their IPO, so founding to IPO, PCs grew
At a compound annual growth rate of 98%.”
Microsoft did not pass IBM in annual revenue until 2015
“Microsoft would not eclipse IBM in revenue, you mentioned market cap, David, but in revenue until the year 2015.”
The early Windows OEM go-to-market team was only about 20 people
“I think the Microsoft OEM team for Windows was like 20 people or something. Before the enterprise, in this era that we're talking about, the group of people responsible for go-to-market for Windows was really small.”
Excel copied Lotus 1-2-3's keyboard shortcuts to preserve user muscle memory
“So a lot of the keyboard shortcuts in Excel to this day are there because they were originally the Lotus one, two, three shortcuts, and they wanted people to have the same muscle memory that just worked.”
Copying proven products delivers better risk-adjusted returns than being first
“So fundamentally what this does for you as a business is it just leads to better risk-adjusted returns. You already know what's going to work before you ship it. Like, you don't really take market risk. So you're not gonna be the first to the market with early…”
Microsoft's copycat apps could not win without major platform shifts
“The Microsoft versions never actually won until there was a platform shift that they could take advantage of to beat the incumbent. Like, Microsoft wasn't gonna beat Lotus one, two, three until the graphical paradigm came along, and then Excel being graphical …”
Document file formats created massive network effects before the internet
“The document formats are a huge network effect thing, even before the internet, even before organizations were networked and computers were networked outside of an organization. File formats. You're right. There's huge network economies to file formats.”
Microsoft's 6,000-person Office team consistently hit three-year planned ship dates
“I did always think it was absolutely incredible when I was at Microsoft and we would ship a version of Office every three years, I worked on Office 15, that the entire 6000 person organization had a process in place where we could release to manufacturing, RTM…”
New tech generations shift value chain power from hardware to OS
“A new technology generation, when something becomes possible and opens up a new market, It enables a shift in the point of integration in a value chain. The old value chain of IBM, if you shipped the mainframe, you had all the power. But in this new world of P…”
VC Dave Marquardt first met Bill Gates at the Homebrew Computer Club
“So Dave had watched Bill present many years earlier at none other than the Homebrew Computer Club
At Stanford.
Yes!
The very place that is part of the Apple lore with Jobs and Woz showing off the early Apple computer.
Apparently, Bill also went and made a pres…”