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Paul Allen

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2018-10-30
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2018-10-30
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  1. And there's going to be several times that Paul has to learn that Build does not view them as equal co-founders. So the note I left myself is this is unequal co-founders part one and there's going to be several examples I'm going to tell you about throughout the podcast. And this is a very true sentence. It says in the last

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  2. Since Bill and I retained ownership of our software, we were free to initiate these deals. And so that's exactly what's going to happen at the very beginning of Microsoft. Paul's going to spend his time making sure everything's working out. He's working at MITS. He's overseeing the software integration for their only customer time. And then Bill goes out and he's going to be selling their basic to other computer manufacturers. But before I get there, there's going to be several parts in the book where Paul has a realization. Remember, Bill is extreme. He's hardcore his own words.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  3. So something Bill taught Paul over and over again was that we need to retain ownership. And so they're talking about after all these orders are coming in, this is the state of what soon to become Microsoft. Our one product was 8080 Basic and MITS was our only customer. Our interests were aligned, and this will obviously change. We'd been working on a handshake with Ed for months, but now we were ready to formulate the relationship. After some back and forth on the numbers, Bill went to a local attorney to have the papers drawn. In return for the exclusive right and license to sell our basic worldwide for 10 years, MITS would give us $3,000 up front plus per copy royalties of $30 to $60 depending on the version. We'd receive 50% of grocery seats from basic licenses bought without hardware sales, and sublicenses to third-party OEMs, the original equipment manufacturers who made their own computers would also be divided 50-50.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  4. There's a lot of times when you're doing something new, the consumer behavior is unpredictable because if it was already predictable, somebody else would have already been doing it. So I love that little paragraph a lot.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  5. And this is another example of instead of reasoning by analogy, thinking from first principles. So what does that mean? What do you know is true? And it says, in Boston and the Bay Area, in labs and corporations like Honeywell, microcomputers were viewed as a passing fad. But the doubters didn't phase us. We were certain this is such an important part. We were certain that the tech establishment was wrong and we were right. And the proof came each day in the mail sacks bulging with orders for the altar and are basic. In that little ramshackle building in Albuquerque it felt as though anything was possible. So what do I mean about first principles thinking? Why would I leave the note? What do you know it's true? Everybody's saying, hey, you guys are stupid for doing this. Microcomputers are fad. You're wasting your time out there in the desert.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  6. Power to you. So he makes the move, things are going really well. He moves out to New Mexico. Later, Bill joins him and says, after Harvard left out for the summer, Bill and this other guy, Monty, joined me in Albuquerque. We rented a furnished two-bedroom apartment that was a five-minute drive from MITS.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  7. From Honeywell, I'd call Ed periodically with updates. One day he interrupted me Stop, stop. How would you like to move down here to New Mexico and run our software group? Albuquerque felt foreign to me. I'd only just learned that it wasn't in Arizona. But the salary was $16,000, a bump from what I was making a honeywill, and it was hard to refuse an offer to work on the code we created. Besides, Bill and I agreed that one of us probably needed to be there to service our customer, the customer being MITS, and ride herd over software distribution. I was the freer agent and the one who received the invitation so it fell to me. I called Ed back and said, When do you want me to start? So he puts in his notice, Honeywell at the time is like your normal.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  8. We could find work together as programmers, he said. Some local firms sounded interested. We'd come up with some exciting project and maybe something new. In any case, we'd have some fun. And why not give it a try, still drifting at Washington State? All right, so that's the college he's going to. I was ready to take a flyer. I mailed my resume to a dozen computer companies in the Boston area and got a $12,500 job offer from Honeywell. If Boston didn't work out, I could always return to school. In the meantime, I'd sample a new part of the country. Plus bills there, and at a minimum we could put our heads together on the weekends. And it says he's talking about his dad's reaction to this. He's like, my dad was less than enthusiastic. This software work seems to be a distraction, he said. I don't agree with your choice, but you're old enough to make your own decisions. Regardless of what they thought my parents always did what they could do to support me.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  9. Generation chip came along, but that's the next generation chip is the one that they use to write basic for Ed Roberts Altair. So it says in 2002, I purchased the one and only Traffa data machine from Paul Gilbert and installed it in our startup gallery at the Museum of Natural History and Science in Albuquerque. I wanted to pay homage to an obscure piece of hardware that played a critical role in the microprocessor software revolution. In my experience, each failure contained, this is his takeaway, it's a really important part, in my experience, each failure contains the seeds of your next success if you are willing to learn from it. We'd have to find something else. So skipping ahead, now we're going about two years after this. And this is moving to Boston. Through the spring semester of 1974, Bill kept urging me to move to Boston.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  10. By that time, Bill and I were preoccupied with running another company in Seattle, of course that being Microsoft. But this is the lesson from here. In hindsight, traffic data was a good idea with a flawed business model. We had done no marker research. We hadn't foreseen how hard it would be to get municipalities to take capital expenditures or that officials would be reluctant to buy machines from students. For Bill, Traffo data's failure would serve as another cautionary tale. Above all, we learned that it was hard to compete with free. Bill took that lesson to heart years later he'd become obsessed with Linux, the open source operating system. But there were positives too. Traffodata bolstered my conviction that microprocessors would soon run the same programs as large computers at a far lower cost. Looking ahead, my development tools for the eight would give us an invaluable foundation when that next

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  11. Had everything manually. So Bill and Paul, along with another person, they started a company which would automatically analyze that data for you. And so it says charging $2 per day of data collection. We found three clients, two smaller counties near Seattle in a district in British Columbia. They mailed the traffic tapes to Paul Gilbert's house. That's the other guy they're working with, where he produced the graphs of hourly car flow. But just as we were getting underway, Washington joined a number of other states in offering the same service to cities for free. We didn't give up easily even attempting to sell our wares in South America. According to six years of tax returns between nineteen seventy four and nineteen eighty, Trafo data totaled gross receipts of six thousand six hundred thirty one dollars and net losses of three thousand four hundred ninety four dollars. In nineteen eighty eight, when we closed our checking account, I received a distribution of seven hundred ninety.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  12. So while this is going on, they come up with an idea for their first business, which a lot of people don't realize. They started a business before Microsoft. And it's called Traffodata. And Traff is short for traffic. So he's going to describe it a little bit here. He says, in describing our work on traffa data, my resume stated, I design and put together a system for traffic engineers to study traffic flow. The system is built around Intel's MCS8008 microcomputer. The software and hardware setup had been fully tested using a prototype. Demonstrations to customers are planned for May 1974. And this is the business model that they were doing. So you might have seen this. If you'll be driving on a road and there'll be these long black wires across from it, and it's usually the city or the state that you're in, and they're trying to count traffic patterns. Well, they were doing that even back in the 1970s, except they would have to add.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  13. People were working on it around the clock. And this is the reason I included this section of the book is because the lesson that they pull from this, which is really important in developing the confidence in their own abilities, especially the confidence to do your own thing. It says Bill and I were the youngest workers there and surely the lowest paid, but we learned that we could hold our own with some of the top programmers around.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  14. Bill said, How much? And Bud replied one hundred and sixty five dollars a week four dollars an hour was a pittance for an experienced programmer, even then, but Bill and I couldn't believe. We found a cheap two bedroom apartment and showed up for work on Monday in january nineteen seventy three. Our employer was TRW, a big aerospace company that had contracted with the Department of Interior to set up a real-time operating and dispass system. So it's going to be referred to as rods from here on in. So it's real-time operating a dispass system. More than a year into the project, the project was overrun with penalties soaring. TRW's new software was still full of bugs. Wheeling into crisis mode, management went out to recruit every able-minded programmer they could find to get rods up and running. By the time we got there, more than 40 people

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  15. Now, in this case, he's in college, he's going to a local school. I don't think it's the University of Washington. I actually didn't write it down, so I don't remember. But he gets a programming job, and Bill Gates is obviously super, super smart. He gets all of his, like, he's still in high school. So he gets most of his senior work done early so he can go down to Vancouver, Washington and take a programming job with Paul Allen. And this is what they're working on. So this might be Paul's first actual job. So says a massive software project for the Bonneville Power Administration's electrical grid was behind schedule, and Bud's the guy that's running the project was scouring the region for programmers who knew their way around a PDP-10. That's what he learned how to program on. It says, I was not quite 20, and Bill was only 17, but age was not a criterion. And you're going to be on salary, Bud said.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  16. When it came to Civil War trivia or the conjugations of language, I had trouble faking interest. And he's going to be writing in his own journal at the time. And he says, I am also very absent-minded and lazy toward things from which I derive no active or contemplative pleasure. But give me a dynamic teacher and engrossing material, and I'd be insatiable. So while he's in school,

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  17. when I found something interesting I check it out and show it to the group. As my senior yearbook shows, I was reading other things as well. There's a picture and it says My chin rests atop a stack of eleven books. Among them Joyce Doubleiner's Modern University Physics, the Mexican War, and the Holy Bible. I'm guessing that the photo was posed to satirize how much work our teachers threw at us. Still, it was a good illustration of my breadth of interest at the time. I was driven more by curiosity

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  18. At the time, there were scarce resources, so that's the way he would be able to learn to get access to these machines. And then he finds out professors like, hey, I don't recognize you. Are you in any of my classes? And he's like, no, I'm not even registered here. And the professor's like, that's fine. He just let him stay and learn, even though he wasn't technically paying for the school. So having haunted the stack, that's the context of what part of the book we're in. Having haunted the stacks of UW's computer science library for some time, I naturally became the research arm of the lakeside programming group. So the Lakeside Programming Group is a bunch of other nerds. And I mean that affectionately him, Bill Gates, and some other guys. I spent countless hours buried in periodicals like datamation or computer design, keeping up with the latest mainframe trends. I dived into esoteric technical reports from MIT and Carnegie Mellon. Dense theoretical stuff that ranged from artificial intelligence to the latest algorithms.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  19. Could have somebody that's incredibly bright but incredibly bored by the subject material and they're labeled a bad student. When most of the time we just have to find, schooling should be adapted to the person. And so this is him going deep, the note I left myself, is going deep on subjects that interested him. So we're going to see the juxtaposition here between not doing homework to being obsessed. And if he's obsessed, he's going to spend as much time as he wants really having like these deep dives into subjects that he wants like he's actually interested in learning about so he says having haunted the stacks of uw's computer science library for some time so you don't uw's university of washington before this uh he was obsessed with programming learned at lakeside and then what he just started walking into graduate level programming classes at university of washington and then eventually like because they had access to a lot of computers that he didn't

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  20. Hard at something I took joy in. What better experience could there be for a 16 year old? So we just found out from his English teacher that when he's gripped in his enthusiasm, he's kind of indifferent to homework. He's not really doing the things he should do, even though he's going to Lakeside's very expensive prestigious private school that he's going to, and that's where obviously he mills bill Gates. But this is the interesting point. And I think this is very common for a lot of people where it's, and my qualms with standardized schooling is that

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  21. Well, let me read it first and then I'll tell you what I like about it. And this is his English teacher describing him. Paul is an enthusiast. And when in the grip of enthusiasm, he's almost totally irresponsible in other areas. How can one help such a student to see the error of his ways? I don't know. He could even be more right than we. Who knows? So first of all, it's a great teacher because accurately describing Paul, but he's not heavy on let me discipline this guy. Let me tell him what like I know what he needs to know. He's like, how do you help a student see the error of his ways? I think you're making a mistake by disregarding your homework, but I don't know. That's his next word. He could even be more right than we. And it turns out he was because he went on and took his enthusiasm for this and started a company that changed his life. What I was going to say before I read that though, I think when like...

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  22. He says, Then in the fall of my 10th grade year, my passion found me. This is a very interesting wording. My passion found me. Kind of goes in line with what Bezos was saying. I didn't find my passion. It found me. Programming resonated with my drive to figure out whether things worked or not and then to fix them. I had long marveled at the innards of things. He was just talking about that. From transistors and integrated circuits. But crafting my own computer code felt more creative than anything I've tried before. I sensed that there were always more to learn, layer upon layer of knowledge and techniques. Others might have found us eccentric, but I didn't care. I had discovered my calling. I was a programmer. My English teacher dismayed by my chronic indifference to homework, he turned philosophical. And this is a great

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  23. Five years old, he was just very extremely passionate about rocket technology. So he's taking what he calls his lottery winnings from Amazon and applying it to his true passion. So we're going to find Paul Allen's passion is programming.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  24. When you grow up and have a job, do something you love. Whatever you do you should love it. He'd repeat this to me over the years with conviction. Later I'd figure out what I had figured out what he meant. Do as I say, not as I've done. Much later my mother told me that my father had wrestled with his career choice. He suspected he might be happier coaching football than managing libraries he would manage libraries for colleges, but he finally chose the safe and practical route. A nine to five life under fluorescent lights lots of men from his generation did the same, but he wanted me to choose better. So this week, while I was taking notes on one of my favorite entrepreneurs that I covered, Danny Meyer, if you go back and listen to the podcast I did on his book, Setting the Table.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  25. How to do something by seeing it done the wrong way. So we're gonna see a regret that surfaces in his father's life, that he's now trying to instill in his son. So it's basically saying, hey, do as I say, not as I've done. And it says, I was still young when my father first asked me what I wanted to do with my life. It was his way of imparting his liconic wisdom. He was a man of very few words.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  26. By the task in front of us. And this is a really good important point that I think has made multiple times, not only when you hear of founding stories from other entrepreneurs, but the books that I've read for this podcast. And he says, but we were young and green enough to believe that we just might pull it off.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  27. Ed Roberts, this is Paul Allen in Boston, Bill said. We've got a basic for the altar that's just about finished, and we'd like to come out and show it to you. I admired Bill's bravado, but worried he'd gone too far, since we yet to write the first line of code. So this is really interesting. Without saying anything to Paul in advance, he just telling this guy, yeah, we're almost done, and we want to come out and show it to you. We learn obviously what Paul said in the last sentence. We haven't even written our first line of code. So I bring that up because as I was reviewing all the notes and the highlights getting ready for this podcast, I realized that I'm doing a podcast on Paul Allen that is full of stories about Bill Gates because of he had very what he would call Bill was obsessed with being hardcore. He was very, he just has a very

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  28. And so it says, we followed up with a phone call. You should talk to them. You're older, Bill said. No, you should do it. You're better at this kind of thing, I said. We compromised. Bill would make the call, but he would say he was me. When it came time to meet with Mittz, Mitts, MIT S is the company that's making the Altair 8800, and it's an acronym. It stands for Micro Instrumentation and Telementary System. So it says when it came time to meet with MITS face to face, our thinking went, I'd be the one to make the trip. I had my beard going and at least looked like an adult, while Bill, who'd routinely get carted into his 30s, could still pass for a high school sophomore.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  29. So they decide to send letters to the manufacturer of the Altair 8800. It's this little company in Albuquerque, New Mexico. They don't receive any word back. So they decided to call. And they're going to call to see if they can write the software for the Altair 8800.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  30. Let me know. So a few weeks after that, Paul is reading the magazine Popular Electronics, and he sees an advertisement for the Altair 8800. And so now this is him talking about how he reacted to seeing that. I slapped down 75 cents and trotted the half dozen slushy blocks to Bill's room in Harvard's courier house. I burst in on him cramming for finals. You remember what you told me? I said, feeling vindicated and a little breathless. To let you know when somebody came out with a machine based on the 8080? Yeah, I remember. Well, here it is, I said, holding up the magazine with a flourish. Check it out. As Bill read the story, he began rocking back and forth in his chair, a sign that he was in deep concentration. I could tell he was impressed. We were looking at the first commercial personal computer.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  31. Okay, so this is Paul writing about how he came up with the idea for what would eventually become Microsoft. So he said a few months after the 8008 was announced, this is a microprocessor from Intel. One of those brain waves came to me. What if a microprocessor could run a high-level language, the essential tool for programming a general-purpose computer? It was plain to me from the outset that we use basic stands for beginners all-purpose symbolic instruction code, that relatively simple language that Bill and I learned back at Lakeside in our first computer experience. And so I asked Bill, why don't we do a basic for the 8008? He looked at me quizly and said, because it would be dog slow and pathetic, and basic by itself would take up almost all the memory. There's just not enough horsepower, it would be a waste of time. After a moment's reflection, I knew he was probably right. Then he said When they come out with a faster chip.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  32. Bill and I had already found a groove together. I was the idea man, the one who conceived of things out of whole cloth. Bill listened and challenged me, and then homed in on my best ideas to help make them a reality. Our collaboration had a natural tension, but mostly it worked productively and well.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  33. Okay, so let's get back into Idea Man. And this is a little bit about, this is Paul speaking about how he works and how he comes up with the ideas that he worked on. So he says, my really big ideas have all begun with a stage setting development. Then I ask a few basic questions. Where is the leading edge of discovery headed? What should exist but doesn't yet? How can I create something to help meet the need? And who might I be enlisted to join the crusade? Whenever I had a moment of insight, it has come from combining two or more elements to galvanize a new technology and bring breakthrough applications to a potentially vast audience.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  34. Bill and I learned how to dissect computer code together. We started one failed business and worked side by side on professional programming jobs while still in our teens. It was Bill who had coaxed me to move to Massachusetts with a plan to quit school and join him at a tech firm. Then he reversed field to return to college. Like me, he seemed restless and ready to try something new Bill and I kept casting about for a commercial project. We figured that we'd eventually write some software where we knew we had some talent. We fantasized about our entrepreneurial future. One time I asked Bill if everything went right, how big do you think our company could be? He said, I think we could get it up to thirty five programmers. That sounded really ambitious to me.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source

  35. As I walked toward Harvard Square on a December weekend afternoon in 1974, I had no inkling that my life was about to change. I was 21 years old and at loose ends. My girlfriend had left a few weeks earlier to return to our hometown of Seattle three thousand miles away. I had a dead end job at Honeywell and a crummy apartment. The one constant in my life those days was a Harvard undergraduate named Bill Gates. My partner in crime since we'd met at Lakeside School when he was in eighth grade and I was in tenth.

    2018-10-30 · Founders · #44 A Memoir by the Cofounder of Microsoft · IDENTIFIED FROM THE TRANSCRIPT · source