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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  October 22, 2016 9:00am-9:31am EDT

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♪ >> what does her family fake? david: do they think it was something wrong with us men wanting to do computers? did you ever think your life would be better off getting a harvard degree? mr. gates: i am a weird dropout. david: as far as your relationship with steve jobs -- you were the wealthiest man for 20 years more, is that more of a burden than a pleasure? >> would you fix your time, please?
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david: let me move it this way. ok. ♪ david: i do not consider myself a journalist. nobody else would consider myself a journalist. i begin taking on the life of an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? you built one of the great technology companies in the world and one of the great companies in the world and a you are building and operating one of the great foundations of the world? you compare the challenge of building microsoft with the challenge of running the bill gates foundation? mr. gates: i think to have more in common that people might expect. the idea of the you find what in innovation is going to become a release to graphic, have some setbacks, a theory of change.
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my microsoft work was when i was very young, starting when i was 17 and that was my primary focus until i was 53 when i made the transition. for the early part of that, i was kind of maniacal. i was not married,, did not believe in weekends until i was 30 i did not believe in vacations at all. it was incredibly fulfilling to write the code and the hands on, stay up all night, so for my 20's and 30's, i think of microsoft thing was perfect. i did not have the breadth of knowledge that would let me play my role as the foundation. i think it was good preparation, and then after i met belinda, got married and had kids, i was looking at the world more broadly, thinking about where the wealth should go, and i would say they were equally difficult. you think that you should learn
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more, that getting, building the team and thinking about things in a better way, so you see the positive results but you always want to do even better. david: let's talk about microsoft. he started that when you were in high school, and you were driven to be involved with computers. review alone, did many people know about computers? mr. gates: it was a fairly special time because computers when i was young were super expensive. my friend paul allen and i actually snuck in two places at the university of washington when they had computers that were not used at night. we were fascinated by what the computer could do. we had to go out of our way and were lucky we did at all. when the idea of moving the computer onto a chip that intel would make and would make the
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computer literally millions of times cheaper than the ones with reducing, so both powerful and available for people on a personal level, then the idea would be very different. the software you would need, the way the industry would work. we were super lucky to be there when that was happening. david: what did your family think? did they say something like, there's something wrong with this man? mr. gates: they knew i was obsessed with computers, that of its get athletics, sometimes leave the house when they prefer i would not go work at night on these things, so it was kind of considered a little strange, and the big moment was when i said instead of going part of my senior year, but i wanted to go work for a company writing software. they were great about allowing that to be my hobby. david: p but to harvard and you dropped out. have you ever thought about how your life could be better off if
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you got your harvard degree? mr. gates: i am a weird drop out because i take college courses all of the time. i love learning company courses, and things, so i love being a student. there were smart people around and they fed you and they give you these nice grades of that make you feel smart. so, i feel it was unfortunate that i did not get to stay there, but i do not think i missed any knowledge because whatever i needed to learn, i was still in a learning mode. david: in the early days, you were just a college dropout, very young looking, did you get taken seriously by businessmen much older? mr. gates: for some people, the youth and geekiness, hey, should we trust them? that is so weird. we have never seen something like that before. yes, we had to fight for acceptance. i cannot rent cars so i had to take cabs around.
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as we got a little bit of success, people were fascinated by this deep belief we had in software. david: when microsoft is moving forward, you decide to take the company public in 1986, and at that point you are a billionaire. mr. gates: pretty close to it. within a year of going public, i think. there is some fortune cover that says, the deal that made bill gates $360 million or something like that. david: did you change your life at all? mr. gates: that whole time was amazing because i was hiring people as fast as i could. i brought in steve ballmer who was very good at that and helping us out. we had a sense of urgency leading the way. the graphic center with windows that we want to do, so i was super busy, and the idea that i could hire so quickly and invest
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and build this world was fascinating to me, but i was really busy. if some friend had tried to call me, you know, i would not have too much time for that. i was really into building this company. i was going out and telling people about the magical software which was good for my company but also helped me understand the opportunities, the huge change agent that software individually software plus the internet would become. i was having fun, it was amazing, but i always thought, hey, we are one step away from not leading. we have to keep doing better. david: when you had the famous ibm contract, you wanted the contract to produce the operating system. why did they let you own it and they had to license it? was that a mistake on their part? mr. gates: this is before graphic interface, when you just have text on the screen, so the software was the key thing. it got to be more of a high-end machine.
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they do not see how big this would be and their legal department did not want to take responsibility for the code. they had a limited license. we understood that this was a seminal machine and other people would do some hour -- similar machines so that was advantageous to us. they did not see the value in the software. they thought the hardware was the key and the software was the necessary thing. they did not realize the vision we had, which was the software over time would be way more important than hardware. they would have negotiated a different deal. david: you have a fair amount of money for anyone your age at that time. did you splurge and buy a nice car, an airplane, a boat or did you not care about that? mr. gates: i bought one thing that was a tiny bit of a splurge, the first car i owned was a porsche 911.
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it was used, but it was an incredible car. it was actually when i was down in albuquerque and sometimes when i would want to think at night, i would go out and drive around at high speeds. fortunately, i did not kill myself doing that. david: what about steve jobs in those days, what was your relationship with him in the early days and how did it change? mr. gates: we were both there at the very beginning. the apple 1 was the computer steve wozniak designed and he worked with steve and they came and offered these of various computer club meetings. we were sort of colleagues and pitching the gospel of personal computing. we were kind of competitors. the time we worked together most intensely was after the ibm pc came out. steve had a group, a small group at apple developing the macintosh and he came to us early on and asked us if we
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would commit resource. we put more people on the project than apple did and did the early application software that used that mouse, graphic center, so it was a huge win for microsoft and apple when the macintosh became so successful. david: when your mother for said, i would like to come and have dinner, you should meet him, you did not seem that interested. why was that? mr. gates: i thought it was someone who bought and sold securities, which is a very different thing. that is not curing disease or a cool piece of soware. the idea of looking at volume curves, that is why it was so shocking when i met him. ♪
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♪ david: your company grows, becomes successful in the most successful company in the world. at what point do you say, i want to do something else with my life? mr. gates: 1995 was a big year we shipped product and the software was doing well. we emerge, we were slightly the biggest depth with engineering and emerged as the successful company, and so i start thinking about, wow, there is a lot of value in microsoft. so during the 1990's i am thinking about that, my mom tragically passes away in the same year i get married in 1994. my dad is volunteering to help out, thinking about the philanthropy piece, so it was in
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the year 2000 that i put $20 billion into the foundation and then it became the biggest foundation at that point. david: you mentioned you got married in 1994 marrying a graduate. how that you have time to woo somebody when you are running your company? mr. gates: she was an employee of microsoft. we would run into each other in new york city where we sat together during a dinner, and she is an amazing person and kind of caught me by surprise how much engaged with my attention versus all of the exciting microsoft stuff i was doing. so, we dated on and off for about five years and decided to get married. david: you decided your foundation with focus principally on health in africa
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and k-12 education in the united states. is that right? how did you come to those conclusions that those with the two things you wanted to work on as opposed to everything else? mr. gates: we talked about it a lot, so that was a decision melinda and i made. we wanted to take the greatest injustice in the world, something we could make a huge difference in and that is health and we brought that by doing agriculture, sanitation and other things. we wanted to take a cause that would help the united states bs -- be as strong and improve educational opportunities. david: you go into the field. why do you feel you need to go into the field in africa or latin america, or any part of the world giving away money and meet the people? mr. gates: i have chosen to spend my time and melinda
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spends her time building the foundation so it has an impact. i get a lot of enjoyment. this is how i have taken everything i have learned from microsoft in the position i am in and helping to drive the strategy and go out and see what is going on with this work. that is my full-time job, and it is a wonderful job. david: your foundation has a certain life. it is not perpetual. is it 20 years after either you or your wife is the last one to live dies, it would end? mr. gates: that is right. the way we are managing the institution, keeping it excellent and using it to solve problems that can be totally solved, so we work on malaria. this foundation should be able to participate in getting rid of
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that. all of these infectious diseases that so disproportionately hurt the poor and really explain most of the difference between why a poor child has a 50 times greater chance of dying than a child from a wealthy country. in 30 or 40 years, those problems should have been brought to an end. whatever the new problems philanthropy should go after, the people who are alive then and taking great executives and building institutions, they would do a much better job than we can writing down a little guidance. it is a limited time foundation. david: when your mother for said, i would like to come and have dinner with me with warren buffett. you did not seem that interested. why was that? mr. gates: warren, i thought that was somebody who bought and sold securities. that is not curing disease or a cool piece of software. the idea of looking at volume
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curves, it does not invent anything, so i thought my way of looking at the world, what i wanted to figure out in the way he looked at it, there would not be much intersection. that was why it was so shocking when i met him, he was the first person to really ask me about software and software pricing and why was an ibm able to overwhelm microsoft and what was going to happen in terms of how software changed the world? he let me ask him about, why are you investing in certain industries and why are more banks profitable than others? he was a broad systems thinker, so it started a conversation that has been fun and enriching and in incredible friendship that was completely unexpected. david: he taught you how to play bridge. mr. gates: i already knew how to play bridge but our family had done it, and because warren --
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it was a chance to spend time with warren, i renewed my bridge skills, but most things we did were in our hours that we got to goof off to go. david: you have given up on golf? mr. gates: warren gave up on golf a few years ago, so my primary excuse to play golf has gone away, so i'm golfing not much now. tennis has become my primary sport. david: warren buffett called you and said, by the way, i am going to give you most of my money. or you surprised? -- were you surprised? mr. gates: that was a complete surprise because warren is the best investor and has built this unbelievable company. i was learning so much from them, but his wealth was devoted to a foundation that his wife
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was in charge of, and so tragically she passed away and so then he had to think that his initial plan would make sense and much to my surprise, he decided that part of the wealth, a little over 80% would come to our foundation, so it was a huge honor, a huge responsibility and an incredible thing because it let us reach our level of ambition. by most definitions, the most generous gift of all time. david: you started with warren be giving pledge. what is that about? mr. gates: warren was brainstorming with us about how philanthropists figure out how to do, how could they kind of help share with each other
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without giving up the diversity of what they did? he got us to do some dinners of people that were already doing amazing philanthropy and talk about how they built staff and kicked causes. not that they would get to the same things, but that the quality, how early people got engaged would be enhanced by the people getting together and making a public commitment to give the majority of their wealth away. so, that is because of the giving pledge group. david: you are the wealthiest man in the world for 20 years. how does that affect your life daily, people coming up asking for money, expecting you to buy them things. do you get tired of it? ♪
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♪ david: when you were doing microsoft at the beginning, you are doing the coding yourself, and you are presuming more calming that anybody, but now you have so many other responsibilities. when microsoft develops a new piece of software, are you able
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to talk to the software engineers at the same level you could 20 years ago? mr. gates: i am nowhere near as hands-on as when i was writing the code, but in my career this evolution of being in individual performer than a manager, manager of managers and then looking at broad strategy, you have to get used to the fact that you do not have as much control. i try to understand enough about software that the trade-offs we are making about features, the basic design, i still enjoy those discussions, and even today at microsoft, we get to talk about, ok, what should the next office do? how could windows be better? how will the interface change? those sort of things. i am able to participate but it is a way more complex deal than i could actually write all of the codes myself anymore. david: when somebody turns on the computer today, they have to
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have three fingers, usually and they put a finger on control, alt, delete and it seems a little awkward to do that. why did you do that and why do people have to have that mechanism to turn on the computer? mr. gates: most machines now that it has moved away from that, but the idea that we knew there was logic in the keyboard that could detect a truly unique single that would bypass the software running so you can know he was really starting over. clearly, that ended up being an awkward piece of user interface. if we had to do it again, we would not do it. it was the chasm between microsoft and ibm that it ended up being that way. it is kind of become the poster child of, hey, couldn't you have made this stuff a little simpler? david: you are the wealthiest man in the world for 20 years or
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more. how does it affect your life daily? people come up to you asking for money, expecting you to buy them things. mr. gates: fortunately, people know the wealth is dedicated to the foundation so they have ideas in the foundation area, improving education. then it is great to have them talk to me or talk to those people. i have the benefit of being well known so i can go out and meet interesting people and share my views and get a lot of attention. i would say that is a benefit. when i am out with the kids, then it can be a tiny bit of a drawback, you may not get as much privacy as you would like, but overall, my success has allowed me to get more done, build partnerships, meet some great people. david: how do you deal with it when you want to go shopping? mr. gates: i go shop, go out to the theater. david: people do not come up to you and ask for selfies?
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mr. gates: they can, but that is pretty quick. people are usually very nice about it. david: what about your children? everybody who is wealthy and has children, how do you train your children to live with the wealth, how much do you give them and how do you get them involved in philanthropy? mr. gates: our kids are young enough that the key focus is helping them enjoy learning, get a great education. all of them will pick careers that are not related to software in philanthropy. they will strike out in their own direction and be great in their own way, whatever it is they picked to do. so, we have chosen that they will have enough wealth that they will never be poor or anything, but we are not going to take billions of dollars and
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have that define their life. the vast majority of the wealth is dedicated to the foundation. in so far, they are great kids and they enjoyed learning about what we are doing in africa and that may shape where they go with their lives, but it will be up to them. david: when people look back on what you have done 20 years from now, what would you like to have people say bill gates achieved? mr. gates: i do not think it is important for me to be remembered specifically. i do hope infectious disease is largely eliminated as a problem, so that nobody is having to talk about it and people can focus on other issues. that would be a huge, great thing if our work helps improve u.s. education, that would be a huge, great thing. most importantly, the people who
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really know me, my kids, they feel i was a good father, gave them an opportunity to go create their own life. ♪
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