Hard Drive - Bill Gates and the making of the Microsoft Empire 2

For my write-up on my readings on James Wallace & Jim Erickson Hard Drive: Bill Gates and the Making of the Microsoft Empire, I shall write about the following interesting parts that I got from my reading.

At page 33.“ Gates was finishing up the ninth grade when C-Cubed went under. When it did, he made the first of what would be many smart, profitable deals while at Lakeside. In the process, he showed that when it came to business, he didn’t allow anything, even friendship, to stand in the way. Without discussing the matter with Allen and Weiland, their partners in the Lakeside Programmers Group, Gates and Evans negotiated to buy the valuable DEC computer tapes from C-Cubed at a cut-rate price. They hid the tapes in the Lakeside teletype machine. When an angry Allen found out, he took the tapes. Gates and Evans threatened legal action, despite the fact that they were barely teenagers”

It seems like Gates took a hard-hearted approach towards his friendships even when he was managing Microsoft later on with Paul Allen. Paul Allen, in his biography, Idea Man, claimed how Bill Gates pushed a hard bargain of 64%-36% in profit sharing from the company with him. Further in Allen’s biography, he wrote that when he contracted Stage 1-A Hodgkin’s lymphoma later on, on "One evening in late December 1982, I heard Bill and Steve speaking heatedly in Bill's office and paused outside to listen in. It was easy to get the gist of the conversation. They were bemoaning my recent lack of production and discussing how they might dilute my Microsoft equity by issuing options to themselves and other shareholders. It was clear that they'd been thinking about this for some time."

This account of how one business partner conspires to reduce his other business partner’s ownership by diluting his share was something I saw from the movie the Social Network as well. That movie accounted how Mark Zukerberg, the founder of facebook, used a similar trick to play out his co-founder, Eduardo Saverin.

I am aghast at how these businessmen treat their friends. They do not seem to value friendship at all, which is rather sad in my opinion. I don’t think they ever see anyone in their lives as being true friends, and have no qualms about turning on their friends for an opportunity. The law should protect vulnerable minority shareholders from being victims of such unscrupulous corporate practices. From my study of company law, there are oppression remedies that minority shareholders can bring against such unfair practices. The court would usually order the oppressor to buy up the shares on the oppressed minority shareholder at market price, and sometimes where the injustice is not irremediable, order a ‘just and equitable’ winding up of the company.  

I wonder if there would be anything further in my reading of the Hard Drive that would remedy the damage to Bill Gates’ character that I have written about thus far. What I have been reading so far from the book is how brilliantly talented and intelligent a man Bill Gates was in his youth. He showed a knack for doing business even at a young age. At page 46 - “Gates went to Washington, D.C, as a page in the U.S. House of Representatives. His parents had gotten him the job through Brock Adams, who was now a congressional representative. Gates quickly showed his talent for making business deals. He bought 5,000 McGovern-Eagleton buttons for a nickel each - $250 worth. When George McGovern dropped Thomas Eagleton from the presidential ticket, Gates sold the scarce buttons as collector’s items for $25 each, making several thousand dollars in profit.”

I do read of such penchant for entrepreneurship in one’s youth in an account of Warren Buffett as well. He was remarking how profitable it was for him to sell coca-cola drinks which he bought at 5 cents each for 25 cents each. I wonder what a typical law student at NUS thinks about entrepreneurship, and engaging in trade to make a profit. Personally, I am intimidated in doing sales or entrepreneurship, and I don’t have much experience doing such stuff. I also lack knowledge and ideas on how to make a profit from entrepreneurship. My Dad tells me that I don’t have the disposition to be a good businessman. Perhaps I should stick to being a lawyer.

Bill Gates seems to buck the stereotype of being the cloistered nerd who has no life apart from handling the computers. At page 47 - “Girls had been admitted to Lakeside at the start of Gates’ junior year, when Lakeside merged with St. Nicholas, an all-girls school. Gates signed up for a drama class during his senior year that included some of the first female students to attend Lakeside. As a result, Gates landed leading roles in two school plays, The Night the Bed Fell, by James Thurber, and Black Comedy, by English playwright Peter Shaffer. The Thurber play required that Gates memorize a three-page monologue. Gates, with a nearly photographic memory, merely glanced at the pages for a few seconds and had the material memorized.”

I would have liked to identify Bill Gates as the sort of the social misfit who made his mark despite his social handicap. I do like a good underdog story that I can identify with and find inspiration from. But it is interesting that he seems to manage well on the social status ladder in his school from this account that I am reading. Nevertheless the authors write later on at page 63 : “Despite his association with the outgoing Ballmer, Gates was very much a loner with only a small group of friends. His shyness often came across as aloofness.” I suppose I can make the best understanding of my reading from this account by inferring that Bill Gates managed to lead a fulfilling social life despite being an introvert.