#401 How Bill Gates Works

**David Senra** (0:00)
I want to start with a quote by Bill Gates on Bill Gates, and then I want to tell you this excellent Larry Ellison quote on Bill Gates that I found. So first, this is Bill Gates on Bill Gates. He says, a key advantage I had was being fanatical. That is taking all of my capabilities day and night and just focusing on how do you write good software. I loved being a fanatic. Eventually, I reveled in it. I didn't believe in weekends. I didn't believe in vacations. For a lot of people, it wasn't an ideal place to work. We were pretty frantic and demanding. And then here's the quote from Larry Ellison on Bill Gates. Keep in mind, Larry Ellison and Bill Gates were very fierce competitors. This is what Larry Ellison said. Bill Gates is one of the most remarkable business people I've ever met. Some people say Bill is the most brilliant guy that they've ever met. There are a lot of really brilliant scientists in our business. Forgive me, there are a lot of people in the world smarter than Bill Gates. There are very few people in the world that have his focus and endurance. Someone once said Bill wants people to think that he is Thomas Edison when he is really Rockefeller. If he was Edison, he would be less dangerous. He is utterly relentless. He is indefatigable. He is absolutely focused and he wants it all. Barry Diller said he is young and he's mean and he's not tired. That's a high compliment coming from Barry Diller. Bill is tough and he wants it all. And I have incredible respect for that man. So recently Bill Gates just wrote an autobiography. It's called Source Code. It covers his early childhood and his life up until founding Microsoft in a few short years after that. And so originally this episode was just going to be about what I learned by reading Source Code. So what I decided to do instead is I want to make a How Bill Gates Works episode. Very similar to the How Elon Works episode I just did. And so I grabbed all the notes and highlights from Source Code and four other books that I've read on Bill Gates. And then I stripped away everything that wasn't his approach to building his company. And so I'm going to go through book by book. So let's start with Source Code. A lot of this that I pulled off in Source Code is you see one of the things that the genius things that Bill Gates did is he designed a company that was natural to him, that benefited from his innate talents and personality. So it says by the time I was in my early teens, my parents had accepted that I was different from many of my peers and had come to terms with the fact that I needed a certain amount of independence in making my way through the world. From a very early age, Bill Gates discovered that he liked being, what he said earlier, I was a fanatic, he liked being obsessed. Unfortunately the school he went to, which is called Lakeside, had access, which is extremely rare at this point in history, to a computer. Lakeside had set up a way for students to connect with a big mainframe computer over a phone line. It was incredibly rare back then for teenagers to have access to a computer in any form. And so as soon as Bill discovers this, he says, we really took to it. We devoted all of our free time to writing programs. And he found the perfect activity and hobby that aligned with his innate personality. He says, programming fit me because it allowed me to define my own measures of success and it seemed limitless. The logic, focus and stamina needed to write long, complicated programs came naturally to me. I would retreat into my own thoughts. I would picture computer code in my mind. And one of the things that young Bill Gates is going to discover, like many of history's greatest entrepreneurs did before him, is that constraints are your friend. Small was key. Computers back then had very little memory, which meant programs had to be lean, written using as little code as possible, so not to hog memory. Like the famous line, I would have written a shorter letter, but I did not have time. It is easier to write a program in sloppy code that goes on for pages than to write the same program on a single page. This goes back to an idea that has popped up the last few weeks with you and I, when we talked about James Dyson, believe that lean engineering is good engineering. Elon Musk would say the same thing. Bill Gates would say the same thing. Lean engineering is good engineering. Now what is so fascinating about this is that you will see that Bill also ran his business this way. He has a visceral, like disgusting reaction. He just hates waste and inefficiencies. And one of the ways this manifested was Bill was obsessed with cost control and he is constantly hounding everyone in the company about it. This will come up many, many times in every book that you read about Bill Gates and Microsoft. Actually, one of my favorite stories about this is I got to spend a bunch of time with John Mackey, who's the founder of Whole Foods. And during one of our conversations, John told me one of the craziest things that anyone has ever said about this podcast, because before, by the time me and John met, he had listened to over 100 episodes of Founders. And he told me that if Founders existed when he was younger, that Whole Foods would still be an independent company. That since the podcast and all of History's Greatest Entrepreneurs are constantly emphasizing the importance of controlling expenses, he would have put more of a priority on it, especially during good times, during boom times. It is very natural for a company and really for human nature to just not watch your costs as closely, because everything is going so well. That is something I was talking about with my friend Eric, who's the co-founder and CEO of Ramp. Ramp is the presenting sponsor of Founders. And way before they were the presenting sponsor of Founders, I had known all the co-founders of Ramp and had spent a bunch of time with them. They all had listened to the podcast and they picked up on the fact that the main theme, one of the main themes of Founders is the importance of watching your costs and controlling your spend and how doing so gives you a massive competitive advantage. This is something Bill Gates understood intuitively and implemented incessantly. Wait till we get to these parts. I think it's going to blow your mind. Warren Buffett said that a good manager of a business should be a demon on costs. Bill Gates was exactly that and that is a main theme for Ramp. The reason that Ramp exists is to give you everything you need to control your spend. Ramp gives you everything you need to control your costs. They give you easy to use corporate cards for your entire team, automated expense reporting and cost control. Ramp helps you run an efficient organization, which Bill Gates was obsessed with doing. And Ramp does this all on a single platform. Make history's greatest entrepreneurs proud by going to ramp.com to learn how they can help your business today. That is ramp.com. So, in addition to having a distaste for inefficiency, a distaste for waste, having the ability to hyper focus, two other traits of Bill Gates that are present in his early childhood, that will never leave him, and are very present as he's building Microsoft, is the fact that he is ruthlessly competitive and full of energy. And so he would tell stories in the book, in Source Code, about the fact that even when he was a kid, he had sisters, that they would play all kinds of board games. So, Monopoly, Risk, Card Games. And he says they had to turn everything into a competitive sport, that they would buy two copies of the same puzzle, and then they'd race to see who would finish first. And then he says his other notable early trait was excess energy. And he says, I rocked. Rocking while, you'll see this in any interviews. There's also a great documentary on Bill Gates on Netflix, where he's constantly rocking. So he says, I rocked. Rocking while seating, rocking while standing. Anytime I got to really thinking about something, rocking was like a metronome for my brain, and it still is. And then another trait that's really important to understand about Bill Gates, because again, all we're talking about is the ideas he used and the personalities he used to build his business. He is incredibly combative. And the first main person he was combative with was his mother, because she tried to control him. Bill Gates is unmanageable. And eventually his parents figured this out. He says, my parents knew that the rhythm of my mind was different from the other kids. My sister did what she was told. She played easily with other kids, and from the start got good grades. I did none of these things. I was an aggressive, rebellious child. He would be the same kind of founder. I was described as hyperkinetic, brainy, contrarian, and temptuous. My teachers and my parents noted at an early age of what was to come. I channeled intensity into anything that interested me and nothing that didn't. And Bill Gates lives in binary states. This will pop up over and over again. He's either totally apathetic or completely obsessed. And one of his first obsessions, like many of his great entrepreneurs, was reading. By elementary school, I was reading a lot on my own at home. I was learning how to learn by myself. And I liked the feeling of being able to quickly absorb new facts and entertain myself with books. School felt slow in comparison. Reading was my default state. When I read, hours flew by. I tuned out the world. I was in my own head. Books were the one thing my parents never questioned spending money on. One of our greatest treasures was a set of the World Book Encyclopedia. I read through every volume A to Z. Again, I have to point this out. The maximum I have for this is they devour entire shelves. This idea of reading every single book on a subject, reading entire libraries, reappears over and over again in these biographies of great people that did great things. Thomas Edison, Winston Churchill, Elon Musk, Edwin Land, Bill Gates, they devour entire shelves. If they are interested in a topic, they must. They can't even, I think they're compelled, they can't even help themselves. They must read every single thing they can get their hands on about it. I had growing confidence in my own power of my own intellect. With this confidence also came a feeling that the intellectual divide between adults and me had collapsed. My father would later say that this change happened abruptly. He said, I became an adult overnight, an argumentative, intellectually forceful, and sometimes not very nice adult. I was nine. A lot of people ask me for a top 10 list. I was like, tell me, just give me the top 10 of all the books that you read, and I'll just read your top 10 list. I don't know what that list would look like. All I know is there's one book on Bill Gates that has to be on that list. One of my favorite books I've ever read is called Hard Drive, Bill Gates and the Making of a Microsoft Empire. I've read it twice. I've done two episodes on it. And the reason that I'm, and I'm going to go through a bunch of highlights for you in a little bit on the book. And one of the reasons I find that book so interesting is because it focuses on Bill Gates' ability to focus. And he talks about this in Source Code. He says, I was very deliberate about what I put energy into. I think that is a huge difference between people that accomplish great things and people that want to, but never do. You have to be very deliberate about what you put your energy into. I felt most at home in my own head. I could go days without speaking, emerging from my room only for meals and school. This got to be such a big problem. They had like a therapist, like a family therapist, and it was really the therapist was there to try to moderate the relationship between Bill and his mother. And the reason I bring this up is because there's gonna be so many times throughout a young Bill Gates life, where older adults realize this kid is special. He's got an iron will and it's just not gonna work. Essentially, what happens is the therapist tells his parents, you have to loosen your grip on him. You are going to break before he does. And later on in the book, when Bill Gates is already running Microsoft for, or this is a different book, later on in the podcast, I'll tell you about this. You know, he talks about the fact that he's been running Microsoft at that time for like 20 something years. He's like, I don't understand, this is fantastic. Why is it so rare for people to run a company they founded for multiple decades? Goes back to that legendary endurance and focus that Larry Ellison observed him in. And so, this is the end result of family therapy. My father later shared what Dr. Cressy said. Give it up, he told my parents. He's going to win. Ease up, don't force it, give your son more freedom. And so, any adult that came in contact with the young Bill Gates, it said Bill had a lot of innate self-confidence. He had a high opinion of himself from a young age. I think this is one of the most important things. I absolutely loved Michael Dell's autobiography that I've told you about a million times. You know, I've listened to the audiobook three times before I made the episode on that book. And one of my favorite things that Michael Dell shared in the book was, you know, the idea that I'm going to try to take on the world's biggest company with $1,000 from my dorm room, and he says, was I a little full of myself at 19? Sure, I was. I think you have to be to do anything important. Very similar to the line in this book. Bill had a lot of innate self-confidence. He had a high opinion of himself from a young age. And one of the smartest things that Bill did from a young age is he started consuming a ton. He said he consumed stacks of biographies. And he named some in the book, like Franklin Delano Roosevelt, Douglas MacArthur, Napoleon, Henry Ford, etc. He said we spent, him and his friend were doing this together. He said we spent hours on the phone dissecting their lives. We analyzed the past they followed to success with intensity. Again, he can't do anything. If he's doing anything, he's doing it with intensity. Goes back to his love of computers and really picking a business that would come naturally to him, one he could do for many, many decades. I loved how the computer forced me to think. It was completely unforgiving in the face of mental sloppiness. Again, which really disturbs him. It demanded that I be logically consistent and pay attention to details. One misplaced comma or semicolon, and the thing wouldn't work. This feedback loop was addictive. He's like 13 at this point in the story. The feeling of getting better and better was a rush. Writing programs flowed in from a combination of skills that came easy to me. Logical thinking being one, and an ability to focus intensely for long periods being another. Programming also stoked the persistent need I had to prove myself. I was an 8th grader confident in my brain power and convinced that my intensity meant that I could do anything the older guys could do, if not better. The way he ends this paragraph speaks back to his hyper competitiveness. I was determined to not let anyone get anything on me. And so this is when he's going to meet his future. He meets his future co-founder Paul Allen at Lakeside. Paul Allen is two years older than him. And there's something that Bill Gates says in a few different books. He was attracted to a field where there's like no path. There's like no track in front of you. You kind of have to figure this out for yourself. And one way he would talk about this later, when he was asked to give advice, you know, if we were starting over, if you're a young person, what would you do today? You obviously wouldn't start Microsoft today. And he says you should look for virgin territory to identify opportunity. And that is exactly what we find where we're on the story, because he says there's no instruction. We knew more than our teachers, and we were forced to try to piece together how to write our first programs on our own. Later on, I'll talk about, you know, we couldn't watch YouTube tutorials on how to code because there's no internet. There was no internet. So he says, as the weeks went by, a lot of the kids who first played around with the terminal, the computer, lost interest and drifted away, leaving a small group of hardcore adherence that is Bill Gates' favorite word by far. Hardcore. And this is the key. Everyone is human nature. They give up on everything. Remember what Larry Ellis said about Bill Gates. There are very few people in the world that have his focus and endurance.