Microsoft Volume I

**David Rosenthal** (0:00)
What were you listening to before we hopped on to your walkout music?

**Ben Gilbert** (0:03)
New Beyoncé.

**David Rosenthal** (0:04)
Oh, New Beyoncé. I haven't heard it yet. How is it?

**Ben Gilbert** (0:06)
I really like it.

**David Rosenthal** (0:07)
Nice.

**Ben Gilbert** (0:08)
I think it is reductionist to call it country.

**David Rosenthal** (0:12)
I was appropriately enough listening to Start Me Up Through the Ages.

**Ben Gilbert** (0:16)
Of course you were. But I feel like a David Rosenthal move is that you might have been listening to Start Me Up whether we were doing Microsoft or not. That's a very squarely in your genre song.

**David Rosenthal** (0:28)
The Stones though, man, like it's crazy. They're in their 70s, 80s.

**Ben Gilbert** (0:33)
Amazing.

**David Rosenthal** (0:34)
Man, I hope we're in our 70s and 80s dancing on stage.

**Ben Gilbert** (0:38)
Season 126

**David Rosenthal** (0:39)
Yeah.

**Ben Gilbert** (0:42)
All right, let's do it.

**David Rosenthal** (0:43)
Let's do it.

**Ben Gilbert** (1:01)
Welcome to season 14, episode 4 of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

**David Rosenthal** (1:09)
I'm David Rosenthal.

**Ben Gilbert** (1:10)
And we are your hosts. We often remark that selling software is the best business model of all time. Well, today, finally, we tell the story of the company that created that business, Microsoft.

**David Rosenthal** (1:26)
Finally. We're like 10 years into Acquired here. We're finally doing it.

**Ben Gilbert** (1:30)
It's been daunting. We wanted to do it for a while, but it takes some chutzpah to tackle Microsoft.

**David Rosenthal** (1:35)
I'm so fired up. We're ready. It's time.

**Ben Gilbert** (1:38)
Well, listeners, Microsoft today is sprawling and massive. It is the world's most valuable company worth over $3 trillion. They have 49 years of history making software for consumers and enterprises, making hardware, gaming systems, gaming studios, Windows apps, iPad apps, Mac apps, operating systems, mobile operating systems, MP3 player, search engines, cloud computing services on cloud computing, programming languages, development environments. The list goes on. But it did not start out that way. Today we will tell the story of the desktop software company. Before the enterprise, before IT, before the internet, before being a trusted partner to governments around the free world. And really before people even knew what to do with personal computers. This is the story of a bunch of rag-tag geniuses in their 20s pushing what was possible. Welcome to Microsoft, the PC era. Well, listeners, if you want to know every time an episode drops, you can get hints at the next topic and follow up. You can sign up at acquired.fm slash email. Come talk about this episode with the community at acquired.fm slash slack. If you want more from David and I, you should check out our second show, ACQ2, where we interview founders, investors and experts, often as a deeper dive into topics we cover on the main show. Before we dive in, we want to briefly thank our presenting sponsor, JP Morgan Payments.

**David Rosenthal** (3:09)
Yes. Just like how we say every company has a story, every company's story is powered by payments, and JP Morgan Payments is a part of so many journeys from seed to IPO and beyond.

**Ben Gilbert** (3:20)
With that, this show is not investment advice. David and I may have investments in the companies we discuss, and likely all of you if you hold any index funds, and the show is for informational and entertainment purposes only. David, where on earth do we start the Microsoft story?

**David Rosenthal** (3:37)
We're right down the middle on this one. We're going to start in 1955 in Seattle, Washington, with the birth of Bill Gates III or Trey, as he's known growing up. It's so confusing because his dad is the second, but he goes by senior and Bill is junior slash the third slash Trey. So Bill in 1955 is born as the second of three children to Bill and Mary Gates. Now, Bill Gates senior, his father, is from Bremerton, the Navy town just across the sound from Seattle, where he grows up in a family that owns and runs a furniture store there, a long way from the software king of the world here. Now, Bill Gates senior slash the second, after high school, he joins the army during World War II, serves during World War II, and then he goes, I presume, on the GI Bill to the University of Washington, where he's the first member of his family to go to college. There he gets an undergrad and a law degree in four years, and then decides to stay in Seattle with his new family and become a practicing attorney. Now, I say family because at the UW, he meets and marries one Mary Maxwell.