Entrepreneurs

What Microsoft billionaire Bill Gates was doing at 20 years old

Microsoft co-founder Bill Gates
Doug Wilson | Getty Images
Microsoft co-founder Bill Gates

Today, Microsoft co-founder Bill Gates is one of the world's richest people, with a total net worth estimated at nearly $90 billion. But a little over four decades ago, Gates was a brash young software developer who was just getting ready to take center stage.

In fact, it was this week in 1976 that a 20-year-old Gates was preparing to make a big speech — the opening remarks at the First Annual World Altair Computer Convention in Albuquerque, New Mexico. At the time, Gates was still technically a student at Harvard University, having taken a leave of absence after two years in school to form a computer software company with his high school friend, Paul Allen. That company, of course, would become Microsoft and Gates never finished his degree (though, he was granted an honorary one in 2007).

Gates and Allen had worked together as computer programmers at software company Honeywell in the summer of 1974 following Gates' freshman year at Harvard. That same year, the world's first personal computer kit was released. The Micro Instrumentation and Telemetry Systems' (MITS) Altair 8800 inspired Gates and Allen, and they started working on software for the computer.

In a 2007 commencement speech at Harvard, Gates reminisced about calling MITS president Ed Roberts (from his dorm phone) to sell MITS on the idea of Gates building a version of the programming language BASIC for the company's new Altair computers.

"I worried that they would realize I was just a student in a dorm and hang up on me," Gates recalled. "Instead they said: 'We're not quite ready, come see us in a month,' which was a good thing, because we hadn't written the software yet.

"From that moment, I worked day and night on this little extra credit project that marked the end of my college education and the beginning of a remarkable journey with Microsoft."

In fact, Gates and Allen both admitted later that they had lied and told MITS that they already had a version of BASIC for the Altair when they hadn't yet written the software. "We had nothing," Allen told CBS' 60 Minutes in an interview.

But by the time the audacious pair met with MITS in New Mexico two months later, their programming language was ready.

After selling that software to MITS, both Gates and Allen took jobs with the company in Albuquerque at the end of 1975, while also forming their own partnership, then called "Micro-Soft." Gates and Allen continued working on developing software and, in February 1976, Gates wrote his famous "Open Letter to Hobbyists" in MITS' newsletter.

In the letter, which Gates later would say "really became a cause celebre at the time," the future billionaire complained about the widespread practice of computer users sharing the software he and Allen had developed without paying for it, calling the practice copyright infringement. Gates argued that, in order for quality software to be developed for computers, that developers like himself needed to be paid fairly. Gates included his Albuquerque address at the end of the letter for "any one who wants to pay up."

Over the ensuing decades, Gates and Microsoft would make billions of dollars precisely because of its copyrighted software is not shareable.

The open letter earned Gates a fair amount of notoriety in the world of "computer hobbyists" at the time, as it was reprinted in several computer magazines. A month later — on March 27, 1976 — Gates took the stage as the keynote speaker at the Altair Computer Convention, signalling his own ascent in the world of computers as well as the fact that it was becoming less and less likely that he would return to school anytime soon.

Later that year, Allen and Gates' side project, "Micro-Soft," began selling programming language software to other companies along with MITS, including General Electric and Citibank.

"If things hadn't worked out, I could've always gone back to school," Gates said in a 1994 interview. "I was officially on leave, I didn't have, like, a family to feed or anything. But, I was doing the payroll, writing the taxes, writing the contracts [and] figuring out how to price the software."

In November 1976, Gates and Allen officially registered the company name "Microsoft" (without the hyphen) in New Mexico. Three years later, the company left New Mexico to establish its new headquarters just outside of Seattle, where both Gates and Allen grew up.

Paul Allen and Bill Gates in 1987
Getty Images | Ann E. Yow-Dyson
Paul Allen and Bill Gates in 1987

Allen left the company in 1982, while Gates remained CEO until 2000, steering the spread of Microsoft's ubiquitous Windows operating system and Office software suite.

Today, Gates is the world's second-richest person, behind Amazon's Jeff Bezos, while Microsoft has a market value of nearly $700 billion.

In 1994, Gates reflected on those early days of Microsoft, saying: "Microsoft was a business from the beginning, not that we had any clear view that it would ever be a large business. But, I had to pay these friends I'd hired. At a minimum, I had to make enough money to pay their paycheck.

"And, if I got enough confidence we could sell a lot more, then I'd be able to hire even more people to get ahead, to be the leader, and doing lots of products that could share code with each other and take the market."

In fact, confidence was key in transforming Gates from a 20-year-old college kid with an interest in computers to co-founder of a company that is now one of the world's largest. He recently talked about the need for self-confidence to go out on a limb and "try out new things."

"Self-confidence is primary," he told the Australian Broadcasting Corporation, "and then finding your passion is an adventure."

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