Column: Gates' World Of Good

Letter From Silicon Valley

06.19.06, 6:00 AM ETBurlingame, Calif. -
So why'd he do it?

Why did Bill Gates decide to walk away from full-time work at Microsoft--the software giant he founded 30 years ago--in favor of a new career as a full-time philanthropist?

Gates himself didn't offer much of an answer last week. Most commentators have been so busy picking apart the strategic implications for Microsoft (relatively minor) that they haven't tried to probe the private motivations of the world's richest man.

But for those of us who have watched Gates redefine himself over the years, there are plenty of clues. No younger upstart pushed him out; after all, Gates is still Microsoft's biggest shareholder and can do anything he wants at the company. Instead, his choice reflects how much his dreams and opportunities have changed in the two main arenas of his life.

Walk around Microsoft's Redmond, Wash., campus, and you can tell right away that you're at a mature, slow-growth company. Huge teams of people worry about how to upgrade long-established products so that existing customers will buy them one more time. There's a dash to the parking lot at quitting time. Employees grumble that the stock isn't going up and that their once-magnificent equity compensation packages have lost their luster.

It didn't used to be this way. When I first visited Microsoft in 1990, engineers and even marketing managers were filled with a change-the-world zeal. I remember one young engineer telling me in awed tones how he felt knowing that the code he wrote could change the lives of people he had never met in places he barely knew existed. He could literally feel power surging from his typing fingers into the world.

OK, so maybe that guy had an exaggerated sense of self-importance. But the Microsofties believed in something bigger than themselves. And Gates, who lived, breathed and slept Microsoft, was the most energized of all.

If you want to find that sort of enthusiasm in the Seattle area today, cross Lake Washington and visit the unmarked gray and glass building that houses the Seattle headquarters of the Bill & Melinda Gates Foundation. There, scores of program officers are running the world's largest private foundation. They talk excitedly about ways to improve education or to battle Third World diseases such as malaria and AIDS.

Their ideas are audacious, teetering right on the edge of genius and possible failure. In philanthropic circles, the Gates crowd is seen as brash--chock-full of a belief that technology will cure the world's problems. And their budget is enormous. Led by the threesome of Gates, his wife, Melinda, and former Microsoft comrade Patty Stonesifer, the foundation is hiring teams of the "smartest" people it can find.

Sound familiar? For Gates, stepping inside this foundation is a lot like turning back the clock to 1990, when Microsoft was young, proud and daring.

At Microsoft, the top job is not about changing the world--it's about reinvigorating the company and sustaining the stock price. That's no place for someone with big dreams.

When Gates has talked over the past couple of years, he has doggedly described the importance of software, how Microsoft is fighting Internet hackers and how it can help make companies more efficient. But his heart hasn't been in it.

Even within internal meetings at Microsoft, people say they see the old Gates passion light up his eyes when he talks about the mind-numbing statistics of mortality due to diseases like diarrhea, tuberculosis and malaria.

But doing good, especially with a lot of money, is surprisingly hard. It's not enough to simply want to do good. You need a plan, a willingness to cope with setbacks, the brains to figure out how to recover when things go awry, and the stomach to deal with misfortune, incompetence and, sometimes, sheer fraud.

Gates believes technology can help save the world--not by handing out computers but by doing hard science to develop new vaccines and by crunching data to understand the supply chain of getting life-saving drugs to remote villages. That makes him unusual in the world of global public health, which typically has been driven by medical workers who started their careers working in rural clinics and ministering to one person at a time.

Gates isn't a one-at-a-time kind of guy (see: "The (Almost) Exit Interview"). Imagination drives great philanthropy--a techno-colored vision of how the world can be a radically different place, writes Mark Dowie in American Foundations: An Investigative History, one of the few hard-hitting books on the subject.

At the Gates Foundation, there are big visions: a world where every child can be vaccinated; where the age-old diseases that cripple developing nations finally can be quashed; and where high-school students everywhere will be excited about school and their opportunities. These ideas are bigger than serving the enterprise. Bigger than software itself.

And this time, the world is probably going to thank Gates.

http://www.forbes.com/home/columnists/2006/06/16/gates-retires-microsoft-cz_ec_0619valleycolumn.html

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Column: Who's Really Running Google?

Letter From Silicon Valley
06.05.06, 6:00 AM ET

This is the first in a series of dispatches from Silicon Valley from Forbes magazine Senior Editor Elizabeth Corcoran.

BURLINGAME, CALIF.--Imagine that the earth's magnetic field flip-flopped: Instead of compass needles pointing north, they'd quiver around the "S."

That's what's happened in Silicon Valley. Since the early 1990s, entrepreneurs and engineers in the Valley have compulsively looked north toward Redmond, Wash., peeking over the shoulder of Microsoft. Writing a business plan? Start by finding out what Microsoft is doing. Dreaming up a product? Better calculate how much time you have before Microsoft makes it part of its operating system.

Now the compass needle has swung south and points to Mountain View, Calif., home of the Googleplex. Microsoft is still around, of course, just like the Grand Canyon. But it's not likely to slink around in the middle of the night and trip you up. Microsoft has become more predictable. Now it's Google that people obsess over; Google that has become the great vacuum cleaner of talent, sucking up all those "really, really smart" people; Google that dreams up dozens of nifty ideas a year and plugs them into its dominant search engine.

In a Microsoft-oriented world, it was easy to figure out who was in charge: First , and later . But who's running Google?

Eric Schmidt, of course, is the chief executive, the guy who cheerfully called himself the "adult supervision" when he signed on. And he puts on a good face for the outside world: "The only way we'll deal with our growth and scale is with a systematic approach to each and every thing we do," he declared at Google's press jamboree in May. The company's focus, Schmidt assured reporters, is really on search. "We have more people working on search than ever before," he said.

But as charming as he is, Schmidt runs Google about as much as much as the Dalai Lama runs the world's spiritual life.

Google hardly has a classic corporate command structure. Instead, Google executives seem to carry themselves with all the authority of an overindulgent parent, constantly worrying about what employees think. Before Google announced that the company would obey the Chinese government by censoring the results of some searches, senior executives knew they'd take heat from human-rights advocates for the decision. They could cope with that. More nerve-wracking, however, confided one senior executive, was what people inside the company would say.

This attitude draws snickers from outsiders. "I've heard that they have a lot of cacophony in the development process. I'm not surprised," deadpanned Microsoft's Ballmer at a recent Silicon Valley gathering. "It's important to have lots of flowers--but important to have coherence, too."

Peek inside the Googleplex, and what you'll see looks more like swarm behavior than a military drill. In many families, everyone has to pitch in and do some grungy work to keep the household running. But at Google, every engineer acts like the favorite child. From a Google employment Web site: "Because great ideas need resources to grow into reality, at Google you'll always get the resources you need to make your dreams a reality." (As my 9-year-old son would say, "Swe-eet!")

According to Peter Norvig, who directs Google research, "We rely on the Lake Wobegon Strategy, which says, 'Only hire candidates who are above the mean of your current employees.' " Managing people who are told from the minute they pick up their ID card that they're probably smarter than their boss is like supervising the wind. Ever think your boss was wrong? Well, if you're smarter than he is, then clearly you must be right. The logical conclusion: Just ignore him.

Once inside the Google tent, engineers are free to spend 20% of their time on projects that they're passionate about. But hey--no one's standing around with a time sheet. Just imagine the conversations:

Google boss: "Hey, how about getting that Google toolbar to work with the next version of Firefox?"

Engineer: "Oh, that." Yawns. "Yeah, I'll get to it. Right now, I'm passionately working on a mash-up that will help you plot a trip to Elvis festivals all over the world!"

Even Schmidt has conceded that the balance between gotta-do's and wanna-do's has gotten a bit out of whack. Google managers recently surveyed their workers and discovered that they weren't quite spending 70% of their time on the company's "core" areas--namely, search and advertising. "So, we're taking steps to encourage people to shift their energy back to that 70%," Schmidt assured reporters.

Schmidt has been through this before, with mixed results. He spent his formative years at Xerox's Xerox Parc, that incubator of brilliant ideas that sadly made only marginal dents in the corporation's bottom line. And at Sun, Schmidt helped promote Java, which turned out to be quite handy for much of the tech world but did little more for the company than provide a cool advertising campaign. By the time Schmidt reached Novell, that company was in dire need of forceful leadership. But oddly enough, all the leadership in the world rarely produces innovation--just better execution of what you already know how to do.

What those experiences have shown, time and again, is that innovation comes from contrarians, from the folks who pick a different path, who could care less about the rules, who aren't good soldiers.

One of Schmidt's great strengths is that he accepts that fact. As a result, he has defined his job not so much as leading Google but as running interference for it--placating the investment community, soothing nervous regulators and policymakers and doing whatever it takes to create a magical force field protecting Googleteers, so they can follow their instincts and invent new stuff.

The Internet, Schmidt has said, turns power relationships upside down. That's true inside the ultimate Internet company--Google--as well as out on the raw and woolly Web. As long as the masses are running Google, innovation will flourish. When management forcefully steps in, the pace of change will slow.

So, no, Schmidt isn't in charge--and for that, we should all thank him.

http://www.forbes.com/2006/06/02/internet-microsoft-google_cz_ec_0605valleyletter_print.html
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