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G Is for Guts

The author argues that Bill Gates should get more respect for showing his true entrepreneurial colors by turning Microsoft operations over to Steve Ballmer and heading back to the laboratory.
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Entrepreneurial Ego

It's also for Gates, the man who has shown his true entrepreneurial colors by turning Microsoft operations over to Steve Ballmer and heading back to the laboratory.

If Rodney Dangerfield still feels he gets no respect, I want him to consider the reaction to Bill Gates's most recent career move at Microsoft. In January, Gates went from being CEO of the multibillion-dollar business he cofounded to naming himself "chief software architect" and handing over executive responsibility for his company to Steve Ballmer. What is most striking about the business community's reaction to that changing of the guard is how few people recognized it for what I think it was: a courageous leap into a self-esteem-threatening black hole. On the contrary, I've encountered two interpretations of Gates's ceding control: that it had the potential to temper the Justice Department's wrath and, more reasonably, that it could ease the ennui Gates suffered as a result of being an incredibly successful businessman with nothing left to prove.

Typical of the cynicism that dogged Gates after he bounced himself upstairs were doubts about his ability to innovate, based on how little of Microsoft's core technology sprang from the mind of Bill. Because Microsoft rose to prominence by selling products that it purchased or copied from others, the argument went, Gates's return to the "garage" could never produce the stuff of legends. Who cares? Gates is an entrepreneurial genius, and only fools who don't understand what entrepreneurship is about denigrate his aptitude or his success.

I suspect that Peter F. Drucker would be among the first to remind Gates's detractors that entrepreneurship and innovativeness are parallel dimensions of genius, much as composing music and being a concert pianist do not necessarily overlap. In his landmark book Innovation and Entrepreneurship: Practice and Principles, Drucker first debunks the notion that entrepreneurial spirit must emanate from the inventor's laboratory to be worthwhile. He then goes on to define entrepreneurs as those who apply "the basic concepts ... of management to new problems and new opportunities." The entrepreneur is a change agent who helps society enhance the yield and satisfaction from existing resources. And if Gates and company do not deserve the lion's share of credit for moving the information-technology revolution from punch cards to PCs, no one does.

You've probably heard the old saw "Windows 95 is Macintosh 85." Although it may be true that the Windows interface looked virtually identical to the first versions of Apple's Macintosh operating system and that Microsoft invested $150 million in Apple to, among other things, resolve long-standing patent-infringement litigation back when Apple's viability was in question, using those facts to "prove" Gates's lack of entrepreneurial talent misses the point. What are the testaments to, and proof of, Gates's entrepreneurial genius? His savvy decision to pump life into Apple when he did, because keeping a competitor alive would ultimately expand his market; and his understanding of marketing his product to the world rather than innovating for innovation's sake. Gates did business better than Jobs and the folks at IBM. An ocean of propellerheads would not be working today, let alone driving Porsches, but for a man who bought or copied what others had invented.

In a similar vein Gates gets panned for being a Billy-come-lately to the Internet party. After he had recognized the threat posed by Netscape's dominance, it took him a while to come up with the technology necessary to take his own browser to market. So what? I would argue that Gates's prescience is what sets him apart from entrepreneur wanna-bes: he saw the future, put his money where his mouth (and mind) was, admitted the need to play catch-up, and posed a big enough threat to Netscape that it ran to Washington, D.C., for protection. Gates's approach to business not only demonstrates the wisdom of "better late than never" but also embodies the cornerstone of entrepreneurial talent: It ain't what you've got, it's what you do with it that counts.

Because I don't know Bill Gates and have no idea what goes into the development of software, I can't say whether a revolutionary product will result from his moving from corner office to computer lab. I can say that he's proved he has the psychological fortitude to endure the travails of innovation. That, to be sure, is half the battle. Consider the following attributes, which all but guarantee Gates's success in the ongoing transformation of Microsoft in the face of ever changing customer demands:

He has no fear of failure. When Gates handed the reins of his company to Ballmer, he didn't retire, leave the field to buy a sports franchise, or develop venture-capital firms. Instead, he strode boldly into the trenches and proclaimed his willingness to test his mettle against the best the world has to offer. Gates has guts with a capital G, as I see it.

He shows no signs of having "founder's disease." Gates has spent his life building the business that he just turned over to a trusted ally. Show me a dozen successful business builders who can lay claim to the same strength of character. If Gates's lack of "my company equals myself" pathology were the norm and not the exception, the consulting industry that deals with family businesses would die in a New York second. Remember, Ballmer sets the strategy, Ballmer gets the credit for the next two-for-one stock split, and Ballmer calls and addresses the press conferences. Gates innovates or stays in his lab. After a lifetime of having Wall Street and Silicon Valley jump every time he sneezed, forfeiting that degree of power and control shows a strength of character typically found only in Congressional Medal of Honor winners.

He didn't hedge his bet one iota. In fairness, $85 billion provides a nice cushion against a fall, and no one doubts that if Bill fares as badly in his career shift as Michael Jordan did when he left basketball for baseball, he'll still never miss a meal. That said, most folks who make the Forbes 400 still establish a host of hedges before making a career move into the great unknown. Not Gates. There was no "It will take me years to recapture the technical knowledge I've lost while running this business" before he stepped down. Instead, he sounded like a Cyndi Lauper lyric extolling the desire to "just have fun." That attitude is the foundation of self-actualization and the psychological precursor of viewing the world with childlike creativeness and openness to the possible. Gates, by running with abandon toward the demands of an encore performance, has told the world that he is not afraid.

Whenever I read press reports about former CEO Bill Gates I am struck by how often reporters use the adjective nerdy to describe him. Judging by what he did back in January, I'd be willing to back him in hand-to-hand combat with a Navy Seal. The sort of courage that Gates displayed when he relinquished control of Microsoft is as characteristic of the successful entrepreneur as any other attribute I can name.

Dr. Steven Berglas is a clinical psychologist and management consultant on the faculty of the Harold Price Center for Entrepreneurial Studies at UCLA's Anderson School of Management and of Harvard Medical School's Department of Psychiatry. His previous columns can be found at www.inc.com/ incmagazine/columns/ego.


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Last updated: May 1, 2000




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