According to the most recent Forbes billionaires list, Bill Gates and Warren Buffett are the first and third richest persons in the world, with a combined net worth of approximately $152 billion. Masters of their respective fields, they are considered by many to be among the most successful people alive.

Interestingly, Gates and Buffett also happen to be longtime friends. Together, they've made a number of public appearances, and Gates credits Buffett with "invaluable" insights that have shaped his business acumen.

In the spring of 1998, Gates and Buffett came to Seattle to speak to University of Washington Business School students. They each gave a few introductory comments, then proceeded to answer questions from the audience. The lessons for entrepreneurs are insightful (and plentiful).

Here are a few of my favorites:

On what matters more than IQ and talent (6:30):

Buffet uses his opening comments to highlight the value of rationality. He compares IQ and talent to the horsepower of a motor, but rationality to the output, or "how efficiently the motor works." As he puts it: "A lot of people start out with 400 hp motors and get a 100 hp of output, and it's way better to have a 200 hp motor and get it all into output."

So why do smart people do things that interfere with getting the output they're capable of?

According to Buffett, it has to do with one's habits, character, and temperament: "Everybody here has the ability absolutely to do anything I do and much beyond, and some of you will and some of you won't. The ones that won't, it'll be because you get in your own way. It won't be that the world doesn't allow you to. It will be because you don't allow yourself to."

So how do you become a more rational person? Buffett suggests picking a person you truly admire, then taking a moment to list the qualities that make you respect that person.

He then recommends practicing those qualities, as you would practice training for a sport, until you "make them your own." A little practice will begin to produce habit-forming actions, therefore converting all your horsepower into output.

On adapting to change (16:00):

Gates cites IBM as an example of a company that made big mistakes in adapting to the industry:

"IBM was probably more dominant than any company will ever be in technology... they had the smartest people and the customer feedback, and yet they missed a few turns in the road. And so that makes you wake up every day thinking, 'Hmm. Let's try to make sure today's not the day we miss the turn in the road.'"

But everyone gets taken by surprise sometimes. For Microsoft, it was the internet. Gates says the internet came along, and it was a fifth or sixth priority on their list. A point came when they realized things were moving much faster than their strategy supported. What next? Gates continues:

"That was a case where as an act of leadership I had to create a sense of crisis and have a couple months where we all just threw ideas and sent electronic mail around, went on a bunch of retreats... and then, it eventually coalesced around a few ideas..."

According to Gates, that kind of crisis is likely to come up every three or four years or so. The key is to take the reins when needed and make sure to keep up with current trends. (Companies like Blockbuster and Sears are examples of companies that missed the turn in recent years.)

On how success is personally defined (11:00):

Both Gates and Buffett speak of finding joy in daily work. Buffet describes his work as "getting to do what I like to do, every single day of the year, with people I like."

So what about working with those that, in Buffet's words, "cause your stomach to churn?"

"I have turned down business deals that were otherwise decent deals, because I didn't like the people that I would have to work with, and I didn't see any sense pretending."

Gates adds that he's careful not to dwell on success. The bar gets raised. People's expectations change. But the level of competition, breakthroughs, and research gave him what he feels is "the best job in the most exciting field in the world."

On their biggest role models (17:56):

Both Gates and Buffett cite parents as role models. Buffett goes on to mention his wife. "She's taught me a tremendous amount," he says.

We're all looking for great examples to follow, but maybe we ignore what's right in front of us. You can learn from everyone around you. What qualities drew you to your mate? What lessons have you learned from your parents?

As Buffett appropriately quotes Yogi Berra: "You can learn a lot just by watching."

On their biggest successes, and biggest mistakes (40:33):

Buffett focuses on "taking the big swing," and looking for things that shout at you: "When you find something where you know the business, it's within your circle of competence, you understand it, the price is right, the people are right, you take your thumb out of your mouth and you barrel in."

But Buffett admits to his share of mistakes as well. Be careful of the "used cigar butt" approach to investing, he warns. "You see the cigar butt down there: It's soggy, and it's terrible, but there is one puff in it -- and it's free." Don't get sucked in by a low price, if everything else looks bad.

Gates says his best decisions had to do with picking the right people to work with. "Having somebody who you totally trust, who's totally committed, who shares your vision and yet has a little bit different set of skills, and also acts as a check on you... Some of the ideas you come up with you run by them because you know they're going to say, 'Hey, wait a minute, have you thought about this and that?'... The benefit of sparking off of somebody who's got that kind of brilliance -- it's not only made it fun but it's really led to a lot of success. Picking a partner is crucial."

On regrets (44:20):

One of the final questions taken from the audience is answered very differently by the two moguls:

If you could change one thing about your life, what would it be, and why?

Gates focuses on time management. Despite the fact that at the time of this interview he is already the richest man in the world, he has a regular practice of getting one of his respected colleagues, Steve Ballmer, to analyze his schedule and criticize how he is using his time:

"That's pretty useful," says Gates. "If I can get more time to sit down with the engineers, if I can get more time to get out with some customers -- those are the things that I just love to do... it just gets me excited, it clears my mind... I'm always trying to make sure I'm only doing the things that are important."

And Buffett? His answer is a little simpler:

"I never look back. I don't worry about anything... You play the hand you get, you play it as well as you can... and you're thankful."