Hard Drive: Bill Gates and the Making of the Microsoft Empire (11 page)

Although the licensing agreement was a good one for Microsoft, it would never make Gates or Allen rich men. They could only earn a maximum of $180,000 in royalties according to the terms of the contract. But for the time being, they needed MITS to help market BASIC with the Altair.

As Microsoft grew, Gates sought out trusted friends to join him in his crusade. His recruiting forays often led back to Lakeside School in Seattle and to his old friends from the computer room.

That first summer in Albuquerque, when it became clear he and Allen couldn’t do all the programming work themselves on BASIC, Gates contacted Chris Larson, his young prot6g6 at Lakeside. Larson was only a sophmore, but he had the same energy, passion, and commitment as his mentor. In the two years since Gates had left Lakeside for Harvard, Larson had taken over Lakeside’s computerized scheduling project. He was also looking after Bill’s sister Libby, who now attended Lakeside.

Larson, four years ahead of Libby, saw to it that she got the classes she wanted. Larson and his friends got the classes they wanted, as well. “I guess there was an unwritten understanding between us and the faculty that we wouldn’t overly abuse the situation, or obviously we would have had the job taken away from us,” recalled Larson. (Two years later, as a senior at Lakeside, Larson scheduled himself in a class with all girls—a nifty bit of programming wrongly credited to Bill Gates.)

Gates recruited Larson for the summer, and found a second programmer for the summer from Harvard—Monte Davidoff, who had developed the math package for BASIC. When Larson and Davidoff arrived in Albuquerque, they shared an apartment with Gates and Allen, often sleeping on the living room floor. All four kept late hours, and became familiar with every late- night pizza place and coffee shop in the neighborhood. The MITS software office where the Microsoft employees worked was separate from the company’s main administrative office, located next to a vacuum cleaner shop. While MITS hardware engineers worked on memory boards and refinements for the Altair, Gates and his team worked on BASIC and various software programs that allowed the Altair to be used with a teletype, printer, or paper-tape reader.

The people employed by MITS and Microsoft were youthful computer fanatics, religious zealots who worshipped The Machine. “It was almost a missionary kind of work in the sense that we were delivering something to someone they never thought they could have,” recalled Eddie Curry. “There was a kinship that you wouldn’t normally see in
commercial
enterprise between not only the people in the company but between the people in the company and the customer base. People would work from early in the morning until the end of the day. Then they’d rush home to get dinner, come back and work until late at night. Typically, there were people at MITS 24 hours a day, seven days a week.”

Curry got a call one day from an executive who said he had been trying for a week to get hold of Gates or Allen. The executive was excited because he felt he had stumbled upon what he thought was a little known industry secret—software people only came out at night. Gates sometimes slept at the Microsoft offices, just as he had slept in the computer lab at Harvard at times rather than returning to his room at the Currier House. One day Ed Roberts was taking a group of visitors on a tour through MITS when he stepped over a body in the software area. It was Gates, curled up on the the floor, sound asleep.

“Bill and Paul were very, very intense,” said Curry. “They had a clear understanding of what they were doing, in the sense that they had a vision of where they were going. It wasn’t just that they were developing BASIC. I don’t think most people ever really understood this, but Bill, certainly, always had the vision from the time that I met him that Microsoft’s mission in life was to provide all the software for microcomputers.”

Gates, Allen, and the other programmers got along with Curry, but not, curiously, with Roberts. The Microsoft employees had long hair and kept strange hours. They listened to rock’n’roll music while Roberts preferred easy-listening music. “As soon as Roberts would leave,” recalled David Bunnell, “they’d switch to rock’n’roll. I couldn’t see how they ever got any work done with that acid rock music blaring out all the time, day and night.”

In addition, Roberts considered Gates something of a smartass. They were both extraordinarily well-read, and would often debate issues unrelated to computers. Should the United States have dropped the atomic bomb on Japan? Regardless of what side Gates took on an issue, Roberts took the opposite . .. seemingly out of spite rather than conviction. The gangly teenager clearly got under Roberts’ skin. It was inevitable the two would clash about more serious matters, as well, and they did, often and angrily. The burly Roberts, who could be surly, authoritative, and intimidating, was used to getting his way. No one at MITS got along in complete harmony with Roberts. Employees either did things his way, or encountered fierce opposition.

Gates, on the other hand, didn’t back down regardless of how formidable Roberts could be.

“Bill could be fairly prickly,” said Nelson Winkless, the first editor of
Personal Computing
magazine. “He had his own view of what MITS ought to be doing and how they should do it. He was very much self-possessed.”

Although he wasn’t old enough yet to order a beer legally, the 5-feet-ll Gates stood his ground with Roberts, often going jaw to jaw with the huge, gruff man 13 years his senior. Roberts weighed close to 300 pounds, and at 6-feet-4 towered over Gates. “Bill was brash, very intelligent, and energetic,” recalled Bunnell. “I knew of no one who would go to the wall with Ed until I met Bill Gates.”

In Gates’ mind, every good idea at MITS was only halfexecuted, and he didn’t hesitate to let Roberts know how he felt. “MITS was run in a very strange way,” he said, “and everyone there felt very poorly. . . . We all thought, gee, this thing is a mess. And there was a vacuum of leadership. It was actually kind of unusual. Even though I was never formally an employee or anything—I was just doing my software stuff—I had some thoughts on how it ought to be run, so we’d all sit around and talk about this stuff and people would actually kind of egg me on to stand up to Ed. We always thought we might do something to improve the way things were run.”

The company’s foul-ups drove the business-minded Gates up the wall, especially the problem MITS was having with dynamic memory boards for the Altair. These high-tech circuit boards gave the Altair enough brain power to run BASIC, and were essential to the sale of BASIC, which required a minimum of 4K of memory. But the boards seldom worked. Gates wrote a software program to test the boards and didn’t find one that worked as advertised. “It was
irritating, as well as an embarrassment
to everybody, including us,” said Curry. This was particularly so since many of the faulty memory boards were delivered to Altair customers already frustrated that it had taken so long to get one of the computer kits. Other hardware companies, seeing an opportunity in the young microcomputer field, were soon making and shipping memory boards that did work, which irritated and embarrassed Roberts enormously. Gates ranted and raved at Roberts about the problems he saw. He and Allen needed cash flow to fund their young company’s growth. How could they expect royalties from their agreement with MITS when things at MITS were so screwed up?

Although Roberts respected Gates’ technical abilities, he didn’t care for Gates’ confrontat
ional style. “We got so we didn’t
even invite him to meetings where we were trying to come up with a new software approach or something like that because he was impossible to deal with,” Roberts recalled. He was a spoiled kid. He literally was a spoiled kid, that’s what the problem was. Paul Allen was much more creative than Bill. Bill spent his whole time trying to be argumentative and not trying to come up with solutions. Paul was exactly the opposite.”

At the end of that first summer in Albuquerque, Larson went back to school at Lakeside, and Davidoff returned to Harvard. Gates, too, decided to go back to Harvard that fall. He was still wrestling with his future, and his parents continued to pressure him to finish his education. For the next year and a half, Gates would divide his time between school and poker at Harvard and creating software and negotiating deals for his new business in Albuquerque.

With Gates, Larson, and Davidoff back in school, Allen was left alone to deal with Roberts and MITS. He had his hands full. MITS had been the first company to hit the market with an affordable microcomputer, but others quickly followed. A couple startup companies were working on a microcomputer that used Motorola’s new MC6800 microchip instead of the Intel 8080, the mathematical engine in the Altair. Roberts wanted MITS to build a new Altair around the Motorola chip. Allen argued otherwise. It would mean rewriting the BASIC software, and putting out competing hardware products in the marketplace. But Roberts, as usual, got his way. Allen brought in Richard Weiland, one of the founding members of the Lakeside Programmers Group, to write the 6800 version of BASIC. MITS later did produce an Altair known as the 680b, though as Allen had predicted, it was not very successful.

In late 1975, MITS decided to release a floppy disk-storage system for the Altair 8800. As a result Allen, as software director, was asked to develop a disk BASIC, quickly. Magnetic disks that stored data had been used for years in mainframe machines and minicomputers, but it was not until after the Altair hit the market that floppy diskettes were designed for microcomputers. Disks were a much more efficient way to store data than paper tape.

Even before MITS had announced its intentions to market a disk-based version of Altair BASIC, Allen, anticipating the need for such a product, had asked Gates to write the new software code. But Gates had been busy on other projects and pushed the request aside. Now Gates had no choice. When the fall semester ended, Gates flew to Albuquerque and checked into the Hilton Hotel with a stack of yellow legal pads. Five days later he emerged, the yellow pads filled with the code of the new version of BASIC. Gates then went to the software lab at MITS to iron out the new BASIC, instructing the others that he was to be left alone. In another five days, Gates had what would become known as DISK BASIC running on the Altair. That, at least, is the “official” version of Chairman Bill’s feat of programming prowess, as recounted in the preface to the company’s bible, the MS-DOS Encyclopedia. Although Gates is generally thought of as the father of Microsoft BASIC, which became an industry standard and was the foundation on which his software company was built, there are those in the industry who believe Allen deserves at least as much credit as Gates, and possibly more. According to them, the legend of Gates has risen to such Olympian heights that it sometimes overshadows reality. Ed Curry, for one, felt Allen never got the credit he should have for his work on BASIC.

“What was delivered to us initially there in Albuquerque,” said Curry, “was what came to be known as the 4K version. And it had no file management capability and was, you know, very restrictive, about as restrictive a subset of BASIC as you could have and still call it BASIC. It was Paul who began to flesh it out.. .. When you read things about Bill writing BASIC, for example, to me, that’s a little bit of a joke. He was part of a team. I think it’s accurate to say that if you went back and looked at BASIC three or four years later and said, ‘Okay, who made the most significant contribution?’ it was Paul Allen. The initial hack was a very important piece of work. Undoubtedly it was very challenging and very difficult, but ... You know, I don’t want this to come out that I said Bill Gates didn’t write BASIC. That’s not what I’m saying. Bill was part of a team effort. He made very
important
contributions. But if any one person were to be said to be the author of BASIC, I would think it would be P
a
ul. If you asked who was the driving force behind BASIC, it was Bill and Paul. If you asked who solved the hard problems, it was Bill and Paul. But in terms of who sat down and did the work for BASIC as we know it today, it’s got to be Paul who did the lion’s share.”

Those patient enough to have actually received an Altair kit, skilled enough to have assembled the pieces, and lucky enough to have gotten the machine up and running could have cared less who authored BASIC. They just wanted to use it, and when they couldn’t get it, many resorted to “stealing” this prized piece of software that gave them the programming power to turn $397 worth of electronic parts and an Intel 8080 chip into a useful computer that could do more than just flash two rows of red LED lights.

These computer hackers were the first “software pirates,” a somewhat romantic description suggesting high-tech swashbucklers who hack their way across computer screens like Errol Flynn. But as far as Bill Gates was concerned, they were unprincipled thieves. And he called them as much in an infamous letter published in the Altair newsletter, which was reprinted in other computer magazines and ended up as dartboard material in computer clubs from New York to California.

Gates wrote his stinging denunciation in early February of 1976, but the larceny problem and what to do about it had been eating away at him for months, after he learned that unauthorized copies of BASIC were being handed out like so many free raffle tickets at computer club meetings across the country. What happened one night at a gathering of the Homebrew Computer Club in Northern California was typical.

The computer clubs fueled the revolution that had begun in Albuquerque with the Altair and was sweeping across the country like an out-of-control prairie fire. The clubs were technological communes for those who loved computers. Gates himself had toured in the MITS-mobile to encourage some of the clubs to organize. And they did, in garages, warehouses, homes, schools, offices . .. anyplace members could meet and talk about computers. The clubs were organized by engineers, technicians, hobbyists, hackers, electronics buffs, gadget freaks.. . energetic people fascinated by the seemingly limitless possibilities for microcomputers. Probably no computer club in the country reflected this communal spirit more than Homebrew. From its ranks would come numerous industry pioneers who blazed their own trails through the Silicon Valley and a new multibillion- dollar industry.

Homebrew started in a garage on a rainy night in early March of 1975, in the town of Menlo Park, next to Palo Alto and Stanford
University, on the edge of the
Silicon Valley. More than thirty people turned out for the first meeting, including an electronics whiz kid working in the calculator division of Hewlett-Packard named Steve Wozniak.. Within a year, Wozniak, with Steve Jobs, would build a personal computer of his own, the Apple I, which would transform the computer industry.