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Microsoft: Two Kids Who Saw the Future (Ep. 88)
In December 1974, Paul Allen walked past a newsstand in Harvard Square and saw a magazine cover that would change history. The January issue of Popular Electronics featured a small metal box called the Altair 8800. It was the first personal computer. It had no keyboard. It had no screen. You programmed it by flipping switches. And it had no software.
Allen sprinted to his friend's dorm room. "Bill, we have to do something. This is happening without us."
Eight weeks later, having never touched an Altair, Bill Gates and Paul Allen demonstrated a working BASIC interpreter for the machine. They had written the entire program on Harvard's mainframe, testing it against an Altair they simulated from the published specifications. The first time their code ran on actual hardware was during the demonstration itself.
It worked.
This episode traces the founding of Microsoft and the creation of the software industry. We begin in the computer room at Lakeside School in 1968, where thirteen-year-old Bill Gates discovered the machine that would become his obsession. We watch the partnership with Paul Allen form, the decision to drop out of Harvard, the move to Albuquerque to be near MITS, the company that made the Altair.
Then came IBM. In 1980, the largest computer company in the world needed an operating system for their new personal computer. They came to Microsoft. Gates didn't have an operating system—but he knew someone who did. He bought QDOS from Seattle Computer Products for fifty thousand dollars, adapted it for IBM, and licensed it non-exclusively. IBM got their operating system. Gates got the right to sell the same software to everyone else.
That licensing deal—the one IBM thought was insignificant—built Microsoft into the most valuable company on Earth. Every PC clone ran MS-DOS. Every clone needed to be compatible. The industry standardized around Microsoft not because of monopoly but because of network effects: software written for MS-DOS ran everywhere.
Two kids who saw the future before anyone else, who wrote code for hardware they had never touched, who understood that software would matter more than hardware. They were right.
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By Bored and AmbitiousIn December 1974, Paul Allen walked past a newsstand in Harvard Square and saw a magazine cover that would change history. The January issue of Popular Electronics featured a small metal box called the Altair 8800. It was the first personal computer. It had no keyboard. It had no screen. You programmed it by flipping switches. And it had no software.
Allen sprinted to his friend's dorm room. "Bill, we have to do something. This is happening without us."
Eight weeks later, having never touched an Altair, Bill Gates and Paul Allen demonstrated a working BASIC interpreter for the machine. They had written the entire program on Harvard's mainframe, testing it against an Altair they simulated from the published specifications. The first time their code ran on actual hardware was during the demonstration itself.
It worked.
This episode traces the founding of Microsoft and the creation of the software industry. We begin in the computer room at Lakeside School in 1968, where thirteen-year-old Bill Gates discovered the machine that would become his obsession. We watch the partnership with Paul Allen form, the decision to drop out of Harvard, the move to Albuquerque to be near MITS, the company that made the Altair.
Then came IBM. In 1980, the largest computer company in the world needed an operating system for their new personal computer. They came to Microsoft. Gates didn't have an operating system—but he knew someone who did. He bought QDOS from Seattle Computer Products for fifty thousand dollars, adapted it for IBM, and licensed it non-exclusively. IBM got their operating system. Gates got the right to sell the same software to everyone else.
That licensing deal—the one IBM thought was insignificant—built Microsoft into the most valuable company on Earth. Every PC clone ran MS-DOS. Every clone needed to be compatible. The industry standardized around Microsoft not because of monopoly but because of network effects: software written for MS-DOS ran everywhere.
Two kids who saw the future before anyone else, who wrote code for hardware they had never touched, who understood that software would matter more than hardware. They were right.