1 00:00:02,279 --> 00:00:04,760 Speaker 1: Steve Bomber and Bill Gates have a lot in common. 2 00:00:05,040 --> 00:00:07,920 Speaker 1: They were both CEOs of Microsoft. There are two of 3 00:00:07,960 --> 00:00:10,960 Speaker 1: the wealthiest people in the world, and they both dropped 4 00:00:10,960 --> 00:00:14,160 Speaker 1: out of prestigious universities to work at the computer company 5 00:00:14,240 --> 00:00:18,079 Speaker 1: founded by Gates and Paul Allen in ninety five. But 6 00:00:18,160 --> 00:00:21,720 Speaker 1: when Bomber joined Microsoft in nine eighty as the company's 7 00:00:21,880 --> 00:00:26,520 Speaker 1: thirtieth employee, Microsoft had yet to dominate the personal computer market. 8 00:00:26,920 --> 00:00:30,880 Speaker 1: It eventually created three billionaires and an estimated twelve thousand 9 00:00:30,960 --> 00:00:34,519 Speaker 1: millionaires out of its employees. After seating control of the 10 00:00:34,560 --> 00:00:38,560 Speaker 1: company to such an Adela in Bomber purchased the Los 11 00:00:38,640 --> 00:00:42,640 Speaker 1: Angeles Clippers for two billion dollars, joining Microsoft co founder 12 00:00:42,640 --> 00:00:46,000 Speaker 1: Paul Allen as a fellow NBA owner. He recently sat 13 00:00:46,040 --> 00:00:49,440 Speaker 1: down with Carlisle Group co founder David Rubinstein. They spoke 14 00:00:49,440 --> 00:00:53,640 Speaker 1: on David Rubinstein's Bloomberg television program Peer to Peer Conversations. 15 00:00:54,120 --> 00:00:56,240 Speaker 1: As we sit here today, you were the owner of 16 00:00:56,280 --> 00:00:58,880 Speaker 1: the l A Clippers. Let's talk about how you became 17 00:00:58,880 --> 00:01:01,840 Speaker 1: an owner of the Clipper. So you retired in two 18 00:01:01,880 --> 00:01:06,080 Speaker 1: thousand fourteen from Microsoft as a CEO, and the Clippers 19 00:01:06,080 --> 00:01:09,000 Speaker 1: were more or less going to be available. You paid 20 00:01:09,080 --> 00:01:12,039 Speaker 1: two billion dollars for the team at the highest price 21 00:01:12,080 --> 00:01:15,399 Speaker 1: than ever paid for a sports team in basketball, where 22 00:01:15,440 --> 00:01:18,360 Speaker 1: all the other owners happy with you because you elevated 23 00:01:18,360 --> 00:01:20,320 Speaker 1: the value of all their franchises. And I assume they've 24 00:01:20,319 --> 00:01:21,840 Speaker 1: pat you on the back whenever they see you. Now, 25 00:01:22,440 --> 00:01:24,440 Speaker 1: when I bought that, I think there were two reactions 26 00:01:24,600 --> 00:01:27,680 Speaker 1: about the team. Number One, yes, as you described, yes, 27 00:01:27,760 --> 00:01:30,760 Speaker 1: our teams, Well, this has been a great investment. The 28 00:01:30,800 --> 00:01:33,480 Speaker 1: second was, oh, my god, I wonder if this guy's 29 00:01:33,480 --> 00:01:35,560 Speaker 1: gonna throw over ound money in a way in a 30 00:01:35,640 --> 00:01:38,280 Speaker 1: way that's gonna and the league has plenty of rules 31 00:01:38,280 --> 00:01:42,160 Speaker 1: so you can only it's it's hard to outspend anybody else. 32 00:01:42,200 --> 00:01:44,000 Speaker 1: But I think there was a little concerned about that. Okay, 33 00:01:44,120 --> 00:01:46,760 Speaker 1: so you were living in Seattle area. Now you have 34 00:01:46,800 --> 00:01:48,680 Speaker 1: a team in the l A. Do you go down 35 00:01:48,680 --> 00:01:50,640 Speaker 1: there and yell and scream like all the other fans. 36 00:01:50,880 --> 00:01:53,440 Speaker 1: I do. In fact, we have forty one home games. 37 00:01:53,480 --> 00:01:56,640 Speaker 1: I've probably made thirty eight this year and maybe another 38 00:01:56,720 --> 00:01:58,880 Speaker 1: seven away games. So I make it to a lot 39 00:01:58,960 --> 00:02:02,280 Speaker 1: of games, and uh, it's fun to be enthusiastic. I 40 00:02:02,880 --> 00:02:06,400 Speaker 1: enjoy it. Uh, you know, things are most fun when 41 00:02:06,400 --> 00:02:09,960 Speaker 1: it's your kid playing. Uh. Second, most, you know this 42 00:02:10,000 --> 00:02:11,880 Speaker 1: owner thing is pretty good because you have a sense 43 00:02:11,919 --> 00:02:13,880 Speaker 1: of the dynamics of the guys. So you go into 44 00:02:13,880 --> 00:02:16,040 Speaker 1: the locker rooms and say, well, you know, guys could 45 00:02:16,160 --> 00:02:17,840 Speaker 1: do this better, or that you tell them anything in 46 00:02:17,840 --> 00:02:20,400 Speaker 1: the locker room, or you give any tips. I got 47 00:02:20,680 --> 00:02:24,600 Speaker 1: three principles. Number one, don't talk to anybody after a loss. 48 00:02:24,880 --> 00:02:29,720 Speaker 1: That's number one. Coach, yes, but not players. Number two, Uh, 49 00:02:30,200 --> 00:02:32,400 Speaker 1: you know, pump guys up, which I do usually with 50 00:02:32,440 --> 00:02:34,600 Speaker 1: texts after a game, or sometimes I go talk to 51 00:02:34,680 --> 00:02:38,400 Speaker 1: somebody after big games in the locker room when we 52 00:02:38,480 --> 00:02:41,640 Speaker 1: lose or win our last game of the season in 53 00:02:41,720 --> 00:02:44,400 Speaker 1: the locker room, and I go to training camp at 54 00:02:44,400 --> 00:02:47,200 Speaker 1: the beginning of the year, give a little speech, um, 55 00:02:47,480 --> 00:02:49,440 Speaker 1: a little bit of a pump up. I guess you'd say, 56 00:02:49,480 --> 00:02:52,880 Speaker 1: But you have coached um young children in basketball. Do 57 00:02:52,880 --> 00:02:54,680 Speaker 1: you ever take any of the tips and give them 58 00:02:54,760 --> 00:02:59,120 Speaker 1: give them to your l a Clippers coach. No. I 59 00:02:59,200 --> 00:03:01,640 Speaker 1: hear their owners to do that, and I'm not gonna 60 00:03:01,680 --> 00:03:04,359 Speaker 1: be that guy. Well, you're famous when you were Microsoft 61 00:03:04,440 --> 00:03:06,880 Speaker 1: for pumping up people. You have a voice that projects 62 00:03:07,000 --> 00:03:09,160 Speaker 1: and when you're watching the game, do you yell and 63 00:03:09,200 --> 00:03:12,320 Speaker 1: scream like everybody else, I yell and scream. I've become 64 00:03:12,680 --> 00:03:15,680 Speaker 1: a little more moderate, so I preserve my vocal cords 65 00:03:15,720 --> 00:03:18,320 Speaker 1: because you know, it certainly can be a problem when 66 00:03:18,320 --> 00:03:22,720 Speaker 1: you're let's go, let's get these goods. You know, um, yeah, 67 00:03:22,800 --> 00:03:24,880 Speaker 1: it can be an issue. So what's more fun running 68 00:03:24,919 --> 00:03:27,480 Speaker 1: Microsoft or running the l A Clippers? Running the l 69 00:03:27,560 --> 00:03:30,800 Speaker 1: A Clippers, I mean, running Microsoft was a ton of fun, 70 00:03:30,960 --> 00:03:34,040 Speaker 1: and it was you know, it's kind of inspirational because 71 00:03:34,520 --> 00:03:37,600 Speaker 1: we were working on stuff that literally transformed the world. 72 00:03:37,640 --> 00:03:39,640 Speaker 1: And I got a lot out of that, and the 73 00:03:39,680 --> 00:03:43,400 Speaker 1: intellectual challenges were strong, and I loved that, and I 74 00:03:43,400 --> 00:03:46,480 Speaker 1: thought a unique value to add. But just for fun, 75 00:03:46,560 --> 00:03:49,960 Speaker 1: fun fun. There's really no stress running a basketball team, 76 00:03:50,640 --> 00:03:54,120 Speaker 1: except you really want to win. Let's talk about your background. 77 00:03:54,120 --> 00:03:56,120 Speaker 1: If you grew up in the Detroit area, your parents 78 00:03:56,120 --> 00:03:58,480 Speaker 1: were immigrants. Where were they from? My dad was an 79 00:03:58,480 --> 00:04:01,720 Speaker 1: immigrant from Switzerland. He let Switzerland after World War Two, 80 00:04:02,200 --> 00:04:04,640 Speaker 1: worked for the U. S Military as an interpreter at 81 00:04:04,640 --> 00:04:07,560 Speaker 1: the war trials at Nuremberg because they were looking for 82 00:04:07,640 --> 00:04:10,600 Speaker 1: German speakers who were not German citizens because they were 83 00:04:10,600 --> 00:04:14,040 Speaker 1: afraid of that. And then he met his sponsor. Uh 84 00:04:14,360 --> 00:04:17,839 Speaker 1: was one of the g I s dad who he 85 00:04:17,880 --> 00:04:20,160 Speaker 1: had worked with as an interpreter. I don't think he 86 00:04:20,200 --> 00:04:22,720 Speaker 1: finished high school. He's never precisely and that certainly didn't 87 00:04:22,720 --> 00:04:25,440 Speaker 1: go to college, but he worked at Ford. My mom 88 00:04:25,520 --> 00:04:28,240 Speaker 1: actually not an immigrant, her parents were and they came 89 00:04:28,360 --> 00:04:32,440 Speaker 1: from I guess it was probably Russia at the time. Okay, 90 00:04:32,520 --> 00:04:35,640 Speaker 1: so you did pretty well in high school. Your validatornamor class. Yes, 91 00:04:35,760 --> 00:04:38,240 Speaker 1: he went to Harvard. And then when you're at Harvard 92 00:04:38,600 --> 00:04:41,880 Speaker 1: you have a classmate that's down the hall name Bill Gates. 93 00:04:42,120 --> 00:04:44,840 Speaker 1: It was interesting because the guy who introduced and says, 94 00:04:44,880 --> 00:04:47,440 Speaker 1: you guys are both kind of weird, energetic guys you 95 00:04:47,440 --> 00:04:51,000 Speaker 1: should meet. So we did. And the time we met 96 00:04:51,080 --> 00:04:53,680 Speaker 1: was just about the time he was starting Microsoft plus 97 00:04:53,760 --> 00:04:57,040 Speaker 1: or minus a month, I want to say. And that 98 00:04:57,200 --> 00:04:59,359 Speaker 1: clearly was more than this is just going to be 99 00:04:59,360 --> 00:05:02,400 Speaker 1: another random guy. I mean, a guy starting his own company. 100 00:05:02,400 --> 00:05:05,640 Speaker 1: It was the second company A done one in high school. Uh. 101 00:05:05,680 --> 00:05:09,640 Speaker 1: He was clearly a special, a special guy, and I 102 00:05:09,640 --> 00:05:12,240 Speaker 1: got to know him pretty well. You graduated Magna Cloudy 103 00:05:12,680 --> 00:05:15,080 Speaker 1: and then you decided to go to Procter and Gamble. 104 00:05:15,360 --> 00:05:18,280 Speaker 1: I did Procter and Gamble now very often Procter and 105 00:05:18,320 --> 00:05:20,560 Speaker 1: Gamble gets a lot of very talented people in their 106 00:05:20,720 --> 00:05:25,080 Speaker 1: young trading programs. Did anybody famous work alongside you? Well, Bunny, 107 00:05:25,120 --> 00:05:28,120 Speaker 1: you should mention that a number of people did when 108 00:05:28,120 --> 00:05:31,560 Speaker 1: I was there. Scott Cook, who started into it, was there. 109 00:05:32,120 --> 00:05:35,279 Speaker 1: Jeff Immelt who ran Ge and I worked together on 110 00:05:35,720 --> 00:05:39,560 Speaker 1: Duncan Hind's Brownie Blueberry Muffin and Moist and Easy Snack 111 00:05:39,600 --> 00:05:44,200 Speaker 1: Cake Mix. We were the dynamic drivers of brownie mix sales. 112 00:05:44,839 --> 00:05:47,960 Speaker 1: Um so he was. He was around. Meg Whitman came 113 00:05:48,080 --> 00:05:51,400 Speaker 1: right after I left. It really was a great, a 114 00:05:51,400 --> 00:05:53,800 Speaker 1: great place. Go to Stanford and you're gonna get your 115 00:05:53,880 --> 00:05:56,320 Speaker 1: m b A. And then you decide to leave and 116 00:05:56,400 --> 00:05:59,080 Speaker 1: drop out of Stanford to go to this tiny startup 117 00:05:59,120 --> 00:06:02,800 Speaker 1: in Seattle are called Microsoft. What did your father saying 118 00:06:02,800 --> 00:06:07,440 Speaker 1: about that? Oh? He he was apoplectic in a way. 119 00:06:08,040 --> 00:06:10,800 Speaker 1: I mean, he didn't try to stop me. But I 120 00:06:10,800 --> 00:06:13,080 Speaker 1: remember when I called home and my dad said, what 121 00:06:13,160 --> 00:06:17,960 Speaker 1: the heck is software? Uh, he'd actually been involved installing 122 00:06:18,000 --> 00:06:22,080 Speaker 1: Wang systems old word processors. But what software? And then 123 00:06:22,120 --> 00:06:24,920 Speaker 1: my mom said, why would a person ever need a computer? 124 00:06:25,680 --> 00:06:29,000 Speaker 1: Now today you'd say that's crazy but wasn't crazy in night. 125 00:06:29,640 --> 00:06:32,400 Speaker 1: But they said, okay, okay, we hear you, we hear you. 126 00:06:33,160 --> 00:06:35,400 Speaker 1: If it doesn't work out, you go back to business school, right, 127 00:06:35,720 --> 00:06:38,800 Speaker 1: I said, right, And then never came back. So the 128 00:06:38,880 --> 00:06:41,640 Speaker 1: summer ends and you stay there, and you're the thirtieth 129 00:06:41,640 --> 00:06:45,440 Speaker 1: employee of Microsoft, and ultimately you become I guess next 130 00:06:45,480 --> 00:06:47,440 Speaker 1: to Bill Gates and Paul I on the biggest shareholder. 131 00:06:47,560 --> 00:06:49,120 Speaker 1: What were the jobs you had as you work your 132 00:06:49,120 --> 00:06:53,400 Speaker 1: way up? Well? I started out as assistant to the president. 133 00:06:53,440 --> 00:06:57,040 Speaker 1: I was Bill's assistant, basically chief cook and bottle washershire 134 00:06:57,440 --> 00:07:01,640 Speaker 1: So I set up the accounting, which there was some, 135 00:07:01,839 --> 00:07:05,440 Speaker 1: but we needed a professionalize. I was the HR department. 136 00:07:05,520 --> 00:07:09,400 Speaker 1: I hired everybody. When IBM came the first time about 137 00:07:09,440 --> 00:07:13,600 Speaker 1: their personal computer, I became the kind of salesman on IBM. 138 00:07:14,040 --> 00:07:17,160 Speaker 1: Why I knew how to wear a tie. I was 139 00:07:17,200 --> 00:07:19,480 Speaker 1: about the only guy around the place, and Bill said, 140 00:07:19,800 --> 00:07:21,240 Speaker 1: you have a diet in a suit? Why did you 141 00:07:21,280 --> 00:07:23,160 Speaker 1: come to the meeting? So when did you realize this 142 00:07:23,240 --> 00:07:25,760 Speaker 1: isn't a little startup that's gonna be a nice little 143 00:07:25,800 --> 00:07:29,240 Speaker 1: company in in one part of the software world. It's 144 00:07:29,280 --> 00:07:31,440 Speaker 1: going to be a dominant company in the world. By 145 00:07:31,480 --> 00:07:34,840 Speaker 1: the late eighties, I would say, for sure, I knew 146 00:07:34,840 --> 00:07:37,160 Speaker 1: the company is going to be something. I remember when 147 00:07:37,200 --> 00:07:40,480 Speaker 1: Andy Grove, who went who ran Intel, said someday there'll 148 00:07:40,480 --> 00:07:43,280 Speaker 1: be a hundred million computers a year or sold. Bill 149 00:07:43,320 --> 00:07:45,080 Speaker 1: and I looked at each other and said, he's nuts. 150 00:07:45,280 --> 00:07:47,440 Speaker 1: There's never gonna be a hundred million. These days, there's 151 00:07:47,440 --> 00:07:50,640 Speaker 1: three hundred million plus computer sold a year. And your 152 00:07:50,680 --> 00:07:53,520 Speaker 1: father and mother, what did they say at this point? Yeah? 153 00:07:53,600 --> 00:07:57,440 Speaker 1: And then they got they got comfortable when we went public. 154 00:07:57,480 --> 00:08:00,880 Speaker 1: They knew I wasn't gonna be brokeh Will actually offered 155 00:08:00,920 --> 00:08:03,280 Speaker 1: me a decent starting salary. It was either forty or 156 00:08:03,320 --> 00:08:06,400 Speaker 1: fifty grand I can't remember which looked good in that 157 00:08:06,640 --> 00:08:09,920 Speaker 1: in that day and age. So they knew that was 158 00:08:09,960 --> 00:08:13,520 Speaker 1: a good choice. Now, my dad still had a little skepticism. 159 00:08:13,560 --> 00:08:17,280 Speaker 1: There were all these people and there was nothing physical 160 00:08:17,360 --> 00:08:19,560 Speaker 1: you could get your What do all these people do? 161 00:08:19,920 --> 00:08:23,000 Speaker 1: There's no there's no product. What did they all do? 162 00:08:23,520 --> 00:08:26,280 Speaker 1: So that that that was a confusing point. I mean's 163 00:08:26,280 --> 00:08:29,200 Speaker 1: a smart guy, but he'd always asked me that every 164 00:08:29,200 --> 00:08:32,440 Speaker 1: time we went through the campus. So and near two thousand, 165 00:08:32,440 --> 00:08:36,320 Speaker 1: you become the CEO. Bill decides to sort of sort 166 00:08:36,360 --> 00:08:39,320 Speaker 1: of retired, became the chief software architect, but no longer CEO, 167 00:08:39,960 --> 00:08:42,600 Speaker 1: so you now can run the place where you were 168 00:08:42,640 --> 00:08:45,640 Speaker 1: surprised that Bill decided to retire. I was surprised. I 169 00:08:45,679 --> 00:08:49,640 Speaker 1: was surprised. Bill had asked me to be president. Said fine, 170 00:08:49,679 --> 00:08:53,120 Speaker 1: and that was a another number two position and I 171 00:08:53,200 --> 00:08:55,120 Speaker 1: was fine with that. And then Bill came to me 172 00:08:55,160 --> 00:08:58,319 Speaker 1: and said, hey, will you be CEO? And I asked him, 173 00:08:58,440 --> 00:09:00,800 Speaker 1: do you really want me to be CEO or do 174 00:09:00,800 --> 00:09:03,679 Speaker 1: you really kind of want me to be a figurehead? Um, 175 00:09:03,720 --> 00:09:05,560 Speaker 1: just just tell me. He says, no, I really want 176 00:09:05,600 --> 00:09:10,880 Speaker 1: you to be CEO. And I would say, was I CEO? Well, 177 00:09:11,040 --> 00:09:14,080 Speaker 1: because Bill, you know, stayed working every day, told about 178 00:09:14,080 --> 00:09:17,400 Speaker 1: two thousand eight, and I would say I didn't feel 179 00:09:17,440 --> 00:09:21,880 Speaker 1: like a total CEO probably until Bill wasn't working there 180 00:09:21,920 --> 00:09:25,319 Speaker 1: every day in two thousand and eight, because there was 181 00:09:25,320 --> 00:09:27,960 Speaker 1: a lot of shared responsibility. Talk about some of the 182 00:09:28,000 --> 00:09:30,800 Speaker 1: things that happened while you were CEO. You moved into 183 00:09:31,000 --> 00:09:34,600 Speaker 1: video gaming, I guess Xbox. Yeah. We were saying, what's 184 00:09:34,640 --> 00:09:38,880 Speaker 1: the path for uh software if you will, into the 185 00:09:38,960 --> 00:09:41,800 Speaker 1: living room, and the only path that was really clear 186 00:09:41,840 --> 00:09:45,200 Speaker 1: at the time was the video gaming systems. There was 187 00:09:45,240 --> 00:09:48,120 Speaker 1: no way to be in the video game business and 188 00:09:48,120 --> 00:09:51,360 Speaker 1: not build the hardware. We had been in the hardware 189 00:09:51,400 --> 00:09:54,320 Speaker 1: business in a small way. We'd had our mouse product, 190 00:09:54,400 --> 00:09:58,160 Speaker 1: a few other products along the way, and frankly, I 191 00:09:58,200 --> 00:10:03,200 Speaker 1: think we probably in many ways have done more hardware sooner. Well, 192 00:10:03,280 --> 00:10:06,360 Speaker 1: you've made another investment at the time that was actually criticized. 193 00:10:06,440 --> 00:10:09,080 Speaker 1: It was an investment in a company called Facebook. I 194 00:10:09,120 --> 00:10:11,480 Speaker 1: think you invested about three hundred million dollars or so. 195 00:10:11,679 --> 00:10:14,720 Speaker 1: And why did you do that and did you regret 196 00:10:14,800 --> 00:10:16,559 Speaker 1: not trying to buy the whole company. I did try 197 00:10:16,600 --> 00:10:20,480 Speaker 1: to buy the whole thing. Uh. Zuckerberg came up to Seattle, 198 00:10:20,840 --> 00:10:24,920 Speaker 1: we met down there. I put a concrete financial offer 199 00:10:25,000 --> 00:10:28,920 Speaker 1: on the table, but it's a little ross. Pero tried 200 00:10:28,960 --> 00:10:32,280 Speaker 1: to buy Microsoft from Bill Gates in like seventy nine, 201 00:10:32,320 --> 00:10:35,040 Speaker 1: and Bill said, no, founders really have a lot of 202 00:10:35,040 --> 00:10:38,160 Speaker 1: love and passion around their stuff. And even though Facebook 203 00:10:38,200 --> 00:10:40,520 Speaker 1: was tiny I think it was two thousand nine and 204 00:10:40,600 --> 00:10:45,240 Speaker 1: I offered twenty plus billion dollars something like that and 205 00:10:45,600 --> 00:10:50,080 Speaker 1: market absolutely no interest. Wow. Okay, So a couple other businesses, 206 00:10:50,080 --> 00:10:52,840 Speaker 1: they think the smartphone business that Apple is now more 207 00:10:52,920 --> 00:10:55,360 Speaker 1: or less perfected, at least the United States. Uh, you 208 00:10:55,400 --> 00:10:57,840 Speaker 1: were skeptical that that would be a great business. Do 209 00:10:57,880 --> 00:11:00,800 Speaker 1: you think Microsoft could have gotten into that business or earlier? Yes, 210 00:11:01,040 --> 00:11:03,200 Speaker 1: we could have and should have. We should have done 211 00:11:03,280 --> 00:11:05,760 Speaker 1: in my opinion, we should have gotten in the harbor business. 212 00:11:05,800 --> 00:11:09,560 Speaker 1: And that's my I blew that. One of the other 213 00:11:09,600 --> 00:11:12,200 Speaker 1: things that happened during this period of time when you 214 00:11:12,200 --> 00:11:15,520 Speaker 1: were the CEO was cloud computing. Your own neighbor, Amazon 215 00:11:15,600 --> 00:11:17,640 Speaker 1: built this big business under your own nose. Were you 216 00:11:17,800 --> 00:11:20,560 Speaker 1: surprised that they have become so big in cloud? They've 217 00:11:20,559 --> 00:11:24,680 Speaker 1: had more success than I anticipated. I didn't sell them short, 218 00:11:25,160 --> 00:11:28,960 Speaker 1: but they have had more success. Here's here's why I'm 219 00:11:28,960 --> 00:11:32,319 Speaker 1: not saying I was completely dubious. It is very hard 220 00:11:32,480 --> 00:11:36,520 Speaker 1: sometimes for big companies to do something very different. I 221 00:11:36,600 --> 00:11:38,880 Speaker 1: call it doing a second trick. At the time, I 222 00:11:38,880 --> 00:11:41,320 Speaker 1: would call Amazon a one trick pony. It was doing 223 00:11:41,320 --> 00:11:45,080 Speaker 1: this retail stuff. It was doing an awesome job. But 224 00:11:45,200 --> 00:11:47,640 Speaker 1: to do a second trick, you don't get a lot 225 00:11:47,640 --> 00:11:50,120 Speaker 1: of companies who do that. That doesn't mean Microsoft's out 226 00:11:50,160 --> 00:11:52,439 Speaker 1: of the game, are you know? We started this thing 227 00:11:52,480 --> 00:11:56,560 Speaker 1: called Azure and Office three and my successor, Sata has 228 00:11:56,600 --> 00:12:00,679 Speaker 1: taken the thing too very much New Heights, and right 229 00:12:00,720 --> 00:12:02,640 Speaker 1: before you left you tried to buy and you did. 230 00:12:02,800 --> 00:12:05,360 Speaker 1: Ultimately after you left, I think they completed the Nokia 231 00:12:05,400 --> 00:12:08,320 Speaker 1: acquisition and that was an effort to get into smartphones 232 00:12:08,400 --> 00:12:10,280 Speaker 1: that didn't work out. Why do you think it didn't 233 00:12:10,320 --> 00:12:13,559 Speaker 1: work out? I think out. I think there were probably 234 00:12:13,600 --> 00:12:17,720 Speaker 1: two reasons. Number one, maybe it was late, and number two, 235 00:12:18,400 --> 00:12:21,200 Speaker 1: after I left, while the company went ahead and bought 236 00:12:21,200 --> 00:12:24,280 Speaker 1: it um, I don't think there was the same level 237 00:12:24,280 --> 00:12:28,080 Speaker 1: of enthusiasm at the board level and management level for 238 00:12:28,440 --> 00:12:32,720 Speaker 1: scaling up and investing there. Okay, so you ultimately decided 239 00:12:32,760 --> 00:12:35,880 Speaker 1: to leave and your successor UH is such an Adela 240 00:12:36,320 --> 00:12:39,079 Speaker 1: or your surprise when he was selected? No? No, he 241 00:12:39,200 --> 00:12:43,400 Speaker 1: was the recommendation that I made. He's the recommendation that 242 00:12:43,440 --> 00:12:45,800 Speaker 1: Bill Gates made. I thought he was a candidate to 243 00:12:45,840 --> 00:12:48,880 Speaker 1: replace me, which is why we moved him into his 244 00:12:49,000 --> 00:12:51,319 Speaker 1: last job, which was running one of the big divisions. 245 00:12:51,800 --> 00:12:53,520 Speaker 1: And I was glad he got the job because he's 246 00:12:53,559 --> 00:12:55,839 Speaker 1: done a great job. Now, when you were there, you 247 00:12:56,000 --> 00:13:00,280 Speaker 1: dramatically increase sales UH, and earnings were dramatically higher. The 248 00:13:00,320 --> 00:13:02,760 Speaker 1: stock price didn't go up. Why do you think there 249 00:13:02,800 --> 00:13:05,840 Speaker 1: wasn't a correlation between the stock price and earnings and revenue. 250 00:13:06,559 --> 00:13:10,959 Speaker 1: Probably two factors. Number One, I took over at least 251 00:13:10,960 --> 00:13:12,800 Speaker 1: at the worst time if you want your stock price 252 00:13:12,880 --> 00:13:15,199 Speaker 1: to go up. I came in right at the heart 253 00:13:15,720 --> 00:13:20,480 Speaker 1: of the dot com bubble. Everything was sky high. The 254 00:13:20,559 --> 00:13:24,040 Speaker 1: bubble breaks, and by the way Judge orders the breakup 255 00:13:24,040 --> 00:13:27,480 Speaker 1: of Microsoft, that happens, you know, within several months of 256 00:13:27,520 --> 00:13:30,240 Speaker 1: me taking over, and things fall down and then you 257 00:13:30,240 --> 00:13:32,720 Speaker 1: have to build back up. That's number one. By the 258 00:13:32,840 --> 00:13:35,040 Speaker 1: end of my tenure, I had a certain kind of 259 00:13:35,080 --> 00:13:39,880 Speaker 1: reputation with Wall Street and and not not that favorable, 260 00:13:39,920 --> 00:13:43,800 Speaker 1: not about my performance, but certainly people, Hey, the guys 261 00:13:43,800 --> 00:13:47,319 Speaker 1: a grinder's gonna keep doing this thing, but are all 262 00:13:47,400 --> 00:13:51,560 Speaker 1: these new things gonna actually break through profit wise? And 263 00:13:51,679 --> 00:13:55,040 Speaker 1: number two, I think mostly people on Wall Street would 264 00:13:55,040 --> 00:13:58,839 Speaker 1: have said I overinvested. I was spending too much money. Uh. 265 00:13:58,880 --> 00:14:01,839 Speaker 1: And the only chance to position the company really came 266 00:14:01,880 --> 00:14:04,839 Speaker 1: when Sacha started. And you know, he's done a good 267 00:14:04,880 --> 00:14:08,000 Speaker 1: job of repositioning the company and investor's minds. So since 268 00:14:08,000 --> 00:14:09,920 Speaker 1: you've left, the stock has gone up a fair bit 269 00:14:10,360 --> 00:14:12,360 Speaker 1: and your net worth is going up a fair bit. 270 00:14:12,360 --> 00:14:15,080 Speaker 1: As a result, you're the biggest individual shareholder of Microsoft. 271 00:14:15,120 --> 00:14:17,160 Speaker 1: Is that right? Yeah, that's right. So how come you 272 00:14:17,200 --> 00:14:20,400 Speaker 1: didn't sell more shares because Bill Gates and Paul Ellend 273 00:14:20,400 --> 00:14:23,160 Speaker 1: have sold a large part of their shares well. When 274 00:14:23,160 --> 00:14:25,960 Speaker 1: I was CEO, I just didn't think it was right. 275 00:14:26,800 --> 00:14:29,280 Speaker 1: Somehow didn't feel right to me. And it's not like 276 00:14:29,320 --> 00:14:32,120 Speaker 1: I'm even with what I had done to diversify at 277 00:14:32,160 --> 00:14:34,600 Speaker 1: that time. It's not like I'm going to go broke 278 00:14:35,000 --> 00:14:38,560 Speaker 1: if the Microsoft stock does poorly. Uh, And it wasn't 279 00:14:38,600 --> 00:14:42,760 Speaker 1: doing poorly, and I ran the company. If I didn't believe, 280 00:14:43,160 --> 00:14:46,080 Speaker 1: and people knew I already had enough money, I should 281 00:14:46,080 --> 00:14:50,560 Speaker 1: stay invested. I should stay there. When I left, I 282 00:14:50,560 --> 00:14:53,800 Speaker 1: still loved the company. I did a little bit of 283 00:14:53,800 --> 00:14:57,720 Speaker 1: of stuff to diversify slightly. I put some money aside 284 00:14:57,800 --> 00:15:01,320 Speaker 1: for charity, but I still you know, I'm a loyal 285 00:15:01,640 --> 00:15:05,040 Speaker 1: loil dude. I still drive Forwards. My dad worked at Forward, 286 00:15:05,080 --> 00:15:08,160 Speaker 1: and I still own Microsoft stock. So you retire off 287 00:15:08,280 --> 00:15:10,440 Speaker 1: as the CEO at the age of fifty seven. What 288 00:15:10,440 --> 00:15:12,120 Speaker 1: did you decide you wanted to do when you left? 289 00:15:12,520 --> 00:15:14,600 Speaker 1: I had not really given it a ton of thought 290 00:15:15,600 --> 00:15:19,320 Speaker 1: until I left. I again had this sort of hardcore notion. 291 00:15:19,360 --> 00:15:21,680 Speaker 1: I was supposed to just give give it all from 292 00:15:21,680 --> 00:15:24,240 Speaker 1: Microsoft until they leave. So I leave, and what am 293 00:15:24,240 --> 00:15:28,240 Speaker 1: I gonna do? Well? Owning a sports team was attractive, 294 00:15:28,240 --> 00:15:30,760 Speaker 1: so within a few weeks I went and visited Roger 295 00:15:30,800 --> 00:15:34,320 Speaker 1: Goodell and Adam Silver, the NBA and NFL commissioners. I 296 00:15:34,360 --> 00:15:37,760 Speaker 1: thought that would be a fun thing to do. Uh, 297 00:15:37,800 --> 00:15:41,480 Speaker 1: and my wife, who had been involved in philanthropic stuff, 298 00:15:41,600 --> 00:15:44,920 Speaker 1: really focused in on foster kids and disadvantaged kids and 299 00:15:44,960 --> 00:15:48,880 Speaker 1: state of Washington. She said, come on, dude, time you 300 00:15:48,960 --> 00:15:54,920 Speaker 1: gotta get involved. Uh So I did. Um At first, 301 00:15:54,960 --> 00:15:57,320 Speaker 1: I said, come on, government takes care of these problems, 302 00:15:57,960 --> 00:16:01,280 Speaker 1: and she said, no, Philanthropy's got her role. But it 303 00:16:01,360 --> 00:16:05,120 Speaker 1: did intrigue me to what degree government really does help 304 00:16:05,440 --> 00:16:09,120 Speaker 1: disadvantage kids. I had a hard time finding the numbers, 305 00:16:09,480 --> 00:16:12,360 Speaker 1: which led to me starting this thing called USA Facts 306 00:16:12,720 --> 00:16:16,320 Speaker 1: and between USA Facts or philanthropy, the clippers and having 307 00:16:16,360 --> 00:16:18,720 Speaker 1: a good time, which in my case means exercising and 308 00:16:18,760 --> 00:16:23,520 Speaker 1: playing golf. Um, my life's pretty full. Okay, I don't 309 00:16:23,520 --> 00:16:25,560 Speaker 1: play golf because my theory was, if I had a 310 00:16:25,560 --> 00:16:28,040 Speaker 1: meeting with you and you thought I was competent, intelligent, 311 00:16:28,320 --> 00:16:29,920 Speaker 1: and you saw me in the golf course. It would 312 00:16:29,960 --> 00:16:32,520 Speaker 1: destroy the illusion of competence. So I guess why I 313 00:16:32,560 --> 00:16:37,440 Speaker 1: don't play um, But you're probably right and I still play. 314 00:16:37,680 --> 00:16:41,160 Speaker 1: So let's talk about the organization you started USA Facts. 315 00:16:41,320 --> 00:16:43,320 Speaker 1: How did you get involved in this idea and what 316 00:16:43,440 --> 00:16:45,400 Speaker 1: is it now doing? So I said, I really want 317 00:16:45,400 --> 00:16:48,640 Speaker 1: a consolidated view of what government does. Where does the 318 00:16:48,640 --> 00:16:51,760 Speaker 1: money come from, where does it go? And oh, by 319 00:16:51,760 --> 00:16:55,400 Speaker 1: the way, also, what are the impacts? You know, if 320 00:16:55,440 --> 00:16:58,040 Speaker 1: we're transferring wealth, what does quality of life look like? 321 00:16:58,160 --> 00:17:01,600 Speaker 1: We're investing in education, It is the quality of the outcome. 322 00:17:01,680 --> 00:17:04,399 Speaker 1: How how good are or how well are our kids doing? 323 00:17:04,840 --> 00:17:07,720 Speaker 1: What are your philanthropic goals? Would you say in terms 324 00:17:07,720 --> 00:17:09,680 Speaker 1: of areas you want to focus on with the wealth 325 00:17:09,720 --> 00:17:12,800 Speaker 1: that you have, Yeah, we're single purpose. What can we 326 00:17:12,920 --> 00:17:17,119 Speaker 1: do to improve the chances that kids born at the 327 00:17:17,119 --> 00:17:20,960 Speaker 1: bottom of the economic total poll their parents are move 328 00:17:21,119 --> 00:17:24,359 Speaker 1: up economically. You're always going to have some people who 329 00:17:24,400 --> 00:17:26,280 Speaker 1: are at the bottom of the economic total poll. It 330 00:17:26,320 --> 00:17:29,960 Speaker 1: shouldn't just be the same people all the time. People 331 00:17:30,040 --> 00:17:32,639 Speaker 1: should be moving up. People should have a shot at 332 00:17:32,720 --> 00:17:36,320 Speaker 1: the American dream, which is the chance to do whatever 333 00:17:36,359 --> 00:17:38,679 Speaker 1: you want to do and that's not true. For a 334 00:17:38,720 --> 00:17:42,280 Speaker 1: lot of kids when they're born, their probability of staying 335 00:17:42,280 --> 00:17:46,440 Speaker 1: where they are economically is very, very high. I don't 336 00:17:46,440 --> 00:17:48,720 Speaker 1: think that's okay. There are a lot of reasons people 337 00:17:48,880 --> 00:17:51,600 Speaker 1: point to education. Education is a part of it, but 338 00:17:51,600 --> 00:17:53,280 Speaker 1: there are a lot of reasons why kids can't get 339 00:17:53,320 --> 00:17:55,639 Speaker 1: an education. And I think it's important to take a 340 00:17:55,640 --> 00:17:58,679 Speaker 1: look at that chain and then try to find not 341 00:17:58,840 --> 00:18:01,560 Speaker 1: only the not for profits to invest in. We think 342 00:18:01,600 --> 00:18:04,399 Speaker 1: it's very important to try to stimulate the right behaviors 343 00:18:04,440 --> 00:18:07,359 Speaker 1: by government and the right spending by government because it 344 00:18:07,400 --> 00:18:09,600 Speaker 1: can make a huge difference. So if you look back 345 00:18:09,640 --> 00:18:12,600 Speaker 1: at your extraordinary career at Microsoft and now what you're doing, 346 00:18:12,760 --> 00:18:14,960 Speaker 1: any regrets or you're happy with everything the way it 347 00:18:15,000 --> 00:18:18,439 Speaker 1: worked out. I'm pretty happy with the way things worked out. 348 00:18:18,440 --> 00:18:20,240 Speaker 1: I mean, I can go back and there's decisions I'd 349 00:18:20,240 --> 00:18:23,359 Speaker 1: make differently if I was at Microsoft. But you know, 350 00:18:23,400 --> 00:18:25,680 Speaker 1: if I look at the span of work, we went 351 00:18:25,720 --> 00:18:27,560 Speaker 1: from a company that had two and a half million 352 00:18:27,560 --> 00:18:29,679 Speaker 1: in sales and thirty people to a company that had 353 00:18:29,720 --> 00:18:33,560 Speaker 1: a hundred thousand people and eighty billion roughly of sales 354 00:18:33,600 --> 00:18:36,240 Speaker 1: and lots of profit. I can feel good about that. 355 00:18:36,320 --> 00:18:40,320 Speaker 1: Even though, uh, there were mistakes. I started out the 356 00:18:40,359 --> 00:18:43,120 Speaker 1: process with a lot of friends. I still have mostly 357 00:18:43,160 --> 00:18:45,560 Speaker 1: the same friends as I did, which I feel very 358 00:18:45,600 --> 00:18:48,520 Speaker 1: good about that. I'm in a very good place in 359 00:18:48,560 --> 00:18:51,879 Speaker 1: my life now, probably you know, in a way, the 360 00:18:51,960 --> 00:18:54,720 Speaker 1: best ever. Although I wouldn't trade out anything I did 361 00:18:54,800 --> 00:18:57,760 Speaker 1: in the past, at least at this age. I like 362 00:18:57,920 --> 00:19:01,120 Speaker 1: being a little less busy. That's good for me. I'm 363 00:19:01,119 --> 00:19:04,480 Speaker 1: pretty pleased. So as a leader, uh, you are well 364 00:19:04,520 --> 00:19:09,479 Speaker 1: known for very visible and vocal expressions of your thoughts. 365 00:19:09,960 --> 00:19:12,879 Speaker 1: Is that a style you consciously adopted or it just 366 00:19:12,960 --> 00:19:15,680 Speaker 1: happened that way. I was a very very shy kid, 367 00:19:16,400 --> 00:19:18,960 Speaker 1: very shy kid. I was a shy kid when I 368 00:19:19,000 --> 00:19:22,280 Speaker 1: got to Harvard. And then I built my confidence as 369 00:19:22,400 --> 00:19:25,600 Speaker 1: my as I built it because I was doing things 370 00:19:25,600 --> 00:19:27,919 Speaker 1: and being successful. I was shy when I got to 371 00:19:27,960 --> 00:19:30,760 Speaker 1: business school. When I got to Procter and Gamble. First 372 00:19:30,840 --> 00:19:32,800 Speaker 1: day I started a guy who wind up my roommate. 373 00:19:33,200 --> 00:19:35,680 Speaker 1: He said it was like this, Hi, my name is 374 00:19:35,680 --> 00:19:39,800 Speaker 1: Steve Bohmer. My palms sweaty because I'm so nervous, UM, 375 00:19:39,920 --> 00:19:43,480 Speaker 1: so shy kid. And then I got better and better 376 00:19:43,640 --> 00:19:47,439 Speaker 1: and I developed some confidence in public speaking. And and 377 00:19:47,720 --> 00:19:49,720 Speaker 1: it turns out I have something of a knack and 378 00:19:49,800 --> 00:19:52,000 Speaker 1: part of that is getting in front of your troops 379 00:19:52,040 --> 00:19:55,000 Speaker 1: and pumping them up and tell his story and um, 380 00:19:55,119 --> 00:19:58,040 Speaker 1: I will do and bestball. It's a weird environment because 381 00:19:58,200 --> 00:20:00,200 Speaker 1: of course I don't have a lot of credible why 382 00:20:00,200 --> 00:20:02,600 Speaker 1: I'm an owner for that, sax, I'm not an expert. 383 00:20:02,720 --> 00:20:04,679 Speaker 1: But you know, at the end of the day, at 384 00:20:04,720 --> 00:20:07,000 Speaker 1: least I can I can get into the game and 385 00:20:07,080 --> 00:20:09,359 Speaker 1: be verbal and vocal. Okay, what would you say is 386 00:20:09,359 --> 00:20:12,960 Speaker 1: the most important characteristic to be a good leader. Commitment. 387 00:20:13,880 --> 00:20:16,240 Speaker 1: You really have to have your head in the game 388 00:20:16,680 --> 00:20:19,840 Speaker 1: and be committed to be a good leader. There's two 389 00:20:19,880 --> 00:20:23,159 Speaker 1: parts of leadership. One is leading people, and that's about 390 00:20:23,240 --> 00:20:26,440 Speaker 1: commitment and people understanding you have commitment. The other part 391 00:20:26,440 --> 00:20:29,359 Speaker 1: of leadership, which doesn't get talked about much because you 392 00:20:29,400 --> 00:20:31,919 Speaker 1: have to be a leader of ideas. The worst thing 393 00:20:31,960 --> 00:20:34,000 Speaker 1: you can do both for your people in generals to 394 00:20:34,359 --> 00:20:37,240 Speaker 1: say let's go and you point that way, and the 395 00:20:37,280 --> 00:20:40,280 Speaker 1: truth is you should have gone that way. So leaders 396 00:20:40,280 --> 00:20:44,080 Speaker 1: have to be leaders of ideas. The ideas compelled the people, 397 00:20:44,320 --> 00:20:46,600 Speaker 1: but then the ideas have to be right and you 398 00:20:46,680 --> 00:20:49,800 Speaker 1: have to stay committed. If twenty years from today or 399 00:20:49,800 --> 00:20:52,320 Speaker 1: twenty five years today, you're looking back on your life, 400 00:20:52,600 --> 00:20:55,000 Speaker 1: What would you want people to say was your legacy, 401 00:20:55,040 --> 00:20:58,920 Speaker 1: what you contributed to our country? Well, you asked the 402 00:20:59,040 --> 00:21:02,320 Speaker 1: very specific question, what would I would I contribute to 403 00:21:02,359 --> 00:21:04,679 Speaker 1: our country? What I hope we do is make some 404 00:21:04,840 --> 00:21:09,440 Speaker 1: difference in the lives of kids. That's number two. Number one. Hey, 405 00:21:09,680 --> 00:21:14,879 Speaker 1: we democratized computing and putting that kind of power and 406 00:21:14,920 --> 00:21:19,440 Speaker 1: capability for people to to thrive, to investigate, to be smarter, 407 00:21:19,600 --> 00:21:23,880 Speaker 1: to to create more. I feel immense pride about that. 408 00:21:24,640 --> 00:21:26,919 Speaker 1: I put that number one. I think that was not 409 00:21:27,000 --> 00:21:31,920 Speaker 1: only something that affected this country, but the world. Whatever 410 00:21:31,960 --> 00:21:34,880 Speaker 1: we do philanthropically, I hope makes a big, big difference. 411 00:21:35,720 --> 00:21:38,400 Speaker 1: It's hard to make a bigger difference than being involved 412 00:21:38,400 --> 00:21:42,960 Speaker 1: in the popularization of computing and the five NBA championships. 413 00:21:42,960 --> 00:21:45,960 Speaker 1: You will have one that will be important as well, right, Yeah, 414 00:21:46,000 --> 00:21:47,840 Speaker 1: but that's kind of a zero sum game. When we 415 00:21:47,880 --> 00:21:50,159 Speaker 1: win them, somebody else doesn't win them, So it's a 416 00:21:50,200 --> 00:21:52,760 Speaker 1: little harder to say it's a broad contribution. But in 417 00:21:52,920 --> 00:21:54,720 Speaker 1: l a that would be a big contribution.