Why Did Bill Gates Start His Business?

With a net worth of $130 billion, Bill Gates is one of the world’s wealthiest people. He earned his wealth by forming Microsoft and pushing the limits of computer technology.

But how exactly did he manage to become such an influential leader in the tech world?

A look at his early life and business offers some insights as to how he became the titan of technology that he has become.

What Was Bill Gates’s Early Life Like?

Bill Gates grew up in Seattle as the family’s only son (he has two sisters). The family held a prominent position thanks to his father’s civic work and role as the president of the Washington State Bar Association and the Seattle King County Bar Association.

His mother served on the board of the United Way of America. While the family wasn’t wealthy, it enjoyed an upper-middle-class position that gave Gates opportunities to explore his interest in computers.

Gates says that his parents encouraged him to follow in his father’s footsteps and become a lawyer. At the same time, they encouraged his interest in computers.

When Gates was a young teenager, his mother helped to lead a fundraising event for his school to purchase a computer terminal (a Teletype Model 33 ASR terminal) and buy time on General Electric’s system.

When the school’s allotted time on the GE computer ended, Gates and future Microsoft co-founder Paul Allen started a small business so they could purchase time on a PDP-10 computer owned by the Computer Center Corporation.

Without much money, Gates and a few friends exploited bugs in the system so they could afford more time. Computer Center Corporation banned the group for a summer. Later, it hired them to find more bugs to prevent others from exploiting them.

The group of friends Gates made at Lakeside Prep School formed the core of Microsoft’s early business venture.

What Inspired Bill Gates to Start His Business?

While Gates attended Harvard, his close friend, Paul Allen, took a programming job at Honeywell. Allen would frequently visit Gates at his Harvard dorm.

While versions of the story differ, what’s certain is that Gates and Allen encountered an issue of Popular Mechanics in 1975 that reviewed the Altair 8800, one of the first microcomputers available to the public.

Gates and Allen quickly realized a business opportunity. Gates left Harvard to join Allen at Honeywell, and the two got to work building the foundation of Microsoft.

They reached out to Micro Instrumentation and Telemetry Systems (MITS), the Altair 8800’s manufacturer, and said they were developing a BASIC interpreter for the platform. Really, they had only thought to develop the interpreter. The catch was they hadn’t done any work.

Micro Instrumentation and Telemetry Systems showed serious interest, though, so Gates, Allen, and some friends built a demo of their proposed interpreter. They presented it to the company and secured a contract.

Since MITS was located in Albuquerque, New Mexico, the duo decided to leave Boston. They relocated to New Mexico and formed Microsoft, which they sometimes spelled “Micro-Soft” as a combination of the words “microcomputer” and “software,” to work with MITS.

What Motivated Bill Gates When He Was Young?

From an early age, Bill was entranced by how computers could execute code perfectly. He seems to have been motivated by opportunities to explore technology’s capabilities.

Some of his early successes as a programmer include:

  • Building a tic-tac-toe game that pitted the player against the computer
  • Creating a program that would automate Lakeside Prep School’s scheduling system
  • Using an Intel 8008 to capture traffic data he could present to engineers (Gates, Allen, and Paul Gilbert formed the business Traf-O-Data to sell the product)
  • Developing a pancake sorting solution for a course problem at Harvard (it was the fastest solution to the problem for 30 years)

Gates also seems to have understood the benefits of forming business structures through which he could market marketable products.

Although he made modest sums from these early businesses, they funded his interest in computing technology and gave him opportunities to grow his skills.

What Was Bill Gates’s Life Before He Was Successful?

Arguably, Bill Gates has always been successful. He started earning money from his computer skills when he was just a teenager.

He never graduated from Harvard because Microsoft’s business opportunities were more attractive than continuing his coursework.

While he might have struggled at points, his businesses have always enjoyed some level of success.

How Did Bill Gates Start Microsoft?

Bill Gates started Microsoft with Paul Allen by reaching out to Micro Instrumentation and Telemetry Systems (MITS) about building a BASIC interpreter for MITS’s microcomputer.

In truth, Gates and Allen hadn’t started work. Still, they got a positive response from MITS.

Subsequently, they put together a demonstration within a couple of weeks and secured a deal. After relocating from Boston to Albuquerque, they formed Microsoft as a partnership.

Where Did Bill Gates’s Business Start?

Gates and Paul Allen formed Microsoft in Albuquerque, New Mexico so they could be close to the business’s first client, Micro Instrumentation and Telemetry Systems (MITS).

Within a few years, though, they moved the company to Bellevue, Washington, a Seattle suburb.

Was Bill Gates Born Rich?

Whether you think Bill Gates was born rich largely depends on your definition of “rich.” His family enjoyed an upper-middle-class position with ample financial and social resources. This position allowed him to attend a private school that had access to General Electric’s computer system.

At the time, computers were very expensive and difficult to access. So, without this advantage, it’s difficult to imagine that Gates would have been able to develop the skills that made him a billionaire.

It’s also important to note that Gates’s mother played a critical role in Microsoft’s early success. Her social connections brought her into contact with John Open, the CEO of IBM.

She mentioned her son’s work, which got Opel interested in what Microsoft could offer IBM, which hired Microsoft that same year and frequently asked Bill Gates to oversee important projects.

Why Did Bill Gates Start His Business?

Bill Gates started Microsoft with co-founder Paul Allen to develop software for Micro Instrumentation and Telemetry Systems (MITS). The company started with an interpreter for the Altair 8800, a microcomputer popular among hobbyists.

Early in Microsoft’s history, Gates learned that nearly 90% of Altair 8800 users hadn’t paid for the Microsoft Altair BASIC software he had built. He published a letter in the MITS newsletter stating his belief that programmers should get paid for their work.

Many hobbyists were primarily interested in pursuing the capabilities of new technologies. However, they had little interest in the finances behind these technologies. Gates’s opinion wasn’t popular among hobbyists, but it highlights his understanding of how business success contributes to technological advances.

How Did Microsoft Become So Successful?

Microsoft became so successful because it understood the importance of developing a computer operating system that practically anyone could use.

The graphics-based Windows platform made it possible for untrained consumers to purchase computers and use them at home.

Before Windows, users had to rely on the command line interface, which requires learning detailed instructions that aren’t feasible for casual users.

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