Microsoft Co-Founder Paul Allen Hits Out at Gates

http://online.wsj.com/article/SB10001424052748703806304576232051635476200.html?mod=WSJ_hp_MIDDLETopStories

by nhebb • 15 years ago

142 74 15 years ago

online.wsj.com

winestock• 15 years ago

Cringley's account of Paul Allen's fight against Hodgkin's disease while at Microsoft may be relevant.

http://www.pbs.org/cringely/pulpit/2006/pulpit_20060330_0008...

smackay• 15 years ago

Cringley's account is very critical of Gates and Balmer, particularly on the subject of getting control of Paul Allen's shares in Microsoft should the worst happen. While this seems very cold-blooded it was probably a reasonable course of action given the circumstances - look what happened to CraigsList when one of the founders sold out to eBay.

yannickt5• 15 years ago

My interpretation of the article is that Allen felt betrayed because Gates and Ballmer were having these discussions behind his back.

codingthewheel2• 15 years ago

Difficult to see how publicizing this stuff could be beneficial for Mr. Allen. At that level, and sitting on top of a multi-billion dollar fortune, it almost never behooves you to say anything negative about anybody -- least of all one of your former partners. I also think complaining about not getting a bigger share of MS stock, when you've got 14 billion in the bank...not exactly the stuff of which Jedi are made.

silvestrov• 15 years ago

He wants to be acknowledged. Everybody knows Bill Gates and sees him as the smart and great computer guy, while Mr. Allan is an unknown. It's like 2 brothers where the lesser talented uses all his life to proof he's just as good and therefore never gets to create something.

bad_user• 15 years ago

I don't see Gates as the great computer guy. I look at him as a ruthless evil genius that made Microsoft what it is. Of course that's partly because he's also a "great computer guy".

To make an analogy with Apple, if anything, his role at Microsoft was more like that of Steve Jobs, rather than that of Steve Wozniak; he provided the vision, he made the business calls that made Microsoft. Bill Gates does have a different style than Steve Jobs and doesn't have the same distortion field and attractiveness, but his speeches at Ted are great nonetheless (which makes me think he was bored at Microsoft :)).

melling• 15 years ago

Who destroyed Lotus, WordPerfect, Borland and Netscape? Who swore under oath that the browser is part of the operating system, and couldn't be removed? Why are 9 out of 10 desktop computers running Windows? I think only one man gets the credit. :-)

Hopefully, he can ruthlessly solve a few of the long-running problems in the world.

nikcub• 15 years ago

The story is part of a very good publicity campaign for his book, which has been written as a memoir. He wants his legacy to be remembered as 'Paul Allen' rather than 'that other guy'.

(The excerpt in VF is very good: http://www.vanityfair.com/business/features/2011/05/paul-all...)

jbigelow• 15 years ago

What is the risk for somebody with 14 billion in the bank to call out other when he/she feels they've been wrong (regardless of whether it's perception or reality). Allen could have called Gates they antichrist and he'd still have people lined up around the block to take his VC money or sit in the owner's box of Trailblazers game with him. 14 billion is definitely "FU" money.

shareme• 15 years ago

Large risk as you cannot buy a rep..its earned not bought

grannyg00se• 15 years ago

It's an interesting type of discrimination at play here. The rich have just as much right to free speech and human emotion as everybody else. If someone feels that they have been mistreated, it is not appropriate to belittle their concerns based on their net worth. Whether their net worth is very low, or very high.

raghava• 15 years ago

> The rich have just as much right

and a greater level of privilege to free speech, imho.

sunchild3• 15 years ago

He isn't doing it to benefit himself. He probably doesn't care whether you like him or not, and he definitely doesn't need your money or respect.

I guess Paul just wants the world to know that the image of Gates as our benevolent patron of philanthropy is itself revisionism, lest anyone forget that Bill Gates was one of the least loyal and trustworthy friends a person could ask for.

It doesn't surprise me that HN sides with the victor in cases like this, but I would argue that any serious business person should watch and learn carefully from the lessons of two close friends who changed the world and ended up disliking each other.

anonymous2463• 15 years ago

"least loyal and trustworthy friends a person could ask for": citation?

Are you referring to the discussion Gates and Ballmer had about diluting Allen? That seems to be a way to dilute a founder who was slacking off. The word partnership is used several times; this may imply that everybody was 100% vested already. If so, this is the only thing they could do to somebody who wasn't pulling his weight.

codingthewheel2• 15 years ago

Yeah, I completely agree. I'm sure he doesn't need my or anybody else's money or respect. But I wonder if the message he's trying to get across is the one that's actually getting across. Looking at it from a gaming standpoint, can his play here can ever have a positive expectation?

patentnerd• 15 years ago

I'm not sure that Paul is that great of a guy either. His company is a bit of a patent troll, for one.

Here are some his "inventions":

http://bit.ly/dXsk5P

spinchange2• 15 years ago

I have always thought the relational dynamic between Jobs and Woz was instructive for similar reasons. (Not that these two founders aren't friends anymore, but I think it's pretty obvious that it isn't what it was)

chaostheory• 15 years ago

I don't doubt Allen's claims, but years and experience can change a man. The person Paul was complaining about, probably doesn't exist anymore except in distant memories, albeit rather painful ones. People can change for the better.

dgallagher• 15 years ago

Bill Gates of 30 Years Ago != Bill Gates of Today

You of 10 Years Ago != You of Today

People change with time, and are not necessarily the same as they were in the past. Forming a collective of ones entire life and cherry-picking various moments simply gives you highlights, both good and bad. They don't speak to what the person is right now.

Probably your best bet to gage someone is to look at what they've been doing recently, going back maybe no more than ~5 years. Here you'll see someone whose learned from their past mistakes, likely acting differently due to life lessons, and are essentially the most authentic "version" of a person they currently are.

gwern2• 15 years ago

> At that level, and sitting on top of a multi-billion dollar fortune, it almost never behooves you to say anything negative about anybody -- least of all one of your former partners. I also think complaining about not getting a bigger share of MS stock, when you've got 14 billion in the bank...not exactly the stuff of which Jedi are made.

At that level, money is more about points than bucks. He's not upset he can buy fewer baseball teams, he's upset that his status was being lowered and he was being disrespected and treated as prey/

As far as the former partners go, Cringely claims Allen has been dissociated financially for a long time:

> Maybe that�s just the sort of fiduciary discussion board members have to have, but it didn�t go over well with Paul Allen, who never returned to Microsoft, and over the next eight years, made huge efforts to secure his wealth from the fate of Microsoft. He sold large blocks of shares on a regular basis no matter whether the price was high or low. Then in October and November of 2000, just as he was finally leaving the Microsoft board, Allen did a series of financial transactions involving derivative securities called �collars,� that are a combination of a right to buy and a right to sell the stock at different prices such that both his upside and downside financial potential are limited. By the end of 2000, though Allen technically still owned 136 million Microsoft shares, his wealth was for practical purposes separate from that of Gates, Ballmer, and the rest of Microsoft.

Inasmuch as Cringely reported essentially the same anecdote as in the _Vanity Fair_ excerpts, I'm inclined to take him at his word when he writes about Allen's finances.

michaelchisari• 15 years ago

At that level, and sitting on top of a multi-billion dollar fortune, it almost never behooves you to say anything negative about anybody

I've never understood that. At what point do you make enough money to say whatever the hell you want, without any fear of repercussions? What's the point of having all that money if you have to worry about what other wealthy people think of you?

narrator• 15 years ago

If you are a billionaire you buy a news network and then hire a pundit, heck a whole panel of pundits to say whatever negative things you want to say about anybody.

michael_dorfman• 15 years ago

See http://news.ycombinator.com/item?id=2386411 for the Vanity Fair article by Allen.

c23• 15 years ago

I feel like I've worked with people like Paul Allen (programmers). They tend to over value their own contributions and have "revisionist histories" when considering their relationship with their manager, but really it comes down to how much recognition they received.

The quote about Paul wanting significantly more shares for his contributions to SoftCard specifically ring true. SoftCard might have been a sales success, but comparing it's impact on Microsoft to Basic itself is a little off.

hvs• 15 years ago

It's hardly fair to look back with 30 years of hindsight and say that BASIC was more important to a company than SoftCard. Obviously, we know that now, but that doesn't speak to their specific situation.

rbanffy3• 15 years ago

IIRC, Paul Allen wrote most of Microsoft's original BASIC interpreter... And the emulator they used to develop it.

c23• 15 years ago

BASIC was the foundation of the company, by 1980 SoftCard was one project of many.

I don't discount the importance of SoftCard, it was actually key in the development of the relationship between IBM and Microsoft in the 80s, but even more key was the building of the relationship itself, which was largely driven by Gates.

Allen's attitude at the time reminds me of software developer coworkers who over emphasis the contributions that software development makes. I can understand Gates' reaction - Gates' job was not any easier and certainly not any less important, so why redistribute shares?

eyeforgotmyname2• 15 years ago

I always thought that Gates was the key business guy and Allen the key technology guy, Gates made the money and Allen made the product. Once the product was out Allen was no longer required, the ball was in Gates court and he sold the shit out of it. Am I wrong in this view?

yannickt5• 15 years ago

Cringely's article, as well as Allen's accomplishments outside of Microsoft make that questionable. Gates may have had more business savvy, but it seems pretty evident that Allen was in no shortage of it either. To put it another way, I don't think Allen was to Gates what Wozniak was to Jobs.

eyeforgotmyname2• 15 years ago

So then what was Gates contribution? I thought he was a brilliant businessman but that he wasn't really a tech guy. Is that wrong?

nickpinkston• 15 years ago

All Ye founders take note and prepare thy operating agreements - for the waters of startups are red with the blood of ye fellow founders!

kloncks• 15 years ago

Is it just me or was Bill's reaction so cordial and professional? I loved it; thought it was great.

"While my recollection of many of these events may differ from Paul's, I value his friendship and the important contributions he made to the world of technology and at Microsoft," Mr. Gates said in a written statement.

yannickt5• 15 years ago

It is exactly the kind of response I would expect from someone in his position. He has nothing to gain by reacting overly negatively, and his legacy is not exactly at stake.

dko• 15 years ago

Set agreements in stone as early possible. No matter how much trust there is, and no matter how awkward it may seem.

And I can't help but draw parallels with The Social Network, which incidentally is also an account by an 'ousted' co-founder.

yannickt5• 15 years ago

Cringely wrote a piece in 2006 about Allen progressively distancing himself from Gates, Ballmer and Microsoft. It certainly raises questions about Gates' character.

http://www.pbs.org/cringely/pulpit/2006/pulpit_20060330_0008...

Edit: Beaten to the punch by about 2 hours. Oops.

meterplech3• 15 years ago

It seems to me the biggest allegation here is that Bill Gates and Steve Ballmer tried to dilute his shares when he was diagnosed with cancer the first time.

I hate to seem callous here, but, that might've completely made sense. God forbid if Allen had died, the company, still pre-IPO startup whose main product was MS-DOS (pre Office or any version of Windows) would want its shares controlled by people with business interests in the company. When you are a startup you want to align incentives properly and yes, people who are unfortunately unable to contribute, even if it's through no fault of their own probably shouldn't have huge amounts of stock.

Besides that allegation I don't really know what else here is that negative on Bill Gates.

edit: MS-DOS not MS-DOC. Mistyped

stretchwithme4• 15 years ago

That MS-DOC program didn't sell a single copy.

That's why even founders should be on a vesting schedule.

rbanffy3• 15 years ago

There would be nicer ways to shield the company from that. They could talk to Allen, make sure that, in the possible event of his death, they would take care of his family in case the company succeeded.

In all my commercial ventures, my partners were also my friends. I would never, ever even entertain doing something like this to a perfectly healthy partner, much less one with a serious health problem.

meterplech3• 15 years ago

I agree that you shouldn't screw a friend over obviously. But, there does need to be some way to make sure equity of an early stage company is in the hands of the people who are most incentivized for its success. Ideally Gates would offer a contract where he could buy shares from Allen to make sure he and his family was taken care of. But- I do understand the logic of trying to ensure key stakeholders in the company are leading it.

kenjackson• 15 years ago

Targeted dilution of individual shareholders seems extremely shady. Almost seems like it should be illegal.

As noted by someone else, they should have simply retained first option to buy any portio of Allen's shares in the case where his shares would change hands. Actually that should probably apply to all major insiders.

Intentionally trying to dilute his shares, if this did indeed happen, is tantamount to stealing in my eyes.

yannickt5• 15 years ago

I dunno. It looks like Allen's contributions as a co-founder back in the DOS days were very significant. I think he deserved at least a face-to-face, open and honest discussion.

meterplech3• 15 years ago

That's completely fair. I agree with that. But, we don't know if this was a discussion between the two (Gates and Ballmer) with the intent of discussing it with him afterward.

adammichaelc• 15 years ago

I think you are right. In my opinion you have to handle each situation separately. So you dilute because it's best for the company, and then you also (assuming you have the means) take care of your friend monetarily and help lighten the medical expense load for him.

stretchwithme4• 15 years ago

"I'm not sure Bill would ever have dropped out of Harvard if it wasn't for Paul," Mr. Yoffie said, referring to Mr. Allen's role in encouraging Mr. Gates to leave college to start Microsoft. "I don't know whether Steve Jobs, without Wozniak, would have ever gotten things together."

baloney.

david927• 15 years ago

Yoffie mixed up Wozniak and Jobs there.

stretchwithme4• 15 years ago

totally, Woz is awesome, to be sure. But Jobs has been running without him quite well of late.

burgerbrain• 15 years ago

Without Woz, Jobs would have never even had a product to begin with. Forget having a company, there would have been no reason to form a company.

stretchwithme4• 15 years ago

Many companies built personal computers. Only one built the Mac. Jobs would have found someone else. Being able to make things is not as common a skill as knowing how to make things great.

tmsh• 15 years ago

The article makes it out as if Paul Allen is some sort of unlucky, dabbling entrepreneur post-Microsoft:

Many of his business investments, like the cable company Charter Communications, software company Asymetrix Corp. and set-top box maker Digeo Inc., have either flopped or fared poorly for him.

I don't think so:

http://www.vulcan.com/

wmboy• 15 years ago

Admit it, you're more likely to read the book now than you would have been...

He obviously wants his book to be successful (though not for monetary reasons) so it would make senese to write about something controversial - in this case putting Bill Gates in negative light is obviously the easist way to get attention.

elvirs• 15 years ago

okay, may be Paul could have made a couple of billions more. but lets keep in mind that all that fortune was made for him after Paul left the company. Now he writes the this book trashing his old friend and partner who actually made him rich? To me it looks like this is more of an ego issue for Paul rather than letting the world know truth about Bill.

Microsoft Co-Founder Paul Allen Hits Out at Gates

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