Idea Man

by Paul Allen

  I checked into Swedish Medical Center in downtown Seattle, my first hospital stay since having my tonsils out as a child. That night I dreamed that a Gumby-like creature was stuck to me. It was made of black tar, and I just couldn’t get it off. I awoke in a panic.

  On September 25, they performed the biopsy. After I came out of anesthesia, the surgeon entered my room looking grim. “Mr. Allen,” he said, “I took out as much as I could, but our initial diagnosis is lymphoma.”

  I knew that was cancer, but not much else, and as I found out more I got terrified. In those days, even early-stage lymphomas had a fifty-fifty chance of killing you. I tried to make sense of the possibility that I might soon die. I’d had twenty-nine good years, but I couldn’t help feeling cheated. I had so much more to explore and experience.

  The next morning, the surgeon and oncology team returned, all smiles. “We’ve got good news,” the surgeon said. “You’ve got Hodgkin’s disease.” An in-depth look had modified their diagnosis. “The cure rate’s in the midnineties, if it’s early-stage,” he went on. “You’re going to be fine. You’re going to recover from this.”

  I wanted to believe him. It sounded good, and everyone’s body language seemed positive. But I was still in shock from the day before.

  The hospital needed to “stage” my illness to see how far it had progressed, beginning with a more invasive biopsy that drew bone marrow from my hips. I made the mistake of buying a book about Hodgkin’s that showed how tumors could metastasize, with charts on survival outcomes, and it scared the heck out of me. The worst part was waiting for test results as the bump on my neck kept growing to the size of a robin’s egg. My father, a testicular cancer survivor, told me, “Son, none of this stuff is pleasant, but you have to take it like a man.” That might sound cold in print, but knowing that he’d gotten through it was comforting to me. I couldn’t give in to panic or despair; I had to tough it out.

  Then, good news: They’d caught my disease in Stage 1-A, before it had spread. Early-stage Hodgkin’s lymphoma is one of the most curable cancers. I’d drawn a scary card, but hardly the worst. I began a six-week course of radiation, five days a week. The waiting area was filled with people in hospital gowns, some with conditions that gave them very little chance. The room was eerily quiet as people waited to be called. One day a man wandered in and asked for a cigarette machine. The nurse stood up and said sternly, “Sir, there are no cigarette machines in cancer wards.” The man fled.

  I was grilled ninety seconds per side with high-energy X-rays. Including setup, the procedure took less than fifteen minutes. The technician said, “Mr. Allen, nobody has ever shown the energy you have to jump on the table and jump off again.” I just wanted to get out of there as fast as I could. A month in, after they started targeting my spleen, the nausea came in waves. I’d race home before throwing up for hours. Over two months I lost twenty pounds.

  At home I rested and listened to music. I spent time with my parents and sister, but I needed more to distract me. So instead of doing the sane thing and taking a leave, I went into the office a few afternoons a week, just to keep my hand in. That was the no-excuses Microsoft culture: relentless commitment to work. Striving for normalcy, I even took a weekend beginner’s ski class when I had barely enough energy to coast down a hill.

  Halfway through therapy, my white-cell count dropped so low that they had to stop for several weeks. But by then the tumor was shrinking. There was no guarantee of a cure, and I still felt sick and debilitated, but I began to be encouraged.

  After resuming the radiation, I was in Bill’s office one day talking about MS-DOS revenues. Our flat-fee strategy had helped establish us in several markets, but I thought we’d held on to it for too long. A case in point: We’d gotten a fee of $21,000 for the license for Applesoft BASIC. After sales of more than a million Apple II’s, that amounted to two cents per copy. “If we want to maximize revenue,” I said, “we have to start charging royalties for DOS.”

  Bill replied as though he was speaking to a not-so-bright child: “How do you think we got the market share we have today?” Then Steve came by to weigh in on Bill’s side with his usual intensity. It would have been two on one, except I was approximately half a person at the time. (Microsoft later switched to per-copy licensing, a move that would add billions of dollars in revenue.)

  Not long after that incident, I told Steve that I might start my own company. I told Bill that my days as a full-time executive at Microsoft were probably numbered, and that I thought I’d be happier on my own.

  I was still undergoing therapy when Bill signed off on my proposal to start a Microsoft Hardware Group, which set about designing a plug-in mouse for Charles Simonyi’s GUI applications. We contracted with a Japanese manufacturing firm called ALPS, and soon a Microsoft Mouse prototype took shape: a metal-finish tracking ball and a pair of shafts to read the ball’s movement and decode direction and distance. Don Burtis created a card that could interpret those signals for the PC. (It was thirteen years before the advent of Universal Serial Bus connections.) The big question was: How many buttons? I decided on two, a compromise between the three-button mouse on the Alto and the one-button model Steve Jobs was developing for the Lisa.

  I visited Jobs in Palo Alto around that time to hear more about his plans for the Macintosh, Apple’s cheaper GUI machine then still in development. We had a vested interest in the Mac, which would give our GUI applications—Microsoft Word and Excel—a welcome foothold until the PC platform and our new Windows operating system caught up to them. Jobs launched into a soliloquy about the glories of the graphical user interface, not knowing he was preaching to the choir. After I let it slip that we were planning a mouse for Microsoft Word, Jobs put their one-button mouse through its paces. When I asked him whether two buttons might be better, he passionately lectured me: “You know, Paul, this is all about simplicity versus complexity. And nobody needs more than one button on a mouse.”

  I said, “But Steve, people have more than one finger, and there’s going to be things they might want to do with a right click, too.”

  Jobs dismissed my point with a shake of his head. He believed in making the entry-level experience as unintimidating as possible—and that there was usually one and only one correct way to do things. At Microsoft, we tried to balance simplicity with power. I considered the trade-off worthwhile if an extra feature made a program or device more functional.

  When Word came out before the Mac in 1983, our first-generation mouse didn’t sell very well, despite a retail price less than half of our competition’s. Jon Shirley, who succeeded Towne as Microsoft’s president that year, would complain that we had “mouse-infested warehouses.” The main problem was Word 1.0, a dumbed-down, pre-Windows attempt to mimic a graphical user interface. But I wasn’t discouraged. Our strategy was geared toward introducing people to a new experience that would pave the way for better versions of our software.

  In time, I’d be vindicated. Windows was introduced in 1985, eventually becoming the dominant GUI personal computer platform. The Microsoft Mouse thrived through many incarnations—optical, wireless, laser, Bluetooth—as one of the company’s longest-lived products. And every one of those mice had more than one button. People quickly adapted. Today that extra button helps millions of Windows users gain access to context menus and a host of other convenient features.

  Postscript: In 2005, after twenty-two years of one-button worship, Apple relented and released the multibutton Mighty Mouse.

  ONE EVENING IN late December 1982, I heard Bill and Steve speaking heatedly in Bill’s office and paused outside to listen in. It was easy to get the gist of the conversation. They were bemoaning my recent lack of production and discussing how they might dilute my Microsoft equity by issuing options to themselves and other shareholders. It was clear that they’d been thinking about this for some time.

  Unable to stand it any longer, I burst in on them and shouted, “This is unbelievable! It shows your true characte
r, once and for all.” I was speaking to both of them, but staring straight at Bill. Caught red-handed, they were struck dumb. Before they could respond, I turned on my heel and left.

  I replayed their dialogue in my mind while driving home, and it felt more and more heinous to me. I helped start the company and was still an active member of management, though limited by my illness, and now my partner and my colleague were scheming to rip me off. It was mercenary opportunism, plain and simple. That evening, a chastened Steve Ballmer called my house and asked Jody if he could come over. “Look, Paul,” he said, after we sat down together, “I’m really sorry about what happened today. We were just letting off steam. We’re trying to get so much stuff done, and we just wish you could contribute even more. But that stock thing isn’t fair. I wouldn’t have anything to do with it, and I’m sure Bill wouldn’t, either.”

  I told Steve that the incident had left a bad taste in my mouth. A few days later, I received a six-page, handwritten letter from Bill. Dated December 31, 1982, the last day of our last full year together at Microsoft, it contained an apology for the conversation I’d overheard. And it offered a revealing, Bill’s-eye view of our partnership.

  During the last 14 years we have had numerous disagreements. However, I doubt any two partners have ever agreed on as much both in terms of specific decisions and their general idea of how to view things.

  True, we were extraordinary partners. Despite our differences, few cofounders had shared such a unified vision—maybe Hewlett and Packard or Google’s Sergey Brin and Larry Page, but it was a short list.

  Sometimes I think that I have more confidence in your abilities than you do. Your strong association with SoftCard always surprises me. … Frankly, breakthrough ideas like … SoftCard are great, but they are not necessary.

  Bill knew that SoftCard was still a sore point with me. He walked a fine line here, trying to acknowledge my contribution without giving it too much weight.

  The company is really in great shape by some measures. … However, the company is in BAD shape by one measure. We are a lot less unique [than] we were before. … Our product spec’s and overall approach is [sic] not as unique as they should be.

  Early in the life of Microsoft, nobody else had what we had: a robust yet compact BASIC for microcomputers, plus a proven set of development tools. When we achieved a dominant position with MS-DOS, no other product compared. But as the industry matured, Microsoft’s rate of innovation had slowed. The company needed all of the out-of-the-box ideas it could muster, and Bill didn’t want mine to slip away.

  Paul—sometimes I feel like you are telling me I’m a bad guy or that the company is bad. Sometimes I feel like you don’t understand all the effort that’s gone into the company.

  In fact, I was well aware of the tremendous effort that Bill and others had invested to make Microsoft great. After all, I’d been part of it.

  I know you’ve thought about this more than I have, but do you really want to be a solo performer? I understand wanting to take time off but if you really wanted to work solo why did you come back to Boston and convince me to drop out of school? Your best work has been helping to plan and design, not execute.

  Bill was right. Our great string of successes had married my vision to his unmatched aptitude for business. But that was beside the point. Once I was diagnosed with Hodgkin’s, my decision became simpler. If I were to relapse, it would be pointless—if not hazardous—to return to the stresses at Microsoft. If I continued to recover, I now understood that life was too short to spend it unhappily.

  Bill’s letter was a last-ditch effort to get me to stay, and I knew he believed he had logic on his side. But it didn’t change anything. My mind was made up.

  AS THE NEW Year began, there was much to be done at Microsoft. The Multi-Tool product line was evolving into what would eventually become Microsoft Office, with Mac versions already under way. There was excitement over Windows—or “Interface Manager,” as it was called, until someone in marketing persuaded Bill that “Windows” was sexier. The company had plenty of innovative products in the pipeline. I felt like I was leaving it in good shape.

  By the end, Bill and I had diverged in ways that went beyond our yelling matches. His extreme competitiveness helped make him a historically successful CEO, but it also destabilized our relationship. One small example came before I left the company, when Bill was giving me a hard time about everything I hadn’t been doing. In my defense, I said, “The TRS-80 Model 100 math package was a big job, and it turned out pretty well.” A year or so earlier, Tandy had asked us for a decimal floating point math program for their early notebook computer, a must for precise financial calculations. I’d never done one before and sweated bullets for months to get it right.

  And Bill said, “I wrote all that code.”

  “Really?” I said. He’d say these things with such conviction that it made me wonder for a moment: Had I written it? I went back and found the source code and printed it out, and of course it was mine. Bill hadn’t written a single line; in fact, he wasn’t even writing code at that point. The next day I went back to his office. I dropped the listing on his desk and said, “OK, Bill, here’s the math package. Show me what you wrote.”

  It was a strange moment. Bill froze in mid rock, glanced down at the code, and muttered, “Yeah, you did write it.”

  Sometimes it seemed that Bill so utterly identified with Microsoft that he’d get confused about where the company left off and he began. I didn’t feel quite the same way. The business was hugely important, but it did not define me. I wasn’t sure what the future held, or even how much of it I’d have to enjoy, but I looked forward to a new phase. I had never forgotten my father’s advice: “Whatever you do, you should love it.” My dad was happy for me when I’d returned to Seattle four years earlier, full of ideas and enthusiasm. It seemed to him that I’d found my calling, and I thought I had, too. But now it was time to go.

  In January I met with Bill for one final time as a Microsoft executive. As he sat down with me on the couch in his office, I knew that he’d try to make me feel guilty and obliged to stay. (Months after Vern Raburn had left to go to Lotus Development, Bill wrote to me that he was still “confused and hurt” about what had gone wrong.) But once he saw he couldn’t change my mind, Bill tried to cut his losses. When Microsoft incorporated in 1981, our old partnership agreement was nullified, and with it his power to force me to accept a buyout based on “irreconcilable differences.” Now he tried a different tack, one he’d hinted at in his letter. “It’s not fair that you keep your stake in the company,” he said. He made a lowball offer for my stock: five dollars a share.

  When Vern left, the Microsoft board voted to buy back his stock at three dollars a share, which ultimately cost him billions of dollars. I knew that Bill hoped to pressure me to sell mine the same way. But I was in a different position than Vern, who’d jumped to Lotus in apparent violation of his employment agreement. I was a cofounder, and I wasn’t leaving to join a competitor. “I’m not sure I’m willing to sell,” I countered, “but I wouldn’t even discuss less than ten dollars a share.”

  “No way,” Bill said, as I’d suspected he would. Our talk was over. As it turned out, Bill’s conservatism worked to my advantage. If he’d been willing to offer something close to my asking price, I would have sold way too soon.

  On February 18, 1983, my resignation became official. I retained my seat on the board and was subsequently voted vice chairman—as a tribute to my contributions, and in the hope that I would continue to add value to the company I’d helped create.

  WITH MY HODGKIN’S in remission, I didn’t know what to do next; I just knew that I wanted to enjoy life. I would literally stop in my tracks to look at a flower or the sky, or consciously savor a moment with family or friends. Though my Microsoft shares were not yet liquid, I was in decent financial shape. I had a nice house and enough money in the bank to pay my bills for a while and travel.

  That sprin
g I went to Hawaii with Marc McDonald and Ric Weiland. As a boy, I’d thrilled to Sean Connery’s scuba adventures in James Bond films like Thunderball. When I found out that our hotel had a pool where you could try breathing with scuba gear, I jumped at the chance. The next day I did a shore dive among the brilliant fish that swam around the reef, and I was hooked. Diving took me into a different physical realm—something like being an astronaut, I supposed. (I became a certified diver two years later, and have since dived throughout the world, from the Galápagos to the Red Sea. It’s my great escape.)

  I wasn’t home long before I took off again, this time on a road trip to Anadarko, with my father joining me for the home stretch. We saw my Uncle Louis, who took us to a classic barbecue spot and then to his Western Wear store, where I disappointed him by choosing a plain leather pair of boots over snakeskin or alligator. My dad drove back to Seattle with me, and the road got him talking about a subject he’d never broached before: his experience in World War II, when he’d been part of the second wave that landed at Normandy. “It got pretty hot a few times,” he said. He told me about the German buzz bombs that rained on the troops as they waited in England before crossing the Channel. At a given point, a cut off valve sent those early cruise missiles into a dive. If the soldiers heard the buzzing stop overhead, they’d lunge under their card tables for whatever shelter they could find.

  There was one last thing my father told me as we drove along, before lapsing back into his typical silence: “If you take care of your men, they’ll take care of you.”