Idea Man

by Paul Allen

  THOUGH IN REMISSION, I still waited for something bad to happen. My doctors told me I’d be in the clear if I had no recurrence within three years, and that the odds were on my side: a 96 percent chance of a cure. But I couldn’t stop thinking about that other 4 percent. I was still recovering from the blow of the first diagnosis, from hearing I might die. I took it harder than some might have. Whenever I caught a bad cold or felt a strange sensation, I got a sinking feeling.

  I had a battery of tests every two months, followed by days of anxiety before the results came in. One day in May, I woke up with my chest throbbing. I had blood drawn to check my “sed rate,” a measure of inflammation in the body. It came back at 29, about double the norm, a number that might indicate cancer. I was sure that my Hodgkin’s had come back. At best, I thought, I’d face the ordeal of chemotherapy. At worst, the end could be near.

  On Friday, May 13, I repeated the test, which would take several days to process. Rather than wait at home, I flew to the National Computer Conference in Anaheim, California. I kept feeling worse and more worried, unable to sleep, and left the convention early for a late-night flight back to Seattle. In the air, at some point after midnight, I was panicked enough to draft a handwritten will. (In distributing my 3.2 million shares of Microsoft stock, I sensibly advised the recipients to hold on to them for a while “to enjoy the maximum return.”)

  Hours later, my doctor called with the test results: all good. My sed rate had dropped to 16. My chest pain was inconsequential. That was a great day; everything seemed possible again. As I wrote in my journal, “Tonight I walked around Green Lake at sunset. It was a beautiful sight. I even saw a huge catfish swimming by the shore. …”

  Two weeks after my scare, I traveled with my dad to Twin Lakes, our old family vacation spot. The two of us reverted to our usual interaction style, lots of fishing and reading and not much conversation. One day my father hooked a huge rainbow trout and battled it for half an hour before he could angle it up to our boat. I stood by, net in hand. When the fight was over and the fish safely in the boat, my dad grinned like I’d never seen him grin before. It was as though he’d reconnected with the best days of his youth. He’d caught the biggest trout he would ever catch, and he was content.

  Near the end of our stay, out of the blue, my father looked at me and said, “No matter what happens to me, always take care of your mother and your sister.” It wasn’t like him to be explicit about such things. But perhaps he’d had a premonition.

  I’D RARELY BEEN abroad except on business, but now I had all the time in the world for a European tour. I began that July in Scotland and then Ireland, where I met up with my sister and Brian, her fiancé. In Belfast I stayed at a hotel near blocks of rubble; it was the time of the Troubles, and bombings were commonplace. I was on my own the first night and went to the hotel bar. Once the patrons established that I was an American, they bought me drinks and toasted me, one after the next. The next day, Brian’s brother picked me up and asked, “Paul, why did you choose this particular hotel?”

  My travel agent found it, I said.

  “Oh, so you didn’t know it’s been blown up three times, then?” Now I knew why the Irishmen toasted me. I was the only American crazy enough to stay there.

  I’d long wanted to take my father to France, but he had no interest. “I’ve already seen it,” he said. But I’d found another reason to go, a woman I’d met through a friend two years earlier. Francoise was incredibly attractive: dark hair, olive skin, exotic Mediterranean looks. She was a high-level accountant with a wild streak: offbeat, full of energy, always up for adventure. I stayed at her apartment in Villefranche-sur-Mer, and then we drove to Nice and St. Tropez in her Renault Quatrelle with a stick shift in the dashboard and a flip-back plastic roof, the perfect car for the south of France. Francoise was resplendent in her orange or yellow pantsuits and her long hair blowing in the wind. I stopped thinking about past or future; every moment was full.

  We spent warm days on the beach, where Francoise got me to wear a Banane bathing suit about two inches high. I felt ridiculous but went along, and gradually I came to see the meaning of the saying that Americans live to work, while Europeans work to live. “Paul,” Francoise said in her perfect English, “have you ever experienced wine and cheese together?”

  And I said, “I have no idea what you’re talking about.”

  “That’s horrible, that you Americans don’t know these things.” She and her friends bought six bottles of wine and six different cheeses, and we spent the evening on the sand tasting the various combinations, each one a distinct explosion of flavor in my mouth. I was a middle-class guy from Seattle who’d been brought up on steaks and potatoes, and suddenly I was eating Vietnamese spring rolls and thin-crust pizza with a splash of spicy olive oil and an over-easy egg in the middle. I was living the good life on the French Riviera, which is a very good life.

  AFTER MY FATHER retired from UW, his knee started acting up from an old high school football injury. In the fall of 1983, when it got to the point that he could hardly work in his beloved garden, he arranged to have the knee replaced. The surgery was routine. Afterward, though, he couldn’t stop wincing, which was hard for me to watch; he was such a tough man that the pain must have been unbearable. He stayed in the hospital another few days to get his legs back under him, and all went according to plan. When I came to visit him on a Tuesday night, he was looking forward to joining us for the Thanksgiving holiday.

  The next day he was up and walking when a blood clot dislodged from his knee, traveled to his lungs, and formed a lethal pulmonary embolism—cardiac arrest, just like that. He was still connected to the EKG machine when we reached the hospital, and it was traumatic to watch the line on that machine get smoother and smoother until it went flat. My father was sixty-one years old. He never got to build that little place on the river that he’d talked about, where you could fish for steelhead whenever you wanted. When my uncles came up to make the arrangements, I could barely speak. I was in utter shock. I couldn’t believe that my dad was gone.

  We’d left a lot of things unsaid, and now I hadn’t had a chance to say good-bye.

  Later I’d commemorate him by establishing a library endowment fund in his name at UW, where so many people loved him. In 1990, a new addition was completed that now holds more than a million volumes. The Kenneth S. Allen Library includes the earth and space science collections that absorbed me on many a weekend when I was young. My own memento is much smaller: an oval of turquoise that my father had for years before finding a silver setting in Santa Fe a few months before he died. I have worn that ring ever since, and I think of him each time the stone catches my eye.

  * * *

  LOSING THE CAMARADERIE and creative work at Microsoft left a hole in my life. I missed the good times with Bill, when we’d spur each other on to bigger and better ideas, though the occasions had grown fewer toward the end. But I never felt tempted to reconsider my departure. It was like a failed romance. Parts of the relationship had been wonderful, but I remembered the negatives, too. I could not go back.

  Microsoft kept an office for me for quite a while. When I came in now and then to brainstorm with my old development guys, I was treated as an elder statesman. I’d get copied on some memos, but I wasn’t really in the loop. My guys would tell me that upper management seemed less balanced now that Bill had lost his technical foil-in-chief. As the company kept growing and changing, it wouldn’t be long before my legacy became less personal than the stuff of company lore.

  One day a big stack of boxes arrived at my home. They were consolidating office space, and they’d packed up my things and sent them to me. That felt like closure of a sort.

  For a time I was happy traveling back and forth to France and spending time with Francoise. I thought I’d retire at age thirty and follow my inclinations; once Microsoft went public, I’d never have to worry about money. But after a year and a half of vacationing, I got restless. I saw what happened
to my father after he’d traded his librarian’s job for fishing and his garden. He seemed diminished, somehow. I didn’t want that to happen to me.

  Luckily, some new ideas lay in wait.

  CHAPTER 13

  HELLHOUNDS

  Bill and I kept in touch after I left Microsoft, but it took me a while to get past the bitterness of my last months there. When Bill offered to invest in my new company, Asymetrix, I decided against it. I wanted to see where I could take it on my own, without his help.

  Over time, though, the hard feelings faded. In 1990, when Microsoft rolled out Windows 3.0, Bill was generous enough to share the stage with me and ToolBook, an Asymetrix product. After a five-year hiatus, I rejoined the Microsoft board. And when Bill got married in 1995, he included me in his wedding party. After he became a family man, we found a pattern not uncommon among old friends. We saw each other a handful of times a year, took in a movie or went to lunch. We’d fall into old rhythms, that high-bandwidth exchange of ideas—a reminder of our once-powerful bond.

  By the late 1990s, Microsoft was the largest and most profitable software company in history, growing at the same rate as the personal computer industry—very rapid growth, indeed. Armageddon seemed unlikely, yet Bill still saw the glass as seven-eighths empty. While Microsoft stock options had created thousands of millionaires, including some long-tenured secretaries, it also led to a gradual exodus as people retired early or went off to try their own start-ups.

  Bill had done well too, of course; twenty years after we’d founded the company, he was the richest person in the world. But he felt beset by shareholder and Wall Street expectations for ever-increasing profitability and growth. As the company’s chairman and CEO, Bill was never one to hype future earnings. He’d make modest predictions to set the stage for the company to shine when it exceeded projections. But as Microsoft’s stock price rose by a multiple of nearly a hundred in the 1990s, he found those victories harder to pull off.

  To be fair, he had a tough, tough job. In the high-tech field, there’s tremendous pressure even when you’re doing well; you have to run incredibly hard just to hold your competitive position. As Bill told Tom Brokaw on an NBC special in 1995, technology was “a very scary business. If you fall behind technically, no matter how much your past success has been, it’s no guarantee that you’ll keep doing well in the future.” Within months of that appearance, in an internal memo that spread swiftly over the Internet, Bill pointed to Netscape Navigator as the main obstacle to Microsoft’s ascendance on the Internet “tidal wave,” which he now considered the key to the company’s future. And because Navigator didn’t require a richly endowed operating system, it was also a threat to Windows and Office, Microsoft’s core businesses.

  Leaders tend to stick with the style that made them successful. In Bill’s case, the tried-and-true formula was hyperaggression and supercompetitiveness. When your company becomes the industry leader, though, the game changes, and you need to ease off to avoid too much resentment from the rest of the ecosystem. But Bill couldn’t back down; that wasn’t in his DNA. He sent the same public message, over and over again: We take on all comers, and we clobber them. Just days before the Brokaw special, when the New York Times Magazine portrayed Microsoft on its cover as an eight-hundred-pound gorilla, it signaled something ominous. Bill’s hard-nosed approach, on top of Microsoft’s run of success, had provoked a backlash from competitors and their allies in the federal government.

  The antitrust campaign against Microsoft came to a head in 1997, when the Justice Department demanded a stiff fine against the company for alleged violations. A parallel case was advancing in the European Union. Still on the company’s board, I advised Bill to temper his stance: “Look, Microsoft is going to win anyway from the momentum of the market and the position we’re in. You don’t need to be so aggressive.” I questioned Bill’s assertion that Internet Explorer had to be embedded within Windows for the operating system to work right, a key point of dispute in the federal lawsuit. There was no technical necessity for the bundling, since Windows could be tied to any competent browser and work just as well. (The company has since acknowledged as much in a settlement with the EU that allows users to choose any browser they wish.)

  But Bill insisted, as a matter of legal principle, that a company had the right to add features to a product even when that product monopolized the market. What he failed to grasp, despite warnings from many, was that the government’s case wouldn’t hinge on its legal merits. The attack on Microsoft was at bottom political. A target had been painted on the company’s back.

  United States v. Microsoft was filed on May 18, 1998. “Microsoft is unlawfully taking advantage of its Windows monopoly … to undermine consumer choice,” said Attorney General Janet Reno. “The Department of Justice will not tolerate that kind of conduct.” That November, in footage that will live forever on YouTube, portions of Bill’s three-day deposition were replayed in U.S. District Court. The Justice Department’s hired legal gun, David Boies, had pushed all of Bill’s buttons, and Bill took it from there. Rather than simply respond to Boies’s questions, he belittled them: “What do you mean by Internet software?” Not only is that question ridiculous, but I’m going to explain just how ridiculous it is—and how clueless you are about the software business.

  Bill was sarcastic, combative, defensive, and contemptuous. I knew those traits well, but they were less than helpful on the stand. He might as well have told the Department of Justice (and by extension the judge) that the antitrust case was the stupidest thing he had ever heard. Anti-Microsoft sentiment became widespread and intense, and it cut Bill to the core. He’d been the darling of the business press, the crafty entrepreneur and technology genius. Now the media portrayed him as a bully who’d bent the rules and probably broken them. After he called me late one weekend afternoon, I met him in the living room of the lakeside estate I’d helped him choose years before. Bill looked drawn, as though he hadn’t slept for days. Redlining from stress, he showed a side of himself that many would have found surprising. He’d been trying to move the company forward all these years, he said, but the strain of expectations had grown too much for him.

  “I’ve been trying to pump air in the balloon,” he said, “and now the balloon’s popping. I can’t keep it going anymore.”

  NOT EVERYONE SAW Microsoft in a bad light. I was dining alone one night at Il Mulino, the Italian place in New York’s West Village, when I noticed a middle-aged man in a double-breasted jacket at a corner table in the back. He had slicked-back hair and a statuesque lady at his side, and he was sitting with his back to the wall, where he could eye the entrance. Toward closing time he sauntered over and said, “Are you Mr. Allen?” He had a thick New Jersey accent, something out of The Sopranos. After I confirmed my identity, he said, “Your company’s involved in that antitrust trial.”

  “Yes,” I said. I wasn’t quite sure where this was going.

  “Your Mr. Ball-mer said some very critical things about the attorney general.”

  “Yes,” I said. In the events leading up to the antitrust suit, Steve had gotten front-page press by declaring, “To heck with Janet Reno!” Now I was getting a little nervous.

  And the man said, “I would like to be able to say the same things, but I’m not in a position to say them. Tell your Mr. Ball-mer when you see him that there’s someone who appreciates what he’s saying.”

  Relieved, I said, “I’ll tell him!”

  On April 3, 2000, Judge Thomas Penfield Jackson ruled that Microsoft had violated the Sherman Antitrust Act. Two months later, the other shoe dropped: Jackson ordered the company broken into two, one for operating systems and the second for other software.

  I thought the judge had overreached. The remedy seemed draconian, way out of proportion to the violations found by the court. “The judge is out of bounds—he just hates us,” Bill said. “This will never stand up on appeal.” He was probably right, but what if he wasn’t? How much synergy would
Microsoft lose if Windows were split off from Microsoft’s applications? Would our software be marginalized? Which company would Bill go with, and what would happen to the other?

  A few months later, shortly after I ended my second stint on the Microsoft board, a federal appeals court reversed the breakup order. The final settlement imposed relatively mild penalties. But the case’s impact on Microsoft was profound because it siphoned so much time and energy, especially from Bill. In a company where tech decisions were still ultracentralized, the repercussions of a distracted CEO had to be damaging. We can only speculate as to how much it affected Microsoft’s course in those critical years, and over the difficult decade that followed.

  EVEN THOUGH HE’D seemed frayed of late, I was stunned when Bill announced that he was stepping aside to become “chief software architect” in January 2000, with Steve Ballmer succeeding him as CEO. Steve had been best man at Bill’s wedding, yet they had a tacit rivalry that went back to Harvard, where they’d vied to see who’d get the better grades. While Steve had long served as Bill’s top lieutenant, you got the sense through the nineties that he wasn’t necessarily being groomed for Microsoft’s top spot. I’d say that Bill viewed him as a very smart executive with less affinity for technology than for the business side—that Steve just wasn’t a “product guy.” It took a while for Bill to come around to what seemed obvious to the rest of the board. Whatever his strengths and weaknesses, Steve was the only viable successor.

  Bill made it clear that he’d still be Microsoft’s technical leader. He looked over the new CEO’s shoulder at every turn and openly chafed at his own waning influence. Steve called me several times to complain that Bill had challenged him during meetings: “What am I supposed to do?”

  “You’ve got to take him aside,” I’d say. “You have to tell him that he can’t contradict you in front of your people anymore. You’re the CEO now.” You had to be direct with Bill. It didn’t work any other way.