Gates began going to the computer room whenever he could, every day, with a hard-core group of friends. “We were off in our own world,” he remembered. The computer terminal became to him what a toy compass had been to the young Einstein: a mesmerizing object that animated his deepest and most passionate curiosities. In struggling to explain what he loved about the computer, Gates later said it was the simple beauty of its logical rigor, something that he had cultivated in his own thinking. “When you use a computer, you can’t make fuzzy statements. You make only precise statements.”13
The language the computer used was BASIC, Beginner’s All-purpose Symbolic Instruction Code, which had been developed a few years earlier at Dartmouth to allow nonengineers to write programs. None of Lakeside’s teachers knew BASIC, but Gates and his friends inhaled the forty-two-page manual and became wizards at it. Soon they were teaching themselves more sophisticated languages, such as Fortran and COBOL, but BASIC remained Gates’s first love. While still in middle school, he produced programs that played tic-tac-toe and converted numbers from one mathematical base to another.
Paul Allen was two years ahead of Gates and physically far more mature (he could even grow sideburns) when they met in the Lakeside computer room. Tall and socially gregarious, he was not a typical wonk. He was immediately amused and charmed by Gates. “I saw a gangly, freckle-faced eighth-grader edging his way into the crowd around the Teletype, all arms and legs and nervous energy,” Allen recalled. “His blond hair went all over the place.” The two boys bonded and would often work late into the evening in the computer room. “He was really competitive,” Allen said of Gates. “He wanted to show you how smart he was. And he was really, really persistent.”14
One day Allen, who came from a more modest background (his father was a library administrator at the University of Washington), visited Gates at his home and was awed. “His parents subscribed to Fortune and Bill read it religiously.” When Gates asked him what he thought it would be like to run a big company, Allen said he had no clue. “Maybe we’ll have our own company someday,” Gates declared.15
One trait that differentiated the two was focus. Allen’s mind would flit among many ideas and passions, but Gates was a serial obsessor. “Where I was curious to study everything in sight, Bill would focus on one task at a time with total discipline,” said Allen. “You could see it when he programmed—he’d sit with a marker clenched in his mouth, tapping his feet and rocking, impervious to distraction.”16
On the surface, Gates could come across as both a nerd and a brat. He had a confrontational style, even with teachers, and when he was angry would throw a tantrum. He was a genius, knew it, and flaunted it. “That’s stupid,” he would tell classmates and teachers alike. Or he would escalate the insult to be “the stupidest thing I’ve ever heard” or “completely brain dead.” At one point he laughed at a kid in class for being slow in figuring something out, causing a popular kid sitting in front of Gates to turn around and grab him by the buttoned-up collar and threaten to pummel him. The teacher had to step in.
But to those who knew him, Gates was more than merely nerdy or bratty. Intense and whip smart, he also had a sense of humor, loved adventures, took physical risks, and liked to organize activities. At sixteen he got a new red Mustang (he still had it more than forty years later, preserved in the garage of his mansion), and he took it on high-speed joy rides with his friends. He also brought his pals to his family compound on the Hood Canal, where he would kite-ski on a thousand-foot line behind a speedboat. He memorized James Thurber’s classic story “The Night the Bed Fell” for a student performance, and he starred in a production of Peter Shaffer’s Black Comedy. Around that time, he started informing people, in a matter-of-fact way, that he would make a million dollars before he turned thirty. He woefully underestimated himself; at age thirty he would be worth $350 million.
THE LAKESIDE PROGRAMMING GROUP
In the fall of 1968, when Gates was entering eighth grade, he and Allen formed the Lakeside Programming Group. Partly it was a geek’s version of a gang. “At bottom, the Lakeside Programming Group was a boys’ club, with lots of one-upmanship and testosterone in the air,” said Allen. But it quickly morphed into a moneymaking business, and a competitive one at that. “I was the mover,” declared Gates. “I was the guy who said, ‘Let’s call the real world and try to sell something to it.’ ”17 As Allen later noted with a bit of an edge, “While we were all bent on showing our stuff, Bill was the most driven and competitive, hands down.”18
The Lakeside Programming Group included two other denizens of the school’s computer room. Ric Weiland, who was in Allen’s tenth-grade class, was an altar boy at the local Lutheran church whose father was a Boeing engineer. Two years earlier, he had made his first computer in his basement. He looked much different from the other obsessives holed up in the computer room. Strikingly handsome, square jawed, tall, and muscular, he was coming to grips with the fact that he was gay, which was difficult to be open about in a conservative high school in the 1960s.
The other partner was Kent Evans, who was in Gates’s eighth-grade class. The son of a Unitarian minister, he was gregarious and unfailingly friendly, with a lopsided but winning smile that came from being born with a cleft palate that had been surgically repaired. He was utterly fearless and uninhibited, whether it was cold-calling grown-up executives or climbing rocky cliffs. He had made up the name Lakeside Programming Group as a way to get free material from the companies that advertised in electronics magazines. He also loved business, and he and Gates read each issue of Fortune magazine together. He became Gates’s best friend. “We were going to conquer the world,” said Gates. “We used to talk on the phone forever. I still remember his phone number.”19
The Lakeside Programming Group’s first job came that fall of 1968. Some engineers from the University of Washington had formed a little time-sharing company, housed in an abandoned Buick dealership, called the Computer Center Corporation and nicknamed C-Cubed. They bought a DEC PDP-10—a versatile mainframe that was destined to become a workhorse of the burgeoning time-sharing industry and Gates’s favorite machine—with the plan of selling time on it to customers, such as Boeing, who would hook in via Teletype and phone lines. One of the partners at C-Cubed was a Lakeside mother who came up with an offer for Gates’s gang that was like asking a posse of third-graders to be tasters in a chocolate factory. The mission: to drive the new PDP-10 as hard as they could and as long as they wanted, programming and playing on it nights and weekends, to see what things they could do to make it crash. C-Cubed’s deal with DEC was that it would not have to make lease payments for the machine until it was debugged and stable. DEC had not counted on its being tested by the pubescent hot-rodders of the Lakeside Programming Group.
There were two rules: whenever they crashed the machine, they had to describe what they had done, and they couldn’t do the same trick again until they were told to. “They brought us in like we were monkeys to find bugs,” Gates recalled. “So we would push the machine to the max in these totally brute-force ways.” The PDP-10 had three magnetic tapes, and the Lakeside boys would get all of them spinning at once and then try to crash the system by launching a dozen or so programs to grab as much memory as they could. “It was goofy stuff,” Gates said.20 In return for performing their shakedown cruise, they got to use all the time they wanted to write programs of their own. They created a Monopoly game with random-number generators to roll the dice, and Gates indulged his fascination with Napoleon (also a math wizard) by concocting a complex war game. “You’d have these armies and you’d fight battles,” Allen explained. “The program kept getting bigger and bigger, and finally when you stretched it all out, it was like fifty feet of Teletype paper.”21
The boys would take the bus to C-Cubed and spend evenings and weekends hunkered down in the terminal room. “I became hard-core,” Gates boasted. “It was day and night.” They would program until they were starving, then walk across the
street to a hippie hangout called Morningtown Pizza. Gates became obsessed. His room at home was strewn with clothes and Teletype printouts. His parents tried to impose a curfew, but it didn’t work. “Trey got so into it,” his father recalled, “that he would sneak out the basement door after we went to bed and spend most of the night there.”22
The C-Cubed executive who became their mentor was none other than Steve “Slug” Russell, the creative and wry programmer who as a student at MIT had created Spacewar. The torch was being passed to a new generation of hackers. “Bill and Paul thought crashing the machine was so fun that I had to keep reminding them they weren’t supposed to do it again until we told them so,” Russell said.23 “When I stuck my nose in on them, I’d get asked a question or five, and my natural inclination was to answer questions at considerable length.”24 What particularly amazed Russell was Gates’s ability to associate different types of error with specific programmers back at DEC headquarters. A typical bug report from Gates read, “Well, Mr. Faboli’s code at this line, he’s made the same mistake of not checking the semaphore when he’s changing the status. If we simply insert this line here, we can get rid of this problem.”25
Gates and Allen came to appreciate the importance of the computer’s operating system, which was akin to its nervous system. As Allen explained, “It does the logistical work that allows the central processing unit to compute: shifting from program to program; allocating storage to files; moving data to and from modems and disk drives and printers.” The operating system software for the PDP-10 was called TOPS-10, and Russell allowed Gates and Allen to read, but not take home, the manuals. They would sometimes stay until dawn absorbing them.
In order to fully understand the operating system, Gates realized, they would have to get access to its source code, which programmers used to specify each action to be performed. But the source code was tightly held by the top engineers and was off-limits to the Lakeside boys. That made it all the more of a Holy Grail. One weekend they discovered that printouts of the programmers’ work were discarded into a big Dumpster in the back of the building. So Allen clasped his hands to give Gates a boost—“He couldn’t have weighed more than 110 pounds,” Allen said—and he dove into the container to rummage among the coffee grinds and garbage to find the stacks of stained and crumpled fanfold printouts. “We took that precious hoard back to the terminal room and pored over it for hours,” said Allen. “I had no Rosetta Stone to help me, and understood maybe one or two lines out of ten, but I was blown away by the source code’s tightly written elegance.”
That led Gates and Allen to want to drill down a level deeper. In order to grasp the architecture of the operating system they would have to master assembly code, the underlying commands—“Load B. Add C. Store in A.”—that directly spoke to the machine’s hardware. Allen recalled, “Seeing my interest, Steve Russell took me aside, handed me an assembler manual bound in glossy plastic, and told me, ‘You need to read this.’ ”26 He and Gates would read the manuals and sometimes still be confused. At that point Russell would hand them another one and say, “Now it’s time to read this.” After a while, they became masters of the complexities, and the simplicities, that can make an operating system so potent and graceful.
When the DEC software was finally determined to be stable, the Lakeside boys lost their right to use the PDP-10 for free. “They basically said, ‘Okay you monkeys, go home,’ ” Gates said.27 The Lakeside Mothers Club came to the rescue, at least to some extent. It funded personal accounts for the boys, but there was a time and dollar limit. Gates and Allen knew they could never live within the limit, so they tried to beat the system by getting hold of an administrator’s password, hacking into the internal accounting system file, and breaking the encryption code. That allowed them to tap into free accounts. But before they could wreak much havoc, they got caught: their math teacher found their roll of Teletype paper with all the account numbers and passwords. The matter went all the way up to the top echelons at C-Cubed and DEC, and a stern delegation visited the school for a meeting in the principal’s office. Gates and Allen hung their heads, feigning deep contrition, but it didn’t work. They were banned from using the system for the rest of the semester and the entire summer.
“I swore off computers for a while, and I tried to be normal,” said Gates. “I decided to prove I could get all A’s without ever taking a textbook home. Instead I read biographies of Napoleon and novels like Catcher in the Rye.”28
* * *
For almost a year the Lakeside Programming Group was on hiatus. Then, in the fall of 1970, the school started buying time on a PDP-10 from a company in Portland, Oregon, called Information Sciences, Inc. (ISI). It was expensive, $15 an hour. Gates and his friends quickly learned to hack in for free, but once again they got caught. So they took another approach: they sent ISI a letter offering their services in return for free time.
The executives at ISI were dubious, so the four boys went down to Portland carrying printouts and program codes to show how good they were. “We outlined our experience and submitted our résumés,” Allen recalled. Gates, who had just turned sixteen, wrote his in pencil on lined notebook paper. They got an assignment to write a payroll program that would produce paychecks with correct deductions and taxes.29
That’s when the first cracks appeared in the Gates-Allen relationship. The program had to be written not in BASIC (Gates’s favorite language) but in COBOL, the more complex language that had been developed by Grace Hopper and others as a standard for businesses. Ric Weiland knew COBOL and wrote a program editor for the ISI system, which Allen quickly mastered. At that point the two older boys decided that they didn’t need Gates or Kent Evans. “Paul and Rick decided there wasn’t enough work to go around and said, we don’t need you guys,” Gates recalled. “They thought that they would do the work and get the computer time.”30
Gates was frozen out for six weeks, during which time he read algebra books and avoided Allen and Weiland. “And then Paul and Rick realized, oh shit, this is a pain,” said Gates. The program required not only coding skills but someone who could figure out social security deductions, federal taxes, and state unemployment insurance. “So then they say, ‘hey, we’re in trouble on this thing, can you come back and help?’ ” That’s when Gates pulled a power play that would define his future relationship with Allen. As Gates described it, “That’s when I say, ‘Okay. But I’m going to be in charge. And I’ll get used to being in charge, and it’ll be hard to deal with me from now on unless I’m in charge. If you put me in charge, I’m in charge of this and anything else we do.’ ”31
And so he was, from then on. When he returned to the fold, Gates insisted on turning the Lakeside Programming Group into a legal partnership, using an agreement drawn up with his father’s help. And though partnerships generally don’t have presidents, Gates started calling himself that. He was sixteen. Then he divvied up the $18,000 worth of computer time that they were earning, screwing Allen in the process. “I gave 4/11ths to myself, 4/11ths to Kent, 2/11ths to Rick, and 1/11th to Paul,” Gates recalled. “The guys thought it was really funny that I did 11ths. But Paul had been so lazy and had never done anything and I was just trying to decide, okay, there’s a factor of two between what Paul did and what Rick did, and then there’s more than a factor of two between what Rick did and what Kent and I did.”32
At first Gates tried to give himself slightly more than Evans as well. “But Kent would never let me get away with that.” Evans was as savvy about business as Gates was. When they finished the payroll program, Evans made a note in the meticulous journal that he kept: “Tuesday we go to Portland to deliver the program and as they have put it, ‘hammer out an agreement for future work.’ Everything so far has been done for its educational benefits and for large amounts of expensive computer time. Now we want to get some monetary benefits, too.”33 The negotiations were tense, and for a while ISI tried to hold back some of the computer time payment because they o
bjected to the lack of documentation. But with the help of a letter written by Gates’s father, the dispute was resolved and a new deal was negotiated.
In the fall of 1971, at the beginning of Gates’s junior year, Lakeside merged with a girls’ school. This created a class-scheduling nightmare, so the administrators asked Gates and Evans to write a program to solve it. Gates knew that a school schedule had scores of variables—required courses, teacher schedules, classroom space, honors classes, electives, staggered sections, double-period labs—that would make it extremely difficult, so he declined. Instead a teacher took on the challenge, while Gates and Evans taught his computer class for him. But that January, as he was still struggling to produce a workable program, the teacher was killed when a small plane he was riding in crashed. Gates and Evans agreed to take over the task. They spent hours in the computer room, often sleeping there overnight, trying to write a new program from scratch. In May they were still struggling, trying to finish so that it could be ready for the next school year.
That is when Evans, despite being exhausted, decided to go through with a mountain-climbing excursion he had signed up for. He was not an athlete. “It was really unusual that he signed up for this climbing course,” Gates recalled. “I think he wanted to push himself.” Evans’s father, knowing how drained his son was, begged him to cancel: “The last conversation I had with him was trying to convince him not to go, but he had a commitment to finishing things.” The class was learning how to belay on one of the more gentle slopes when Evans tripped. He tried to get up, then continued to roll more than two hundred yards across the snow and down a glacier, tucking in his arms to protect himself instead of splaying them out as he should have. His head smashed into several rocks, and he died aboard the helicopter that came to rescue him.
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