Bill Gates on Founding and Origins

The machine that created Microsoft's market came from Ed Roberts's MITS, founded in an Albuquerque garage in 1969 by Roberts and Forrest Mims to sell model-rocket telemetry kits, which evolved into calculator kits featured on Popular Electronics covers. Texas Instruments' decision to sell finished calculators at less than half the prevailing price devastated the kit business and left Roberts struggling under roughly a quarter-million dollars of debt, forcing the bet on a computer kit: the Altair 8800, built on the Intel 8080 and featured on the January 1975 Popular Electronics cover, sold by mail order with no screen or keyboard, programmed through front-panel switches or a serial terminal. It became the first commercially successful personal computer, its bus became the industry-standard S-100, and, as computing pioneer Harry Garland put it, the product catalyzed the entire microcomputer revolution. Its first programming language was Altair BASIC, Microsoft's founding product.

William Henry Gates III, born in Seattle on October 28, 1955, co-founded Microsoft with his childhood friend Paul Allen in 1975 and became the defining executive of the microcomputer revolution. He ran the company as chief executive for twenty-five years, added the presidency and board chairmanship when Microsoft incorporated in 1981, and became the world's youngest self-made billionaire in 1987 at thirty-one, a year after the public offering began compounding his stake. Forbes ranked him the wealthiest person alive in eighteen of the twenty-four years between 1995 and 2017, and in 1999 he became the first person whose net worth briefly passed one hundred billion dollars. Over time he traded operating control for philanthropic scale, co-chairing the Bill & Melinda Gates Foundation with Melinda French Gates from 2000 until 2024, and Time counted him among the twentieth century's hundred most influential people. He and French Gates jointly received the Presidential Medal of Freedom in 2016.

Paul Gardner Allen, two years older than Gates, met him at Seattle's Lakeside School, which Allen attended from 1965 to 1971, and the two sharpened their programming on the school's Teletype terminals and on University of Washington machines until they were banned from the laboratory in 1971 for abusing their privileges. It was Allen who bought the Popular Electronics issue announcing the Altair 8800 and rushed it to Gates, and Allen who convinced Gates to leave Harvard to build the software company that became Microsoft. Allen named the partnership, negotiated the first MITS demonstration, and wrote the interpreter's make-or-break bootloader on the flight to Albuquerque. His 2011 memoir, Idea Man, fixed his reputation as the technologist and visionary half of the founding duo, the one who saw the personal-computing future first and pulled Gates into it, with the title itself a summary of how Allen understood the partnership's division of labor.

Before Microsoft, there was Traf-O-Data, the 1970s partnership among Gates, Allen, and hardware builder Paul Gilbert. Roadway traffic counts were then recorded mechanically on paper tape, with time and axle counts punched as patterns, and state and local governments paid firms to process them; the two Lakeside students reasoned they could do the work cheaper and faster with a machine built on the newly announced Intel 8008 microprocessor. Neither knew hardware design, so Gilbert became the third partner and built a prototype that read the tape's hole patterns onto computer cards, while Gates used a University of Washington machine to produce the traffic-flow charts. The business achieved only modest success, but it mattered far beyond its revenue: Allen's 8008 emulator, written for Traf-O-Data, became the foundation on which the two simulated the Altair and wrote the BASIC interpreter that launched Microsoft.

Gates studied the philanthropy of Andrew Carnegie and John D. Rockefeller before building his own, donating Microsoft stock in 1994 to create the William H. Gates Foundation; in 2000 he and his wife combined three family foundations and donated stock valued at five billion dollars to create the Bill & Melinda Gates Foundation. By 2013 it was identified as the world's largest charitable foundation, with assets reportedly above $34.6 billion, and its structure drew on the Rockefeller model of tackling global problems governments ignore. Its program divisions span global development, global health, United States programs, and global policy and advocacy, funding fights against AIDS, tuberculosis, and malaria, vaccine campaigns to eradicate polio, sanitation and agriculture programs including Golden Rice, and family-planning access. David Rockefeller's personal generosity was a credited influence, and unlike some peers the foundation lets benefactors see how its money is spent.

Microsoft was founded on April 4, 1975, in Albuquerque, New Mexico, after Paul Allen, then a programmer at Honeywell, saw the January 1975 Popular Electronics cover story on the Altair 8800 while walking through Harvard Square. Allen bought the magazine, rushed to Bill Gates's Currier House residence, and the two resolved to build a BASIC implementation for the machine. They pitched MITS a demonstration before any interpreter existed, then spent roughly eight weeks, with the help of Monte Davidoff, writing one; when Allen flew to Albuquerque, the software ran, and MITS agreed to distribute it as Altair BASIC. Allen moved to Albuquerque, Gates quit Harvard to join him, and the partnership they incorporated there booked $16,005 of revenue by the end of 1976, a modest figure that nonetheless marked the birth of a company built on selling software as a product.

When Gates and Allen read about the Altair in January 1975, they understood that computer prices would soon fall far enough that selling software for them could be a real business, and they told MITS founder Ed Roberts they were developing a BASIC interpreter, though none existed, following the engineering custom of the trial balloon. Roberts agreed to a demonstration in March 1975, giving them weeks to deliver. Allen adapted an Intel 8008 emulator he had written for Traf-O-Data to simulate the 8080 on Harvard's PDP-10, and the pair developed and tested the interpreter there; Harvard officials were displeased but found no written policy against it, so debugging finished on time purchased from a Boston timesharing service. Monte Davidoff, a fellow student, argued for floating-point arithmetic and was hired to build it. The finished interpreter, with its own input-output system and line editor, fit in four kilobytes of memory.

The company's early identity took shape around naming and place. Allen devised Micro-Soft as a portmanteau of microcomputer and software; the hyphen disappeared within a year, and the name Microsoft was registered with the New Mexico Secretary of State on November 26, 1976. Ric Weiland, a high-school collaborator, was the first employee hired. The first international office, ASCII Microsoft in Japan, opened on November 1, 1978, and on January 1, 1979, the company moved from Albuquerque to Bellevue, Washington, because top programmers were hard to recruit to New Mexico; eleven of the thirteen employees posed for a staff photograph just before the relocation. The move put the young firm back in the Seattle orbit where Gates and Allen had grown up, within reach of the talent pool that would power its next decade. Microsoft's BASIC variants were simultaneously becoming the dominant programming language of early home computers, including the Apple II and the Commodore 64.

Gates grew up in Seattle's Sand Point neighborhood, the only son of William Gates Sr., a prominent lawyer, and Mary Maxwell Gates, who sat on the boards of First Interstate BancSystem and United Way of America; his maternal grandfather, J. W. Maxwell, had been a national bank president. Known as Trey within the family, he was small for his age and bullied as a child, and his parents initially steered him toward the law. The household ran on competition, with a reward for winning and a penalty for losing in everything from card games to swimming to the dock. At thirteen he enrolled at Lakeside Prep, where the Mothers' Club spent rummage-sale proceeds on a Teletype terminal and time on a General Electric machine. Gates wrote his first program there, a tic-tac-toe game in BASIC, was excused from math classes to pursue computing, and became fascinated that the machine executed code perfectly every time.

The Albuquerque demonstration became founding legend. On final approach into the airport, Allen realized they had forgotten to write the bootloader that would read the punched paper tape into the Altair's memory, and he finished writing it in 8080 machine language before the plane landed. Only when the tape loaded and the machine displayed a prompt asking for its memory size did they know the interpreter actually ran on Altair hardware. Roberts agreed to distribute the software and hired them to maintain and improve it, with Allen becoming MITS vice president and director of software at $30,000 a year while Gates worked as a contractor titled Software Specialist. The July 22, 1975 contract paid $3,000 at signing plus royalties per copy sold, thirty dollars for the 4K version, thirty-five for 8K, and sixty for the extended edition, capped at $180,000, with MITS holding a ten-year exclusive worldwide license.

Steve Ballmer, whom Gates had met at Harvard, joined on June 11, 1980, and would succeed Gates as chief executive from January 2000 until February 2014. On June 25, 1981, Microsoft restructured as a Washington corporation, making Gates president and chairman of the board and Allen executive vice president and vice chairman. The partnership fractured in early 1983, when Allen left after receiving a Hodgkin lymphoma diagnosis, an exit preceded by months of strain over a contentious dispute about Microsoft equity. The two men later repaired the relationship, donated millions together to Lakeside School, and remained friends until Allen's death in October 2018, but the formal business partnership between Microsoft's two founders had effectively ended while the company was still on its way up, leaving Gates with undivided operating control of the firm he would lead as chief executive for another nineteen years.

When the Mothers' Club computer fund ran out, Gates and other Lakeside students chased time on DEC PDP minicomputers, including a PDP-10 run by Computer Center Corporation, which banned Gates, Paul Allen, Ric Weiland, and Kent Evans for a summer after catching them exploiting operating-system bugs to obtain free time. The four responded by forming the Lakeside Programmers Club and offering to find bugs in CCC's software in exchange for terminal hours; Gates went to the company's offices in person and studied the source code of Fortran, Lisp, and machine-language programs until the arrangement ended in 1970. In 1971 a teacher enlisted Gates and Evans to automate Lakeside's class scheduling for computer time and royalties. Evans was killed in a mountain-climbing accident near the end of junior year, a day Gates later ranked among the saddest of his life, and Allen stepped in to finish the system.

IBM approached Microsoft in July 1980 about software for its forthcoming personal computer, a connection eased by Gates's mother's service on a United Way board alongside IBM chief executive John Opel. IBM initially asked Microsoft to write the BASIC interpreter and, when the subject of an operating system arose, Gates referred the company to Digital Research, maker of the dominant CP/M system; those negotiations failed. When IBM's Jack Sams reported the impasse, Gates and Allen proposed 86-DOS, a CP/M-like system Tim Paterson had built at Seattle Computer Products. Microsoft first licensed and then fully acquired the system, hired Paterson to adapt it for the IBM PC, and delivered it as PC DOS for a one-time fee of $50,000. Gates deliberately did not transfer the copyright to IBM, betting other manufacturers would clone the hardware; they did, and MS-DOS became the industry's de facto standard.

A national merit scholar who scored 1590 out of 1600 on the SAT, Gates enrolled at Harvard in the autumn of 1973, taking Math 55 and graduate-level computer science courses without ever settling on a concentration. There he met fellow student Steve Ballmer, the future Microsoft chief executive who stayed to graduate magna cum laude while Gates left after two years. In a combinatorics class taught by Professor Harry Lewis, Gates devised an algorithm for pancake sorting that held the record as the fastest solution for more than thirty years, with its eventual successor only two percent faster, and the work was formalized and published with Harvard computer scientist Christos Papadimitriou. During the summer of 1974 Gates joined Allen at Honeywell, keeping the partnership alive until the Altair 8800 created the opportunity that pulled him out of Cambridge for good.

The January 1975 issue of Popular Electronics, demonstrating the MITS Altair 8800 built on the Intel 8080, convinced Gates and Allen that the moment had arrived to start a software company, and Gates dropped out of Harvard that same year. His parents were supportive once they saw how badly he wanted it, and he framed the decision conservatively: he remained officially on leave, so that if the venture failed he could always return to school. He never went back to complete his degree. Instead he took a leave of absence in November 1975 to work with Allen at MITS in Albuquerque, where their new partnership, named Micro-Soft as a blend of microcomputer and software, opened its first office. The trade name Microsoft was registered with the Secretary of State of New Mexico on November 26, 1976, dropping the hyphen within a year.

The foundation's origin story, as Gates tells it, begins with his parents and a newspaper article. The core belief that every life has equal value came from lessons his mother and father taught early, and as Microsoft wealth grew in the late 1990s, he and Melinda began looking for ways to give back, starting with expanding technology access in American public libraries. Then he read an article reporting that millions of children in poor countries were dying annually of diseases that rich nations had long since learned to prevent, and he sent it to his father with a note asking whether they could do something about it. That moment redirected his life. He began meeting scientists, health workers, and community leaders to learn where philanthropy could matter, and the foundation born in 2000 co-founded Gavi with a $750 million pledge and helped create the Global Fund, with Warren Buffett's extraordinary 2006 pledge of more than $30 billion enabling bigger, longer bets.