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When I say Bill Gates got lucky, I mean it.

In his book Outliers, Malcolm Gladwell talks about how just personal talent and intelligence alone are not enough to achieve extraordinary success. Instead, factors such as cultural background, the right time with the right opportunities, and unfair advantages also play a massive, massive role. And Bill Gates' story of founding Microsoft is no different.

By the time Bill Gates dropped out of Harvard to start Microsoft, he had been programming practically non-stop for seven consecutive years, which gave him enough confidence that he could do this. And it all became possible because Bill Gates came from a wealthy family. His parents enrolled him in a private, expensive school that had computers. The guy got access to computer terminals that were connected to mainframe computers—the time—when most schools or colleges didn’t even have computers—nor did Gates' friends see computers while the guy was practically using one on a daily basis.

It was a series of “Right” events and opportunities that helped Gates master programming and start Microsoft when he was just 19. It wasn’t just one thing that went “Right” For Bill, almost everything got right, which brought one opportunity after another—again and again and again.

Watch Bill Gates talking about getting lucky:

The level of luck Bill got is very, very rare.

If Bill was just a smart and talented guy, he wouldn’t be able to do anything—just like his Lakeside school friends. How many of his school colleagues or friends built companies like Microsoft, or at least recognizable companies? None. Bill founded Microsoft not just because he was smart and talented, but because Bill was in the perfect place, the timing was right, and his parents were amazing and rich who had connections with great individuals. And because of this, he got access to people and technologies he wouldn’t have otherwise.

It’s so fascinating at the same time inspiring.

So this week’s deep dive is about the journey of Bill Gates and Microsoft. I’m going to take you through what separates Bill Gates from most of us, and how the idea of starting Microsoft when he was just 19 was not a “Bold” move for him. We’ll go through Gates' life's journey, the unfair advantages he had, and how Microsoft became a trillion-dollar company.

Get your popcorn ready, and let’s dive in!

1. Bill Gates’ Story

While Bill Gates founded one of the world’s most successful companies, Microsoft, and became a billionaire, one of Bill Gates’ close friends and fellow computer enthusiast, Paul Gilbert who had the same level of excitement and curiosity about computers and technology as Bill Gates did—didn’t achieve anything significant in life despite being in the same place, the same time, and had access to the same technologies.

So what separated Bill Gates from Paul Gilbert?

The trio, Bill Gates, Paul Allen, and Paul Gilbert started their first startup called Traf-O-Data, a company that focused on processing traffic data for local governments using microprocessors. But unfortunately, the business failed. Seeing this failure, Paul Gilbert took it as a waste of time, and unlike Gates and Allen, Gilbert chose not to continue down the entrepreneurial path, while the other two guys a few years later founded Microsoft.

This is the full story that made it all possible for Bill Gates.

The Upbringing

William Henry Gates III, famously known as Bill Gates was born on October 28, 1955, in Seattle, Washington. Bill was the only son of their “Rich” parents, which made him very special to them. The guy has two sisters, the elder one, Kristi (Kristianne), and the younger one, Libby. Below is an image of Bill Gates the (little guy on the left) His mother, father, and two sisters:

You see that little kid on the left? That’s Bill, a very clever guy.

Bill’s childhood was not easy for him as he’d often get bullied in school. But the guy was smart and had an exceptional aptitude for math, logic, and reasoning. Early on, he studied in public school. But later, his parents decided to send him to a private institute, Lakeside Prep School when he was 13, an eighth grader. And that’s where things got interesting as Bill got access to the computer. His school had a Teletype Model 33 ASR Terminal which was connected to the mainframe computer in downtown Seattle.

The guy was hooked. He found the technology fascinating and would spend hours and hours playing around and coding on the computer. This was interesting because while he had access to the computer, most of his friends had never seen or used a computer in their entire school life. And it all became possible because his parents sent him to an expensive private school, which only rich parents could afford, like Gates’ parents.

While studying in school, he made a few close friends, and one of them was Paul Allen who was just a few classes ahead and older than Bill. They both would spend most of their time together thinking and discussing computers and programming. The following is the picture of Paul Allen and Bill Gates using their school’s computer Terminal, Teletype Model 33 ASR:

This was the time when Bill Gates and his future co-founder, Paul Allen learned about how a computer practically works and how to code and program applications—all by themselves, which would later help them build their future businesses.

The Family Background

Bill Gates was a very privileged guy because of his family background.

William Henry Gates III grew up in a well-to-do family that encouraged curiosity and academic excellence. His father, William H. Gates Sr. was a prominent lawyer with deep ties to the business community, while his mother, Mary Maxwell Gates was a board member at several influential organizations including the United Way and IBM.

Bill’s parents were rich and wealthy, and because of that, he got enrolled in one of the best private schools in Seattle that had computers, which allowed Gates to learn programming. Not only that, since his parents were high-net-worth individuals, they had some of the best networks with business people. And because of this, later in his life, Bill got many business opportunities to work for the biggest companies in the world like IBM.

For example, later in this deep dive, I’ll talk about how because of Bill Gates’ mother, he got a business contract with IBM—only because his mom knew an executive at IBM, and told to contact Bill Gates for it, which is very unusual for most of us, isn’t it?

Watch how chilled Bill was when he started Microsoft:

That being said, Bill’s parents were not just wealthy and rich, but also they had great parenting skills that reshaped Bill's growth trajectory growing up. And you can’t deny the fact that great parenting matters as much as money and connections do. For example, Bill’s recalls:

The central idea is that his family’s wealth allowed him access to elite education, networking opportunities, and business guidance—creating an environment where his success was not just possible but highly probable. But not many people in their lives unlock the opportunities Bill Gates did because of his parents. They didn’t just help the guy enroll in the best school or college but also helped him in his business ventures, which I think is truly remarkable.

The Smart, Hard-Working Guy

His parents' connection and wealth of course helped Bill experience the “Rare” things in the world growing up. But without his smartness and intense work ethic nothing was possible or achievable. The guy was extremely hard-working and had an innate talent for problem-solving, math, and reasoning. He had an obsessive work ethic—often pulling all-nighters to write codes and refine business strategies.

He also did many crazy, insane things, especially to access the school’s computers, and when he’d get caught by the teachers and administration, he’d find ways to solve the situation and look for other ways to get access to computers nearby. He also had an obsessive mentality towards learning things like programming.

His talent and intelligence showed when he got 1590 out of 1600 in the SAT exam, which was a way to get selected in Harvard University. Many claim that he has an IQ of 160—the same IQ level to Einstein. Though Bill Gates never publicly confirmed whether he has 160 or not.

In his newly published book, Source Code, this is what he shares:

This gives us a glimpse of how and why things became possible for Bill Gates. The combination of his parents’ wealth & network, and the guy's ability to be curious and learn things fast was what allowed Bill Gates to do extraordinary things and achieve great success in life. But this isn’t the complete story. To understand the whole picture, we need to study his entrepreneurial life and see what he did differently.

2. The Entrepreneurial Journey

Microsoft wasn’t the first business Bill Gates started. Actually, he had done many side projects and also built a company called Traf-O-Data, which he co-founded with two other guys, Paul Allen, and Paul Gilbert when he was around 17. The business wasn’t quite successful but it taught Bill Gates valuable lessons about building a company. What’s more interesting is, when the guys founded Traf-O-Data, Gates was still in high school, while his friend Paul Allen just started going to Washington State University.

The journey of founding Microsoft started when Bill Gates took the SAT exam and scored 1590 out of 1600, which got him to enroll at Harvard University in 1973 at the age of 18. And there, he’d begin the actual entrepreneurial journey by starting Microsoft.

Now the journey begins!

Founding Microsoft and Early Days

It was January 1975, Bill Gates, a 19-year-old guy, was a sophomore student at Harvard, when one of his school friends, Paul Allen, the guy who was at the time studying at Washington State University, showed him a newspaper of Popular Electronics, which had featured Micro Instrumentation and Telemetry Systems’ (MITS) new micro-computer Altair 8800 at the front page of the newspaper that looked like this:

Paul and Bill saw an opportunity and discussed that they could leverage it by programming a BASIC interpreter for the device and selling it to MITS. To work on this, Bill Dropped out of Harvard and Paul Allen from Washington State University. Bill called MITS and said that ‘They had a working interpreter.” If you don’t know, an interpreter is a type of computer program that executes code line by line, translating it from a high-level programming language into machine code or an intermediate form at runtime. However, the reality was, the guys actually didn’t have any working interpreters as they had promised to MITS.

So what did the guy do? They worked the next two months from January to March building the interpreter for the MITS’ new micro-computer. Once the program was ready, they demonstrated it to MITS in March 1975, and thankfully it worked flawlessly. MITS agreed to distribute it and marketed it as Altair BASIC.

A few months later, in April 1975, the guys established the business, naming Micro-Soft, a short version of Micro-computer software. However, the dash didn’t last long, and later renamed the company to Microsoft.

Microsoft Altair BASIC was popular with computer hobbyists. But Bill Gates found out that a pre-market copy had leaked out and was being widely copied and distributed. In February 1976, around one year later, Bill wrote an open letter to Hobbyists in the MITS newsletter in which he stated that more than 90% of the users of Microsoft Altair BASIC had not paid Microsoft for it—resulting in Microsoft became independent of MITS in late 1976, and continued to develop programming language software for various systems.

The company also moved from Albuquerque to Bellevue Washington in January 1979.

The Big Breakthrough Moment

In 1980, Microsoft entered into building its own operating system.

IBM, the leading supplier of computer equipment to commercial enterprises at the time approached Microsoft in July 1980 asking for software for its upcoming personal computer, IBM PC. Wait! How did IBM reach out to Microsoft? All thanks to Bill Gates’ mother who had referred IBM's then-CEO John Opel to Bill Gates. So John reached out to Bill Gates and discussed the software requirement. For Bill Gates, the main problem was that Microsoft had no working operating system at that time, so they referred to Digital Research (DRI), makers of the widely used CP/M operating system of that era.

But for IBM, the deal went poorly, and did not reach a licensing agreement with DRI. So IBM asked Bill Gates if they could provide an operating system for their new personal computer, IBM PC. Guess what? A few weeks later, Gates purchased an operating system from Seattle Computer Products—changed it, modified it, and named it MS-DOS 86. Microsoft delivered it to IBM as PC DOS for a one-time fee of $50,000.

The thing most people get wrong: What many people don’t realize is that Microsoft didn’t actually create the operating system, MS-DOS from scratch. Instead, Gates acquired an existing system called QDOS (Quick and Dirty Operating System) from Seattle Computer Products—modified it, and then licensed it to IBM.

The real breakthrough for Microsoft came not just from the IBM deal but from Gates’ realizing that he could license MS-DOS to multiple hardware manufacturers instead of selling it outright. Unlike IBM, which focused on selling hardware, Microsoft retained control of the software, allowing it to become the de facto standard for PC operating systems. This approach ensured that as the personal computer industry exploded, Microsoft’s software would remain essential. MS-DOS was released with the IBM PC in 1981. Thereafter, most manufacturers of personal computers licensed MS-DOS as their operating system, generating vast revenues for Microsoft, by the early 1990s, it had sold more than 100 million copies of the program.

This was really a breakthrough moment for Microsoft, which drove the company valuation to $1 billion by 1985, making it an unicorn—Bill Gates being President and CEO and Paul Allen the Executive Vice President of the company.

Scale and Growth

And since then, the company kept on growing—introducing one product after another.

Microsoft released Windows 1.0 on November 20, 1985, as a graphical extension for MS-DOS despite having begun jointly developing OS/2 with IBM that August. The next year, in February 1986, the company moved its headquarters from Bellevue to Redmond Washington. The same year the company also went public on March 13.

In 1990, Microsoft introduced the Microsoft Office suite which bundled separate applications such as Microsoft Word, Microsoft PowerPoint, and Microsoft Excel. This attracted many new customers who wanted to use productivity applications to streamline their work and process for personal and professional uses.

The company released Windows 95 on August 24, 1995, featuring preemptive multitasking, a completely new user interface with a novel start button with 32-bit compatibility. Windows 95 came bundled with the online services MSN, which was at first intended to be a competitor to the internet, and Internet Explorer, a web browser.

The company launched Xbox on November 15, 2001, making its entry into the gaming console market. This was a bold move against established players like Sony’s Playstation 2 and Nintendo’s GameCube. The Xbox was powered by a 733 MHz Intel processor, a customer NVIDIA GPU, and featured an internal hard drive—the first home gaming console at the time. Flash forward to today, Microsoft Gaming is the third-largest gaming company in the world.

The results? If you look at the following chart carefully you’ll find that the company saw a huge surge (growth) from 1995 to 2001, jumping its market cap from $100 billion to $500 billion. This was one of the major growth periods for the company (if we skip the recent growth!) And it’s all because the company released breakthrough products that time again and again and again for many consecutive years—from Windows 95 to the Xbox gaming console.

But Microsoft’s success was not just about good products, it was also about aggressive business tactics. Gates was known for his cutthroat competitive style, leveraging Microsoft’s dominance to crush competitors. The company used bundling strategies, exclusive licensing agreements, and strategic acquisitions to maintain its market position.

By the mid-1990s Microsoft, which became a publicly owned corporation in 1986, had become one of the most powerful brands and profitable companies in American history. It consistently earned profits of 25 cents on every sales dollar, an astonishing record. In the company’s 1996 fiscal year, it topped $2 billion in net income for the first time, and its unbroken string of profits continued, even during the Great Recession of 2007–09 (its net income had grown to more than $14 billion by fiscal year 2009).

What’s more interesting is, in the history of Microsoft, the company has never seen a decline in its revenue growth YoY, except in 2009, and 2016, which also was not that massive. Not many tech companies have the revenue growth trajectory that Microsoft has accomplished, I believe.

3. MicroBill

What, MicroBill?

Just like the guys named Microsoft because of the “Micro-computer software” I’m going to call this MicroBill because of “Microsoft and Bill Gates.” No crazy idea, right? And in this section, I’m going to talk about what happened or what Microsoft did, especially after 2000.

Of course, not everything was smooth sailing for the company. Microsoft did launch many life-changing technologies and software. But it also faced many controversies and backlashes from users and customers around the world. And that’s what I’m going to cover in this section.

Not only that, I'm also going to point out what Bill, especially Microsoft, has been building in recent years. As you know a lot has changed, and things aren’t as they used to be—especially the AI boom led to some of the drastic shifts in where technology is heading. So of course, that’d be also a topic for this section.

Let’s roll.

The New CEOs

Bill Gates, after facing many challenges and legal battles, stepped down as CEO of Microsoft in 2000 and handed the role to his college friend, Steve Ballmer, who led the company through a turbulent period marked by both successes and missed opportunities.

The company launched many successful products under the leadership of Steve. For example, Xbox, Microsoft Office, Search Engine—Bing, Windows 7, Visual Studio, Outlook, and acquired Skype and Yammer. But the company also got accused of many allegations in the leadership of Steve, which some of them still haven't been resolved.

In 2014, Satya Nadella became the new CEO of the company, who was previously working at Microsoft’s Cloud and Enterprise Division. On the same day, John W. Thompson took on the role of chairman, in place of Bill Gates, who continued to participate as a technology advisor.

In the leadership of Satya, the company saw massive growth—introducing breakthrough products and acquiring new, great companies. For example, the company acquired the Nokia devices and Services business, which was very popular at the time. The company purchased Mojang Studio, the company that created Minecraft, a popular video game.

In 2016, Microsoft acquired LinkedIn, a social media platform for professionals for $26.2 billion. In 2018, Microsoft acquired GitHub, a platform for developers for $7.5 billion. And then In 2020, Microsoft introduced Azure Space—expanding its business to Cloud computing. The company did so many launches and acquisitions under the leadership of Satya Nadella, who remains the CEO of the company as of 2025.

Controversies

With its success, Microsoft also faced numerous controversies and allegations throughout the history of the company. The frequent allegations are the ease of use, robustness, and security of the company’s software. Here are some of the most controversial controversies of Microsoft:

#1: The company has been criticized for the use of permatemp employees (employees employed for years as “Temporary” and therefore without medical benefits), and the use of forced retention tactics, which means that employees would be sued if they tried to leave the company.

#2: The company has also been accused of overworking employees, in many cases leading to burnout and executing working experience within a few years of joining the company. There is a famous phrase used by Microsoft employees “Velvet Sweatshop” which means Microsoft provides nearly everything for its employees in a convenient place, but in turn, overworks them to a point where it would be bad for their overall health.

#3: The company faced multiple antitrust lawsuits, the most significant being the United States vs. Microsoft case in the late 1990s. Regulators accused Microsoft of monopolistic practices, particularly around how it bundled Internet Explorer with Windows to crush competitors like Netscape.

#4: In the early 1980s, while business partner Paul Allen was undergoing treatments for cancer, Gates—according to Allen—conspired to reduce Allen's share in Microsoft by issuing himself stock options. In his autobiography, Allen would later recall that Gates was "scheming to rip me off. It was mercenary opportunism plain and simple".

#5: Gates has often been accused of bullying Microsoft employees. Gates would interrupt presentations with such comments as "That's the stupidest thing I've ever heard" and "Why don't you just give up your options and join the Peace Corps?" The target of his outburst would then have to defend the proposal in detail until Gates was fully convinced. Not all harsh language was criticism, a manager recalled that "You're full of shit. That's the stupidest fucking thing I've ever heard" meant that Gates was amazed.

#6: As reported by several news outlets, an Irish subsidiary of Microsoft based in the Republic of Ireland declared ~$276 billion in profits but paid no corporation tax for the year 2020. This is due to the company being tax resident in Bermuda as mentioned in the accounts for 'Microsoft Round Island One, a subsidiary that collects license fees from the use of Microsoft software worldwide.

#7: In 2020, ProPublica reported that the company had diverted more than $39 billion in U.S. profits to Puerto Rico using a mechanism structured to make it seem as if the company was unprofitable on paper. As a result, the company paid a tax rate on those profits of "nearly 0%". When the Internal Revenue Service audited these transactions, ProPublica reported that Microsoft aggressively fought back, including successfully lobbying Congress to change the law to make it harder for the agency to conduct audits of large corporations.

#8: The same year, in 2020, Salesforce, the manufacturer of the Slack platform, complained to European regulators about Microsoft due to the integration of the Teams service into Office 365. Negotiations with the European Commission continued until the summer of 2023, but, as it became known to the media, they reached an impasse. Microsoft is now facing an antitrust investigation.

#9: In June 2024, Microsoft Corp. faced a potential EU fine after regulators accused it of abusing market power by bundling its Teams video-conferencing app with its Office 365 and Microsoft 365 software. The European Commission issued a statement of objections, alleging Microsoft's practice since 2019 gave Teams an unfair market advantage and limited interoperability with competing software.

#10: In November 2024, the Federal Trade Commission (FTC) launched an investigation into Microsoft, focusing on potential antitrust violations related to its cloud computing, AI, and cybersecurity businesses. The probe scrutinized Microsoft's bundling of cloud services with products like Office and security tools, as well as its growing AI presence through its partnership with OpenAI.

If you’re wondering, how did I find all these allegations and accusations, just so you know, I did nothing special. Everything is publicly available, especially on Wikipedia. To read them in detail, you can check this Microsoft and Bill Gates page on Wikipedia.

Microsoft & Bill Gates Today

Aside everything, Microsoft is one of the oldest, most successful companies in the world. The company is about to turn a half-century old in 53 days, which will be completed on April 4, 2025.

Today, Microsoft's total market cap hovers around $3.051 trillion—making it one of the largest, most successful companies in the world. The company has a strong presence in software, cloud computing, and AI. However, the company did lose on many things like the smartphone market (crushed by Android and Apple.) But it also stood out in many industries for example cloud computing service (Azure) and PC Operating Systems, Windows.

Microsoft is now racing the AI game and has launched its AI product, Copilot. The company has also partnered with the world’s most successful AI company, OpenAI to leverage AI and expand its businesses globally—benefiting customers and businesses around the world. Looking ahead, Microsoft continues to innovate in AI and enterprise technology—ensuring its dominance in the tech industry for years to come.

Talking about Bill Gates, he no longer works at Microsoft or isn’t part of the board members at Microsoft, but rather focuses on his philanthropic work—Gates Foundation. His public image has evolved, but he still remains a controversial figure, especially after knowing that he had a personal connection with Jeffrey Epstein, a child sex offender. And part of the reason, his then-wife Melinda French Gates divorced Bill was because she didn’t like Gates meeting Jeffrey Epstein.

When asked about Bill Gates’ ties to Jeffrey Epstein, here’s what he said (Crazy!):

I personally am not a big fan of Bill Gates, especially given that the guy is more controversial than I thought. Of course, he made Microsoft the most successful company in the world and changed millions of lives. But he also has done many bad things, or made bad decisions for humanity. To count on a few, the Covid Vaccine patent, connection with Jeffrey Epstein, owning 269,000 acres, suspicious philanthropic work. You see? I’m still figuring out the guy, and trying to come to the right conclusion on why he is doing what he is doing the way he is doing it all.

Thanks for reading, catch you on the next one.