June 30, 2019

Bill Gates on Advice For Founders, Mistakes, and Philanthropy – Venture Stories

Check out the Venture Stories Podcast Page

Key Takeaways

• Advice to founders on work-life balance:
  • It’s important during the early years of your company that you have a team consisting of people who have chosen to be maniacal about their work
  • “I have a hardcore view that there be a very large sacrifice made in those early years, particularly if you’re trying to do some engineering work”
• The U.S. has the highest dropout rates among high school and college students compared to every other country in the world
• Global poverty is decreasing, but it’s becoming increasingly concentrated in Africa
• In the future, AI will be your portal to the world (largely replacing social networking, search, productivity applications, going to Amazon and buying something, etc.)
  • It’ll be like your personal agent
• We haven’t yet solved the problem for how we get a low-cost education for low-income students (that they actually complete)
  • Most community colleges have a >50% dropout rate
  • Most 4-year colleges have a >30% dropout rate

Books Mentioned

• Bill’s 2019 summer reading list includes:
  • Leonardo da Vinci by Walter Isaacson
  • Everything Happens for a Reason: And Other Lies I’ve Loved by Kate Bowler
  • Lincoln in the Bardo by George Saunders
  • Origin Story: A Big History of Everything by David Christian
  • Factfulness: Ten Reasons We’re Wrong About the World and Why Things Are Better Than You Think by Hans Rosling
    • Julia highly recommends this one
    • One of the key points discussed – be a “possibilist”, not an optimist
• Bill is also a fan of Steven Pinker’s writing, specifically The Better Angels of Our Nature

Intro

• Village Global is an early stage venture capital firm backed by many successful entrepreneurs, including Bill Gates
• Host – Julia Hartz, the co-founder and CEO of Eventbrite
• Bill Gates is the founder of Microsoft

On Microsoft

• It was financed mostly by money Bill made in high school
  • (Besides a 5% investment at an early valuation of $20 million)
• Bill says one of the most crucial hires early on was that of Steve Ballmer

Work-Life Balance

• Bill has said that in the early days of Microsoft, in his 20s and 30s, he really didn’t do much else besides work (even on weekends)
  • He didn’t take any vacations
• What would we he say to early stage founders today about work-life balance?
  • It’s important during the early years of your company that you have a team consisting of people who have chosen to be maniacal about their work
  • “I have a hardcore view that there be a very large sacrifice made in those early years, particularly if you’re trying to do some engineering work”
  • Many markets are “winner-take-all” in the software world
    • “The greatest mistake ever is whatever mismanagement I engaged in that caused Microsoft not to be what Android is [the standard non-Apple phone platform]… that was a natural thing for Microsoft to win”
    • Small differences magnify themselves over time – so it’s really important to work at it

If Bill were in his 20s again, what kind of company would he start?

• Probably something that has to do with AI
  • “The big question for anyone who’s ever written a piece of software is, “What’s the software that’s controlling a human?”
    • Think – how can a human play chess, engage in social activities, create art, etc.
  • Expanded – He’d spend a lot of time trying to create software that can do the equivalent of what a human can do
• Or perhaps something related to biology (specifically, trying to eliminate diseases of the poor/infectious diseases)
  • Disease like typhoid and rhinovirus
• Or energy (related to solving climate change)

The Evolution of Entrepreneurship

• Over the course of Bill’s career, a real “founder ecosystem” has started to develop
  • It’s much easier to meet other people facing the same challenges of running a company
  • “There’s all these people who want to hand you money now”
  • It’s much easier to move fast, invest, and scale – but because of this, intense competition is present
  • Entrepreneurship has really gotten to be much more of an understood field

A Quick Blurb on Education

• The U.S. has the highest dropout rates among high school and college students compared to every country in the world
  • The U.S. has more students entering higher-education than any other country, but 12 countries currently graduate more students

Reading

• Bill’s 2019 summer reading list includes:
  • Leonardo da Vinci by Walter Isaacson
  • Everything Happens for a Reason: And Other Lies I’ve Loved by Kate Bowler
  • Lincoln in the Bardo by George Saunders
  • Origin Story: A Big History of Everything by David Christian
  • Factfulness: Ten Reasons We’re Wrong About the World and Why Things Are Better Than You Think by Hans Rosling
    • Julia highly recommends this one
    • One of the key points discussed – be a “possibilist”, not an optimist
    • Bill notes from the book – “The people least aware of the improvements in the world are professors at U.S. universities”
• Bill only started reading a lot once he hit 30s
• “I read a TON of science”
• Bill is also a fan of Steven Pinker’s writing, specifically The Better Angels of Our Nature
  • “The world is improving in all these unbelievable ways and the human characteristic is to look at where it’s not improving”
    • “I do worry that if you don’t get a lot of people thinking about this… people won’t work together. The really hard problems – solving climate change, not having big pandemics, or not having big wars – those are all things that require countries to work together. There really are no super big problems that don’t require countries to work together.”

Global Poverty is Decreasing But is Becoming Increasingly Concentrated

• In 1990, 36% of of the world lived on $1.90 or less per day
  • Today – this number is 9% (which is mostly concentrated in Africa – by 2050, 90% of the extreme poor will live in Africa)
• To bring this number down – we need investments in health, education, and governance (specifically in Africa)
  • “Until you get a certain quality of governance, you can’t get roads, you can’t get electricity, you can’t get schools, and you can’t get basic healthcare”

The Future of Education

• With the rise of online learning (with platforms like Khan Academy) pressure is starting to rise against the traditional university model
  • Places like Stanford don’t have to worry due to a surplus of philanthropy and science grants
    • In fact, they’ll (along with Harvard/MIT) probably start contributing more and more material towards online education (expanding things like MIT OpenCourseWare) 
  • But state level schools are really at risk (where the vast majority of college education is completed)
    • Tuition for state schools tend to range from $11k-17/year, and it’s only rising
  • But realize – “The number of students who can learn without a social setting around them is very, very small”
    • (Currently)
    • And the group that does the worst with online learning is low-income students – they hit dead ends much quicker
• “We haven’t yet solved the problem for how we get a low-cost education for low-income students (that they actually complete”
  • Most community colleges have a > 50% dropout rate
  • Most 4-year colleges have a >30% dropout rate

What’s the unsolved problem, which could be solved with tech, that Bill would like to see someone tackle?

• There’s currently nothing that matches a great 1-on-1 tutor to a student ready to learn
• The bodies and brains of ~40% of kids in poor countries don’t fully develop
  • During their early years, disease and nutrition characteristics are such that they tend to have IQs < 80
  • “If we can solve the nutrition thing – that’s gigantic in terms of human potential”

What’s going to be the business model of the “Microsoft for AI”?

• In the future, AI will be your portal to the world (largely replacing social networking, search, productivity applications, going to Amazon and buying something, etc.)
  • It’ll be like your personal agent, giving in to see all your information, being the sole platform you interface with
• Therefore, this type of AI has the opportunity to combine many different elements – advertising, subscription, etc.
  • Why advertising? – There are win-win situations where your desire to know about a new product type is beneficial to you and the advertiser

Who’s been instrumental to Bill’s success?

• “No founder can change the world alone, it requires a village around you to help you realize your full potential” – Julia
• Warren Buffet, who Bill has gotten to become friends with over the last 30 years
  • Warren doesn’t involve himself much with the tech world and therefore has a good outside observer’s prospective
  • One lesson Bill has learned from him – work should be fun! (work is so fun for Warren, that he works 6 days a week at 88-years-old)

Venture Stories : bill gates, entrepreneurship, founders, philanthropy, startup, work life, work-life balance
Notes By MMiller