Bill Gates Shares About Strategic Partners and How to Scale Successfully


Gates attributes early partenrship with IBM as crucial to establishing Microsoft as tech powerhouse.

Recently Bill Gates sat down with LinkedIn founder and Venture Capitalist Reid Hoffman. Gates relayed a story about how in 1980 IBM was pushing Microsoft to quickly provide the operating system for the 16-bit IBM PC.

"We put so much energy into this thing," he said on the podcast "Masters of Scale". Gates told the listeners that Microsoft benefitted from the partnership in a major way, following the release Microsoft had an operating system that they were able to market as a separate product.

One recent computing historian referred to the partnership as the date (39 years ago) "IBM Signs A Deal With The Devil."

Gates explained how IBM Japan in particular had standards that pushed Microsoft to be its best. He said, "IBM Japan in particular was picky about quality. It was difficult at first to get acclimated to their standard, but I eventually realized that they weren't crazy, they were just disciplined" He said he realized that he himself would have to learn how to do that.

"We spent two years just in total pain, where the Japanese guys were flying in, and they would sit there day and night even though they didn't even know how to fix the thing," Gates said.

Gates's experience with IBM Japan led to the advice he told Hoffman that applies to anyone who wants to scale their company fast, "You have to pick customers that are both highly visible and tough." Tough means selecting customers with high standards, who, in turn, elevate the standards of your company.

"Partnerships really are so understated in terms of their key role," Gates said. Gates explained how Steve Ballmer would fly cross country to IBM Headquaters on several occasions just for one day which helped the partnership between Microsoft and IBM thrive. Gates describes this as "the right thing to do to get things done."

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Economics, Finance and Investing