Tuesday, August 27, 2013

My Favorite Steve Ballmer Story

A great deal has been written about Microsoft CEO Steve Ballmer in the wake of his retirement announcement last week.

Lost in these articles is the crucial role that Ballmer played in creating Microsoft. When Gates, Allen, Ballmer, et.al. started the company, they shared a single dream of a world connected by personal computers (PC) that would be easily accessed by anyone, even those lacking in technology skills.

While you can argue that some of its products are not particularly user-friendly, Microsoft changed the world, and not too many companies can make that claim.

The story of Microsoft, and other tech giants, is beautifully told in a book titled Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can't Get A Date.  Written by Robert Cringely, the book later became the basis for a television series on PBS called "Triumph of the Nerds".


Even though the book is fairly dated (it was first published in the early 1990's), I still think it is one of the best in its genre in capturing the spirit of the tech industry in Silicon Valley.

Which brings me to my favorite Steve Ballmer story.

Here's the excerpt from Cringely's book:

The Age of Microsoft dates, I believe, from a moment in 1989 when executive vice-president Steve Ballmer borrowed some money. Prior to that moment, Microsoft had all the elements necessary for global digital dominance except the will to make it happen. Ballmer's mortgage signified that there was finally a will to go with the way.

Ballmer's was Bill Gates's Harvard buddy, and Microsoft's twentieth employee.When Ballmer joined Microsoft in those early days, he didn't even have an office, but was granted space at one end of the sofa near Bill's desk.  Ballmer, a former brand manager at Procter & Gamble, represented Microsoft's new business orientation, an orientation that surged after 1989. By that year, just as Bill had, he came to the blinding realization that IBM no longer controlled the PC business - Microsoft did....

So Ballmer took a chance.  He borrowed everything he could against his Microsoft stock, stock options, and his every other possession.  In all, Ballmer was able to borrow $50 million and he used every cent to buy more Microsoft shares....Ballmer was betting his entire fortune on Microsoft. This is the only instance I can recall of such behavior.

There's something about betting every penny you have in the world that helps with focus, and Microsoft has been very focused during the 1990s. As a result, Steve Ballmer is now Microsoft's third billionaire, joining Bill Gates and Paul Allen.

A different side of Steve Ballmer, perhaps, than you have heard about recently.