INTRO: Bill Gates is likely the most well known billionaire
in the entire world.
Everyone knows him as the child prodigy that dropped out of Harvard and founded one of
the biggest companies in the world: Microsoft.
Since then, he’s dominated the top of the billionaires list, currently standing at $112
billion.
And that’s after donating more than $50 billion to charity.
Clearly, founding Microsoft has worked out extremely well for Bill, but Bill Gates wasn’t
the sole founder of Microsoft?
In fact, Microsoft was actually cofounded by another child prodigy named Paul Allen.
And this wasn’t just some honorary title either like Apple’s cofounder Ronald Wayne.
Paul was heavily involved in the company for nearly a decade before he decided to part
ways.
At the time, he owned roughly 25% of Microsoft which at the peak would translate to $625
billion.
Yet, most people have no idea that Microsoft even had a cofounder or that he tragically
died a few years ago.
So, here’s what happend to the forgotton founder of Microsoft.
PRE MICROSOFT: Taking a look back, Paul Allen was born on
January 21, 1953 in Seattle Washington.
He was born to a pretty academic family as both of his parents were heavily involved
in libraries.
In fact, his father worked as the associate director of libraries at the University of
Washington.
Meanwhile, his mom was a librarian.
Hearing this, I don’t think you’d be surprised to hear that his parents put him in the best
school that they could afford: a private preparatory school called Lakeside School.
For perspective, annual tuition at this school currently costs $38,000.
Aside from enrolling Paul in a prestigious private school, his parents would also consistently
take him to museums, galleries, and concerts to expose him to as many interests as possible.
But, ironically, his greatest interest wasn’t any of these.
His greatest interest was messing with computers with his friends from school: Bill Gates and
Kent Evans.
This trio would regularly use Lakeside’s Teletype terminals to develop their programming
skills, and soon enough, they would actually found a programming club.
The only problem though was that they didn’t any access to computers.
So, they made a deal with a local computer company called Computer Center Corporation.
They offered to find bugs in their software in exchange for computer time.
It didn’t long for them to go from this to developing scheduling software for Lakeside.
Despite spending all this time on his hobbies, Paul never slipped up academically either.
In fact, he got a perfect 1600 on the SAT before being admitted into Washington State
University.
Paul was actually 2 years older than Bill, so Bill was still in Seattle when Paul went
off to college.
This made it easy for them to stay in close contact and work on their first serious business
endeavor called Traf-O-Data.
At the time, state and local governments would often perform traffic surveys in order to
make stop lights more efficient.
To accomplish this, they would lay out rubber hoses on the road, and every time a car passed
by, it would create air pulses within the rubber hose which was recorded by a mechanical
counter.
Paul and Bill’s vision with Traf-O-Data was to digitalize this entire process.
But they once again had a fundamental issue, they didn’t have access to a computer.
So, they partnered with a man named Paul Wennerg who could build them a computer.
But just as everything was starting to get off the ground, the trio would be stopped
cold in their tracks.
The state of Washington would develop their own traffic processing program which they
gave out for free to local governments.
So, this unfortunately completely eliminated the need for Traf-O-Data.
By this point, Paul had finished two years of college, but when he was offered a job
as a programmer at Honeywell in Boston, he dropped out and took the job.
This was actually perfect timing because Bill would go to Harvard at the same time which
is also in Boston.
So, the duo was able to continue their friendship in Boston, and it didn’t take long for them
to start their next business venture.
MICROSOFT: In 1975, Paul and Bill would begin Microsoft,
but the company was nothing like what we know them as today.
The company was actually focused on selling a programming language interpreter in New
Mexico.
One of their first clients/partners was an up and coming company called Micro Instrumentation
and Telemetry Systems.
And given that this company was located in Albuquerque, New Mexico, Paul and Bill decided
to base Microsoft there as well.
It wasn’t till 4 years later that they would move the headquarters to their home state
of Washington.
In the meantime, Microsoft would get some international exposure as well.
In August of 1977, they would form an agreement with ASCII Magazine in Japan which allowed
them to open ASCII Microsoft.
Despite all this progress with the company, it didn’t take long for Bill and Paul to
start developing some animosity towards each other.
It all started with Bill wanting more equity than Paul.
The argument from Bill was that he was still in college and making no money while Paul
already had a well paying job.
So, Bill was not only taking a bigger risk with Microsoft, but he would likely be able
to spend more time on Microsoft.
This argument made sense to Paul, so he agreed on splitting the equity 60-40.
But, it wasn’t long before Bill wanted even more equity.
Bill soon renegotiated the contract to be a 64-36 split.
Paul didn’t want to make a big deal about this and he knew that both of them would be
super rich anyway if things worked out.
So, he didn’t really fight back against Bill, but over time, things just got even
worse.
As Microsoft started to attract press attention, Bill become the public face of Microsoft which
slowly ate away at Paul’s significance within the company.
The two were quickly growing apart and they both knew it, but Paul says that he was “Too
angry and proud” to confront Bill about it.
Bill’s personality didn’t make such a confrontation much easier either.
According to Paul, Bill was usually an extremely sore loser and he often had difficulty admitting
his shortfalls.
For example, Paul stopped playing chess with Bill very early on because Bill would often
sweep the pieces onto the floor in anger whenever he lost.
While such quirks were likely quite annoying, none of this was enough for Paul to leave
the company.
He was extremely optimistic about the future of Microsoft, but all of this would change
when he found out that he couldn’t be nearly as optimistic about his own life.
In 1982, at age 29, Paul would be diagnosed with Hodgkin’s lymphoma which is a type
of cancer that affects the immune system.
Despite this scary diagnosis, Paul would stick around at Microsoft, but his input into the
company was significantly less for obvious reasons.
However, Bill had a different take on the situation.
Instead of supporting his friend through this difficult period, Bill would start complaining
about how Paul was becoming unproductive.
And the breaking point was when Paul overheard Bill and Steve Ballmer discussing how they
could reduce Paul’s equity.
After hearing this, Paul would do the honorable thing and resign from Microsoft in February
of 1983.
POST MICROSOFT: Fortunately, Paul’s cancer would get significantly
better following his departure from Microsoft, but his mental health was worse than ever
before.
You see, Paul didn’t really want to leave Microsoft.
He wanted to be part of something big, and he had already founded something big.
But, because of Bill, he was unable to continue that journey.
It should be noted that Paul was still on Microsoft’s board, but this wasn’t what
he wanted per se.
So, he kind of just wallowed in his own despair for a few years after leaving Microsoft, but
all of this would change when Microsoft went public in 1986.
At the end of the first trading day, Microsoft would be valued at $780 million which gave
Paul a net worth of $195 million.
Paul now had boat loads of money and a life threatening disease that could return at any
time.
So, I don’t think you’d be surprised to hear that Paul decided to stop feeling sorry
for himself and started living it up while he still could.
But before he did that, he wanted to start off with a positive task.
So, in 1986, he founded the Paul G. Allen Family Foundation which was dedicated to advancing
health and human services.
After this, however, Paul started splurging.
He of course bought all of the classic things like mansions, yachts, private jets, and sports
teams.
But he also had several creative engulgences as well.
For example, Paul was a massive fan of music and especially rock music.
So, in 2000, he opened the Experience Music Project which was a rock and roll museum that
was dedicated to his rock hero Jimi Hendrix.
He also created his own band called The Underthinkers where he sang and played guitar.
In 2013, he launched a full album in which he personally wrote or cowrote every song
in the album.
Aside from music, Paul also began collecting really unique items.
For example, he built up a collection of WWII fighter planes.
He also had an extensive art collection that was filled with pieces that were worth tens
of millions each.
Paul didn’t just spend all of his money though, he also invested significant portions
of it.
For example, he had stakes in America Online and DreamWorks.
His sports bets also ended up playing out pretty well as he owned the Seattle Seahawks,
the Portland Trail Blazers, and the Seattle Sounders.
The Seahawks would end up making it to the super bowl 3 times and they even won in 2014.
Not all of his investments went so smoothly though.
Paul definitely had his fair share of losses which in his case were massive.
One of his investments, Charter communications, filed for bankruptcy while many of his other
pet projects including Asymetrix, Starwave, Metricom, and Interval Research never lived
up to what he envisioned.
Nonetheless, his stake in Microsoft and his other successful investments were more than
enough to make up for these given that he would end up with a net worth of $20 billion.
PAUL ALLEN: In terms of Paul’s relationship with Bill
Gates after the fall out, they did eventually make amends and get back onto a talking basis.
But, it was never quite the same.
Paul stuck around on Microsoft’s board up until 2000 at which point he left as Bill
Gates stepped down from being CEO.
Unfortunately, Paul’s lymphoma would resurface in 2009 and though he would get treatment,
he was no doubt get weaker and weaker.
As Paul saw the end of his life approaching, he decided to write a memoir called Idea Man
that told the story of Microsoft from his perspective.
In the book, he claims that it was actually him who came up with a bunch of the ideas
that Bill often gets credit for.
For example, Paul says that he who came up with the name Microsoft, and that he created
the SoftCard, and that he was the one who thought of targeting the personal computer
market.
According to Paul, he was the one that came up with all the ideas while Bill spent most
of his time running the business itself.
Many critics have pointed out that the book is filled with bitterness and that it’s
more of a rant than an inspiring memoir.
But, none of that really matters though as Paul’s lymphoma would return yet again in
2018, and it would take his life on October 15, 2018 at age 65.
In terms of what will happen to his fortune, Paul never got married and had no children,
so he doesn’t have any heirs who will takeover.
Paul’s goal was to simply donate all of his money after his death and he wrote a detailed
plain regarding how to do that.
So, all that’s left is for his sister, Jody Allen, to actually execute his final vision.
While he was never able to be the leading voice at Microsoft, hopefully, he will continue
to be the leading voice behind his fortune.
Would you guys rather be rich and sick or poor and healthy?
Comment that down below.
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