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A Little Company Called Microsoft is a story from the It Happened in Albuquerque section of the STARTUP Gallery. Click on the map to explore any section of the gallery.
A Little Company Called Microsoft
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Pink Floyd’s Dark Side of the Moon was getting heavy rotation on album-rock stations in 1975, the same year Bob Dylan released his great “comeback” album, Blood on the Tracks. Bellbottoms had maxed out a few years earlier and now existed as vestigial “flares.” Jaws was a hit that year, and George Carlin hosted the first Saturday Night Live.

In Albuquerque, 1975 was the year of two Balloon Fiestas, one in February and one in October. It was also the year Paul Allen arrived with a roll of paper tape containing the very first Microsoft BASIC, a programming language he and his partner Bill Gates were hoping to sell to a computer company called MITS. Allen was expecting something grander than the small, cluttered operation he found on Linn Avenue, but the company had just created the first affordable home computer, and that was enough for Allen and Gates.

They set up the MITS software department in a little office around the building from the main MITS space, right next to the vacuum cleaner repair shop. It was staffed by Allen, Gates, a couple of programmers hired by MITS, and a few old friends from Lakeside School in Seattle, who would appear for months at a time to help out.

The small staff kept their own hours, generally late morning to midnight. They took their lunch breaks together and their dinner breaks together. Sometimes they worked all night and went to breakfast together. Gates and Allen talked through every decision, sometimes loudly and at length. To unwind they went to movies, played chess, and drove their cars out on the cement plant road. Loud music was a constant, work or play.

In the early days the Seattle crew all lived together. Allen was more or less the anchor, with the others coming and going as school and other commitments permitted. Even Bill Gates spent two years off and on back at Harvard before dropping out for good.

Their own company, Microsoft, began to take shape as they learned how to run a business. They bought a DECwriter terminal for the apartment, where they carried on a parallel operation separate from MITS. When they outgrew the apartment they went out looking for offices, which by the end of 1976 they found in a building called Two Park Central Tower.

Microsoft was growing apart from MITS, which in their minds wasn’t doing enough to sell the software. The split was formalized in 1977 when a California company called Pertec bought MITS, and the rights to BASIC became the subject of arbitration.

The arbitration failed to produce a clear result, and the two sides ended up coming to their own agreement. Afterward, Microsoft began to seem more like a business and less like a group of guys scrambling to keep up. They still scrambled, but the goals became clearer. Very big companies, such as Texas Instruments, NCR, and General Electric, were buying their software. The strategy was to try to do every language they could: Fortran, APL, Cobol, Pascal. The ambition, even then, was to have Microsoft software running on every computer.

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Related Links

The Accidental Zillionaire
Wired profile of Paul Allen.

Bill Gates Interview
Transcript of 1993 video oral history from the Smithsonian Institution.

The $100 Billion Friendship
Interview with Bill Gates and Steve Ballmer. Brent Schlender, Fortune magazine, 1999.