William H. Gates III COL ’77, LLD ’07 Q&A | The Harvard Campaign Launch

William H. Gates III COL ’77, LLD ’07 Q&A | The Harvard Campaign Launch


[APPLAUSE] So Bill, thank you very
much for doing this. You are very famous
for, among other things, not having graduated
from Harvard. Have you ever thought
what you could have made of yourself had you actually– actually stayed and
got your degree? Well, two times ago, when
I was last in this hall, I was giving a speech and Mark
Zuckerberg was in the audience. So I– I got him to drop out. The true thing–
you know, I ended up going a total of three years,
and I took a lot of courses. So I’m not really a
drop out in the sense that I fled the university. I was having so much fun. It was just that it seemed
like, unless we got in on the ground floor, we were
going to miss the opportunity. Well, when you
applied to college, you applied to Harvard,
Yale, and Princeton. And suppose you hadn’t
gotten into Harvard, and you’d only gotten
into Yale and Princeton. Do you think the value of
being a drop out of Yale or a drop out at Princeton
would have been as valuable? Well, there’s the prestige of
turning Harvard down, which– I don’t have that. So you’ve got–
famously, you got– you did very well on
standardized tests. You got 1590 out of 1600. Have you ever thought
what that question was that you got wrong? Well, the truth is, I went– that was the verbal SAT. I got 790 the first time. I told my parents their
vocabulary wasn’t large enough. And I was criticizing them. So I did go back and take it,
and do better the next time. OK. So when you were at
Harvard, you did enjoy it, but you were famous for
playing a lot of poker. You were famous for
auditing a lot of courses. And famous for not attending
the courses that you were supposed to be taking. So what would you say was
the great experience you had, and what you learned
the most out of Harvard? Well, you know, when
you come to Harvard, there are so many
brilliant people. And for a lot of people in
your high school realm– and you probably have
fairly key positioning. You’re one of the more studious,
one of the better at math or science– you have something that people
understand your positioning. Well, when I came to Harvard,
in my freshman class, we had 80 people in
one class, all of whom personal positioning was,
I am the best math person. And so we had 79 frauds. And so I thought, well,
I’m probably not going to be the best at this. In fact, a great
guy, Andy Braiterman, who’s a lawyer in New York,
was first in that class. So I decided I would be
the guy who never attended any class he was signed up for. So within my first
month, I figured out that was my unique positioning. And I hoped that 80
other people wouldn’t steal that positioning. But it turned out no
one else imitated me. But you started out, you were
going to be a math major, and you finally
realized there might be somebody better in
math, so you decided to be an applied math major. Is that true? Well, there were certainly
people better than me at math. I mean, I took the
Putnam and scored well, but not at the top. The main reason I
switched to applied math was that Harvard had this
strange rule, that you– if you were trying
to get into a class, like some movie class, or
political science class that was very crowded, if you
were in applied math, you could pretend to be
applying math to that domain, and be treated as though
you were a student majoring in that field. But they never pinned you down. So you could use it as
a kind of wild card. And there were a bunch
of economics courses I wanted to get into,
including Mike Spence’s micro-economic course,
that I would not have been able to
get into unless I could say I was applying
applied math to economics. So it was a great choice. OK. So when you gave your– you received an honorary
degree from Duke– from, uh, from Harvard a few years ago– [AUDIENCE GROANS] –his wife– his
wife went to Duke. She has a real degree. Actually, she has two. Both from Duke. His wife got the honorary
degree from Duke this year, and you got an honorary degree
a few years ago from Harvard. And in that, you said that you
wanted to be in the Radcliffe– the dorms, because you
concluded that there were more women than
men there, and you had a better chance of scoring
a date if you were in Radcliffe. Well, it’s still a
very, very low chance. So it didn’t work out. They had hamburgers, too. You could get
hamburgers for lunch, no matter what
they were serving. That was exciting. Obviously, you
famously left Harvard. Your parents– when you called
your parents up and said, look, I’m going to drop out
of Harvard, what did they say? Well, you never say that
you’re dropping out of Harvard. You know, I went on
leave from Harvard. And so if things hadn’t
worked out for my company, for Microsoft, I could
have always come back. Now, eventually they changed the
course catalog and requirements enough, nobody would
know what it would mean. And I was so close
to graduating. So, you know, my parents
probably thought within a year or so the thing would collapse
and I’d be, like, a year off. Like studying
abroad or something. But had– the truth is, had
you graduated and stayed, would it have made a difference? In other words, would
the world be different because you couldn’t
have started your company by graduated,
having not dropped out, or not? No, it turns out that
the urgency we felt– that if we hadn’t
started in 1979– if we’d waited and started
in 1980, or even 1981? Because of the way we
thought about the problem, because we were so
software-oriented, and thought it– and most companies weren’t
focused on software. People did software as sort of
a side deal because they had to. But the hardware was what
you paid all the money for. The software just came free. So the idea of
software companies wasn’t around all that much. So we– in fact,
although we felt like we had to do it
that day, an extra year would have– would have been OK. It wouldn’t have changed
the course of history to hang out another year. OK. So when you started
your company, you were the chief software
engineer, in effect– architect. And you were also the CEO. When you started it, to
be realistic about it, did you actually ever
think it could take off to the extent it did? Or what did you think
the realistic goal was? Well, I had what you might call
an inconsistent view, which worked out very well. One view was that there’ll
be a computer on every desk and in every home
running our software. And so that would be billions
of copies of our software. And that our– we should
do everything for that. But then when it came to
spending money, renting things, I had a view that, OK, maybe
we could triple in size. And I ought to do enough in
terms of how I structured things, to triple in size. So that was kind of my man– there was my vision,
which was grand. My management view,
which was to triple. And then there was my,
OK, do we have enough cash if nobody pays us? So I always liked to have– because we had a few
customers go bankrupt, because being in the personal
computer hardware business was pretty chaotic. I always wanted to
have enough cash to pay everybody for a year. And still, to this
day, Microsoft has enough cash to pay
everybody for a year. More than a year, I’d think. Yeah, more than a year. So when you started,
how did you avoid what so many other entrepreneurs
are unable to avoid, which is taking venture capital
money and diluting themselves? You didn’t really take
venture capital money. How did you avoid that? Yeah. We got– software, if you
can sell it in volume, has extremely
favorable economics. Because the costs
are quite finite, and you can scale the
volume, in our case, to sell millions of copies. You know, every
Apple II computer, Commodore Pad, IBM PC, had
copies of our software. So our income went up a lot. So we didn’t have to
build any factories. We were cash positive. And we didn’t have a
year where we lost money. You know, the first few
years, OK, Paul and I worked for free– Paul Allen, who
was my co-founder. But after that, we were
just generating cash. We eventually gave away– or sold– 5% of the
company for a $1,000,000– so a $20 million valuation– just to get a venture capital
company to join our board, and give us some adult
advice about various things. Which actually was–
was quite helpful. We picked one in the Valley– a guy named Dave Marquardt
came on our board and did a fantastic job. That money sat in the bank. It’s still in the bank today. So it was not for anything
to do with capital, but rather just
to join the team. And he’s still on the board. Yep. He’s still on the
board [INAUDIBLE] and is still extremely helpful
as a lot of important decisions get made. So when you were
starting, Steve Jobs was also starting his
company, not long after. Yeah. He was in India when we started. A year later. Yeah. OK. So when his software was
developed at one point, it was thought to be
very good software, but he didn’t want
to license it. Was that helpful to you? Because his software was so
good at that time that your– if he had licensed it, there
would have been no need for IBM or others to license
your software? Yeah. It’s a little complicated. So there’s three phase of Apple. There’s the Apple II
era, where Wozniak did– Steve Wozniak, who
is a great engineer– did the Apple I software. Then he got kind of lazy,
or wasn’t focused on it. So I got to do the
Apple II Basic, and licensed that to Apple. Then there’s the Mac era, where
they did all their own system software, and we were
the big application provider for the Mac. And because we were doing so
well with our Mac application software, we kept telling
Apple they should license their software to other people. Because it would have
been better for Microsoft. Although ironically, that
would have had competed with MS-DOS and Windows. They, for a while,
thought about doing it, and then chose not to do that. And then– then comes
the era of, sort of, post-Mac, where they do
all the different things, and still keep it
proprietary to them. So truthfully, if they had
done it in the Mac era, that would have
been good for us, because our applications
share was so– so strong. And we totally believed
in the licensing model. You know. Today, Windows and Android
follow the licensing model, and have a very high share. Although Apple’s managed,
on a reasonably modest share by our standards, to make an
incredible amount of money. Now, IBM decided to build a PC,
and they wanted to get somebody to provide the software. They thought, I guess, that
hardware was the most important thing, and they’ll have some
software provided by somebody. How did you manage
to get that contract, and do you think IBM
made a mistake by not buying the software
from you, as opposed to licensing it from you? Yeah. They certainly made a mistake. But they– you know, IBM is a
great company that’s done many, many great things. The actual project
that did the IBM PC was started by the IBM
management committee, more to prove that they
could do products quickly. They were seeing
four year cycles between when they
decided to do something and something shipped. So they had a
facility in Florida, Boca Raton, that had
done a product systems, hadn’t done well. So they told them, you guys,
do a personal computer, and try and do it in 18 months. And your strategy is going
to be to use third parties. So they went to Intel for the
chip, UPS for the software, a group called Computerland
for the distribution, and the goal was just
to do it really quickly. So we wrote the
software for that. The volume protections
they had for it were, like, 200,000 or 300,000 units
over a three year period. So they didn’t view
it as important. Ironically then, that
thing was hyper successful. And so the divisions– the dedicated word processor,
the small business machine– they got completely taken over
by this tiny little group. And so the fact that
they didn’t know it was going to be
such high volume meant that the way they
negotiated with us– we thought it was going
to be super high volume, and they didn’t. And, you know, then
that can lead to them thinking they got a good deal. Which they didn’t. OK. So in those days, you were
a rival, a bit, for Apple, to some extent, with Steve Jobs. But at one point,
he needed money, and you put up some
money to bail out Apple. What was that like, when he had
to come to you to get money? Well, yeah. So in the Apple II era,
we did software for them, and we were kind of
friendly competitors. Then when they started
the Mac, Steve came to us. And we actually put more people
on the Mac than Apple had, because we wanted to do
all this application stuff. So we were really
very much partners. Then Steve gets kicked
out of the company. He’s not the CEO during
that period at all, but he is the head
of the Mac project. And so we’re working closely. Then Sculley comes
in, he’s gone. Then there’s this management
that wasn’t doing so well. That was negotiating with
us on a bunch of things. And it was taking forever. I think it’d been a
year of negotiation. And so when Steve comes
and takes over the company, he sort of said, hey, of the– I want it this, this,
and this, and I’m going to give this, this, and this. So we did the deal
in three days. Including putting
money into the company. We bought, I think,
6% of Apple, which our lawyers thought,
for anti-trust reasons, we shouldn’t hold on to. It would’ve been nice if we had. But we mostly,
besides the cash, we committed to do our Mac
application software, and really support the company. And then Steve, through
great management, turned the company around. First on the Mac, and then
did a bunch of new products that made it extremely valuable. Before all that happened,
you took your company public, I think, in 1986, or so. Exactly. And you were 31. More or less. Right? So you’re 31 years old, and
you’re very, very wealthy, at least on paper. Did you think at the time that
the company could actually get much bigger than it had been? And did you realize
how wealthy you were? Did it change your life? Or you just kept working
as hard as before. You didn’t really pursue
any outside activities after you realized how
wealthy you’d become at 31? Well, I was very
fanatical about the job. And so there wasn’t
any spare time. I mean, in my 20s,
I didn’t believe in vacation or weekends. In my 30s, I started
believing in weekends. And then it wasn’t
until I met Melinda I started believing in vacations. Now, I believe in
multiple vacations. I mean, I’ve completely
given up fanaticism. But fanaticism is for
people in their 20s and 30s, by and large. It has its virtues. And so it’s very abstract
that there was that value. I did start to read
up about foundations. Because the idea that
someday, maybe in my 60s, I thought at the time, I’d have
some resources to give away, and how would you do that? I remember seeing the
“Fortune Magazine” cover where Warren talked about– Warren Buffett talked
about that it’s not necessarily a favor to your kids
to leave huge sums of wealth to them, and I– I read that thing– you know,
this might be relevant to me some day. That was before I’d
met and become– later got to be very
good friends with Warren. I thought, oh, this pretty wise. I hadn’t considered the
distortionary effects of this. So it didn’t change my
life at the time, but– Oh, OK. So you take the
company public, you’re still running your
tunnel visions over it. But one thing I
wanted to ask you about with respect to the
software that you created. Which I’ve used for many
years, and many people here have as well. Why, when I want to turn on
my software and computer, do I need to have three fingers? Control, Alt, Delete. What is that? Where is that from? Whose idea was that? Basically, because when
you turn your computer on. you’re going to see some
screens and eventually type your password in, you
want to have something you do with the keyboard
that is signaling to a very low level
of the software, actually hard coded
in the hardware, that it really is
bringing in the operating system you expect. Instead of just a
funny piece of software that puts up a screen that
looks like a login screen, and then it listens
to your password, and then it’s able to do that. So we could have
had a single button that the guy who did
the IBM keyboard design didn’t want to give
us our single button. And so we had– we programmed a little level
that you had to– it’s– it was a mistake. [LAUGHTER, APPLAUSE] We did some very clever things. The IBM PC character set. Usually, you have 128
characters– like the lower case and upper case. But we took the upper ones, and
we put, like, suit symbols in, and– we were able to experiment
with a lot of stuff. But more on the software
side than the hardware. OK. So you’re running
the company, and it’s becoming very, very big,
and bigger and bigger, and you’re becoming
wealthier and wealthier. At what point did you say,
look, I got so much money, I’ve got to do
something with it. Was it your father
who came to you and said, Bill, you’ve got to
do something with this money and create a foundation? What created your
first foundation? What was the impetus behind it? Yeah, so I get married
in January, 1994. My mom passes away that year. And then my dad is sort
of saying to me, hey, you’re getting all
these requests. Why don’t you just
send them to me, and I’ll sort of sort through
them and show them to you, and you can decide if you
want to fund some of them. So he’s looking at any
general requests that came in. Then another really capable
Microsoft executive, Patty Stonesifer,
decided to retire, and I wanted to put computers
in libraries all over the world. And so she created an
entity that was doing that. And so we went from,
like, ’94 to ’97 where we have those
two different things. And it was a total of,
maybe, $150 million a year being given away. Then, because there were–
they had complementary skills, we put it together into
one foundation for Patty to be the CEO of in 1997. So it built up from my dad sort
of saying, saying at night– you know, I told my
dad, look, this money is still increasing in
value and I’m pretty busy. But he said, no, I’ll
make it easy for you. And it was nice, because
then I got down the learning curve a little bit. So you– you’re obviously a
very smart, very driven person, very focused. Did you ever think it
would be difficult to find a spouse that would be
able to keep up with you? Yeah, I suppose so. I mean, not keep up. But, you know, I think
everybody worries about whether there’s some match for– So how did you happen
to meet your wife? She was working
at– she graduated– Well, there’s an
element of luck. She graduated from Duke, and
she went to work for Microsoft, as I understand it. And then how did you happen
to actually meet her? And was that complicated,
dating somebody who is working in your own company? Yeah. I mean, there’s– She didn’t work very
directly for me. And at first, we
weren’t serious at all. I mean, I was
serious about work, and she was serious
about work, and then it kind of surprised both
of us, that, like, wow, I actually might like to spend
a lot of time with this– this person. So it kind of snuck
up on us, I’d say. In a good way. OK. So now your foundation is now
the Bill and Melinda Gates Foundation, and you decided, you
know, I think at the age of 50, more or less, to
retire from Microsoft, and to devote the rest of
your life, more or less, to philanthropic things. So why did you decide to
do it at, let’s say, 50, and was it difficult to withdraw
from running a company you had built, and to really devote
the rest of your life to something different than
what you have been doing for 20 or 30 years? Well, certainly in my 20s,
Microsoft was everything. You know. Every minute, every sense of
hey, am I doing good work? You know, I knew
everybody’s license plate. I could tell you when they
drove into the parking lot, when they left. You know, so it’s
kind of extreme. And so you’re– you’re going
from that to having a wife, having kids, having vacations. And you know, that
felt really good. It felt like it was appropriate. There comes a point
where you feel like, OK, what I’m doing at the Foundation
has more of a unique ability to take pieces– take science, take economics,
take systems, change, delivery– and put
those pieces together, and get the story to the
people who need to hear it. It felt like it really was
a ground floor opportunity. And it was great
that the Foundation, you know, by the
time I switched, which is 5 and 1/2 years
ago, it had, by then, 250 employees and was
running quite well. So I wasn’t doing
it from scratch. It just was beginning
to grab my attention. And so I decided, OK, I’ll make
that my full time endeavor. And that it used
the things that I enjoy about meeting
with scientists, and trying to do things that
are high risk, but if they work, might have a big impact. And you know, at
some point you’ve got to flip from
your primary thing is your business to your primary
thing being the philanthropy. And so I– I made that change. Which was a big change for me. So you have famously
decided that two major areas of the Foundation– one is K
to 12 education in the United States, another is health
care in emerging markets, particularly in Africa– how did you come
to those two areas as the one you
wanted to focus on, and was it difficult for you to
actually come to an agreement among yourself
and, say, Melinda, about what you
wanted to focus on? Yeah, the global health thing
was pretty straightforward. It’s easy not to be aware
of the number of children who die in ill health. You know, if you’re
a poor child, you have 50 times more chance
of dying before the age of five than a person in the rich world. And that’s partly
because you’re not getting the right
medicines, partly because if you live
in equatorial areas, things like malaria are
threatening you and not threatening the rich countries. So the idea that that’s the
greatest inequity in the world, you know, jumped out at us. Both from a visiting
Africa and parts of Asia, and a numeric point of view. You know, many people think
that, OK, Syria is terrible. Yes, it’s incredibly terrible. But a few hundred thousand
over several years is less than 6 million per year. Now that’s the number of
children under five who die. When the Foundation got
started, it was 12 million. So over a period
of about a decade, it’s gone from 12 million
a year to about 6– a little more than
6 million a year. And we’ll get it down in our
lifetime to under a million a year. So the equity between
the poor and the– the rich will largely
be eliminated. So that one was clear. Then the question was, OK,
given that we live in the United States, the framework of
business, law, education, Lakeside Harvard, that allowed
the fortune to be created was here in the US. And so what do you
do to give back? And there, we picked education. Because in terms of equity, or
economic growth, in our view, that’s the big missing
piece, because it’s not operating very well. And if it can operate well, it– it has this monstrous effect. And that was pretty
easy to agree on. Because we had a lot
of chats about it. Neither of us really
varied from that at all. So the Foundation is called
the Bill and Melinda Gates Foundation. Suppose you disagree
on what to do? How do you decide what to do? It’s like raising kids. I mean, you talk, and talk– And work it out. OK. There’s quid pro quo. Somehow it always works out. It’s never been that
difficult. Because we’re talking about what
people should we pick, and what organization
structure– we’re going off on
different trips. And it’s a lot of
fun to talk about it. You know, in Microsoft,
I had that relationship with Paul Allen for the
first 10 years or so. Then I had it with Steve,
where, even though I was CEO for most
of it and he was– we ran it together. Now, the Foundation– Melinda is amazing
at playing that role. OK. So today, let’s talk
about Warren Buffett. You mentioned him. How did you actually get to
meet Warren Buffett initially? And how did you develop such
a close relationship with him? Well, it was a
very strange thing. My mom said that she was having
Kay Graham and Warren Buffett and a bunch of people
to a party on July 4th, and I needed to come. And I said, I’m working, Mom. And she said, no,
no, you have to come. So I said OK, I’ll take a
helicopter out to this place, stay two hours, and
then I’ll go back. And that– that
seemed to satisfy her. So I went out and I met Warren. And I thought, hey, what do I
have in common with this guy? This guy buys and sells stocks. You know, what does
that do to the world? It’s just paper. And, you know, the fact that
people look at, like, trends, and volumes, and they
see things going on in those wiggling things,
it’s not that big value added, really. And so he started
to ask me questions that no one had asked me about. The computer business,
the software business, why IBM hadn’t been
able to do this, what we are good at, why other
companies hadn’t come along, what we were doing
about growth, pricing– just all the questions that, you
know, I sat and thought about. And so then I thought,
well, hey, this guy asked good questions. I was asking about
banking, and loans, and why he invested in certain things. But not in terms of the
prices of the stock, but the dynamics
of the businesses. The people, the
products, the pricing. And basically, so I say I fell
in love with Warren that day. He was so interesting. And we’ve been super
close friends ever since. So you play bridge
a lot with him. And what is it like to have
two of the smartest and maybe the two wealthiest people
in the United States, and you’re playing
bridge and you lose, is that very humiliating? I mean, you’re very wealthy
guys, you’re very smart, and you play bridge
and you don’t win? Well, we put– Warren and
I love to play bridge. It’s very relaxing. You know, great game–
you can play it online. There are thousands of
truly great bridge players that are way better than we are. For amateurs, we’re pretty good. But it’s relaxation. And so we play with people who
are way better, who point out to us mistakes that we make. You know, it’s a fun endeavor. We don’t ever bet or anything. So what did you– well, I guess you don’t need
to make any more money, so– So what did you think when
he called you up one day and said, guess what? I’m going to give you
the bulk of my fortune to your foundation. Were you shocked? And how do you think
he came to that? Most of the time I knew
Warren, from 1994 on, he was in the mode I’d
been in for a while, which is that he felt his
wealth was accumulating, and so it was probably best
that it be given away later. Or he just liked having
the capital to accumulate. He assumed that he would
die before his wife Susie, and she was given
the responsibility to run a foundation
and give it all away. Tragically, she
died before he did. And this is about 7
and 1/2 years ago now. And it was kind of unusual. A few months after that,
he said to me, you know, the logical thing
would be for me to give money to
your foundation. And that’s all he said. He said that would
be the logical thing. And I thought about it, and
I thought, well, we are– we are a large– OK, I guess that’d be logical. But it wasn’t like he was
going to do it or anything. Then the next time I saw
him, he said, you know, it really would be logical. And I thought, he may
be serious about this. I said to Melinda,
he might actually be thinking about this. And it was completely
out of the blue. And then a month after
that he talked to his kids, made very generous gifts for
them to create foundations. Actually, they’d had
their smaller foundations, but made them quite substantial. And there was another foundation
focused on reproductive health things. So a total of five
foundations got resources, but a large, large
percentage came to us. So it was a fantastic thing. And we were able to take
our mission in health, and add agriculture. We were able to take our
mission in K through 12 and add some
college level stuff. So it’s really
enabled us to scale up what we do very dramatically. So what are the assets
now of the foundation? Yeah, the assets
are $36 billion. But the gift– but Warren
gives, on a yearly basis, stock that’s now worth
$2.3 billion a year to the Foundation. Berkshire’s had a
particularly good year. And so the corpus
that I’m saying, that’s the money I put in. So you actually have
to almost double it in terms of the yearly payout. How much are you giving
away a year, annually? We’re just over
$4 billion a year. $4 billion? Yeah. And how do you measure
the success of the money that you give away? Do you have very good metrics? Or you just don’t really
have perfect metrics– I guess there are
no perfect metrics– but how do you follow up
and make sure that it’s being used the way you want? Well, some things are pretty
straightforward to measure. You know, the number of
children who die every year, the way that number’s
measured, it’s accurate to within,
certainly, plus or minus 5%. And so if your goal is to
drive that number, you know, from 12 million to 6 million,
which is where we are now, and from 6 million to 1
million, you either succeed or you don’t succeed. That one requires
tons of partners. That’s not just us. That’s development aid budgets,
and delivery organizations, but we’re part of that
movement, and, you know, really pushed a
lot of new science, including new vaccines, into it. So then you have more
near-term things, like have you discovered a
malaria vaccine, or an AIDS vaccine, or a TB
vaccine, and you look at the scientific
progress there. And that is a little
softer, but you– you can tell. In education, if you’re
giving scholarships, that’s straightforward. If you’re putting
computers into libraries, that’s straightforward. If you’re trying to help improve
the K through 12 personnel system so that the average
quality of teaching is much better– that is, the
really good teachers share their secrets and certain
incentives and professional development are put in, so that
the average moves up to the top quartile, from today’s average
to the top quartile today, that, because it’s subject
to so many uncertainties, including school boards,
political processes, union negotiations, desire
to maintain the status quo– if you said to me, are we making
progress on that one or not, I could talk for a long
time, but I wouldn’t be able to give you a number. And so, you know,
the very risk of it, and the complexity of the
system change that’s necessary, makes that tougher to measure. I’m a total fan of measurement,
you know, where it can be done. But to the degree that would
drive you to low risk things and steer you away from trying
to improve K through 12 US education, then the
fetish towards measurement can be taken too far. So your foundation is not to
be a perpetual foundation. As I understand it, 50 years
after the last spouse dies, it’s supposed to be terminated. Is that more or less right? Yeah. We lowered it from 50 to 20. 20. OK, sorry. So 20. So what is the theory behind
doing it after just 20 years? Why not have it like the Ford
or Rockefeller Foundation, go on forever? Well, those in perpetuity
foundations are amazing, and we partner
with a lot of them. For us, the theory is
that we pick some causes– education, you know,
global health– and we can actually
see childhood death in our lifetime getting
to be pretty small. And so we have this very
specialized organization. And we have malaria experts. We have vaccine
manufacturing experts. We are an institution. It’s not just the
amount of money we give. We are about global health. We have people who
think– you know, have done 20,000 of hours of
videotaping of good teachers, mediocre teachers,
looked at what that is, thought about teacher training. So it’s a purpose-built
organization. And we think that whatever
our ideas are about change in our lifetime
plus 20, you know, they’ll either work or not work. And then it’s up
to rich people who are alive, who are looking
at the current problems, and politics, and technology,
and understanding of learning, to decide to give
their money, as opposed to picking some weird board who,
God knows what they would do. And there will be
plenty of money, but that’s just our choice
not to perpetuate some name, because these missions
don’t– they’re not– they will be solved by someone– hopefully us, but by somebody
within the next 40 or 50 years. OK. So today, you have
a large number of people working
at the Foundation. There’s 800 people, or
something like that. So it’s a bit of a bureaucracy. 800 people is a lot. So if you decide you
want to do something, do they do what you want? Or do they kind of come
back to you and argue, and you have a hard
time getting things done through your own foundation? Or that’s not a problem? Well, we get them to
argue with each other. If you only have
one person who works for you, that can be very
difficult. No, seriously, it’s like Microsoft was,
with about 1,000 people, where the understanding
of the analytics, the bias towards action,
the understanding the different mixes of skill
sets that are required. It’s pretty exciting to go in. I spent this morning discussing
our pneumonia strategy, because there are some
partners here in Boston who are part of that strategy. It’s really fun to go through
the discussion about which paths we ought to take. So it’s– sure, there’s debate. But you have a lot of knowledge. You know, many of the
problems we work on, it’s amazing how little
has been put in to them. Like malaria, or
pneumonia, or diarrhea, or designing new toilets. It’s amazing how
little has been done. So you spend a lot of
time traveling the world, as does Melinda, meeting
with government officials. Is it ever hard to get a
meeting with a government official for you? Or are they always welcome
you because they think you’re going to bring a lot of money? They’ve been very nice. [AUDIENCE LAUGHTER] No, it’s great. The ability to take things
like their childhood death rate and get that higher
on their priority, you know, to have
them understand how they compare to
other countries, what it is about the way they
organize primary health care that’s not working. The way they normally
pick a cabinet, and the way democracy
normally works. The great injustice of
ill health, and the fact that that actually,
paradoxically, means they have very
high population growth, and therefore feeding people
and maintaining stability, is going to be very difficult.
That’s not part of their– people aren’t coming in and
educating them that on a day to day. But yeah, the access
has been super good. Once I wanted to go see Gaddafi,
and Melinda made me hesitate, and then he got killed. So I never got to see him. So, how do you deal
with the problem of wealth and your children? You have three children. So obviously, growing up as the
children of Bill and Melinda Gates obviously has some pluses
and some nonplusses, let’s say. How do you deal with
wealth, and how do you get them interested in
philanthropy as well? Well, it’s certainly
distortionary to have parents who are well
off, or just have parents who are well known. And you know, we’ve
said to the kids that the money’s going to
the Foundation, not to them. And so they won’t be– except if– What was their reaction to that? Well, every year they’re
thinking about that, and get to ask about it. You know, I don’t
think kids want that– I mean, partly
because they’ve been told that all along– but
I don’t think a kid ever comes in and says, yeah, I
should have $500 million. I should be able to sit around. I should be able to
buy a sports team. I mean, what the heck? In terms of your own
contribution to society, what you learn, you know,
go off, be a doctor. Go off, be a scientist. Go off, be a social worker. If you have this pile whose,
you know, sort of leverage of it being used
well kind of exceeds any individual
contribution, I think that would be a
very strange thing. And it’s not just
you who sees that. It’s your friends,
everybody around you. And, you know, you
kind of stick out. You’re not going to have to
ever worry about certain things. So we’ve said that to them. And, you know, they know
we’re quite sincere. They’ve had a chance to travel
the world and see these things. But we’re not saying
to them that they’ll have any role at the
Foundation, or they’ll have their own foundations. Nothing like that at all. But, now you’ve
decided to leave them some money, but a modest amount. Yeah, there’s this thing
about, you know, enough so they’ll never need
anything, but enough so they’ll have to work. That number probably
doesn’t exist. So you know, we’re
probably leaving them a little too much for
one of those goals, and too little
for the other one. So how do you compare the
emotional and intellectual excitement of building Microsoft
with the intellectual and emotional excitement of
solving the problems you’re dealing with now? Are they different? And what is more rewarding
for you, or has been? I think when you’re young,
the very hands-on stuff, where you’re writing
the code yourself, and you’ve just got to prove,
you know, do I understand this? Can I get this done? I think that’s just phenomenal. So I was very lucky to
have that experience. Then as Microsoft
got larger, my role was more indirect, in terms of
picking teams, backing teams, picking general directions. And so my role, when I left my
full time work at Microsoft, and what I’m doing now at the
Foundation is very similar. Now, the domains–
I have to understand vaccines, and northern
Nigeria dysfunction. So the problems– the specifics
on the problems are different. And that’s let me broaden
the kind of science exposure that I get, which I’ve enjoyed. But it’s pretty darn similar
to what I was doing in my 40s at Microsoft, what I’m
doing in the Foundation now. So you meet a lot of very
smart scientists now. Have you met some who you
say, these people are so smart that even I can’t
keep up with them? Oh, absolutely. The world is very specialized. You know, it’s like these
people who play bridge. I don’t care how
much general extra IQ you bring to the problem. You are not going
to catch up to that. And likewise, in all these
areas that the Foundation works. And, you know, there
are some people who just, when it
comes to the sciences, are really unbelievable. Now, it’s very fun to
have those people around. And part of the reason
I’m willing to learn a lot of science is, I know
if I ever get confused, there are people like Nathan
Myhrvold, [INAUDIBLE], I can just send mail
to them and say, hm, I’m a little
confused about this. Straighten me out. So you don’t ever feel like
you’re going to hit a dead end, in terms of your understanding. So do people come
to you all the time and say I’d like your
advice about something, but they really want your money? Have you ever had that? Yeah. You’ve probably done
that to someone. Not to me, you haven’t. Seriously. But yeah, sure. So how do you deal
with requests that are not in your core
areas of your foundation? People come to you, they
might be friends of yours, or they might be
other things that you might be interested in, but
just not your core areas. You just basically–
how do you learn to say no to all these requests? You must get an
incessant amount of them. Well, if it’s coming
from a stranger and it’s not in an area
the Foundation works, then it’s very easy to say no. You know, we don’t do cancer. It’s great that people do. It’s very, very important work. But we don’t. And, you know, so that’s easy. If it fits into the Foundation,
then because of our scale, we have a staff that can look
at things and really evaluate. You know, if anybody has
ideas about malaria, great. We look at every idea about
malaria in great depth. The tough thing is
when it’s people who you have relationships with. Friends, or people that
you’ve asked money for. Then you have to consider
it, and, you know, it’s probably wise to
set aside, you know, 10%, 15% of your philanthropy
for socially-related– and they’re not terrible things. Some of them are going to
be things you kind of go, oh, jeez. All right. So sometimes you do
make some exceptions. But let me ask you– Yeah, I’m not pure. What would you say is
the most exciting thing you have done with your money,
in terms of giving it away? What was– is there some
achievement that you’re really particularly proud of? I know it’s ongoing,
but is there one or two things
you would cite, and one or two things you
would say is a regret? That you wish you hadn’t
done with your money? Oh, what we’re doing
to eradicate polio, which, if we’re
lucky, by 2018 it will become the second
disease after smallpox to be completely eradicated. That is really exciting. And, you know, it’s
down to three countries. Nigeria, Pakistan, Afghanistan. And, you know, it’s complicated. I’ll meet on Monday with
the president of Nigeria, the president of Pakistan– you
know, we’re still very hopeful. That is pretty exciting. Because we’ve had to bring,
you know, satellite mapping, using cell phones,
better vaccines, and reaching out to
religious leaders– a lot of different
things come together. I’d say in terms of
what’s measurably been done, the work on
childhood death and childhood sickness, that’s what
we’re most proud of. And that’s largely been
done through vaccines. It would be great if our
education stuff worked. But that we won’t know
for probably a decade. If polio succeeds, then we’ll
take on malaria and measles in the same way. Try to go, in our lifetime,
for the eradication of those. So what would you like
to see as, ultimately, your business legacy and
your philanthropic legacy? Obviously, you’ve
got a long way to go. But if, today, you were to say
this is what I accomplished in business I’m most
proud of, and this is what I’ve accomplished today
in philanthropy, what would you say they are? Well, business is hard,
because, you know, Microsoft was a significant part
of the creation of the software industry, the personal computer,
which led to the internet. And, you know, there were many
other companies, some of them, you know– yes, Steve Jobs
did important work. But there’s, like, a lot
of other people, too. He and I were the
most prominent. But history always
kind of oversimplifies. You know, there were people
who did things that completely failed, but were very suggestive
of the right answer to fix, so– the competitive
dynamics leads to these– some of these markets. Winner take all, you
know, type results. You know, where today you’re
seeing Google, Facebook, and certain elements
benefit from those dynamics. So I can’t really characterize– you know, personal
computing, internet software, happened a little bit
better, a little bit faster. But you can’t really pull
out one individual’s thing. You know, even if you took a
company, if you said Microsoft, then there’s a much
bigger contribution. But even so, you know,
saying that trying to do some counter-factual
on that is very hard. So I don’t think you can
ever sum up a contribution. Why wouldn’t you say,
take a look at your life. You have a life that
most people would envy. A lot of money, a wonderful
family, very well respected. Successful in everything
you’ve touched. Are there any
regrets in your life? Can you make the rest of us
feel OK that something isn’t perfect in your life, and
you have some regrets, so we can just feel we’re more
simpatico with you in that way? No, I’m super, super lucky,
and I wouldn’t trade places with anyone close to my age. It’s been a lot of fun. You know, there’s tons of
things that I’m not good at. And so the question is always,
can I get somebody involved, you know– you know, certain day to
day management things, negotiating things,
political things. Scientific experts who
really do have the time to focus in on one thing,
like I did in my 20s, and just really, really
see all the possibilities. And, you know, I’m known for
being fairly tough sometimes. I think I’m mellowing. I’m more– trying to be more
generative in these things. So I have work to
do on those things. My wife always gives me good
feedback on those things. If you had not– if Microsoft hadn’t really
taken off, let’s suppose, have you ever thought what
you would be doing today, or what you would have
done with your life? In other words, suppose
Microsoft just turned out to be another software company
that didn’t make it– of which there were
thousands in those days– what do you think
you’d be doing now? Well, software is
pretty magical stuff. So even if I’d been consigned
to a pretty modest role in the software game– software
in the 1980 to even now– and we’re just at the beginning,
because speech, vision– you know, software’s
getting really good. And some great Holy
Grails of that industry that I sat and dreamed about
as a freshman here at Harvard, we’re finally making great
progress on those things. So even if I had had to
do a fairly small company, I don’t think I would
have ever felt like, oh, I should go be a lawyer– which my dad was. And when I was very
young, I originally thought that’s what I would do. Or a mathematician, which
has certain prestige, but very few people get
to contribute to it. So software– either
software research, or even having a modest
software company– I think that that– there are eras where
certain kinds of endeavors are having more impact. You know, it’s not
like I think, oh, I wish I’d been doing auto
engineering in the 1980s. I’m not trying to
denigrate the people who are doing auto engineering. But it wasn’t in a– an exponential, change
the world type mode. You know, today there are
certain things in biology, hopefully in energy, still
in the software IT space. So there’s more domains now
that are changing the world. So you know, young people have
more choices where they could– they could– and I’m
not saying economics– just in terms of their
IQ, having huge impact– there’s more choices today
than when I was young. So given the financial
success you have, and all the things
you have today, would you give them up for 10
additional years of your life? Let’s suppose you could
be 10 years younger, but you had to give
away all your money, but you know you’re going
to live 10 years longer and have good health in that. Or would you be happy
with where you are? I’d prefer 20. 20. OK. We can negotiate for 15. Yeah. Now, you’re obviously the
world’s largest philanthropist. But you’ve also
tried to proselytize a little bit on philanthropy
by starting The Giving Pledge with Warren
Buffett and Melinda. Can you explain what The Giving
Pledge is supposed to do? Well, it grew out
of a dinner that– Warren said, hey,
let’s go talk to people who are doing philanthropy,
and see how they got into it, what they like about it,
you know, what do they think about staff, or causes. And so we had,
actually, four dinners. And it was wonderful to
hear people’s passion, and the different things
they were working on. We weren’t trying to convince
them to give to our causes, and except for very
few cases, they were trying to convince
us to give to theirs. It really was just
sharing about giving. And at the end of
each of those dinners, people said, hey,
what should we do to maybe get other
people to start younger, or to feel less
isolated, that they could learn from each
other about this thing, and draw out a bit
more people in, because we think they’ll
feel good about it. And we talked about
a few constructs. So this idea of a pledge
to give more than half– that the very most successful
could come together in a group that had
done that, and learn from each other,
share experiences, positive and negative,
with each other– that sort of came into being. And amazingly, when we
first called around, I think we got about 35
people fairly quickly into it. You know, you join
fairly early on. And now it has been– it’s
a yearly get together, although there’s more
special learning sessions that people go to– about
three or four of those a year. I’ve met a lot of
interesting people. I’ve learned a lot. And, you know, I think
people are a little smarter, and starting a little earlier. So you now have a long
time to probably continue doing what you’re doing. But do you think you’ll
ever slow down and really, let’s say, relax in
a traditional sense? Or are you going to be driven
like this for another 10, 20, 30 years? Hopefully, I can stay at a high
level of intensity into my 80s. I’d like to. I don’t– you know, I’m
not very good at golf. But you did take up golf, right? Not really. I mean, I– I was out there
hitting the ball, but I never got
that good at that. You should try what I do,
which is miniature golf. It’s a lot easier. So have you ever
thought, when you do slow down, if you ever do
slow down, maybe in your 80s, you might come back to Harvard
to complete your degree? A couple of credits left. Well, I don’t know. I take a lot of college courses. The online free stuff has gotten
very good in these new moves where Harvard’s doing edX,
and there’s Coursera Udacity. But The Learning Company DVDs– now they have
streaming, finally. But, you know, Meteorology,
Biology, Geology, I highly recommend– you know, I just
took Oceanography last month. These are really,
really good courses. So it’s kind of ironic
that I’m a drop out, because I love college
courses probably as much as anyone around. Well, you’ve had
a remarkable life, and you’re obviously
a very famous person who’s attended Harvard. And Harvard is
very proud of you. And we very much appreciate
your giving us this time today. Thank you, Bill. Well, thanks.

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