The Revolution of Personal Computers: From Hobbyists to Billion-Dollar Businesses

Paul Allen and Bill Gates, high school friends, started a two-man software company called Microsoft 20 years ago. Today, Paul Allen owns the Portland Trailblazers basketball team, their Arena, and even the dancers, with a net worth of eight billion dollars. Bill Gates, on the other hand, is even richer than Allen.

20 years ago, Paul Allen, Bill Gates, and other young men invented the personal computer, sparking a revolution that transformed how people live, work, and communicate. The personal computer industry, which did not exist two decades ago, is now the third largest industry globally, between energy production and illegal drugs.

The accidental invention of personal computers by a group of nerds wanting to impress their friends led to a significant industrial revolution. This invention changed the culture of business, making history and shaping the modern world we live in today.

The founders of the PC Revolution, mostly middle-class white kids from Silicon Valley, revolutionized the industry from their garages. These individuals, driven by a passion for technology, played a crucial role in shaping the personal computer industry.

Tech enthusiasts like Edwin Chin, who started his interest in electronics and technology at a young age, continue to drive the PC Revolution. These individuals, often labeled as nerds, are passionate about technology and play a vital role in the evolution of the personal computer industry.

Some individuals have varying degrees of passion for computers, with different types of passion. For example, some people are deeply passionate about live databases and fifth normal form, considering it as their Nirvana and a driving force that motivates them every morning.

Despite being called a nerd by friends, the individual mentioned is unfazed by the label, stating that one should not let others hinder their dreams. In Silicon Valley, where aspirations revolve around becoming successful like Graham Spencer, Chief Programmer for Architects software, being labeled a nerd is inconsequential.

Graham Spencer, along with a group of six individuals who graduated from Stanford University, exemplifies the modern-day startup culture in Silicon Valley. Their company, Architects software, was founded based on mutual liking and camaraderie, reflecting the essence of many successful technology companies.

Technology companies like Architects software prioritize passion and dedication over traditional work hours. Employees are encouraged to work long hours, sometimes exceeding 80 hours per week, with a flexible schedule that allows for intense coding sessions and collaborative discussions even outside regular hours.

The coding lifestyle often involves consuming large quantities of caffeinated beverages like Coke, listening to heavy metal music, and working late into the night. The environment is characterized by a mix of stale pizza, body odor, spilled cola, and a relentless focus on writing code, with personal hygiene and social activities taking a backseat.

The allure of computer logic lies in its comprehensibility compared to abstract concepts like human emotions or cultural nuances. Computers process numerical data efficiently, requiring instructions in binary code to execute tasks accurately, making them ideal for handling quantifiable information while struggling with emotional nuances.

The evolution of computer programming from machine language to high-level languages like English words revolutionized the usability of computers. Grace Hopper's invention of a computer language that could be translated by machines marked a significant milestone, simplifying programming and enabling cross-compatibility among different computer systems.

In the early days of computing, users had to input binary code by flipping switches. The first programming language, Cobalt, was followed by languages like Fortran and Basic, making computing more user-friendly. Programming involved typing long lists of instructions into computers, which was the essence of programming and software development.

Mainframe computers were initially large and impersonal, housed in air-conditioned rooms at companies like insurance firms and banks. They were used to process data and sometimes led to confusion due to similar names. Computer terminals eventually appeared in schools, capturing the interest of some students, particularly those fascinated by the digital world of ones and zeros.

The microprocessor, a chip that revolutionized computing, allowed for the miniaturization of computers. Mainframes, once as big as garages, were now reduced to a single piece of silicon etched with thousands of transistors. Intel, founded 28 years ago, played a pivotal role in inventing the microprocessor, powering 85% of the world's computers.

Intel not only invented the microprocessor but also shaped the culture of Silicon Valley with a laid-back working style. The company's founders, including Gordon Moore, embraced an egalitarian approach where knowledge, not hierarchy, drove decision-making. Intel's microprocessors became increasingly powerful, eventually enabling the development of personal computers.

The personal computer revolution was sparked by a chip that Intel initially underestimated, seeing its potential only for calculators or traffic lights. Fortunately, others recognized its significance, leading to the launch of the world's first personal computer in January 1975. This event marked a pivotal moment in the history of computing, setting the stage for widespread adoption and innovation.

The Altair 8800 was the brainchild of Ed Roberts, an ex-Air Force officer from Georgia. Despite initial skepticism due to the grandiose nature of the idea, Roberts pursued the project. Lack of experience and age played a role in their belief that the project was feasible. The exhibit celebrates the 20th anniversary of the Altair, highlighting Roberts' pioneering spirit in building his own computer.

The Altair's introduction marked a significant shift in the accessibility of computers. Prior to this, computers were centralized and required permission to access. The idea of owning a personal computer and having the freedom to experiment with it was revolutionary. Despite being a computer kit that often didn't work initially, the demand for the Altair was immense, with people camping outside the company's premises eagerly awaiting their machines.

MITS, run by Ed Roberts in Albuquerque, New Mexico, faced financial difficulties as the calculator business was failing. To stay afloat, Roberts needed $65,000. Despite initial doubts, the Altair's success exceeded expectations, with 250 orders a day within a month of its introduction, far surpassing the initial estimate of 800 units sold in a year.

The Altair, the first personal computer, was a historic innovation despite its limited functionality. With no keyboard, monitor, or printer connections, it was primarily a front panel with switches and lights. However, in 1975, owning an Altair was a source of excitement and pride for early adopters, showcasing the growing interest in personal computing.

The Homebrew Computer Club, a gathering of computer enthusiasts, including Lee Felsenstein, met regularly to discuss their passion for computing. The club attracted individuals from various backgrounds, such as electronics, medicine, and radio amateurs. Despite the Altair's limitations, the club members saw themselves as innovative geniuses eager to explore the possibilities of personal computing.

Mellon and Harry Garland founded an early computer company to explore the potential of the Altair, which initially lacked a keyboard and required data input through tedious switch flipping. Programming tasks like simple addition required multiple switch manipulations, making data entry time-consuming and error-prone.

To transform the Altair into a practical tool, a programming language like BASIC was needed. However, experts believed that even BASIC was too large for the Altair's memory. The development of a BASIC interpreter was crucial to enable users to type programs instead of flipping switches, marking a significant milestone in the Altair's usability.

Paul Allen, 20 years after creating the first microcomputer BASIC, returned to Albuquerque with a $15 million jet and a three-foot red carpet to celebrate the event. His innovative work in developing a BASIC interpreter for the Altair showcased his foresight and technical prowess, challenging the notion that existing programming languages were too complex for microcomputers.

Paul Allen and his high school friend Bill Gates, inspired by a device in Harvard Square, recognized the potential for software development in the emerging computer industry. Their proactive approach to contacting potential clients and creating a BASIC interpreter laid the foundation for Microsoft's future success, demonstrating their entrepreneurial spirit and technical acumen.

Paul called up and informed that the Basic program worked flawlessly the first time, printing out memory size. This success was crucial for the future of Microsoft, potentially altering the course of the industry.

After the successful demo, Bill Gates decided to forgo finishing university to seize the opportunity in the emerging microcomputing industry. He joined Allen in Albuquerque, New Mexico, a hub for microcomputing research.

Bill Gates and Allen started Microsoft in Albuquerque, living in The Sundowner motel amidst a rough neighborhood with bars, gas stations, prostitutes, and drug dealers. They worked tirelessly, often with high school friends, in a crowded apartment.

The early Microsoft team, including Bill Gates, worked relentlessly, often through the night, listening to loud Acid Rock music. They were dedicated to perfecting the Basic program for the Altair computer, with Gates even sleeping on the floor of the software lab.

The Basic program allowed the Altair computer to be used for various purposes, from entertainment to serious work like writing games, word processors, and accounting programs. This led to the growth of a thriving industry for microcomputing enthusiasts by the end of 1975.

The early hobbyists, including Bill Gates and Allen, played a significant role in creating the PC industry. Their efforts laid the foundation for software, hardware, applications, and dealerships, shaping the industry's future growth and success.

To reach a wider market, a different vision was needed. The flower children of California, with their unique perspective and spirit, embraced the PC as a groovy innovation, paving the way for broader adoption beyond hobbyists.

The spirit of innovation, akin to that of poets over bankers, infused the products of the PC industry. This creative energy, inspired by the counterculture movements of the 60s and 70s, led to the development of products that resonated with users on a deeper level.

The counterculture movements of the 60s and 70s, represented by individuals like Jim Warren, significantly influenced the PC industry. Events like the West Coast Computer Fair provided a platform for the PC to gain recognition and thrive, shaping the future of Silicon Valley entrepreneurship.

Jim was immediately fascinated by the PC, influenced by the California counterculture that emphasized sharing and community. The Homebrew Computer Club fostered a spirit of collaboration where members freely shared knowledge and solutions, leading to rapid technological advancements in Silicon Valley.

Apple Computer was founded by Steve Wozniak, a technical wizard, and Steve Jobs, a visionary, who saw the potential of microcomputers as a business opportunity. The first Apple computer, a primitive device, was showcased at Homebrew meetings, leading to the formation of Apple as the first mass-market PC company.

Apple started as a quirky company founded by teenage hackers, with the first Apple computer being built in a garage. Despite its humble beginnings, Apple grew to have over 10 million users worldwide. The speaker, an early Apple employee, reminisces about being employee number 12 and recalls a missed opportunity to receive company shares instead of payment.

The Apple I, a basic circuit board without a case or keyboard, paved the way for the more successful Apple II. Recognizing a market for pre-assembled computers, Steve Jobs and Steve Wozniak aimed to create the first packaged computer accessible to software hobbyists. Despite initial skepticism, Wozniak's innovative chip design significantly reduced the complexity and cost of the Apple II, making it a versatile and user-friendly product.

In 1976, Steve Jobs sought venture capital to fund the production of the Apple I. He needed a few hundred thousand dollars for tooling and manufacturing. Arthur Rock, a prominent venture capitalist who had previously funded Intel, provided the necessary funding despite Jobs' unconventional appearance.

Over two years, Steve Jobs and Steve Wozniak transformed the Apple II from a hobbyist computer to a consumer electronics marvel. Jobs' emphasis on design led to the innovative use of a structural foam case, while Wozniak's engineering prowess reduced the number of chips in the floppy disk drive controller from 35 to 8, showcasing efficient engineering.

The Apple II was unveiled at the 1978 West Coast Computer Fair, captivating attendees with its sleek design and efficient engineering. Positioned prominently at the entrance, the Apple II stole the show, attracting dealers and distributors. This successful launch marked the beginning of Apple's rapid growth.

Following the West Coast Computer Fair, Apple experienced explosive growth, with thousands of customers flocking to their Cupertino office. Sales and profits soared, leading to a surplus of funds that the young founders, Steve Jobs and Steve Wozniak, struggled to spend. The success of the Apple II set a new standard for personal computers.

In the early days, the microcomputers market was dominated by hobbyists, often characterized by individuals with big beards controlling model trains. However, to be taken seriously, microcomputers had to transition to performing useful functions beyond just entertainment.

For microcomputers like the Apple II to appeal to a broader audience, they needed a 'killer application,' which is software so useful that people would buy computers solely to run it. The Apple II's killer application was VisiCalc, the first electronic spreadsheet.

VisiCalc was invented by graduate student Dan Bricklin and his programmer friend Bob Frankston. It originated from the concept of a grid of numbers on a Blackboard used for financial planning, demonstrating how changes in one value could impact others.

Dan Bricklin envisioned an electronic spreadsheet as a tool to replace tedious hand calculations by linking values together. This innovation allowed for automatic recalculations based on changes, preventing errors that could have disastrous consequences.

VisiCalc was launched in October 1979, priced at $100. Initially slow, it gained popularity rapidly, revolutionizing how people, both in business and at home, managed and analyzed numerical data. It provided a new level of efficiency and insight into financial planning and analysis.

The introduction of spreadsheets revolutionized decision-making processes, giving individuals the power to manipulate scenarios and make informed choices based on numbers. It transformed the business landscape, with the spreadsheet acting as a crystal ball for businessmen, answering critical 'what if' questions like firing departments or investing large sums of money.

Within five years, personal computers evolved from hobbyist toys to influential tools that shaped society. VisiCalc played a pivotal role in this transformation, propelling the Apple II to historical significance and sparking widespread excitement and media coverage about the potential of small computers.

Apple, initially a garage startup, emerged as a leader in the computer revolution, aiming to change lives significantly. Despite not achieving immense financial success compared to others, the founders prioritized making a positive impact on the world, which they considered a measure of true success.

Ed Roberts, the inventor of the personal computer, faced challenges as the market became competitive, eventually selling his company and pursuing a new career in medicine. Despite frustrations over others taking credit for his work, Roberts' contribution laid the foundation for the success of companies like Apple.

Upon Apple's public offering in 1980, Steve Jobs and others became multi-millionaires, symbolizing the triumph of 'nerds' in the tech industry. Jobs' personal wealth skyrocketed from over a million dollars at 23 to over 100 million dollars at 25, highlighting the rapid growth and financial rewards of the early tech era.

In 1975, personal computers were not owned by anyone, with only mock-ups seen on magazine covers. However, within five years, Silicon Valley saw the rise of a billion-dollar industry driven by a few adolescents' fascination with technology. Apple emerged as a dominant player, capturing 50% of the market.

IBM, known as 'Big Blue,' made a significant impact on the computer industry. While initially focused on mainframe computers for large companies, IBM's entry into the personal computer market required Silicon Valley nerds to engage with corporate America. IBM's culture emphasized loyalty, strict dress codes, and a conservative work ethic.

The evolution of the personal computer industry from a hobbyist pursuit to a billion-dollar business was remarkable. Initially driven by young hackers and hobbyists like Apple, the industry's transformation was largely influenced by IBM's entry into the market. IBM's structured corporate culture contrasted with the free-spirited ethos of Silicon Valley.

IBM's corporate culture was characterized by strict dress codes, loyalty to the company, and a focus on corporate responsibility. IBM employees, known as 'ibmers,' were conservative hard workers who valued mainframes and adhered to a nine-to-five work schedule. The company's culture was akin to a country with its own bureaucracy and unique traditions.

IBM's work environment was described as an 'Intergalactic HQ' with a culture more akin to a country than a company. With hundreds of thousands of employees, IBM fostered a bureaucratic structure and a distinct corporate culture. The company's emphasis on tradition, loyalty, and corporate values set it apart from the innovative and free-spirited ethos of Silicon Valley.

Upon attending his first class at IBM, the speaker recalls an incident where a gentleman checked if he was wearing garters, highlighting the conservative and meticulous nature of IBM's dress code and culture.

IBM's organizational structure was described as having committees to verify decisions, leading to a slow decision-making process but ensuring quality and preventing bad decisions. The speaker, a former IBM employee, compares decision-making at IBM to getting 400,000 people to agree on lunch, emphasizing the challenge of consensus.

An analysis revealed that IBM's processes were so thorough that it would take at least nine months to ship an empty box, showcasing the company's commitment to quality but also highlighting potential inefficiencies.

In response to the rise of personal computer companies like Apple in the late 1970s, IBM decided to enter the market. The Apple II was particularly popular for its simplicity and affordability, leading IBM to recognize the need to compete in this new segment.

Facing a crisis in the personal computer market, IBM's top management met in August 1979 to discuss their strategy. Bill Lowe proposed a radical approach of using open architecture and non-IBM components, challenging the traditional IBM way of doing things.

IBM decided to create a personal computer within a year, leading to the need for a central processing unit, a monitor, and a keyboard. Due to time constraints, they had to quickly assemble the components without extensive design.

A personal computer consists of electronic switches and requires both hardware and software to function. The two essential software components are a computer language for instructions (such as BASIC) and an operating system (like MS-DOS) to manage the computer's operations.

The competition arose between Gary Kildall, the creator of the CPM operating system, and Bill Gates, who supplied computer languages. IBM faced the decision of choosing between Kildall's Intergalactic Digital Research and Gates' Microsoft for their software needs.

Gary Kildall was described as a non-confrontational individual who focused on his projects and avoided conflict. In contrast, Bill Gates was known for his competitive spirit, drive, and willingness to engage in conflict to achieve his goals.

Bill Gates' competitive nature was evident from a young age, growing up in a competitive family environment where everything was turned into a game. This competitive spirit drove Gates to fight his way up from his upbringing to become a successful entrepreneur.

Growing up, there were various competitions like hearts, pickleball, and swimming at the dock. Winning had rewards while losing had penalties. For instance, a funny incident involved Bill showing off his jigsaw puzzle skills, completing it in four minutes despite the box suggesting a genius would take seven minutes.

Bill Gates' intense focus sometimes led to overlooking basic needs like bathing or changing clothes. In a situation where a demo crashed before an announcement, Bill worked all night to fix it, neglecting to take a shower despite desperately needing one.

The stage is set in California with Gary Kildall developing the best-selling PC operating system CPM, while Bill Gates is known for BASIC, the top PC language. IBM had to choose between them to write the operating system for their new personal computer, a decision that would lead to one's success and the other being forgotten in PC history.

In 1980, IBM reached out to Microsoft for a meeting, catching Bill Gates by surprise with their immediate visit request. Gates, along with Steve Ballmer, the only other person in the company with business training, quickly realized the significance of IBM's visit and prepared for the meeting.

IBM mistakenly assumed Microsoft had an operating system due to a product with CPM. When Microsoft clarified they didn't have the rights for CPM, Bill Gates promptly called Gary Kildall of Digital Research to arrange for IBM to obtain the necessary software.

IBM visited the headquarters of Digital Research in California, expecting to license an operating system. However, Gary and Dorothy Kildall, the founders, missed the opportunity by sending IBM away, showcasing a missed chance that could have changed the course of computing history.

IBM arrived at Digital Research with a non-disclosure agreement, causing a dilemma for Dorothy who refused to sign it. Legal scrutiny by Jerry Davis led to IBM's discomfort, highlighting the chaotic situation at the Victorian house in Pacific Grove where discussions ensued.

Digital Research failed to impress IBM during the meeting, leading IBM to return to Microsoft. Bill Gates seized the chance to secure the language business, realizing the significance of IBM's involvement in the PC industry.

Microsoft lacked an operating system for IBM but found a solution through Tim Patterson's operating system from Seattle Computer Products. This system, adapted from Gary Kildall's CPM, became the foundation for PC DOS 1.0, saving the deal with IBM.

Microsoft negotiated with Seattle Computer Products to acquire the rights to PC DOS for $50,000, securing the operating system crucial for IBM's PC project. This deal marked a pivotal moment in Microsoft's history, propelling Bill Gates and Paul Allen to immense success.

In the early days, Microsoft, a company managed by a 25-year-old named Paul Allen, acquired the operating system MS-DOS for $50,000. They then licensed it to the world for up to $50 per PC, resulting in 100 million personal computers running MS-DOS software and funneling billions into Microsoft.

In Southeastern Florida, the IBM PC was developed, and Microsoft, based in Washington state, joined forces with corporate America. This collaboration led to the successful launch of the IBM PC, which was a pivotal moment in PC history.

The introduction of the IBM PC revolutionized the computer industry, with analysts predicting a $100 billion industry. IBM's decision to sell thousand-dollar computers to millions of customers marked a significant shift in the market.

Lotus123, a spreadsheet software based on VisiCalc, became the killer app for the IBM PC. Its success led to immense wealth for its creators, with Lotus being valued at $150 million within a year of its launch.

IBM had forecasted sales of half a million computers by 1984, but they exceeded expectations by selling 2 million units in just three years. This success created euphoria in the industry, with projections soaring to 100 million units.

The IBM PC's success, powered by DOS, gave Bill Gates a vital foothold in the PC marketplace. While the initial deal with IBM did not bring significant revenue, it paved the way for Microsoft to license DOS to other manufacturers, leading to trouble for IBM in the long run.

In 1982, Rod Canyon and three fellow engineers from Texas Instruments sketched out a computer design at the House of Pies Restaurant in Houston, Texas. They decided to compete with the IBM PC by reverse engineering it to create a portable version. This involved figuring out how the IBM ROM BIOS chip worked, which was protected by copyright and IBM's lawyers.

To legally copy the IBM ROM BIOS chip, Compaq had engineers write a specification on how it needed to work through trial and error. They then engaged lawyers like Claude to navigate the legal complexities. The 'clean room' process involved hiring engineers who had never seen the IBM ROM BIOS to develop a new chip, ensuring legal compliance and avoiding contamination.

After 15 senior programmers spent several months and $1 million on reverse engineering, Compaq unveiled the portable computer in November 1982. Marketed as 100% IBM compatible, it became an instant hit, selling 47,000 units in the first year and generating $111 million in sales, setting a record. The success led to Rod Canyon enjoying the luxuries of Aspen, known for its expensive real estate.

Intel, the maker of PC's microprocessor chip, capitalized on IBM's success by selling chips to clone makers, making them smaller, quicker, and cheaper. This unprecedented trend of decreasing prices in the industry posed a challenge for IBM as competitors emerged, such as amstrad, AST, and Dell, who easily built clones with off-the-shelf components, impacting IBM's market share.

In 1985, market competition intensified as prices of competitive products dropped by about 30% every six months, leading to a challenging business environment for IBM. Clone makers, reliant on Microsoft's operating system, further squeezed IBM's profits, highlighting the rapid changes in the industry.

By the mid-80s, Microsoft, under Bill Gates' leadership, experienced significant growth with a vision of a PC on every desk running Microsoft software. Gates' dual role as an industry titan and top programmer led to the development of a unique corporate culture at Microsoft, attracting young talent and fostering camaraderie.

As IBM faced declining market share, they made a strategic shift by developing OS/2, a new operating system intended to compete with Microsoft. Despite the rivalry, IBM enlisted Microsoft to write the code for OS/2, showcasing the complex dynamics of their relationship and the competitive landscape of the industry.

The relationship between IBM and Microsoft was characterized by a culture clash. IBMers were seen as buttoned-up organization men, while Microsofties were viewed as obsessive hackers. This clash became more evident with the development of OS2, where IBM's focus on counting K locks (thousand lines of code) clashed with Microsoft's emphasis on innovation and efficiency.

In 1989, there was a significant amount of resources dedicated to working on OS2 by both Microsoft and IBM. However, after several meetings between Bill Gates and IBM, it became clear that OS2 was not going to be successful due to management issues. The negotiations favored Microsoft, leading to a conflict of business interests as OS2 was planned to undermine the DOS market, which was a major revenue source for Microsoft.

As a response to the challenges posed by OS2, Bill Gates poured resources into developing Windows, a user-friendly interface for DOS. Windows was seen as a way to maintain Microsoft's dominance in the operating system market. Despite IBM's reluctance to embrace Windows, Microsoft continued to promote it as the future of computing.

During a secluded reading retreat, Bill Gates made a pivotal decision that it was no longer in Microsoft's long-term interest to blindly follow IBM. If forced to choose between OS2 and Windows, Gates chose to prioritize Windows, leading to a divergence in the Microsoft-IBM relationship. Despite attempts to collaborate with IBM, Microsoft ultimately had to go its own way, which was a daunting prospect but necessary for their future success.

In early 1990, negotiations between Microsoft and IBM broke down as IBM refused to agree to a deal that would allow Microsoft to profit from Windows 3.0. IBM's insistence on taking over Windows led to Microsoft walking away from the deal. This marked the end of a once-promising partnership that had started in 1980, leaving Jack Sams, who initiated the relationship, to witness its disintegration.

The decision to end the 10-year IBM-Microsoft partnership was made, leading to IBM becoming an also-ran in the PC business. This decision marked the agreement to disagree on the future progress of OS2 and Windows, resulting in IBM not shipping any more products on Windows.

The decision by the fireplace to end the IBM-Microsoft partnership had significant consequences, turning IBM into a secondary player in the PC market. The Boca Raton, Florida birthplace of the IBM PC now stands deserted due to diminishing market share.

IBM reverted to its previous state as a profitable dominant mainframe computer company after losing ground in the PC market. Despite once dominating the PC market and setting industry standards, IBM faced a decline, possibly due to a faster, more flexible business culture.

Larry Ellison, a prominent software billionaire, criticized IBM for making a monumental mistake by being the first manufacturer and distributor of the Microsoft-Intel PC. He highlighted that IBM inadvertently gave away a significant portion of its market value to Intel and Microsoft, leading to missed opportunities and loss of market dominance.

IBM, once 3,000 times larger than Microsoft in 1980, now faces a reversal in fortunes as Microsoft surpasses it in value. Both companies have encountered antitrust investigations due to their monopoly positions. IBM's structured bureaucracy contrasts with Microsoft's more personal and driven corporate culture under the leadership of Bill Gates.

Bill Gates's leadership style at Microsoft emphasized a relentless drive to win and surpass competitors. Gates's fear of growing old and losing innovative edge led him to surround himself with smart individuals to maintain Microsoft's competitive edge. His approach focused on hiring the best talent to stay ahead in the rapidly evolving technology industry.

The tech industry's fast-paced nature means no company, including Microsoft, has a guaranteed position. Reflecting on IBM's decline, Bill Gates acknowledges the need to constantly innovate, move fast, and embrace new ideas to stay ahead. The importance of staying agile and proactive in the face of industry changes is crucial for sustained success.

In 1990, Microsoft developed a groundbreaking version of their software system that surpassed all competitors, a project that had been in the works for years. The idea for this software came from Apple, specifically the Macintosh, which aimed to create the first user-friendly PC in 1984.

By 1980, Apple had become the largest PC manufacturer globally, leading to IBM launching its own PC in 1981. Despite being built on similar technology, IBM's PC was a massive success, sparking the era of PC clones. However, the user experience with PCs was still lacking, prompting the need for a revolutionary change.

On August 24th, 1995, in Seattle, Bill Gates unveiled Windows 95, marking a significant milestone in the PC industry. Gates envisioned Windows 95 to revolutionize computing, making it faster, easier, and more enjoyable for users. The launch was a culmination of a seven-year effort to bring a user-friendly operating system to PCs worldwide.

Windows 95 was hailed as a major improvement in PC technology, making computers more visually appealing and user-friendly. Despite being based on ideas from two decades prior, the software's launch represented a culmination of years of hard work, strategic decisions, and the ability to capitalize on opportunities by Microsoft.

The evolution of personal computing from the early days of complex machines to the user-friendly interfaces of Windows PCs showcased a significant shift in usability. Microsoft's ability to make graphical user interfaces their own demonstrated a strategic prowess in the industry, emphasizing the importance of user experience in technology.

The program focuses on the development of graphical user interfaces (GUI) for personal computers (PCs). The battle to make PCs more user-friendly took 10 years, with Bill Gates becoming the Master of the GUI universe and a gazillionaire.

In 1971, Xerox established the Palo Alto Research Center (PARC) in Palo Alto, south of San Francisco. The goal was to create a paperless office of the future due to the fear that reading computer screens instead of paper would threaten Xerox's business.

PARC fostered an environment of intellectual freedom and creativity. Bob Taylor led the computer science lab, providing researchers with unlimited resources and protection from commercial pressures. The atmosphere was electric, challenging conventional wisdom and encouraging new ideas.

The Xerox Alto computer, built around 1973, is considered one of the first personal computers. Although not for sale and costly, it laid the foundation for modern personal computers like the Macintosh and Windows. The Xerox Alto featured a graphical user interface (GUI) and was connected via ethernet, a pioneering computer network.

Despite groundbreaking innovations, PARC researchers struggled to convince Xerox management of the potential of their technologies. There was a significant mismatch between the researchers' vision for the future of computing and the company's understanding. Management in New York failed to grasp the revolutionary technologies developed at PARC, leading to missed opportunities.

A few miles down the road from Palo Alto, Steve Jobs, known as the most dangerous man in Silicon Valley, shared his vision for changing the world through personal computers. With sheer force of will, Jobs led the personal computer industry by making it follow his direction, driven not by profit but by a holy war for greater computing.

Steve Jobs, a figure of charisma and high standards, co-founded Apple Computer in 1976. He was relentless in pushing people to be great and create greatness, even if it meant being obnoxious due to his uncompromising standards.

In December 1979, Steve Jobs visited Xerox Park and was shown a graphical user interface that left a lasting impression on him. Despite flaws in the demonstration, Jobs saw the potential for all computers to work similarly in the future, leading him to adopt this approach for Apple.

During the visit to Xerox Park, Apple programmers were introduced to a mouse and graphical user interface (GUI) running on an Alto machine. This innovative design allowed for easy operation and a friendly user experience, inspiring Apple to adopt a more graphical approach to computing.

Steve Jobs, after being ousted from the Lisa project, realized the urgency to innovate at Apple as the Apple II was becoming outdated. He then took over the Macintosh project, inspired by Jeff Raskin's idea of a user-friendly $600 computer, codenamed Macintosh.

Steve Jobs recruited John Scully, a Pepsi Cola executive, to be the CEO of Apple, aiming to have a respectable figure to appeal to Corporate America. Scully was initially hesitant but was swayed by Jobs' vision to change the world.

The young Mac team, with an average age of 21, embarked on the challenging task of developing the Macintosh under Steve Jobs' relentless pursuit of perfection. Jobs pushed the team to deliver a revolutionary product that would change the PC market.

Steve Jobs emphasized perfection in the Macintosh project, even down to boot-up time. He motivated engineers by highlighting the impact of shaving off seconds in boot-up time, illustrating the importance of attention to detail in creating a superior product.

By early 1983, Apple faced tough competition from IBM, whose PC had become a market leader. IBM's success was driven by software compatibility and a large user base, posing a significant challenge for Apple's Macintosh to compete effectively.

To ensure the success of the Macintosh, Steve Jobs recognized the need for killer applications that would attract users. He sought the expertise of Bill Gates, the founder of Microsoft, to develop software that would make the Macintosh a compelling choice in the market.

Steve Jobs discussed the development of the Macintosh with Bill Gates at an industry conference, expressing his intention to focus on the graphical interface machine at Apple. Jobs organized an event called the Macintosh software Dating Game to generate excitement among software developers.

Microsoft started working on Macintosh software in early 1982, even before completing their work on the IBM PC. Bill Gates signed a deal with Apple to provide bundled applications for the first Mac, marking Microsoft's entry into the applications business.

While Bill Gates had a graphical user interface (GUI) revelation, Steve Jobs viewed IBM as Apple's main rival. Despite Jobs' showmanship, the IBM PC was impacting Apple's business, leading to concerns about Apple's future in the industry.

The Macintosh team, seen as Apple's Pirates, faced pressure to save the company as the Apple II lost market share. After delays, the Mac launch date was set, with Steve Jobs emphasizing perfectionism in design. The launch event on January 24th, 1984, was crucial for Apple's future.

The fate of Apple hinged on the success of the Macintosh launch, following the failure of the Lisa. John Sculley approved a $15 million advertising campaign for the Mac's unveiling, underscoring the significance of the event for the company.

Despite a disastrous rehearsal, Steve Jobs showcased his mastery as a showman during the Macintosh introduction. He highlighted the significance of the Macintosh as a milestone product in the industry, emphasizing its innovation and impact.

Steve Jobs was introduced as a father figure to the Macintosh, with the presenter highlighting Jobs' pride and happiness in launching a revolutionary product.

The Macintosh's success was attributed to a team of individuals with diverse backgrounds such as musicians, poets, artists, zoologists, and historians, who were also top computer scientists, contributing to its innovative design.

The Macintosh was marketed through a Hollywood-style TV commercial that portrayed it as a friendly alternative to the clunky IBM PCs, symbolizing freedom from oppressive technology.

Despite initial hype, the Macintosh faced disastrous sales by late 1984 due to its higher price of $2500, limited software applications like Mac Paint and MacWrite, and lack of essential business software like spreadsheets and word processing.

The Macintosh lacked a killer application like Lotus 123 for IBM PCs, leading to declining sales as users realized the importance of software functionality over ease of use.

John Warnock's invention of laser printing technology, inspired by Xerox Park, revolutionized desktop publishing by enabling precise printing of computer screen images, leading to the birth of a new business market.

The success of desktop publishing came too late for Apple's founder in 1985 when Mac sales were still flat. Despite this, Steve Jobs refused to believe the numbers and behaved as if the Mac was a hot seller from the start. The gap between the grandiose plans for Macintosh and its actual performance was significant, leading to the need for intervention.

John Scully, seen as Steve Jobs' own creation, presented a strategy to save Apple to the board. The plan did not include Steve Jobs, prompting a decision by the board to move forward with Scully's plans, leading to Jobs' departure from the company.

After Steve Jobs left Apple, the company experienced its most profitable years. Despite mixed feelings within the company due to Jobs' leadership style, there was both relief and worry about the company's future without Jobs' vision, charisma, and drive. Apple never fully recovered from losing Steve Jobs, as he was considered the heart and soul of the company.

The years after Steve Jobs left were the most profitable for Apple, with a median age of 27 among employees. The company adopted a California lifestyle, making the computer industry more vibrant and appealing. However, there were concerns about the excessive focus on a youthful and carefree culture.

Apple arrogantly assumed consumers would always pay a premium for their products, but faced competition from IBM and Microsoft. Bill Gates recognized the threat of Apple's GUI and developed Windows to defend the DOS franchise. This move by Microsoft posed a significant challenge to Apple's dominance in the computer industry.

In the early days, there was a strong belief at Microsoft that betting on graphic user interface (GUI) was crucial. The development of GUI started with Macintosh and then Windows. It was a challenging and frustrating struggle for Microsoft to find a GUI solution that could rival the Mac.

Teams at Microsoft worked tirelessly in windowless offices to build Windows. Despite facing numerous obstacles, including multiple versions and years of effort, Windows gradually improved. By 1990, Windows had evolved significantly, although initially it was considered inferior to the Mac.

Apple sued Microsoft, alleging that Microsoft had copied the look and feel of Apple's GUI. This led to a five-year legal battle, with Apple claiming copyright infringement. The case was a precedent-setting one, with Microsoft's entire strategy hinging on the outcome. Ultimately, Apple lost the case, but it created a period of complacency for Microsoft.

The launch of Windows 3 in 1990 marked a turning point in the GUI Wars, effectively ending Apple's hopes of dominating the market. Windows 3 sold close to 30 million copies within a year, overshadowing the Macintosh and establishing Microsoft's dominance in the market.

Bill Gates' strategy of focusing on creating an open system that could be adopted by other companies proved to be a successful business approach. Despite criticisms of Microsoft's lack of taste and innovation, Gates' vision of making Microsoft software the industry standard prevailed. The success of Windows solidified Microsoft's position as a dominant player in the industry.

Steve Jobs expressed disappointment in Microsoft's lack of original ideas and cultural influence in their products. He criticized Microsoft for not incorporating proportionally spaced fonts and beautiful design elements, attributing these innovations to the Mac. Jobs acknowledged Microsoft's success but lamented their production of what he considered to be third-rate products, suggesting that Windows could have been more innovative if not for the partnership with IBM.

Bill Gates discusses Microsoft's focus on clear leadership and continuous improvement in operating systems. He mentions the company's responsiveness to customer feedback, highlighting advancements in applications and user interfaces over the last decade.

On August 24, 1995, Bill Gates introduced Windows 95, a groundbreaking product that combined the PC's operating system and graphical interface. The global promotional campaign, costing $300 million, aimed to establish Windows 95 as the industry standard, surpassing Microsoft's previous operating system, DOS.

As PCs become interconnected on the emerging information superhighway, Bill Gates faces new challenges in adapting to digital convergence. The internet's rapid evolution poses uncertainties, with Gates acknowledging the unpredictable nature of the industry standard in this dynamic landscape.

Bill Gates expands Microsoft's reach by forming alliances in various industries, such as investing in Steven Spielberg's DreamWorks studio and venturing into cable TV with NBC. Gates' strategic moves reflect a proactive approach to diversification and competition in evolving markets.

Larry Ellison, CEO of Oracle, emerges as a formidable competitor to Bill Gates, envisioning a future where the internet disrupts traditional PC usage. Ellison's focus on software for information sharing among businesses signals a shift towards collaborative technologies, challenging Microsoft's dominance.

Larry predicts the PC will be replaced by a cheap device called an Information Appliance, which will access information and computing via the internet. He envisions a future where connecting to giant computers through the internet will be as easy as turning on a tap, rendering the PC obsolete.

Larry expresses his disdain for PCs, highlighting the cumbersome process of buying software like Windows 95 in physical stores. He criticizes the need to drive to a store, purchase a CD-ROM, read a manual, and install software, contrasting it with the simplicity of accessing information online.

Larry expresses his love for the internet, emphasizing his desire for information to flow seamlessly across the wire. He appreciates the convenience and immediacy of accessing information online compared to traditional methods of purchasing software.

Larry acknowledges the contribution of the nerds of the 70s in laying the foundation for the internet and modern computing. He highlights the importance of recognizing the pioneers who made advancements in technology, regardless of the survival of the PC.

Steve Jobs, despite facing setbacks, has made a fortune from his stake in a movie animation studio. He reflects on the positive reception of the Macintosh by users and the emotional connection people have with Apple products, emphasizing the impact of his contributions to humanity.

Apple, once a leading force in the PC marketplace, is now facing challenges and is considered a fading force. The company's co-founder, Steve Wozniak, now focuses on teaching computing to young students, showcasing a shift in priorities and interests within the tech industry.

IBM, a key player in creating the mass market for PCs, no longer sets industry standards. Many original IBM PC developers have left the company, indicating a changing landscape in the tech industry. Ed Roberts, who built the Altair, the first PC, transitioned back to medicine, showcasing the diverse paths taken by pioneers in the industry.

Despite initial surprises, Microsoft has become highly successful, with numerous millionaires and billionaires. The tech industry's growth and success have exceeded expectations, demonstrating the unpredictable nature of technological advancements and societal adaptation.

Cringley's universal law suggests that society takes around 30 years to fully integrate new technology into daily life. The PC has had 20 years of development, indicating a potential shift or evolution in technology in the near future. The speaker expresses curiosity about what the next 10 years will bring in terms of technological advancements.