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Mr Ballmer, thank you very much for joining us today.
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For the first view from the top.
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>> Speaker 2: Steve, you've got to be Steve.
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[LAUGH] I'm wearing a tie.
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>> Speaker 2: Mr Decker please, sir, open with the first question.
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[LAUGH] >> Speaker 1: Many of the prevailing trends in your markets, such as advertising, supported software, software as a service, open source, mobile platforms run counter to Microsoft's traditional strengths.
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What steps are you taking to prepare the company to compete in this new marketplace?
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>> Speaker 2: Yeah, let me kind of give my characterization of the phenomenon, and you can kind of apply it in a lot of different businesses.
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Are businesses able, willing and capable of embracing new approaches or not?
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They could be new business models, new technology approaches, or do companies get so sort of calcified in the way that they've built their initial success that they can't keep moving and growing?
1:02
That's a generally interesting question to ask.
1:05
It's more interesting to ask probably in technology businesses because the number of times that the loop changes and you get a tectonic shift is probably higher in tech than it would be.
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Say at Procter and Gamble, where AG would tell you they've had four tectonic shifts.
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But they're still selling the same soap basically that they were selling when I worked there.
1:28
And there is a lot of change in transition.
1:30
And one of the things that as a company and as a sort of in the culture of the place is we said, look, what we're good at is building software and commercializing it.
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And unless we're willing to sort of push, push for new models of software delivery can be embedded in a phone, it can be distributed from the Internet.
1:53
Unless we're willing to embrace new models of software commercialization, we've already gone through a couple of these tectonic shifts.
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People will say, well, you've got your model.
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The truth is, no, we grew up on a model of licensing software to people who made computers.
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And then it took us years to build up the capability to sell through retail, and then it took us more years to build up the capability to sell through enterprises.
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And now we're building up the capability to monetize through advertising or through subscription or through embedding in a phone or television set.
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And will we be successful?
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The proof's in the sort of the execution.
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And yet I think culturally we are more committed and more sort of focused on embracing these, both technology and business shifts.
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And we just say that's part of what we have to do because the model is going to morph anyway.
2:50
And we'll see, we'll see how we do with this one, everyone, you get a chance to come up to bat again and prove you can do it and prove you can change and grow.
3:00
And we're up to bat again.
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The good news, depending how you look at it, or the bad news, is take advertising.
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We're the third largest seller globally of online advertising.
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I don't know what I'd tell you if we were the fourth, but we're the third and we're not the second or the first.
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So we're not, you could say relative to everybody on the planet except Google and Yahoo, we've learned a lot.
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And yet compared to the two guys that we benchmark again, we still against, we still have a long way to go.
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But we're pushing and growing and changing all the time, and that's part of our culture.
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>> Speaker 1: And for you, what are the specific leadership challenges associated with embracing that change while also managing these huge businesses that are legacy assets.
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And may not be changing as quickly?
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>> Speaker 2: Despite my kind of statements about culture change, you still have to, you have to preach.
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You've got to embrace, you've got to push every one of these things.
3:55
Whether it was the Internet 10 or 15 years ago, the move to software plus services, you can get people who otherwise will be too cautious.
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They'll say, well, we don't know what we don't know. There is unknown.
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There's known in what we're doing. There's unknown in that.
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Let's not move whether that's technological unknown.
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I would say our engineers generally embrace the unknown.
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Engineers, there's sort of almost an engineering culture in any good company.
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I would bet the engineering culture is different from the sales and marketing culture.
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I joke with our engineers that the prevailing culture is everything is always screwed up, but I personally can fix it.
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That's our engineer skill kind of modus operandi.
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So when you say, okay, there's something new, that culture actually is quite, quite good.
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But then you got to get the business people to also want to say, and I embrace the fact that while there may be risk, I embrace the fact there's also opportunity.
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And the scorecard of business people shifts.
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It's a little bit different than the scorecard of the engineering culture.
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So what we have to do to drive that from a leadership side is a little different on the business side. You got to push.
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I find myself more involved not in micromanaging, but trying to articulate kind of philosophy and principles.
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Because everybody's always trying to otherwise manage to we don't want to change our model, we want to leave everything alone.
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We don't want to sort of go aggressive on price or whatever the case may be. So you got it.
5:29
You really do have to push the agenda.
5:31
Even a place that's got a culture on both the engineering and the business side, that's pretty good about that.
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>> Speaker 1: You mentioned that tension between the engineers and the business people.
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Has the culture changed some such that the business people today have more influence than maybe they did 10 years ago, or is it still very much an engineer?
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>> Speaker 2: Well, I would say we've been very much both for a long time and I'd say we're still very much both.
5:55
And you could say, come on, you got to be kidding about that. Come on, what? Give me the secret. What's the dominant one?
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And the truth of the matter is the company was in effect, I won't say it was born, but it grew up on a partnership between Bill Gates and me.
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And I represented part of the culture and Bill represented the other part of the culture and Bill is a technical person who can see business issues.
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There's no question Bill's as great a business mind, frankly, as he is a technology mind.
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And I grew to really understand and be sympathetic to and really grok the engineering culture.
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But we sort of grew up kind of with what I would call icons of both sides.
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And so I think you find good, strong muscle both on the, I'll call it the go to market side, sales, marketing, etc, as well as on the engineering and development side.
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>> Speaker 1: Given that Microsoft touches so many markets, industries, technology, platforms, geographies.
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As a leader, how are you cutting through that complexity when tracking your own performance?
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>> Speaker 2: Well, that's interesting.
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Last week, last week I did my annual review with our board of directors. So I guess it's. >> How'd that go?
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I hope the view from the top goes at least as well. Fair enough.
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[LAUGH] We have such a breadth.
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You have to say, what are the important dimensions?
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Is it how we're doing today?
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Is it how we're doing tomorrow?
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Of course, it's got to be a balance of those two things, our earnings and revenue and profit.
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Frankly, I think you'd be hard pressed to find any company in the world that's had the performance we've had over the last six or seven years.
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And yet, of course, doesn't reflect itself in our share price, which has been absolutely flat.
7:40
Our earnings per share are up over the last five years, over 100%, and our stock price would be flat.
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That's an interesting factoid.
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Well, it just tells you there's got to be balance.
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How much of it is about where you're going strategically versus what you're delivering today?
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How much is about success in your.
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Existing businesses and how much I think part of the reason why people look at us, they say, what are you really doing in online and mobile?
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Your strength is elsewhere.
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So you got to get things moving in the new and the old.
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The things that you haven't done before, the things that you have done before, we have so many different pistons.
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I mean, at the end of the day, I think there's sort of two big things people will look at.
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I mean, at least the people who evaluate me, which is, do we deliver the goods day in and day out?
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Because if you don't, the fact that you look good for the future probably isn't that important because you'll never reach the future.
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And then the second question is, on the big transitions and big trends, how are you doing.
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Now, you could say, are you doing all right in China?
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And I'd say, well, in a way we're doing great.
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We've got the highest market share the company has in the world in China.
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And then I also tell you, nobody ever, essentially the number of people who pay us for our stuff surrounding error.
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That's partly why we got the market share that we do.
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>> [LAUGH] >> And it's not a feature exactly.
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>> [LAUGH] >> But you take a look at all that and you say, that's a big and important opportunity and we need to do better.
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But maybe in the grand scheme of things, the quality of the team, today's performance and the way things look strategically in terms of the engineering pipeline for the future, those are really the three big dimensions.
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>> Speaker 2: And do you have an actual management dashboard or some other way of gauging key metrics?
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And how many numbers are you looking at? Is it ten? Is it very small?
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>> Speaker 1: No, it's not ten, it's a lot more than ten.
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>> Speaker 1: It's a lot more than that.
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>> Speaker 1: It's a lot more than ten.
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I mean, we have a, we call it our Senior Leadership Team scorecard.
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And it's got 30 things on it.
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And we look at the 30 things on a regular basis.
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And some of them are not numeric.
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I mean they're, how are we doing resolving key strategy issues around topic X or Y?
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And we're keeping our red, green, yellow, little thing going.
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Even our board says, do you really have 30 priorities?
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And of course, we don't have 30 priorities, but there are 30 key indicators of how we're doing and we better have somebody in the company for whom every one of those 30 things is a priority.
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And it's part of the transition you make when the company goes from being really in one business to being in multiple businesses.
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And it just means that if you're going to perform well, you got to perform well more broadly.
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So yeah, we got 30 things we look at.
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The scorecard forms the basis for my review.
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Some of the things are innovation based, some of them are employee development and excellent base, some of them are innovation based, some of them are kind of marketing and image based.
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But those would be the kind of the big buckets.
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>> Speaker 2: You spoke a bit to the evolution that the company has gone through over many years and you've been there since very early, obviously.
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How have the leadership challenges evolved for you since when you got there in the early 80s.
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>> Speaker 1: In a way it's almost like two completely different universes.
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What it takes to be a good leader of a 30, 40, 50, hundred person organization is different than what it takes to be the good leader of a thousand, two thousand person organization in a single business, is different again than what it takes to be the leader of a, we're actually closer to 90,000 employees now person company.
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That's in numbers of businesses.
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What you do, how you spend your time, how you think about things. Completely different.
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I mean there was a day when I would have said I run the business.
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I feel like, I don't run our business.
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I hope the guys who are running our business are running our business.
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>> [LAUGH] >> And I better hold them accountable for.
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But running the business sort of says every day you got your hands, you're moving levers.
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That's not what I'm doing.
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I'm picking people, I'm picking strategies, I'm spending my time, I'm doing a lot of external representation.
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But day to day, who's going to make, there's a few big calls that would pop out, but who's running every day our enterprise business? It's not me.
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And yet I would have told you even as recently as four or five years ago, I would have felt like I had my hands on many more of our businesses.
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But when you get as diverse, you got to recraft and rethink your role.
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So today I don't feel like I operate.
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When you're 30 people, man, that's all you do, is operate and then there's kind of a variety of phases in between.
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>> Speaker 2: So what was the toughest part of that transition for you?
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Going from the hands-on operator to your current role?
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>> Speaker 1: My natural personality is more the hands-on operator than, I just love, give me details, give me things to handle, handle, handle.
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I mean- >> [LAUGH] >> And it's different.
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It doesn't make it better or worse, it makes it different.
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And so really, I think if you talk to folks, they wouldn't exactly use the word micromanager, but I like detail.
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>> [LAUGH] >> Speaker 1: That math tournament thing comes back to play.
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But, so really the question is, and I can't even pretend.
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Our business is diverse enough, I can't know enough in depth to really try to figure out what we should do if I don't agree with the guys who are running the business.
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I have to raise questions, I've got to hold people accountable.
13:35
There are big parts of our businesses that have been around longer that I know better.
13:39
I know the Windows business very well.
13:41
I have a better opportunity to really provide input and change.
13:46
But look, I know the advertising business, but I'm not, I've never operated our advertising business.
13:51
So it just puts you in a different role.
13:53
And it's not a mistake, you can't have a single human being who I mean, we can't do it on the technical side either.
14:01
Ray Ozzy needs to know what links our business technologically, but will he really be in depth in every one of the businesses we're in? It's just nonsensical.
14:10
You've got to really delegate and trust people.
14:13
>> Speaker 2: So speaking of those people that you trust to be at the controls every day, what processes do you have in place to retain those employees outside of compensation, obviously.
14:22
But they're clearly targets every day to be picked off by other technology companies or move down the Silicon Valley, whatever it may be.
14:28
What are you doing to keep those people?
14:30
>> Speaker 1: Well, keep housing prices down, high up here. But no, I'm teasing.
14:36
Truthfully, we get very little, I'll call it poaching of our senior most people, extremely low levels of poaching of our top thousand or so people we call our partners.
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That doesn't mean it doesn't happen occasionally, but very low.
14:54
And these are generally people been with us a long, [COUGH] excuse me, been with us a long time, have a lot of loyalty, really believe in the business.
15:04
Occasionally somebody, [COUGH] occasionally somebody will want to leave different kind of opportunity.
15:10
And usually they'll talk to me a long time in advance.
15:13
And we had a fellow leave recently to come be CEO of Juniper.
15:17
And he had talked to me for a year about, or more about, hey, I might really want to be a CEO someday.
15:23
And I told him why [LAUGH] I didn't think that was all that exciting.
15:27
>> [LAUGH] >> But hey, if that's what eventually that was what he wanted to do and you move forward.
15:34
Frankly, what I would call the retention issues are far more dramatic, kind of in the next band of people, the people who are sort of up and comers, maybe.
15:46
What would I say, four years to ten years into their career.
15:52
That's where we have sort of the most work we have to do.
15:55
And you got to make sure you're giving people opportunity as fast as they can take it.
15:59
You got to You gotta make sure you're giving people rewards and compensation as fast as they can take it.
16:05
At the senior levels, the real issues are how do you mold things so that people all feel like they have enough individual autonomy and authority and yet the whole is bigger than the sum of the parts.
16:18
I'd say that's the number one challenge in what I might call that top thousand type group.
16:22
>> Speaker 2: And how much of your time are you spending developing those people, those top thousand, focusing on them, figuring out their next role.
16:31
And realistically, it's probably not a thousand folks that you're daily dealing with, but how much your time goes to that.
16:37
>> Speaker 1: I'd say there's probably about three or four hundred people.
16:39
I really feel like I can have and should have some real involvement in helping shape what they do next.
16:49
And that happens in a variety of ways.
16:52
Once a year we do a big day or two days per business where all we do is talk about the strategy.
16:58
And then we talk about the key people and how we apply the key people to the strategy and how that shapes going forward big exercise.
17:05
I do one on ones with my directs roughly monthly, depending on the business.
17:10
Turns out that all the time in one on ones or most of the time in one on ones is actually about people.
17:15
Because most of the time that you want to talk about strategy, you actually want to have a broader set of people than not.
17:22
And so you don't tend to do the strategy discussions as much in the one on one you tend to do people stuff.
17:26
So you could say there's another 12 times 10, 120 hours or so a year where we talk about people.
17:34
I was just at an off site.
17:36
We do four off sites a year with our senior leadership team.
17:40
We spent probably four hours talking through people as a team.
17:45
So I would say it's a lot.
17:48
We have a review process, anybody's going to get promoted beyond a certain level.
17:52
We talk about the people as a senior leadership team.
17:55
So it is a huge part, picking, choosing, developing.
18:01
We do what we call a strategy conference three times a year.
18:04
We bring people who are up and coming in various different capacities in their careers.
18:09
We bring them together, we spend a day and a half getting to know them, talking about what's going on, hearing their views on strategy.
18:16
So nurturing, developing the top talent.
18:21
I would say probably for me it winds up being the number one thing I spend time on.
18:29
>> Speaker 2: Switching gears a bit to a very recent public event for Microsoft.
18:35
What key capabilities were you hoping to bring in house with the Yahoo deal?
18:40
And how do you plan to build those capabilities now that the deal isn't going through?
18:44
>> Speaker 1: 20% search share, I'm actually dead serious. I deadpanned it for fun.
18:52
But the truth of the matter is we've got very good people.
18:56
Yahoo's had good people, that's not really the issue.
18:59
But you don't spend $40 billion or whatever the amount would have wound up being.
19:04
You don't spend that to buy capability, you actually spend it to buy position in the marketplace and with customers.
19:12
The search advertising market actually is a very unusual market because it is an auction marketplace and because the advertising isn't an add on to the product, it's a fundamental part of the product.
19:27
So when you look at a search page from us or from Google or Yahoo, there's probably three things that you use to evaluate the quality of the results.
19:37
One is what we pump out algorithmically and generally put on the 10 blue links as we call them on the lower left side.
19:45
We have absolutely great plans to catch, surpass, etc.
19:49
The user interface probably needs a revamp, it never changes.
19:53
Because we're not the market leader, it's probably a little easier for us to play with that than it is the market leader.
19:58
The second thing you evaluate is the relevance and quality of the advertising.
20:03
Well, it turns out that if you want to have more relevant ads, you actually have to have more advertisers bidding on more keywords.
20:10
The more advertisers that bid on the more keywords they bid on, the more you can pick and choose exactly the right ad.
20:16
But the ads are part of that user experience because we have 10% and Yahoo has 20% and Google has whatever and this is the US outside the US Google has more 60 odd percent.
20:29
What you get is a world in which there's more bidders bidding on more keywords in the Google system.
20:33
This is nothing about technology capability, blah blah blah.
20:36
It's just the fact of the matter is you deliver better results.
20:40
And by the way, because they have more bidders on more keywords, they also have a chance to make more money.
20:44
So it's both a product quality issue and a monetization opportunity.
20:49
If you can get more critical mass of users, so you get more critical mass of advertisers.
20:54
And so when you ask me what were we trying to get, we were trying to get 20%.
20:58
There are other great things in Yahoo, but number one is 20% search share in the United States.
21:03
The third part frankly of the search page is the brand.
21:07
You show the same results absolutely side by side and you put the brand of the market leader on it, people are going to rate the same results higher.
21:16
You would expect that proves marketing and brand means something, people rate them higher.
21:21
So we have some work to do on brand that probably was not solved by the Yahoo acquisition.
21:26
But in terms of monetization and ad relevance, getting Scale Microsoft and Scale Yahoo together was kind of at the core, I would say, of that strategy.
21:37
>> Speaker 2: So assuming that that deal can't be revived, what do you do as Microsoft?
21:41
I think it'd be difficult probably to merge with Google.
21:43
But what are your choices?
21:47
>> Speaker 1: Neither one of us is antitrust attorneys, but I bet you're right, you heard.
21:54
Well, there are two things, of course.
21:56
First, we went through a round where we actually tried to see if there wasn't a way to collaborate on search even if we weren't acquiring Yahoo.
22:04
We worked on that with Yahoo.
22:06
We worked on that with Carl Icahn.
22:08
We worked on that, that didn't work, it's okay.
22:14
They know where to find us if they're ever interested.
22:18
But so what we do now is we have to go to build through marketing, through sales, through promotional activities, distribution activities.
22:26
We have to go build ourselves kind of our organic base.
22:31
It'll take longer, I'm not sure it'll be more expensive to our shareholders net.
22:37
Well, I mean, you'd say you're going to spend $50 billion, a lot of money.
22:39
It's ironic, $50 billion at the on the balance sheet sometimes looks cheaper to shareholders than a billion dollars a year for five years.
22:50
Of course, a billion dollars for five years is 5 billion and 50 is 50.
22:55
And yeah, there's a profit stream that comes with the 50.
22:58
But people tend to do apples and oranges comparisons because the accounting rules actually make acquisitions always look favorable from an investor perspective.
23:08
It's not smart, but it's the way most investors look at things as opposed to in real economic terms.
23:15
So in any event, we'll have to take more through the operating income a hit more on operating income as opposed to a balance sheet hit.
23:25
And it'll probably take us a little bit longer.
23:27
I did tell investors that they should be prepared for us to invest someplace between five and 10% of contribution margin back into our search business every year for the next several years.
23:40
And that's kind of the frame for where we go from here.
23:43
And we get a lot of innovation and sort of things we need to do to change the experience, change the business model when you're not the market leader.
23:52
My most important lesson from first year at Stanford Business School Strategy course for Professor Wheelwright and I can't remember what the heck the case was, the market leader should increase fixed costs.
24:07
The number two person in the market is the one who wants to either cut price or raise variable costs.
24:15
We're kind of clearly not number one, so we clearly want to play the game on more of a variable cost and pricing basis than on a fixed cost basis.
24:24
>> Speaker 2: Are there any decisions you made over the course of your career that might have seemed minor or trivial at the time, but have had a significant impact on your evolution as a leader in retrospect? >> As a leader. >> More on the company.
24:37
>> Speaker 1: On the company, the answer is for sure.
24:40
I mean, still, the most important acquisition the company's ever done was the purchase of a company called Dynamical Systems, which I think we probably paid, I don't know, $7 million for something like that.
24:51
There was no venture money.
24:52
It was a bunch of PhD physicists from Princeton and their buddies.
24:58
They were programming out of a house in Berkeley. We bought the company.
25:02
They had something that was a clone of a weird kooky product that IBM had that we thought we needed in order to sell IBM something, blah, blah, blah.
25:13
None of that ever mattered.
25:14
But we got some of the guys who provided some of the core architectural and engineering that really made Windows a success.
25:22
And so when you say it seemed like A, it turned into B.
25:27
But the guy basically who really helped put Windows on the map in a technology sense is a guy who came through that acquisition, the CEO of that company, wound up being our kind of CTO for a lot of years.
25:40
So, yeah, I think we've had some of those accidental things that wound up being quite profound.
25:47
>> Speaker 2: And then how about on you as a leader, anything?
25:50
>> Speaker 1: Me as a leader?
25:52
Things that were small at the time that then felt bigger, harder for me to point to that kind of case.
26:02
I think the kinds of things that I'm drawn to are people who I may not have really groked or valued or appreciated when I first met them.
26:15
They might have seemed quirky or not so capable in one way or another.
26:18
And they wound up being some of the folks who made the most sort of profound difference on the place.
26:25
One guy particularly I think of, he's not himself. The amazing story.
26:30
There's a guy who, every time I met him, I thought, geez, is this guy really going to make it at the company?
26:37
I'll say we're kind of an IQ-oriented company.
26:39
And I'd say to myself, God, is this guy high enough IQ to do his job, I don't know, is the guy going to be able to get there?
26:46
The guy taught me more about what leadership and management's really about because he never really had the whole picture and understood all the details, but he really knew how to build a team.
26:58
And sort of great leaders are part thought leaders, part business leaders, and part great people pickers and people managers.
27:09
And I think most people tend to sort of focus on more on any one of the three of those.
27:14
And I was certainly more on thought leadership.
27:17
It's all about thought leadership.
27:19
Some people tend, it's all about your ability to manage people.
27:22
But the truth is great leaders have to have a mix of those things.
27:25
And I think in a way I got taught that by this one country manager who I kept thinking was no good.
27:32
And then the business just exploded, and his people wound up running various big parts of the company globally.
27:39
And I learned really to appreciate a style that was quite different than perhaps than my own and a set of capabilities different than my own.
27:47
>> Speaker 2: And did that lead to any specific changes at Microsoft in the way you thought about performance management or evaluation of some of the key people there?
27:55
>> Speaker 1: I think it made me and perhaps others far more open to the notion that there were sort of a variety of different approaches to leadership that could be quite successful.
28:09
Where I would say our classic model is one person, everything in their head, go figure it out.
28:15
Well, I described it doesn't work in my current job, but I will say it worked fine when we were 30 people, worked fine when we were 100 people, 1,000 people, 3,000 people.
28:25
And maybe it was two guys, heads, mine and Bill's.
28:27
But the system breaks down at some point because at some point you're not operating one business, and then you really gotta appreciate these kinds of skill sets.
28:35
So yeah, I think it actually did make a difference because it made us all more open.
28:40
It doesn't mean you can go all with people of that ilk either.
28:43
You gotta have some leaders who are primarily thought leaders.
28:46
But mixing it up and getting the right balance in the team.
28:50
Yeah, I think it came out of that experience.
28:52
>> Speaker 2: If you could change one decision that you've made since becoming CEO, what would that be?
28:58
>> Speaker 1: Since becoming CEO?
29:00
So I gotta get the timing right.
29:05
Well, it was a non decision.
29:07
We should have started our R&D efforts in search earlier. Should have. No question.
29:14
No question, and I don't say we should have bought income, or we should have bought overture.
29:18
We should have bought something.
29:19
Maybe we should have done that too.
29:20
But we shouldn't have started.
29:22
We really got in the R&D business around search.
29:25
I can't remember four years ago now, five years ago.
29:28
If we had gotten in eight years ago, I think we'd be in a very different place than we are today.
29:33
>> Speaker 2: And was there the significant discussion of that opportunity eight years ago or was it just not on the radar screen in the way that other things were?
29:39
>> Speaker 1: Some discussion.
29:40
But this is one of the challenges that sort of relates the kinds of challenges that you were asking about at the beginning.
29:46
When you got your hands full and a new great opportunity comes along, it takes a lot of, what shall I say, discipline to do both and to do both well.
29:56
And one of the things organizations can do is discount the size of the opportunity, which was not unfair at the time.
30:03
I mean the search has been around for a long time.
30:06
The thing that in some sense is the great innovation of Google isn't that there's a thing called search altavista.
30:13
There are people who did that stuff before.
30:14
The great innovation was there's a magic way of using a software-based auction marketplace to make money out of the thing.
30:22
And I'm not sure we even needed to have that insight at the time.
30:27
We still should have gotten started even though the business model wasn't clear.
30:33
Because at the end of the day, things that users value necessity, the mother of invention, you'll figure out how to monetize them if they bring end users value.
30:43
>> Speaker 2: And have you made any structural changes in your organization to at least try to prevent missing another opportunity like that or at least being late to the game?
30:51
>> Speaker 1: Yeah, we've made a lot of changes, actually.
30:54
We have more of what we call these labs type groups which are kind of incubation.
31:00
The current fashionable thing at Microsoft is to take your product name and have product name Labs, Office, Office Labs, Live, Live Labs, Virtualization, Virtualization Labs, it doesn't matter.
31:13
And lab says I'm incubating, I'm doing some stuff with small teams to try to make sure we're planting more trees.
31:20
That certainly taken shape.
31:22
The way we run our annual sort of business strategy process has changed as a result of that.
31:28
We have kind of an outside in where's money being created?
31:31
Not just what are we doing and what are the strategies for the businesses that we're in.
31:37
Our research group we just continue to scale up because our research group was kind of all over this.
31:42
I mean, when we finally got in the game, thank God we had a research group because there was all kinds of talent in information retrieval and search and the like.
31:51
So we've pushed the pedal down further.
31:56
But at the end of the day, we have to be prepared both to lead and to fast-forward.
32:00
Follow because if you're as big footprint as we are, it'd be great to say we'll invent everything that's ever going to be important that's probably not practical.
32:10
Let's try to invent the highest percent we can but on other things that are going to be really important, it's important also to be able to be a good fast follower.
32:18
That's not a strategy, but it is a muscle you need to have too and if you take a look at a lot of the things that we all go goo goo gaga over now, they weren't original concepts invented by the companies who made them popular, but they were follow on efforts where somebody was a fast or a better follower.
32:40
And you want to have both muscles available inside our company or maybe any company of any size.
32:47
>> Speaker 2: Microsoft is at the center of significant media attention, both positive and negative, what steps are you taking to lead through that noise with your organization?
32:58
>> Speaker 1: How do I say this the right way, we've had so much noise now for so many years.
33:05
It's easier to lead through the noise today than it was the height of noisiness and issue with our employee base on this would have been the height of our antitrust issues with really with the U. S. department of Justice.
33:22
Because that's our home country where we have sort of the largest percentage are employees.
33:28
And it was not easy because when your own government sues you, people assume that there was something wrong.
33:37
I mean that in kind of a, not just a who knows what the law, nobody really knows the law of large market share once you have it, the government does its evaluation, decides if it's too long, what are the rules.
33:48
That's the way the world works but people say why didn't they know, they should have known, how could they not know?
33:57
Well, you can't know and so you kind of have to reassure employees about the integrity of the institution, of the people, the fact that we were doing the right things all along in a sense and fine, there's a certain set of rules and we got to follow those.
34:13
So you kind of have to do a lot of heavy lifting I would say at that time and people do a lot of soul searching.
34:20
Our leadership team, we went off site I don't remember what year, probably 01, 02, something like that we went for an off site.
34:27
We thought we were going to have a normal old off site we wound up talking just about our values and we wound up writing down the values of the place because it was so important at that time to communicate internally with our employees, externally, etc.
34:40
You could say every company should do it at some point, but in our case, I would say it was brought on.
34:46
We'd always been busy and I think we'd been high values but you want to write them down and let people know what you're thinking.
34:53
Thing is up, down, you still got to talk to your employees, our employees number one thing I would say our employees have on their minds of that ilk is when our products are good, they know when our products aren't as good, they know.
35:06
So you're not, we don't have to talk to our employees as much about that we have to say, what are we doing?
35:10
But we have to talk to our employees these days a little bit about stock price, Bill and I had always vowed we would never talk about the stock price because as Graham said, in the short term it's a good voting machine.
35:23
In the long term, the stock price is a good weighing machine, so any day you look at it, but employees look at it like a day to day kind of report card, how did we do today?
35:31
We're up 3% today, we did brilliant work today, I mean, [LAUGH] of course it's not how it works, but.
35:40
But our stock has been flat for a while, despite the fact essentially, if you add back dividends, we're largely flat for 10 years.
35:48
People say why would and that's not actually untrue of a lot of other large cap stocks, a lot of large cap stocks have that profile but the question is, why are we doing the right stuff?
36:00
At the end of the day, if you drive earnings, you are doing the right stuff and in our case though, the market's also voting on today's products, tomorrow's opportunity, today's capital structure versus what they might want for capital structure.
36:13
And so really educating employees so that they can make their own value sort of estimations and determinations about how the company's doing as opposed to trying to look at a very ineffective day to day scorecard.
36:27
We're spending a little bit of time on that, I would say.
36:30
That process of writing down and communicating the company's values, which were always there, but you had an opportunity to explain to the employees a little bit more clearly did that make a difference?
36:40
Did it help a bit has it played into your leadership?
36:43
>> Speaker 1: It helped certainly kind of give people a magnetic north at the time.
36:49
It helped remind people, we baked it, we put it in our review system for three or four years, people got reviewed on their values in addition to their performance.
37:02
Turns out that's sort of a hard one to do, integrity, you sort of either get a you're fired or you're okay.
37:10
There is kind of a binary on some of this stuff, but people understood our seriousness about those things as well, and I think that was helpful.
37:20
Got to be kind of redundant doing it every year so we focus back now primarily on sort of normal performance but I still talk all the time.
37:30
I'll quote from various of our values, often in the kinds of sort of speeches and broad communications to employees.
37:40
>> Speaker 2: You've interacted with many CEOs not only in the software space, but also in other industries, is there a leader or two whom you most admire and why?
37:48
>> Speaker 1: I'm sort of not an admiring kind of a guy, [LAUGH] no, I don't mean that in admire sort of implies a blind and whole acceptance and that's not my personality.
38:04
I can tell you things that I learn, things that I respect, where I say, hmm, that person really has a good sense of that, boy I really, it was great to hear Jeff Immelt.
38:14
It's great to hear Jeff and I played golf together a couple years ago, and he was talking about some things he had to do with one of his guys.
38:20
He said, I'm going to go see him to see whether he still has his confidence, because if he doesn't have his confidence, I'm going to have to take him out of his job.
38:27
It's a good point when people lose their confidence, you can't lead big organizations without your own self confidence.
38:33
You can't and you learn something there.
38:36
You learn, we're talking about Ag Lafley just listen to Ag Lafley talk about spending time in China watching women do laundry, and you say, well, what do I care about learning laundry?
38:51
That's a different kind of guy, that's a guy who's consumer research and sort of fundamental push to understand, really, to empathize, really.
39:00
And whether it's China or Germany or US, that's kind of where they live and he's got to set a tone for everybody.
39:07
I expect you who runs this business to be out there, know these kinds of customers as well as I know these kinds of customers.
39:15
So you learn, I think these are all great people, but I wouldn't say I admire them, I say, God, I learned something there, God, that guy's good at this.
39:23
This woman's good at this, what about this, what about this, what about this?
39:26
And every interaction, basically, not just with CEOs, but every interaction that I have with talented people, I think you get a chance to glean my job.
39:35
I get a chance to have more interactions with more talented people than most and I feel fortunate that I'm able to sort of glean those kinds of practices from Mukesh Ambani.
39:45
Mukesh was my class at Stanford, he and I both dropped out, and he went to help his dad with the family textile business.
39:54
And it's now, I don't know, between the company he runs and his brother runs, it's like 40% of the Indian stock market.
40:00
Market and you go back and see Mukesh in India, and for a while we were talking to him about a telco project, and he said the price of the service is going to be this, so you have to price your stuff at this, otherwise we can't do it.
40:14
And I said, well, we don't know how to do that.
40:15
He said, well, you better go figure it out because I know exactly what the Indian consumer, mass Indian consumer, can afford to pay.
40:22
Today, he's building as much retail space as all of Walmart just in India.
40:27
And he says, look, I learned from my dad, if you want to sell to the lower classes in India, you've got to let them make money from you.
40:37
So he's got a whole system of buying fruits and vegetables from farmers in rural India so he can turn around and bring them into the retail stores that he's building in those parts.
40:45
I mean it's just real kind of savvy consumer understanding.
40:52
You learn something from a variety of people in a variety of different ways.
40:56
And I think you just want to get every nugget you can.
40:59
>> Speaker 2: We're going to open up the floor for question, but I have one other one for you which is what would some of those key leaders say about you say what they've learned about your leadership style or how it reflects on them?
41:08
>> Speaker 1: Yeah, I think probably the two things people would tend to comment on.
41:14
This is kind of a test in self awareness, I guess with three cameras flying at you.
41:21
But I think a couple things, I think that I certainly have more time invested thinking about how you run an innovation-based company than most people do.
41:38
I mean the truth is we make big bets. They are long term.
41:41
We'll spend whatever nine odd billion, something like that in R&D.
41:45
So we do things at a kind of a scale.
41:47
We have big projects, little projects, we've got incubations and research, we've got acquisitions and internal development.
41:54
And I think I certainly have talked about that a number of times with a number of CEOs.
41:59
And I think people at least understand that whether I think smarter or not about it, I certainly think about it a lot.
42:07
And then I think the second thing, which my YouTube videos really get a lot of CEO attention too.
42:16
And it turns out, a lot of guys will say, do you really do that?
42:20
And there's something where people say, what's how do you think about your presentation style and what you're trying to communicate to your people?
42:29
I mean, I'm a kind of rah rah, passionate, blah, blah, enthusiasm kind of guy.
42:34
And some CEOs will say, boy, that never worked at our place.
42:38
But at least they're kind of in the thinking loop about what does it take for any given population, Microsoft or anybody else's, to keep the kind of employee base focused, enthusiastic, excited, etc.
42:52
>> Speaker 2: Very good, thank you.
42:53
Questions from the audience. Here's to call.
42:58
>> Speaker 1: Gentleman right here.
43:00
>> Speaker 3: Thanks very much for coming.
43:01
My question concerns Microsoft's approach to digital rights management and where you see the evolution of that in the computer business as a whole, given what's happening in the music industry.
43:12
>> Speaker 1: Yeah, well, the word digital rights management is sort of a broad one.
43:16
You might be talking about the protection of content, like music, or you might be talking about the technology.
43:22
Generally, rights holders do have a right to decide what they want to do with their content.
43:28
So, in the music space, I think we're trying to make the technology better and better.
43:33
So if somebody wants to protect their content, we can do it.
43:38
And it's not a pain in the neck for the user.
43:41
But let's face it, it's still easier today if content is unprotected.
43:45
I think that's a fair statement.
43:47
But it's got to be kind of up to the rights holder.
43:50
And we've got to be willing to build technologies that even if that let the rights holder do what the rights holder wants to do.
43:58
And we don't digitally rights protect our software interestingly, we could, but we don't choose to.
44:06
And we get high piracy rates, but we get some things that we, in terms of simplicity of use, etc, that we think merit it.
44:15
When you say digital rights management, though, every one of you is a content creator.
44:20
Certainly, in our organization, I'd say the average Microsoft employee probably writes 50 pieces of email a day, and every one of them, you say, do I want to protect that?
44:31
So we now have technology in our email and file system.
44:35
So you can send email and say, I could send Dan a piece of mail and say, you can read this, but you can't forward it, you can't print it and it's going to destroy itself in 30 days.
44:46
You'd say, why would you ever want to do that?
44:48
Well, there are times when you probably want to do that.
44:53
No, but you stop and think about it.
44:55
Then instead of just being anti digital rights management, you'd say, yeah, if you want to have a private conversation with somebody and know they're going to keep it private, you might want to be able to do that.
45:03
So in general, I think the technology's got broad applicability.
45:07
Even if you don't want to protect, you just want to enforce, for example, policy around document retention is getting to be a bigger and bigger issue for legal discovery.
45:21
You might want to just have a policy.
45:22
All email messages, all are rights protected in the sense that they all delete themselves after 60 days.
45:29
And then you don't have what I might call one of my classmates at business school, the Frank Quattrone problem.
45:36
No, Frank told his people to follow the retention policy of his company and then wound up in court for a long time for doing that.
45:44
The more you can do in an automated and systematic way, the better off you are.
45:49
So I think the technology is super important and yet I think it can be applied under a variety of different sort of regimes.
46:00
>> Speaker 4: You mentioned a lot about how you run different businesses and how you've got a lot on your plate.
46:05
And it makes me wonder what gives you the energy to keep doing this day in and day out.
46:11
>> Speaker 1: I'd love to tell you it was the Starbucks iced tea I drank before I came in here as a plug for a local Seattle company.
46:19
But the truth is, the big three motivators continue to work pretty well for me.
46:26
Number one, I know what we do is positively changing the world.
46:31
You get kicks out of that, I gotta tell you.
46:34
You do and everybody in our industry, even startups, big companies, people just live to see their work sort of be important.
46:44
And that is a motivator for me.
46:45
And it's a motivator, I think, for many in the tech industry.
46:49
Number two, I get a chance to work with great people, the people who work for us, the people who work at our customers.
46:56
William was asking about other CEO.
46:58
I just get a chance to work with people from whom I learn who challenge.
47:03
Sometimes people are also difficult.
47:06
That's the nature of people.
47:08
But at the end of the day, I get sustenance from that.
47:11
And then third for me, I like a challenge.
47:16
I like competing in math competitions.
47:19
I like I'm actually pretty good at what I do. Could I be better?
47:24
Sure, of course you could be better.
47:26
But I'm pretty good at what I do.
47:27
I'm sure a lot better at what I do than I am in my golf game.
47:30
So if the choice is do what I do or go play golf, I.
47:33
Well, once a week, maybe the golf.
47:36
But in general I get a positive reinforcement about tackling hard problems and making progress against them and being successful.
47:47
And those three things provide me with a lot of sustenance. And I've got three kids.
47:52
My youngest is just nine.
47:54
And the notion that I wouldn't be out there working hard at something when I'm asking my kids to To work hard every day on homework or football or whatever they're doing that day.
48:05
I think it's a good role modeling thing as well.
48:07
And so some combination of that makes this the right thing for me.
48:14
When I go towards the back of the room lady in, is it pink? Looks like pink to me.
48:19
There's a mic, I think she'd like to speak, yeah.
48:22
>> Speaker 2: Thank you, I'm wondering, as the CEO, do you believe in the only objective of business is to maximize its profit?
48:32
Because we just had a case on Google in China and tried to answer this fundamental question whether a company should compromise its principles in order to maximize its profit.
48:44
So I'm just wondering to what extent do you believe a company has a so called social responsibility?
48:54
>> Speaker 1: I think companies have a responsibility to a balanced set of constituents.
49:00
A balanced set of constituents, shareholders are certainly a constituent.
49:05
The thing you gotta be careful with, but they're not the only constituent.
49:08
Customers are a constituent, business partners are a constituent, legal authorities are a constituent, but it's a balanced set of constituents.
49:20
The thing I think gets to be a slippery slope is when you say social responsibility, everybody's got sort of different values and views.
49:29
Politics, society, this, that, the other thing.
49:32
So when you say, are you being socially responsible, that isn't a well defined term.
49:39
If a company's going to do business in a country, are you supposed to obey the laws of the country or are you supposed to say, I've got views?
49:49
I mean, if you don't want to obey the laws of the country, maybe you should just not do business there.
49:54
I mean, you gotta decide, my personal values, maybe, I don't know, I believe everybody should get a free set of golf clubs or something.
50:03
I'm being goofy, but it would not be appropriate for me and my CEO of Microsoft role to imply my personal interests and values to the company's behavior.
50:15
And yet it's a slippery slope between that and social responsibility.
50:19
Some people will say, well, geez, there are issues in China.
50:22
You mentioned Google in China, the Chinese government would say, hey, this is the way things are, you know they're that way in our country.
50:31
Do you want to be here or not be here?
50:34
And you can legitimately say I don't want to be here, the company can try to decide.
50:40
There is a set of norms about privacy and free speech in the US that are not necessarily norms in every country.
50:49
So whose social responsibility do you reflect? Your home country? Your CEOs country?
50:57
The country where you do the biggest business?
51:00
I'm not saying there aren't multiple stakeholders, there really are.
51:03
The thing I think I've also learned is you have to really think broadly about the stakeholders.
51:10
And particularly you can't just say, I'm an American company and I know what social responsibility looks like in our country versus this country versus some other country.
51:21
So I think what it means to be socially responsible is different in different contexts.
51:29
And I don't want to sound like I'm copping out on the question, but I think it's too easy to polarize.
51:35
With that said, shareholders deserve to be respected, they deserve to be respected.
51:41
Customers also deserve to be respected, I mean, every day there's a tension between shareholders and customers.
51:48
You could raise your prices, it hurts your customers and helps your shareholders.
51:51
People don't view that quite the same way, but there's an element of profit, but there's also an element of kind of responsibility.
51:58
We give away hundreds of millions of dollars a year of software because we think it is good for society and it'll be long term, good for our shareholders, even if in the short run it isn't.
52:09
But really thinking through, I'll tell you a small story.
52:15
When I came to my first view from the top, there was a representative of a large US oil company.
52:21
I don't know if Dan remembers who spoke.
52:23
And there had just been a big spill off of Alaska and his company had been the spiller.
52:29
And of course every GSB student came in loaded for there, this guy is evil, this is the devil.
52:39
Even in the old days there were social responsibility concerns, they were just maybe a little different.
52:45
And I think they made a big mistake, they tried to say in the meeting that they were socially responsible and then they talked about their donations to art museums and art collections.
52:58
No, you laugh, but by some norms it's a socially responsible thing to do.
53:04
And yet it wasn't at all, it was tenured relative to what the particular audience was thinking about.
53:11
So I think these things have a little bit more nuance than they're generally given credit for.
53:18
The second year course was in business ethics taught by Professor Hanson at the time.
53:24
I never took the course, but I did play golf with the guy.
53:27
[LAUGH] >> [LAUGH] >> And the sense of nuance I think in that was also, even the academics, I think have it easy to see that there's a set of nuance in that.
53:40
>> Speaker 1: We have time for probably one more question.
53:42
>> Speaker 1: [LAUGH] You have time for five more questions, just one more answer because I'm so old.
53:46
>> Speaker 1: [LAUGH] >> Sorry I'll try to be quicker.
53:50
How about way in the back, way in the back.
53:55
>> Speaker 1: At the time it was a pretty risky thing to do, so I'd love to hear how you valued those trade offs and what sort of drivers were important when you made that decision.
54:05
>> Speaker 1: Yeah, well, coming to Stanford was kind of a controversial decision in our family.
54:12
My dad was an immigrant, my dad basically came to the US, wound up in Detroit because that's where his sponsor was.
54:20
And went to work at Ford and everybody who seemed to be successful at the time at Ford went to Harvard Business School.
54:26
So when I told my dad I thought I'd go to this place called Stanford Business School, he said, what, are you kidding me?
54:31
You gotta go to Harvard Business School.
54:33
He'd been talking to me about I went to Harvard as an undergraduate.
54:36
He'd been talking to me about he didn't go to college, but darn, that's what I was going to do.
54:40
So this was kind of a big move that he checked around, yeah, R. J.
54:43
miller okay, it's all right, you can go to Stanford Business School.
54:46
So you got it, it tells you environmentally that my dad was pretty focused on my education here, shall we say.
54:53
So I come and I try to decide what to do for summer job and I think this stays about constant.
55:02
There were the consulting offers and the investment banking offers and I was trying to wrestle through what to do for the summer.
55:09
And then Progressive Insurance, which is now a large auto insurance, but it was tiny at the time.
55:15
I'd interviewed them in college and they offered me the assistant to the president job for the summer, I could just come in.
55:21
William and I were talking because he shadowed a CEO this summer as part of his summer program and that could have been my job.
55:28
So I was thinking about going to Cleveland as a Detroiter, I could look down on Cleveland, I guess, slightly.
55:34
But- >> [LAUGH] >> Anyway, I'm teasing.
55:39
So I was kind of thinking it through and then Bill called and said, hey look, I kind of need a business guy, do you want to come?
55:46
And I said, well, I'm kind of going through this program here.
55:49
And he said, yeah, too bad you don't have a twin, geez, blah, blah, blah.
55:56
>> Speaker 1: [LAUGH] >> And so I called him back the next day and I said, yeah, maybe.
56:00
>> Speaker 1: Maybe I should talk to you, you know, and he said, okay.
56:03
So normally I don't know what it's like these days, but in the old days you didn't go and actually visit companies before you took your summer job.
56:10
You only did that for full time job, but I was really torn.
56:13
So I spent a week and I went to I think Boozer, McKinsey, Bain, BCG, Morgan Stanley.
56:21
And I told all of them, hey, I'm still thinking about joining this friend of mine with this crazy little company.
56:27
And of course they didn't know what it did, and I really couldn't describe it.
56:31
I'd written about 10 programs in my life, but I was hardly what we'd call a computer person at the time.
56:38
And my mom, she couldn't figure out what the heck personal computer, why the heck would a person need a computer?
56:45
I said, it's that friend of mine, Bill, from Harvard.
56:50
So I did the tour, I wound up and everybody said, you're not going to do that.
56:55
You're trying to mislead us because you're not going to come to us, you're going to Bain, aren't you?
57:00
I said, I was thinking about this crazy little software company.
57:03
So I went up and you know, I interviewed, I met Bill's partner Paul, who I'd never spent any time with, and Bill's mom and dad, that was his big recruiting technique at the time.
57:14
He brought his mom and dad, we went out for dinner and I was starting to get kind of excited because I knew I'd respect the intelligence of the guy I was working for, which frankly there's lots of places that doesn't happen.
57:30
And I could kind of be a big cheese, that kind of felt kind of good.
57:34
And I mentioned it to my dad and my dad said, that's, that's nuts, you can't do that.
57:40
You can't do that, and I said, well, blah, blah, blah.
57:45
And so I went to Seattle, I sounded kind of good.
57:48
Bill actually left during the middle of my recruiting visit.
57:51
He flew off on vacation and left me in his house driving his car around for another day and said, this might be kind of fun.
58:01
He was on a boat in the Caribbean, the Do Wa Do Wah.
58:04
We negotiated my package on a ship to shore radio.
58:09
And I said, am I really going to do this?
58:10
I talked to a couple of professors here, they all said, you're kind of nuts actually, you shouldn't do that.
58:17
I talked to some classmates, they said, you're really not going to do that.
58:21
But the thing that really Got it made it easier for me was I knew I could always come back.
58:27
Turns out Stanford will let you back, I bet I could still come back now I have a chance. >> [APPLAUSE].
58:38
>> Speaker 1: So I actually went to Seattle and said look, if it doesn't work, I told Bill I'm coming.
58:44
But I said if it doesn't work out at the end of the summer, you fire me or I quit, either one.
58:49
And let's not let that ruin our friendship forever, but that can happen.
58:54
And after the first month I was pretty sure I was going to quit, I really was.
58:58
I worried that I dropped out of Stanford business school to be the bookkeeper of a flippin 30 person company.
59:05
And I got there, there's no desk, I'm using the couch in Bill's office, that's all he gave me for space.
59:11
And you know, we don't have enough people, we got angry customers, the bookkeeper quits, so I'm helping keep the books, the place is a partnership.
59:21
I go to Bill after about a month and say come on Bill, we gotta hire another 18 people.
59:25
And he flips out and he and I have a huge fight.
59:28
Steve, I didn't talk you into dropping out so you could bankrupt this company, come on, you were supposed to be the defender of financial integrity, insolvency.
59:39
When I got to Bill, I lived with Bill, we didn't have the money to put people in the hotel at the time.
59:44
But every place in Bill's house I'd find these pieces of paper with every person in the company's name on it and their salary and every contract and its value because Bill was sure we were going to go bankrupt.
59:55
So he's always doing cash flow, cash flow, cash flow all over the place, you find these stickies.
1:00:01
They weren't even stickies, just little yellow pieces of paper.
1:00:04
So I say 18 more, we had this huge row, even though I was living with him, I didn't see him for a few days.
1:00:09
And finally he says hire one good guy.
1:00:14
And so we get through that, I'm still thinking I'm quitting.
1:00:17
And I go to him and say look, I'm going to quit.
1:00:20
He says let's go out for dinner with my dad.
1:00:24
Bill's dad is 6ft 7 and not his mom, his mom was kind of charming his dad was a serious guy, good guy, but a serious guy.
1:00:33
And he said Steve, you don't get it, you really don't get it, if you quit, you just don't get it.
1:00:37
We're going to put a computer on every desk and in every home.
1:00:40
And that mantra, which became our country, our country, our company's mantra, that was created out of necessity to try to get me to get it.
1:00:49
And I said, okay, let's do it, you let me hire a few people, we'll see if we can scale up and grow.
1:00:56
I knew I could come back, I bought a house, two weeks later, I told Stanford I'm definitely not coming back.
1:01:03
It was emotional, it was emotional for my dad.
1:01:06
My dad, it probably took five or six or seven years before my dad thought I'd.
1:01:10
He'd just gotten over the fact that I went to Stanford instead of Harvard and, you know, probably took him another six or seven years to get through it.
1:01:17
But that's kind of what went through my head, and I loved Stanford.
1:01:20
The year I had here was one of the most fun years of my life, I learned a little bit. >> [APPLAUSE].
1:01:28
>> Speaker 1: That's not a shot, that's not a shot, we were talking on the way in.
1:01:33
A lot of education is the people you meet and kind of what you learn from them.
1:01:36
And, yeah, I learned a little, I never read a balance sheet before, so I learned that, an income statement, it was kind of cool.
1:01:41
But at the end of the day, I learned something.
1:01:44
But I love the people I met, I loved the experience I had.
1:01:47
I don't know if Wednesday is still a free day.
1:01:49
I love playing golf on the Stanford golf course every Wednesday.
1:01:52
You know, it was great, and this is a beautiful place, but it was the right thing for me to do.
1:01:58
And then the next year, I talked to the guy out of Drop.
1:02:00
He got a Harvard Business School to come to Microsoft full time.
1:02:04
And, you know, I still take a whack at that every now and then, but it's not for everybody.
1:02:09
You gotta be in the right place in your life, and it's gotta be the right opportunity.
1:02:12
But if you see the right opportunity, you should seize it.
1:02:16
I mean, people come to business school to get sort of a new perspective and a new set of opportunities.
1:02:22
And if that opportunity happens to come midstream, it's not going to be that way for most.
1:02:27
It was for me, it was for my classmate, Mukesh Ambani, he went back to India.
1:02:32
It was for this guy, Jeff Sanderson, who I recruited out of Harvard Business School.
1:02:37
It's not going to be for most of you, but as you said, it worked out okay for me.
1:02:42
And if we ever really decide it was the stuff I missed in the second year, I'll bet I can cut a deal with Bob to come back. Thank you all very much. Thank you so much. This is fantastic.