The Entrepreneurial Spirit Is Gone: Gates' Departure Signals An Industry Shift
The reality is, it probably won't make a hill of beans' worth of difference for the company that once, but certainly no longer, set the direction and pace of what was at one time an incredibly exciting industry.
Steve Ballmer is as hard a driver as Gates ever was and, with Ray Ozzie and many others, the company clearly has top-tier talent.
Gates not only made more money than anyone could spend in a lifetime, the company he built also made lots of money for others who never drew a paycheck from Redmond. For that, he deserves lots of credit. Microsoft's vision and drive helped make this industry what it is today. But will it remain important tomorrow? Certainly, it is so large and has such a dominant position in operating systems and productivity software that it will take in lots of cash for some time to come. But that doesn't mean it will remain important.
The giant company has a giant problem. Its business model was built on putting software in a box and selling that software. Today's model is rapidly becoming one in which software is sold as a service or given away for free, with profit made on the advertising sold around it. This poses a huge challenge for the Microsoft monopoly.
But more importantly, for me at least, Gates' eventual departure signals a sad ending to an era of colorful, hard-driving entrepreneurs. It was amazing to watch them build an industry from scratch. There were many others who attempted to, and in some ways did, dominate pieces of the business, if even for a short period of time. Many made millions and departed long ago. Gates, of course, made billions and has stayed with it far longer than most.
But there is a real difference between Gates and his generation and the entrepreneurs of today, in my opinion. Yes, Gates wanted to rule the industry. That's not necessarily a bad thing, and much of what drove him was the desire to build an empire of sorts. But Gates and his competitors in the early days had a passion that was somehow different. Maybe it was because the industry was young and they were making history and somehow knew it. While it was largely about the money, it wasn't all about the money.
Today, we are long past the industry-creation stage. Just look at the leaders of the vast majority of high-tech companies and you'll see professional managers, not entrepreneurs.
We are really only left with a handful of names from the early days.
Steve Raymund of Tech Data is the last of the early distributors who remains, and he will step down as soon as a successor is found. Sun's Scott McNealy is now gone. Michael Dell is still in place, but even he is less involved.
It may be that the companies that began in the 1970s and early 1980s and have survived are just too large and bureaucratic to innovate any longer. It may be that professional managers don't have the innovative blood strain. It may be that the industry is too old. Whatever it is that has resulted in the lack of rapid innovation, Gates' departure is a sign that we are truly out of the industry-creation stage and moving into the professional management stage.
When that happens, innovation declines and advancements are made much more slowly. Fortunes become more concentrated and fewer entrepreneurs emerge. Young companies get acquired rather than go public. The future is still bright, but it is also going to be very different.
Make something happen. I can be reached at (781) 839-1202 or via e-mail at [email protected].