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Bill Gates and Narayan Murthy Interviewed by Prannoy Roy

PRANNOY ROY : To me and many of us at TiE, it is a special moment. We have
with us together two icons of our times - Mr. Bill Gates and Mr. Narayana
Murthy. Both iconic entrepreneurs, but in fact both much more than that. As
you look into their lives there are so many similarities. Like both started
life as hardcore software guys. Mr. Bill Gates wrote the basic compiler and
Mr. Murthy, in the early 70s, also wrote the first basic compiler. Both
today have given up being CEOs and taken a step back to help with the
bigger kind of picture with bigger vision. Both of them have superb right
hand people i.e: Steve Ballmer and Nandan Nilekani. Both have huge
businesses but even larger social goals with larger hearts. Both have
wives, Melinda and Sudha, who infact are even more
committed to changing society, to philanthropy and charity. As icons they
have to resist tremendous pressures, sometimes to enter politics. Both
remarkable men, that come once in a lifetime, once in a generation. Both
used to travel economy class, some say they were stingy, for some it is
about principles. If it is stingy, certainly it is not visible in their
charity. Ironically both are voracious readers, books are their passion.
One major similarity - both really believe in spreading wealth among their
employees through ESOPs but now both have stopped that and the list of
their similarities is endless.

PRANNOY ROY : What are the defining moments in your life?

BILL GATES : Certainly the opportunity to use a computer at young age, I
was only 13 at that time and I was 16 when I first understood the magic of
chips with double power every two years. The school teacher asked me to
teach computer to the class. That was when I got fascinated and completely
immersed. My decision to leave school and start a company, that’s a nice
milestone since it worked. In my case I thought the time was very important
to get in and be the very first. So this chip computer comes out and I
decided to go to Paul Allen and provide the software for the very first
personal computer, which again was incredibly limited. The willingness to
take the risk before anybody else was doing it, I think that was a big help
to us. My parents thought that I was going on leave and will come back as
the company will not succeed, even Harvard was nice enough to say that I
could come back and even today they are willing to take me back.

NARAYANA MURTHY : There have been atleast three defining moments in my
life. First when I was incarcenated in Bulgaria, a communist country and
without food and water for 96 hours. Later I decided that I don’t want to
be a part of this system and I will go back to India to pursue
entrepreneurship and create wealth legally and ethically. Second was in
1990, we had started the company in 1981. It didn’t progress because there
was so much of friction in business in India. There was an offer from
somebody to acquire us for $1mn, from this offer six of my group members
got excited but towards the end I decided that I am not going to sell it
off. Third was frankly getting listed on NASDAQ. In fact it was a small
step for NASDAQ but a giant leap for Infosys and Indian software industry.
I would say that these were the three defining moments in my life.

PRANNOY ROY : How do you keep yourself motivated to work on and on and on?

BILL GATES : I love my work, I get to work with smart people and it’s a
field that’s constantly changing. Every couple of year’s people say that a
new company will throw you out of the business and we get to show people
“not this time”. My vision was not about sales or profits but it was about
this computer, what it could do and we don’t have that computer yet. We
cannot talk to the machine and it cannot talk to us and we are still
looking for that computer. I have a dream of having a computer in every
home, in every desk. We are not even half way in achieving that goal, here
in India we are scratching the surface. So there is still lot of work to be
done as there is no finish line anywhere near.

NARAYANA MURTHY : Most passionate people in the world are held by larger
goals. At Infosys, we have a vision to become a globally respected
organization, not only in India but also in US, Japan, Germany, Australia
UK and that’s still a long marathon. Maybe 10,000 or 12,000 Infosysians
have already made some money but there are 30,000 other Infosysians who
still have to make that kind of money and it is our responsibility to give
our best, our commitment to make sure that they and future Infosysians can
make money.

PRANNOY ROY : Both of you started ESOPs and both of you have given it up.
Why?

BILL GATES : Microsoft shared more wealth than any other company has in the
history of capitalism. If you get to a point where industry is so hot, it
almost hyped then you start to get deviations that not only go up but they
also fluctuate, so to pass the risk of those market conditions on to the
employees may not be right. But we are actually into shares now where you
get your salary and shares of stock and so we cut the variance down and so
the predictability is much greater and still plenty of personal wealth. We
are still sharing the wealth but in a different way and it wasn’t to do
anything with the new accounting principles.

NARAYANA MURTHY : I always believed that leadership does not succeed in a
vacuum, you need people who are smarter than you, who have same or higher
level of passion and energy. If you want to bring those people on board
then you need some equitable paradigm and that is why Infosys adopted the
ESOPs model. We suspended it because we have to expense it out according to
US regulations and then we realized that it is not the best model for us
anymore. And then as it was pointed out, we made an analysis and found that
by creating a paper or variable performance model, we will be able to
provide a decent compensation for all.

PRANNOY ROY : India has got a new energy with Democracy as its foundation.
People have started questioning. Is democracy important in taking business
decisions?

BILL GATES : Democracy means right way of looking at resources. It is the
real commitment to the future. It is a must and we, US, stand for it.

NARAYANA MURTHY : We value knowledge as the most intangible asset. However,
the important question now is, Is it really paying? There has to be a
greater premium on time. We waste lot much of it in discussions. One of my
friends from Harvard aptly quoted, “Two of my greatest challenges are – How
to get my Japanese students to speak up and Indian students to shut up”. We
have to come to conclusion out of discussions and get to execution.

PRANNOY ROY : Does a anti-American wave affect you? Lack of US sensitivity
in handling international affairs to the world issues affects your
relationships with
your partners.

BILL GATES : The world depends on the US to do certain things right whether
it is funding science or whether setting a good example for free trade. I
won’t say we lost business or have some impact it is because of the US
politics. Everybody resents the most successful country and everybody loves
the most successful country. It is all the love-hate relationship. In the
US there are mixed feelings about what they think the US is doing good and
not doing well. It is for the world to understand the benefits of free
trade system. The US should be imitated by others. The way we run our
university system should be learnt by everyone. We stand for – Be good in
every way, innovation in products, markets, etc. People talk of India
versus China, why not India plus China. India should learn from China and
China should learn from India. I am proponent of the combined best
practices of India, China and the US.

PRANNOY ROY : Does the use of force by US in international affairs worry
you?

BILL GATES : It is best to use when the stake is very dramatic. Even in US,
people say we need more evidence (in Iraq issue) but then for us it is
good, for it is for the democracy.

PRANNOY ROY : Is it love-hate relationship? Even we say “Yankee go home,
but take me with you”

NARAYANA MURTHY : I am unabashed admirer of US for their openness. I don’t
know of any other society as open as the US. It is for us to work harder to
convince the US people, decision makers, law makers, that there is good
value for them (inoutsourcing). If there is an outcry, dissatisfaction, I
see it as our failure. ‘The day you say market is wrong, you are finished’,
this should be learnt by US.

PRANNOY ROY : Now we will take some of the questions from the audience.

A1. My question is for Mr. Narayana Murthy. What challenges are faced by
large and small companies in attracting, keeping and retaining best talent?
NARAYANA MURTHY : It is all about creating the dream and vision and
articulating that everybody is able to take the rainbow and put in pocket.
It is all about making sure that people will get their value, people will
automatically come to you.

A2. My question is for Mr. Bill Gates. After the internet, what technology
will take the world now?

BILL GATES : We need to get a device which will get us value at the low
cost. Like speech recognition, mapping devices etc. I see natural interface
technology as the important area that shall dominate the sphere.

A3. My question is for Mr. Bill Gates. What human qualities are important
for success?

BILL GATES : You need passion, intelligence and some kind of integrity to
understand what your limits are. Very strong combination of all the three
shall help to achieve success.

A4. My question is for Mr. Narayana Murthy. Very large companies are
created in US. What do we need to do to have the same in India?

NARAYANA MURTHY : We need a more competitive market. Corporations have to
realize the importance of innovation, good venture capital system,
environment that enhances the quality of education system that focuses on
problem solving and good set of mentoring who will take care of
entrepreneurs’ linkages with the requisite networks.

BILL GATES : We always talk big companies like Yahoo, Microsoft, Google,
etc. We don’t think of numerous companies that fail. It is all market
economy that survives.

A5. My question is for Mr. Bill Gates. What is the fundamental difference
between managing a startup and a large corporation?

BILL GATES : The leadership styles are quite different. When the companies
grow, you acquire skill sets, create a system, take a step back, monitor
the people and manage the managers.

PRANNOY ROY : The last question - Will you ever enter into politics?
BILL GATES : No
NARAYANA MURTHY : No
PRANNOY ROY: Thank you very much.
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posted by Silent Saint @ 10:15 PM