Software billionaires like 19th century tycoons…

Bill Gates, Paul Allen, Steve Ballmer, Steven Jobs and Sun Microsystems co-founder Bill Joy are all about the same age, says Malcolm Gladwell. So were John Rockefeller,  Andrew Carnegie,  Jay Gould and JP Morgan, the biggest 19th century tycoons, he adds. Some generations are luckier than others and benefit from extraordinary opportunities, Gladwell writes in his new book, Outliers: The Story Of Success. Here’s an except published in the Guardian:

If you put together the stories of… the Beatles and (Sun Microsystems co-founder) Bill Joy and Bill Gates, I think we get a more complete picture of the path to success. Bill Joy, Gates and the Beatles are all undeniably talented. Lennon and McCartney had a musical gift, of the sort that comes along once in a generation, and Joy, let us not forget, had a mind so quick that he could make up a complicated algorithm on the fly that left his professors in awe. A good part of that “talent”, however, was something other than an innate aptitude for music or maths. It was desire. The Beatles were willing to play for eight hours straight, seven days a week. Joy was willing to stay up all night programming…

What is so striking about these success stories is that the outliers were the beneficiaries of some kind of unusual opportunity. Lucky breaks don’t seem like the exception with software billionaires, rock bands and star athletes; they seem like the rule.

Recently Forbes Magazine compiled a list of the 75 richest people in history. It includes queens and kings and pharaohs from centuries past, as well as contemporary billionaires such as Warren Buffet and Carlos Slim. However, an astonishing 14 on the list are Americans born within nine years of each other in the mid-19th century. In other words, almost 20% of the names come from a single generation – born between 1831 and 1840 in a single country. The list includes industrialists and financiers who are still household names today: John Rockefeller, born in 1839 (the richest of the lot); Andrew Carnegie, 1835; Jay Gould, 1836; and JP Morgan, 1837.

What’s going on here is obvious, if you think about it. In the 1860s and 1870s, the American economy went through perhaps the greatest transformation in its history. This was when the railways were built, and when Wall Street emerged. It was when industrial manufacturing started in earnest. It was when all the rules by which the traditional economy functioned were broken and remade. What that list says is that it was absolutely critical, if you were going to take advantage of those opportunities, to be in your 20s when that transformation was happening.

If you were born in the late 1840s, you missed it – you were too young to take advantage of that moment. If you were born in the 1820s, you were too old – your mindset was shaped by the old, pre-civil war ways. But there is a particular, narrow nine-year window that was just perfect. All of the 14 men and women on that list had vision and talent. But they also were given an extraordinary opportunity, in the same way that hockey players born in January, February and March were given an extraordinary opportunity.

Let’s do the same kind of analysis for software tycoons such as Bill Joy and Bill Gates.

Veterans of Silicon Valley will tell you that the most important date in the history of the personal computer revolution was January 1975. That was when the magazine Popular Electronics ran a cover story on a machine called the Altair 8800. The Altair cost $397. It was a do-it-yourself contraption that you could assemble at home. The headline on the story read: Project Breakthrough! World’s First Minicomputer Kit To Rival Commercial Models. To readers of Popular Electronics, then the bible of the fledgling software and computer world, that headline was a revelation. Computers up to that point were the massive, expensive mainframes of the sort sitting in the white-tiled expanse of the Michigan computing centre. For years, every hacker and electronics wiz had dreamed of the day when a computer would come along that was small and inexpensive enough for an ordinary person to use and own. That day had finally arrived.

If January 1975 was the dawn of the personal computer age, then who would be in the best position to take advantage of it? If you’re a few years out of college in 1975, and if you have had any experience with programming at all, you would have already been hired by IBM or one of the other traditional, old-line computer firms of that era. You belonged to the old paradigm. You have just bought a house. You’re married. A baby is on the way. You’re in no position to give up a good job and pension for some pie-in-the-sky $397 computer kit. So let’s also rule out all those born before, say, 1952.

At the same time, though, you don’t want to be too young. You can’t seize the moment if you’re still in high school. So let’s also rule out anyone born after, say, 1958. The perfect age to be in 1975, in other words, is young enough to see the coming revolution but not so old as to have missed it. You want to be 20 or 21, born in 1954 or 1955.

Let’s start with Gates, the richest and most famous of all Silicon Valley tycoons. When was he born? Bill Gates: October 28 1955. The perfect birthdate.

Gates’s best friend at Lakeside was Paul Allen. He also hung out in the computer room with Gates, and shared those long evenings at ISI and C-Cubed. Allen went on to found Microsoft with Gates. Paul Allen: January 21 1953.

The third richest man at Microsoft is the one who has been running the company on a day-to-day basis since 2000 – one of the most respected executives in the software world, Steve Ballmer. Steve Ballmer: March 24 1956.

And let’s not forget a man every bit as famous as Gates, Steve Jobs, the co-founder of Apple Computer. He wasn’t from a rich family, like Gates, and he didn’t go to Michigan, like Joy. (But) He grew up in Mountain View California, just south of San Francisco, which is the absolute epicentre of Silicon Valley. His neighbourhood was filled with engineers from Hewlett-Packard, then, as now, one of the most important electronics firms in the world. As a teenager he prowled the flea markets of Mountain View, where electronics hobbyists and tinkerers sold spare parts. Jobs came of age breathing the air of the very business he would later dominate. He picked the brains of Hewlett-Packard engineers and once even called Bill Hewlett, one of the company’s founders, to request parts. Jobs not only received the parts he wanted, he managed to wangle a summer job. He worked on an assembly line to build computers and was so fascinated that he tried to design his own… Steve Jobs was born on February 24 1955.

Another of the pioneers of the software revolution was Eric Schmidt. He ran Novell, one of Silicon Valley’s most important software firms, and in 2001 became the chief executive officer of Google. He was born on April 27 1955.

I don’t mean to suggest, of course, that every software tycoon in Silicon Valley was born in 1955. But there are very clearly patterns here, and what’s striking is how little we seem to want to talk about them. We pretend that success is a matter of individual merit. That is not the whole story. These are stories about people who were given a special opportunity to work really hard and seized it, and who happened to come of age at a time when that extraordinary effort was rewarded by the rest of society. Their success was not of their own making. It was a product of the world in which they grew up…

By the way, let’s not forget Bill Joy… he was born on November 8 1954. And his three fellow founders of Sun Microsystems – one of the oldest and most important of Silicon Valley’s software companies? Scott McNealy: born November 13 1954. Vinod Khosla: b
orn January 28 1955. Andy Bechtolsheim: born June 1955. ·

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