Do You Really Know Bill Gates? The Myth of Entrepreneur as Risk-Taker

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Photo: Laughing Squid/Scott Beale

Before I had to establish my no-blurb/no-review policy for books due to volume (picture: one day’s mail), I received an e-mail from Rick Smith, the founding CEO of the World 50, one of the most exclusive senior executive networking companies on the planet, with members and contributors like Bono, Francis Ford Coppola, and Phil Knight…

He was interested in having me look at his new book Leap, and I suggested he send it along with the understanding that I might not have the time to read it. To tell the truth, it took me a looong time to bother flipping it open, as the subtitle “How 3 Simple Changes Can Propel Your Career from Good to Great” is–in my opinion–devoid of sex appeal and misleading. It should be subtitled “How to Propel Your Life from Good to Great.” “Career” is not the right word at all.

I finished the book in two sittings.

Finally, here was a book that destroyed the myth of entrepreneur as risk taker, using case studies ranging from start-ups that became Fortune 100 companies, to Live Aid and the Girl Scouts.

One of the most frustrating types of resistance I encounter when talking about lifestyle design or entrepreneurship is a general response along the lines of: “That’s great for you, but I have kids and a mortgage. I’m not a risk-taker.”

The fact of the matter is, most of the uber-successful entrepreneurs I know hedge their bets and place small bets while keeping one foot on secure ground. This often includes testing the waters while employed full-time, as Rick himself did before creating World 50 from nothing. Most of them never gamble in real-life, and a decent percentage don’t invest in the public market (like me) because of the lack of control. Are there mavericks who lay it all on the table for the big win or cataclysmic loss? Sure. But don’t believe, just because the media likes to highlight such daredevils, that they are the majority of kick-ass founders. They aren’t.

Here is an excerpt from Leap that shows just how far off most perceptions of entrepreneurs are.

In this case, we start with Bill Gates.

Putting All the Chips on the Table?

Growing up as I did, with an early interest in business, it was almost impossible not to envy people like Gates, and even measure myself against them. Gates had placed all his chips on the table at one time and walked away richer than Croesus. And me? Well, I’d never even sat down at the table. The way I saw it, I couldn’t.

I graduated from a state university with a stack of loans to repay. No sooner had I begun to dig my way out of personal debt than I met my wife (who failed to bring her own shovel). I remember her father joking with me soon after we got engaged. “Son,” he said, “I want to let you know about Lori’s dowry—you get her student loans and her bad teeth!” He laughed from deep in his chest. I moaned from the same spot. Add to that three children born within five years, and I felt like I was slogging through quicksand.

If only I was in a different position, I used to think. If only I had the courage to take on more risk, like Bill Gates, like lots of others I used to list to myself. And then finally, years later, I realized that that’s not how it happened at all.

William Henry Gates III was born October 28, 1955, in Seattle, Washington, to a family with a rich history in business, politics, and community service. His great-grandfather had been a state legislator and mayor, his grandfather was the vice president of a national bank, and his father was a prominent and very wealthy lawyer.

Because young Bill excelled from his earliest school days, especially in science and math, his parents saw that he was enrolled in prestigious Lakeside Prep, known for its intense academic environment. This was in the late 1960s, when the world of computing was just beginning to peek over the horizon and carried a golden price tag. But no problem. To assure Lakeside’s students wouldn’t be left behind, the school held a fund-raiser and, with the proceeds, rented what it thought would be a year’s worth of time on a computer owned by General Electric.

Bill Gates, his close friend Paul Allen, and a few others torpedoed that plan in a big hurry. They started hanging out in the computer room day and night, learning everything they could, even to the detriment of their other academic obligations. Within a matter of weeks, the expected year’s worth of allotted computer time was gone, but that was no problem either. The school simply struck a new deal, this one with Seattle-based Computer Center Corporation, to get additional computer time at good rates.

That might have worked if young Gates and his friends hadn’t immediately started (a) hacking into CCC’s security system so they could reset the meter that tracked computer use and (b) crashing the system just for fun. They were caught, and the company banned Gates and his cohorts from its computers for several weeks. (The thought of Gates and Allen as the godfathers of a hacking subculture that has cost Microsoft and the world overall hundreds of billions of dollars does indeed boggle the mind.) But again, the exile was only temporary.

CCC’s business was beginning to suffer from the system’s weak security and the frequency with which it crashed—many of the same flaws Gates and his friends had been exploiting—so the company offered the gang a deal: find the bugs and pinpoint the weaknesses in the system, and they could have unlimited use of the computer.

In 1970, Computer Center Corporation ran into financial trouble that would eventually put it out of business, but by then, Gates and Allen had found a new computer home at the University of Washington, where Allen’s father worked. Lakeside also pitched in: during Gates’s junior year at the prep school, the administration offered him a job computerizing the scheduling system. Over the summer, Gates and Allen wrote the program, which coincidentally assured that Gates was assigned to classes with mostly girls—a sequence straight out of a nerd’s revenge movie.

In the fall of 1973, Gates left Seattle to begin his freshman year at Harvard, part of his preprogrammed life plan. Allen, who almost certainly could have been admitted to Harvard along with his pal, chose a different route. He wanted hands-on experience, but the two remained in close contact, often discussing the potential of one day starting a company, and at the end of Gates’s first year at Harvard, Allen moved closer to Boston so they could continue to pursue the still-vague possibilities. Then, in December of Gates’s sophomore year, the vague future began to take on a more exact face.

On a visit to Harvard, Allen stopped at a convenience store and noticed the current issue of Popular Electronics magazine. On the cover, under the title “World’s First Microcomputer Kit to Rival Commercial Models,” was a picture of the Altair 8800. Energized as he had never been, Allen showed the magazine to Gates, and within a few days Gates had called the maker of the computer, Micro Instrumentation Telemetry Systems (MITS), and told them that he had written a BASIC computer program that could be used on the Altair.

This was a lie. Gates and Allen were just trying to gauge interest from the company. But MITS was deep in its own deception: the computer shown on the cover had not been developed yet, and even the prototype had been lost in shipping. Still, the magazine article had generated interest far exceeding expectations, so MITS asked Gates and Allen to come in and demonstrate what they were thinking. Only then did the two set out to write the code. Gates focused on programming while Allen worked on simulating how it would work on an Altair 8800, which they didn’t have.

At the meeting eight weeks later, the program worked perfectly, and MITS arranged a deal to purchase the rights to Gates’s BASIC. Gates would later say that it was at this moment he knew the software market had been born. Yet, despite his growing certainty of the opportunity in front of him, Bill Gates waited another 12 months, until his junior year, to drop out of school and, with Allen, form Micro-Soft. And even then, the company might have amounted to little more than a footnote in the history of software without Bill Gates’s mother.

Long active in community service in the Seattle area, Mary Maxwell Gates became the first female president of the United Way of King County and eventually chair of the executive committee of the national United Way, then one of the most influential nonprofit positions in the world. Serving on the exec committee with her back in the early seventies were, among others, John Akers, who would later become the CEO and chairman of International Business Machines (IBM), and John Opel, who preceded Akers in both positions.

Mary Gates mentioned her son’s new business to Opel, who by many accounts then relayed this information to other top IBM executives. There’s no definitive record of what got said when to whom, but only a few weeks after Mary Gates got the ball rolling, IBM took a huge chance by contracting with Bill Gates’s fledgling company to develop an operating system for the company’s first personal computer. The success of both the IBM PC and the Microsoft Disc Operating System (or MS-DOS)—and the sweetheart deal that let Microsoft retain rights to its software—is what ultimately made Bill Gates the richest man on the planet.

Experience, Not Faith

So, did Bill Gates walk away from one of the world’s most coveted degrees toward an uncertain path? Well, he did ultimately make decisions from which there would be no turning back. That part of the myth is dead on. But was Gates a great risk taker? That’s a more complicated story.

His family’s money and position provided cover for his youthful computing hijinks and helped assure that he would have the best education available. As for the famous Harvard dropout story, he didn’t really. Rather, he took a formal “leave of absence,” a kind of emotional umbilical cord that kept him tied to Harvard long after he had vacated the campus, just in case things didn’t work out. But by then, he had already turned the odds in his favor. After half a decade of dancing with the opportunity, beginning early in high school, he had already covered most of his downside risks. He knew, for example, that he loved the work, and the early Micro-Soft had projects in the pipeline.

What’s more, Gates had validation that both he and Allen were highly competent with this new technology, and he could see that the topside potential was huge. The industry was just emerging, and his mother was in the particularly influential position of head of a United Way executive committee that also included two future CEOs of the world’s dominant computer company. As they say, it’s often not what you know but who your mother knows that can land you billion-dollar contracts.

Far from being one of the world’s great risk takers, Bill Gates might more accurately be thought of as one of the world’s greatest risk mitigators. And in that, he is not alone. The simple fact is that everyone is afraid of risk at some level, including everyone I interviewed for this book. That’s a given of human nature. But the further fact is that Door No. 3 is a myth, whether we’re talking about the myth of Bill Gates or the myths that we privately tell ourselves.

You don’t have to be fearless to make dramatic changes in your life. Transformative change isn’t propelled by raw courage. It’s “sparked” by a series of events that build exposure and experience, both of which help to create asymmetric risk. Through sparking, the upside opportunity is confirmed while downside risk is mitigated. Ultimately, the leap—when it comes—is not one of faith but of experience, even of comfort, just as it was for Gates.

###

Interested in more behind-the-scenes stories? Check out Leap. It can be read in two quick sittings and will get you off your ass to do whatever it is that you aspire to do.

Related and Suggested Posts:
From Shanghai to Silicon Valley: 3 Tips for Turning Lack of Resources into Strength

Posted on: September 13, 2009.

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186 comments on “Do You Really Know Bill Gates? The Myth of Entrepreneur as Risk-Taker

  1. Tim,

    I trust your opinion on a book, and if you read it in two sittings, it was probably entertaining. But I’ve read this same story of Bill Gates, the Altair and Basic so many times, and written by some many people, in print and on the web. Could you give us a better excerpt to give us some indication of why this book is worth reading?

    Like

  2. That’s why I find it amusing when people think I’m taking a risk not going to university or getting a job, instead choosing to build a business. But the thing is, I figure I have 4-5 years until all my friends are finished with their further education and at that point they’ll all have their student loans to pay off whilst I’ll remain out of debt.

    I’d consider debt and not having the time to build assets that early in life to be a bigger risk than anything business-wise. Obviously there are the benefits of taking the standard route and it does require self discipline to get things done but it really doesn’t feel like I’m taking a risk.

    And that was a very interesting look into Bill Gates’s early life. Sort of annoyed that I didn’t get up to more computer-related mischief at school.

    Like

  3. This section is very similar to “Outliers” by Malcolm Gladwell. In his book, he also tells the story of Bill Gates and his successes.
    The success of Bill Gates was not only do to his skill, but circumstances that gave him opportunities to hone his skill by being able to work on programs for over 10,000 hours. Bill Gates didn’t do it all on his own, but through many lucky breaks and people that supported him.

    Entrepreneurs know risks vs. investments?

    Like

  4. The most important point in this whole article is the Gates and Allen shopped around their ideas before they were even designed. That’s the key in risk mitigation. They artificially planted seeds that created the demand, even before the new the specifications of the product.

    They had the right skills, were in the right place, but most importantly they actually took the initiative. That’s what I take away from this.

    Like

  5. So many people describe themselves as “not a risk taker,” and use that as an excuse not to do anything without a guaranteed outcome. This should be a very interesting book, and one that takes that excuse away from people.

    Like

  6. It’s always fascinating to me to separate the urban myth from fiction. Reality often times doesn’t correspond with public perception. The truth is that people like Gates make big bets, but they’re very calculated and well-reasoned. Above all, they have faith in themselves to be successful.

    Like

  7. The risk maybe wasn’t as great as what most people believe, but the fear had to be enormous. Anytime you walk away from the thing(s) that others have made you believe you should be doing, the FEAR is magnified. (ie. having a regular corporate job)

    Gates had an obvious family reputation to uphold.

    The difference between Bill Gates and 99% of the other people in the world, is that Bill moved forward with his dream despite his fear.

    F – false
    E – evidence
    A – appearing
    R – real

    Sadly, most people will reach the end of their life and look back with much regret. Fear keeps them from reaching their dreams and living the life they could and should have.

    “When you get to the end of your life and look back on what you’ve achieved and accomplished, that will be what you have traded your life for.” Peter J. Daniels

    Like

  8. David you bring a really good point. School is not for everyone and if one is wise you can use your early 20’s to build assets and a nice fortune. @ Tim, this can also be said about the guys who started Google. Having the right contacts and being driven can be an explosive concoction.

    Have a blast in Nica…..Go to Granada!!!!!

    Jose

    Like

  9. Yeah, I’m excited to read the book. The story of Bill Gates is really interesting. Aside from some of the advantages he had that u discussed above, I also like what Malcolm Gladwell said in Outliers about Gates (and Jobs for that matter). He said that Gates was born in a very narrow window of time, when he would subsequently come of age right at the start of the information/computer age.

    In fact, according to Gladwell, Gates may have been the only teenager in America with access to some of the cutting edge technology of the late 60s and early 70s (some not only no other teenager had, but access most R&D depts of most corporations and universities didnt have).

    But listen, risk-taking is was it is.

    Thanks for the review.

    Cheers,

    Alex

    Like

  10. Kinda sound like a regurgitation of Malcolm Gladwell’s “The Outlier” one of the best books on success I ever read. Sound like this guy just flip the text around a little bit. He told Gates Story in exact manner. I did not even have to finish reading it, I read Gladwell Book 5 times already. Wonder why Tim did him this favor. I’m certain Gladwells book is far better.

    Like

    • Hi Leroy,

      This wasn’t a favor. I don’t do posts as favors, as I don’t need to. I found Outliers infinitely less interesting than The Tipping Point and Blink, but the two books are–regardless–quite different in emphases.

      Tim

      Like

  11. All this stuff sounds very similar to what Malcolm Gladwell wrote in “Outliers,” though from a slightly different angle. These analyses, not only of Gates but others, are all pretty much saying the same thing about the stories of hugely successful people. One, these people had experience that most people didn’t have prior to the emergence of a huge trend. Gates and Allen were relatively unchallenged in computer programming, as so few people their age had access to computers while in school,

    Two, these people had the resources to make the most of the right opportunity when it presented itself. Not everyone has the financial and emotional resources to change course when the golden opportunity of entrepreneurship presents itself.,

    Three, these people happened to be in the right place at the right time for things to fall together for them. If MITS had needed their operating system any earlier, Gates and Allen might not have had the knowledge necessary to pull off their stunt; any later, and they might have been too entrenched in some other programming venture to backtrack and pursue the MITS project.

    I’m interested in knowing if, by the subtitle for “Leap,” if Smith offers advice for the common man to prepare for such success, which Gladwell’s book doesn’t appear to do (though it might, as I about 100 pages left to go).

    Like

  12. Mike, great point, the gates story has been written 100 times. But what always ticks me off is that it is written from a PR point of view. Before I experienced my own Leap, i was just an average guy, the perineal “B student”. And it all happened so quickly. But most people who go through this transition are reluctant to say how normal and average they were before it happened. Reading anyone’s resume, you would assume they never missed a step. But that is not how it is with friends, colleagues, or with the most successful people like Gates who actually make the Leap.

    This is a book written for the average person who is ready to break out in their life.

    Rick Smith (author of The Leap)

    p.s – and Tim was right about the sub-title…

    Like

  13. Interesting read Tim , have to make it a point to check it out…also did you know that A.J. Jacobs new book is out? Looks pretty good as it basically highlights different events and experiences from his past books.

    Also Malcolm Gladwell’s Outliers was also just released and looks promising.

    Cheers

    Like

  14. Tim,
    Thanks for sharing and I’m excited to read the rest of The Leap! This author also published another book called The 5 Patterns of Extraordinary Careers, and it is a great reference to this day. Smith’s experience is inspirational in the fact that he dwells on being an average guy who has found many formulas to success.

    Like

  15. Tim- I hope they included your story in LEAP. It is far more inspiring. I could probably do without Windows but not lifestyle design.
    BTW Random in China was hysterical.
    Keep up the great posts.
    Kelly

    Like

  16. It’s good to see a book like this out there; thanks for bringing it to light. Looks like it addresses two of the biggest misconceptions–the risk-taker mentality you mention and the “overnight success-” notion. Oftetimes the media calls someone an “overnight success” but once you delve deeper, which most people don’t, you find they’ve usually put in years of work, which often consists of many failures.

    Like

  17. Hey Tim, thanks for sharing the story about Gates. This is right in line with the myths about entrepreneurship dispelled in the book The e-Myth (which I think I also heard about first from you).

    Speaking of calculated entrepreneurial risks, can you share a little more with us about how you choose which books to review here on your blog? How much does a post like this pull in for you from Amazon? It would be nice to know a little more about the inner workings and monetization of a top blog like yours.

    Like

    • Hi Corbett,

      Thanks for the comment. The Amazon surprisingly doesn’t add up to much, and perhaps I’ll give some exact numbers in a future post. I haven’t given too much thought to monetizing this blog, though I’m sure that will happen at some point in a more intelligent and systematic fashion :)

      All the best,

      Tim

      Like

  18. Very interesting- Bill gates has always struck me as a smarmy kind of guy you know the kind that wouldn’t have come up in a hard scrabble kind of way. You tell just by looking at him that a lot of his success has come from lucky breaks and his ability to hold people hostage at the point of his monopoly

    Like

  19. I get the same feeling Mike described: Seen and read the Bill Gates story too often, by now…
    Having said that, the premise of the book seems very interesting. I like a book that goes about deconstructing clichés.

    @Tim: Funny, I found Outliers way more interesting than Blink. :)
    (Never read Tipping Point)

    Like

  20. I had a conversation about this with my former boss as I left to pursue my own business. In today’s society there is really very little actual risk, even if you do put it all on the line.

    I’d be surprised if any balanced individual didn’t also have family or friends who would offer a couch to sleep on while rebuilding.

    Keep your living expenses low and 6 months rent in the bank, or available on credit, and what is the worst that can happen? Everything crashes and you wait tables or park cars while you come up with the next business.

    Like

  21. A comment on the comments.

    Be careful of forgetting that bill gates is an exceptionally talented and driven person – there’s a desire to think that successful people are not so, as this gives you an excuse for not succeeding. I think this is the theme for books such as outliers and the key to their popularity.

    The take here though is simply the last paragraph.

    Like

  22. From: Rick Smith

    Interesting discussion, but I wanted to clear up some apparent confusion with Gladwell’s book Outliers. His thesis was that your environment contributes greatly to your ultimate level of success – good or bad. My book, The Leap, seeks to answer an entirely different question – Is it possible for everyday people, those on a lifetime trajectory of ordinary, to break out and achieve extraordinary things in their careers and lives? My research has found that it happens all the time, and it is quite replicable. In fact, I lived it.

    Gladwell uses the Gates story to show how incredibly advantaged he was, with opportunities that tipped the scale in his favor. My point is that, even without these tremendous advantages, you still don’t need to take big risks to break out in your life. Most people who make the Leap don’t. Risk mitigation is a powerful life strategy that works for the privileged and ordinary person alike.

    Like

  23. Wow… some revealing stuff.

    I’m sure a great majority of successful business ventures are less riskier then they are made out to be by print and media.

    I’ll add this to the book list. As many have pointed out already, definitely check out the book Outliers by Gladwell.

    Mike

    Like

  24. Totally agree with this. I had a similar revelation several years ago, when I realized I was on the wrong path in life. Yet the path I felt I should be on, a writing career, seemed impossible to leap toward without sacrificing my family’s needs, which included young children. But then it dawned on me I could simply take one step at a time, lateral moves that brought my true path closer, while I pulled my current path, the one that provided income, with me.

    I looked at ways to hone my writing skills in my current job, taking on work that utilized those talents, as well as working after hours on magazine articles–a labor of love that didn’t seem like work–until one day, I realized the paths had moved much closer to each other, even seemed to merge ahead on the horizon in a distant shimmer. Was that vision ahead real or a mirage? I wasn’t sure, but I did know the leap had become much shorter, and while it still require faith in myself and the universe, it was a much smaller risk than before.

    Good info. Thanks for posting.

    Like

  25. Rick,

    Except… your story proves that Bill Gates wasn’t average at all. He came from a wealthy family, had exceptional opportunities, and had a mother with incredibly coincidental connections.

    If anything, stories like this just prove that luck and coincidence are the real forces behind most great success stories.

    Like

  26. This is a great post. I have been an internet entrepreneur for 7 years or so. What I now realize on reading your post is that although I could have been in business for 10 years by now, I joined a firm doing what I planned to start prior to going it alone. I also built up lots of key contacts with customers and partners prior who ended up really jump starting my business. I also stayed employed for an extra year while I test drove my business concept with several early stage clients. So, the truth is that we entrepreneurs are not really risk takers – we cover all the bases first and then make the jump.

    Like

  27. Sure it may work for Bill Gates, but some business involved taking risk no matter. Depending on which line of business we’re looking at, you might be taking more than you could afford to take.

    In normal circumstances, anyone who is trying to build a business must be optimistic about the future. Therefore, to take the risk or otherwise is ultimately a choice some must come to face.

    Not everyone is born with silver spoon in their mouth. To simply say that entrepreneurs don’t take risk in building an empire is misleading and generalizing.

    Like

  28. This post was well timed for me for a couple of reasons. One of them being your “no-blurb/no-review policy for books” which I didn’t know existed but I’ll have to convince you to transgress when my book is ready for release (it only exists in the form of a title). And second, Bill Gates was on my mind all day yesterday and this morning as I just did a chart of “teachers” in my life. I ended up leaving him out for some reason when I wrote it up, but he popped in my head later as being a large motivation for me to pursue business (I actually view/ed him as competition. The guy to beat!)

    I think books like this are important. I’ve been listening to the “Genius Network” interview of Michael Michalowicz (author of ” The Toilet Paper Entrepreneur “) and a big part of what he talks about is the “real” stories. Everyone sees the end result, but very few pay attention to what REALLY went in to the creation of a Bill Gates, Jackie Chan, Warren Buffett, Richard Branson or a Tim Ferriss. ;) The general thought seems to be “That guy got lucky and POOF millionaire.” The follow up thought is “I’m not lucky, so I shouldn’t try.”

    Being able to observe the successes I’ve experienced in life so far has clearly shown that any “instant” or what appears to be quick success has roots that are deep in time, experience and hard work.

    Anyhow, yours is the only blog I follow and I buy every book that is recommended (Emergency was the PIMP JUICE! I got my copy signed and everything. :) )

    Oh! One more thing (about the comparison to “Outliers” by Malcolm Gladwell in the comments. I have yet to feel compelled to read the book (although I’m sure I will eventually). Seems like it can be summarized in a sentence “Do stuff for a long time and you will be awesome at it.” That being said, “Tipping Point” was the SCIENCE!

    Like

  29. Although this is a great and often told story about Gates once again it illustrates that rich well connected person can take risks and has choices many others do not. I don’t begrudge him this, It would be sad if he had not taken advantage of this. But people like to trot out these stories and say see look you can do it too! That is simply not the case, he had no risk, he had wealth and position to fall back on, he was well connected and had a parent who created opportunities for him. This again is all fine but does not apply to the average guy to gal wanting to start a business.

    It is all on the line when regular people decide to start a business even if keeping on foot in a job. There is the risk of getting fired even if there is no conflict of interest, there is the risk of neglecting family responsibilities and loosing valid relationships with spouses and kids. I can tell you how many successful business owners and executives who have lost their wives and have no real relationships with family or friend beyond superficial business contacts. When a regular person starts up a business no matter what the idea is the risks to every thing else in their lives is huge, the pressure is huge, failure is often a humiliation that friends and family never let go of, the pressure is tremendous and even after success comes of the few sometimes the pay off leaves them alone and lonely at the top with their money.

    The Bill Gates story although a fine story in it’s own really does not apply to the regular person with regular means, his lack of risk really does not relate at all.

    Now someone tell the story about the guy Bill conned out of Windows and gets credit for creating and there we have an example of someone who worked hard risked it all did not know what he had and was paid little for it buy someone who knew exactly what he was buying. For Gates it was a brilliant business move, for the other guy a disaster.

    Like

  30. Rick Smith,

    Thanks for taking the time to write back. It sounds like I’m your target audience for the book without a doubt. Perhaps you’ll make it into my weekly feature, “What I’m reading”

    Mike

    Like

  31. I thought it was a pretty cool post Tim.

    I often run into the risk question a lot from people. I get comments like, “well you’re just a gambler”.

    My simple answer to myself and those who ask is that risk is a pretty misused made up sort of thing.

    I came from a really low income family. Moved out at 18, with absolutely no assets. Since then I’ve been working on fixing that. My view is, what am I really risking?

    Likely that thought process will change when I have a million dollars. But hopefully not :).

    Jordan

    Like

  32. I 100% agree. I started my own design company with years of experience and clients already lined up, so the “leap of faith” wasn’t really there, it was more like just moving towards new possibilities and opportunities that I already knew I could take.

    I love all your posts, keep em’ coming!

    Zack

    Like

  33. Excellent post. So few post around the internet have much to say these days but I think this one was exceptionally insightful so thank you to the author for taking the time to write it.

    Also, kudos to Leroy for eliciting a response from Tim.

    Like

  34. Tim,

    Hadn’t heard of the book…thanks for the intro. To toss my hat in the ring as an entrepreneur, I think there are three skills that we regularly tap into.

    1. Creative idea generation (problem solving)
    2. Actual “movement” toward a goal
    3. Persistence, despite failure

    Each one is difficult to manage in a single instant, let alone every day!

    Always a pleasure to read about other entrepreneurs!

    Thanks for sharing,
    Doc

    Like

  35. The writing that is getting overlooked here is Nassim Nicholas Taleb’s Fooled by Randomness and The Black Swan. He would have a field day with this post hoc analysis of the life of Bill Gates.

    People get lucky breaks. Ordinary success takes only hard work. Extraordinary success takes hard work and luck. If Bill Gates had not been so lucky, he would certainly have been successful in the ordinary sense much like the rest of his family.

    A more interesting story would be Steve Jobs who seems to not have gotten the lucky breaks that a guy like Gates did. Jobs was definitely a risk taker even sleeping on the floor of a friend’s place and dropping out of college after a semester. But his repeated string of successes in the face of adversity points more to true talent than being a mere coin flipper.

    Most success advice stems from people who are successful largely from giving advice on how to become successful. This would be a guy like Tony Robbins who has spawned a virtual industry on this model. I refer to him as the self-fulfilling prophet. But you will notice Bill Gates writes no similar self-help garbage. This is because his success is non-repeatable, and he knows it. Remove any of his lucky breaks, and he is a computer sci professor at MIT.

    The point I do get is that phenomenal success does not necessitate risking colossal failure as well. It is not the choice between wealth and poverty but ordinary success and extraordinary success. I don’t think people need to know how to be extraordinarily successful but to learn to be happy with ordinary success since this is where most of us will end up. This is why Taleb is so helpful. His success is relatively modest but very repeatable.

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      • Brilliant is correct, no doubt. He was speaking recently about how it was a no-brainer to go short the long term US treasury bond market. Proven correct as of late. Not only a brilliant thinker but capable of communicating his premises and conceptual conclusions clearly, in print, as well. Definitely on my would-love-to-have-dinner-with list

        Like

  36. I don’t believe “It’s not what you know, it’s who you know.”
    I could be the son’s president but if I’m an idiot I won’t do very well. Who you know is important at first but whether you are up to the task us up to you.

    So it’s better to become so good you can’t be ignored.

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  37. I understand how frustrating those types of responses can get when you talk about lifestyle design or entrepreneurship. In general people have alibis to explain their lack of achievement or reasons for failure. At times, I am guilty of it as well. Fortunately, I know it’s fatal to success and try to break the habit.

    As Elbert Hubbard once said, “It has always been a mystery to me, why people spend so much time deliberately fooling themselves by creating alibis to cover their weaknesses. If used differently, this same time would be sufficient to cure the weakness, then no alibis would be needed.”

    In other words, I’m sorry you’re the burden of so much resistance but you’re not the one with the issue :-).

    About the closing comment on this post:

    Sure, one does not have to be fearless to make dramatic changes in life. Yet, courage and taking action is a good dose for making dramatic changes. Fear can be the one substance which ignites the fire for transformative change, by taking something dreadful and exchange it for something more valuable. In essence, experience and exposure serve a great purpose but ultimately knowledge and experience are of little use unless one puts it to practical application :-).

    Amusing post, keep up the great work.
    ______________________________________

    @MiltownKid Hey, wassup! Hope you’re well. Thanks again.

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  38. I agree with Tim that the tagline is off putting for me. I read or listen to about one or two books a week. However, I saw this book and never thought twice about skipping it. Any book that has the word career on the cover is a no go for me – unless it is surrounded by a synonym of the word kill.

    @Rick Smith, Thanks for clarifying the differences between Outliers and Leap. When I started out I had little money but I had a strong belief that what I was doing wasn’t a risk but rather a well thought out strategy that calculated and limited risk.

    Adding the book to my future read list…

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  39. I always enjoy the debunking of myth. Did Bill Gates take a big risk? In hindsight “no”, but at the the time, in his mind, that was a big risk. The big challenge is handling that risk psychologically, and he did.

    Was the risk measured? No, how could he know the upside was $60b in personal wealth? He did mitigate the downside by keeping the door open at Harvard.

    Bill Gates best asset was his support system. Most of us would have sold the program to IBM for what we thought was a lot of money. Instead, Gates retained the rights to his program. That’s how he became the richest man in the world and not just another rich man.

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  40. Thanks Tim, great post. I, too, recently discovered this book, lucky
    to be sent an early version. And like you, I didn’t know what to
    expect. But I couldn’t put it down. It is certainly one of the more
    provocative and entertaining books I have read in years!

    I also liked gladwell’s Outliers, but found The Leap much more
    relevant to my situation, just a guy trying to figure out my what to
    do with my life. Where and how I can have the most impact.

    Thanks for sharing this with the world, I think it may help a lot of
    people. Looks like you are already having a big impact (Leap is now
    #1 on Amazons business bestseller list!).

    http://www.amazon.com/gp/bestsellers/books/3/ref=pd_ts_b_nav

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  41. Fear of the unknown is a common reaction for most of us. Even when we know what we want, we often find ourselves afraid to go after it still on the risk of it not working out. I think people are more afraid of failure then anything else simply because we all live in a society where we are born and raised to think failure in any sense is a bad thing. I like that you put an emphasis on the fact that you don’t have to be a risk taker to become an entrepreneur, but rather simply the courage to follow your dream.

    This served as a nice reminder to me about the many misconceptions that exist around the idea of entrepreneurship and life outside the norm.

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  42. Great food for thought.

    Rick Smith you wrote above in a comment “My point is that, even without these tremendous advantages”. Bill Gates coming from tremendous advantage isn’t a good example of this and isn’t a good motivator for the rest of us, so Tim doesn’t seem like an awesome selection. One has to wonder if he had opportunities to mitigate risk that others do not have — though my feeling is that isn’t fundamentally the case for most of us (most of *choose* our stresses).

    Rick, you might confirm your sources for “At the meeting eight weeks later, the program worked perfectly”, because Steven Levy’s Hackers (and other accounts) suggest “The BASIC was far from a working version, but it was close enough to completion and its routines were sufficiently clever to impress Ed Roberts.”

    Adding Leap to my list of books for when I need fresh inspiration!

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  43. Interesting, but ultimately it is a reminder of a hard truth, that people are born into opportunities (whether or not they seize them is another story).

    Turning it around in a positive way could be simply suggesting that you look for that firm ground you can keep one foot on, and actually do what it takes to take advantage of it. Don’t burn the ships, look for a way to secure them as best as you can to minimize risk.

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  44. Tim, I used to think that entrepreneur = risk taker. I’m in my mid-30’s, straight A’s in high school, went straight to college and got my business degree, and have held the traditional jobs working for other people. Then I met my husband, the innovative/creative/software genius. He’s a self-taught non-stop idea generator – which often conflicts with my traditional/analytical/safe self.

    But then we both read your book. And now we are finally on the same page, after being married for what, 15 years now. Tim, could it be that you helped our marriage?! Your concept of “working smart, not hard” REALLY hit home with me. And I don’t want to be old when I retire! So now we’re working together, with me analyzing his business ideas with your concepts in mind. What a team we are now! You’re on a first-name basis in our house, Tim, we’d love to meet you if you’re ever in Boise Idaho.

    With the “Four Hour Workweek” insight, and having just read “The Tipping Point” and “The 22 Immutable Laws of Marketing”, I feel so empowered with this knowledge. To me, the only risky thing about being an entrepreneur is going in blind.

    Rick, I truly believe you’re right, that everyday people can break out of their ordinary life to achieve the extraordinary. But my future success would be such a better example to drive your point home :)

    Angela

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  45. Great post! Life is really about taking
    risks. The more you can step outside
    of your comfort zone, the more you grow!

    Too many people play life small. When
    you play BIG you get BIG results!

    If you’re going to play life, you might as
    well play big. Thanks for the great share:)

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  46. @Charlie: Very good point. I suspect that “How Bill Gates/Warren Buffet/Richard Branson did it” misses the point for almost everyone. You can’t expect to model your life or business after theirs and get the same results, because besides being very, very skilled at what they do, they were probably also extraordinarily lucky.
    And wanting to become a billionaire or even millionaire might be wasted ambition anyway. Monetary wealth has only so much to do with leading a successful and fulfilling life and it’s importance has been vastly exaggerated.

    @Dynasty: Interesting quote by Hubbard. Personally, my greater problem is that I tend to idle and distract myself instead of investing myself in something worthwhile. I realize that I’m idling, so at least I seem to be past the stage of fabricating excuses…

    Thanks to Rick Smith for joining the discussion.

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  47. People simplify Taleb into “it’s all luck.” Gladwell says hard work and luck, explaining the cultural contribution to luck. The problem here is using the Gates’ example, one of monumental success, on a website for the 4HWW. Most of lifestyle designers don’t need Gate’s level of wealth to live their dreams, nor do they want to spend their nights in a computer lab. You need a BIG dose of luck to be the richest person in the world. For 4HWW’ers looking to have enough money and time to live their own life, you need a lot less. I assume that is what this book is about – taking incremental steps of exploration without betting the farm. This is exactly what Taleb would recommend – tinker with a new life without giving away your safty net.

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  48. Man, this is good stuff.

    Tim, I think you do a great job (on the blog and in your book) of explaining the “risk of innaction.” Many people look at changing their life and their career and their work as a risk, but it is so important to realize that simply doing nothing is also a risk. Doing something you hate is VERY risky, even though it might appear on the outside that things are smooth.

    Building up a lifestyle that does not tolerate change or disturbance is the most risky lifestyle around.

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  49. Well if it’s who I know more than what I know, (though from Bill Gates I can see what you know is still damn important), I’d best be working on knowing people.

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  50. Tim,
    I know this is not related to the topic above but thought this would be one of the fastest ways of possibly getting a response. Im a uni student and have just finished reading the 4 hour work week for possibly the fifth time, which means a lot since I dont normally enjoy reading. Anyway i have come up with an idea for my muse and i was wondering if i could ask you a quick question. Like you i have an idea for a supplement based muse but unfortunately i for obvious reasons have not alot of money. However after completing one of the exercises in the book that has you define your nightmare scenario, what steps you would use to get back to your previous state and the benefits of going ahead it seems as if the benefits definitely outweigh the possible worst case scenario. I was wondering though if you could tell me if you had the contract manufacturer do research as far as ingredients and amounts for your supplement or if you knew the entire science behind it. As although i am not a scientist supplements is an area i find very interesting and read a bit about, i have read about some ingredients that replicate the effects i would like my product to have. I hope this post makes sense and that you can help. Thanks

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  51. Perhaps the luckiest break Bill Gates got was to find something so profitable and so interesting to him, so early in life.

    I count myself in the majority in not doing so :(

    I’ve been opening and closing hobby websites for the best part of a decade before finding a subject that sufficiently interests me to put in the ongoing level of work required. (and I was in full time employment for several years before I even started browsing the web, let alone developing on it.)

    The web has provided such a lucky break to so many… although maybe none quite so lucky as was Bill!

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  52. Interesting take on risk perception in entrepreneurs, thanks for sharing Tim.

    I totally agree that entrepreneurship is more about opportunity spotting than risk taking. People just get caught up on the risk taking phase because its the last 10% of the action taken, so they attribute success to the risk taking, not the calculation that actually led to the risk being taken.

    Love the ‘dry test’ of promoting the software and PC before it was built too. Great way to test demand before investing in creating a product! Good lesson there :)

    As this example with Gates shows, the true cause of Gates’ success was a culmination of factors both by his own doing and the cards he was dealt. I think it should be pointed out that even if Gates’ mum didn’t help him land a deal with IBM, he still could very well have succeeded even if not to the same extent.

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  53. As someone who’s actually worked with Bill Gates and with his father (who is a remarkable man who went to college and law school on the GI Bill) and therefore has a pretty good understanding of his family situation, I thought you might be interested in the career advice I just posted for my own nephews and nieces – one point of which is that “Understand The Best Contacts are the Ones You Make for Yourself.”

    Oh, and by the way, I’ve been CMO for two successful startups (Valve and Picnik)- which my college dropout husband cofounded. Neither of us had any family contacts to help and our families struggled. But were were hardworking and focused and had built enough experience to get jobs at MIcrosoft when it had its pick of people from around the world.

    Bill Gates had lots of advantages – which he’s the first to admit….but I think everyone should be aghast if the lesson people take from his life is that you don’t have to work hard and work smart. You might also want to read the post from his dad that appears today on the Huffington Post in which he talks about Bill’s mother and the lessons his children learned from her.

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  54. @lingvoj
    “I don’t believe “It’s not what you know, it’s who you know.”
    I could be the president’s son but if I’m an idiot I won’t do very well. ”

    Ever heard of George Dub?

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  55. this book would be interesting if it would interview most of the people who lost their business during the .com.

    It’s easy to talk about successful stories with all needed ingredients (be it mother’s contacts, hard work or luck). Leaving aside, maybe, the majority of the stories, i.e., people who struggled to ‘leap’, lost their business and tried again misses the real learning about what and how they did it.

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  56. “Yes, David, this is precisely what the book is about: small tweaks, one at a time.” – Tim

    I haven’t read the book but the above statement is so simple and true that it’s often overlooked. Many people do not reach the goals they set for themselves but it’s not because they are afraid to take risks, it’s because they fail to acknowledge the relevance of the accumulation of their small successes to their achievement as a whole. Every goal looks formidable when you are first starting out…but if you keep your nose to the grindstone and continuously fight for each of those “small successes,” you can’t help but reach your goals.

    Thanks, Tim – I look forward to reading Leap…

    Paul

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  57. Tim, I think you’re being a bit naive here propogating mainstream thought… Bill Gates and Microsoft are basically a front company for the C I A. It was simply luck that the C I A backed Gates. Think about it… There is no way on this planet that the military industrial complex would let one guy have a virtual monopoly over the personal computer software market without their intervention and co-operation. Moreover, many of the technologies we see in IT originated from military R and D. The internet being a good example.

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  58. Choosing Bill Gates seems to (more or less) fit one part of your thesis: the assertion that you don’t have to “put all the chips on the table” to find success.

    But this same example contradicts the second part: even if I hadn’t read Gladwell’s account (which goes into greater detail re: Gates childhood), your excerpt, particularly in the last paragraph, shows how Gates’ connections gave him a tremendous edge over the competition.

    I would be willing to take a look at another excerpt from the book. I would hope that you’ve dug deeper than just the Gates story, and could perhaps provide a more interesting, less run-over example.

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  59. @Dynasty – What up thuggin’!
    @Tim – You gotta hook up some kind of replying system! Is the WordPress.com one going to get released to the general public?

    I want to add something to all of the debate about “luck” vs. “hard work.” I’ve still only read the first chapter, but the title says it all “The Magic of Thinking Big.”

    Bill Gates didn’t “accidentally” become a billionaire because of who his parents were and who they were connected to and what resources they had access to. Think about this one. Billionaires have kids too! Mathematically, based on resources and connections, those kids should be TRILLIONAIRES! :D Bill Gates got big because he wanted to. Otherwise he would have stopped somewhere along the line.

    I will agree that the timing was important for Gates and what he did, but that’s true for everyone at anytime (Warren Buffett talks about this as well, for example if everything about W.G. was the same except for his skin color… No billions). There are opportunities just like Gates’ (perhaps better than Gates’!) surrounding all of us right now. They’re just hard for us to see. Keep looking! :)

    One other thought I wanted to add is that it’s up to you and me to decide what success is for us. Too bad all of the books about success focus on people with a lot of material success. A book should be written that balances things out, profiling a Mafia Don, a tribal Chief, a fisherman, a monk, etc.

    Basically people who have painted a vision of their future and have done what’s necessary to get there. THAT’S true success. That’s (obviously, but seldom talked about) what it’s all about.

    [/epicmanicrantingmode]

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  60. Thanks Tim,

    I have read Bill Gate’s book about 10 years ago, it’s refreshing to see another side of Bill Gates and reincarnation of the creator of “blue screen of death”. I also see that Bill Gates did something very special for computers that prolliferated everything else today including Apple’s comeback.

    What I’d like to see really is though, some thoughts on people like Linus, the creator of Linux, of how much money he “didn’t” make while making open source, the true force behind technology today. Even my new phone is a linux-powered device, not Windows, a Palm Pre.

    Well, the book seems lke a great read though, I will have to definitely get it next time at the bookstore at Borders. Your book is still the greatest though. :)

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  61. I’ll definitely look out for this book for my Bottom-line Bookclub! It sounds like it’s piled with ideas on how to be agile by learning how to test and adapt until you get the results you want – I’m all over that! It’s a great strategy for managing fear, but more than that, it’s a great strategy for the innovation and design process.

    Cath

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  62. Considering any Entrepreneur a risk taker is silly. Sitting in a cube or assembly line waiting for your layoff is taking a much bigger risk than being in control of your own life. To me, even the best case scenario of showing up 60 hours a week for the rest or your life, to do work that is “tolerably uninteresting” is the worst possible life to have.

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  63. Great Post, I just did a talk at the McGill University about in essence the same myth of risk and entrepreneurship. In terms of getting young people motivated to get off their butts and aspire to something I’m finding it quite difficult. I even stole a lesson from the 4hww and challenged everyone to email me with their best elevator pitch for personal help from me but I haven’t gotten any bites.
    This is a little off topic but any suggestions to help motivate university students into entrepreneurship?

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  64. Thanks for this recommendation, Tim. As always, you seem to post exactly what I need to know about.

    Rick, I will check out the book when it’s available, and I’ve subscribed to your blog feed.

    Thanks again!

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  65. Oddly enough, reading this post really jumpstarted me on a new line of development that I’ve had on the back burner for a while. Looking at the post again, I’m not even sure where the inspiration came from other than the idea that Gates built a lot before he took the risk to quit. I’ve been putting off developing this new website for a while because I’ve been continuing to build my other one, but there’s no reason to hold off and wait for one to come to completion (especially since it’s not designed to ever by “completed” anyway). Thanks again, Tim. Though your posts are sporadic much of the time, I find that the majority of them have more impact on me than most blogs that I see. Keep being selective!

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  66. People want advice on how to get rich –and pay for it. Now how not to go bust does not appear to be valid advice –yet given that over time only a minority of companies do not go bust, avoiding death is the best possible –and most robust –advice.
    NASSIM NICHOLAS TALEB

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  67. Tim,
    Great post. And the bit about luck and focused effort is right. But the myth about risk persists. I think the word entrepreneur almost valueless these days. Risk is inherent in all strategies and game theories. There is NO riskless strategy. So if risk makes the entrepreneur then we are all one.

    But the term is usually defining someone who is successful, not a risk taker.

    I used to be the Intl. director of training at Gerber’s E-Myth Worldwide and while there I learned first hand the reason the book is so powerful is not because of dispelling a myth. Not the entrepreneurial one at least.

    I’ve heard Michael say over and over that “the only reason to start a business is to sell it.” That is what entrepreneurs do. But after working with literally thousands of small business owners, I’ve never met one that did that. Not one.

    What they do is work very hard, get overwhelmed by a lack of systematization, and then most bail out. Those who make it do so usually in spite of anything like sound strategy. They do so because their top three competitors just happened to go out of business the month before or from some other fortuitous concurrences.

    So the idea that entrepreneurs are those who take huge risks is really just bravado and Donald Trumpeting. Most are very, very calculating and look for the 1 in 11 ratio that keeps them very wealthy and able to keep playing the game.

    However, 99% of the working world (read small business) does NOT do anything like this. They find some passion, follow it, hawk everything and twist every relative’s arm and some how start their thing. Then it’s a matter of time until one of two things happen: 1) They burn out and quite or 2) They hit some level of luck that pays for them to capitalize on that luck and keep things going.

    And rarely, one will get so lucky, like Gates, that what they’ve built connects to a distribution system that is just enough ahead of the “pack” that, like surfing a great ocean wave, they can ride it for one hell of trip – and in retrospect they say holy shit how did that happen?

    But everyone else tries to delineate, cognate, and fundamentalize their method to sell a book or prove a point. We just hate mystery and have to crush anything we can into quantities so we can remove our manic fear of the unknown.

    In reality, no body knows how Gates did it. Even him. So here’s to the adventure, not the seat belts!

    I think great success in is “being available” and having, much like you seem to, a lifestyle that is “available.”
    Cheers,
    Eric

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  68. Tim

    Thanks for this tidbit of information. I really feel you have given me the step by step process to overcome my fears. It is the litle steps that make the difference. In the past I looked for really great big LEAPS but with this book I can take small steps to success. The Bill Gates story is helpful for me to put things into perspective.

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  69. This looks like a fabulous book & I’m eager to read it! I’m so enthusiastic in fact, that I Twittered, FaceBooked and posted on LinkedIn about it!

    I hope everyone benefits!

    Best,
    Christine Elisabeth von Malsen Hueber
    Your Exclusive Social Networking Strategist & Business Management Solutions Expert

    Like

  70. I just finished the test offered on the book’s website and I found it a well constructed test with a slight different approach than most of the other career assessment tests. Check it out: http://www.leapbuilder.com/
    Tim – it would be interesting if you shared your results of the test with us.

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  71. Good read. I was recently reading the blog of Markus Find (founder of Plenty of Fish).

    A year or two ago he said the same thing…the best entrepreneurs aren’t risk takers (well, paraphrased anyway, what he said was slightly different and a bit more abrasive ha).

    But yeah, this is my wake up call to continue refraining from my old gung-ho ways. Thanks for posting

    -Anthony

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  72. Common people respect the brain of this man (Bill Gate), the story of Gate can never be over-flogged, never. In years to come he will continue to inspire millions into taking that bold step (risk or no risk involved). How i wish i can have a friend like Paul Allen. Gate and him could have decided to rest on their oars, reason, their parents are well to do.

    Somebody posted above saying that Gate bought window cheap from the original programmer, the man does not know it value, the idea could have return to where it came from, thank God for WINDOWS, it changed the world, thank you Bill Gate.

    @Rick, please keep up with the good work. we need stories like this in my part of the world (Africa).

    @Tim, am reading the full detailed tit bit! on the true story on Bill Gate from your review, am even more impressed now than ever, thanks, like i said before stories like can never be over told.

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  73. Great post! I’m in the middle of transition period in my career, so this posting really hits home. Apart from Tim’s and Rick’s books, I think Paolo Coelho’s Achemist book, and many more, are really valuable for anyone trying to take a “leap”. Transition and taking a leap is also about feelings, passion and supra-intellectual.

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  74. Hi all,

    I had a conversation w/an entrepreneur about this last night. He was saying things along the lines of “I need a team of risk takers to go with me, who are willing to risk it all for the success of this project, I’ve been homeless before and sold multi million dollar companies, I’m willing to do it again.”

    To which I had to point out that although it might make for a good story, risking everything is NOT a key to success, and is definitely NOT a requirement to success.

    Tim – thanks for the great post, I actually have a copy of the galley to this book on my desk and appreciate the write up and the timing.

    All the best. . .

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