October 30, 2010 12:11 am

Lunch with the FT: Bill Gates

The Microsoft founder turned philanthropist talks with Gideon Rachman about China, foreign aid and the miracle of vaccination
Bill Gates

I am sitting on a bar stool. On the other side of a round metal table, the world’s second richest man is sipping a Diet Coke, eating french fries with his fingers and explaining the history of the polio vaccine. Bill Gates would still be the richest man in the world, if he didn’t keep giving his money away. Now, after donating $28bn to the Bill & Melinda Gates Foundation – which funds health, development and educational causes – he is down to his last $54bn.

For a man who has made such an incredible fortune, Gates seems to have modest tastes. We meet at his office in Kirkland, a suburb of Seattle, and walk across the road to the Beach Café in the Woodmark, a smart local hotel. It is a pleasant enough spot, overlooking Lake Washington, but I am guessing it has been chosen for convenience rather than cuisine. We are seated in the bar area, away from the other diners. Gates is wearing a brilliant white, zip-up sweatshirt over a pale green shirt and khaki trousers. Now in his mid-fifties, he still looks youthful, with just a hint of grey in his sandy hair.

A waitress comes into view and Gates orders clam chowder and a cheeseburger. I also go for a cheeseburger, with a crab dip, and we get talking about life in Seattle. He tells me that he still drives himself around the city. Intrigued by his lack of ostentation, I ask whether he has expensive hobbies? Not really, his game is bridge and “all you need for that is a deck of cards”. So is he an ascetic? Gates demurs – “No ... I have a nice office. I have a nice house ... So I’m not denying myself some great things. I just don’t happen to have expensive hobbies.” Just a couple of miles away, however, lies the hi-tech Gates mansion, said to be worth $125m, complete with a library with a quotation from The Great Gatsby on the ceiling.

Gates’s account of the origins of Microsoft also has little to do with money. He founded the firm in 1975, after dropping out from Harvard to indulge his passion for computing. “When I decided to go and start Microsoft, it wasn’t because it was some lucrative career. Paul Allen [his childhood friend and co-founder of Microsoft] and I were just excited about the personal computer and it was something we were surprised nobody else was working on ... We got to work on the most interesting problems and hired incredible people ... We were in on the ground floor.” As Gates tells it, the money was almost an accidental byproduct: “Really, if you develop good software, the business isn’t that complicated ... The business side is pretty simple; you try and take in more than you spend.”

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Gideon Rachman

I know that many of Gates’s competitors would roll their eyes at that rather artless description of how the Microsoft empire was built. Gates was a famously driven businessman and in the mid-1990s his firm was accused of anticompetitive practices and eventually fined billions of dollars in the US and Europe.

I ask about the popular narrative that in the 1990s the ruthlessly efficient Microsoft had “crushed” its rival, Apple, even though Apple fans insisted that its products were better designed. “I don’t remember them being crushed,” snorts Gates. “I don’t remember them ever being crushed. We were writing software for them and in their lowest day, who [was it that] invested in Apple to help them out? Well, that was Microsoft. I see,” he laughs scornfully.

In the late 1990s Gates, then in his mid-forties, began to change direction and his tough image changed with it, as he channelled his money into philanthropy. “I think there was one year that I gave, like, over $16bn.” He pauses and says with uncharacteristic vagueness, “I think it was the year 2000: maybe even $20bn.” Since then he has kept giving and has also devoted himself to persuading fellow billionaires – such as Larry Ellison of Oracle, Ted Turner of CNN and Michael Bloomberg, the mayor of New York – to give large parts of their fortunes to charity.

Gates muses that the decision to turn to philanthropy at an early age can be uncomfortable for some people. “There’s all sorts of reasons to put off doing it, because however you made your money, you were super-good at it, you know what you are doing ... So getting into something new is very difficult and also it kind of forces you to think about your death.”

In Gates’s case, there is a strong charitable tradition in the family. His late mother Mary chaired the Seattle branch of the United Way International, a major charity. His father Bill senior, now 84, is also an energetic philanthropist, and is currently campaigning for higher taxes on the rich in Washington State. Above all, Gates’s wife, Melinda, whom he met at Microsoft and married in 1994, (the couple has three children) is passionately engaged in the foundation’s work. The plaques on the foundation’s walls say very firmly that it is the “Bill & Melinda Gates Foundation”.

In 2008, Gates became non-executive chairman of Microsoft and he now devotes most of his time to the foundation. But, he says, “I’m working as many hours now as I did in the decade before I made the transition.” He pauses. “I don’t work the hours that I did in my twenties and early thirties, when I took no vacations and didn’t go home most nights. That was true fanaticism.” In those years, when Warren Buffett, the billionaire investor who is now a close friend, bridge partner and a major donor to the Gates Foundation, wanted to meet the man from Microsoft, Gates initially couldn’t find time in his diary. “I was too busy; I didn’t do things like that.” So, I suggest, you had no social life? Gates puts me right: “No, I socialised with my parents on a Sunday night, but I just didn’t go and meet new people who were involved in investments.”

Gates may no longer be working like a fanatic, but he is clearly utterly gripped by the medical challenges that his foundation is taking on – in particular the effort to develop new vaccines for malaria and HIV and to eradicate polio through vaccination. The moments when he appears to be most enjoying himself are when he gets into the science, and as he talks, he folds his arms across his chest and rocks gently backwards and forwards. But his conversation is also punctuated by sudden bursts of laughter. He chuckles as he describes the British army officer in India, who first discovered that malaria was carried by mosquitoes – “You know, good old Major Ross was sitting out there in India, not really doing much, but he was part of the British military and he ... figured out, hey, this thing is not about the smell from the swamp, this is the mosquito biting them.”

The passion for science and technology that drove Microsoft forward is now being channelled into the search for medical advances. I ask Gates whether he sees any parallels between the development of software and the development of vaccines. “Oh sure,” he replies, taking a sip of Coke. “It’s backing smart people to solve a problem you think is important.” The main difference, he says, is the patience required. “With software you know whether something is right or not in three or four years ... but a lot of the things we’re doing now are more in the five- to 10-year time frame, like this malaria vaccine work.”

Gates talks at length and with great enthusiasm about all the various lines of research being pursued in the search for vaccines for HIV and malaria, but he has no medical training. I ask him whether he ever feels out of his depth, discussing the latest developments. He shoots me a slightly incredulous look and says, “No, because I read whatever it takes and I get to learn whatever I want to learn. And I get to spend time with people who work in the field and they’re very nice about educating me. So I’ve got to learn a lot about immunology, which is a super-interesting field,” he says, grinning with pleasure and taking a bite out of his cheeseburger.

One striking feature of the foundation is the extent to which its work is focused outside the United States, particularly in Africa and India. There is a programme devoted to educational reform in America but the largest share of the money goes to health and development in the poorest parts of the world. Gates casts the decision almost as a matter of business efficiency. “You want to improve human life as much as you can sort of per-dollar, and the ability to do that in poor countries is over a hundred times greater than if you are working in an area where the basic situation is much better.”

But what about the lobby of people who insist that foreign aid is ineffective – and that Gates is, in effect, wasting his money? His response is firm, although delivered in mild tones: “Well, if the critics were serious, what they would do is take aid and start to categorise it ... Nobody gave money to Mobutu in Zaire [thinking] he was spending it well, but that was a cold war calculation.” On the other hand, there are also “success stories in aid that are really quite unbelievable”. He ticks them off: “green revolution, reducing mass starvation, preventing famine ... The whole miracle of vaccination ... The primary reason we’ve gotten down from 20m children dying a year to close to eight million is vaccines.” Anticipating the objection that this will just cause a population explosion and therefore heighten poverty, Gates says that the research shows that healthier families with lower infant mortality have fewer children. So his vaccination and development programmes are actually helping to prevent a population explosion, rather than causing one.

Inevitably, Gates is making decisions and funding projects that have all sorts of political implications. But, unlike George Soros, he has carefully avoided becoming a politically controversial figure.

I get just a hint of his politics, however, when we discuss the speed and energy with which China is developing and I suggest that some might find it all a bit scary. The word sets Gates off: “If all you care about is the US or the UK’s relative strength in the world, then it’s particularly scary,” he says laughing sarcastically. “In the US case, 1945 was our relative peak.” Since then, as he points out, other countries from Europe to Asia have rebuilt and become more prosperous, but, says Gates, “I guess I’m just not enough of a nationalist to see it all in negative terms.” On the contrary, Gates is excited by the things that a richer China could bring to the world. “I think it’s good that Chinese scientists are working on cancer drugs, because if my kid got cancer, I wouldn’t look at the label that says ‘made in China’. And, hopefully, we’ll get them working on some of these vaccines and also on energy.”

But Gates is also worried about the environment, so I ask him if the rapid industrialisation of China is a recipe for environmental disaster. Again, his impulse is to look to technology for a solution: “Short of going to war over this issue, the best way would be to find innovative forms of energy generation”. He is excited by solar and nuclear energy, and mocks those who complain about rising Chinese energy use – “I mean, these Chinese are actually using as much energy per capita as the average in the world today, how dare they! How did that happen? The US uses four times the average and the Brits double. But now these Chinese are trying to use the average.”

He shakes his head in mock outrage, and for the first time I feel I am seeing Bill Gates in full flow – a mixture of energy, aggression, humour and intellect. But, just as he is warming to his theme, our waitress arrives with the coffee. Gates has declined, but I have ordered a single espresso (we are in Seattle, after all). When the waitress departs and Gates returns to the sensitive theme of American-Chinese relations, he is speaking more slowly and cautiously.

I drink up my coffee and ask for the bill. As I produce my credit card, Gates looks slightly amused. “You sure you want to pay for this?” he says. “I got money.”

I don’t doubt it. But the rules are that the FT pays for lunch. We will not be asking for Bill Gates’s charity. There are plenty of other willing takers for that.

Gideon Rachman is the FT’s chief international affairs columnist. Read the review of his book ‘Zero-Sum World’

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The Beach Café

Woodmark Hotel, Kirkland, Seattle, Washington

Crab dip $10

Cup chowder $10

Diet Coke $10

Iced water

Old School cheeseburger x2 $28

Espresso $3.25

Total $61.25

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Decoding Bill Gates: Computer programmer to philanthropist

1955 William Henry Gates III born in Seattle, Washington. His mother is a schoolteacher, his father a lawyer. The middle of three children, he has an older and young sister.

1968 Enrols at the private Lakeside School. His programming abilities earn him the task of preparing class schedules; Gates later admits in co-authored book The Road Ahead to modifying the code to put himself in classes with the most female students.

1973 Scores 1590 out of 1600 on his SATs, America’s standardised test for college admission. Accepted by Harvard University.

1975 Gates goes into partnership with childhood friend Paul Allen. They pitch a programming language to MITS, makers of the first personal computer, and christen their partnership “Micro-Soft”. MITS buy the programming for $3,000 plus royalties. Micro-Soft becomes Microsoft, and sales exceed $1m. Gates drops out of Harvard.

1980 Meets with IBM executives to pitch for the software contract for its new personal computer, the PC.

1983 Gates writes his last official line of code for Microsoft, for the TRS-80 Model 100 portable computer.

1986 Microsoft becomes a public company with an initial share price of $21.

1987 Forbes magazine names Gates the youngest ever self-made billionaire; he is 31 with a fortune of $1.25bn. Gates meets future wife Melinda French, a Microsoft executive.

1994 Gates buys a copy of the Codex Leicester – a collection of writings by Leonardo da Vinci – for $30.8m and founds the William H Gates Foundation.

1995 Tops Forbes’s rich list for the first of 13 consecutive years.

1995 His first book, The Road Ahead, spends seven weeks at the top of the New York Times bestseller list.

1996 Gates and his family move into a purpose-built, $54m home overlooking Lake Washington.

1998 While visiting Belgium, Gates is hit in the face with a cream pie by social activist Noel Godin, who describes his action as a rebellion “against hierarchical powers”.

1999 Gates’s personal worth is estimated to exceed $100bn. The William H Gates Foundation, renamed the Bill & Melinda Gates Foundation, is devoted primarily to international health projects.

2000 Steps down as chief executive of Microsoft.

2004 The European Commission fines Microsoft $627m for anticompetitive practices.

2005 Awarded an honorary knighthood for his contribution to the UK. Entomologists name a Costa Rican flower fly, “Eristalis gatesi”, after him.

2006 Announces decision to phase out involvement with Microsoft, focusing instead on the work of his charity. Warren Buffett donates shares worth $31bn, to be released over a generation.

2007 Gates finally “graduates”; Harvard awards him honorary degree.

2008 Number of computers running Windows worldwide estimated at 1bn. Gates ceases day-to-day involvement with Microsoft, but retains a position as non-executive chairman. Valued at $58bn after his charitable giving, Gates drops to third on Forbes’ rich list.

2009 Gates tops Forbes’ rich list.

2010 Carlos Slim Helú tops the list, pushing Gates into second place. Total charitable donations from the Bill & Melinda Gates foundation exceed $22bn.

Alexandra Coghlan

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