Steve Ballmer

“You could call it anything that is extensible, and it's the extensibility that makes it a platform, because you're going to get people to extend the value you add. Part of the issue for Microsoft is if you see yourself as just a platform company, platforms need apps. You want to have the top first-party app that runs on your platform. Otherwise your platform can't get good. I think you can get stuck in the mud if you say we're just a platform company.”— Steve Ballmer

Strategy & Decision Making · Technology & Engineering · Business & Entrepreneurship

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Platform needs first-party apps to succeed

“Qi Lu's a genius. We've got to hire Qi. Satya, me, Harry, fly down to California and we meet with Qi Lu. Qi's brilliant. Qi leaves the room. I don't know who throws the idea out at first, maybe Satya. We should hire Qi and I should work for him. After Qi walked, we talked for about 15 minutes. Then Harry calls Qi and said, do you mind coming back? It's the story I just told you. It's what it told me about Satya. He'll prioritize that. He doesn't have an ego that gets in the way.”— Steve Ballmer

Leadership & Management · Psychology & Behavior

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Satya volunteers to report to new hire

“Sports is so much more accountable than business. Every 24 seconds, you get a report card. You can't say, I'm going to make it up next quarter. You lost that game, that game is on, you lost comp for the rest of the season. You cannot dig yourself out of that one game loss hole. Your customers know everything you know. Every statistic we have, our customers have. There's almost nothing we get to watch practice, our fans don't. But the level of accountability is so high. The speed is high.”— Steve Ballmer

Leadership & Management · Culture & Society

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Sports vastly more accountable than business

“We took a revenue hit. Definitely we could have made more revenue on that side if we'd done things a little bit differently. But it's about basketball. We have a lot of toilets. Something like three times the average. Why? It's about basketball. Get out and get back into your seat. Don't miss the action. We started out with a lot more concession stands, and then we said, no, no. Let's just do this completely frictionless. There's no checkout. We don't serve eclectic food. Same thing everywhere.”— Steve Ballmer

Strategy & Decision Making · Operations & Execution

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Revenue sacrifice for core experience

“The best teams, the players hold each other accountable, and not just the best player holds everybody else accountable. Everybody's got to hold everybody accountable, which really means give the feedback. In Microsoft, we got rid of the value called teamwork. I didn't want that one. I said open and respectful and dedicated to making others better, because teamwork could sound like treat everybody nice. Open? Yes. Respectful? Yes.”— Steve Ballmer

Leadership & Management · Culture & Society

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Teamwork = dedicated to making others better

“I wanted to make Intuit Dome the best place for the hardcore basketball fan. You sit in there and you're a fan. It's a live event. Got to have energy, got to have intensity. Essentially, a whole side of the building is structured more like a college gym. Long and steep, there are no suites on the side. We even built a student section right in the middle. It's standing room only. You must stand. You can't wear visiting gear paraphernalia on that whole side. Four thousand seats. It's small.”— Steve Ballmer

Strategy & Decision Making · Creativity & Innovation

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Arena designed for hardcore fan only

“We paid $45,000 or $49,000 for this operating system. We sold it to him, half of what we paid for it. We said, we can do this 10 to 20 times. Twenty times $21,000, $400,000 against $50,000 we paid for it. Pretty good deal. It was a little better than that as you said. We didn't charge for the operating system on an ongoing basis. We charged for it one time. If you got a new version, we charged another time.”— Steve Ballmer

Business & Entrepreneurship · Strategy & Decision Making · Economics & Markets

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DOS: one-time to per-unit licensing shift

“Bill and I went through a year where we didn't speak. I didn't know what it meant to be his boss, and he didn't know what it meant to work for me. When he asked me to be CEO, I said, do you really want me to be CEO or do you just want me to be a figurehead? He said, no, I want you to be real CEO. Well, he didn't know how to show me a different kind of respect. I didn't know how to show him a different kind of respect.”— Steve Ballmer

Leadership & Management · Psychology & Behavior

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Year of not speaking with Gates

“Reference checking. How good is the reference checking in most businesses? Not good. Basketball? You should see the amount of reference material we have on a guy before we draft them. People have talked to their old coaches, they've talked to their teammates. That's what scouts do. They've watched them play, they've been to practices, they know what they've talked to references about work ethic. You talk to their parents. There are so many things.”— Steve Ballmer

Leadership & Management · Operations & Execution

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Sports reference checking vastly superior

“I view this, and I probably evolved my view to this over time, when you sell the enterprise, you have to provide peace of mind, which is like an insurance policy. Buying more than you might be using or some users are using. It's an insurance policy.”— Steve Ballmer

Business & Entrepreneurship · Psychology & Behavior · Strategy & Decision Making

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Enterprise sales is selling peace of mind

“Where did we learn to build internet-scale infrastructure? Some with Azure, some even more than Azure, Bing. We developed the capabilities, but then you look at the product and what was our strategy for Bing? Well, there's too much based upon Windows integration. You have to say this is a separate part.”— Steve Ballmer

Strategy & Decision Making · Technology & Engineering

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Built capability but wrong product strategy

“If you're trying to skate to where the puck is, if you're trying to recognize what capabilities you need, if you're a startup in something, there's an ongoing business, you just keep enhancing your products. There's a line extension. But new, SQL Server for example, was that for a while. It was related because we had a backend platform. But it turned out the phone was more like a startup, recognizing and thinking about things, and then asking yourself, what capabilities do you need?”— Steve Ballmer

Strategy & Decision Making · Leadership & Management · Operations & Execution

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Startup mode requires new capabilities

“Orlando Ayala gets up, this is probably 2002-ish, 2001-2002, we're still in the throes of the thing, my name is Orlando Ayala. I'm a proud Colombian. I am not a proud Microsoftee today. Our integrity is under assault. My personal integrity feels like it's under assault. It wasn't just a business issue that needed to be taken care of. It was a culture issue. It was bothering people, particularly senior people, very personally.”— Steve Ballmer

Leadership & Management · Culture & Society

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Antitrust as personal integrity crisis

“Most businesses are zero trick ponies. You might create something that goes nowhere. You might create what's essentially a feature for somebody else's business and get acquired. One-trick ponies are amazing. People should be in awe of one-trick ponies. Two-trick ponies, ooh la la. Those people tend to go down in business history, especially those tricks stay alive for a long time.”— Steve Ballmer

Strategy & Decision Making · Business & Entrepreneurship

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Zero, one, two-trick business taxonomy

“I had no credibility in terms of what some investors wanted to hear. My actions were consistent with that. People did worry about the future of a couple of our franchises, most notably Windows. You get all these things, narrative, transition from high price, some issue about franchises, and me being a big spender, no wonder the stock stayed flat. With hindsight, people aren't going to say, oh, he is showing up. He's a changed man. There was no way to reset the investor view of me.”— Steve Ballmer

Leadership & Management · Psychology & Behavior · Economics & Markets

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Some narratives require new CEO to reset

“I was very transparent with everybody. We brought the management team in. I let everybody speak. It's a big decision to be in the phone hardware business. We do the presentation. The process from there to the time the board says no, I didn't find very respectful. I was not happy with the process, but they wanted me to stay. I said, this is a good time. We can't make my play here. The cloud's just coming on. We're going to have to build new capabilities.”— Steve Ballmer

Leadership & Management · Strategy & Decision Making

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Board rejection of phone triggered resignation

“If you sell it, you're just going to pay capital gains taxes. If you're really just being a financial monster about it, you got to decide, will Microsoft underperform the index by enough to offset the capital gains taxes. I don't need the money. I got plenty to live on without selling anything. Where's that money going to go? Some will go to my kids, but most of it's going to go to the government or to philanthropy.”— Steve Ballmer

Economics & Markets · Strategy & Decision Making

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Hold unless underperformance exceeds cap gains

“Charlie Munger gets up to the mic and says, Steve, I'm wondering why you held onto your Microsoft stock when your partners over there didn't. I know you're not that smart. I said, no, Charlie, but I'm loyal. I don't know why Paul and Bill didn't hang on. You'd have to ask them. But for me it's from the heart thing. What's the worst thing that happens? Microsoft goes to zero? Probably not, but even if Microsoft goes to zero, me and my family, we can live, we can give away money.”— Steve Ballmer

Psychology & Behavior · Economics & Markets

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Loyalty trumps optimization for Ballmer

“Andy Grove who was running Intel at the time said, pretty soon we'll be selling 100 million PCs a year. I think it might have even been in the 90s. Bill and I laughed and said, ah, that's not going to happen. We invested big time and if it did happen, we said that's great, we're not going to underinvest. But we thought, ah, he's crazy. This market will never grow like that. I would say we classically underforecast, that was our tendency.”— Steve Ballmer

Strategy & Decision Making · Psychology & Behavior

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Underforecast but never underinvest

“IBM divorces us in 1990. My wife and I were remodeling our house. We were living in a condo. We stopped on a run, used a restroom. I pick up the Wall Street Journal and I read that IBM's divorcing us. Mr. Wizard. Whoa. Shoot. Oh my God. We were so, you could say energized if you like. Scared also works. It's like, oh my God. Now we have to confront the bear.”— Steve Ballmer

Strategy & Decision Making · Psychology & Behavior

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IBM divorce: fear and opportunity