by Alex Banayan
“Uh, yeah,” I said, “I think this is good.”
“Okay,” the Chief of Staff said. “Great.”
I turned back to my notepad. If anything could lead me to the Holy Grail, it had to be a tactical business question, and probably something about sales. Without a doubt the most important sale of Gates’ life was the IBM deal he closed at its Boca Raton office in 1980. He was twenty-five and IBM was the biggest tech company in the world. Because Gates was able to close that deal, it put Microsoft in the position to dominate the software industry for decades. After IBM, he struck a deal with HP, and the dominoes kept falling. Gates would tell PC executives, “Are you going to bet on some operating system that second-raters use, or are you going to bet on the one endorsed by IBM?” It was the tipping point of Gates’ success, yet no biography I’d read explained how he closed the deal.
“I told my friends about the IBM Boca story,” I told the Chief of Staff. “One question they wanted me to ask was: If Bill were teaching a five-minute class on how to handle major sales meetings, what would he teach?”
“That’s good,” the Chief of Staff said. “I like that.”
The office door opened.
Gates returned to his armchair and I asked my question.
“At the time,” he said, “I was young, and I looked younger. IBM had people around the table who were initially quite skeptical of me.” He explained that the first step in a sales meeting is having to blast through skepticism, and the best way to do that is by overwhelming people with your expertise. Gates would talk fast and dive immediately into the details—character sets, computer chips, programming languages, software platforms—to the point that it became undeniably clear he wasn’t just some kid.
“Almost anytime they asked us how long it would take to do something,” Gates said, moving on, “we’d kind of say, ‘Well, we can do it quicker than we can tell you how long it takes to do it! So when do you want it? Like, hours from now?’ ”
His advice to overpromise isn’t new, but Gates was selling IBM on his speed in a way that was obviously impossible. In reality, it took Microsoft months to deliver the software. But that didn’t matter in the long run. What mattered is that Gates understood that one of the problems large companies have is they move slowly—so he was selling them on what they needed most.
Gates then told me something that completely flipped what I thought I knew about structuring a deal. He bet it would be better to take less money from IBM than to squeeze it for all it was worth. He believed that other companies would come into the PC market, and if he could close the IBM deal, other PC companies would make even more lucrative deals with Microsoft.
“So the deal would be monetized somewhat with IBM,” Gates explained, “but more with the other companies coming in.”
Gates wanted to be paid in something more valuable than cash: strategic positioning. It’s better to make a fair deal today that sets you up for more deals down the road than a great deal that doesn’t set you up for anything. The takeaway was clear: choose long-term positioning over short-term profits.
Reflecting back, I should have been grateful for the lessons Gates was sharing. But instead I just sat there thinking, “Really…? That’s it? Where’s the Holy Grail?”
It’s taken me a long time to understand why I was so blind. I was part of the BuzzFeed generation, and because Gates’ insights weren’t tweetable or packaged in a listicle like “10 Surprising Secrets from the World’s Richest Man,” I didn’t recognize their value. I figured the Holy Grail had to be buried somewhere else, so I asked Gates about his negotiating secrets.
“What was it like negotiating with people who were so much older and more experienced than you?”
“Well, IBM had certain constraints,” he replied. He then began telling me about source code and unlimited liability, which seemed to have nothing to do with negotiation. I couldn’t understand why he wasn’t answering my question.
Only with hindsight can I see he was answering it, just not how I wanted. It wasn’t until I later listened to the recording that I understood what he was saying.
During the IBM negotiation, Gates knew he had to keep Microsoft’s source code secret, yet he also knew he couldn’t tell IBM not to take the source code because that was the very thing it was buying. Gates figured out what IBM was scared of—a major lawsuit—and used that to form a strategy. In the contract, he insisted on unlimited liability if IBM accidentally disclosed the source code. That meant if any employee even unknowingly leaked the code, Microsoft could sue IBM for perhaps billions. That scared IBM’s attorneys so much that the company chose not to even take the source code, which is exactly what Gates wanted. The lesson: figure out your opponent’s fears, then use them to your advantage.
“That was hugely strategic,” Gates said, grinning. “Steve Ballmer and I thought that through.”
All of that went over my head during the interview, though. So I took a breath and made the question more specific. “How did you negotiate with Ed Roberts?” Roberts was the founder of MITS, the company that bought Gates’ first piece of software.
I was hoping to hear a secret checklist like, “One, sit up in the chair; two, shake their hand at an angle; three, when there’s a minute left, stand up, look them in the eye, and say this…” But of course Gates didn’t give me any of that. Instead he told me all about the life of Ed Roberts. Then he told me all about the business model of MITS.
Again, only looking back can I see his answer made sense. He was saying it’s critical to become an expert on the background of the person you’re dealing with. When it came to the founder of MITS, Gates learned everything he could about his personality, his quirks, his successes, and his dreams. On top of that, Gates learned about his business model, financial constraints, capital structure, and cash flow problems.
But again all that went over my head. I checked my watch. Time was running out. I panicked and asked a third time. “What are three negotiating mistakes people make?”
Gates let out a sigh. He looked at me as though he couldn’t understand why I didn’t get it. He began to answer, and it essentially sounded like: Well…not doing what I just said…
I sat there thinking, “What’s wrong with this guy? Why won’t he give me a real answer?” It never crossed my mind that it was me who wasn’t getting it.
Gates told me to ask for their advice, spend as much informal time with them as possible, and get them to take me under their wing. I can see now that Gates was essentially telling me to stop worrying about the BuzzFeed tricks. The best negotiating tactic is to build a genuine, trusting relationship. If you’re an unknown entrepreneur and the person you’re dealing with isn’t invested in you, why would he or she even do business with you? But on the other hand, if the person is your mentor or friend, you might not even need to negotiate.
It was the last thing I expected to hear from the business world’s chess grandmaster. I thought he’d share battle-tested secrets, but instead he was telling me to befriend my opponent so I wouldn’t have to battle.
The Chief of Staff cleared his throat.
“You have time for one more question.”
* * *
I flipped through the pages of my notepad. There were still so many unasked questions.
Screw it, I thought. If I have one final minute with Bill Gates, I might as well have some fun.
I tossed my notepad to the side.
“What’s your most memorable, crazy, funny hustle story from early on?”
Gates took a moment to think.
“Well,” he said, uncrossing his arms, “there were lots of funny negotiations with Japanese companies.” His gaze lifted as though he was watching a movie in his mind’s eye. I could feel his excitement as he told me about a meeting with a group of Japanese executives. Gates was pitching them as hard as he could, explaining things ov
er and over, until finally at the end he asked if they wanted to make a deal. The executives huddled together. They talked to each other in Japanese for a minute, then five minutes, then ten. Twenty minutes passed. Finally, they gave their verdict.
“Answer is…”—dramatic pause—“…maybe.”
“Which in Japanese pretty much means no,” Gates said. “Then we told them, ‘Oh, your lawyer speaks such good English!’ And then they said, ‘Oh, but he speaks terrible Japanese!’ ”
The Chief of Staff and I broke into laughter. It’s as if all my tension from the past forty-five minutes had shattered.
Gates shot straight into another story about a different Japanese executive. The man had flown out to Seattle, showed up at Gates’ office, and began saying how great Microsoft was, piling on compliment after compliment. Gates got nervous. Microsoft was late delivering software to the executive’s company, so it didn’t make sense. The executive kept being extraordinarily kind, lavishing all this praise, and Gates wondered: What does he want? Did he want to buy more software? Finally, the executive got to the point.
“Mister Gates…what we want to buy…is…”—another dramatic pause—“…you.”
The three of us laughed again, and for the first time, it felt like this wasn’t an interview anymore. We were just three guys having a good time.
“What did you say?” the Chief of Staff said, laughing. “ ‘Answer is maybe’ ?”
We joked around a bit more, then the Chief of Staff bent down and zipped up his bag. Gates took the cue and pushed himself out of his armchair.
“How old were you during those Japanese negotiations?” I asked.
“The big years in Japan were when I was between nineteen and twenty-three. My friend and business partner Kay Nishi deserves a lot of credit for that. It was he and I going around. We’d stay in the same hotel room that had two single beds. People would be calling us in the middle of the night. I remember one night we got to sleep for like three hours straight and I woke Kay and said, ‘Hey, what’s wrong with business? Nobody’s called for three hours!’ ”
Gates continued for a bit more, and I noticed that a sense of warmth had spread throughout the room. It made me regret not starting the interview like this in the first place. But it was too late. Gates shook my hand and said goodbye. He walked toward his desk and I headed for the door. Before stepping out, I turned my head over my shoulder, grasping for one final glimpse. Just when things had started feeling right, it was over.
CHAPTER TWENTY-SEVEN
The Third Door
TWO MONTHS LATER, THE STORAGE CLOSET
I felt like I was trapped in an old nightmare. Once again I was hunched over my desk, my head in my hands.
You’ve got to be kidding…
When I had first met Gates’ Chief of Staff at TED, not only had he said Gates would do an interview, but he’d also said he would help me secure an interview with Warren Buffett. Gates and Buffett were best friends, so if there was anything that would sway Buffett, this had to be it. The Chief of Staff eventually contacted Buffett’s office, and while I’ll never know what happened, the Chief of Staff then sent me the following email:
Please no more calls to Warren’s office. Thanks…
I couldn’t believe it. Not only was the answer still no, but I’d been so persistent I got myself blacklisted.
No business book ever talked about this. No inspirational quote warned me about the dangers of over-persistence. Not once had I stopped to ask myself, “Am I being the kind of person people want to help?” Instead I just kept calling Buffett’s assistant week after week. And after months of hearing no, I still flew to Omaha and sent her a freaking shoe. I was so obsessed with achieving my goal I was blind to how I came across. I’d dug myself into such a deep hole that even Bill Gates couldn’t pull me out.
I should’ve learned about the dangers of over-persistence a long time ago, when I was harassing Tim Ferriss by sending him thirty-one emails. Ferriss wanted nothing to do with me. He agreed to the interview only because of my Inside Man at DonorsChoose. Though because Ferriss ultimately said yes, I took that as a win. It was only now, because Buffett ended in failure, that I was taking the time to reflect. Life will keep hitting you over the head with the same lesson until you listen.
And I must not have been listening to a lot of lessons, because Buffett wasn’t the least of my problems. Ever since I left Bill Gates’ office, I’d sent out more interview requests and received even more no’s from Lady Gaga, Bill Clinton, Sonia Sotomayor, Michael Jordan, Arianna Huffington, Will Smith, Oprah Winfrey—and when I’d circled back to Steven Spielberg, even he’d said no.
I’d thought the rejection from Spielberg had to be a mistake. When we first met, he’d looked me in the eye and told me to come back to him. So a friend from Summit had introduced me to the copresident of Spielberg’s TV production company so I could explain the situation in person. The copresident personally passed along my request, but Spielberg’s response was still no. The copresident tried other angles, sending the request a second time and then a third. Still no.
What the hell was going on?
I slammed my laptop shut and paced across the storage closet, but the cramped space made me even more frustrated. I pulled out my phone and texted Elliott.
Could use some advice. U around?
My phone rang before I put it down.
“That was fast,” I said.
“Of course it was fast,” Elliott replied. “What’s going on?”
“I’m going crazy. Bill Gates’ Chief of Staff told me to build momentum, so I built momentum. Malcolm Gladwell wrote about the tipping point, and I hit my tipping point. I’d thought once I’d interviewed Bill Gates, everything would fall into place. But I’m still no better off.”
“You idiot. You asked that stupid question when we first met and I told you there is no tipping point. It’s all just little steps.”
I fell silent. He had said that.
“A tipping point only appears in hindsight,” Elliott added. “You don’t feel it when you’re in the trenches. Being an entrepreneur is about pushing, not tipping.”
“Fine, I get that,” I said. “But you know what pisses me off? All these no’s I’m getting are of zero help. They tell me, Oh, we love what you’re doing! Unfortunately his schedule is just overwhelmed. Of course he’s busy. But so is Bill Gates. If he really wanted to do it, he’d make the time. What am I supposed to do when I’m not only getting rejected, but I’m not even being told the real reason they’re saying no?”
“Dude, that’s the story of my life. They’re called bullshit no’s. I get them a thousand times a week. You just have to build a pipeline so when you get a bullshit no from one person, there’s still thirty others to work on.
“You want to know why a pipeline works?” Elliott went on. “A year and a half ago, when you first cold-emailed me asking for advice, you didn’t know that a month earlier I’d made it my New Year’s resolution to find someone to mentor.”
I was stunned.
“Crazy, right? There’s no way you could’ve known that. My point is that I’m sure I wasn’t the first person you emailed for advice. You asked dozens of people, and because of an external factor you couldn’t have predicted, one of those things worked. You have no way of knowing what’s going on in the lives of the people in your pipeline. You can’t anticipate their mood or how generous they’re feeling. All you can do is control your effort.”
“But what if all thirty things in my pipeline are clogged?”
“Then you have to do two things: One, think bigger. And two, think differently.”
“Come on, man. Give me something concrete.”
“I can’t give you all the answers, but I’ll give you an example. For the Summit conference we organized in Washington, D.C., we couldn’t get a single person to give the main
keynote. People were busy. Blake Mycoskie from TOMS said he couldn’t come. It was just a disaster. So we had to think bigger: Bill Clinton. And we had to think differently: we hosted a fundraiser for his foundation so he had to come. Once he was in, we called Russell Simmons—who had already said no—and we asked him if he could give the opening remarks for Bill Clinton, so now he said yes. Then we planned the event to coincide with Ted Turner’s travel schedule in D.C. Doing that, plus having Clinton confirmed, led to Ted Turner saying yes. Blake Mycoskie still told us he had other commitments, so we changed the request and asked him to moderate a Q and A with his hero, who we knew was Ted Turner. Boom. Now Blake was in. You just have to give people an offer they can’t refuse.”
An idea was coming to me. “I wonder if—”
“Yes.”
“I was going to say, I wonder if—”
“Yes. Yes, yes, yes. Whenever you wonder, the answer is yes. People don’t want to do small shit. You need to think bigger and think differently. Don’t ‘I wonder’ through life. Just make it happen.”
ONE WEEK LATER, CENTRAL PARK, NEW YORK CITY
I zipped up my jacket and followed Elliott through the crowd. It was an hour past dusk. Directly in front of us was an outdoor stage lit up in lava-red concert lights. John Mayer was under the spotlight, slinging his guitar strap over his shoulder and triggering the roar of sixty thousand fans.
I’d come to New York to take meetings to reboot my interview requests and build my pipeline. Elliott invited me to this festival and we were now making our way to the stage. As we moved forward, Elliott spotted someone he knew, waved, and headed his way.
I stood back to let them catch up. A minute later, Elliott grabbed my shoulder and pulled me forward. “Matt,” Elliott said, “have you met Alex?”
