Steve Ballmer, former CEO of Microsoft and owner of the LA Clippers, may be the happiest retired person in tech — or even the world.
He met Bill Gates in college and joined Microsoft as the 30th employee. Now, he lives an enviable (and well-deserved) life full of late morning rises, golf, yoga, sports games, philanthropy, meditation, and walks with his wife.
“What I found is I control my time, I can pick and choose what I do,” Ballmer told Business Insider US Editor-in-Chief Alyson Shontell on her podcast, “Success! How I Did It.”
At first, Ballmer tried to stay as busy as when he was Microsoft’s CEO. Now he’s found a slower pace is better.
“I had probably been retired about a year and then I said, ‘This is nuts, I don’t have to recreate the pace with which I used to work,'” Ballmer said.
“I get up, I walk with my wife, I have a chance to reflect and meditate, work out. I usually don’t get any place until about 10 in the morning … Work some, hit some golf balls late in the afternoon. It’s cool to be able to control my time and still be involved in fun and productive activities.”
Ballmer bought the LA Clippers in 2014 after Donald Sterling was forced to offload the team following the public release of a racist recording. Ballmer is also involved in philanthropy with his wife, Connie, and they launched USAFacts.org, an initiative that shows how the government spends money on local, state, and federal levels.
In the wide-ranging conversation, Ballmer and Shontell discussed:
- What Ballmer’s days are like now that he’s retired
- How Bill Gates recruited him to Microsoft as employee #30
- What the day of Microsoft’s IPO was like, and how he celebrated
- How difficult it was to run Microsoft while Bill Gates was still around
- What really happened during the infamous chair-throwing incident with the Google engineer
- How he dealt with the rise of all the FANG stocks while he was at the helm of Microsoft
- What it was like to leave Microsoft after so many years
- How he bought the LA Clippers in the midst of the Donald Sterling controversy
- Starting USAFacts.org to increase transparency about government spending
- Ballmer’s career advice for anyone who wants to become a Fortune 500 CEO
You can listen to the full interview here:
Subscribe to “Success! How I Did It” on Acast or iTunes. Check out previous episodes with:
- Box founder and CEO Aaron Levie
- Robinhood founder and CEO Vlad Tenev
- ClassPass founder Payal Kadakia
- DropBox founder and CEO Drew Houston
Following is a transcript of the podcast episode; it has been edited for clarity and length.
Becoming the happiest retired billionaire
Alyson Shontell: We’re so happy to have you with us here, Steve.
Steve Ballmer: Thanks for having me — really appreciate it.
Shontell: The first thing I wanted to ask you about is my colleague Julie Bort recently sat down with you and she says you are the happiest retired person in tech. So tell me what it’s like to be you right now. What are your days filled with?
Ballmer: The No. 1 thing I would say about retirement is you get to control your own time. I probably went into retirement maybe a little anxious, certainly not knowing what I was getting into. I didn’t think about exactly what I was going to do until the day I walked out the door at Microsoft, and what I found is I control my time, I can pick and choose what I do, and I found three things that delight me in addition to just having a lot of fun, playing golf, doing yoga, stuff like that. But I’m also working on the Clippers. That’s a serious investment of time. Part of that’s going to games. I’m going to say it’s fun work, if you will.
I’m working on a project we call USA Facts, which is a project to pull together government numbers in a kind of 10K-like format to try to provide better integration of government data and better transparency. Then my wife and I have a philanthropic focus on kids in the US who are born into circumstances where they may not get a real shot at the American dream.
Shontell: I’m going to ask you about all of that, but first, let’s go back into the very beginning. From what I understand, you were a pretty shy kid and you grew up in Michigan.
Ballmer: Yeah, I grew up in Detroit, and when I was 8 years old, my family moved to Belgium for three years, which actually was kind of a nutty thing back then. My dad was an immigrant, spoke a bunch of languages, so Ford sent him over there, but it was like being in an isolation chamber. You know, very little English TV, Europe was really still coming out of World War II, and it built a global perspective that I think was helpful. Grew up middle-class and then developed an interest in math and numbers, which has been a core strength, I would say, of mine since.
Meeting Bill Gates in college, and how Gates recruited Ballmer to Microsoft
Shontell: You were the Harvard basketball team’s statistician, you beat Bill Gates at a math competition at Harvard, so I think a math whiz would be a justified term. So one person that you met when you were at Harvard is Bill Gates, who you would have a long career with. What were those early days with Bill like?
Ballmer: We met early sophomore year. We were living on the same floor in our dorm, and we had a mutual friend who lived in the middle. He said, “You guys are both crazy, unusual guys, you would enjoy each other.” So he introduced us and we became good friends. That was the year he started Microsoft. It was a friendship from the start. Classes, math, economics, a lot of talk about business. Not that I knew a lot about it, but there was some mutual interest and then when he started Microsoft, he’d come back when he was gone and talk a little bit, be involved in some Harvard activities. I remember a long walk we had here in New York one time. We were way uptown, maybe in the Plaza, and we walked all the way downtown and back, and he was just telling me and explaining all about Microsoft and what was going on and some of the small things like managing the office and getting furniture, and I said, “Oh, you ought to hire somebody like my mom — that’s kind of what my mom does at her business,” and by the time I got hooked up at Microsoft, Bill had this great lady, Miriam Lubow, who did all that stuff. Those were fun times.
Shontell: You joined as employee number 30. What was your interview process like? Was there even an interview? Did you just call up Bill and say, “Hey, like can I come on full time?” How did it work?
Ballmer: Kind of the other way around. I worked a couple years at Procter and Gamble. Microsoft was going and then I was back at Stanford, at business school. The summer before, I went to business school, I had come up to Seattle to visit Bill when the business was in Albuquerque and I was at Procter and Gamble, so we had stayed in touch. I was getting probably April-ish of my first year in business school, and I was trying to decide between investment banking and consulting and I got a call from Bill and he said, “Hey, you know, we’re kind of looking for a business person. Yeah I know you’re in school, too bad you don’t have a twin brother.” Blah, blah, blah.
So then, it became clear to me what the hint was. I was supposed to take a trip back East to visit all these companies and I called him back the next day and said, “Hey, Bill, maybe I’d be interested.” I flew through Seattle on the way back and nobody could believe it. But I decided to go and Bill and I had a deal. If things didn’t work out, he’d fire me at the end of the summer or I could quit at the end of the summer. For the first month or so, I’d say we both wondered whether it might work. And then we hit a rhythm and quickly thereafter I bought a house and that now was 37 years ago, so a long time.
Early days at Microsoft as “Chief dishwasher” and an “office” that was Bill Gates’ couch
Shontell: You made it long past that first month —
Ballmer: I did.
Shontell: Which is great to see. So remind us all what Microsoft was like in those days.
Ballmer: The year I arrived in June, and the last year for which we had filed taxes, was $2.5 million in revenue. Then the first year I was there, we got to $7.5 million in revenue. The company was already in hardware and software.
People focus on the software side, but we had a product called the Z-80 SoftCard, which plugged into an Apple II and made it into a CPM, which is an old operating-system machine. About 30 employees, kind of helter-skelter.
When I got there the first day, there was no office, no place to sit. And Bill said, “Oh, you can have this corner of my couch in my office.” So we pushed some papers aside, and I sat down and sure enough my office was sitting on that couch until I could carve one out of the office going forward. I became the chief cook and bottle washer, I would say, accounting, HR, and pretty soon thereafter, some folks from IBM came to talk about what would become the first PC. Bill wanted somebody to sit in the room with him, I was probably the guy who could best wear a suit, so to speak. For IBMers, you needed to have suits, so I became also the IBM account manager pretty early in my stay.
Shontell: So a lot of different jobs. As any fast-growing startup, you wear a lot of different hats.
Ballmer: I think my title was assistant to the chairman or something like that.
Shontell: So assistant to the chairman to CEO. It’s a pretty incredible rise. What do you think are the most important things you did over your first decade there that set you up to become the eventual CEO?
Ballmer: You sort of glamorized my path. I kind of came in as a No. 2 guy. Bill Gates and Paul Allen were both founders, and there was a guy named Vern Raburn. I didn’t ascend very far over time; I moved from No. 2 to the top job.
But the first 10 years, the two things I would probably highlight: One, I really set up the recruiting system, particularly college recruiting. The lifeblood of any tech organization is its talent. I’d say that was, to me, one of my pride and joys and very instrumental in the company’s growth because we needed that huge influx of talent to drive our agenda and stay up with the industry.
The other thing which was a major focus and very important was managing the IBM relationship. That really got us into the operating-system business. That was the foundation on which we defined the PC business.
I’m going to give you two more. I ran the Windows development project. I got in and managed to get Windows into the market, which I say was a very important thing in the company’s history. And we did go from a partnership when I joined, to a corporation, and the corporation had stock options, which was an important recruiting and attraction tool. At the time, the notion of giving out stock was there but certainly alien, particularly to these college recruits.
Shontell: So talk to me about the IPO day because I believe you owned about 8% of the company when it went public. What was that day like?
Ballmer: I don’t really remember it terribly well. Two things I do remember about the day: We had moved into our new campus, I think the same day maybe, and one of the guys who had been with us — he actually predated me as a summer intern — was a friend of Bill’s from high school. There was a sign he put up that was sort of neon-y that said it was IPO day, move into a new office day, I think, if I’m remembering this correctly, and maybe it was his birthday, maybe he didn’t put it up but it was his birthday.
I remember that and I remember going out for drinks afterward with my then girlfriend and being slightly celebratory, and I don’t remember anything else about it, frankly.
Bumping heads with Bill Gates and learning to be a CEO
Shontell: IPO day is not exit day necessarily. From a business perspective, business certainly goes on and then you’ve got a whole other suite of people to please with your public company.
I wanted to talk to you about your first few years as CEO. It seems like it was a little bit of a challenge because Gates had huge shoes to fill — it’s his company that he cofounded and he was still around. So what were those first years like really running the company?
Ballmer: I would say there were four things that were important or interesting.
No. 1: I did take over at the top of the dot-com bubble. Microsoft’s market cap may now be where it was back then — the stock price is certainly over — but it’s only in the last couple of years. So I took over at exactly the peak and it was really hard to show fine stock performance from there.
No. 2: We had to really resolve our issues with the Department of Justice and the EU. People forget that was a big issue at the time.
No. 3: I had not really run any product development except that small stint on Windows, and so building relationships and thinking about how I interact with the product development side, even with Bill as “chief software architect.”
And then Bill and I had to go through a rough patch to figure out what it really meant that he had asked me to become CEO, but he wanted to stay around sort of working for me as “chief software architect.” We got through what I’ve called the bumpiest period in about a year and a half, two years, but it was bumpy. But I don’t think I felt really like CEO in full until Bill chose to leave the company in a full-time sense in 2008.
Shontell: And what were some of those bumpy things? Because I think I’ve seen you say you figured out eventually how to manage Bill or you’re not quite sure if you ever really realized how to do it.
Ballmer: Well, I never really managed Bill. Forget the “figure out how to do it.” We changed the nature of our partnership and I think that was important, but it was still a partnership as opposed to my CEO-ship. When it came to technology judgments, Bill really drove that stuff, I would say. The bumps were: Nobody quite sure what it meant. You’d get in front of a team meeting — am I supposed to lead that meeting? Is Bill supposed to lead that meeting? Is he following my lead? Am I following his lead? That’s a transition. When you’re in a meeting, am I supposed to guide the meeting? Do I look like the final decision maker or not? We had to get through a lot of bumps like that; I had things I had to evolve, Bill had ways in which he needed to evolve.
The infamous chair-throwing incident that never happened
Shontell: And one thing you touched on is that you did become CEO right at the peak of the dot-com boom, and then the next 10 years were totally insane. All of the FANG stocks right now, you saw either launch or explode during those 10 years. Microsoft had been the main player and then all of a sudden there’s all this competition. So what was it like watching Facebook rise, watching Apple kind of come from the ashes into dominance, Google come from obscurity and actually not even exist into full bloom?
Ballmer: At the time, each and every one of those things hurt me in the sense, “Oh, we should do this, we should have done that.” In a way, that was the most naive view I had. There’s no reason why one company should have every idea in every category. The world’s not going to work like that. But that was my thought process at the time and I probably allowed myself and our company to get a little bit too diffuse in its thinking. But it did — oh — it wounded me. Facebook’s not in the same business as Microsoft, not really. Apple, a little more competitive still. Google, more competitive still. Amazon, because of their AWS web services, more competitive still.
Shontell: So about Google, you’re obviously a passionate person, which is great for rallying people up and getting them pumped. Sometimes, I’m sure, in management, you had to keep it in check a little bit. There was that famous story of your engineer leaving for Google. Can we talk about that chair incident? What happened that day?
Ballmer: Oh, it got overblown. Mark Lucovsky, who was the engineer, I had worked with for many years. I think the story was that I threw a chair, that’s not right. I shook —
Shontell: So you never threw the chair?
Shontell: Oh my god — OK we need to set history straight.
Ballmer: I kind of shook the back of the chair. I mean I shook one, I’ll cop to that, so to speak. But I never threw a chair.
Shontell: OK, the legend goes that he told you he was leaving for Google and you were like “Ahh!” and threw a chair. No chair thrown?
Ballmer: I said, “Mark, come on, you should stay.” And then I kind of rattled — “Come on, Mark.” I was rattling the back of a chair — I didn’t pick a chair up and throw it. I’m not even sure I’d have the strength to do that.
Shontell: Sounds like healthy passion then.
Ballmer: I think it was healthy passion.
What advice Steve Ballmer gave to his successor, Satya Nadella
Shontell: You’ve called Microsoft your fourth kid; you were breathing it for 34 years. What was the process like when you realized that your time there was coming to an end and that you were going to have to figure out what the next phase of your life was going to be?
Ballmer: OK, first let me say, winding up Microsoft was about Microsoft. Other than having a big sense that I’d like to own a sports team, I had no plan. I was really focused in on Microsoft. When you say the final time, I actually think of the period starting in 2008 when Bill stepped down.
My focus over that time was really getting us started in the cloud. We did and I’m highly pleased at the progress Microsoft’s made. There’s something I wish we’d started earlier or different. We started what’s now our Azure effort. Probably would have done that slightly differently. What’s now Office 365 was really moving. We really dove further into the hardware business. We doubled down on Xbox, we started our Surface product line — I think that’s terribly important today to Microsoft’s real presence with the consumer.