Explainer: Famous corporate duos
They remain friendly — on the surface anyway — but the explosive, entrepreneurial success realized by Bill Gates and Paul Allen tapped an often-combustible chemistry, Allen recounts in an upcoming memoir.
Allen describes Gates as tireless and ultra picky — a cutthroat negotiator with a “mercenary” edge — and depicts himself as the team’s innovator. The title, “Idea Man,” certainly promotes that image.
But by merging their disparate talents — and idiosyncrasies — Gates and Allen co-sculpted Microsoft, rebooting the business world while reaping billions. Despite their sometimes serious differences, they were sufficiently in sync when it came to the technological course they charted, according to book excerpts published in the current issue of Vanity Fair.
(Msnbc.com is a joint venture of Microsoft and NBC Universal.)Story: Microsoft co-founder Allen blasts Gates in new book
Gates and Allen, who met in preparatory school, formed an iconic partnership that changed the business world. That kind of strategic cohesion has often been the secret fuel behind hugely successful businesses. Simply put: You don’t have to be best pals to be on the same page. But it doesn’t hurt.
“To get along in business, the partners should have different skill sets that are complementary,” said Issamar Ginzberg, a Brooklyn-based strategy adviser to entrepreneurs. “Two people who are good with numbers but bad at deadlines would be horrible. When they mismatch, they make a much better pair. … (As) in marriage, opposites attract.”
Here are eight pairs whose inventions and gambits made permanent changes in the world’s business landscape.
Ben Cohen and Jerry Greenfield
How they got together: They met during a seventh-grade gym class on Long Island in the early 1960s — the slowest kids on the track.
In 1978, they took a $5 correspondence course on ice cream making from Penn State University. They pooled $12,000 ($4,000 of it borrowed) and opened Ben & Jerry's Homemade Inc. ice cream scoop shop in a renovated gas station in Burlington, Vt.
Who did what: They blended laughs with social consciousness and liberal causes while co-running the business. Greenfield was the primary ice cream maker. Cohen was the main taster, scooper, deliveryman and marketer, according to Entrepreneur magazine.
By 1984, annual sales were $4 million. The company expanded distribution to eight states while fending off two attempts by Pillsbury to restrict its growth. Greenfield oversaw the new Ben & Jerry’s Foundation while Cohen boosted employee loyalty through profit sharing.
How it ended: Ben & Jerry’s endures in its dozens of zanily named flavors, including the new “Late Night Snack” — vanilla, caramel and fudge-covered potato chips. In 2000, Ben & Jerry’s board of directors approved a $326 million sale to Unilever, a British-Dutch multinational.
Greenfield told a Boston newspaper the founders remain “goodwill ambassadors for the company.”
Bill Hewlett and Dave Packard
How they got together: After graduating from Stanford University in 1934, the electrical engineers took a two-week fishing trip to Colorado. Five years later, a former Stanford professor urged the friends to launch a business.
With $538 in capital, they devised gadgets in a garage outside Packard’s house in Palo Alto, Calif. A coin flip determined the company’s name.
Who did what: An exception to the general rule of opposites, both Hewlett and Packard had strong technical chops. In 1938, Hewlett built HP’s first product, an instrument to test sound equipment. In 1942, Packard designed a reliable, low-cost voltmeter.
Both had an eye for new markets. Hewlett scouted European locations and HP went global with a German plant in 1958. Packard forged business ties in China in the 1970s.
Packard also infused fresh oversight tactics, calling one approach "management by walking around.” HP also pioneered flextime for workers.
“Bill and Dave clicked because they had similar personality types with an insatiable curiosity,” said Bert Martinez, founder of a sales and business-training firm in Houston and Mesa, Ariz., who has studied the so-called “HP way.” “They were driven by accomplishment, not egos.”
How it ended: Hewlett retired in 1987, Packard in 1993. Packard died in 1996, Hewlett in 2000. In 2010, Hewlett-Packard employed more than 320,000 people and reported more than $126 billion in revenue.
Warren Buffett and Charlie Munger
How they got together: An Omaha, Neb., doctor who knew the two men arranged a get-acquainted dinner at an Omaha restaurant in 1959. Three years earlier, Buffett had launched an investment partnership in Omaha. Munger, raised in Omaha, was a California lawyer at the time. Buffett urged Munger to quit law and focus on investing, according to “The Warren Buffett Way” by Robert G. Hagstrom.
In 1962, Munger started his own investment partnership in Los Angeles as Buffett began buying stock in Berkshire Hathaway — a company with its roots in the textile industry. In 1964, Buffett seized control of Berkshire Hathaway. At the same time Buffett and Munger were both buying shares of Blue Chip Stamps, a trading stamps company and, at one-time, a competitor to S&H Green Stamps. By the late 1960s, Munger was chairman of the Blue Chip Stamps board. In 1978, Berkshire Hathaway merged with Blue Chip Stamps. Munger became vice chairman of Berkshire.
Who does what: Buffett, known as a value hunter, has been influenced by Munger’s philosophy that science, history and psychology also have places in financial decisions. Munger taught Buffett that it’s sometimes wise to pay a fair price for a quality company.
While Buffett is the public face of Berkshire, the “Oracle of Omaha,” the two men work as a team.
“In every way (Munger) functions as Buffett’s … alter ego,” Hagstrom wrote. “We have only to count the number of times Buffett reports, ‘Charlie and I’ did this, or decided that, or believe this, or looked into that, or think this, almost as if ‘Charlie-and-I’ were the name of one person.”
How it ended: More than half a century after they met, the two men continue to work together. Buffett, 80, remains the chairman and CEO of Berkshire Hathaway, while Munger, 87, is vice chairman. Buffett is the nation’s second-wealthiest man, with a personal fortune estimated at $50 billion, while Munger is worth about $1 billion, according to Forbes. Their company’s revenue grew by almost 20 percent in 2010 to $36.2 billion.
In a search for his eventual successor at Berkshire, Buffett lost one leading candidate when his lieutenant David Sokol resigned. Questions have been raised regarding Sokol's decision to purchase shares of Lubrizol prior to Berkshire's decision to acquire the chemical company.
Jerry Yang and David Filo
How they got together: They were fellow Ph.D. candidates at Stanford University in the early 1990s.
Who did what: Yang and Filo shared three traits: technical brilliance, boredom with schoolwork and wandering minds.
At Stanford, they began a project to create computer chips, according to a 2008 Entrepreneur magazine article. They found the work tedious. When their faculty supervisor left for an Italian sabbatical, they shoved their project aside and began surfing the young Internet. They stumbled onto scores of compelling sites but realized the Web was utterly unorganized, making it tough to relocate their favorite pages. That sparked an idea: a map for friends and fellow surfers — a list of cool sites, arranged by topics. In 1994, the duo devised a search engine based on typing keywords, dubbing it “David and Jerry’s Guide to the Web.”
As their list expanded, Yang and Filo further split the sites into subcategories. Soon after they revealed their invention, it was attracting 170,000 daily visitors. A year later: 1 million per day. In March 1995, the pair incorporated their hobby as “Yahoo!” — picking the name from a dictionary. They soon got venture capital funding and left Stanford, according to the company history.
How it ended: Yang resigned as chief executive in 1998. His departure ended a rocky reign highlighted by his refusal to sell Yahoo! to Microsoft for $47.5 billion — then considered to be more than triple the company’s market value. Filo still serves as the company’s key technologist with the official title of chief Yahoo.
Sergey Brin and Larry Page
How they got together: In 1995, Brin met Page during an orientation for new students at Stanford. Brin later acknowledged both were “kind of obnoxious.” They clashed on every topic that arose in their conversations — even the value of urban planning. Through their constant bantering, a friendship was kindled.
Who did what: Brin was into data mining. Page was fascinated by the notion of ranking the importance — or value — of a research paper by how often it was cited in other papers, according to a 2008 profile of the pair in the Economist.
They jammed their dorm room with cheap computers and applied Page’s theory to Internet pages. This discovery spawned a new search engine, originally dubbed BackRub. In 1997, they renamed it Google, a play on “googol,” a term for the number 1 followed by 100 zeroes — to represent the seemingly infinite quantity of information on the Internet. According to Google’s corporate website, the pair got $100,000 in venture capital a year later from Andy Bechtolsheim (co-founder of Sun Microsystems) and set up shop in a Bay Area garage.
How it ended: Earlier this year, Eric Schmidt stepped down as Google’s CEO and handed day-to-day operations to Page. Brin focuses on new products and strategic projects for the Mountain View, Calif.-based company. Google earned $8.5 billion in profits last year and employs more than 24,000 people.
Steve Jobs and Steve Wozniak
How they got together: They became high school pals in Cupertino, Calif., where they were both social outsiders, fascinated by electronics. Each later worked in Silicon Valley — Jobs at Atari, Wozniak at Hewlett-Packard. They stayed in contact.
Who did what: After dabbling in computer design, Wozniak in 1976 created a machine that eventually would become the Apple I — yet another American garage invention. With his keen sense of future markets, Jobs insisted the pair try to sell the device. Apple Computer was born in 1976. The company flourished with its 1977 release of the Apple II — the first personal computer to boast color graphics.
“Some relationships are all about the ‘wow’ factor. Jobs and ‘the Woz’ worked that way,” said Theodore Malloch, author of the new book “Doing Virtuous Business.” “Each had a great mind, they shared similar interests, and they produced inventions to have fun. To wow their friends they invented something called Apple I.”
Their iconic partnership was brief. In 1981, Wozniak was injured when his small plane crashed during takeoff in Santa Cruz, Calif. He suffered temporary amnesia and decided to stop working, returning to the University of California at Berkeley to earn a diploma. He formally resigned from Apple in the mid-1980s.
Jobs left Apple in 1985 while feuding with CEO John Sculley — the former Pepsi president whom Jobs had lured to Apple to help the company mature. Jobs returned to Apple in 1996, eventually becoming CEO while overseeing the inception of a wave of wildly popular innovations, including iPods, iPhones and iPads.
How it ended: On Jan. 17, Jobs took a medical leave of absence, almost seven years after he was diagnosed with pancreatic cancer. On March 2, he appeared at the launch event for iPad 2. Wozniak never returned to Apple but still appears at Apple events.
The iPad alone accounted for about $10 billion in sales in 2010, according to news reports. Some analysts believe the Cupertino-based company is on pace to surpass $200 billion in annual sales in two years.
Orville and Wilbur Wright
How they got together: They were born into a family of seven siblings — Wilbur in 1867 in Indiana and Orville in 1871 in Ohio.
Who did what: The brothers were well-read, masterful mechanics. They initially opened a bicycle shop in the 1890s. Wilbur often took the lead on a lifelong project that ultimately led to their 1903 invention of the world’s first successful airplane.
Wilbur began pondering airplane engineering in 1896 when Otto Lilienthal, a German, died in a glider crash. (Orville was delirious with typhoid fever at the time). Three years later, Wilbur wrote to the Smithsonian Institution, asking for any available information “on the proper construction of a flying machine,” according to AmericanHeritage.com. Wilbur also conceived a better way to boost a plane’s lift through “wing warping." For their famous flight, he chose the location — Kitty Hawk, N.C. — for its ocean breezes and soft sandy surface.
And after an unsuccessful test flight by Wilbur, Orville was the first person to achieve a safe flight in a power-driven plane – for about 12 seconds and 120 feet – at Kitty Hawk.
How it ended: In 1909, the brothers established a plane-manufacturing business, the Wright Co. Wilbur was president, Orville vice president. They had a factory in Dayton, Ohio, and headquarters in New York City. In 1912, Wilbur died of typhoid fever. In 1915, Orville sold his interest in the company. After several mergers and acquisitions, the Wright Co. eventually became the Curtiss-Wright Corp. Now based in Parsippany, N.J., Curitiss-Wright describes itself as a “diversified, multinational provider of highly engineered, technologically advanced products and services.” It has a market capitalization of $1.6 billion.
Bill Gates and Paul Allen
How they got together: They met in 1968. Allen was in the 10th grade and Gates was in the eighth grade at Seattle’s Lakeside School. As Allen writes in his new book “Idea Man,” when Gates was 13, he showed Allen an issue of Fortune magazine and asked, "What do you think it's like to run a Fortune 500 company? ... Maybe we'll have our own company someday."
Who did what: When Gates was attending Harvard, he and Allen wrote BASIC for the Altair microcomputer. That breakthrough creation meant the duo had to form a business partnership. According to Allen, he suggested their company’s name: "Micro-Soft."
"From the time we'd started together in Massachusetts, I'd assumed that our partnership would be a 50-50 proposition. But Bill had another idea," Allen wrote. He notes in his book that he later agreed to a 60-40 split of Microsoft, believing that division to be fair. But soon after that agreement, Allen writes, the division was changed to 64-36.
Gates offered a statement about the book saying, in part: "While my recollection of many of these events may differ from Paul's, I value his friendship and the important contributions he made to the world of technology and at Microsoft."
In his book, Allen portrays Gates as an arrogant, hard bargainer, a gifted programmer and passionate leader. The author sketches himself as rational, logical and creative.
"Our great string of successes had married my vision to his unmatched aptitude for business," Allen wrote.
How it ended: Allen resigned from Microsoft in 1983 after being diagnosed with Hodgkin's disease. He is the owner of the Seattle Seahawks and the Portland Trail Blazers and said to be worth $13 billion.
Gates stepped down from daily duties at the company in 2008 but remains chairman of Microsoft, and with his wife Melinda, is a noted philanthropist. Even after giving away billions, Gates remains the richest person in America with a net worth of $56 billion, according to Forbes magazine.
Bill Briggs is a frequent contributor to msnbc.com and author of the new nonfiction book “The Third Miracle.”
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