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Originally published April 18, 2011 at 12:14 PM | Page modified April 18, 2011 at 10:07 PM

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A talk with Paul Allen | Drama at Microsoft, adventures in his second act

Drama defined the early years at Microsoft and the complex relationship between its two founders, as Allen describes in his memoir "Idea Man," which is being released Tuesday. Seattle Times business reporter Kristi Heim caught up with Allen at his estate on Mercer Island.

Seattle Times business reporter

One day in 1982, the year before Paul Allen left Microsoft and his partner Bill Gates, he recalls overhearing Gates unleash a tirade on a young Microsoft employee leading development of a new and better operating system for IBM.

Gates was furious that he hadn't made the customer happy. Allen took the developer's side and yelled back at Gates.

"By that point we were standing six inches apart, chest to chest and nose to nose," Allen writes. The employee, Mark Zbikowski, "was watching like a horrified teenager whose parents sounded like they wanted to kill each other."

Such drama defined the early years at Microsoft and the complex relationship between its two founders, as Allen describes in his memoir "Idea Man," which is being released Tuesday. The tirades also provoked Allen's decision to quit the company and pursue a much different life based on his own eclectic interests, and paid for by the billions that his Microsoft shares would eventually bring.

Much of the story of Microsoft's emergence has been told before, but Allen wanted to write a book from his own perspective, no doubt to try to reinforce his place in its history and shape his legacy.

"I think few people in their lifetime have the chance to be involved in something like the creation of Microsoft — that's always going to be something I'm known for," he said in an interview at his Mercer Island home last week. "But I hope some of these other things like brain research and just the sheer number of things I became excited about and tried to make a difference, explore and push boundaries, I think that's pretty unique."

Allen, 58, said the book is something he thought about for many years, but after being diagnosed in late 2009 with non-Hodgkin's lymphoma, his second bout with cancer, he worried he might not finish it.

More than half of the 358-page memoir is devoted to events that led to the creation of Microsoft and the eight years Allen spent there. Later, he recounts his experiences owning two professional sports teams — the Portland Trail Blazers and the Seattle Seahawks — funding the first private space flight, investing in various cable and wireless ventures that resulted in spectacular losses, delving into the inner workings of the human brain, and relishing adventures with celebrity friends and luxury collections, including his 414-foot yacht Octopus.

He calls his second act "truer to his nature."

But the experience working with Gates made the deepest impression.

In the book, Allen accuses Gates, along with Chief Executive Steve Ballmer, of trying to cheat him out of Microsoft shares while Allen was being treated for cancer in 1982. Allen said he overheard the two conspiring to dilute his shares by issuing options to themselves and others. (Ballmer went to Allen's house later to apologize.)

"My partner was out to grab as much of the pie as possible and hold onto it," Allen writes. At one point Allen wanted to tell Gates "some days working with you is like being in hell."


Allen was too proud and angry to confront Gates, but he said the old wound still stings when he thinks about it.

"When you go back and you relive those moments, it does remind you of the sting and the surprise, and a disappointment, too," he said in the interview. Some Microsoft veterans, including Vern Raburn, who worked with Allen in the first few years at Microsoft and is quoted in the book, and Jon Shirley, who served with Allen on Microsoft's board, have said they couldn't understand Allen's vitriol, considering how well off he became.

"To say it turned out great, so why does it matter what happened along the way. ... I don't understand that logic," Allen said in response. "You have to look at the sequence of events that happened and say, 'Did people act at all points in the most straight, honorable and forthright way?'

"I don't personally feel bitter, but if you're going to do this, you should do it accurately and precisely and tell it like it was. Otherwise what's the point?"

Zbikowski, who spent 25 years at Microsoft before retiring in 2006, had his own take.

"I don't think Paul is saying I have $14 billion; I really should have $18 billion," he said. "Paul is a really sensitive guy so I think he was wounded."

"I don't think he's lashing out," Zbikowski said. "If he was lashing out, he could say a lot more things."

Zbikowski says he remembers the shouting match over the IBM project "very, very well" — it was his first big job after graduate school.

"Bill and Paul were red-faced and screaming and I was just appalled," he said.

But what happened as a result advanced the evolution of personal computers.

"IBM had told Bill it was unacceptable we were so late in delivering the product," he said. "But the product that IBM wanted would have been uninteresting. Paul was pushing to take the state of the art and move it forward a bit."

In the end, they devised a system that paved the way for future advances to give PCs much more storage.

"It was prescient of Paul to see that we'd need this organizational ability so far in advance of the hardware," Zbikowski said.


Allen is an intensely private person who tends to shun interviews, but as part of publicity for the book, he agreed to one at his lakefront compound on Lake Washington. Earlier for a segment on "60 Minutes" that aired Sunday, he sat for a two-hour on camera interview and participated in three days of filming around Seattle. Allen found the experience exhausting.

At his estate, which includes several large houses, an outdoor sculpture garden, an indoor swimming pool and a full-size basketball court, a security guard drove guests around in a golf cart. A row of luxury sports cars were parked in separate garages outside of Allen's house, just down the driveway from the homes of his mother and sister.

A woman with a crisp British accent who manages the estate was called to fetch a pair of Allen's glasses for an outdoor photo session on a large lawn overlooking Lake Washington. His dog, Rosie, a friendly brown Dachshund, followed on his heels.

Allen's critics say he has used his wealth to influence development in Seattle at taxpayers' expense, from public financing to build a stadium for the Seahawks to getting special zoning deals and persuading the city to build a new streetcar through his holdings.

As two of the best-known Seattle figures of the past three decades, both Gates and Allen now define Seattle's future as well as its past, with the Bill & Melinda Gates Foundation's new headquarters rising between Allen's Experience Music Project and his Vulcan real estate developments in South Lake Union.

Long before their struggling startup grew into the world's largest software company, they were just two boys inside a room at Lakeside School figuring out how to send commands to a remote mainframe computer the size of a tractor trailer, and Dumpster-diving on weekends for the source code to operate the latest model.

Always the film buff, Allen drew a contrast in the interview between their partnership and the feud between Facebook co-founders dramatized in "The Social Network."

"Ours is different in that we were working so closely together in all facets of the business" he said. "We were finishing each other's sentences. We were working side by side on these things in a super collaborative way. Things changed over time."

Gates said in a statement, "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." Last year, Allen responded to Gates' appeal to take a "Giving Pledge" and made public his intention to donate most of his wealth to charity. But while Gates is still bent on changing the world, Allen seems more content to explore it.

He funds an assortment of projects in areas that engage his interest and where he thinks he can make a difference, but he does not articulate specific goals for his philanthropy.

"I'm not somebody that just has one or two things in life that are laserlike focused," he said. He also sees the work as longer term:"You can't just say I want to figure out how the brain works in 10 years."

His first diagnosis with cancer at age 29 was a wakeup call to get more enjoyment out of life, Allen said. "When you're just chained to your terminal, you're thinking of future rewards and the impact of what you're doing," he said. "You're not exactly striving for balance."

In his book, Allen talks about his first love, Rita, whom he dated in high school and came close to marrying. The two moved to Boston together but she later returned to Washington state.

Rita Schenck, now a Vashon Island resident who works for a nonprofit environmental institute, said Allen got in touch with her about 12 years ago after finding her on the Internet. Schenck, who has been married for 30 years, said they remain friends.

In school, Allen played chess and guitar and worshipped Jimi Hendrix, she said, but later he became consumed by computers.

"For me it was just really important to have somebody for whom I could be the center of his life," she said. "It was pretty clear I wasn't going to be the center of his life. Computers were going to be center of his life. I'm very fond of him and sad it didn't work out."

Asked whether his legacy would be dominated by the image of a lonely billionaire surrounded by expensive toys, Allen was unapologetic.

"Hey, part of life has to be about enjoying life and having different experiences, especially if you're with friends and you're on an adventure on a boat or a submarine — it's a lot of fun," he said. "If you have the chance to realize some of these dreams you had as a kid and you have the opportunity, why not pursue that?"


Even with his memoir complete, there's still something left unresolved.

Allen wants to sit down with Gates one more time and hash it out.

"I expect to sit down with Bill at some point and have a very intense discussion," he said. "I think that will probably be good for both of us."

Who is going to pick up the phone?

"It could happen either way."

Last year, Gates came regularly to visit his old friend at home while he recovered from chemotherapy.

"It seemed that we'd be stuck with one another for as long as we lasted," Allen wrote.

Kristi Heim: 206-464-2718 or

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