SVA Speaker Series: Bill Gates in Conversation with Ron Conway

We were honored to host Bill Gates on October 14th for an intimate conversation with Ron. The pair have known each other for 40 years, first meeting when Ron was a customer of Bill’s then-startup Microsoft, purchasing software for his then-startup, Altos Computers. Their conversation focused on Bill’s experience as a founder and businessman and dove deeply into the current state of the COVID-19 pandemic and Bill’s perspective on and passion for philanthropy. The summary that follows draws highlights from their discussion, which was originally live-streamed for SV Angel portfolio company founders.

**Bill’s responses are loosely quoted and sometimes paraphrased below. The interview has been edited for clarity.

Video Recording

Business Learnings

Early decisions and factors that contributed to the success of Microsoft

Timing: The microprocessor revolution was happening, and the traditional companies just didn’t recognize how important that was — that the nature of computing, the importance of software would be there.

Importance of Building a Team: We hired amazing people, including people who had been executives in other businesses. For example, John Shirley who had been President of RadioShack. I remember being very shy about saying to John that I wanted to hire him. I actually had one of my board members break the subject to him because I was just too shy. John came on and did an absolutely phenomenal job. Another example is Charles Simonyi, who had been at Xerox Parc and had done unbelievable work there. We mixed in real industry experience and were very good at hiring high IQ people.

Having a Global Perspective: We were more global in nature than any of our competitors, so our operations in Europe and Japan were bigger than our operations in the US for a long time. Our competitors really were incredibly US-centric and didn’t understand the overseas market.

Importance of Multiple Product Offerings: A lot of the companies we competed with were single-product companies, like WordPerfect, or WordStar, or Lotus 1–2–3, whereas we thought of ourselves as a software factory. Our ability to do graphics interface or to integrate the Office components together differentiated us — we were just moving at a much faster pace than others.

Importance of Work Ethic: My favorite panel ever was one where I was promoting the graphical user interface and the other panelists at the end said that I was “wrong as usual,” but because I worked such long hours I would probably succeed, even though I shouldn’t. They were so intimidated by how hardcore my work ethic was — at that point I was in my 20s, so very different than today!

Business Challenges & Memorable Risks

Managing a difficult partnership: IBM was the dominant computer company at the time.. We decided to do a partnership with them and managing that was very difficult. Eventually they decided they didn’t want to continue the partnership with us and that was also very difficult. So, managing our most important customer/partner was very difficult.

Operations in Japan: Over a third of Microsoft’s profitability came from Japan in our first three to five years and figuring out how to operate there was also a challenge. They require all sorts of things to be done in a special way, and figuring out the small subset that you really do have to do special for Japan, vs. the things you do the normal way, is very tricky. We made a clear bet on what we were going to do special, and what we weren’t, and it ended up working out extremely well for us.

Growth Opportunity Over the Next Five Years

The holy grail of software is Artificial Intelligence, either in a pure software capability or in a physical robotic capability. Going back to the 60s, the Stanford Research Institute (SRI) had their robot, Shakey. I remember seeing that when I was in 10th grade and saying, “That’s what I want to work on — making that robot a lot better.” It’s incredible how a lot of that technology eludes us to this day, both the robot side and even on the software side. We still haven’t solved the common sense understanding of the world aspect, that projects like CYC tried to address 20 years ago. There are plenty of important things to work on, but the Holy Grail is sort of the Turing Test AI.

Allocation of Bill’s Time

My biggest allocation of time is to the Gates Foundation, and as we’ll discuss, a lot of that’s focused on COVID-19 — how we reduce the deaths and end the pandemic. But even before the pandemic the Foundation was where most of my time was allocated, and a lot of that work is health-related.

My second biggest thing is my work on climate change. I have a book coming out next year and I created an organization called Breakthrough Energy Ventures, that brings 18 investors together, and that’s going super-well.

I also continue to work at Microsoft about 15% of the time. It’s fascinating and I love that. And then I have some years where I’m working on things like Alzheimer’s or obesity, where there are companies I’ve invested in. Those aren’t developing world issues but they’re still super-important and still somewhat underfunded.

COVID-19

Sources of Reliable information & Notable Initiatives

IHME — Best source for forecasting new cases and deaths

Gavi, The Vaccine Alliance — Organization responsible for delivering vaccines to lower-income countries around the world

The COVID-19 Therapeutics Accelerator — Advancing research into accessible coronavirus treatments

Current State of the Pandemic

• The best forecasting is done by IHME, which is a group at the University of Washington that the Foundation funds. They called this rebound in all the European countries about a month ago where most of the models did not. Now, models are pretty inaccurate, but the basic trend is clear: things are going to get worse.
• US cases and deaths will likely rebound into the Fall, as we’re seeing almost everywhere in the world.
• Seasonality factor — People will spend more time indoors and because of the way your upper respiratory tract works, when it’s colder the virus replicates more.
• We expect that we’ll go back up to over 60K infections per day, and the death rate will get back up to ~1500 a day.
• The good news is that innovations are starting to arrive.

Innovations for Treatment

Monoclonal Antibodies (for early stage disease)

• Monoclonal antibodies should work both for treatment and for prophylaxis.
• Have shown promising results as a therapeutic when administered early in the patient’s illness.
• Eli Lilly and Regeneron are in the lead for development and both have applied for emergency use licenses, but AstraZeneca and a few others are only a few months behind.
• Eli Lilly has applied to the FDA for approval of a 0.7 gram dose and another option is a 0.3 gram dose, which would be possible to administer via intramuscular shot. Larger doses (above 0.3 grams) can only be administered by IV infusion.
• It doesn’t scale for prophylaxis, but for treatment, if the 0.3 gram intramuscular shot works, then we can apply monoclonal antibodies worldwide.

Antivirals (for early stage disease)

• Remdesivir is an antiviral drug that seems to have a pretty modest effect. Merck also has an option that is pretty far along.

Immune Modulators (for late stage disease)

• Dexamethasone — has shown promising results in a recent UK trial. The foundation joined the Africa Medical Supplies Platform to help scale-up this treatment after the results were released.

Vaccine

• We’ve never had so many vaccine efforts focused on one target. It’s mind blowing.
• There are seven notable efforts for vaccine development — mostly big pharma companies in the West; two or three should be available by the end of the year, and they will all be a two-dose shot (second dose taken ~a month after the first).
• Funding for these R&D efforts has been led by the US government, CEPI, which the Foundation funds, and from direct funding from the Gates Foundation.
• The first vaccine available will likely come from Pfizer. They’ve done a really great job on an RNA vaccine in partnership with BioNTech. Unfortunately, it is relatively expensive to make and fairly hard to scale up, but they’ll figure out how to scale it up for the US (not for the entire world).
• If a vaccine is extremely efficacious (90% transmission blocker) you only need about 70% population coverage in order to completely stop the virus spread and go into exponential decline, as opposed to exponential growth.
• If things go well with both vaccines and therapeutics, things will be moving back toward normal, hopefully next year. However, even with, say, a 70% vaccination rate in the US, things can’t return entirely to normal because there is always the risk of the disease coming in from the rest of the world. Once we determine which of the vaccines is best at transmission blocking it must be distributed very broadly.

COVID Surprises

Transmission: If you go back to what I was saying in my 2015 TedTalk, The Next Outbreak? We’re Not Ready, when we thought about respiratory diseases, we thought about diseases where you cough. All other respiratory diseases irritate your lungs and make you cough so the disease spreads and survives. This Coronavirus is not about coughing. It’s actually a pretty rare symptom. Just talking loudly or singing actually causes spread. A small percentage of people who are infected have extremely high viral loads (~20x the average) and we refer to them as super spreaders. Even at a distance of eight to ten feet, if they are talking loudly, super spreaders are able to cause an infection. If people could go to bars and not talk to each other, we could open the bars, but when people go to bars, they talk fairly loudly and they get close to each other, so bars are about as bad a super spreader environment as there is.

Masks: We didn’t understand about masks early on. It took until almost May, when we looked at the various cruise ship data, that we realized, “You’re infectious before you seek a test!” (pre-symptomatic) or that there are people who are never symptomatic. The biggest transmission group is actually pre-symptomatic, and that really is the worst thing for a disease — when you don’t know you’re sick, and you’re spreading it. Ebola’s the opposite. With Ebola you’re definitely bedridden before you have enough viral load to infect anyone, and in fact, the worst thing is a funeral when you touch the body because of the infectious viral load found on the skin. All of the big spread in the West Africa Ebola crisis actually was funeral-related. COVID-19, early on, is even worse than influenza in terms of transmission.

Testing & Opportunities for Innovation

You can’t test your way out of a pandemic unless you can test at least a quarter of the population every week. That’s an order of magnitude greater than our current testing capacity and nothing we’re doing with strip tests or slight increases with PCR machines is going to get anywhere close to that. To address this, you need to make the strip tests super-cheap, high-volume, and very accurate. (We’re working on that, but right now the sensitivity of point-of-care tests isn’t as good). Or you need to make the logistics for the central lab very strong.

PCR Machines: Fortunately, PCR machines work. They’re quite sensitive and have very few false negatives, but they require you to transport the samples to a central lab and require certain reagents that can have supply chain problems, which can create a bottleneck. There’s an approach that we think will be proven out in the next few months where we actually use a PCR machine that’s used in the agricultural field, which is a tape-based approach that is much less expensive and eliminates the need for reagents.

Swab Tests: We showed early in the epidemic that swabbing around the tip of the nose was just as accurate as the first testing methods, which required jamming the swab into the back of the throat, which makes you cough and requires a health worker to take the sample. Now you can self-test, avoiding the possibility of coughing on, and potentially infecting a healthcare worker. This self-testing approach has been adopted pretty broadly.

Saliva-based Tests: Unfortunately, the saliva-based solutions just aren’t as accurate. You give up almost a factor of two sensitivity, so it’s the swab to the inside of the nose, even with a strip test if we can solve sensitivity, or this new central lab approach.

Home Testing

• Current home tests cost about $5 to produce and are in short supply.
• They don’t catch early stage disease, so understanding how to deal with that lack of sensitivity is important.
• It is also crucial to report all results (even negative) to local health authorities to help inform our approach to interventions. We don’t want a lot of people doing tests where they don’t report the outcome, so ideally, the strip test either needs to have some sort of Bluetooth-to-phone connection, or you’d have to take a photo of your results and the barcode and make sure that gets back to the public health authorities.

Scaling/Improving Home Testing: Pre-positioned swabs would need to be available in every pharmacy, at every employer, at the library, etc. Whenever you think you’ve been exposed or think you feel any symptoms you go get a test kit and apply it to yourself, and then do one of two things with the swab:

1. Take the swab and stick it into a little bit of liquid, and then pour the liquid on the nitrocellulose strip. It will register a color result that indicates whether you’ve tested positive or negative. This is called a strip test or point of care test.
2. Put the swab into a barcoded plastic bag provided in the test kit, and you send it in to the central lab, which is hopefully doing it at this new low-cost way of doing the PCR.

Leadership During a Pandemic

Most of the tech companies will be the last to go back into the office because compared to say schooling, the benefit to society of us being in the same office is actually pretty modest. We can do mostly digital work.

• You have to give allowances to your employees so they can improve their equipment.
• You have to understand that people with kids are under a lot of stress.
• You have to understand, are there employees who are just having a really tough time? And you have to figure out how to reach out to them, even in just a comforting, friendly way.
• Hiring new employees is a bit strange because virtual work doesn’t allow for the normal casual interactions of in-person collaboration. The software is going to get a lot better, but right now it doesn’t afford that.

Current Unmet Needs Related to the Pandemic

Sadly, this epidemic has taken every type of inequity — racial inequity, white-collar vs. blue-collar inequity, rich country vs. poor country inequity, inner city vs. suburban school inequity — and exacerbated them to a meaningful degree. Governments have started to show up for the big things (vaccines, medical supplies, etc.) though there’s more needed to ensure innovations get scaled to the world. You also have to support local organizations to find out where the need is. Food banks, local tutoring initiatives, mental health care, etc.

Ideally, we’d see philanthropy from the wealthiest go up by like a factor of two, where payouts are much higher, and funding, particularly to local social service organizations, would go up dramatically.

Philanthropy & The Giving Pledge

When you move into philanthropy, you’re moving from the area where you made your money — where you have decades of experience, a team with diverse skills, and feedback from the market telling you what’s working — to a place where the problems are much harder, and understanding if your efforts are working is far more difficult because you don’t have that market-type feedback, and you just don’t have the experience. The idea of the Giving Pledge is to get people together. To share their passion, to share what they’ve learned. It’s a moral commitment for people who’ve done extremely well to, over their lifetime or in their wills, give away half of their money.

• Nobody ever writes a check to the Giving Pledge itself. Nobody ever solicits you to give to something in particular.
• Pledgers don’t pool money, but we’re learning from each other about what’s worked well and what’s not worked well. The meetings are all optional; it’s just learning together.
• The benefits mostly come through the annual meeting or specialized meetings where members begin discussing causes that are important to them. For example, there was recently a meeting about the oceans because many of our 200 members are interested in cleaning up our oceans. Also a lot of philanthropists’ kids get together to talk about how they are working in their families or thinking about philanthropy.

Melinda, and I have deepened our partnership by having a common cause and learning together — including making lots of mistakes. Helping with that journey is what the Giving Pledge is about. The dream, although we’ll never be able to measure it, is that the quantity and quality of philanthropy will be a lot higher than it would have been without that group coming together.

Why Should Founders Consider Pledging?

Everyone who joins sort of changes the norms in society. Yes, if you’re lucky enough to have huge wealth, you’ve got kind of a moral obligation to take your talent and try to give it back to society. What that means is quite a range of things in terms of the causes that you pick.

• People outside the US see philanthropy as a great strength of the US. But it should be probably triple the size it is today. It’s about 2% of the economy and we could do a lot better, particularly at a time like this.
• Tech entrepreneurs not only bring their resources and their energy, but they also see how digital approaches can help you achieve more. I think the tech industry has something they can bring in terms of the innovative thinking that can help with tough social goals.

Other Resources:

Collaborative philanthropy is a growing movement. These are ways to get to know other philanthropists, some of the best philanthropists are involved helping to guide them.

• Blue Meridian is focused entirely on looking at the poverty and equity challenge in the US. They’ve got some incredible partners, some of whom focus on particular cities, some who focus on particular causes.
• The Audacious Project is one that Chris Anderson has pulled together in a brilliant way.
• The Climate Leadership Initiative
• Co-Impact
• Lever for Change

If you’re just thinking about philanthropy, we’d love to talk to you, even outside the Giving Pledge. I think that’s a great way to get on the learning curve. Philanthropy can be a learning journey, and if anyone wants to work in areas where the Gates Foundation has been involved, we can connect you with the people who are working with those things independently. We try to be a resource for all the philanthropy that goes on.