Small Business Clinic
Kola Owolabi
Would you be surprised to know that Bill Gates, the erstwhile richest man in the world (18 years out of 24 years between 1995 and 2017) is one of the world’s worst penny pinchers? Do you know that even when he was the Chairman of Microsoft Corporation (the biggest computer software maker in the world) Bill Gates still got his lunch ticket signed by his then Managing Director, Steve Ballmer?
Do you know that up till very recently Microsoft pays one of the lowest salaries within its industry?(rather than pay the people big cash as salaries they use stock options meaning that their remuneration is tied to the performance of the company)
Why is this man still behaving so miserly despite the fact that Microsoft has enough money to buy up the entire Black Africa (its market capitalization is about 30% more than the GDP of the continent of Africa)?
The simple reason is that the company was built mainly on brain and sweat equity and the company was so used to making use of lean resources during its growing years that the big money coming thereafter did not affect their mentality of extreme cost consciousness. Actually the people are not seeing the money at all. They are only seeing the big vision that is ahead of them and are pursuing it with lethal zeal. The company was built around the vision to ultimately create a world where every home and office table will have a PC. Most of us already know how the company started in the first place. The twosome who created it, Bill Gates and Paul Allen, both very young at the time (Bill was 17 and Paul 21) put up the money that they had between them as youngsters (Bill had won a few bucks playing poker and Paul had saved some too at a brief spell working in a company). They promptly started out in pursuit of their vision. Since they had so little money, they concentrated on how they were going to start making sales from day one. They went out aggressively to start creating software and sell to prospective users.
The use of the brain and sweat equity came when they got a big break to create a software for IBM, the invincible computer giant of that time. IBM had approached them to design a software to run the PC they were developing. Microsoft did not have the software or anything near it and there was no way they would have developed one from scratch and deliver to meet the tight timing given by IBM. So it was inevitable that they had to go shopping to fulfill the order. They finally spotted a small software maker, Seattle Computer who had developed a software (Q-DOS) that would fit the IBM order. The challenge of getting the funds to pay for the software in order to supply to IBM came up. So while Paul Allen was busy negotiating with Seattle Computer, Bill Gates was at the IBM end doing serious haggling. With the order from IBM tucked under their shirt, they approached Seattle Computer. It was just a few days before the IBM order was due that Paul Allen concluded negotiations with the software maker. The two young men used brain equity in the negotiation of the terms of the contract with the seller of the software and the buyer (IBM). Thereafter, they proceeded to use sweat equity (By the way sweat equity is when you use your time, talent and energy to get your business going instead of using money). They tinkered with the software themselves (this took a grueling 5 days when they worked non-stop) and by the time they were through, the software had been remodeled to look like their original creation.
Kola Owolabi is the CEO of David Solomon Consulting. He is a Fellow of the Nigerian Institute of Management Consultants (FIMC.CMC). He can be reached by phone or WhatsApp through 08023203198.
