Steve Ballmer is a prominent American businessman and philanthropist, best known for his role as CEO of Microsoft from 2000 to 2014. In today s episode, Ballmer shares the circumstances of his upbringing in Detroit, the early days of Microsoft, and his concerns about the public s waning faith in the American dream. He also discusses his work with USA Facts, his advice to entrepreneurs, and the shifting landscape in big tech today. Don t miss hearing from Steve Ballmer on this latest episode of the Sunday Special. Subscribe to our new podcast, The Huddle, wherever you get your podcasts, and don t miss our newest episode of The Sunday Special on Apple Podcasts! Subscribe today using our podcast s promo code POWER10 for 10% off your first month with the discount code Power10. Learn more about the Power10 discount offer here. Use the promo code: PODCAST10 at checkout to save 10% on your purchase of an Apple product or accessory. And don t forget to rate, review, and subscribe to our podcast wherever you re listening to this podcast. The Power 10% discount is good for 4 months, and a discount of $99.99 for 5 months, plus free shipping when you buy a second copy of Power10, plus an additional $10 discount when you upgrade to Power10 becomes a member of the Provenible Loyalty Club membership offer. Subscribe today! Thanks so much for listening to the show! and share it with a friend or become a patron! Subscribe, rate, comment and subscribe on iTunes. and review it on your thoughts on the PodCast! or subscribe to the podCastle Connect with a fellow podcasting app! Thank you for listening and review this episode is a fellow patron of the show Podcoin! The Podcoin Connected Connected by Podcoin? and a fellow podcaster? Subscribe & subscribe to Podcoin Connected to the Podco Connected To The Podco? Learn More about the PodCo Connected With The Pod Co? and Subscribe to Podco or Learn More About The PodCastle & more! , and more! Subscribe to The Pod is a Podcasts Connected Across the Vineyard v=1.5/5/Alfred & Co Connected In The Vineyard? , And more Like This Podcasts & More Connected Through This Is My Story?
00:00:09.000We don't have a quote, business guy, unquote.
00:00:13.000And my vast business experience I'm an ad manager of the school paper, football team manager, publisher of the literary magazine in college, plus learning a little bit about advertising at Procter& Gamble.
00:00:28.000And man, oh man, I was the big businessman, if you will.
00:00:34.000Steve Ballmer is a prominent American businessman and philanthropist, best known for his role as CEO of Microsoft from 2000 to 2014.
00:00:41.000Microsoft grew to $80 billion in revenue under Ballmer's tenure, and Ballmer himself became an institutional figure in Silicon Valley, well known for his distinctive management style and marketing talent.
00:00:50.000Beyond his corporate achievements, Ballmer launched USA Facts in 2017, a non-profit organization dedicated to equipping Americans with the big data points on the biggest issues that face our country today, like the economy, immigration, and healthcare.
00:01:01.000Ballmer and his wife Connie also co-founded the Ballmer Group, whose philanthropic mission focuses on improving economic mobility for families across the United States.
00:01:09.000Notably, Ballmer also purchased the NBA's LA Clippers in 2014, where he has financed the construction of a brand new stadium and can often be found courtside at games.
00:01:16.000In today's episode, Ballmer shares the circumstances of his upbringing in Detroit, Michigan, the early days of Microsoft, and his concerns about the public's wavering faith in the American dream.
00:01:24.000Ballmer also discusses his work with USA Facts, his advice to entrepreneurs, and the shifting landscape in big tech today.
00:01:30.000Steve's enthusiasm for business and clear passion for his charitable work are all evident to those who meet him.
00:01:34.000Don't miss hearing from Steve Ballmer on this latest episode of the Sunday Special.
00:01:38.000Steve Ballmer, thanks so much for taking the time.
00:01:52.000So, I want to talk to you about USA Facts in just a few minutes, but I want to begin with sort of your business career, because that's how most people know you.
00:01:58.000They either know you from your days at Microsoft, or they know you as owner of the Clippers.
00:02:01.000I want to start with sort of the general idea of the American Dream.
00:02:04.000There's been a lot of talk politically from all sides about how the American Dream is dying, how it's dead, but your story is an American Dream story.
00:02:11.000So, how does someone like you, I guess the 30th employee at Microsoft, end up as the head of Microsoft?
00:02:25.000And in a sense, I'll say our two-generation story, if you will, is an American dream.
00:02:31.000My grandparents on my mom's side were immigrants from what's now Belarus and Ukraine, Jewish immigrants trying to avoid the pogroms, et cetera, came here, you know, Before, if you will, World War I. My dad himself was an immigrant.
00:02:51.000He came here after World War II. He'd been an interpreter at the war trials at Nuremberg.
00:02:56.000So I'm pretty recent, as my folks would have said, off the boat.
00:03:01.000Neither of my parents went to college.
00:03:06.000My grandfather, on my mom's side, didn't finish second grade.
00:03:10.000So, while asking for no empathy, I will say, you know, we're recent, recent in the country.
00:03:18.000And I was brought up, I would say, solidly middle class.
00:03:24.000My dad worked his way up from payroll clerk at Ford, but they were able to You know, give us a good education.
00:03:34.000I got a scholarship to a nice fancy private high school that helped me a lot.
00:03:40.000And then went to Harvard and, you know, after that, if you will, I was quite set up.
00:03:46.000I no longer was at the bottom of the American dream.
00:03:51.000Graduated, worked for a couple years at Procter& Gamble, one year back in business school in Stanford, and then my college buddy from down the hall, Bill Gates, gave me a call and said, hey, look, we've been building our company.
00:04:07.000We don't have a, quote, business guy, unquote.
00:04:11.000And my vast business experience, ad manager of the school paper, football team manager, publisher of the literary magazine in college, plus learning a little bit about advertising at Procter& Gamble.
00:04:26.000And man, oh man, I was the big businessman, if you will.
00:04:52.000First thing, Bill and I had a chance to, quote, fight about, unquote.
00:04:57.000After about a month and a half, I wanted to Add another 18 people to the 30 people we had.
00:05:04.000Bill said, you're going to bankrupt us.
00:05:06.000I didn't ask you to drop out and I was going to go back to school.
00:05:10.000And then Bill said to me, no, no, we're going to put a computer on every desk and in every home.
00:05:16.000And that sounded like a big, broad ambition.
00:05:19.000And he said, all right, you hire one good person and we'll figure out about the other 17.
00:05:23.000And it kind of all came together, and when I left, the company I think was about 88,000 people.
00:05:31.000We had about $27 billion of pre-tax income, and they've taken it now to higher heights, if you will.
00:05:40.000So, that story is an amazing story, but it also happens to be a fairly typical one in the sense that I know a lot of people who have made a lot of money in the United States, and very few of them were born to the silver spoon.
00:05:51.000I know that when we started our company, obviously, my sort of family history is actually quite similar to yours.
00:05:56.000My grandparents on both sides ended up coming to the United States very early on in the 20th century.
00:06:11.000And they gave me the basis to do things like go to a private high school and then go on to UCLA and Harvard Law School and then launch a business.
00:06:19.000And so this bizarre idea that the American dream is dead, that something has fundamentally shifted, We live in a great system that allows for meritocracy, it allows for free markets, it allows for generationally advancement to be made.
00:06:44.000Not everybody's going to make it from the bottom of the mountain all the way to the mountaintop, but you can move up the mountain such that your kids can make it the rest of the way.
00:06:52.000Do you feel like the American dream has fundamentally shifted over the course of your lifetime, or is that still a possibility for people?
00:06:58.000I think it's a possibility for sure, but I also feel as if it is, and the data from Raj Chetty, an economist at Harvard, who's been working in collaboration actually with the IRS, so he can look at specific data,
00:07:15.000if you will, would show that the economic mobility of For African Americans born in the country, particularly African American males, and for Latinos, are not as good.
00:07:31.000And, you know, is the American dream alive for some folks?
00:07:38.000I'm not saying it isn't, but it's certainly, the data would say, tougher for some groups to achieve that kind of mobility.
00:07:46.000And I'm sure if we went to Appalachia, just as a specific example, we'd find some of the same, if you will, for white people growing up in certain pockets.
00:09:41.000ZipRecruiter is the smartest way to hire.
00:09:43.000So when we look at your story over at Microsoft, you know, obviously we started business.
00:09:46.000We're nowhere near Microsoft's level of success.
00:09:49.000So when you give business advice to people, which I'm sure you do all the time, what are some of the biggest lessons that you learned during your course of business?
00:09:56.000And what are some of the biggest fights that you had with people like Bill Gates along the way?
00:10:00.000Because as somebody I have a couple of business partners, those fights are fairly constant.
00:10:03.000I think people don't really tend to see that outside the company, but that sort of stuff is happening all the time behind the scenes.
00:10:34.000When I was an undergraduate, my You know, my dad worked for Ford, but I interviewed with about 32 different companies on campus just to learn, okay, what is it like to work in the back office of a bank?
00:10:48.000What does it look like to be an accountant?
00:10:50.000What does it look like to, you know, be a salesperson?
00:10:53.000I think it's really important to take that on as a mission to find a passion, not hope you randomly luck out and find one.
00:11:25.000So I absolutely believe that hard work is critical.
00:11:29.000The thing I have learned, I think, a little bit since Microsoft is you need to still retain a little bit of brain space, a little more brain space to speculate on what may come next.
00:11:42.000If you become a dreamer, not going to work.
00:11:45.000If you become totally a grinder, not going to...
00:13:07.000Leadership is about thought leadership.
00:13:10.000It's not just about people leadership.
00:13:12.000If you're very charismatic and you're running off a cliff, more people are going to follow you off the cliff.
00:13:18.000So damn, man, you better pick the right direction.
00:13:21.000Just a little bit of food for thought.
00:13:24.000Yeah, I mean, there are a couple things there that I want to hone in on a little bit.
00:13:26.000The first one that you mentioned, which is passion for the thing.
00:13:28.000Again, when I talk with folks who are very successful, there is this kind of bizarre idea out there that they became very successful because they're constantly thinking about money.
00:13:36.000Not a single person I know who has founded a successful company originally thought predominantly...
00:13:42.000They thought more about the business and why they were enchanted with the idea of spreading that business.
00:13:49.000If you think too much about the money when you're first starting a business, you actually end up doing the wrong thing.
00:13:54.000I remember when I was in law school and I was interviewing for law firm jobs and I really had no interest in working at a law firm.
00:13:59.000And so I remember being in an interview and somebody said, so why do you want to work at a law firm?
00:14:02.000And I gave the honest answer, which was for the money, because the starting salary was like $180,000 a year.
00:14:07.000And that was the wrong answer, as it turns out.
00:14:09.000And I thought to myself, well, but that's true.
00:14:11.000I mean, nobody's joining a law firm because they want to work 2,200 billable hours a year doing doc review in the back room.
00:14:17.000But the reality is that The employers looked at that answer, and what they were recognizing is that if you are in it for the money, you're not going to stay in it.
00:14:24.000If you start a business because you think that that's the thing, that's where the money is, then you're not going to have the passion to go through the hard times, because the minute that the money doesn't come, you're just going to move on to the next thing.
00:14:35.000I agree with you if you're trying to have that kind of drive to do something new.
00:14:43.000Now, for some people, I think people elect a profession where they say, hey, I can make With greater certainty, I can have a very nice lifestyle if I pick this profession.
00:15:00.000I'm sure some lawyers do that, and that's okay.
00:15:07.000It's not about getting rich, but hey, with relatively low risk, I have a chance of doing relatively well.
00:15:15.000This will sound a little bit off, but I think some of that is also true in getting into the investment business, whether it's venture capital or private equity or even advising corporations on finance.
00:15:33.000And capitalism works on this in the sense that, you know, if you look at top graduates of top schools who go into business, guess what?
00:15:43.000While the kids will say they don't care about the money, the jobs that pay do attract the highest percentage of the people.
00:15:49.000I'm a big believer that markets actually are very efficient.
00:15:55.000If you put an incentive out there and it appeals to somebody, it's going to work.
00:16:01.000One of the other things you mentioned there was the luck aspect.
00:16:04.000And there certainly is a luck aspect to what works and what doesn't.
00:16:07.000And sometimes things you don't think are going to work definitely do.
00:16:09.000But there are some studies that suggest that one of the things that distinguishes successful leaders from unsuccessful leaders is actually how much they attribute their success to luck in a way that you wouldn't sort of expect, which is successful leaders, when something goes right, they tend to attribute that to luck.
00:16:24.000And when you're an unsuccessful leader, you tend to attribute bad things happening to So if you're a successful leader, you think everything that's going wrong is my fault.
00:18:32.000Now, we didn't have an operating system.
00:18:35.000We had a bunch of language software, and there was some confusion because we had licensed one for a variety of reasons.
00:18:41.000Anyway, we say we don't have one, but we really wanted them in the PC business, so we literally called the number one operating systems company at the time, a company called Digital Research, and said, we're going to put some guys on the phone.
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00:20:36.000So one of the other questions I asked earlier was sort of about how you navigate conflicts in the boardroom.
00:20:42.000How do you deal with top-level conflicts?
00:20:44.000I'm going to take this advice, again, with my own business partners.
00:20:48.000Yeah, I would say, you know, you really have to work things out and people have different personalities.
00:20:57.000You know, from the time Paul Allen, who co-founded Microsoft, retired in about 83 after dealing with Hodgkin's disease, you know, I was basically the number two guy at Microsoft and number one business guy and Bill and I would tussle about things.
00:21:16.000And there was a certain way we'd work them out.
00:21:19.000They were never decided in one cataclysmic meeting.
00:21:23.000There was a lot of struggle and body punching and minor gives and, you know, we worked it out.
00:21:32.000Twenty years later, Bill asked me to be CEO of the company.
00:21:36.000And I said, do you really want me to be CEO? Like, the number one guy and you're going to be the number two guy?
00:22:06.000It is absolutely tricky, and I suspect if you get two hardheads, I call Bill and I two hardheads, it's a little bit different than if you have two different personalities, somebody who's a little quieter but no less steely versus a hardhead, and everybody Yeah, it works it out in their own way, I guess.
00:22:27.000Or don't work it out and things blow up. - So I'm gonna come back to the clippers of it in a bit, but I wanna get to USA Facts.
00:22:34.000So this is a new venture that you've started.
00:22:36.000It's a nonprofit that's designed to essentially provide just the facts.
00:22:40.000And obviously we live in a, what people have termed a post-fact environment where everything is narrative.
00:22:45.000And one of the difficulties in the industry that I'm in, right, because I'm in the media industry, and that means that I do opinion journalism, is trying to make clear to my audience what is opinion and what is fact.
00:22:54.000And so one of the sort of rubrics that I've used historically is you listen to my show, then listen to Pots of America.
00:23:01.000If we say things that are the same, those are the facts.
00:23:03.000Everything else is probably the opinion that's being drawn from that set of facts.
00:23:07.000USA Facts is an attempt to sort of distill down what those facts are.
00:23:11.000Where did you come up with this and how has it been developed?
00:23:26.000You're going to help with our philanthropy.
00:23:28.000And she was focused in on foster kids at the time and kids who grew up in tougher circumstances without maybe that ability to dream the American dream.
00:23:51.000But it got me keyed up to understand what does wealth transfer look like in America?
00:23:57.000Which got me more interested in taxes, who pays them, what the government spends the money on.
00:24:04.000From there, I got interested, well, government's not a business.
00:24:07.000What kind of outcomes, though, do we get for the money that gets spent?
00:24:12.000And once my shape of what I was interested in became clear, I said, gosh, I wish I had something like a 10K report that every corporation files with the Securities Exchange Commission.
00:24:53.000Pension plans do forward progress, and we do publish those.
00:24:58.000And the thing would also have to be then comprehensive, comprehensible, and because we're talking about government, It makes it almost by definition nonpartisan because we're just reporting on what happened.
00:25:13.000We don't even take an opinion about what should happen.
00:25:19.000I mean, it's very hard to grade things.
00:25:21.000Take spending on transportation infrastructure.
00:25:24.000If you look at the data from the Army Corps of Engineers, most of our bridges and roads have been getting better and better and better with the roughly $200 billion a year we were investing as a country.
00:25:50.000If you're my daughter-in-law with our grandchild, guess what?
00:25:53.000You might say, if there's even, you know, 1% of roads or bridges that are deemed unsafe, we should spend more.
00:26:00.000so there's no normative way to say what is better and what is worse so no scorecarding just here are the numbers and before you have your damn debate at least let's debate from what's true and let's not be like a politician where boom we just grab one number out of the ether give it no context to somehow alarm people or excite people and if you look at them in context You know,
00:26:35.000If you look at the median wage in our country, the median wage has gone up 21%, essentially, since the start of COVID. At the same time, inflation's been about 19% since the start of COVID. So that's what's true by the numbers.
00:26:52.000Now, there's a lot of feelings from politicians.
00:26:55.000There's a lot of feelings from citizens.
00:26:59.000But the numbers are what the numbers are, and how people choose to react, what people forecast for the future, what actions people want to take, that becomes partisan.
00:28:23.000Anyway, long-winded, but that's how I feel about it.
00:28:25.000So to give people a sort of a sample of what you're talking about, I wanted to play a clip from a video that is about budgetary issues.
00:28:32.000Here is something from USA Facts talking about the aging of the American population.
00:28:37.000People are more likely to live alone today than any time in the past.
00:28:42.00029% of households today consist of individuals living alone without a child compared to 13% in 1960.
00:28:53.000Second, a greater share of the population is over 65, increasing from 13% of the total in 2010 to nearly 18% in 2023.
00:29:05.000More retirees rely on income from Social Security and support from government services like Medicare.
00:29:13.000So, I mean, obviously this is a breakdown of just basic statistics.
00:29:17.000And then, as you say, the implications can be taken in any of a number of different directions.
00:29:21.000I think there's some pretty obvious implications from that particular clip.
00:29:24.000When you have an aging population, that means that you're going to need more money going into the services that pay for that aging population.
00:29:30.000Or, if you don't have more money coming in, you're going to have to cut the services that are available to that aging population.
00:29:34.000That's just an inescapable conclusion, obviously.
00:29:37.000I mean, I'll let you make the conclusion, but strictly by my math lessons, I think kind of anybody else's math lessons, it's true.
00:29:50.000We don't make that forecast, but if you ask me as a nonpartisan person who can use Excel, yeah, I'd say that's probably what Excel would say.
00:30:00.000I mean, so how do you determine which subjects to focus on?
00:30:04.000So you say facts is pretty comprehensive, but it can't cover everything, and you have to put your focus some places as opposed to others.
00:30:09.000How do you decide which areas you want to put your energy into?
00:30:13.000Yeah, we absolutely, though, start comprehensively.
00:30:17.000We don't hide anything, because if you don't talk at all about some area, in a sense, you're not true to this notion of keeping things in context.
00:30:29.000How much do we spend on, if you will, crime and criminal justice?
00:30:36.000Now, do we give you this much in terms of data that might help you understand, or do we give you this much?
00:30:44.000So we start wide and just a little deep, but we've taken some subjects, like immigration, like the budget, where we have gone deeper.
00:30:56.000There's other topics where I'd like to go deeper.
00:30:58.000I don't think our crime data is as deep as I would like it to be for people to really have the numbers to make decisions, whether it's in their mayoral races or typically the mayoral races or county prosecutor races.
00:31:16.000Does that data exist in a form we can package it?
00:31:26.000And yet, people say there's homelessness, houses are not affordable, There is a depth that we can provide in that topic that we do not today.
00:31:37.000So we do a good job on some, and I wouldn't say we do a bad job anywhere, but we have an opportunity for increased depth, particularly if you look at these things in a local context.
00:31:48.000Most people don't care about housing prices nationwide.
00:31:51.000They take their interest in the housing prices in Jackson, Mississippi, or Seattle, Washington, or wherever.
00:31:58.000So, you know, in making these videos, you know, obviously you're breaking down the stats.
00:32:13.000We do not do causation precisely because it does get political.
00:32:18.000And if economics was a science, then there would be economists who work for the government who would give you what they would call a scientific explanation of what's happened.
00:32:51.000You get some major innovation in society, the personal computer.
00:32:55.000People speculated during the Clinton era that the advance of technology really stimulated the growth that caused budgets then to, even during I think one or two of those years, run a surplus.
00:33:10.000I loved it when I was selling PCs and software that people were saying that.
00:33:15.000I can't prove to you there was causation there.
00:33:35.000Well, it might have gone from 1 to 2, but if it's in the context of 100, 1 to 2, the doubling doesn't help you understand the full context.
00:35:18.000The International Fellowship of Christians and Jews is on the ground, providing food, shelter, and safety to those in need during this crisis.
00:35:24.000Since the war started, thousands of reservists, everyday Israeli citizens, have left their families to serve their country.
00:35:57.000So one of the issues that you mentioned a little bit earlier that I wanted to play a clip from another one of the videos is the issue of immigration, which obviously is a very hot button issue.
00:36:06.000President Trump has obviously campaigned heavily all three times he's campaigned on issues surrounding the border.
00:36:10.000Here's a bit of the video from USA Facts about immigration.
00:36:13.000Let's step back for a fact check on unauthorized immigration.
00:36:17.000Two and a half million encounters with unauthorized immigrants at the southwest border in 2023.
00:36:23.000Of these encounters, 1.3 million people were released into the country.
00:36:28.000430,000 more people were transferred to ICE or Health and Human Services.
00:36:35.000765,000 people were repatriated or expelled, plus an estimated 600,000 who entered the country undetected.
00:36:46.000That means 2.3 million new unauthorized immigrants came over the southwest border into the country.
00:36:55.000Yeah, again, that is just perfectly statistically accurate.
00:36:59.000And it is funny how we do live in a polarized environment in which watching that video will either make you extremely mad or extremely happy, depending on your political point of view.
00:37:09.000You might get offended by the simple statistic.
00:37:11.000Have you found that response from people to any of your videos, just people getting randomly offended by the statistics themselves?
00:37:17.000Yeah, I think there are people who look at that, certainly, and have said to me, wow, I didn't know those numbers.
00:37:31.000And then you'll get people who will also look at our unemployment data, and they see unemployment small, and they say, oh, well, I'm glad we have those people.
00:37:43.000Because otherwise, who would be doing all these jobs that we need done in our economy?
00:37:48.000So, I can get multiple reactions to a set of data and what to do about it.
00:37:56.000Now, myself, I'm a math guy, and I just think about immigration as kind of, instead of a, you know, sort of this huge, what would I call it, religious war, I would say simply, I think most people believe we should have more than zero immigrants, and most people would say we should have less than unlimited.
00:38:19.000So all we're talking about is the number.
00:38:23.000The number and the ways in which we bring people into the country.
00:38:27.000And if the debate can be grounded in numbers, maybe we can take some of the religiousness out of the argument and start thinking about it.
00:38:37.000Now, on top of this, we have two million people who we admitted to the country who don't have a path to citizenship but are authorized.
00:38:45.000We've got another half a million people in the country who have a path to citizenship.
00:39:02.000And if we can make a numerical, maybe instead of screaming at each other, it's like a business deal.
00:39:09.000Maybe somebody can actually agree on what number and in what form.
00:39:13.000So, it sounds like you've spent some time in Washington, D.C. talking to politicians about all of these sorts of stuff.
00:39:18.000And the impression, and I think that it's largely correct having spent some time in Washington, D.C. myself, is that the parties have never been further apart.
00:39:24.000That there's just not a lot of bipartisan talking between the Republican Party and the Democratic Party.
00:39:29.000That you will get some areas of agreement, particularly China policy.
00:39:32.000You seem to have some agreement between the Republican and Democratic Party.
00:39:35.000But the amount of talk, just general amount of talk between Republicans and Democrats...
00:39:39.000It seems to have declined at an extraordinary rate, that there's actually an incentive structure that punishes people who talk across the aisle.
00:39:50.000We've been able to have a set of bipartisan meetings to discuss the facts, more so in the Senate, Senator Romney, Senator Schumer.
00:40:00.000But we've had very conservative Republicans and very liberal, so to speak, Democrats sit with us together And go through the numbers.
00:40:10.000Now, people may process them differently, but at least I've found that there's some bipartisanship in this notion, at least of some group of people, in looking at the numbers.
00:40:21.000With that said, some politicians said this to me, which I found very interesting.
00:40:28.000We now live in a world because transportation is so good that everybody goes home every weekend.
00:40:35.000It's not like people's families moved to D.C. like the old days, and people were running into each other at kids' baseball games, and there was more of a sense of, I'll call it, bipartisan collegiality because people had that, I'll call it, social time in which they were mixing.
00:40:53.000The second thing these politicians highlighted for me was we now have kind of this format, Back when I talked about this probably 10 years ago, cable news, now it would be podcasts and everything else, where there's more good opportunity to sensationalize things, because more voices are coming to the fore.
00:41:18.000And so between sensationalism and the lack of chance to really meet in some environment other than the dramatic environment of Congress, There has been more polarization endemic in the system, let alone whatever level the policy disagreements really are.
00:41:40.000I find it unfortunate, and yet there were certainly bipartisan Mostly bipartisan or semi-bipartisan bills passed in the last year.
00:41:54.000It might have been one or two Republicans agreeing with the Democrats or vice versa.
00:42:00.000But, you know, we did get a CHIPS Act.
00:42:02.000We did get the IRA. We did get the infrastructure bills.
00:42:06.000And I'm not going to argue whether those are good or bad.
00:42:08.000People have to assess that on their own.
00:42:25.000And I think that probably had a lot to do with China policy.
00:42:27.000Yeah, I mean, I wanted to actually ask you about some sort of technological issues that are arising.
00:42:32.000Obviously, this is your area of expertise, although you've suggested before that you're not a technology expert who ran Microsoft, which is a funny place to sort of be in your career.
00:42:41.000With that said, the big talk of everybody in D.C., in Silicon Valley, is now about the rise of AI and how transformative AI is going to be.
00:42:50.000And the capabilities really are astonishing, although the reality is that I think the application, sort of the killer apps for AI, have not yet been developed.
00:42:58.000Like how they enter daily life for the vast majority of people.
00:43:01.000Most people are kind of using them informally.
00:43:04.000Like when you use Google now, probably you're reading the AI answer at the top of Google rather than actually scrolling through the pages of results.
00:43:12.000Or you might use ChatGPT to ask it a quick question that you might not Google.
00:43:16.000But the sort of transformative effect in terms of the output has not yet been felt.
00:43:20.000How transformative do you think AI is going to be?
00:43:22.000And how quickly do you think the markets adapt to AI? How fast are businesses going to integrate this technology?
00:43:29.000Yeah, I think it's I think it is as big as the rise of microprocessors.
00:43:37.000And with microprocessors, I guess I can include PCs, phones, all of that, the internet, and now AI. And why?
00:43:49.000Because most of the scenarios I was describing that customers were interested in when I left, they're all AI scenarios.
00:43:57.000Get me ready for my European trip, business trip.
00:44:03.000Okay, it can know what customers I'm seeing.
00:44:06.000It can tell me what our sales data is for those customers.
00:44:10.000It can show me with the most recent contacts.
00:44:12.000It can find the briefing documents that our team, it can summarize all that.
00:44:19.000That's a very valuable scenario from my perspective.
00:44:23.000Really game-changing in terms of making people more productive and, frankly, changing what jobs will exist in our workforce and what jobs won't.
00:44:34.000I'll give you another example that's more in the personal realm.
00:45:02.000You know, I really am interested in the interaction between changing demographics and changes in our economy and the job situation in the country.
00:45:13.000Well, right now we just try to bring together a bunch of data and we have to do that ourselves.
00:45:19.000If we can get rid of some level of hallucination, the kind of work we do, Which maybe every citizen can do for themselves becomes easier.
00:45:29.000So yeah, whether it's business, personal, we're actually not a not-for-profit.
00:45:36.000We don't make any profit, but I pay for USA Facts with after-tax money, not pre-tax money.
00:45:45.000It's my theory that I can now say there's no government subsidy that comes through deductibility on USAFAQs, which I personally think is kind of a principled thing.
00:45:56.000So there's no, if you will, tax deduction in which I pass part of the cost on to other taxpayers.
00:46:05.000I see so many scenarios like that, let alone the, hey look, we're trying to, as a scientist, we're trying to rapidly do a bunch of experiments for, I don't know, cancer research.
00:46:53.000I think what happens is that people start discounting what technology can do in the long run because they're discouraged about what it may have done in the short run.
00:47:06.000I tend to see the long run as always more promising if it's the right technology and I think this one is.
00:47:12.000So that raises also questions of valuation.
00:47:15.000It seems like the valuation on many of these companies is extraordinary compared to the earnings right now.
00:47:21.000The P.E. ratios are out of this world on this sort of stuff, and that, of course, is requiring a lot of speculation.
00:47:27.000When you were the head of a massive publicly traded company, how did you deal with that as CEO? How the market was valuing what you were doing?
00:47:36.000How should people see the stock market as a reflection of the value of a company?
00:47:40.000In other words, I suppose I'm asking, how efficient are markets?
00:47:47.000Number one, we versus many, many tech companies were always more or less valued in part on our earnings, not some grand long-term view of what our earnings might be.
00:48:01.000Some of that was built in, but we, Microsoft, have had great earnings from the get-go.
00:48:07.000The company was profitable essentially after the first four months.
00:48:12.000So, there's been an earnings perspective.
00:48:15.000With that said, there's been a lot of companies that were not valued on earnings.
00:48:18.000And I'd point back to the dot-com bubble.
00:48:23.000There were plenty of companies that wound up going away or value dramatically shrinking and getting bought.
00:48:31.000I mean, even Netscape you can take a look at if you want to.
00:48:36.000It was a darling with a very large market cap.
00:48:40.000Let's say those market caps were 15, 16 million for startups with no profit that were really just barely startups.
00:48:48.000If you put 25 years of inflation on top of 15 billion, You're not the same, but you're getting up about to the valuations we see today that don't seem right.
00:49:03.000So I just claim, if you think about it inflation-adjusted, we do have precedent to what's going on.
00:49:10.000Now, do I think markets are efficient?
00:50:05.000I think we will have the most, and we have different products.
00:50:09.000We have what I call the one or two minute product, one of our articles or a quick fact checkup.
00:50:16.000We today have what I call our hour and a half to two hour products, which are our annual report and we still do a 10K. We don't have as many 15 minute products, which is what the videos are.
00:50:29.000And I think 15 minutes gives you a depth which is highly desirable.
00:50:35.000And I think our audience and where we go will depend on the range of products.
00:50:40.000Can we make video a steady part of what we do?
00:51:03.000So all of those factors will determine the breadth of our audience.
00:51:07.000But we do require people who are comfortable with numbers and people willing to take the time.
00:51:14.000I think that's someplace between 10 million and, I don't know, 30, 40 million Americans.
00:51:20.000It'll include some students, some young people who are interested in getting active, older people who have the time, middle-aged people who are worried about some set of factors in their life and want to learn more.