How to Make a Fortune in the Software Industry

Article excerpt

Back in 1975, when Paul Allen and I were college kids, the two of us in my dorm room cooked up the first software program for a microcomputer.

Paul showed me a Popular Electronics story about the "era of the computer in every home," and the two of us decided that software was the future.

This was the beginning of Microsoft.

Communication was simple: just Paul and me talking over Cokes and pizza. Nobody else cared much about our opinions.

Things have changed in the past two decades.

I still enjoy junk food, but I also spend two hours a day reading and answering electronic mail from Microsoft's 15,000 employees.

Lots of e-mail comes from outside Microsoft too.

Questions range from what it's like to be married (it's great), to what movies I like ("Schindler's List" and "Shadowlands") to complicated questions that would take a book to answer (and, as a matter of fact, I am writing a book).

The trouble is, I can spend my days answering outside e-mail and giving speeches or I can run my company.

I try to do both, but I don't communicate enough to broad groups and a lot of my e-mail goes unanswered.

Think of this new monthly column as my e-mail to you.

I'm excited about writing it because it lets me communicate to a wide audience without being edited into a soundbite or filtered through somebody else's perceptions.

Not all questions come to me through e-mail, by the way.

Sometimes people stop me at an airport, or a would-be entrepreneur corners me at a computer show or a college kid sends me a letter.

One student recently asked what to him was an important question. It wasn't a big philosophical idea he wanted to discuss, although I suppose you could say he wanted to talk about the free-market economy.

He wanted to know: "Is it too late for me to get into the software industry and build a company and get rich?"

I'm often asked that question, and my answer is always the same: This is a great time to be in software.

I won't say you can build another Microsoft. But you can shoot for $2 million a year in sales by selling 10,000 copies of a $200 product.

That's pretty good and it happens all the time.

Because I remember how exciting it was to start a software company, I enjoy the success stories of others.

Small software companies are always cool.

They begin with a guy (or gal!) who has an idea. He or she gets together some friends who know how to program, and they build a product.

There's lots of craftsmanship in what they do because they care about it. …