My Favorite Mistake
Allen, Paul, Newsweek
Byline: Paul Allen
Paul Allen on how he and Bill Gates went bust before they went big.
In the summer of 1972, when I was home in Seattle from college and Bill Gates was heading into his senior year at Lakeside School, we were casting for our maiden business venture. Bill had contracted with a company that measured traffic patterns by counting the car wheels that ran over pressure-sensitive rubber tubes. Every 15 minutes, a machine would punch a sequence of holes onto a customized paper tape, with each pattern representing a number of cars. The tapes had to be manually read and then repunched onto batch-loaded computer cards.
I wondered instead about using a minicomputer. Intel had a new eight-bit microprocessor, the 8008, that I thought could process traffic-flow data analysis. We tracked down an electrical-engineering student, and soon he had a workable sketch for Traf-O-Data, the name Bill proposed. Armed with our data charts on hourly traffic flow, any county would know just where to install stoplights or focus road repairs. Bill and I scraped together $360 and picked up an 8008 chip at a local electronics store. …