Friday, November 13, 2009

More Misplaced Hero Worship: Gates & Buffett On CNBC

Count me among the unimpressed.

CNBC's much-touted Columbia Business School appearance of Bill Gates and Warren Buffett, heavily promoted all yesterday and aired last night, is completely uninteresting to me.

Are Gates and Buffett wealthy? Yes. Successful? Certainly at times they have been.

Are either a model for the paragon of our society? No.

Or the two people most-qualified to opine on "Keeping America Great?"

That, by the way, is the intended topic of their appearance in a town hall format for CNBC at Columbia.


Neither is an inventor or true entrepreneur.

Buffett went to Columbia, studied under the legendary Ben Graham, and made his mark as an equity investor. Basically, he invested other people's money.
Gates is famous for presiding over Microsoft's growth as a software giant. But his and its origins are a little less auspicious.
But let's see how the companies with which both are associated have fared recently.
Over the past five years, Microsoft and Berkshire Hathaway have had mixed results when compared with the S&P500 Index.
Gates' company has underperformed the index, while Buffett's company has modestly outperformed.
In fact, for the entire period, Microsoft has underperformed the S&P, while Berkshire treaded water for half of the period.
Going back further, to 1985, it's clear that Gates' Microsoft had an incredible streak of wealth creation. There were software publishers before Gates, but his company did a few things differently, and was blessed with fortuitous timing.
For the record, Gates' biggest break came when he managed to hoodwink the original developer and owner of the rights to MS-DOS to sell them to him for a song. Meanwhile, Gates had IBM negotiating with him to provide such an operating system for the IBM PC.
Gates' Microsoft retained the rights to royalties on all the PC clones, which was the source of the firm's incredible gusher of profits in those early years.
Following this, Gates drove his team to create knock-offs of already-existing business tools for text, presentations and spreadsheets, uniting them, uniquely, in the "Office" suite.
But let's be fair. Gates and his people had existing products at which to aim. Remember Lotus 123 and Quattro Pro? How about WordStar, Wordperfect and other early text programs? Harvard Graphics or Persuasion for graphics?
And Microsoft's Windows? Stolen from Apple, who stole it from Xerox's PARC developers.
My point is, Gates did a yeoman's job of building on others' earlier successes, but there is almost nothing important that Microsoft ever pioneered. Especially the infamous web browser.
I'm not a purist. I don't own a Mac, an iPod or an iPhone. Not being a complete Neanderthal, I do own two Shuffles.
Gates' company provided good value in software for the money, except for later versions of the company's operating system. But let's not confuse what Microsoft has historically produced with truly innovative creations. They never have been. Rather, Gates' and Microsoft's strength has always been taking existing software and enhancing it, packaging it with other software, such as Office or Windows, and delivering it at a reasonable price-point.
Buffett is even less accomplished in this vein. Look, the guy had a number of good years early on, but he's never created anything.
There's a big difference between creating wealth and knowing anything about "keeping America great."
If it's only about making money, let's hear from John Paulson or Steve Cohen. Or Michael Steinhardt and Eddie Lampert.
Then there's the venue. Columbia's Business School?
Is there a more cookie-cutter place where students are focused on conformity to the norms they believe will get them a Wall Street job?
Gates didn't even finish college.
As I listened yesterday afternoon to the CNBC anchors extol the greatness of Buffett and Gates, I nearly became sick. Bill Griffeth nearly began to build an altar to the two billionaires.
I think this is all grossly misplaced attention.
If "keeping America great," in a business sense, is the focus, I would have chosen radically different people to interview.
Some of my candidates?
-Bob Metcalfe, inventor of the Ethernet
-Fred Smith, founder of FedEx
-Pierre Omidyar, founder of eBay
-Michael Dell, founder of Dell Computer
-Steve Jobs, co-founder of Apple
These people have all exhibited far more in the way of innovative flair and creativity, successfully, than either Buffett or Gates.
And I wouldn't waste the appearances on MBA students. Instead, I'd open it to a mix of college and graduate school students of all disciplines.
I certainly wouldn't purport to offer, as examples of people who know how to "keep America great," two guys who have created nothing on their own, but are never the less long on willingness to pontificate in a media spotlight.

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