Microsoft just reached $2T, pushing Steve Ballmer's net worth to $80B.

Interestingly: when Ballmer joined MSFT in 1980, he was employee #30 and received ZERO equity. By its IPO in 1986, he owned 8% of MSFT.

How did Ballmer get that stake? A contract quirk.

Here's the story🧵
1/ Ballmer's Microsoft tale begins in 1975, his sophomore year at Harvard.

He lived down the hall from some dude named Bill Gates.

While Gates dropped out to start Microsoft, Ballmer was a total Harvard head -- playing on the Football team and writing for The Crimson.
2/ After graduating, Ballmer tried his hands at a few things:

◻️ Product Manager at P&G, where he worked with future GE CEO Jeff Immelt
◻️ A brief attempt at Hollywood screenwriting
◻️ Stanford Business School

While at Stanford, Ballmer was convinced by Gates to drop out...
3/ ...and come join Microsoft.

It was 1980 and the software co. was seeing explosive revenue growth: $16k in 1976 --> $8m in 1980.

Ballmer was to be Gates' first non-technical hire and the offer he gave reflects the fact that Gates' hadn't recruited a business person before.
4/ Ballmer's offer:

◻️ the title of "business manager"
◻️ $50k base salary
◻️ZERO equity
◻️CRUCIALLY-- as Microsoft was so desperate for sales know-how -- Gates (and co-founder Paul Allen) gave Ballmer "10% of profit growth" he could generate.
5/ With Microsoft growing like a weed (it would 2x to $17m in 1981), Ballmer's "10% of profits" deal was not sustainable.

At the time, Microsoft was a partnership (Gates 64% / Allen 36%).

One early VC (Dave Marquardt) wanted to restructure the corp for wider stock ownership.
6/ Gates wanted nothing to do with the restructuring, so Ballmer and Marquardt took the lead.

This was the corporate structure they drafted:
◻️ Gates and Allen own 84%
◻️ 8% goes to investors
◻️ 8% goes to Ballmer (in exchange for *waiving* his 10% profit share deal)
7/ Gates was OK with the deal but Allen was not.

He wanted Ballmer to own 5% max...so Gates agreed to drawdown the rest of the equity to give Ballmer from his own pool.

By 1986, Ballmer owned 8% of $MSFT. It was worth ~$56m when Microsoft IPO'd at $700m.
8/ In the decades since, Ballmer -- who was Microsoft's high-energy CEO from 2000-2014 -- has largely kept his stake in $MSFT.

Today, he owns ~4% of the tech giant while Gates owns ~1.4% (Allen died in 2018, and long ran down his stake).
9/ Ballmer is currently the world's 14th richest person and very high-profile owner of the LA Clippers (which he bought for $2B in 2014).

As far as "contract quirks" go, the one Ballmer had when he signed with Microsoft has to be one of the most outrageously lucrative ever.
10/ Follow @TrungTPhan for other baller business stories and -- also -- a steady drip of dumb memes:
12/ Here’s a random video of Ballmer waiving his hands around like Dennis Rodman:
13/ This may or may not have been Ballmer when he signed the MSFT contract that gave him 8% of the company:

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Trung Phan 🇨🇦

Trung Phan 🇨🇦 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @TrungTPhan

29 Jun
In 2001, Larry Page and Sergey Brin were looking to hire a CEO. They picked Eric Schmidt in part because they all hung out at Burning Man.

Schmidt'd package: $250k base + $300k bonus + 6% of Google. He's now worth $24B.

Lesson: It's not what you know, it's who you party with. Image
Follow @TrungTPhan for other MBA-caliber lessons in one tweet:
Read 4 tweets
27 Jun
Huy Fong's Sriracha hit revenue of $150m+ a year...with no sales team, no trademark and $0 in ad spend.

Its creator is Vietnamese-American David Tran, making the sauce's success a tale of immigrant hustle and a product that literally sells itself.

Here's the story🧵
1/ The Sriracha story traces back to the 1930s.

In a Thai town called Sri Racha, a housewife named Thanom Chakkapak created a paste of chili peppers, distilled vinegar, garlic, sugar and salt.

Variations of this recipe have travelled across the globes in the decades since.
2/ One variation was created by David Tran, a major in the South Vietnamese army.

In 1978, the Tran family joined 3k+ refugees and fled Communist Vietnam on a Taiwanese boat called the Huey Fong (means "Gathering Prosperity”). The boat inspired the business name Huy Fong Foods.
Read 22 tweets
26 Jun
When you go to a Vietnamese restaurant with your non-Vietnamese friends and order Vietnamese food food while speaking Vietnamese.
When Dr. Patel, CFA goes to an Indian restaurant with his non-Indian friends and order Indian food while speaking the restaurant-specific Indian language:
When John W. Rich goes to Wendy’s with his McDonald’s-loving friends and orders every Wendy’s chicken item (spicy, home style, nuggets, fingers) from the Wendy’s menu:
Read 4 tweets
25 Jun
Been looking at Disney World for my kid.

Went down a rabbit hole: Disney def pulls out all the phycological and engineering tricks to make the park "memorable". Here are a few 🧵
1/ The job of building the park falls on Disney's Imagineers.

There are about 1.5k of them and they use this design pyramid which focusses on visual communication, wayfinding and "making things memorable."
2/ The power of smell

Memory and smell go hand-in-hand. A Disney Imagineer literally invented a machine (Smellitizers) to emit scents that match surrounding.

◻️ Main Street (cookies baking)
◻️ Pirates of the Caribbean (salty sea air)
◻️ Pooh's Adventure (honey)
Read 15 tweets
22 Jun
Found a glorious IMDB post: "movie scenes inspired by paintings". Here some great ones🧵

1/ Inception (inspired by "Penrose Stairs", M.C. Escher)
2/ Scream (inspired by "The Scream", Edvard Munch)
3/ The Exorcist (inspired by "Empire of Light", René Magritte)
Read 12 tweets
22 Jun
The CGI in Steven Spielberg’s 1993 film Jurassic Park was so good, it convinced:

• George Lucas to get started on the “Star Wars” prequels
• Stanley Kubrick to invest in “A.I.”
• Peter Jackson to make “Lord of the Rings”

Lesson: Spielberg is responsible for Jar Jar Binks.
Jurassic Park def has one of the best "legacy" sections on Wikipedia

en.wikipedia.org/wiki/Jurassic_…
Side note: Steven Spielberg made $250m from Jurassic Park (merch and box office) -- its the single largest sum any individual has made from one film.
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

:(