Bill Gates hosted a video chat on March 31, 1999. Viewers emailed questions
which Gates answered live. Read the transcript of Gates’ opening
remarks and answers from the video chat below. Also see the selection of
additional questions from viewers that Gates answered after the chat. NOTE: The following questions were answered during the video chat and are
attributed to the people who emailed the questions. In some cases the
questions have been paraphrased for brevity.
A brief INTRODUCTION from Bill Gates
Question 1: "In the next 10 to 50 years, what will be the fate of the retailer,
particularly the small operator with a surge of Internet commerce?"
-Benjamin
Question 2: "Technology drives businesses faster, which in turn drives
technology faster. Can technology help me to keep up with this frenzied pace?"
-Sri, Chicago
Question 3: "How can we, in education, also move at the speed of thought?
Once we have the computers in place and the educators trained, how can we
continually leverage all of the great technologies?"
-Rick
Question 4: "Does business culture need to change to take advantage of a
digital nervous system?"
-James
Question 5: "How do you see the future of e-business in developing countries?
Will we have the same opportunities as big American companies?"
-Jorge, Peru
Question 6: "How do you think technology can impact the legal profession,
which is still very reliant on paper?"
-Peter
Question 7: "Does your daughter use a computer yet?"
-Sara, St. Louis
Question 8: "My company has been run as a decentralized business for almost
100 years and does not share information freely. What are your thoughts about
how to bring us into the digital age?"
-Hank, Montreal
Question 9: "What should the middleman do to shore up against the coming
revolution in business?"
-Clay
Question 10: "How long does it usually take to transform a company to a fully
digital nervous system?"
-Ryan, California
Question 11: "What will Windows look like when we have bandwidth up to 10
million bits per second?"
-Don, Toronto
Question 12: "What about a small company? What can be done to build a
digital nervous system there?"
-Terry, Texas
Question 13: "Christina asks about starting a career in computers. She's a
single parent and wants to know, how can she obtain certification?"
-Christina
Question 14: "How can nonprofits compete in this environment?"
-John, National District Attorneys Association
Question 15: "How at Microsoft do [you] measure the effectiveness of people
utilizing the PC to analyze digital data to make decisions?"
-Bob, Trenton, New Jersey
Question 16: "Do you think companies will leverage an efficient digital
infrastructure to perform one-on-one marketing in the future?"
Eddie, Framington, Massachusetts
Question 17: "As we become more dependent on the Internet, will viruses
become commonplace?"
-Rita, Fort Worth, Texas
Question 18: "Is traditional patent law able to handle the pace of innovation
without placing unreasonable constraints on knowledge sharing/evolution?"
-Robert, Texas
Question 19: "What are some of the most important things you deal with on a
day to day basis?"
-Henny, California
Question 20: "E-mail is a great tool, but can it become an abused application?
How can businesspeople deal with 50 to 100 plus e-mails a day? How many
e-mails do I get a day?"
-Chad
Question 21: " I am currently reading your book, but what are you reading
about?"
-Gavin
Question 22: "If you were to start a company now with less than a half million
dollars, what would be the three things you'd put your money into?"
-Rick, Mill Creek, Washington
Question 23: "What do you see as the future of Windows CE? Will these
devices eventually be a common household appliance?"
-Gary, Michigan
BILL GATES: Welcome. Thanks for joining me for this video chat. I hope you're
finding the book interesting. It was certainly fun to write it because I was getting
so many questions from businesspeople about what should they do to address
the digital economy; and to sit down and really gather my thoughts and be able
to share the best examples was something that I really enjoyed doing. This
video chat is a way to continue that dialogue. I'll start off with a few thoughts
and then I'll open it up and we'll get through as many questions as we can.
Last week I did the book tour and it was great to sit down with some business
school students. I was in New York at Georgetown and at Columbia and Stern,
and down in Washington, D.C., at Georgetown, and then last Friday over in
London at London Business School. These students really are deeply involved
in how they're going to go out and be change agents, taking these ideas that
business can be done in a better way and making sure the companies they're
working in are adopting them and getting lots of advantages from that.
A lot of the questions I got on the book tour related to how different countries
are moving to adopt these technologies. And it is fascinating that U.S.
businesses have been the first to really latch onto this, to use technology in
some new ways. Now that's creating a very positive dynamic where other U.S.
businesses see it, businesses outside the U.S. see it and everybody has to
rise up to this new level.
They've got to improve their game to play at a world class level. In responding to
the questions about the book, the one area that I wish I'd put even more in
would relate to small businesses, because small businesses have to work in a
digital fashion to be competitive with larger businesses. They've got to work
across distance, they've got to work with lots of customers, they have to have
people who do lots of different things. So the imperative here for them is even
greater than for the large businesses.
With that, let me go ahead and take some of these questions that are coming
in and give some answers. First, from Benjamin Stewart we have a question
about the future of retail. He asks, in the next 10 to 50 years, what will be the
fate of the retailer, particularly the small operator with a surge of Internet
commerce?
The role of the retailer certainly is going to change and nobody really can
predict exactly for different product categories how quickly people will switch to
use the Internet as the way that they want to buy products. Today the most
market share the Internet has is for trading stocks, and that's fairly natural. You
want to have the latest data there. The people who are doing it are quite affluent
and so they have these high-end tools. A little over a third of retail stock trading
is done on the Internet and that number is continuing to go up.
Now in areas like books or insurance or things like groceries or drugs, there will
be a significant Internet presence, particularly if the delivery systems are
enhanced so that products can be delivered to your house many times a day if
they've been ordered over the Internet. So retailers that are just taking standard
products and not really providing much additional in the way of service or advice
may be in for a drop in volume that will cause them to change how they think
about their business.
Now when they're offering products that are fairly unique or that require advice or
installation, the retailer's involvement and business is going to be in good
shape. In fact, in many cases, they'll be able to expand their business because
they'll be able to take their unique value-added and go up on the Internet and
talk about that and therefore attract in a larger customer base than they could
have previously. So there's a separation here of the retailers that are adding
value versus just purely distribution. If it's purely distribution, then in areas
where this Web lifestyle is taking off and you've got the physical distribution, the
small retailers probably will have to change their strategy and contribute in a
new way.
The next question is from Sri from Chicago. The question is, technology drives
businesses faster, which in turn drives technology faster. Can technology help
me to keep up with this frenzied pace?
Well, of course, the pace is only going to go as fast as people adopt to it, and
that's partly why I titled the book Business @ the Speed of Thought, not
Business @ the Speed of Light. You don't really want to make decisions any
faster than you have the right information to make them, so there is a limit even
with the best tools of how frenzied you want to be.
Now technology is going to make these things a lot easier. The ability to filter
out things, find out what you might be interested in that's coming in over the
Internet and prioritize that for you; notifying you of something new that's going
on that, based on your patterns of interest, you find it worthwhile to be notified
about. So technology is a tool here. Certainly it's better to have the filtering
capabilities of the digital world and the ability to summarize information and see
it in very rich views than to simply have a stack of paper that represents all the
information that might be relevant. So used in the right way, technology can
allow you to focus in on what you care about and deal with this increasing pace
out there.
The next question is from Rick Mislan. His question is, how can we in
education also move at the speed of thought? Once we have the computers in
place and the educators trained, how can we continually leverage all of the great
technologies?
Of course, I devoted a chapter in the book to education and some of the great
things that are going on there. In a sense, students are the ultimate knowledge
workers. They want to find out about such a wide range of topics and they want
to collaborate with other students who might be learning about the same thing.
The Internet creates a framework where all that information is there and you can
match up with other people as well. It also creates a framework where teachers
can share with each other. So one of the things we're going to see is that
teachers will take advantage of course material that's created online and not
only share their comments about how to use it, but also edit it, add to it. You'll
have teachers building on each other's work. In the past, teachers didn't get
much of a chance to go into each other's classrooms and see how things were
being presented and therefore combine all those good approaches. Here with
the electronic interchange, you'll have Web sites that bring all of that together.
So teachers collaborating with teachers, students collaborating with students
and parents being able to be brought into the mix to see what's going on and
share with their kids or even share with the class as a whole in a very new way.
Now education will take a long time before all the new course material is
redesigned in this way. You'd actually like the textbooks to talk about the
Internet and using the Internet as part of that homework process. You'd like
teachers to be constantly going out and finding new things on the Internet that
can make the subject matter more engaging for the students and then
contributing that so other teachers can find it. So I think the way to continually
leverage this technology is to become a contributor, participate in the
communities that are out there, hear about the best practices, think about how
you can step up the way technology is used for something like the "Anytime
Anywhere Learning" program that provides a portable computer for every
student. That's sort of the ultimate, although it requires a lot of resources to
achieve that.
Another question, from James Loucks is, does business culture need to change
to take advantage of a digital nervous system?
There's no doubt that when you bring new communication tools into the
business environment, there's an opportunity to have a bit of a different culture,
a culture where the top managers aren't the ones who have all the information, a
culture where you're not just meeting and sitting and having things presented to
you, a culture where you really expect ideas to flow within the company and if
somebody's unhappy about something, they can share that very easily.
I can use electronic mail to send out a survey form to a group of employees and
in just an hour's time I'll have back information about how they feel about the
priorities we're setting-do they feel like their leadership is leading them in the
right direction? So that kind of culture where you have openness, you can really
get response from people where they're not having to waste a lot of their time
dealing with overhead type functions. You're really saying to them, we value
your ideas. We're giving you a tool that lets you not just sit in front of a few
forms that you just fill in, but we're giving you the wealth of information from all
the different applications we run so that you can solve customer problems or
contribute to the strategy that we have. That does represent a bit of a different
culture. And so some companies will find it easier to move into this
environment, but they'll all, by the time they're done with it, have a change in the
culture of how the company is managed.
The next question comes from Peru. It's from Jorge Cornejo and he's asking,
how do you see the future of e-business in developing countries? Will we have
the same opportunities as big American companies?
I think the biggest difference when you get outside the United States is that the
Web lifestyle will take much longer in developing countries. The cost of the
communications, the cost of the computers will mean that you won't get the
majority of consumers using electronic mail and buying electronically for quite
some time. What you will get is businesses working this way, so
business-to-business commerce will change worldwide in a very rapid fashion,
even in developing countries.
You'll also have businesses be able to offer their services back into the
developed world far more effectively. If they have a specialized product, then all
the buyers will be able to know about that. If they have some services they can
offer, then they'll be surprised where in the world the interest in those
capabilities might come from. So e-business is particularly important for the
export activities of developing countries even though their consumer markets will
take longer to develop. So this is certainly a global phenomenon. The PC and
the Internet are the foundation of this are global standard that everybody has
access to.
The next question is from Peter Amshell. He asks, how do you think technology
can impact the legal profession, which is still very reliant on paper?
Well, I know at Microsoft we're a lot more efficient in dealing with legal issues
because of the pervasive use of rich electronic mail. Whenever there's a
contract, I get that in my [electronic] inbox. I see the annotations of changes
that are being proposed or what the history of that contract is. I can see
comments that people have made. I'm able to have electronic mail to get legal
advice on issues on a very casual basis just during the course of the day. For
something complex, of course, we'll meet face to face, but we're able to avoid a
lot of the meetings that you'd need that would have been routine in the past.
We're able to brainstorm and get input from even outside law firms where that
might be appropriate.
So lawyers have got to use electronic mail. Because of the benefit of sharing
with clients, it will become really a requirement. They've got to have their
electronic documents filed away so that they can go back and find them very
easily. They're dealing with a case; all of the information should be in electronic
form so they can search that information. The ultimate step here is to actually
get the courts to accept case filings in electronic form. In Singapore, they've
already done some of that. It will allow the court to manage cases in a better
way, to take the information that should be accessible and make that very
easy. So the whole legal business is headed towards being purely digital. I'd
say they should be among the first to embrace these technologies.
Sara Jacobee from St. Louis asks, does my daughter use a computer yet?
My daughter turns three this month and she's already a very happy computer
user. In fact, just last night we were sitting and playing with some of the Jump
Start educational software. Now, she uses a trackball, one of the big yellow
Microsoft track balls, because it's a lot easier for her to manipulate that than the
mouse. But she sits and does puzzles and letters and songs and all sorts of
things that I think are really helping her with the alphabet. And it's just a lot of
fun. Now we only let her use the computer about an hour a day so it's balanced
with lots and lots of reading and school, other activities, but I think she's already
better off because of the fun she's having.
Hank Jonas from Montreal asks, my company has been run as a decentralized
business for almost 100 years and does not share information freely. What are
your thoughts about how to bring us into the digital age?
The digital age makes it easier to share information so that if you want to have
data about customers or data about what you're seeing in the market or move
people around in the company or talk about what's going on in the market, you'll
be able to do that. If a company is decentralized in the sense of people in many
locations and they don't have a chance to get together face to face very often
and they're not really sure what topics they might have in common, electronic
mail is great for that because it's very simple to say, hey, you might be
interested in this. If it's not worthwhile, then the people can just delete the
e-mail message, and yet they can still pursue the decentralized approach
where they're really focused on their own activities and just from time to time
sending e-mail off to the other people inside the business.
They might find cases where they want to act more in concert with each other
because the tools help them to identify those opportunities. So businesses
where people are moving around a lot and they don't have this regular structure
that forces them to share information-electronic tools I think are even more
valuable in that case. You do have to decide that there are issues in common.
Even with these electronic tools that make it easy to share, if you find you have
nothing in common, then really what you're talking about is two different
companies that are on their own agenda. You might then think about really
splitting up so that the compensation and all the other systems, you get the
benefit of the independence that might be possible.
Clay Hamilton asks about the fate of the middleman. What should the
middleman do to shore up against the coming revolution in business?
The value-added is changing from the manufacturer down to the person who
uses the product. This is not a case where all middlemen will disappear. In fact,
in some cases because you can get into the flow of what's going on and add
advice, add services in a different way, you'll have middlemen who grow up that
wouldn't have been possible in the way that the chain worked before. If all the
middleman is doing is simply providing the physical location or passing that
transaction along, then you really do have to say that the strategy has got to
change.
If the middleman has some expertise, then that expertise can be applied to a
broader set of transactions than just the ones that happen to come through their
storefront or just happen to come from the products that they're involved in the
actual sales of. So if you're a middleman, this revolution really forces you to
step back and think about competition in a new way, to think about what kind of
unique things will you be able to offer.
It really does change the pricing of a lot of activities. In the past if you could
take a percentage of the regular transaction flow, you'd have some of those
transactions you added a lot of value to and some that you didn't. The Internet
will allow some simple transactions to go around you. You'll have to price the
value that you create on top of those other transactions in a different way and
get people to be more explicit about understanding how you're really helping
them out. So that's a challenge for lots of businesses where they've mixed
together things under a single pricing umbrella and now some of those things
will be done in a different way.
Ryan Ornelas of California asks, how long does it usually take to transform a
company to a fully digital nervous system?
It takes two or three years to get 100 percent of the way to a digital nervous
system, but even in the first nine months the difference can be dramatic. When
you get somebody showing off to another executive how they're able to look at
sales, they're able to look at the new market, they're able to look at profitability,
when you have a case where the paperwork has gone away and yet you have
better visibility to the information and that information is more up to date, that
can really spread quickly because the workers, their expectation of how they
should be able to interact, how information should flow is very, very different.
So if you kick it off the right way with leadership from the top and pick a few
things and make sure they work very, very well, get the electronic mail culture
going, get some fascinating data online that empowers people, then you'll find
that it's an unstoppable phenomenon. It really develops an energy of its own and
even though some of the tougher issues about getting integrated views across
all the data you have and really capturing all of that digitally, that may take a
couple of years, you'll be really on the track. For Microsoft there are still some
things we need to do related to how we categorize information about our
customers and the interaction with customers-and get that information all the
way back to the product designers. We're still working on refining that, even
though we're already a couple years into the process. So that's one of the ones
where many iterations are necessary.
Bill Gates, March 31, 1999, via video/internet live chat.
