PDF Summary:Source Code, by Bill Gates

Bill Gates is renowned as a businessman, software developer, and pioneer of the computer revolution. At age 19, he founded Microsoft, which he would build into one of the world’s largest tech companies. But how did Gates become the man he is today? What experiences led him to stake his first claim on the home computing landscape at such an early age?

In Source Code, Gates describes his formative years from his childhood in Seattle to the founding of Microsoft. In it, he reflects on the people, events, and sheer luck that made him a key figure in the computing world. In this guide, we’ll also look at the personal roles Gates explored during his adolescence and the impact they had on his growth. Additionally, we’ll put the events of Gates’s life in their historical context, and we’ll analyze Gates’s recollections through the lens of childhood development, education, psychology, and identity formation.

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Gates and Evans’s friendship was cut short by Evans’s untimely death in a mountaineering accident in May, 1972. This occurred shortly after two of Gates’s teachers died in an airplane crash. Gates writes that this confluence of tragedies, but Evans’s death in particular, marked a moment of transition in his life. Had Evans lived, they’d have probably gone to college together and remained close friends (or even business partners) for the rest of their lives. However, even in his grief, he was struck by how strongly Evans’s death affected others. To cope with his loss and navigate a world that no longer contained his best friend, Gates resolved to continue the extracurricular coding work he and Evans had started together.

(Shortform note: According to a 1973 American Alpine Club report, Evans died when he was unable to successfully halt a downward slide with his pick-axe. No matter the cause, the effect on Gates was profound. Teens experience a variety of responses to grief, ranging from anger and guilt to emotional withdrawal. Whatever reaction people have, psychologists are clear that grief never just “goes away”—the associated feelings can wax and wane for years. Instead of encouraging young people to move past it, experts recommend helping them find productive ways to work through their emotions, as Gates did for himself by diving back into coding.)

Continuing the programming group’s work wasn’t something Gates could do by himself, so he reenlisted his friend Paul Allen, who was now attending Washington State University. Working together helped Gates and Allen grieve, and it also rekindled the bonds of their friendship. Gates recalls that he came to appreciate how his and Allen’s different personalities balanced and complemented each other—Gates was frenetic whereas Allen was calm and patient. Gates was obsessed with the software they were writing, while Allen showed an interest in the computer hardware it ran on. This opened Gates’s eyes to ongoing advances in microprocessors that would present them with great opportunities several years down the road.

(Shortform note: Allen, like Gates, had been encouraged by his mother to explore a multitude of interests, but at first, his primary passion was science, not computers. Once he started down the computer science path, it was his interest in hardware that would later let Gates’s drive to write software come to its full fruition. In Allen’s memoir, Idea Man, he recounts how his understanding of the field’s emerging hardware systems would allow their joint business to become omnipresent in the computer world. Allen would be diagnosed with lymphoma in 1982, after the events of Gates’s memoir, and would pass away after a recurrence of it in 2018.)

College Life (1973-1974)

Because of his family’s high expectations, there was never any doubt that Gates would go to college. He applied to top-tier universities and was accepted to Princeton, Harvard, and Yale. Gates writes that Harvard was always his top choice, so after his final summer in Seattle, he moved to Boston for the next stage of his life—which he thought meant pursuing an academic career in advanced mathematics. Harvard opened a world of opportunities for Gates, especially in the growing field of computers, but college life and Gates’s frenetic personality clashed in ways he hadn’t counted on.

(Shortform note: The schools Gates mentions belong to the “Ivy League”—a group of eight private universities in the northeastern US that are counted among the top schools in the country. While other universities offer comparable educations, Ivy League schools are also known for their powerful alumni networks and bankable reputations—their graduates tend to land higher-paying jobs due to the clout of having an Ivy League degree. However, the academic career Gates began pursuing would have offered few job opportunities outside of universities and research institutes.)

Gates says that one of Harvard’s main draws was its Aiken Computer Laboratory, which he visited soon after starting college. The lab was funded by the Defense Advanced Research Projects Agency (DARPA) for the benefit of Harvard’s engineering program, and though undergraduates weren’t usually admitted, Gates lobbied for—and received—access. In addition to housing a powerful computer of its own, the Aiken Lab had access to ARPANET, the computer network that would eventually grow into the modern internet. Once granted admission, Gates spent nearly all his free time at the Aiken Lab, where he worked on his own coding projects side-by-side with graduate students.

(Shortform note: The ARPANET system that Gates gained access to had only existed for four years at the time of his enrollment. Officially launched in 1969, it was the product of Cold War computer network research—the intent was to design an information network that would continue to function if one or more of its connected computer systems was destroyed in a nuclear attack. As other computer networks were developed in the 1970s, the information transmission protocols developed by DARPA researchers became the global standard, allowing different networks to talk to each other and leading to the “birth” of the internet in 1983.)

Gates Burns Himself Out

Despite Gates’s enthusiasm for college—or perhaps because of it—the realities of campus life began to wear on him mentally and physically. Gates admits that many of his troubles at school were the fault of his attitude and approach to education, which were at odds with the rigor and discipline required to succeed in an academic setting. Bored with the courses he was required to take, Gates would skip classes for an entire semester, then cram for the final exams at the end. He did this so he could sit in on classes that did interest him, as well as to free up more time for computing. However, the result was weeks of extreme stress as he tried to make up for lost time, and his grades suffered greatly despite his last-ditch efforts.

(Shortform note: Though Gates describes the stress he experienced at Harvard as self-inflicted due to his unorthodox approach to classwork, the strain of academic life is a widespread condition. In Laziness Does Not Exist, Devon Price argues that academia pushes many students so hard that their health suffers from the strain. This is backed up by numerous research studies that have found that nearly 35% of graduate students suffer from clinical anxiety. Since anxiety is often the first symptom of other mental health issues, this suggests that universities pressure advanced degree students to the point that more than a third of them are suffering serious and potentially long-lasting harm.)

According to Gates, the biggest emotional blow Harvard dealt him was learning that he wasn’t the best and the brightest. Gates’s whole self-image had been based on being the smartest in his class, if not his whole school, but at Harvard, everyone had that background. As such, Gates struggled with finding a new role. At first, he’d hoped to pursue pure mathematics, but he hit a barrier when he realized he couldn’t crack the particular way of thinking that only the top mathematicians possessed. As he started feeling lost and his grades continued sliding, his body began to give out as well. The junk food, lack of sleep, and nonstop anxiety of making up for all his missed coursework took their toll, eventually landing Gates in the hospital.

(Shortform note: It’s unclear to what extent Gates’s identity as “the smart kid” was self-imposed and how much was due to other people’s perceptions, but since the 1970s, psychologists have questioned the negative emotional impact of applying such labels to students. In 1979’s The Drama of the Gifted Child, Alice Miller pointed to depression in adulthood as a result of linking a student’s self-worth to their capacity for achievement. Likewise, in Limitless Mind, educator Jo Boaler stresses that students whose self-worth is based on academic success learn to see failure as a source of shame, and students segregated into high-achieving groups, as Gates was by gaining admission to Harvard, may feel like frauds if they’re not at the top of the class.)

A New Direction (1975)

At about this time, Gates began to seriously consider the computer industry, not academia, as his career path of choice. He’d kept in touch with Paul Allen, who joined him in Boston that summer to start his own career in computing. Together, they were at the right stage in their lives to capitalize on a computing revolution that was going to ignite later that very year.

Gates says that the revolution began when the Altair home computer was released in 1975. Whereas the computers Gates had spent his life programming were behemoths accessed via remote terminals, the Altair was the first home computer with any real processing power. It wasn’t much like the home computers of today—it came as a disassembled kit, it lacked a keyboard or monitor, and programs had to be keyed in manually using a back-and-forth toggle switch for ones and zeros. Nevertheless, Gates recognized its potential. Computer processors had been becoming smaller and more powerful, so a computer that would fit on a desk had been inevitable. All he and Allen needed now was a way to make such devices user-friendly.

(Shortform note: The Altair 8800 computer kit was developed by a team of Air Force veterans, and because of its internal 8-bit microprocessor, Popular Electronics hailed it as “the most powerful computer ever presented.” Its main issue was a lack of a user-friendly interface, but whereas Gates would look for a software-based solution (as we’ll see next), others looked at improving on the Altair’s hardware. In particular, after seeing a demonstration of the Altair, future Apple cofounder Steve Wozniak thought of integrating a similar microprocessor into a terminal that used a keyboard to input data and displayed the output on a TV screen. His design would soon become the Apple I computer, launching another major home computer business.)

“Micro-Soft” Is Born

Gates believed the answer to the Altair’s usability issue was in software, not hardware. When he’d first learned to code, he’d done so using the programming language BASIC. Now, Gates and Allen hit upon the idea of adapting BASIC to run on the Altair, which would let home users input programs more easily. In 1975, they named their business partnership “Micro-Soft” (for “microcomputer software”) and sent their proposal to MITS, the makers of the Altair. MITS responded that Gates and Allen weren’t the only ones with that idea, but whoever was able to develop Altair BASIC first would win the contract for software licensing rights. At once, Gates put his academic work on hold—he and Allen had a mission, and speed was of the essence.

(Shortform note: The difficulty Gates and Allen faced in designing a programming language for the Altair is that a computer’s central processing unit (CPU) operates solely on machine code, expressed as a series of ones and zeros. To translate a high-level language such as BASIC into a form the Altair’s CPU could parse, they had to come up with a way to translate BASIC commands into binary instructions the Altair could execute. The system that Gates and Allen designed interpreted BASIC instructions into machine language one line at a time, which was the most pragmatic approach due to the Altair’s limited memory. More powerful computers are able to use compilers that translate entire programs into machine code all at once.)

To put their plan in motion, Gates and Allen used Harvard’s Aiken lab to write their software. Allen designed a system by which Harvard’s computer would mimic the Altair’s processor, while Gates wrote the code for BASIC that it would run. While effective, this ran afoul of Harvard’s rules regarding use of their hardware. Gates recalls that universities at that time hadn’t yet considered the possibility of students writing commercial code on their computers. Gates was cited for his excessive amount of computer time, as well as for letting unauthorized people (such as Allen) into the restricted lab. He was threatened with expulsion, but in the end he was merely reprimanded, and Harvard tightened their rules on lab use.

(Shortform note: Rules to curtail the commercial use of campus resources have now become formalized and standard in the academic world. Harvard’s current policy explicitly states that “no Harvard resources may be used for private business purposes.” Other institutions leave the door open for research on commercial applications, with the caveat that faculty or staff first obtain permission. Stanford University and the Massachusetts Institute of Technology both have policies to this effect. Harvard has further policies surrounding the patents on technology developed at its facilities—if the university doesn’t file for patent rights itself, then the student or faculty member who does is required to share 20% of their revenue with the institution.)

Gates Launches His Career (1975-1978)

Despite their troubles at Harvard, Gates and Allen were able to complete a prototype of BASIC for the Altair. Between semesters in 1975, they left Boston to set up shop in Albuquerque, New Mexico, where MITS was headquartered. Little did Gates know at the time, but his life had just changed direction. Over the next two years, he’d play a leading role in the birth of the home computer industry, clashing with both the computer hobbyist culture and the owners of MITS before turning Microsoft into the leading software-driven company of the computer revolution.

Gates writes that when he and Allen arrived in Albuquerque, they learned that MITS had vastly underestimated the demand for their Altair computer. Instead of the hundreds of orders they’d expected, thousands of computer enthusiasts wanted one, even without an easy way to input programs. Gates and Allen sold MITS exclusive worldwide rights to their BASIC software for the Altair’s processor for an initial fee of $3,000 plus royalties for each copy of their software MITS sold. Gates and Allen agreed to a 60/40 split of the proceeds, with Gates receiving the larger share, since he’d been the one most responsible for the coding.

(Shortform note: MITS was an acronym for “Micro Instrumentation and Telemetry Systems,” and though small, the company Gates encountered had already grown from its humble beginnings as a maker of electronics for model rockets. They’d moved on from there to selling electronic calculator kits—a market dominated by their much larger rival, Texas Instruments. As mentioned earlier, MITS’s Altair computers, like their calculators, were build-it-yourself kits aimed at hobbyists. The version that Gates and Allen were enamored with had several design flaws, including an insufficient power supply, but by 1977, these faults would be corrected—just in time for the Altair to be outcompeted by more user-friendly home computers, as we’ll see.)

As a software company, Micro-Soft’s first hurdle was to convince computer hobbyists that software was something they should pay for. Gates explains that in the ’70s, the computer industry revolved around hardware—software was treated as an afterthought, and many computer enthusiasts believed that it should be traded and passed around for free. Even before their deal with MITS was final, someone in California’s Homebrew Computer Club stole a copy of Gates’s BASIC prototype and shared it with others in their community. The theft and proliferation of free copies of his software stung Gates so badly that in 1976 he published an article lambasting the hobbyist community for piracy, triggering a debate over free software.

(Shortform note: The Homebrew Computer Club Gates writes about was a crucial meeting place for California’s growing electronics community, founded in Menlo Park by political activist and hobbyist Fred Moore. In two years from March, 1975, its members grew from 32 attendees to a mailing list of over 1,500. Despite the Homebrew Club’s importance to the nascent home computing community, Gates wasn’t the only tech pioneer to be wary of how freely they shared information. Biographer Walter Isaacson wrote that Apple cofounder Steve Jobs had to convince his business partner, Steve Wozniak, not to give the club their Apple I circuitboard designs so as to avoid cutting into potential sales.)

The Age of Microsoft Begins

Newly registered in New Mexico as “Microsoft,” Gates and Allen set up shop in Albuquerque, hired their first staff, and began producing software. Though MITS was their initial client, Gates knew that other, better-funded businesses would eventually dominate the computer market, so he began work on BASIC and other programming languages that would operate on different computer systems. However, since MITS owned the distribution rights to Gates’s BASIC, all outside client contracts had to go through them, and Gates recalls that MITS soon became delinquent in paying Microsoft the royalties it was owed. Gates returned to Harvard, but his main concern remained the future of his and Allen’s business.

(Shortform note: The business trap Microsoft almost fell into was that of being a contractor with a single client. As a business model, this carries a lot of risk, the first of which is that if your client goes out of business, so do you. Beyond that, being dependent on a single relationship leads to a power imbalance between the contractor company and its customer, as in the way Microsoft’s contract allowed MITS to act as a buffer between Gates and Allen’s work and any other potential buyers. However, the interdependence of a client and its contractor works both ways, especially if a specific contractor (such as Microsoft) is the only source of a product or service that a company relies on.)

In January 1977, it became clear to Gates that MITS was holding Microsoft back. Texas Instruments, Commodore, and later Apple were all expressing interest in acquiring Gates’s BASIC for their new computer systems, but MITS was in the process of being bought out and showed no interest in fulfilling its contractual obligation to actively market and license their software. Gates went on leave from Harvard (to which he’d never return), and working with legal advice from his father, Microsoft took MITS into arbitration to settle their dispute. Microsoft won: The judgment ended MITS’s rights to BASIC and confirmed that Gates and Allen owned the software’s original source code, which they were now free to license as they pleased.

(Shortform note: In computing terms, the source code of a piece of software refers to the original sequence of instructions written by its developers before being compiled into machine language. Usually, when a customer buys a program, their license only covers the object code, the binary version of the software that only a computer can read. By regaining ownership of their source code, Gates and Allen became free to compile and license new versions of BASIC object code for any computer manufacturer who wished to make it available for their products.)

Gates writes that Microsoft broke free from MITS just in the nick of time—1977 was the year that the home computer market exploded, and Microsoft was primed to make the most of its potential. That fall, three affordable, groundbreaking home computers hit the market: the Apple II, the Commodore PET, and Tandy’s TRS-80, collectively referred to as the “1977 Trinity.” Each of these systems came with their own version of Microsoft’s BASIC, with which hundreds of thousands of users could now write their own computer programs. In early 1978, since they were no longer bound as a contractor to MITS, Gates relocated Microsoft to his hometown of Seattle, where the next chapter of his life and business was about to begin.

(Shortform note: Though all three computers in the 1977 Trinity ran Gates’s BASIC software, they weren’t mutually compatible with each other, and each had its own advantages and quirks. The Apple II was the most expensive of the three, but its color graphics were a highlight for gamers and its openness to add-on components made it ideal for hobbyists to tinker with. The Commodore PET came with a built-in monitor, internal cassette storage, and was heavily marketed to schools thanks to its sturdy design. The TRS-80 was by far the most affordable of the three, selling for as little as $600, was able to display more characters on the screen, and was available at the popular electronics chain RadioShack, helping it outsell the other two.)

Reflections on Identity

Gates concludes with his departure from New Mexico and his hopeful visions of the future from that time. Throughout his memoir, he meditates on the various ways his past shaped him, including the many roles and identities he took on in his formative years. In conclusion, let’s recap how Gates’s sense of himself and his potential transitioned over time.

From the start, Gates knew he wasn’t the same as his other classmates. In elementary school, he recalls being surrounded by others who were richer, taller, more athletic, or simply cooler than he was, so in his early days, he adopted humor as what set him apart and took on the role of “class clown.” He found that this identity served him well in terms of popularity, since he could be liked for being willing to crack jokes without having to compete with more popular students on their own terms. However, this identity didn’t serve him forever. When he transferred to Lakeside School, his joking ways worked against him in the more serious, academic-minded environment and his academic performance took a hit.

(Shortform note: The “class clown” role isn’t uncommon in classroom culture—nearly everyone had one in their cohort growing up (perhaps it was you). In addition to humor, class clowns rate high in leadership traits, but often have deficits in areas such as self-control and engagement with their lessons, as Gates demonstrated when his grades began to suffer. Research suggests that students adopting this role benefit from increased social status and acceptance, the outcomes Gates says he was aiming for. Nevertheless, such children are often a challenge for teachers to deal with unless their disruptive behavior can be redirected in a more positive way.)

However, he recalls that during his hiking trips—the ones he started going on in his rebellious phase—he found that others looked up to him for his toughness, determination, and his problem-solving skills. Because of this, Gates writes that his outdoor activities gave him a taste of what it meant to be seen as a leader. Even though he wasn’t traditionally athletic in a way that would have made him stand out at school, when going on wilderness trips with his friends, his other attributes were more valuable.

(Shortform note: Educators have long viewed extracurricular outdoor activities as a way to teach children life and leadership skills beyond the scope of the classroom, at least as far back as the founding of the Boy Scouts in 1908. Research supports the efficacy of such programs: A 2023 study of the National Outdoor Leadership School found that outdoor programs boost young people’s teamwork skills, self-empowerment, and feelings of belonging, all of which are key leadership traits. Additionally, outdoor activities have been shown to boost young people’s communication and problem-solving skills, as well as their empathy and resilience.)

Personal Roles Are Multiple-Choice

Gates recalls that during the time when his grades started slipping at school but he found himself blossoming on his hiking trips, he realized that “identity” is context-specific—one person can fill a multitude of roles depending on the situation and the people he’s with. This insight would serve him well going forward as he started to learn to craft his identity to suit whatever challenge or environment he was in.

(Shortform note: Gates’s insight about the nature of identity may have been key to his personal development, since our sense of identity—how we understand and define ourselves—is fundamental to how we move through the world. In Far From the Tree, psychologist Andrew Solomon explains that identity formation is a complex, lifelong process that’s influenced by many factors. He breaks them down into vertical identities (traits taken from our parents) and horizontal identities (the ways we’re different from our parents). Gates’s identities fall into both camps—his parents were leaders, but didn’t seem to be pranksters. As with other children, it was Gates’s horizontal traits that proved a challenge for his teachers and caregivers.)

The idea of playing multiple roles is something Gates first put to use at Lakeside, where he took on the personas of “smart kid,” “jokester,” and “leader” all at once, depending on whether he was interacting with teachers, hanging out with friends, or taking part in the burgeoning computer group. He recalls sometimes taking deliberate steps to keep his identities separate. For example, his grades improved when he reapplied himself and started taking his studies seriously, but since (as stated earlier) being “smart” wasn’t cool for boys, he arranged to own two separate sets of textbooks—one for school and one to study at home—so no one at school would see him study hard, maintaining the illusion that he wasn’t a nerdy bookworm.

(Shortform note: The way Gates adapted his persona depending on social context is a common phenomenon first observed by the early psychologist Carl Jung. In his research, Jung described the “persona” as a filter someone uses as an intermediary between their true, inner self and the external world. Just as Gates took on various roles throughout his childhood, adults do this all the time—you may have one persona you adopt as a parent while showing a different side of yourself at work, and yet another when interacting with your friends. However, doing so can have negative consequences: When you adopt a persona to hide parts of yourself, such as when Gates hid his efforts to study hard, it can result in chronic stress, anxiety, and depression.)

Identity into Adulthood

Gates would learn that identities change over time, though they all would contribute to his growth. As mentioned earlier, in his Harvard years, Gates’s “smart kid” identity took a hit when that trait no longer distinguished him from others. However, he writes that the particular way he was smart—being willing to push boundaries, question norms, and break rules—still helped him stand out and created opportunities that were normally reserved for more advanced students.

In particular, the intellectual enthusiasm that fueled his academic drive and his determination to find his own path (first expressed in his youthful hiking trips) coalesced to spark a new identity for Gates: that of a business founder and entrepreneur. This identity had started to grow at Lakeside school during his first ventures with Kent Evans and Paul Allen. As he transitioned from Harvard to Microsoft, this new identity would define his future. At the end of his memoir, there were several other identities that Gates had yet to assume: tech giant, business mogul, family man, and philanthropist. But that, as they say, is another story…

Being Deliberate About Identity

By being self-aware about his identity and how to use it, Gates’s narrative demonstrates that identity is something you can control—you don’t have to let it control you. In Awaken the Giant Within, self-help expert Tony Robbins expands on this theme. He points out that like beliefs and values, most people adopt an identity without consciously thinking about it—but, as Gates realized, it isn’t fixed or innate. However, identity dictates behavior, since we subconsciously strive to act in ways that reinforce the identities we’ve chosen. For this reason, says Robbins, it’s important that a person’s chosen identity pushes them in a positive direction.

Robbins goes on to state that your identity depends on whether you define yourself based on your past, present, or future. For example, Gates could have defined himself based on his history as “the smart kid in school,” but at Harvard he realized that that no longer worked. During his transitional period, his identity may have been defined by the present, switching back and forth between his roles as a student and entrepreneur. By the end of this memoir, Gates appears to have defined his identity based on his future at Microsoft.

Robbins emphasizes that your identity doesn’t define who you are—instead it determines what you do. For example, if someone believes that they’re strong, smart, and hard-working, they’ll behave in ways that live up to those traits. By the same token, if someone’s identity involves counter-productive behaviors, they’ll continue to engage in those actions. This is a pitfall Gates may have run into when he continued to act the role of “class clown” long after it served him to do so. However, as he moved into adulthood, Gates seems to have learned to be mindful of which traits and behaviors would move him forward in life, which may have been what made it possible for him to leave Harvard and forge a path of his own.