The Four Lenses of Innovation: A Power Tool for Creative Thinking

Meet the trend surfers

It could be argued that Bill Gates built Microsoft’s entire software empire on his ability to repeatedly see the next wave coming and then quickly mobilize his resources to capitalize on it. Right at the very beginning, Gates and his friend Paul Allen founded the company on the notion that computer software was going to be the industry of the future. In 1978, just three years later, Microsoft’s revenues had already hit $2.5 million (Gates was only 23 at the time).⁵¹ Gates imagined that one day there would be a computer on every desk, and he wanted it to be running on Microsoft software. As the personal computer industry began to take off, Gates made contact with IBM’s CEO, and in 1980 he was asked to develop the operating system for the company’s new range of PCs. Turning down IBM’s offer of a flat $50,000 development fee in favor of a licensing agreement, Gates showed that he had a better understanding of where the computer industry was going than its mightiest player at the time. That legendary deal meant that Microsoft retained ownership of what became MS-DOS and could license it to other computer manufacturers. As companies around the world started producing IBM-compatible PCs and licensing Gates’s OS, Microsoft’s revenues went into an exponential curve, rising from $7.5 million in 1980 to $140 million by 1985.⁵²

When Steve Jobs visited Microsoft in 1981 and demonstrated an early prototype of the Macintosh computer to persuade the company to develop ...