[applause] >> well, thank you. it is a pleasure to be here. i am nervous. this is a big speech for me. this is one of the biggest of my life, in fact. you are looking at me like i am nuts. i left microsoft a month ago. this is the first speech i will give and maybe the last if it does not go well. i am a little nervous. what do you talk about now? i want to pick themes that i would have talked about when i was at microsoft. i am clearly the former ceo.

i want to speak about things that i would say upon reflection that i learned about business. we will see how that goes. i joined microsoft 34 years ago. at the time, the company was 30 people. we had done two and a half million of good revenue the year before. i had been screwing around in school during the first five when i joined, the company was five years old. you can say two and a half million is a lot of money. compared to the $80 billion that we do today and the hundred thousand people, i joined a startup. i joined a startup. it is hard to talk about microsoft like a start up.

i have a new perspective. i worked for a company of 30 people and 100,000 people in every size in between. we have done things well and screwed things up. it does give you a bit of lesson and perspective. i have some ideas about startups. some ceo is running a 40,000 person company, i have some ideas. the journey has been nothing short of amazing, if nothing in terms of its volatility. i joined a company that existed before there was an ibm pc. i was good at wearing a suit compared to all of the other

people at the start up. i became a salesman on our first relationship with ibm building the pc. there is a faith there. our whole world is a startup. it was about helping this larger company. everything was based on the servicing the needs of this company that had 300,000 people even at that time. ibm it was the biggest thing in the technology business. we used to call it the bear. ride the bear. hang onto ibm. we spent five or six years doing that. what are we creating and crafting? that is where we birthed what i would consider modern microsoft. windows and office in the late 80's and early 90's. we were in the process of giving birth to the business that would

be what our company would explode. we went through a period then where we did get some critical mass. we were all about starting something. we were bootstrapping. now it is about spinning that hamster wheel. that is a good thing to do in business. when you have enough success that you need to pedal fast, that is good. a lot of people try to pedal fast before they have anything that is good. it is kind of a life lesson. get a good idea and then work like hell to make it popular. that was a phase for microsoft. that was probably the favorite phase, when you have a germ of a good idea and you are working hard on it and you are scaling it up.

you're not thinking as hard. you can say that is a mistake and i would agree. that is a wonderful thing. then we get to the dark years. if you are successful enough, you will have dark years. if you are successful enough, you can run into anti-trust authorities. any start up will not want that problem. it is a double-edged sword. you also find that the thing that you did that made you successful in the first attempt may not sustain you. one of the things i learned about our business is a one trick pony. a pony you can teach one trick.

many companies are one trick ponies. if you are a one-trick pony in business, you are fantastically successful. you invented one thing and got it right. that is optimum. if you are a great one trick pony, your trick might last for 100 years or 200 years. coca-cola is a 100-year trick. brand oxford is a several hundred year trick. if you're going to aspire to be anything in brands, aspire to be brands that look like they are on the cutting edge hundreds of years later. you are forced to do a second trick or you die.

if you don't do the second trick, then you should do every trick. the history of business is most people do one trick. they run with that as long as it works and then they fade out. we were fortunate. we came up with the second trick. how do you take microprocessors and push them in to the backend automation of business? there was a day when there was a thing called a mainframe. it was a popular form of computing. i know this is a bit antique at this stage. my 14-year-old asked me what ibm does. the truth of the matter is, ibm was everything for automating business computing. we pushed microprocessors into the very fabric of the way is businesses worked. that was our second trick.

out of those two tricks, we have gotten $80 billion of revenue. why didn't you do the third trick right? let's call that phones for just a second. i don't know if we were too busy. we have done two. the challenge is now that those two tricks will go for many years. in our industry, you have to do a third trick. there are no hundred year tricks in the technology business. apple did two tricks. they built the mac and they almost went bankrupt and they did a second trick around touch computing and the ipod. it is an amazing company because it did two tricks.

we are an amazing company because we did two tricks. how'd you do multiple tricks? ♪

>> there are a few principles that i would highlight for this audience. the first one is probably not

one that gets talked about as much as it should. that is that ideas do matter. you do need a powerful idea to have a business that is going to succeed whether on a large scale or a small scale. the idea needs to be significant. it is easy to read about startup this or startup that. i was in san francisco the other day and i was told you can get venture capital without an idea. that is interesting. i would say the quality of most of the ideas i hear about, they are just not that powerful. people spend too little time trying to get the right idea. getting the right idea is really hard. you have to work at it and you might have to fail at it and you might have to modify it. you might have to try another idea. you have to decide how to think about the idea.

has anybody seen an older movie called "thelma and louise"? by the end of the movie, they are driving their car off of a cliff. i won't fill in the details. it was brad pitt's first movie. they really ran fast. by the end of the movie they were running fast. i would not want to follow them off the cliff. some people fall in love with their first idea and don't stop to say what are other ideas. are there other ideas or better ideas? i don't care if you're as big as microsoft today, ideas matter. two tricks made the whole company. the third trick is out there waiting to be invented.

or invented by a start up. or a larger business that can do certain types of innovation. ideas matter. second, you have to be passionate about what you want to do. passion matters. too many people don't get revved up and fired up and consumed by what they do. i find that sad. you want to do something you can fall in love with. coming right out of college, you have to work on your resume. maybe for one job that is ok. it is not ideal. finding something that you can get passionate about, i was lucky. for me, it was pure luck. i never thought i would join a small company. i assumed i would join a big company.

my dad had joined big companies. i got to create an entire industry. i was lucky. i loved the people. i loved the leadership area and i loved the technology. i loved the impact on the world. i loved that we had brainiacs that worked for us. i found something that i loved. passion absolutely matters. optimism. smart people love to be negative. that is my summary of life. they love to be critical. you have to to succeed. if you want to be successful, you have to stay optimistic. colin powell has written books on leadership. he has one line that i love. optimism is a force multiplier.

if you're not leading with optimism, if you do not believe, then nobody is going to be with you or follow. nobody is going to buy in. execution and measurement. you had better stay on top of yourself and really measure. unless people measure themselves, you do not get any better. you cannot succeed unless you are holding yourself accountable and owning. i have seen people who are brilliant and when it came time to execute and count success, maybe not so much. maybe not so much. in order to do that, you have to know what the goal is. if the goal is to get to 450 million users and then sell to facebook, whatsapp did a hell of a job. that is a hell of a job.

what outcome do you want? bill gates was offered $7.5 million to sell microsoft in 1979. he would have been a rich guy if he had taken it. even putting that aside, the impact on society would not have been the same. we had discussions with facebook about buying a facebook. zuckerberg knew what he wanted as an outcome and was willing to put in the blood, sweat, and tears. execution and measurement are hugely important. people let themselves off the hook. you have to get in the weight room. i don't know if that expression works at all. in american football, the most important thing you can do is get yourself stronger. a lot of companies do not do that. they are good at something and they don't build new muscle. they don't train.

you have a small market share in the phone business, why'd you guys even screw around? we are in the weight room, baby. we are getting good. we know what it takes to make these devices. we understand what is capable and possible in the hardware. if you do not get in the weight room, then you cannot win the next generation. if apple had not been a hardware company, they could not have come in the generation of the ipod, even with steve jobs returning. ♪

>> it looks like the peddling is what you enjoy most. >> i had my run. i had the coolest experience in business history. why would i do some b team may thing it.

i do believe that for me there are things that i am interested in where i can maybe make a difference. i am an expert at what i have done. i had a chance to grow up with it. essentially i got to build microsoft from the beginning. i have been one of the top two guys at microsoft for 34 years. i know what i am doing. i will never be as good at anything as i was at being ceo of microsoft. i will never have an opportunity that is the same. that is part of the magic. now i get to find the next thing i am passionate about. i am fascinated with some of the challenges the world does face. health care in the united states is an intriguing thing to me.

it costs about 17% of gdp. in most of europe it is 12% of gdp. if the world could allocate five percent of gdp, do you know how much money that is? there are countries with that spend less on. i don't know if i'd be good at that problem. i am reading books and talking to people. i have to decide if i have any real passion to make a real difference. ideas matter. i am interested. i will learn more about it. there are three or four of those things and i will decide if there is a real impact i can make. i am a believer that a lot of things is technical change or government change. technology has influenced

everybody in the world. technology is a wonderful thing. government improvement is the other thing that can improve everything in the world. the way government allocates and spends money. the effectiveness of government is another thing -- i am not going to run for office -- could i make a difference somehow on that? i can try to improve my golf game and try to get in better shape. i will always fight a battle on that. >> what is the developing technology to move into? >> i am a former ceo of microsoft.

i will speak as a shareholder more than i will speak as the ceo. it is important to me that i'd be a good a former ceo. the company will continue to talk about its directions. i am enthused about two things. the transformation of new muscle. the muscle needs to be in cloud services and in devices, including hardware. the big transformation conceptually, big companies can move things on a large scale, i should be able -- this is the first speech i have had to do anything.

i actually got here in time to check the auditorium. i should've just asked for a photo. how do i get a virtual digital assistant? it is with me always and senses my environment and knows about me and knows about the world and can act on my behalf. there is no reason that i don't know your name right now other than i don't know your name right now. should i have been able to know that? of course. image recognition exists. wearable computing exists. it should have scanned and given me two or three possibilities and then let me guess that you are the joseph myles.

i don't have that with me today. >> what advice to the of to entrepreneurs between optimism and good business sense? >> the mistake people make is they say because i have an idea it must be a good one. luck plays a factor. am i pursuing this idea because it is the only one i have or because it is good? that is an aspect of life. the second thing you have to say to yourself is am i prepared to stand by my idea even if it does not weather the storm initially very well? do i believe in the power that i will stick with it? your first idea will probably suck. that is statistically true.

microsoft was at it 11 years or 12 years before what we did mattered a super amount. the third thing is do you have an idea for a business or something cool that nobody will pay for? there are people who have ideas for something cool that nobody will pay for. there are some very large businesses in our industry that is unproven that people will pay for them. there are companies that have market capitalization and make no money. that doesn't make much sense to me. it happens. if i can get a market cap, then you can count me in. you have to ask yourself if your idea is powerful, am i willing to stick with it, and do i believe that it is an idea for a business as opposed to something cool that nobody will pay for?

thank you all very, very much. [applause] ♪

>> this week on political capital -- we debate the cia versus diane feinstein. vernon silver reports on the pope. we begin with two of the smartest political minds. john sununu.