Transcript

Replay: Bill Gates is ending his foundation — here’s how it began

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0:53 Hey folks, Jeff Berman here. I am thrilled to share some of the new names who will be joining us at this year's Masters of Scale summit. This may be our biggest stage yet. Reed Hastings, Meredith Whitaker, Van Jones, Amjad Masad, and more. Will be there with us October 20th through 22nd in San Francisco. If you're building something great, or you want to build something great, We want you there with us too.

1:20 Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. Hi listeners. It's your host, Reid Hoffman.

1:34 Welcome back to part two of our landmark episode with Bill Gates. On how to accelerate. History. In part one, we heard how Bill scaled Microsoft. In this episode, we turn our attention to the Bill and Melinda Gates Foundation.

1:50 I believe this episode includes the greatest success story. Ever told on the show. All that. Is ahead. We'll start.

1:58 As always, with a story. Mm. There's a piece of technology. We all use every day. But barely notice it.

2:09 This technology has been around. In some form or another. Since the dawn of civilization. The ancient Romans, Chinese.

2:21 and the Abbasid Caliphate. All used it. But product development. a toad over the years. And billions.

2:31 Aren't served. By its current design. That Is what I call

2:37 A neglected opportunity. And a legendary tech founder. Stepped in. We got universities involved, we did prototypes, now we're getting big companies drawn in. That's Bill Gates.

2:50 In recent years, he's taken on an audacious goal. to completely reinvent a ubiquitous tool. Most people turn up their nose at this essential invention if they notice it at all. Through the centuries, this item has acquired a multitude of names.

3:08 The dunny. The Privy. A chamber of commerce. The Thunderdome. That's right.

3:17 We're talking about A toilet. And if you're not familiar with its history, You're not alone. But its origins are fascinating.

3:27 The modern laboratory was born in England in fifteen ninety six. When John Harrington Presented Queen Elizabeth. With his invention. A flush toilet.

3:38 A bowl fed with water from a cistern that banished the royal business. Out of sight. Flush. Four. 1866.

3:52 London. is suffering from the great stink. A putrid smell. That overwhelm the city. It's cause.

4:02 The use of the Thames River. as an open latrine. The solution? Master Engineer. Joseph Basilget.

4:11 For sure. An underground system of pipes. That clears the air. And drastically reduces deaths.

4:19 From that point on Sewer based sanitation. becomes a norm. Worldwide.

4:27 And the toilet innovation pipeline. Stops flowing. Cities throughout the developing world still lack sewers. Huge swaths of humanity are stuck. With a great stink.

4:39 Mm. It's one of these things that you're never exposed to. until you really are going out there and as you're touring those slums, it feels implight. To bring it up. But it doesn't smell very good.

4:55 This isn't down to a lack of know-how. It's down to a lack of engineering solutions appropriate to the geography and income of these cities. The problem isn't just unpleasant. It causes the deaths. Of a million children.

5:10 Every year. And yet Progress has stalled. And so unless There's some breakthrough.

5:18 you're going to literally be living in human feces with the unpleasantness and disease impacts that implies. We expect Consistent upward progress in tech. But there are areas.

5:32 The market doesn't fund. Where inflection points cease to come. The toilet. is one. And Bill is asking.

5:41 Why can't we build? A better one. On paper. Looks very solvable. It look solvable.

5:49 but no one was trying to solve it. So in 2011, the foundation launched. The reinvent the toilet challenge. They hold expos. They court research partners from universities and corporations. And they fun promising ideas.

6:06 A solar powered toilet. A toilet that uses worms to break down waste. A nanomembrane toilet. That burst. Dash.

6:19 We're still not there. But It did take some audacity. To say let's bootstrap a completely different approach. Because they're just

6:29 It wasn't gonna happen otherwise. It wasn't going to happen otherwise. Bill Gates' career. As a testament. To what happens when the right person has the right idea?

6:44 At the right time. and they do everything they can. to accelerate history. Change comes about differently. In the non profit world.

6:54 than the commercial world. But Bill's work. With the Bill and Melinda Gates Foundation shows clear parallels. I believe. It's not enough.

7:04 to just take advantage of inflection points in history. You have to accelerate those inflections if you want to achieve Huge scale. You gotta have incredible talent at every position.

7:17 Huge push. There are fires burning when you're going out. Can you believe it? And then you go back to this is totally gonna be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Not balls ten years later, well that's just how you do it. We haven't made just how you do it. This is masters of scale. I'm Reed Hoffman.

7:51 Co-founder of LinkedIn. Partner at Greylock. And your host. And I believe it's not enough. Just to take advantage of inflection points in history.

8:00 You have to accelerate. Those inflections, if you want to achieve huge scale. In part one of this two part episode, we saw how Bill Gates took Microsoft to massive scale. By spotting and accelerating A string of inflection points in technology.

8:17 And the same kind of remarkable effort has driven their success at the Bill and Melinda Gates Foundation. But in philanthropy? It's not enough to just spot an inflection point. You may have to will them into existence. With persistence.

8:32 Partnerships. Innovation. And Yes money. I should probably mention that the foundation has become the world's single largest private philanthropy.

8:42 handing out more than fifty billion dollars in grants. But it's one thing to give money away. And quite another. To have impact with it. So I want to start with a success story.

8:54 I'd argue it's the biggest success story. We've ever told. Unmaster the scale. And to be clear It's not Bill Gates' success.

9:04 It's Humanity success. And the foundation. played a pivotal role. Excellerating it.

9:13 Now normally On massive scale, we reveal the success story slowly. Over the course of the episode. Knowing. that you already kind of know how the story turns out.

9:26 But despite the magnitude of this global success, there's a good chance you've never heard about it. Here it is. In the past two декадes. We reduce childhood deaths. By fifty percent.

9:40 From ten million. To just over five million deaths. Annually. What does that mean? It means that this year

9:48 Four and a half million children. Who would have died. Before the age of five. Of something completely preventable. Are still alive.

9:58 It's an achievement. That ranks among humanities. Best work. In this episode, we'll focus on the story of this one extraordinary inflection point. It's the perfect illustration.

10:14 of the playbook that allows the Gates Foundation. to accelerate history and we'll start at the beginning. The Bill and Melinda Gates Foundation. Launched in two thousand. Combining

10:28 What inspired them. Was a shocking article. They both read. About children dying.

10:36 By the millions. of preventable diseases. I asked Bill about it. What was the opening theory Of

10:44 This is how we're gonna do something different. than anyone's done with foundations before. Was that There were innovations that the market wasn't funding.

10:55 As I'd learned About why at that time Ten million children die every year. And then looked into how many resources were going to fix those problems, malaria, diarrhea, pneumonia. I was completely shocked.

11:10 When you have a disease that only poor people have, the market doesn't have an incentive. To come up with drugs and vaccines for those diseases. The lack of attention to fatal childhood diseases would be the first of many jarring discoveries. But at first The challenge seems straightforward to Bill.

11:28 There were diseases that needed cures. So We would go in and solve that. This wasn't arrogance, but It's more a testament to Bill's optimistic belief that technology can overcome almost any problem.

11:42 And that's natural for me because Microsoft Created a software Economy By hiring top engineers and Riding the wave of more powerful

11:53 Microprocessors to create software and software platforms. Bill wasn't underestimating the problems. He was remembering. What worked for him in the early days of Microsoft?

12:04 Then he leaned into the inflection point. Around newer. Faster microchips. Here. He was eyeing another inflection point.

12:14 This time Biotechnology. They just weren't being used to solve the challenge.

12:25 of childhood disease. Here you had biological science moving ahead. DNA sequencing, stem cells, all sorts of Deep knowledge. But then applying that knowledge to create actual tools and making sure they could get out to all the children of the world, there was this

12:44 Stunning vacuum which was In a way tragic. But it Excited me because I thought Okay.

12:53 That plays to my strengths. Please to the values Melinda and I have. Let's go build a team to do that. Let's go Let's go build a team to do that.

13:11 Bill was ready to solve. He saw a challenge. Childhood deaths. In developing countries. And he saw a tool set.

13:18 in biotech that would enable new vaccines and drugs. Now we just needed to know which problem. To solve first. For this. He needed data.

13:28 And Bill found himself. Foiled. From the start. My assumption was that the same type of measurement

13:35 And celebration of great successes and discussions of great failures would exist in this global health community. That existed in private markets. In fact, the under investment

13:51 An knowing. uh how many children died and what they died of was unbelievable. You can't save kids' lives if you don't really know what they're dying from. And you can't know if you've succeeded unless you measure What you achieve.

14:07 It was a riddle. At a global scale. An untangling how Bill and the Foundation found a meaningful way to make a difference here. is like following a detective story. From an especially convoluted case.

14:20 At each twist in the tail. Just as Bill thinks a solution is in sight and the riddle is solved. Another thorny issue. stalls progress. But the story begins with their search for answers and partners.

14:34 You think That the pride and the Energy and visibility. of that work would draw in More and more people and

14:44 A lot of top talent. In fact It was truly obscure. When the United Nations issued its Millennium Development Goals in two thousand. Bill and Melinda

14:54 Latched onto them. As the kind of clear measurable goals they could get behind. Among the eight millennium development goals, there were targets like Eradicate extreme poverty and hunger

15:05 Achieve universal primary education and reduce child mortality. We got involved in the millennium development goals. And that was the first time there was something that brought that through in a crisp way that the world does have a report card. that is not just increased global GDP

15:23 That Deaths and hunger and malnutrition. or responding to crises like the HIV epidemic. Even though the market system alone isn't gonna solve those problems, we should think of that as being part of our report card. Here's the first lesson.

15:40 Of accelerating any historical inflection point. Don't go it alone. Even when you're Bill Gates. And you funded the world's largest private philanthropy. Don't go it alone.

15:52 Bill and Melinda immediately saw that the Millennium Development Goal number four Reduce child mortality. was the inflection point. They were looking for. And the foundation would ultimately become the largest philanthropic contributor to the goals by far.

16:09 contributing seventeen point nine billion dollars. But it's one thing to write a check. And quite another. To solve a problem. The foundation.

16:19 Was determined to do both. And for that. They needed to understand why exactly. So many kids were dying. Remember what Bill said earlier.

16:29 The under investment In knowing. uh how many children died and what they died of was unbelievable. Everyone knew the number of child deaths. was staggering.

16:42 But no one knew. Exactly what they were dying from. It turns out That causes the death. were often not recorded.

16:50 And when they were. They were often vague. For example. Two of the most common listed causes of childhood death. Or pneumonia?

16:58 And diarrhea. And that didn't add up. Інна діяс а симптом, і такі на каз. There's one

17:08 that was causing over half of those, but the balance wasn't understood. Likewise pneumonia Again there was uh pneumococcus was about forty percent, but the balance wasn't understood. And so the idea that nobody was funding that data infrastructure which would guide your innovation, your delivery. That actually was pretty

17:30 Shocking. This is a great example. Of the problem solving required to achieve scale. On social issues. You have to dig beyond.

17:39 What's visible? to the underlying cultural roots. As Bill dug deeper into what was known about childhood deaths He realized. The lack of data.

17:50 Wasn't due. to a lack of interest. But rather. A set of complicated Cultural and economic factors.

17:57 Here's one example. The lack of autopsies. in developing countries. Well, an autopsy is a super expensive thing. The skill and cost isn't

18:09 in this world at all. And it's very disfiguring to the body. Yeah, many reasons why. Only rich people do we actually know what they die of. Bill had discovered two factors that were limiting the data.

18:22 Autopsies are expensive. They're also invasive. And that makes them Unacceptable. In many cultures.

18:30 He and his team went looking for a solution. Rooted. In innovation. So then we found somebody who invented this thing called minimally invasive autopsy, where you take a few samples that don't disfigure You know, the puncture wound you can't see, you take too long samples to gut samples.

18:46 The tech already existed. Now the challenge was getting families who had suffered the loss of a child to To agree to the autopsies. So the foundation funded an ongoing effort. To work with affected families.

18:59 And respectfully. Secure the data. They helped create an independent organization called Champs. Child Health and mortality prevention surveillance.

19:11 We're now out and actually getting permission from eighty percent of the mothers, as we explain. This will help us. You know, your death is tragic, but if you agree this will help. More autopsies. would mean more data.

19:24 About the causes behind child mortality. But that data would only be worthwhile. If they were reliable. Standardized collection efforts.

19:34 Worldwide. As Bill looked around, He found those efforts noticeably Even bizarrely absent. The idea

19:42 that nobody was funding that data infrastructure which would guide your innovation, your delivery. That actually was pretty Shocking. Bill's quest for reliable data led him to global health researcher Chris Murray.

19:58 When I first met Chris Murray He actually worked in Geneva for the World Health Organization, and he said look, there's a basic paradox. that WHO isn't allowed to write documents saying that countries are all messed up. Because That's our

20:14 Our managers are from those countries. A sort of dispassionate look at those numbers. needs an independent institution. An independent institution. could cut through the politics that kept data.

20:30 In the shadows. Chris made that case. And in two thousand seven, The foundation helped establish the Institute. for health metrics. And evaluation.

20:40 Which Chris leads to this day at the University of Washington. It wasn't a one time donation. But an ongoing commitment to drive inflection points. in global health. That aspiration, hey, we better know.

20:53 What's killing all these kids? What's killing them with the diarrhea, what's killing him with the pneumonia. We've spent hundreds of millions of dollars and had to get smarter and smarter and You know, created institutions. The creation of independent institutions has become a hallmark

21:11 Gets work done in the world. But as they started out. In two thousand. Holistic solutions. Or elusive.

21:18 Let's go back with Bill. To the beginning. In the early days, you'll remember that Bill was was eager to innovate. Developing a new product.

21:27 And bringing it to market. That was something. He knew how to do it. But as it turns out The problem wasn't just the

21:34 The lack of cures. It was the lack. of access. In Microsoft the market invention is straightforward in one sense, which is

21:42 Here's an amazing product that you should buy. But here we actually have to change the market. So what does the tool set look like for changing the market? Yeah, in the case of Microsoft The evolution of the hardware technology, including the chip and the storage and the connectivity.

22:00 came together with the software. And You know, partly we saw That we could bet On

22:07 really powerful hardware because it wouldn't be too expensive. In the case of global health I thought That the research piece And the breakthrough.

22:18 Say new vaccines or drugs. Возврани місін піс. Sadly The delivery mechanism in many of these countries, the primary health care system was also

22:29 Very, very poor. And it was kind of shocking that For that diarrheal disease rotavirus. We found out that the rich world had a vaccine. And

22:41 It wasn't getting out to the kids who needed it most. So that's this deep irony that The kids who are least at risk of dying or getting the vaccine in the kids the most or not. And I admit For a year or two

22:53 I thought, Josh, isn't someone else gonna solve this financing and quality of delivery problem? And eventually got convinced that no, it wouldn't be solved, and so it would be almost Pyrrh to invent more new vaccines that wouldn't get financed and wouldn't actually get delivered. This realization marked a key pivot for Bill and the Foundation.

23:17 It's one that will be familiar to any founder trying to bring about a change. Whether commercial. Or nonprofit. Often The problem you set out to solve.

23:28 Has to wait. Whole lot of other problems first. In Bill's case. He couldn't just focus on vaccines.

23:37 He also had to solve for What he call the Delivery problem. Why was it?

23:45 Could be effectively delivered in some regions. And not others. It comes down. Yeah, governments.

23:53 in rich countries, even now in middle income countries, are pretty amazing. We kind of take for granted that The water system, electricity system, education system, justice system, these things work pretty darn well. As you get into very poor countries. The fact that salaries don't get paid and you know even vaccines that are life saving The funds don't get allocated. They can even be stolen.

24:18 Uh it's pretty shocking how bad government can get. In his years at Microsoft. The government was at times. More an adversary than an ally. But at the foundation.

24:29 Bill had to rethink this relationship. The foundation. may have contributed Billions. to the millennium development goals.

24:38 But governments. Contributed. Hundreds of billions. They needed each other. Microsoft didn't need

24:46 government intervention to build and sell products or get them involved. Matter of fact it was kind of more challenging the other way. But the question about saying, All right, in order to fix these problems, we actually in fact have to get onside with governments. If you could call through time and call the younger Bill Gates and say, Here's how you should start dealing with governments at the beginning. This is what you should do. What was the learning curve there?

25:09 You always have to decide are you gonna get the government to step up to its role there? Are you gonna try to go around it and eventually realized we have to get governments to step up. It's the only long term solution. So there've been a huge learning curve on the delivery side. There are huge learning curves on delivery.

25:27 And also huge differences. Between countries. On one end of the spectrum. There are governments. That proved to be exceptional partners.

25:36 Like Ethiopia. One of the greatest experiences we had is that the Prime Minister of Ethiopia. wanted to have a good health service. And so the relationship on building up their health system and even improving their agriculture system, we got to do that in partnership.

25:57 That became an example for us. Found a willing government. That was allocating its money the right way. was willing to put a measurement system in place and When the figure said things were going poorly, they didn't try and reject the data that they were in it for the long run.

26:14 That was pretty fantastic for us. But not every country partnership. Works out this well. A case in point.

26:25 is Nigeria. Which once accounted For half. of the world's polio cases. Largely because vaccines are

26:33 weren't reliably delivered. Especially in the troubled north. of the country. The foundation. Back to an effort.

26:40 that went around the government. Two hundred thousand volunteers. Immunized. Forty five million children. Nigeria.

26:49 hasn't recorded a new case of polio for three years. But it's an ongoing effort. To maintain the partnerships. That ensure vaccines. Get to those who need them.

27:00 We did a much better job getting new vaccines introduced. in all countries than we did improving the coverage. The coverage thing Even today in northern Nigeria I spend a ton of time on it. I do conferences. multiple times years with these governors of the states in the north. So we're hopeful

27:19 But that has proven to be tough. But even the toughest efforts have long term payoffs. Bill says. In parallel the biological sciences that give us new ways of inventing vaccines.

27:32 That's gone super well. Even though there's some miracles that haven't emerged yet. An HIV vaccine, uh T B vaccine. You know, over the next

27:42 ten to fifteen years, we are going to have those. And so it's well worth Making sure that the delivery system is gonna be there. not only for what we have today, but for these things that are so exciting that are coming down the pipeline. To paraphrase the ancient Greek inventor who

27:59 Archimedes. With a long enough lever. And a fulcrum on which to place it. You can move the world. The challenge is finding that lever.

28:09 And convincing. Enough people. To grasp it with you. After the break. I'll share the most telling moments from my conversation with Bill on the comparisons between scaling a global company.

28:22 And a global philanthropy. These were the questions I couldn't wait to ask him. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely. From Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.

29:06 Humans will never be more intelligent than AI. Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Khalyubi. And on my podcast Pioneers of AI, we answer that question and so many more.

29:27 As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. As I mentioned in part one. When you think of the people

29:52 who've achieved huge scale. in both a global business. And A global philanthropy.

29:59 The intersection is literally One person. Bill Gates. This is what interested me most because When I sat down with Bill.

30:07 I'm fascinated with how he reflects. on both those similarities and differences between Microsoft and the Gates Foundation. I asked them about this from a number of different angles when we talked. And I started with the idea of a co-founder. Bill's first co founder,

30:25 Paul Allen. came along early in Bill's life. And Bill is clear about Paul's importance. Well Paul. Well

30:32 totally critical to there being in Microsoft at all. The foundation was also explicitly launched with a co founder. It's called After All. The Bill and Melinda. Gates Foundation.

30:45 I was really curious how this experience of co founding compared. So how did you and Melinda meet? Melinda was a employee at Microsoft. She went to do congo both her undergrad and MBA there in five years.

31:00 She and I end up sitting next to each other at this big dinner. In New York. and talking to each other. And Few weeks later I asked her out and

31:11 For five years we were kind of off and on, getting to the point where We decided to get married. So obviously it's something of a challenge in the intensity of founding a new organization and co founding to do it. You know, husband and wife. Adds an extra

31:26 Both probably delight, but also some stresses. What was that like? Well I'm sure That have I tried to partner with my spouse in my twenties or Even my thirties, I Couldn't have achieved it.

31:37 You know, I'm a lot more mellow. Melinda's just very Mature and thoughtful. The fact that I was used to being a CEO. Did require some adjustment that

31:49 Okay, she sees things that I don't see. You know, we need to have a common view of things. And so Іноар Кейс. It's been fantastic.

32:00 that we get her skills and and my skills going together. Leaving aside the complexity of working with your spouse. This partnership. Welinda. would be quite different.

32:11 than the partnerships he had. with Microsoft co founder Paul Allen. an eventual CEO. Steve Ballmer.

32:18 It was always a challenge. That You know, I Managed Paul and on pushed him to work super hard. Steve and I it was a little complicated'cause Steve worked for me and then

32:29 He became CEO and the whole thing of Who was leading who was following during that period. Wasn't That black and white.

32:38 But it all you know had a happy ending. And so what did that initial team look like? 'Cause obviously at Microsoft it was engineers. But it was more focused on biology. Like what would you say was like the okay, these are the people we must have and this is how we start building this new kind of foundation. Yeah, the mix of

32:58 Deep skills you need in an organization is always a question, and how do you Get those people mixing together. Here Understanding how to work in poor countries and get things delivered that hadn't been an area of specialization at Microsoft.

33:14 Hiring smart engineers was, but this was more biology focused than software focus. So I had to really study the pharmaceutical companies. Which You know, we're doing a mixed job, you know, try to figure out who's doing it best in terms of both design and going in and drawing some of the very best people out of farm.

33:35 Because in a virtual way We needed to become a pharmaceutical company and actually You know, create more successful products. Than any pharmaceutical company was. So that

33:47 First group was there to help us sort of bootstrap. Uh we had a An amazing person Patty Stone Cypher who in partnership with my dad were the first executives. And so they

34:01 looked around and said, Okay, how do we go down this science path and with a little bit of part time help from me. And so When did you start thinking There actually in fact there were more interesting parallels between

34:17 the business innovation of creating these markets. And the foundational work Let's metricize. what saving a human life is worth. And then let's drive that metric across all of the innovations is one of the earliest things I remember.

34:32 hearing the Gates Foundation talking about. It wasn't so much that I thought I was bringing my business approach, it was that I was shocked that those foundational elements really weren't present. And you know, it's partly lack of attention, lack of funding.

34:49 And bringing that type of business thinking in was actually Fairly new. You know, kind of building a Microsoft from a Yeah, a small organization to a global organization was

35:05 This notion of being very customer focused. Challenging customers that were important. and surprise and delight them and then that created the whole market. Did you find a similar pattern?

35:17 going on with the foundation? Is that is that a pattern that that also kind of is figuring like Well, how do we actually in fact have the right Purchasers of these new kinds of drugs, the right. Understanding of how we're trying to save children's lives. Yeah, there have been sort of two miracles

35:34 In global health. in the last fifty years. There was the smallpox eradication. And so looking at the great people who did that and And then Jim Grant, who ran UNICEF in the nineteen seventies, had gotten a focus on

35:50 Getting vaccines out to lots of children. Uh now it was a very small set of vaccines, but he got the coverage up dramatically by celebrating the countries that were doing it well and To some degree shaming the countries that were not doing it well.

36:06 And so this idea that We would pick diseases and have some of them be exemplars. We would pick countries and really highlight where they had done things well. Part of the good news was that I when I looked at child survival versus GDP

36:23 It wasn't. A perfect correlation. You know, if you have to wait. For the GDP of a country to grow. Uh before you can get the death rate down.

36:32 That's Definitely. Countries like Tanzania Rwanda, Senegal.

36:41 Had A third of the child to death's of other countries who had the same or more GDP That suggested that

36:51 They were getting the tools out and managing this their system. the primary health care delivery system in a way that was affordable and impactful and So you know, tell the stories of the heroes individually and the system's approach Which is you know less exciting, but also important.

37:10 That was key to us. And so I really dove into The historical Exemplar Costa Rica Sri Lanka.

37:19 And the contemporary ones uh including some of these African countries. Part of scaling Microsoft when you were leading it from its Start up to Global transformation. It's

37:31 You know, it's always hard work and a l bunch of lessons learned about how to scale an organization because It's we know, how the rule changes when you're a hundred people, two hundred people, five hundred people, a thousand people, all of a sudden the organizations get large. Has the pattern been the same with building the foundation? In terms of what the scaling of the organization had been. Yeah, so

37:53 Geographic scaling It's very different. Then engineering scaling. Geographic scaling you can have the central assumption that

38:05 Your activities in each of the countries are going to be ninety percent similar. Understanding what that ten percent should be, you know, what does Japan really need that's different? What does You know, South Africa needs different That's a fun, interesting problem. But the basic approach Use is Going to be the same.

38:23 The engineering piece where you're adding more products. For Microsoft that was fundamental that Most of our competitors were single product companies. Microsoft knew that we wanted to be a very multi product company and we wanted to be way more international than the other guys. So we wanted to own all our subsidiaries to direct distribution.

38:44 Everywhere. In in the world. And we wanted to understand how we avoided top management not being a bond like so that we could just keep adding product groups.

38:58 For the foundation We like that. Same sort of engineering scaling. So that We created budgets for each of the program groups, so the malaria group, the tuberculosis group, the HIV group. The thing I underestimated is that in drug creation

39:16 There are a lot of horizontal skill about manufacturing and regulatory approval. And so until we hired the current head of our global health group, Trevor Mundell. We thought We tried too much.

39:30 To have those Engineering groups. science groups be too independent of each other. We didn't have a central manufacturing expertise, central regulatory expertise. Trevor came in and said

39:41 No, you need to have both. So our engineering design is actually somewhat more complex. А те фаундейш Yes, at Microsoft there's a central engineering group about tools and training, but that's like five percent to the headcount.

39:57 In the case of the foundation, we have over thirty percent Uh the head count. And budget. is in these horizontal things and That's

40:07 A management challenge. uh because you have the two different groups but the nature of the problem demands They You do it that way. And so when did you start

40:19 Also figuring out how to deploy technological innovation. Not just of the biological sort, but of the kind of more wide ranging. You know, here I'm gesturing at the grand prize technological challenges with the toilet and so forth. But when when did that start factoring in and how did that start saying, Okay, technology also gives us

40:39 unique leverage here. Well we mimicked The thing that Hilbert did. in terms of the great unsolved problems, uh he did that for mathematics around the turn of the century.

40:51 And so very early on we did that. For global health. And If we look back on it, we didn't pick exactly the right ten things.

41:02 And yet by putting money behind those things and creating visibility for the field. You think That in the process of cutting child to deaths from ten million year to five million year The pride and the Energy and visibility

41:17 More and more people and A lot of top talent. In fact It was truly obscure. And so

41:26 When did the Technological Elements coming. The fact you've build two amazing huge scale organizations is that there's Parallels in business models, there's parallels in organization, there's also parallels in technology.

41:40 And like the the toilet was one of the ones we've talked about before. Well the toilets An example where Trickle down doesn't work. Where you get a failure of trickle down to work.

41:52 is when you have things like a sewered based sanitation system where you have to build all that piping and those processing plants. And the cost Get stuck at a level that's barely affordable by middle income and In these big African cities

42:07 It'll just never happen. And this brings us back to the top of the episode. An inflection point. That will never happen unless the right people And organizations.

42:21 and nations. Get together. To make it so. So the engineering

42:28 Craziness. To say that you could do the toilet As this self contained Filter

42:36 Could you get Down to five cents a day. And can you make it so that it matches the gold standard that is the Rich World Flush Toilet. And we on paper looks very solvable. For Bill Gates.

42:50 Solvable problems start. With technology. For you, they may start somewhere else. But with a powerful combination. A people.

43:00 Partners and persistence. You can accelerate history. And even will. A new inflection point. into place.

43:13 I'm Reed Hoffman. Thank you for listening. Masters of Scale is a Wait What original. The show is recorded on site in California and produced at the studio inside SY Partners in New York. Our executive producers are June Cohen and Darren Triff.

43:38 Our producers are Chris McLeod, Adam Skuse, Jenny Cataldo. Jordan McLeod. Catherine Clark Gray. Halibonny. and Ben vanilla.

43:47 Our supervising producer is Jay Punjabi. Music and sound design by Ryan Holliday and Daniel Nissenbaum. Mixing and mastering. I Brian Pugh. Special thanks.

43:58 Christian. Alicia Schreiber David Sanford Saire Sapiaba. Bob Safia. Christina Gonzalez and Sarah Samman.

44:07 Is it? Masters of Scale да For this episode. And be sure to subscribe to our email newsletter.