Monday, July 26, 2010

Microsoft Analogy Invoked Again. And Wrongly. Of Course.

Rio Rancho Mayor Tom Swisstack said today he believes in the Green2V project, a $500 million, one million-square-foot solar panel manufacturing plant proposed for Rio Rancho. Once the city receives the necessary financial information, we will do due diligence, he said. Swisstack’s statement suggests the city has yet to received the financials for the startup firm. Swisstack spoke at the monthly meeting of NAIOP, the Commercial Real Estate Development Association.
The point here is that Swisstack invoked the Microsoft analogy and invoked it erroneously, following the example of almost all Albuquerque civic leaders over the decades. He claimed Microsoft left Abq because “they couldn’t get the money.”
Swisstack’s implication is that some sort of civic failure exists in the departure of Microsoft from Albuquerque. That isn’t true. It was business.
Specifically (and I writing from memory here, so forebear an occasional detail), it was the mid-1970s. Microsoft had a debt, legal fees, I believe, to the Poole Law Firm. It was $50,000. Gates tried to borrow the money from Albuquerque National Bank, a decidedly conservative outfit. ANB said no, and no surprise. Gates was a very smart visionary, aged maybe 22. Such folks don’t get money from banks. Nor do they get money from lawyers. Bob Poole declined the opportunity to swap the debt for equity. Again, this was a correct decision. Lawyers, my dad having been a major exception, are supposed to work for money, not equity. Neither bankers nor lawyers do venture capital.
Gates then went home to Seattle, the location of the money. It was a business decision. End of story. No social failure on the part of the Albuquerqueans.

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