JOEL SPOLSKY REGISTERED SURPRISE WHEN Bill Gates strode into the conference room. Not at the PowerPoint deck Gates held in one hand, or the dozens of leaders from around Microsoft that lined the walls. What surprised Spolsky was that Bill Gates walked on two legs, swung two arms, and took in the room with two eyes.

It seemed odd to him that Microsoft's legendary co-founder possessed all the other constituent parts that made him a human being, just like Spolsky.

He had little time to ruminate on what else he and Gates had in common. Gates cracked a joke with one of the executives as he shuffled through a ream of laser-printed paper the size of War and Peace. It was June 30, 1992, and Spolsky was either the guest of honor, or the soon-to-be-recipient of a blistering interrogation. Everyone else was there to bear witness.

Spolsky fixed his attention on the report Gates held. His surprise swelled to astonishment. He had started Microsoft in June the year before as program manager for the Excel team. One of his major projects was to sort out Excel Macros, an esoteric programming language specific to Excel that had no official title. Spolsky wrote up a 500-page spec report that deemed Excel Macros outmoded and opaque, and proposed Excel Basic, a derivative of Microsoft's Visual Basic programming language, as a solution tailored for the Excel team's needs.

What amazed Spolsky wasn't that Gates had the report. He had printed out and sent Gates a copy 24 hours earlier before the meeting, what managers called a "BillG review." What amazed him was that the margins of the first page were full of handwriting. Gates' handwriting, no doubt. That Bill Gates had not only read some of his report, but had taken notes, was enough to plant a ball of nerves deep in his stomach. Those nerves multiplied as Gates paged through the printout, offering glimpses of more handwriting.

Gates turned his gaze on Spolsky, adjusted his glasses, and fired off a question. Spolsky answered it. Gates asked another. Spolsky answered again, and his anxiety thawed. These weren't too bad. Surface-level stuff. The next question was harder, more technical. Spolsky answered, smooth and without hesitation. The next question was more technical still, as was the next, and the next, and the next.

Gates' stare intensified with each line of inquiry until he hardly seemed to blink. Spolsky soon had trouble predicting where each question would lead. He knew the report back to front, but the co-founder's question seemed almost random, a story with no plot, or with one that had yet to reveal itself.

Occasionally, Gates swore. Spolsky thought nothing of the curse words. He was too busy forming answers.

At last, Gates nodded, got up, and left. "Four," one of Spolsky's team members announced.

Murmurs filled the room as executives shared looks of incredulity. Sensing Spolsky's confusion, one of them explained that during every BillG review, one attendee's only job was to count the number of times Gates dropped an f-bomb.

"Wow, that’s the lowest I can remember," someone said. "Bill is getting mellow in his old age." (Gates was in his mid-30s.)

Gates' killer instinct was as legendary as his bank account. Countless developers had been on the receiving end of his interrogatories and diatribes. So had his family members. "Growing up, if I thought my parents were being unfair, I could be pretty harsh with them," he wrote in a blog years later. "When I was at Microsoft, I was tough on people I worked with. Some of it helped us be successful, but I’m sure some of it was over the top."

Over the top was an understatement. Nearly every senior developer and manager at Microsoft during Gates' tenure had "BillG" anecdotes. During the 1980s and '90s, the co-founder berated employees in public, stalked the office parking lots during weekends to see who was working overtime, and spouted off to anyone who disagreed with him. Gates had a habit of writing severe emails to programmers in the wee hours of the morning, with "This is the stupidest piece of code ever written" as his opening salvo.

Former employees have described Gates as demanding and the Microsoft culture as confrontational. School friend and co-founder Paul Allen noted that conflict seemed to fuel Gates. So did scheming. "I'd assumed that our partnership would be a 50-50 proposition. But Bill had another idea," Allen wrote in his memoir, Idea Man. In Microsoft's early days, Gates pushed for a 60-40 controlling interest in Microsoft with Allen, insisting that he "did almost everything on BASIC," the interpreter that set them on their path to becoming Fortune 500 entrepreneurs. Allen accepted, only for Gates to counter his own offer and insist on a 64-36 split. Not in the mood to haggle, Allen agreed.

Later, Allen uncovered a scheme by Gates and then-president Steve Ballmer to water down Allen's stake in the company while Allen recuperated from his battle with Hodgkin's lymphoma in 1982. Allen confronted them, earning an apology from Gates, but the damage was done: Allen resigned. When Gates offered to buy him out for $5 per share, Allen asserted he would accept no price lower than $10. Gates refused, and Allen left Microsoft in 1983 still in possession of his ownership stake. That turned out to be the right move: His net worth matured to approximately $13 billion by 2011 and grew to over $20 billion by the time of his death in October 2018.

Compared to Allen and countless others, Joel Spolsky got off easy. One reason, he learned after his BillG review, was his preparedness. "Bill doesn’t really want to review your spec," a peer explained to him, "he just wants to make sure you’ve got it under control. His standard M.O. is to ask harder and harder questions until you admit that you don’t know, and then he can yell at you for being unprepared. Nobody was really sure what happens if you answer the hardest question he can come up with because it’s never happened before."

Gates's pugnaciousness was a double-edged sword. Although it scarred many engineers and managers, others thrived in an environment where they knew they would be challenged, and where they were expected to push back. "A lot of people don’t like their jobs because they don’t get any feedback," said Scott MacGregor, a former Microsoft employee who spoke to authors James Wallace and Jim Erickson for their 1993 biography Hard Drive: Bill Gates and the Making of the Microsoft Empire. "You always knew what Bill thought about what you were doing. The goal, the motivational force for a lot of programmers, was to get Bill to like their product."

"Robbie and I both came from Office, so we were relatively used to getting yelled at by these guys," Ed Fries says of the united offensive Gates and Ballmer would unleash. "And when I say 'yelled at,' I mean it was part of the process. I never took it as vindictive. I have a huge amount of respect for Bill and Steve, so please don't get me wrong, but they could be aggressive. They were competitive and pushed hard and asked hard questions. Questions that, honestly, if you'd spent a year working on something, you should be able to answer."

ED FRIES STEPPED into Microsoft's boardroom and checked his watch. He was a few minutes early for the four o'clock meeting on February 14, 2000, but so were several others. Twenty people were seated around the long table in the center of the room. More chairs lined the walls, and other managers filed in and took seats.

Steve Ballmer entered shortly after Fries arrived and chatted with Fries and Robbie Bach, who was also early. J Allard was at the table. Several minutes passed, by which time Gates was conspicuous in his absence. "He was late for the meeting, which was not super-unusual," Bach says. "At that time, Microsoft was not a particularly punctual place."

Around four fifteen, Bill Gates stalked into the conference room wearing a furious expression. In his hand he held a printout of a PowerPoint presentation Bach had given him a day or so earlier. Without a word, he reached across the table toward Bach and slammed the printout onto the surface.

"This is a fucking insult to everything I've accomplished at this company," Gates shouted.

All the air was sucked out of the room.

"I was coming into the meeting expecting them to push hard," recalls Fries. "Bill, especially, if he doesn't like an answer, he'll ask a more pointed question. If he doesn't like the answer to that, he'll ask a more pointed question, and so on until pretty soon you're down really deep. Maybe you're even talking about code. I thought it was going to be like that, but I was a little surprised by how it started."

Fries eyed Bach, clearly waiting for him to take the lead. Bach had a habit of meeting with Ballmer--usually on a golf course or a basketball court--and soften the blow. "Typically, by the time we had formal meetings with Steve, he already knew the bad news," Fries adds. "We'd bring it up, and it felt like the news had already been discussed and digested. We would do what are called three-year planning meetings. Ours would go smoothly even if we had bad news because Robbie had pre-disaster'd him. In this case, pre-disastering clearly had not happened."

Bach returned Fries' blank stare. In this case, pre-disastering would not have been an option. "I will say that most of my ability to manage meetings with them was informed by the Valentine's Day Massacre. I didn't work for Steve directly yet, so I had a little bit less access. But it would not have mattered. That meeting was going to happen. It might not have happened with as many swear words as it did, but that meeting was going to be a bad meeting no matter what."

As one, Fries and Bach turned to J Allard. All three knew why Gates was livid. The PowerPoint detailed all their findings gathered over the previous 12 months: meetings with hardware manufacturers, costs of parts, failed attempts to purchase or partner with studios such as Nintendo, Sega, and Electronic Arts. Xbox would have to pivot from a PC-like device powered by Windows to a more traditional game console. That meant Gates's dream of spreading Windows from offices to the living room was dead in the water.

"Now, was I prepared for Bill coming into the meeting, lunging across the table, and pounding his hand on the table and scaring the crap out of me? No, I wasn't quite prepared for that," Bach continues. "So Ed's right. The vehemence of the disagreement was surprising, but the source of it was not. The source of it was about strategy and approach, not performance or execution."

All the color drained from Allard's face as Gates shouted and pounded his fist on the table. Inwardly, Fries sighed. Fine, he thought. I'll say something. "I think we're doing the right thing," he began. Without missing a beat, Gates redirected his fury at Fries. He snatched the PowerPoint deck off the table and stabbed his finger into financial slides, where large, negative numbers dominated each page. All the financials indicated that Microsoft would have to spend between five and six billion dollars over five years, figures that accounted for everything from development contracts with hardware and first-party software manufacturers, a robust advertising campaign, distribution, and the loss on costly components like the hard drive.

In the grand scheme of Microsoft's finances, that cost could be considered trivial: Windows and Office generated approximately $1.5 billion per month. "Very few companies could take that kind of bet and not face existential peril," says Stuart Moulder, a product manager in the games group. Moulder did not attend the Valentine's Day meeting but heard about it soon after from Fries and other attendees. "For Microsoft, that bet was inconsequential, I would say. They had something like $80 billion in the bank, and money in the bank isn't good because it's not working for you. Every quarter, we made that much more money. The Xbox really wasn't a big bet in the big picture of Microsoft's overall fortune."

Other managers detailed their plans. Fries talked about his plans to build a portfolio of first-party developers that focused on quality over quantity. He would concentrate on Xbox and trust Stuart Moulder to run day-to-day business in the PC games group.

Cameron Ferroni, an engineer working with J Allard, explained that the Xbox would give developers access to the kernel, the lowest level of an operating system where they could fine-tune performance. Gates and Ballmer balked. Windows never handed over total control to developers or users. Ferroni and other game-savvy attendees shrugged. "Look, once the game is in the box, it controls the hardware. The operating system can't interrupt. There's no multitasking. It's not a Windows device."

That was the wrong thing to say. "So you guys just decided to go build a video game console," Gates ranted. "What good is that? You're not going to help Windows get into the living room."

While most attendees stared helplessly at Bill Gates, Bach watched Steve Ballmer. Although Bach still had limited access to Ballmer, a few managers had warned him this news was coming. "Steve disagreed with us, but he was the--it's hard for me to even say this--Steve was the calming force in the room. Which is not his usual mode, but often was his mode with Bill. They would sort of do it to each other: Sometimes Bill would call Steve down, sometimes Steve would calm Bill down."

That was how Gates and Ballmer worked. Both men possessed differing skill sets--Gates's insistence on research and data juxtaposed with Ballmer's focus on bottom lines--but some overlap existed. Both men were analytic and technical. Sometimes, rather than feed off one another, one would try to move a discussion forward.

"Okay, that's a problem," Ballmer said. "We're going to have two developers conferences?" he continued, thinking Microsoft would have to make appearances at even more conferences to promote PC or Xbox games, not both. "That doesn't feel like what we said before."

Gates lobbied for his Trojan horse, while Thompson, Fries, Bach, Allard, and others tried to explain why that was no longer workable. Ballmer had no interest in building a game console either, especially with the financials the team projected, but he wanted to have productive discussion.

Around six, Bach grew tired of rehashing the same points. "If you guys are that upset about this," he said into a gap in the tirade, "let's just not do it." Gates and Ballmer turned to him. "We're two months in," Bach continued. "Nobody knows about the project. There's 30 people working on it. People can go back to their other jobs, leave the company, whatever they wanted. No harm, no foul. If you're not excited by it, let's not do it."

Gates and Ballmer considered that option. Bach waited tensely. He'd spoken up to take the temperature of the room. Either a majority wanted Xbox to move forward as a game console, or Ballmer and Gates would kill it. If it died, so what? The last year comprised maybe 10 percent of his career. Yet doubt nagged at him. "By that point, I had drank just enough of the Kool-Aid to want to go do it. And if I'm honest, that was probably ignorance on my part. I really didn't understand just how hard that was going to be. I was excited about the challenge. I liked the team and the passion, and I'd gone over the edge on that."

Fries, too, knew he would come out of the meeting fine whether Xbox moved forward or faded away. Also like Bach, he had grown attached to the project. "I was running our gaming business and could continue running our gaming business, which is what I wanted to do. It wasn't like I went into the meeting terrified that I'd lose my job. But we'd all spent a year getting ready for this meeting, and there were people who would lose their job--or have to find another position within the company--if the Xbox didn't go forward."

Gradually, a consensus took hold. Xbox was dead. Then, before the meeting broke up, someone said, "What about Sony?"

That question froze Ballmer and Gates before they could leave. What about Sony? The answer was ominous. PlayStation 2 would launch in Japan in a few weeks, and would drop in the United States that summer. Sony continued to promote the console as a PC-like device in the living room. If Microsoft stepped back and let PS2 materialize, the battle over the living room would end before it began.

Talk went back and forth again for the next hour. Finally, Rick Belluzo turned to Rick Thompson. "Do you think these guys can make this happen?" he asked, referring to the Xbox team.

"Absolutely," Thompson replied without a moment's hesitation. "They'll get it done."

Ballmer and Gates shared a look. "Okay," Ballmer said, holding every pair of eyes. "We're going to do it your way, and we're not going to have this meeting again. Bill and I are going to support this project to get it done the way you think it needs to get done."

With that, the meeting adjourned. One by one, the guys filed out of the boardroom and slinked back to their offices to call their wives or girlfriends and apologize for canceling or postponing their romantic evening out.

Despite any storms they might weather from their wives, Bach and Fries left the meeting feeling optimistic and energized.

"They supported us at every step of the way through every stupid thing we did, through all the bad times and the good times," Bach says of Ballmer and Gates. "There were a lot of difficult periods, but they supported us 100 percent. I never felt a lack of support from them. Quite the opposite, in fact: We got more support than we deserved."

Fries was elated that the resolution acted as a bomb that blew up over half the problems on his to-do list. "By the end of that first year, I think we all understood a lot better why our initial, preconceived notions were wrong. After the Valentine's Day Massacre, I don't remember tearing my hair out about, how can we port Flight Simulator to this? Or Age of Empires? I remember my time really being focused on running around getting console developers onto the platform and getting other teams I was already working with focused on making games for this new platform. Just like Xbox itself changed, our understanding of the market and what it would take to be successful changed, too."

Moulder believes Bill Gates bet on the Xbox in part because Gates, as a developer, had insight Ballmer lacked. "You didn't really have to have an upgraded processor, more memory, a sound card, and a video card because you wanted to drive your Excel spreadsheets faster, or even Windows. Windows has become more demanding, so you needed some extra power for it, but not as much as you did for games. What caused consumers to go through the upgrade cycle much faster than they otherwise would have done was games. And when you buy a new PC, guess what you have to have? A new copy of Windows. The fact that games drove that upgrade cycle resulted in a benefit for Microsoft. I think Bill knew that at some level and appreciated it."

"For me, it was the most important meeting of the Xbox development process," Bach says. "The 18 months between the Valentine's Day Massacre and the launch of Xbox were the worst 18 months of my career. They were super-hard."