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How Bill Gates Sold IBM a Product He Didn't Have
How you can sell like the legendary Microsoft billionaire
Good Morning and happy National No Socks Day! A friendly reminder that this holiday comes with terms and conditions: Remote sales reps, do as you please. In-person office based reps, this one ain’t for you. Unless you wanna to be known as "that person" in all future pipeline reviews. Now let’s get into today’s Follow Up. 😁
Dealing with a stalled prospect 🛑
How Bill Gates sold a product that didn’t exist 🤯
Closing 30 deals per rep per month 🤑
Sales jobs & a meme 😂
Sales Tip of The Day 💡
When a prospect is dragging their feet with answers like “I just need to run this up the chain,” or “my team’s still reviewing it.”
It’s not a no. But it’s not a yes either. It’s limbo.
❌ Got it. Sounds like a lot of internal steps. I’ll check back in a week.
✅ Totally get it. If this were 100% up to you, what would you do?
This question does two things:
It reveals where they stand emotionally (excited? hesitant? checked out?)
It tells you who or what is blocking the deal, and what to do next.
Red tape is real… But so is influence.
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How Bill Gates Sold IBM a Product He Didn’t Have Yet
In 1980, a 24-year-old Bill Gates sat across from IBM executives who were building their first personal computer.
When they asked if Microsoft could provide an operating system, Gates didn't hesitate: "We can deliver it in just a few days."
There was just one tiny problem… Microsoft didn't have an operating system.
But that didn’t matter.
Not only did Gates sell IBM a product he didn't have yet, but he negotiated one of the most lucrative deals in tech history. That agreement went on to make Microsoft 100’s of millions of dollars, and turn them into the tech giant we know today.
Today, we’re walking through how he pulled it off and the sales lessons we can apply to our own deals. 👇️
The Sell It, Then Build It Deal
When IBM came knocking on Microsoft’s door, Bill Gates was running a small software company focused on programming languages, not operating systems.
A note for our fellow non-techie’s: A programming language is a tool developers use to write instructions for a computer to follow, like Python or Java. An operating system, like Windows or macOS, is the software that manages a computer’s hardware and runs those instructions.
The IBM reps initially thought Bill was the office assistant, and told him "Don't get too excited… don't think anything big is about to happen."
But Gates saw an opportunity too big to pass up. Instead of admitting Microsoft didn't have what IBM needed, he confidently assured them they could deliver.
After getting IBM's interest, Gates and the Microsoft team scrambled to find a solution.
They discovered a small Seattle company with an operating system called QDOS (Quick and Dirty Operating System), purchased it for about $75,000, refined it, and delivered it to IBM.
Lesson 1: Sell the Vision, Not The Current Reality
Since Microsoft didn’t have what IBM wanted, Gates had to sell them on what Microsoft could deliver.
When a prospect asks, "Can you do X?" the question isn't "Do we have this feature today?" but instead, "Can we deliver an outcome?"
This doesn't mean lying or overpromising.
It means having the confidence to commit to solving problems and delivering outcomes.
Gates knew Microsoft could acquire an operating system, even though they didn't have one when IBM called.
Some of the best deals often start with "We don't have that yet, but we will."
Lesson 2: Understand What the Customer Really Needs
IBM didn't need Microsoft's existing products. They needed an operating system for their new PC.
Gates could have simply said, "Sorry, we don't do that," and Microsoft might be a footnote in computing history today.
Instead, he listened to IBM's needs and positioned Microsoft as the solution.
In your sales calls, you can dig beyond surface answers to understand the underlying business problem. What prospects ask for is rarely what they actually need.
Lesson 3: Deal Structures for the Long Game
The most brilliant aspect of Gates' deal wasn't just the sale, it was how he structured the deal.
IBM paid just $50K for the operating system, but Microsoft retained non-exclusive licensing rights. Which meant Microsoft could sell it to other companies as well.
When IBM's PC exploded and competitors rushed to create clones, they needed Microsoft's operating system. This single decision made 100s of millions for Microsoft.
In your deals, think beyond the immediate commission:
Is there a creative structure to make this a win-win?
How could this deal create future opportunities?
Is a smaller deal with strategic terms better than a larger one with limitations?
Lesson 4: How to deliver on promises you can't keep (yet)
After promising IBM an operating system, Gates had to deliver. Fast.
So he got resourceful. Microsoft found QDOS (Quick and Dirty Operating System), bought it for $75K, improved it, and delivered it as promised.
When you commit to solving a customer's problem, you might need to:
Partner with another vendor
Bring in specialized experts
Build custom solutions
The best sales reps have the figure-it-out (FIO) trait.
They make things happen when it feels like there’s no solution.
And that’s the difference between order-takers who live paycheck to paycheck and the deal-makers who make the big bucks.
Have you ever sold a product you didn't have yet? |
