How to Become As Rich As Bill Gates

Lesson 3: Acquire Research Results by Hiring and Buying

Conventional (loser) economic wisdom holds that monopolies should spend heavily on research because they are in a position to capture the fruits of the research. But if you want to become as rich as Bill Gates, you have to remember that it is cheaper to wait for a small company to come up with something good and then buy them. In the old days, antitrust laws kept monopolies from buying potential competitors. But not anymore. When Microsoft products were threatened by network computers and Web-based applications, they simply bought WebTV and Hotmail.

Another good strategy is to hire the right people. Some of the guys who wrote Microsoft Windows had previous worked on window systems at Xerox PARC. So Xerox paid for the research; Microsoft paid only for development.

In the long run a tech company without research probably can't sustain its market leadership. So you'll eventually need to build something like research.microsoft.com (check out netscan.research.microsoft.com to see some interesting online community research).