The Valentine’s Day Massacre
Nine senior employees gathered in the executive boardroom at 4 p.m. on Feb. 14. Most had dinner plans with their partners that evening. They expected a routine meeting, but it quickly became evident their bosses were not convinced of the plan to invest large sums of money in a console without Windows software. Making matters worse, the team had forgotten to carry out one crucial pre-meeting ritual.
FRIES Robbie would play basketball with Steve. Basically, what Robbie would do is something that we ended up calling “pre-disastering.” That’s where Robbie would let slip on the court that there’s some kind of bad news coming up, and then he’d work it all out ahead of time. For whatever reason, the pre-disastering didn’t happen.
BACH Bill is about 15 or 20 minutes late, and he’s pissed. And he comes in shouting and slams his first on the table and says a bunch of things I won’t repeat. The gist of it was: You’re screwing Windows.
FRIES Bill throws the PowerPoint deck down on the table and says, “This is a fucking insult to everything I’ve accomplished at this company.”
BACH I’d been there, at that point, 12 or 13 years and been told I was a knucklehead at least five or six times. It was just kind of the way the company communicated.
FRIES We all turned to J, because J was in charge of the system’s software, and J was normally great with Bill and also was never afraid to stand up for himself.
ALLARD I was only 30 and had a lot to learn (and still do), but I had 10 years in the company, shipped dozens of products.
FRIES When we turned to look at J, he just kind of had that deer-in-the-headlights look, and nothing was coming out of his mouth. I stepped in and tried to explain, and Bill yelled at me and shut me down. And then Robbie started to talk, and Bill yelled at him. By then, J had snapped out of it and started to defend the decision. Ballmer, meanwhile, had been flipping through the slides and started to see the big red numbers on the business side, so he gave Bill a break in yelling and started taking over yelling about how much money it was going to lose.
BALLMER I’ve been CEO for a month. So I’m in a new mode. It’s like, OK, this is my decision to make, not Bill’s.
ALLARD Internally, this was, and is, the most ambitious “from zero” effort ever.
FRIES Around 7 or so, we’re all thinking, Not only are we being yelled at for hours, but we’re missing our dinner reservations with our significant others. So we’re now in trouble at home
and at work.
BALLMER I came into that meeting sort of as my first big CEO decision. It also was an emotional time. My dad was sick with cancer. He died a week after that meeting. It was a stressful time. I’m in this new job. I want to do it well, and this is my first big call.
BACH We’re not getting anywhere. So at some point during the meeting, I said to Steve Ballmer, “We’re not going to convince each other. So let’s just decide not to do this. If you guys are that concerned about it, let’s just stop.” And of course, that led to like another hour of angst about, “Well, Sony has got PlayStation 2 in the living room. They’re calling it a computer. What are we going to do about that?”
FRIES One of the vice presidents who had been quiet the whole time asks this question, “What about Sony?” So that basically stopped the room, and the way I remember it is, it got quiet for a second, and then Bill got that kind of funny look he gets when he’s thinking and said, “What about Sony?” And he turns to Ballmer, and Ballmer said, “What about Sony?”
BALLMER I think I knew at the beginning of the meeting that I wanted to say yes. I also knew that, man, this thing was going to get the Roto-Rooter of all Roto-Rooters before I would say yes.
FRIES Bill turns and says, “I think we should do it.” And then Ballmer says, “I think we should do this.” And then they said, “We’re going to approve this plan just like you guys asked for. We’re going to give you guys everything you want. You wanted $500 million in marketing money. You want to go off into a different set of buildings so people will leave you alone.” That part went super quickly, like five minutes quickly.
BACH So Steve looks up, and he says, “OK, we’re done. Bill and I will support this to the end.”
FRIES I walked out of there with Robbie, and I said, in what at that point was 15 years at the company, “That is the weirdest meeting I’ve ever been in.” And then a month later, Bill was onstage at the Game Developers Conference announcing the
Xbox.