Early in 1997, a 31-year-old Microsoft executive named David Risher told his boss that he was quitting to join an intriguing Seattle startup called Amazon.com. Risher, who had come to Microsoft from Harvard Business School six years earlier, was hardly disgruntled. He loved Microsoft, where he was surrounded by smart, interesting people and had an amazing amount of responsibility. And, of course, he was richer than he'd ever imagined; a rising young executive with his tenure at Microsoft is likely to have at least $2 million in vested stock options.
When he told his superior, Pete Higgins, of his plans, the response was immediate: "You're going to leave Microsoft for a retailer?" Back then, Microsoft employees had a powerful sense of themselves as being at the center of the computing universe, with opportunities they could find at no other company. The notion that Risher would view this little local startup as offering greater challenges and bigger opportunities—well, to Higgins, that was just unfathomable.
After Higgins failed to talk Risher out of quitting, the young executive was summoned to Bill Gates' office, where the Microsoft founder—whom Risher had met maybe a half-dozen times—tried to convince him that leaving the company would be "the stupidest decision you'll ever make." Not long after that meeting, Risher spent an hour with Steve Ballmer, who also tried to persuade him to stay. Both men seemed agitated that Risher would view the prospect of leaving Microsoft as...