Born András István Gróf on (1936-09-02) September 2, 1936, in Budapest Hungary, Andy Grove was an enigma. He died on 21st March 2016. For records purpose, Andy retired as Chairman of Intel in 2002 and wrote a book “Only Paranoids Survive” a landmark book. I have read the book sometime back, and I am sure going to reread it.
I have always thought that when He creates people, you and I are created in an assembly line process but Groves of this world are created in a designer studio meant for special people. I am writing this piece to understand Grove’s thinking and how it can be applied to life in general.
Robert Noyce and Gordon Moore founded Intel in 1968 and Grove was the first employee to join though he was not a founder. Till 1985 Intel was a DRAM (Dynamic Memory Chips) manufacturer. But since late ’70s Japanese started winning the business from all and dumping their products at a very low price in the US market. This was a big problem for Intel.
There are many quotes attributed to Grove and some are real Gems; quotes tell us the thought process in creating Silicon Valley and its unique culture. It is said that “Probably no person has had greater influence in shaping Intel, Silicon Valley and all we think about today in technology world than Andy Grove.” Some of Andy’s quotes can also be applied to our personal lives.
He first used the term Point of Inflection to describe how industries change. Inflexion Point is defined mathematically as “a point of a curve at which a change in the direction of curvature occurs.” In business “it is a time of significant change in situation or turning point”. The smooth bend in curve is the inflexion point.
Intel, the DRAM manufacturer, was ahead of the pack in technology terms in the ’70 s .But Japanese competitors were good at manufacturing processes and efficiencies, and this is where Intel was lacking. Advantages of new technology are available for a small period but what sustains business is manufacturing. In this race, Japanese started catching up with Intel, and a stage reached where Intel was pushed to the corner. Intel market share had gone down from 80% to 10 % in a few years. This was the point of inflexion. At this stage, Andy Grove guided Intel to shift from DRAMS to Microprocessors. They not only shifted but just stopped making DRAMs. Rest as they say is history!
This was the point of inflexion which Andy caught perfectly; he visualised the change in direction where business was moving. He managed to minimise all the errors that Intel had made in DRAM business. From open technology, he moved towards patented technology. He made sure that Intel had top class manufacturing facilities and efficiencies. This helped Intel in keeping competitors at bay! He also made sure that Intel had long term contracts with first IBM and then Compaq for supplying Intel Microprocessors to manufacture PCs. There was a so-called error in Pentium chip. This was deftly handled by Intel, and they replaced all the chips whoever wanted them to be replaced, no questions asked! This so-called error would not have affected regular users of PC. This business savviness helped Intel. Then the great partnership of Windows and Intel called Wintel happened in the market. But Intel was open to Linux when it was required later.
Many of us have this inflexion point in our lives. Sometimes it is an opportunity to go into business, moving to a different country, changing your line altogether. On the personal front, it can be meeting the right spouse, making new friends, the opportunity to go for a great education, and meeting a great mentor! How many of really know that an inflexion point is looming around? I think not many of us have the vision to know what is happening around us. If we knew there would be a large number of success stories. Inflexion Points can make you or break you!
In the Indian context, a commercial vehicle manufacturer took a decision to get into the car business. Was it the inflexion point for this company? This decision is dragging the company over a period, and now with all international players around, the drag is going to be heavier and heavier! Almost at the same time, another Indian company manufacturing two-wheelers took a decision to stay out of the car market! (Though they were attempting to enter) Other company probably understood the inflexion point better and stayed its course. But this company also missed the inflexion point! They thought that the scooter market in India is declining fast. Hence they withdrew from the scooter market. But there was big market demand for fancy scooters with no gears. Currently, half a million scooters are made every month!
Then there is Nokia. They missed the inflexion point indicated by Smart Phones! From number one to number no one was a swift downward journey for them.
Paranoia is a thought process believed to be heavily influenced by fear and anxiety. Andy’s book Only Paranoids Survive is a thought process created due to his experience during Intel’s DRAM manufacturing phase. It is possible, that the anxiety and fear of getting wiped out of business by the competition created Paranoia in Andy. He was probably always thinking about what he should do next so that he could remain ahead of others. This thought and correct application of technology took Intel, to today’s pinnacle position.
But we must understand that we cannot apply the same thought process of paranoia in our personal lives. Personal life is not about profits, competition and money. It is much more. I am sure Andy was not paranoid in his personal life. His simple and frugal life style indicated that he was a normal human. He had no fascination for big houses, big cars and all such so-called success indicators. How many real successful persons can stay away from this the glamour of success?
“In technology whatever can be done will be done” is another of his famous quotes. Many things which we probably imagined in childhood are actually available today. 50 years back the world as we know was “biiiiiiig”, with technology it has become a village. Support services and functions are handled by persons sitting in any part of the world, thanks to technology. As late as the early 80’s getting telephone line in India was a big deal. Now there are 800 million subscribers of phone companies in India, again thanks to technology. To purchase things one had to go to shops or supermarkets, now we can do these things sitting at home.
I am sure till his death Andy had “Intel Inside” him. But I am sure that “Person Inside” was far different than the thought process of “Intel Inside”! There is an incident that shows the real Andy. During 1995 launch of an Intel product, the launch opened with Intel bunny people; at the end of the dance, people expected Andy to come on stage and start the proceedings. To every body’s surprise, one of the bunnies removed the face mask and behind the mask was Andy! Who would have thought that the CEO of the largest company in the world would swing hips with Broadway dancers? That probably was real Andy!
Andy, this is my salute to you! I am sure you are planning the next tech revolution, along with Steve Jobs over there!