Today in 1993, Intel released the first Pentium, a series of x86 architecture-compatible microprocessors. With the Pentium, Intel charged into the consumer market.
Fortune magazine, May 16, 1994: “Pentium PCs, which cost at least $3,500 last fall, could drop to $2,000, the typical price paid by a home buyer, by the end of this year. [Intel’s CEO Andy] Grove… is betting the ranch that Intel can take over your home even more completely than it has already conquered your office. He aims to transform the PC powered by Intel chips into an all-purpose consumer device that will ultimately subsume your TV, telephone, VCR, answering machine, videogame console, and set-top cable TV box -- and serve as your family vehicle for tooling down the info highway.”
In 2019, I interviewed Avram Miller, who together with Les Vadász, established in 1991 what became Intel’s venture capital arm, Intel Capital:
Miller focused his investment activities on the consumer market for computers—because that was what interested him… Grove told Miller he was wasting his time, but “the good thing about Andy was he wouldn't stop me.” … And he did it at the right moment, “because we started having the Internet and there was all this convergence of things,” says Miller.
“Convergence” was THE buzzword of the early 1990s, heralding the coming fusion of computers, communications and content (media). Miller was at the center of all things converging, both offline and, increasingly, with the emergence of the Web, online. At first, “convergence” was equated with “interactive TV,” beefing up television sets and channels to provide a wide range of content and data services to the home. Intel was less interested than other players in TVs and more interested in PCs as the target for all this new consumer interactivity.
Grasping the large opportunity for selling more “Intel Inside” PCs, Miller was instrumental in the development of residential broadband, pushing Intel and others into the development of cable modems as facilitators of new media streams into the home (removing “the bottleneck over the ‘last mile’ connection to the end-user” as Hybrid Networks, one of Miller’s venture investments, described itself in its 1997 IPO).
“I couldn’t believe the amount of money that was being spent to do interactive television,” says Miller. “It never happened. It still hasn’t happened. People don't want to interact with their TV. Unless you are a gamer.” But the interactive home PC did happen. Instead of making the existing TV distribution network work like the Internet, the winning solution—and the triumph of the PC over the TV—was the adding to the Internet of a truly interactive, linking-everything piece of software, the World Wide Web…
Considering the desire for change expressed to Miller when he was hired and what became to be known inside Intel as Grove’s Law—"only the paranoid survives”—why didn’t Intel capitalize on its successful investments in Internet-related and other startups to transform itself again (as it did when it moved in the 1980s from memory chips to PC microprocessors)?
The microprocessor was like a vein of gold. And when you dig up all the gold, Miller used to tell Andy Grove, all you are left with is a big hole. Intel needed to get out of there but “it was just impossible. Andy got stuck, he couldn’t move.”
Why couldn’t Andy Grove move—a very successful business leader who has already managed before a courageous and difficult move and has spent the 1990s being paranoid, promoting the theory of “disruption”? One answer was given years earlier by another very successful business leader which Miller had the privilege of working with—Ken Olsen, founder and CEO of Digital Equipment Corporation (DEC).
“Probably the biggest danger, the biggest human weakness, comes from a few years of success. It blinds us. It blinds anyone. Pride—probably the biggest human weakness,” says Olsen in a film intended to celebrate DEC’s 25th anniversary which ended up focusing entirely on Miller and his team developing Digital’s first PC in 1981-1982. The film, never shown internally or publicly as originally planned, “exemplified the confusion that rocked Digital in the early 1980s,” say Glenn Rifkin and George Harar in The Ultimate Entrepreneur, published in 1988, at the peak of DEC’s success and just before its quick descent into tech oblivion.
Olsen got it right about pride. In 1983, Wall Street demanded his ouster from the company he founded. And he proved them wrong, leading Digital through its best years. When Fortune calls you (in 1986) “arguably the most successful entrepreneur in the history of American business,” it does something to your pride, to how much you tolerate arguments, to your willingness to get unstuck.
Great business leaders get stuck even when they are very aware of the dangers of success and of human weaknesses. Jeff Bezos’ insistence that it is always “day 1” at Amazon, that it will always act as a startup, does not guarantee that Bezos and his successful creation will not get stuck in the future. The same goes for today’s “king of Wall Street,” Jensen Huang and his company, Nvidia, where the mantra is “our company is thirty days from going out of business.”
No matter what they tell you in business schools, I don’t believe there are any rules or prescriptions or 12-steps or whatever else that could turn this awareness, this healthy paranoia, into guaranteed longevity, agility, and triumph over all competition. Just like any other human activity, business and succeeding in business is a multi-faceted endeavor subject to too many variables for us to predict what will or will not work in a given situation. The same actions that work for one company may not work for another.