Money and Finance

Paranoid survivor

Andrew Grove, the former boss of Intel, believes other fields can learn from the chipmaking industry that he helped bring into being

EARLIER this year Andrew Grove taught a class at Stanford Business School. As a living legend in Silicon Valley and a former boss of Intel, the world’s leading chipmaker, Dr Grove could have simply used the opportunity to blow his own trumpet. Instead he started by displaying a headline from the Wall Street Journal heralding the recent takeover of General Motors by the American government as the start of “a new era”. He gave a potted history of his own industry’s spectacular rise, pointing out that plenty of venerable firms—with names like Digital, Wang and IBM—were nearly or completely wiped out along the way.

Then, to put a sting in his Schumpeterian tale, he displayed a fabricated headline from that same newspaper, this one supposedly drawn from a couple of decades ago: “Presidential Action Saves Computer Industry”. A fake article beneath it describes government intervention to prop up the ailing mainframe industry. It sounds ridiculous, of course. Computer firms come and go all the time, such is the pace of innovation in the industry. Yet for some reason this healthy attitude towards creative destruction is not shared by other industries. This is just one of the ways in which Dr Grove believes that his business can teach other industries a thing or two. He thinks fields such as energy and health care could be transformed if they were run more like the computer industry—and made greater use of its products.

………………..

Related book: Only the Paranoid Survive

- Links
For those curious to see the legend we named Boyles Asset Management after, see THIS video (it starts at the 6:05 mark). Latticework of Mental Models: Framing Effect (LINK) Henry David Thoreau on Success (LINK) Buffett's Unconventional Investments...

- Improving Returns With Industry Consolidation...
From the book Capital Account: One of the primary cures for poor returns is consolidation, which is either driven by mergers and acquisition activity or by firms leaving the industry. By increasing the average size of firms within an industry, consolidation...

- If You Want The Real Silicon Valley, Skip Bravo And Tune In To Pbs
It’s fair to say that without Intel founders Robert Noyce and Gordon Moore today’s Silicon Valley startups wouldn’t exist. The prosaic reason is because Intel churned out the first microprocessors, the building blocks of today’s computing found...

- Be The Disruptor
Found via Farnam Street. There is also an interview with the co-authors HERE. Harvard Business School professor Clayton M. Christensen’s theory of disruptive innovation provides a framework to understand how businesses grow, become successful,...

- When Capitalism And Corporate Self-interest Collide - By John Kay
Adam Smith understood the difference between policies that favoured free trade and policies that favoured established business. “The interest of the dealers in any particular branch of trade or manufacturers,” he wrote, “is always in some respects...

Money and Finance