Jensen Huang on Nvidia's first 6 months: Sometimes you have to ignore your customers.

Summary

The script narrates the intense competition in the 3D graphics industry, highlighting the journey of a company that thrived amidst numerous competitors. It emphasizes the importance of understanding the core of one's business, in this case, semiconductor technology, and the relentless pursuit of improvement, as dictated by Moore's Law. The speaker recounts the strategy of ignoring customer feedback that deemed their products too expensive or advanced, trusting in the insatiable demand for better graphics and the transformative power of technological progress.

Takeaways

• 🚀 The 3D graphics industry in the early 1990s was booming, leading to a surge in startups in Silicon Valley.
• 🌟 In 1993, the speaker's company was the only consumer 3D graphics company globally, with Silicon Graphics being the professional counterpart.
• 📈 By 1995, the industry saw an influx of competition, with 50-70 startups entering the same market space.
• 🏆 Nvidia stands as the sole surviving computer graphics company today, outlasting approximately 200 competitors.
• 🤔 The speaker poses a critical question about what factors led to their company's survival amidst intense competition.
• 💡 The importance of perspective in business is emphasized, suggesting that understanding the core of one's business is essential for success.
• 📚 The foundation of the speaker's business was semiconductor technology, governed by Moore's Law, which doubles performance and halves cost every year or two.
• 🛑 The company chose to ignore customer feedback for a time, believing in the insatiable demand for better 3D graphics, despite initial resistance.
• 🔮 The speaker believed in pushing the boundaries of technology, even when it meant creating products that customers initially deemed too expensive or unnecessary.
• 🛍️ Customers' understanding of the business's nature was limited, especially during the industry's formative years, justifying the company's decision to push forward with innovation.
• 💰 The speaker recounts taking a risk with the company's last few million dollars to build a chip that was considered too advanced for the market at the time.

Q & A

What was the state of the 3D graphics industry in 1993 according to the script?

In 1993, there was only one consumer 3D graphics company in the world, with Silicon Graphics being the professional 3D graphics company located up the street.

How did the 3D graphics industry evolve from 1993 to 1995?

Between 1993 and 1995, the industry saw a rapid increase in the number of startups, with around 50-70 companies entering the market to do the same thing as the original consumer 3D graphics company.

What is the significance of 'Mo's law' in the context of the 3D graphics industry?

Mo's law, not a physical law but a law of competition, challenges engineers to improve semiconductor technology, doubling performance approximately every year or two while also reducing costs by a factor of two.

Why did the company decide to ignore customer feedback about their product specifications?

The company believed that 3D graphics was insatiable and that following Mo's law to make their graphics processors twice as good every year was more important, even if customers initially said it was too expensive or not needed.

What was the company's strategy in the face of intense competition from about 200 companies?

The company focused on the insatiable demand for better 3D graphics, doubling the performance of their products annually, and relying on Mo's law as their guiding principle, despite initial customer resistance.

How did the company differentiate itself from competitors during the intense competition period?

The company differentiated itself by adhering to a unique perspective on the insatiable nature of 3D graphics and the continuous improvement promised by Mo's law, even when it meant going against immediate customer feedback.

What does the speaker suggest is the key to surviving in a competitive industry?

The speaker suggests that having perspective on the nature of the business and understanding the underlying technology, such as semiconductor technology and Mo's law, is key to survival in a competitive industry.

Why did the speaker believe that sometimes it is necessary to ignore customers?

The speaker believed that ignoring customers is sometimes necessary because they may not fully understand the nature of the business or the potential of the technology, especially during the creation of a new industry.

What was the outcome for the majority of the 3D graphics companies that started during the boom period?

The majority of the 3D graphics companies that started during the boom period did not survive, with Nvidia being the only surviving computer graphics company in the world today.

What was the company's approach to product development based on the script?

The company's approach to product development was to focus on making their graphics processors significantly better each year, regardless of immediate customer demand or feedback.

How did the company's perspective on the 3D graphics market influence their business decisions?

The company's perspective that the 3D graphics market was insatiable influenced their business decisions to continually improve their products based on Mo's law, even in the face of customer objections or lack of interest.