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The paranoid survivor

How Andy Grove built the ethos that drives Silicon Valley

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Business Standard Editorial Comment New Delhi
Last Updated : Mar 23 2016 | 9:48 PM IST
The ethos of Silicon Valley's high-tech industries favours intelligence over manners and background. Abrasive criticism of ideas is the norm rather than the exception. This take-no-prisoners management paradigm was established by Andy Grove, who died on Monday at 79. Grove, along with Gordon Moore and Robert Noyce, was part of the troika that made Intel the world's premier chip maker. He had worked with both of them in Fairchild Semiconductor and he was their first hire, as director of engineering, when they founded Intel in 1968. The management practices he evolved became enormously influential. Intel became a byword both in terms of cutting-edge research and efficient manufacturing, as well as for its redoubtable ability to transform itself when the end-users' zeitgeist changed. Grove also mentored several of the Valley's leading lights, including Steve Jobs and Mark Zuckerberg.

Read more from our special coverage on "INTEL FOUNDER, ANDY GROVE"


Born as András István Gróf in Budapest in 1936, he once described himself as a "young hothead, running around like a drunken rat". That was circa 1963, when he was a graduate student in chemical engineering at the University of California, Berkeley. By then, the immigrant had Americanised his name to Andy Grove, but he had not till then lost his thick accent. He was also hard of hearing, due to a childhood illness. Grove survived being Jewish under the Nazi occupation of Hungary during World War II and then the brutal suppression of a popular rebellion by Soviet forces in 1956. That was when he fled to Austria. As a penniless student in America, he did menial jobs to support himself while graduating at the top of his class from the City College of New York. Although he wrote a standard textbook on the physics of semiconductors, Grove is recalled more often for his ability to build institutions. He described his management style as "constructively confrontational". Nothing was taken on trust, every idea was questioned; every engineer had to back up theories with data.

Intel co-founder Gordon Moore famously quantified the rapid pace of change in the semiconductor industry when he pointed out that the number of transistors inscribed on every square inch of an integrated circuit doubled every year. That law held true for decades. Chip-making was also fiercely competitive. Grove's early life and temperament, not to mention his uncompromising intelligence, made him ideally suited to cope with such a dizzying pace of change. The ferocity of the competition may perhaps have accentuated a tendency to paranoia caused by early life experiences. He made a virtue out of necessity when he claimed "only the paranoid survive".

Several of his business decisions have become Silicon Valley folklore. In the 1980s, when competition from cheap Japanese memory-makers was killing Intel, he took the decision of shutting down that entire line and shifting entirely to making microprocessors. He convinced IBM (and its clones) to put "Intel Inside" on their personal computers. The "X86" series dominated that industry for more than a decade, and the successor i-series still dominates. The first Pentium chip had a floating point bug which caused errors with some very specific calculations. Grove instituted a "no-questions-asked" return policy (with some reluctance). That cost Intel $500 million but it maintained market share. Grove tackled his medical problems with the same courage. He endured multiple ear operations until his hearing finally became normal. When he was diagnosed with prostate cancer in 1994, he researched "the hell out of it" until he figured out the optimal treatment and won remission. He faced up to Parkinson's Disease by learning taekwondo in his 60s. He did not go gentle into that good night.

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First Published: Mar 23 2016 | 9:41 PM IST

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