Andy Grove, Who Taught Silicon Valley How to Do Business, Diesby
When Steve Jobs and Larry Ellison told Andy Grove he was the only person in Silicon Valley who they would willingly work for, he told them he wouldn’t have hired either because they were “a couple of flakes.”
He was at least half serious and didn’t crack a smile.
“It didn’t matter,” said Ellison, the founder of Oracle Corp. “Both Steve and I admired and respected Andy. We enjoyed all of our precious time with him, including the memorable and characteristic abuse.”
The dinner conversation between three of the most famous men in the history of the technology industry illustrates the impact that Grove had on the rise of Silicon Valley. Grove died Monday at the age of 79.
The Hungarian-born refugee was one of the founders of Intel Corp., the semiconductor company. He helped build it up it from a 1960s startup to the world’s largest chipmaker, a title it still holds. Grove, who literally wrote the book on how to handle corporate crises with “Only the Paranoid Survive,” also broke new ground by making Intel a household name. And he had as much impact on his industry as a mentor to many of Silicon Valley’s elite -- from Ellison and Jobs to Facebook’s Mark Zuckerberg.
“Andy and I got to collaborate on several projects, and I never stopped learning from him,” said Microsoft co-founder Bill Gates. “He was at the forefront of creating the personal computer industry, and whenever we spent time together, I always came away impressed by his brilliance and vision.”
Before he achieved success and fame in his adopted country, the man born Andras Grof in Budapest on Sept. 2, 1936 had to endure some of the worst of Europe in the middle of the last century. He grew up in a middle-class Jewish family in Budapest. In his autobiography “Swimming Across,” he described a fairly idyllic early life that was soon thrown into turmoil. During World War II, his father was conscripted into a Hungarian army labor battalion and taken off to the Russian front, where he was reported lost. After the Nazis invaded in 1944, he hid with Christian families under a false name and narrowly escaped a sweep of the countryside that eradicated Hungary’s Jewish population outside of its capital -- about half a million people.
He survived the fight for Budapest between the invading Russians and Germans by hiding in cellars. The torment did not end with the defeat of Germany; his family had to endure more brutality at the hands of the occupying Russians. The rest of Grove’s childhood was spent amid the tightening grip of the single-party communist government of Hungary, which took its orders from Moscow. His father, who had returned skeletal from a labor camp, was forced into menial work after being publicly accused of bourgeois tendencies. Grove was only able to get into university, despite his strong grades, by begging favors to get around his family’s “class enemy” status.
By 1956, Hungary was caught up in a wave of anti-Soviet protests that swept across Eastern Europe following the death of Stalin and early freedoms of the Khrushchev period. In the ensuing crackdown, Grove and his family again found themselves sheltering in the coal cellar as artillery shells hit their neighborhood. Heeding the word of an aunt who had survived Auschwitz, Grove joined the flood of people taking advantage of the chaos and walked across the border into Austria and a life in the West.
He never went back to his homeland.
‘Scared to Death’
Arriving in the U.S. with less than $20 in his pocket, he was taken in by relatives in New York, where he studied chemical engineering at City College and graduated at the top of his class, teaching himself English along the way. But he hated the weather in New York and moved to the West Coast to attend the University of California at Berkeley, where he earned a Ph.D. in chemical engineering.
He joined Fairchild Semiconductor in 1963, the seminal chip company and home to a group of men who would give Silicon Valley its name, many of them the founders and leaders of the U.S.’s biggest semiconductor companies. Five years later, he followed Gordon Moore and Robert Noyce out the door to help found Intel.
“When I came to Intel, I was scared to death,” Grove said on the company’s 25th anniversary. “I left a very secure job where I knew what I was doing and started running R&D for a brand new venture in untried territory. It was terrifying. I literally had nightmares.”
But Grove was a perfect fit. Moore and Noyce, both brilliant inventors, were opposite personalities -- one studious and low key, the other exuberant, and a born motivator and salesman. In the middle was Grove, who brought a salutary passion for organization to the laid-back California attitudes of the 1970s. Carl Everett Jr., who ran the microprocessor division during his 18 years at Intel before leaving to head Dell Inc.’s personal computer division, recalled the early efforts to develop PC chips.
“It was like a construction project that was managed by a group of engineers that were being trained on tools and equipment that were just invented,” he said in a March 2005 interview. “Then Andy came along.”
His exactitude was unrelenting. Grove forced Intel workers, including Moore, to sign in if they arrived at work after 8 a.m. He personally approved any expense over $2,000 at a company that employed more than 80,000 people.
“I heard that Andy said once that the only boss he ever had was me,” Moore said in September 2005. “If that’s true, he never had a boss.”
If Grove experienced fear when he came to Intel, that didn’t stop him from using it as a management technique. He influenced a generation of Intel executives who referred to planning meetings with him as a “Hungarian inquisition.”
“Mentoring with Andy Grove was like going to the dentist and not getting Novocain,” said Pat Gelsinger, a former Intel executive who went on to become CEO of VMWare Inc. “If you went into a meeting, you’d better have your data; you’d better have your opinion; and if you can’t defend your opinion, you have no right to be there.”
It wasn’t unusual for presenters to fail to make it beyond the first slide in a carefully prepared presentation before having their idea ripped to shreds by Grove. But those who survived his oversight point out that there was much more to it that bullying.
“He had this reputation of being pretty brutal and direct, but he was in such aggressive pursuit of the right answer and using whatever tool was necessary to get to the right answer,” said Gelsinger.
Arguments at Intel were far from corporate dysfunction. Grove instituted “constructive confrontation” and “free and open debate” at meetings where participants would argue aggressively, regardless of rank.
“Grove loved to fight,” Andy Bryant, Intel’s former chief financial officer, said in a February 2005 interview.
When fights were over, participants had to follow another of his maxims -- “disagree and commit” -- whatever their opinion. When he retired as Intel chairman in May 2005, Grove joked about his reputation for demanding evidence to back any proposal.
“I didn’t enjoy myself 100 percent of the time,” he said at his last shareholder meeting. “According to my statistical analysis, it was about 80 percent.”
Grove’s ability to make tough decisions, mapped out in his 1996 book, “Only the Paranoid Survive,” helped Intel overcome a crisis in the 1980s, when it lost ground to Japanese chipmakers whose costs and prices were lower. His response was to get out of the market for computer-memory chips, a product Intel invented and built its fortune on. Instead, Grove poured the company’s resources into microprocessors, betting on the market for PCs. It was a huge gamble. At the time, Intel processors were far from the industry standard.
Under Grove’s leadership, the company launched Operation CRUSH to sell what was thought by many to be an inferior chip. But it did something companies didn’t do back then: It touted the chip’s end-user benefits, rather than its technical specifications. In the short term, it exceeded its goal of 2,000 customers for the 8086 processor and, more importantly, won a spot in the new PC that IBM was dabbling with.
One of Grove’s technical assistants, Dennis Carter, noticed Intel’s newer processors weren’t initially outselling older ones and proposed a marketing campaign directed at consumers. By 1991, the company was pouring cash into its ‘Intel Inside’ campaign, making its chips as well known as the computer brands they powered. Grove, the scientist and management disciplinarian, embraced the marketing, even donning a colored factory clean-room bunny suit and dancing on stage. The showmanship paid off: Intel became one of the world’s most recognizable brands. Consumers no longer bought computers based on the brand of box -- Hewlett-Packard or Dell -- but rather which version of the Pentium to buy.
During his 11 years as Intel’s CEO beginning in 1986, Intel pushed aside competitors and grabbed the more than 80 percent market share in PC processors it still has. In that period, Intel’s sales surged 20-fold to $26.3 billion from $1.27 billion in 1986.
“If you were to pick one person who built Silicon Valley, it was Andy,” Marc Andreessen, the entrepreneur and venture capitalist, said in a 2015 Churchill Club award presentation. “Andy kind of set the model for what a high quality Silicon Valley company could be.”
It’s difficult to overstate the respect Grove commanded among Silicon Valley’s elite. He was a huge influence on the famously headstrong Jobs. When Jobs failed to impress Intel executives with his funding pitch in the earliest days of Apple, Grove chose to personally invest in the company. When he was deciding whether to return to Apple after he was ousted, Jobs sought out Grove’s advice.
Throughout his life, Grove kept making time for new generations of Silicon Valley’s executives on their way up, acting as a mentor and challenger of assumptions for people like Zuckerberg and Dropbox’s Drew Houston.
“I first met Andy after a series of pretty hard times at Facebook when a lot of people in his position wouldn’t take the time to see me,” Zuckerberg recounted as part of the Churchill Club’s award presentation. “He was always so generous.”
Even his failing health was turned into a learning tool for others. When Grove was treated for prostate cancer in the mid 1990s, he wrote about the experience in a 1996 Fortune magazine cover article. He went on to lobby for changes in medical research and the use of information technology in the health-care industry, turning his personal frustration into a call to action. In January 2008, he promised to bequeath as much as $40 million to the Michael J. Fox Foundation, a group created by the actor to seek a cure for Parkinson’s disease. Grove was diagnosed with it in 2000.
Even in retirement, he wasn’t content to make the rounds receiving awards and living on past achievements. His public appearances always had a point. When he received his Churchill Club Legendary Leader Award in 2015, he struggled onto stage, took the microphone and urged the audience to help out refugees.
“I made it, let’s help in a little way to help them make it.”
Grove is survived by his wife Eva Kaston, who he married in 1958, and his two daughters.