Only the Paranoid Survive
How to Exploit the Crisis Points that
Challenge Every Company and
Quotes on Paranoid
Paranoia is the belief in a hidden order behind the visible.
Paranoia is heightened awareness.
The Year “I994”
Intel in 1994:
A $10+ billion company
the largest producer of computer
Pioneers of two important building
blocks of technology– memory chip
Growing at a rate of 30% per
“Something went wrong”
• Floating Point Flaw in Pentium
• Initially Intel became defensive:
Replacement of processors for only
those who do a lot of Math on their
computers ...view middle of the document...
the industry is more like the old.
After it, its more like the new. It is a
point where the curve has subtly but
profoundly changed, never to change
3 Stages of Recognition
• A troubling sense that something is
• A dissonance between what the
company thinks its doing and what is
actually happening in the company.
• A emergence of new understandings,
a new set of rules.
Before and After the SIP
Winners and Losers
• Winners of the old system are
usually losers in the new system
because their success and their tried
and tested success formulae don’t
allow them to ever completely adapt
to the new system.
The New Rules of Horizontal
• Don’t differentiate without a
• The first mover and only the first
mover has the opportunity to gain
time over its competitors- and time
advantage is surest way to market
• Price your product on what the
market the bear.
10X Change: COMPETITION
10X Change = MEGACOMPETITION
When the business landscape
10X Change: TECHNOLOGY
• “10X” = Something can be done
“10X” BETTER, FASTER or CHEAPER
• Usually the change is GRADUAL &
CONTINOUS…. It never ends!!
• FUNDAMENTAL RULE: “What can be
done will be done!”
“I give the
10X Change: CUSTOMERS
Businesses leaving customers (obvious)
Customers leaving business ( subtle)
Henry Ford’s slogan “ It takes you there and brings you back.”
General Motor’s “ A car for every purse and purpose.”
10X CHANGE: SUPPLIERS
10X = Shift of power to suppliers.
10X CHANGE COMPLEMENTORS
10X = Change in technology affecting the business of your
10X CHANGE: REGULATION
10X = Appearance & disappearance of regulations.
• In the face of a strategic inflection
point some will ADAPT & others will
be in DENIAL.
• Those in who will resist facing the
painful new world thus, will be the
LOSERS & those who adapt will come
out as WINNERS!!
• More than one forces can CHANGE!!!
When Intel Encountered
Strategic Inflection Point
• Started off in 1968, with core idea of
“ Putting more transistors on a silicon chip, to increase
computer’s memory and passing the benefit to customer
through LOWER COST & HIGHER PERFORMANCE.”
• First in the industry to come up with 64-bit memory
followed by 256 bit & 1024 bit memory.
• Early 70’s, 100% share in memory chip market segment
• After ten years, Intel stood for MEMORIES and memories for
Start of Inflection Point
• Early 1980’s, Japanese appeared.
• Quality issues.
• First reaction: DENIAL!!
• Second reaction: FIGTHING BACK!!
• Spent heavily on R&D for memory chip,
neglecting microprocessors as slower-growing
• Incurring losses, losing market share.
• But clinging on to...