I always say that two things make for success: being lucky and not mistaking luck for being smart. Luck is the most impactful factor contributing to success. It is generally not sufficient, but it is usually the most important. This is a crucial lesson for all business professionals, as mistaking luck for being smart can lead to disastrous consequences.

So, how does this relate to Intel’s dramatic decline? The IBM personal computer brought the luck that fueled Intel’s remarkable growth. Intel had no influence over IBM’s decision. IBM chose the 8088 microprocessor due to time-to-market considerations. To supply IBM, Microsoft bought an operating system that ran on that microprocessor, which became PC DOS. This stroke of luck became the foundation of the Personal Computer. Once Intel realized the opportunity (several years after the IBM announcement in 1981), Andy Grove got the whole company focused on it. As I am fond of saying, Intel discovered a vein of gold and extracted every ounce, leaving it eventually in a big hole.

The result was a substantial increase in its market cap. However, the company mistakenly believed that the PC phenomenon would continue indefinitely. Andy Grove and I had many arguments about this, and I, for one, made several attempts to expand the company into other areas, particularly networking and communications, but my efforts failed. My suggestion to acquire Qualcomm was dismissed because ‘why would we want to be involved with cell phones?’ Broadcom was the most logical company for us to develop, but we didn’t do that either. Intel just doubled down on the PC.

We should’ve turned our overvalued stock into a currency to acquire many other companies. At the same time, Intel Capital, which Les Vadasz and I founded in 1992, became the most successful corporate venture group of its time. Les and I wanted to have a significant strategic impact on the company through the insight that we gather from working with with early stage companies, but we did not. We did help grow the PC business and made a lot of profit but it had no long-term influence on Intel’s direction.

Just before the so-called dot-com bubble burst, Intel had a market cap close to $500 billion, resulting from Intel’s growth and astounding profits and a stock market that went crazy for the internet. How Intel could think this would continue is beyond me.

After leaving Intel in 1999, I was on the board of several internet companies. One, PCCW, under the leadership of Richard Li, also had a ridiculous market cap. But we knew it and used our stock to buy a real asset, the Hong Kong phone company.

After the PC, Intel never got lucky again. But luck was there. Luck would have been buying Nvidia, which had a market cap of about 6 billion. We considered it many years earlier because we needed to improve in graphics. But our concept was to make the microprocessor do everything to justify our high prices. However, the micro process could not do everything. The luck would have been buying a graphics company focused on gaming that would turn out to be the engine for AI.

Intel managed to miss every significant new opportunity after the PC, 43 years ago.

Now, I am sad to say, its days are numbered. I think it would eventually be broken into pieces and sold off. It reminds me of Digital Equipment Corp which suffered from the same, disease, hubris.

You can read more about this in my book, The Flight of a Wild Duck. https://wildduckflight.com/