When Les Vadasz and I started Intel Capital in 1991 (I had already been doing minority investments since 1988), we had three objectives:

1. Provide strategic insight that would support the long-term plans of the company
2. Grow the current business
3. Realize an adequate financial return

We believed, correctly, that by working with early-stage companies we could gather important insight into future opportunities and challenges. That part was true, but our inability to use this information to inform Intel’s long term plans meant that little strategic value was actually received.

We were definitely able to help grow the current business. The example I like to use (probably because I led this activity) was driving the creation of residential broadband, which played an extremely important role in making the personal computer the interactive device in the home.

We wanted to get a good enough return that we would not be constantly under the eye of the finance people. Instead, we made billions and became one of the most successful venture groups in the world and the leader in corporate venture capital.

Les and I did not think of ourselves as venture capitalists. We originally called the group Corporate Business Development (CBD). Les Vadasz’s title was Senior Vice President and Director of Corporate Development, while my title was Vice President of Business Development.

CBD was rebranded as Intel Capital after I left in 1999. I think the focus of Intel Capital really changed when Arvind Sodhani took the helm in 2005. Prior to that, Arvind was Intel’s Treasurer.  While he had a strong background in finance he had no understanding of technology. 

In the 90s, Les and I  recognized the importance of the Internet, but Intel was stuck in the PC era and would not change. It pretty much missed every major change in the computer industry since.

One of the lessons I learned from both my time at Digital Equipment Corporation and then Intel is that it is more important what you do in the good days than how you react to the bad days that follow. Thinking that today will last forever is the curse of successful companies.  I fear that Apple is now in the mode.  

The latest  major change in the computer industry that Intel missed was AI and its relationship to GPUs (graphics processors). In addition, the company, which had been the leader in semiconductor process technology, lost that leadership position.

I wonder if the old CBD would have seen it coming. I am sure that even if we did, we would have had no impact on the company’s strategy. Andy Grove set into motion a series of increasingly poor choices in CEOs. Not one of them had a strategic bone in their bodies.

Let’s hope the new guy, Lip-Bu Tan, can figure out what to do to save Intel—if it can be saved.

In the meantime, Intel is spinning out Intel Capital as an independent entity. Just what the world needs: another venture capital firm.