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Only the Paranoid Survive: Book Review

Only the Paranoid Survive Book Review

Only the Paranoid Survive: How to Exploit the Challenges That Challenge Every Company is a book originally recommended to me by Ben Horowitz. It’s written by Andrew Grove, who led Intel’s astonishing growth and was seen by many as a founding father of Silicon Valley.

Andrew started at Intel at its inception in 1968, going on to carry out a multitude of roles in his rise to both CEO and Chairman. He retired in 1998, and sadly passed away in 2016.

In today’s technological world it’s sometimes easy to forget how incredible Intel’s rise was. Before Intel, and the domination of the microchip, most household goods were essentially dumb. The microchip heralded the age of intelligence for a huge range of products from digital cameras and domestic appliances, through to toys digital cameras, consumer electronic products, household appliances, toys and manufacturing machinery. For this, and his effectiveness as a manager and leader, Andrew was named Time Magazine’s Man of the Year in 1997.

So this month I’ve been reading one of his bestselling books, Only the Paranoid Survive. Here are my top 5 takeaways and quotes from it:

Only the Paranoid Survive: Top 5 Takeaways

  1. Strategic Inflection Points need very different and special treatment: Grove says that a ‘Strategic Inflection Point’ (SIP) comes about when there is an ‘order of magnitude’ change in the business environment your company operates in. When a SIP hits, the ordinary rules of business go out the window. However, if you manage it correctly, a Strategic Inflection Point can be the perfect opportunity to crush it in your marketplace and become even stronger than you were before. SIPs, says Grove, are the absolute times when management must act. These are opportunities to transcend the market — or be trashed by it.
  2. Crises can be overcome by huge amounts of hard work and sheer will power: Grove was known for his hard-working, don’t-wimp-out attitude and this inevitably helped the company flourish whilst others struggled. The New York Times’ obituary of Andrew Grove says that many of Intel’s staff,
    “…acknowledged that Mr. Grove’s overbearing management had pulled Intel through crises that often proved fatal to other Silicon Valley companies.”
  3. Paranoia causes you to make big bets: Craig Barrett, another former Intel CEO quoted Andy Grove in a CNBC interview when Facebook bought WhatsApp, saying it was a classic case of “only the paranoid survive”. He pointed out Facebook was losing out on some of the younger market and bought WhatsApp in a mega-sized deal out of paranoia over that fact.
  4. It is possible to walk the narrow line between disaster and opportunity: But once you’ve identified your SIP, you need to make the right decision about what to do next. Grove’s approach to decision making is highly analytical. He steps outside of himself, the company and the market to take in wide-ranging inputs – from customers and suppliers through to potential competitors and more.  
  5. Familiarity breeds contempt: Grove embraces fear in his company, and encourages others to do the same. It’s all too easy when you dominate a market to assume it’s going to carry on for ever, and Grove urges a bit of fear and paranoia to combat that.
early Intel advertisement

Early Intel advertising

Only the Paranoid Survive: Top 5 Quotes

  1. “There are waves and then there’s a tsunami. When a change in how some element of one’s business is conducted becomes an order of magnitude larger than what that business is accustomed to, then all bets are off.”  – Grove on Strategic Inflection Points.
  2. “Why shouldn’t you and I walk out the door, come back and do it ourselves?” – Andy Grove, in conversation with his colleague Gordon Moore in 1985, discussing how they would be acting if they were new into the business, rather than entrenched in its thinking.
  3. “Complacency often afflicts precisely those who have been the most successful.” – I was reminded of both Syed’s Black Box Thinking and Silver’s Signal vs Noise when reading this book. It’s important to suspect yourself of being wrong and to try and break your own theories. The more senior you are, and the more success you’ve had, the more important this is.
  4. “Looking back over my own career, I have never made a tough change, whether it involved resource shifts or personnel moves, that I haven’t wished I had made a year or so earlier.” – The technology (and many other) industries is littered with examples of companies who led huge markets but who acted too late in the face of a Strategic Inflection Point – Compaq, Blackberry and Dell to name just a few. Grove argues strongly that you should be paranoid enough to tinker with your golden goose.
  5. “Business success contains the seeds of its destruction”. – Grove says this in the opening chapter of the book and I find it an incredibly elegant and true statement. He makes the point that the more success your business has, the more likely it is to be copied and competed against.

Enjoyed this review? Check out a few of our other book reviews, where we cover stories about tech and customer service:

Gabler’s biography of Walt Disney, with a focus on customer service and obsession

Zendesk Founder Mikkel Svane’s story of the company’s growth, Startup Land

Brad Stone’s excellent history of Amazon and Jeff Bezos