Say the Difficult Thing
In 1996, a 33-year-old CEO flew to Tokyo to tell his biggest customer three things. Each one was more humiliating than the last.
First: the technology we promised you doesn’t work.
Second: cancel the contract, because we’d just waste the rest of your money.
Third: we still need the final $5 million, or we vaporize overnight.
That was Jensen Huang. The customer was Shoichiro Irimajiri, then president of Sega.
Jensen had laid off more than half of Nvidia that year, from 100 employees down to 40. About thirty days of cash left.
He’s said many times that he was embarrassed to ask. Irimajiri took a few days, then agreed to all three. The $5 million, converted to equity, kept Nvidia alive.
Twelve months later, the RIVA 128 shipped. Jensen built it in six months instead of the standard eighteen to twenty-four by spending most of their remaining cash on a chip emulator instead of multiple physical tape-outs. It sold a million units in four months. When it launched, Nvidia had one month of payroll left.
At the launch, Jensen handed every employee a crisp one-dollar bill.
Then he started opening every monthly all-hands with the same line:
“We’re thirty days from going out of business.”
He’s used it for thirty-three years.
The most valuable chip company in history began with the three sentences its founder was embarrassed to say out loud.
P.S. Sega sold their stake for $15 million at Nvidia’s 1999 IPO. Jensen has said that, had they held it, the stake would be worth around $1 trillion today.
