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Jensen Huang, the CEO of NVIDIA, offers a refreshing perspective on business strategy that focuses on innovation rather than competing for market share. In a recent discussion, Huang shared his philosophy, which prioritizes creating new, groundbreaking products over fighting for a piece of the existing market.
Photo: NVIDIA
Huang explains that NVIDIA never talks about market share within the company. "Why are you talking about I have 23% market share and they have 27% market share? Why are you fighting people for market share?" he asks. For Huang, the concept of market share implies that many companies are doing the same thing, which raises an important question: why engage in the same work as everyone else? He believes it's a waste of talent to focus on something that's already been done unless the goal is merely to enjoy the competition, which he does not.
"Why am I squandering the lives of these incredibly talented people to go do something that's already been done?"
Instead, NVIDIA avoids commoditized markets and focuses on innovation. Huang emphasizes the importance of doing something that has never been done before. This approach means walking away from businesses that have become commoditized, whether through NVIDIA's own initiatives or external factors. By moving away from these markets, NVIDIA signals to its employees that they are dedicated to unique and meaningful work.
"That demonstrates very clearly to your employees that we're not going to go do commodity work. And so the combination of choosing the right work and walking away from the wrong work, that is the best way to create the conditions."
This strategy of choosing the right projects and abandoning the wrong ones creates the best conditions for innovation. It ensures that the company's talented employees are engaged in work that truly matters and has the potential to make a significant impact.
Huang's philosophy is echoed by other successful entrepreneurs. For instance, Steve Jobs famously said, "Innovation distinguishes between a leader and a follower." Jobs always emphasized the importance of creating groundbreaking products rather than simply competing in existing markets. This mindset helped Apple become one of the most innovative companies in the world.
A case study that illustrates this approach is the story of Tesla. When Tesla entered the automotive market, it didn't focus on competing with traditional car manufacturers for market share. Instead, Tesla aimed to revolutionize the industry with electric vehicles. This focus on innovation rather than competition allowed Tesla to become a leader in the electric vehicle market, changing the future of transportation.
Jensen Huang's message is clear: true success comes from doing what hasn't been done before. By focusing on innovation and avoiding commoditized markets, companies can create unique products that stand out. This strategy not only benefits the company but also motivates employees to engage in meaningful and impactful work.
Listen to Jensen: