How NVIDIA learned to problem solve at speed to create a $3 trillion business.

Founded in 1993, NVIDIA started by designing and manufacturing graphics cards for video game consoles. Today, it’s worth USD $3 trillion and is the backbone of the AI technology revolution.

Their first chip, the NV1, was a flop. "Nobody goes to the store to buy a Swiss Army knife. It’s something you get for Christmas," NVIDIA CEO Jensen Huang said, reflecting on the product.

The chip was over-engineered, accounts from that time suggested. A new chip, the RIVA 128, saved the company.

However, by the early 2000s, NVIDIA faced another significant challenge: designing and launching a graphics card took more than a year, while chip buyers refreshed their PCs every six months.

This meant no single manufacturer could stay on top if they kept to that schedule.

NVIDIA’s solution: fundamentally restructure its engineering department to align with the product development cycles of customers like Microsoft, Dell, and Sony. 

They cut the development cycle in half—from 12 months to just 6 months. This shift created a platform for rapid innovation and powered NVIDIA’s rise to the tech giant it is today.

Here’s how they did it.

1. Cross-Functional Teams: They restructured R&D into cross-functional groups that included people from software, hardware, and systems engineering, speeding up decision-making and improving collaboration by reducing inter-departmental delays.

2. Small, Agile Teams: They created small teams, allowing quick iteration based on feedback.

3. Ownership and Accountability: Each team was given ownership of a specific aspect of the product development process, streamlining decision making and maintaining focus on deadlines. 

4. Rapid Prototyping: They used rapid prototyping to test and refine ideas quickly, enabling early identification of the best solutions.

5. Flexible Processes: They adopted flexible processes that allowed them to quickly adjust plans based on feedback, testing, or market changes.

6. Collaboration with Partners: They worked closely with customers to align development goals and timelines. This ensured that R&D efforts directly supported their needs and specifications.

Key Takeaways:

1. Purposeful collaboration

Cross-functional small teams with clear accountability, along with active partner involvement, speed up decision-making, boost collaboration, and create new ideas faster.

2. Problem solving at speed

Fast prototyping, adapting, and refining new ideas based on feedback and market changes turns ideas into competitive products faster.

When is becomes a cultural norm to solve problems at speed, it creates the conditions for sustained breakthrough innovation that competitors can’t match.