Ben Gilbert: prediction

Transcript context

…Yeah. I had his story about him in my autobiography too, which because of time, we probably won’t go into. Not Michael Porter. But Bruce Henderson, we will talk about him. He is now considered to be father of the competitive strategy. He came to Texas Instruments one day in (I think) around 1970. Or I should say he first called the TI CEO, Mark Shepherd, and told him that he had founded Boston Consulting Group, and BCG has experience curve theory that would benefit the semiconductor industry. TI was the largest company in the semiconductor industry then, and Mark Shepherd liked a presentation of this theory. Mark Sheppard said yes. Bruce Henderson brought Bill Bain—you probably know that name—with him, came to Dallas, and made the presentation, and Mark Shepherd invited the COO and me to attend the presentation. It was a very eloquent presentation because Bruce Henderson was a very eloquent man. Bill Bain was on the side, apparently, Bruce Henderson’s [...]. Anyway, Mark Shepherd was impressed, and he decided that TI would work with BCG on this learning curve theory. Bruce Henderson then assigned Bill Bain to work most of the time at TI, like three days a week. And Mark assigned me as TIs guy. Bill Bain and I became partners, and I assigned Bill Bain a small office very close to my office at TI in the same building because he needed a lot of things from me. He needed permission to get our costs, our prices. We had a lot of families of integrated circuits and transistors. He had a lot of requests, so it was easier if he was nearby. Every time when he arrived at some interesting, useful conclusions, he would also discuss them with me. We had a very pleasant association for, oh, I would think two years, maybe even more. He would fly to Dallas every Monday and go back to Boston either Wednesday night or Thursday night. Of course, every time he went back to Boston, it would be to tell Bruce Henderson what he had done that week. This went on for (I think) two years. Then finally Bill Bain came to see me one day. it was in those two years that I absorbed a lot of learning curve stuff, which I used up to now. I found that highly fruitful as a thinking tool. It seems so fundamental to the industry that you want to get through the low volume period as fast as you can. Ideally, you spend no time in the low volume period. It seems like over time, all the returns in the industry, the winner is the one with all the volume, because they’ll just have the lowest prices. And there’s a flywheel where once you have the lowest prices, you get all the business, then you can reinvest that in the next node. It’s almost, I couldn’t have told you that TSMC was going to be the winner, but once you internalize the learning curve and globalization, you can into it. Then in the future there will be one winner in semiconductor manufacturing. But one day after a couple of years, Bill Bain came to me in Dallas, said, you are the first one I tell this to outside the Boston Consulting Group. I am leaving Boston Consulting Group to start my own consulting company. I said, why? I said obviously Bruce Henderson thinks very highly of you. Bill Bain said, yes, but there is the [...] imperative. That’s the first time I heard that term [...] imperative.…

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