Ep.221 – The Booth at Denny’s and the Long Technology Bet

Josh Lupresto (00:24.114)
In nineteen ninety-three, three engineers sat down at a booth in Denny’s in East San Jose. One of these guys bust tables at that exact restaurant as a teenager. They ordered some bottomless coffee. They sketched out a company on the back of an idea that would someday have regular people wanting 3D graphics on the home computer. Crazy idea. I know. this market at the time, it didn’t exist. It was zero dollars. Crazy part here.

Total capital that these guys started the company with 600 bucks. If we’ve got you guessing, think about it, think about it. That company today is NVIDIA. Today, now it’s worth what, north of four trillion dollars. It is basically powered the start of the and what’s going, the entire AI revolution. Now, here is the part that nobody puts on the highlight reel, though.

Everything looks like an overnight success, right? between that booth and four trillion dollars, NVIDIA died almost more than once. So the reason I want to tell you this story today is because I think this arc of NVIDIA, the the near death or deaths, the pivots, the decade of betting on somebody that you know, nobody believed in or maybe misunderstood this whole concept. I think that arc.

Is your arc and that is the technology advisor’s arc? So should we get into it? Back for another session this week. I’m your host. Welcome to Next Level Biz Tech. I’m Josh Lupresto SVP of Sales Engineering at Telarus and I have been going deep on our good friend here, Jensen Wong at NVIDIA. And there’s a great founders podcast episode. If you’ve never listened to this,

awesome, awesome podcast host, David Senrah. And he did an episode that ties back into take him’s book called The Nvidia Way. And this one, I gotta tell you, it kind of sucked me in. And there’s a whole through line here. It’s the arc that we’re gonna talk about. And and the more I sat with this, it was such a good book. I just kept getting sucked in because I just I could relate, right? And I I I just I realized that this is kind of one of the best stories

Josh Lupresto (02:48.065)
That that we’ve got that relates to what we actually do for a living. So today’s episode is actually titled What Jensen and NVIDIA teach us about outlasting every technology shift. So let’s jump in. So part one the booth and a company that maybe shouldn’t have made it. Let me let me set the table a little bit here. So so Jensen, if you don’t have the backstory, is born in Taiwan, came to the US as a kid. he got sent through

a a weird paperwork mix up to this reform school in Kentucky of all places. So he worked his way through, ends up at Oregon State, and then Stanford, and then found himself kind of designing chips at AMD in a company called LSI Logic. So we all know AMD. So now in 1993, he’s 30 years old, married two kids, he walked away from a stable engineering career to start this NVIDIA.

company with two friends from Sun Microsystems, and that’s the the the two friends at the booth that we talked about. Now, if you you read this book, he talks about by his own admission, they had no idea what they were doing. and he thought, you know, the odds of success here are about 0%. And if he would have known how hard it would be, he probably wouldn’t have done it.

And and it nearly ended fast, right? Like we talked about. The first chip they had, they came out with this chip called the NV1. They made a really strong technical bet. And it used quadrilaterals to make graphics, right? You think of just these boxy shapes, Minecraft, things like that. So they’re they’re they’re feeling good right after they ship it. Microsoft announced this new standard, if you remember, called DirectX. And DirectX says, we are only gonna support triangles. So that one announcement.

Imagine reading that, right? Nvidia’s whole architecture was just on a dead end overnight. So the company at that point, days from bankruptcy, right? Everything shifted. So so stop and sit with that for just a second. The biggest player in the market made one move. And this this technology that NVIDIA bet the whole company on was instantly obsolete. Kind of sucks. So if you’ve sold

Josh Lupresto (05:00.481)
technology for more than, I don’t know, five minutes. you know, some of these things probably feel a little bit familiar. The platform you built your customer on got disrupted, the carrier got acquired, a a channel rep changes. maybe even, you know, the product that you led with last year were selling and and got everybody excited about. Maybe somebody end a lifed it. You know, sometimes this the the the the whole ground shifts under us because, you know, somebody up three levels up, different part of the food chain made a decision that we didn’t get to vote on.

So, you know, Jensen’s in this boat. What did he do? Well, obviously he didn’t quit. he went out and did this crazy negotiation with Sega. Yeah, remember Sega. he got a little bit of a financial lifeline. So he used that to say, All right, let me let me use that lifeline. Let me design my next chip. This chip called the Riva 128. In about nine months, here’s a real change that that you saw in the business. you know, just

For context here, that that kind of chip that we’re talking about. That would normally take two years to develop. That was pretty, pretty normal. two years chip development cycles before NVIDIA changed that. So what did they do? They spent I think a third of their remaining cash on some kind of touch and go simulation software just to try to hit the timeline. It worked, it shipped, and it was a hit. And the company survived to kind of make it, you know, one more day. So what’s the lesson here?

The lesson i i it’s not they got lucky, sure luck’s a part of this from time to time, but the lesson is they survived the shift by reinventing faster than the disruption that was trying to kill them. Right? That’s move number one. So now let’s jump into part two. Let’s jump into let’s call it betting on something that maybe people didn’t believe in, okay?

All right, so so we walk forward here. Nvidia survives the nineties, wins gaming, builds what you still know called the G Force line of things, of cards. company goes public in ’99. Great company. Could have stopped there, perfectly nice, just doing gaming and and and chips for gaming, right? Instead, 2006, the man with the leather jacket made the bet that kind of defined everything. He launched this thing called CUDA.

Josh Lupresto (07:21.61)
And I don’t I don’t know that a lot of people understand really what CUDA is, but it’s really, really important as it relates to this because this is again, it’s a subtle differentiator. There’s a through line here, and there’s a little bit of an undertone. So the the simplest way to kind of explain CUDA is it allows you to let NVIDIA graphics chips do general purpose computing for math, science, anything, right? It’s this it’s this library of software.

That allows you access to that hardware, not just drawn pictures and triangles and quadrilaterals for video games, right? So here’s what that decision cost. It’s probably scary at that time. CUDA ran something, I think it was like half a billion dollars a year, half a billion in R D at a time when that whole profit line of the company was just about a few hundred million.

So I think it made every product more expensive. They were jamming all these extra computing capabilities into cards that gamers were buying. Wall Street looked at this and said, This is crap. they hated it. In 2008, then, if you kind of pick up the thread there a little bit, there was the financial crisis that hit the stop drop dropped at something crazy, like 80%, right? So from 2007 to 2015,

Here we are, kind of circling the drain again. The company barely grew at all. So when Jensen stood up and launched CUDA, the the the room was silent, right? The market’s reaction to what was the company’s most important bet was like, okay, yeah, just shrug it off, right? And you kind of had this whole decade of doubt. So you think about think about the conviction that that takes. So for 10 years.

His own engineers have said Wall Street expected CUDA to be a complete failure that ended the company. His own engineers. So ten years of building libraries, writing documentation, supporting all these university researchers, just trying to get mind share, laying down this infrastructure for traffic that did not yet exist. Sound a little bit familiar there? you know, look, it’s like

Josh Lupresto (09:38.605)
It’s building the road before any cars, it’s building the electric car company before there is a charging network. There’s a lot of comparisons here.

So 2012, you got a team out of the University Toronto University of Toronto entered an AI image recognition contest with a neural network they were calling AlexNet. So they trained it on two NVIDIA gaming cards using CUDA. And not only did it win, it just wrecked the field. And in in in in the book, right, it talks about there’s a lot of competition at that time. There was a couple of people vying, hard to tell who was gonna be what.

But not only, you know, did it did it did it not win, it just destroyed everything. So why, right? Well, I mean, NVIDIA made that. It’s a bet that it defended for six years while everybody was skeptical. And then only company is standing there with shovels, right? when this gold rush starts, I guess. So why am I telling you all of this lead in and and and you know, ten minutes of story here?

on this channel podcast, right? For you the advisor, because there’s a translation here. And I think it’s really relevant. You think about the the episode that we did two weeks ago, we talked about the the $14 billion tell. I I think of this as a little bit of a continuation on that. There’s another there there’s another factor here. So you don’t get to control the technology shifts, you just get to control how you’re positioned for them.

When they land. So zoom out, zoom out sometimes, just a little bit. So Jensen couldn’t make Alexnet happen. He couldn’t have, right? But what he could do was be ready when it did happen. So he spent a decade staying close to the frontier, building relationships, learning the emerging use cases. And so when that wave finally came, he wasn’t scrambling to catch up. It was already there.

Josh Lupresto (11:35.33)
That is the entire job description of a great technology advisor. You’re not gonna predict every shift. but if you stay close to the customers, you stay curious about what’s coming next, you build the relationships now so that you know, your customer when that world changes, you are the first call. You are not a stranger. So you you know, you take all of those things, you stay close to the customers, you go out to some of the events, the the

Just different business enablement events, the different beyond the solutions, the sales masteries, all those things, right? We’re trying to help you stay close to that. The Tuesday call, and then in conjunction, as you think about as you’re talking to customers, that keeps you, I think, as close to it as you really can. So let’s get into part number part three. The advisor, you, is the constant. So let’s make this, let’s make this through line really explicit because I think this is kind of the heart of it.

So NVIDIA went from 3D graphics for gamers to general purpose computing, and then on to now deep learning, generative AI, robotics, self-driving cars. I mean, think about that. It’s wild, right? Completely different technologies, completely different markets, even. But what was the one thing that stayed constant the whole time? Jensen had this discipline of the company that he built to stay with it, be ready. So here’s our version of that.

The technology that your customers buy is gonna keep changing. You are the absolute constant every single time. So think about everything. Let’s let’s back way up for a minute. All right. So think about everything that’s been changing in this channel in the years that you’ve all been doing this. We went from selling circuits, MPLS to SIP, and hosted voice comes out and the cloud comes out. Remember everybody said that.

You know, the cloud was just gonna be for dev and experimental. It wasn’t gonna be production. And then it was you know, SD Win and and SASE and Cyber and Contact Center, CX, and now here we are with AI. every one of those, every single one of those was supposed to be the thing that disrupted us all. Why why why would anyone go to the advisor to buy the cloud? They could just click a button here, just go to the website and yet.

Josh Lupresto (14:02.423)
Here we all still are, still in the relationship, still getting the calls more than ever because it’s more complicated than it’s ever been. And there are so many reasons why the customer calls you for that. They didn’t want the cloud instance or the model. The customer just wanted an outcome. They got a lot of things going on. They just wanted somebody to to trust. you know.

that they could trust to help them and and just get there without getting burned. Like if you really simplify it. So that’s what you sell. You don’t sell the technology. I know it feels like it, but you’re just selling this navigation through the technology. And then the faster that technology changes, the more valuable the navigation becomes, right? Think about where we’re at, where we’re going with AI and models and different products moving around and vaporware and, you know,

Claude here and open AI this, and it’s hard. I can’t imagine being in a customer’s shoes right now. There are so many choices, more than there’s ever been. And there’s never been more pressure for them to figure this out than there is now, right? So, whatever the customer needs, they’re cutting costs, they’re trying to innovate, maybe they’re trying to get ahead of a competitor, maybe they’re going through full digital transformation, or they just got told by the board have an AI strategy by Q3.

Doesn’t matter. You’re the person who’s seen the shifts before, who isn’t married to a singular vendor and sits on their side of the table and translates. Don’t forget that. Don’t forget how freaking valuable that is.

NVIDIA endured because it kept reinventing what it sold while keeping who it was. You endure, I think, what I see day in and day out. talked to a pile of you already this morning. you endure that. You endure that exact same way. The logo on the product changes, the trusted advisor in the chair does not.

Josh Lupresto (16:11.757)
let’s jump into part four. You know, I love questions. You know, I love probing questions. that’s I think the things that that move the needle. So let’s get practical here. you know, the constant is this mindset, but you you close these business deals and you open these conversations with questions. So great discovery is how do you find that opportunity that’s hiding within all of that crazy change? So let me give you a

let me give you a set of questions I think you can take into your very next customer conversation. So pause this, replay this, write these down. I’m gonna give you just a few of them here. So start with the change itself. Ask Mr. Customer, what has changed in your business in the last 12 months that your current technology wasn’t built for?

That question, just that alone, surfaces, the disruption, the the merger, the new locations, the how we’re changing, how we go back to office, the new compliance thing, the AI mandate from the board, that change is where the deal lives. Now we love pain. Go to the pain. Ask, where are you spending money today that you can’t quite explain or justify? That’s cost cutting, that’s optimization, that’s

You know, every customer has spend that they have stopped looking at. You find that you know, you’re you’re you’re delivering value before you’ve even sold anything. you’re gonna hit right at the heart of it. Think about all the token maxing and all the the spending that’s happening right now. Great question to ask. Then the ambition. Ask if you had no technical constraints, right? The magic wand, what would you change about how your business runs?

That’s really where the innovation and and and the transformation lives. You’re gonna get them to describe this destination that they wanna go to and you’re gonna be the guide to it.

Josh Lupresto (18:15.383)
Fear, always something to talk about, to get on the table. They may not say it, but it’s always something that everybody’s dealing with. What’s the fear? So ask them this. what is what is the thing that if it broke or got breached tomorrow, would ruin your quarter? That’s security, that’s resilience, that’s business continuity. That’s usually, usually the fastest moving budget in the building. I’ve seen budgets come from that.

When the qua five minutes before that, they didn’t have budget, not a focus right now.

Then kind of like we talked you know, two episodes ago, here’s here’s the tell. We gotta get the tell. Ask who else, and I don’t see this one asked enough, who else have you talked to about this and what did they get wrong? Such a good one. I think that tells you, it tells you the competition, it tells you the history, and it tells you how to position yourself as the one that can finally get it right for them, especially if this is a new customer for you. Such a great question to ask.

When there is a problem and you can help your customer through these trenches, I think we’re all defined in how we go to battle and how we help somebody through battle, because that is when somebody needs you the absolute most. So pause and listen to those five again. Back up a couple of minutes, then come back here and notice what all five of those have in common. None of them mentioned a single product, right?

And this is coming from an engineer. All we want to talk about is, check this thing out. This is amazing. It’s so hard for us not to say that sometimes. So none of those questions mentioned a product. We just get to ask, listen, and understand. They are all about the customer’s world. That’s the Jensen move. Go to school on the customer and understand the shift better than they do. And the solution over time will reveal, I think it’ll reveal itself.

Josh Lupresto (20:21.613)
So here’s the most important part of the discovery that I don’t know that I see enough of. When you hit something that you don’t fully understand in AI, security, complex cloud, you will, right? That’s that’s life. There’s so much insane technology out there. That’s not a moment to bluff. you you all do a great job at, hey, let me help you. Let’s bring in some reinforcements. Okay. You don’t have to go it alone. And I think that kind of takes us into one of the last parts of this.

I I I I want you to hear this, right? Think about think about our boy Jensen here. He didn’t design every single chip. He built a team of the best engineers in the world and he put them on a stage and gave them credit. That’s the whole NVIDIA story, right? It’s about a leader that knows exactly where his genius ends and where the engineers begin, who he needs to bring in next. So you have that same thing available to you.

You don’t have to be the deepest technical expert in the room. If you are, fantastic, but you don’t have to be. You just have to know when to bring one in. So that’s what our sales engineer team, sales engineering team here is for. You think about, you know, shameless plug when that discovery you know, uncovers something big and complicated, a real AI deployment, a multi-site sassy design, security architecture, full transformation.

That’s exactly when you loop us in. You’ve had that conversation. You’ve asked some of the probing questions. They have an absolute need. You have qualified it. That’s where we’re here to help. So we’ll go as deep as the customer needs on this, you know, physical, virtual whiteboard, on the design, on the supplier selections. While you stay owning the relationship, quarterback the deal. We are here to help. So you bring the trust. We’ll bring some technical horsepower.

I think together that’s just a killer combination. Your customer cannot get from any single vendor. They can’t get from a website. And that whole model, that’s how the complicated deals actually get won. If I go back and look at all of them, that is the recipe that’s worked. Okay. final thoughts. Let’s bring it home. so you think about in this book, a kid who bust tables at Denny’s sat

Josh Lupresto (22:45.793)
Back down at that same restaurant 20 years later and started a company with six hundred bucks with zero percent odds. I’ve never heard of zero percent odds before. it it nearly died when the market moved against it. It it it bet on everything, it bet everything on that that somebody believed in and got laughed at for a decade, right? That he got laughed at. So it endured, not because it guessed the technology right at every time. We’re not gonna get that right.

But because it kept reinventing what it offered while staying true to who it was. That is the technology advisor’s story, too. The tools are going to keep changing, the shifts are going to keep coming. And every single one of them is an opportunity. Everything is an opportunity. It is not a threat as long as you are the constant that your customer can count on. So this week, go have one conversation.

Where you don’t lead with a product. It’s hard. Lead with one of those discovery questions. Find the change. Find the opportunity hiding in it. And remember, when it gets complicated, you have got an engineering team here ready to ride Shotgun. So that’s it. That’s the show for today. if you got to thinking about a customer that you should go and call and you should text and set up a meeting, go do it. That wraps us up. I’m your host.

Josh Lupresto This has been what Jensen at Nvidia can teach us about outlasting technology shifts. Until next time. Thanks, everybody.