Nvidia stumbled in the first few years. Its first product tried to do too much and was based on Nvidia's own quirky standard. After a round of layoffs in late 1995 Huang gathered the company's 35 remaining employees in a room and leveled with them: The company would have to find a way to catch up, fast. He gave up Nvidia's software to focus on the DirectX graphics standard that Microsoft was building into millions of PCs.
Huang spent $1 million, a third of the company's cash, on a technology known as emulation, which allows engineers to play with virtual copies of their graphics chips before they put them into silicon. That allowed Nvidia to speed a new graphics chip to market every six to nine months, a pace the company has sustained ever since. Says Richard Bergman, senior vice president with the graphics unit at competitor AMD: "They raise the bar every time."