Upon his return to Apple Inc. in the 1990s, Steve Jobs started what would become one of the most legendary business turnarounds in history. The key to the comeback was refocusing the iconic technology company on its original DNA: combining beautifully designed, high-quality products with a simplified, friendly customer experience. While Mac users have benefited from Apple’s return to form, the roughly 9 in 10 computer users who rely on Windows machines generally have not.
But at least one company is challenging the notion that consumers who want an affordable Windows-based computer have to settle for clunky design and suboptimal performance. NZXT, based in Southern California, started out as a small-scale manufacturer of hardware components and accessories and has been making complete desktops for only about four years. In an industry where giants like HP Inc. and Lenovo churn out more than 70 million computers a year, NZXT is a tiny player. Yet the brand’s growing popularity among gamers, designers, engineers and others who tend to have strong views about technology suggests the computer market isn’t inevitably locked into two extremes, Apple or an interchangeable array of bland Windows machines.
Founder and Chief Executive Officer Johnny Hou started NZXT in 2004 to sell a colorful, robot-themed computer case he designed when he was an engineering student at University of California, Irvine. In an interview earlier this month, the entrepreneur explained how the venture brought together his lifelong passions for gaming, design and technology.
Desktop computers are popular with gamers because they can be run with the most powerful chips, producing the best image quality. But Hou also noticed the community cared about how their computers looked from the outside, which for PCs generally meant beige or black plastic housing. Bootstrapping the company with his own funds and money borrowed from his parents, NZXT built a thriving business selling sleek glass and metal computer cases. The firm later added components including cooling machinery and power supplies.
Yet NZXT’s big business evolution didn’t come until 2017, when Hou decided to test the market’s appetite for full desktop systems that broke the mold of clunky mass-market PCs.
Dominated by a handful of companies, the PC industry has long equipped machines for the general consumer with cheap power supplies, bland cases and subpar chip coolers that often overheat. Another annoyance is “bloatware,” unneeded software that comes preinstalled and can slow down processing speed. While Dell Technologies Inc. and HP have bought high-performance gaming PC makers in their past, the acquired operations — including Alienware and VoodooPC — stagnated under their parents.
Like Apple, NZXT focuses on customer experience. Its PCs are sold exclusively on the company’s website. Outside a monitoring app to adjust color settings for its coolers, NZXT doesn’t install additional software. Instead of showing buyers a list of confusing technical specs, the website asks video game-oriented customers simple questions about what games they want to play within a certain price range before recommending a system setup. Most important, each PC comes with NZXT’s high-quality cases and cooling systems.
It’s hard to know whether the NZXT model is financially sustainable. The company declined to say whether it was profitable or disclose revenue or sales details. It announced its first large-scale capital infusion last month, raising $100 million from private equity firm Francisco Partners and several technology entrepreneurs including the co-founders of Twitch and Fitbit. Hou said the funds were needed “to become a billion-dollar-plus company and get to the next level.”
NZXT now has 450 employees, having doubled in size over the last 18 months. By comparison, PC giant HP has roughly 50,000 workers.
Curious about alternatives to mass-market PCs, I purchased an NZXT machine last month. NZXT allows for more customization than systems with similar specifications from HP or Dell, a feature I appreciated as a gamer and PC enthusiast who wants the most reliable components. The machine I ultimately bought cost $2,434, hundreds to thousands of dollars less than those offered by other boutique PC makers such as Falcon Northwest or Corsair. The NZXT desktop is quiet and fast. Design aficionados will appreciate the tidy cable management design.
NZXT has built a passionate fan base. Whether it can make money while turning out premium machines and keeping prices affordable remains to be seen. It’s possible that as with other niche manufacturers, its success will make it an attractive acquisition target. But for now, NZXT’s arrival in a marketplace that for years has left consumers with mainly unappealing choices shows that mediocrity isn’t inevitable.-Bloomberg
Also read: Why $69 billion Activision deal could be a blunder for Microsoft