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Kindle Notes & Highlights
by
Tae Kim
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January 1 - January 3, 2025
At Nvidia, the whiteboard is more than the primary form of communication at meetings. It represents both possibility and ephemerality—the belief that a successful idea, no matter how brilliant, must eventually be erased, and a new one must take its place.
Whiteboarding also requires active thinking and inevitably reveals how well (or not) any employee, including an executive, knows the material. Employees must demonstrate their thought process in real time, in front of an audience; there’s no hiding behind neatly formatted slides or slick marketing videos.
If an investor had purchased $10,000 of Nvidia stock when it made its market debut on January 22, 1999, that stock would have been worth $13.2 million on December 31, 2023.
“When we were younger, Tae, we sucked at a lot of things. Nvidia wasn’t a great company on day one. We made it great over thirty-one years. It didn’t come out great,” he said. “You didn’t build NV1 because you were great. You didn’t build NV2 because you were great,” he said, referring to the company’s first two chip designs, both of which were flops that nearly killed Nvidia. “We survived ourselves. We were our own worst enemy.”
I FOUND THIS TO BE A pervasive attitude within Nvidia: that the culture of the place discourages looking back, whether at errors or successes, in favor of focusing on the future—the blank whiteboard of opportunity.
This culture combines unusual independence for each employee with the highest possible standards; it encourages maximum speed while demanding maximum quality; it allows Jensen to act as strategist and enforcer with a direct line of sight to everyone and everything at the company. Above all, it demands an almost superhuman level of effort and mental resilience from everyone. It’s not just that working at Nvidia is intense, though it certainly is; it’s that Jensen’s management style is unlike anything else in corporate America.
Jensen runs the company in the way he does because he believes that Nvidia’s worst enemy is not the competition, but itself—more specifically, the complacency that grips any successful company, particularly one with a long and impressive track record such as Nvidia.
“People with very high expectations have very low resilience. Unfortunately, resilience matters in success,” he later said. “Greatness is not intelligence. Greatness comes from character.”17 And character, in his view, can only be the result of overcoming setbacks and adversity. To Jensen, the struggle to persevere in the face of bad, and often overwhelming, odds is simply what work is.
“Luck has a lot to do with success, and my luck was having met them.”
“We thought we had built great technology and a great product,” Malachowsky said. “It turns out we only built great technology. It wasn’t a great product.”
”We’re thirty days from going out of business”—that served as a warning about complacency and conveyed the expectation that everyone, from the CEO on down, had to work as hard as they possibly could, even if it meant sacrificing their lives outside of Nvidia.
“Oh my God, we got here and we thought there was going to be a secret sauce,” one engineer said.3 “It turns out it’s just really hard work and intense execution on schedules.” It was Nvidia’s culture, in other words, that made the difference.
“I don’t think people are trying to put me out of business,” he once said. “I know they’re trying to.”5
The company was now twenty times more valuable than it had been on IPO day, thanks to a combination of strategic vision, relentless execution, and the paranoia that kept Jensen and his executive team on guard for threats that could come from anywhere, at any time.
Nvidia’s current position—among chip designers and in the national and global economies—seems unassailable. As Amir Salek put it: “The moat is CUDA.”
It still prized technical skill and maximum effort above all else. It still made strategic decisions for the long term rather than try to juice its stock price over the short term. It still operated with the necessary paranoia of a leading business in a volatile industry, always trying to correct course before it started down the slope toward irrelevance and obsolescence.
“I don’t like giving up on people,” he said. “I’d rather torture them into greatness.”
“That’s all he said. There was no ‘attaboy.’ There was no ‘great job.’ There was none of that. It doesn’t matter how well you think you did,” Vivoli said. “It’s okay to be proud, but the most important thing is trying to improve.”
Do your job. Don’t be too proud of the past. Focus on the future.
Managers at Nvidia were trained not to get territorial or feel like they “own” their people and instead got used to them moving around between task groups. This practice removed one of the main sources of friction at large companies.
Through mechanisms such as direct public feedback, the Top 5 e-mail, and the requirement to present ideas on a whiteboard rather than as a static PowerPoint, Nvidia equips its workforce with powerful weapons in the constant struggle for accuracy and rigor and against groupthink and inertia.
CEOs want to survive. Naturally, then, they prefer not to oversee a direct subordinate who is brighter and could potentially replace them. They tend to opt for someone slightly less astute than they themselves are. But when the CEO eventually departs, the glad-handing executive who is now on good terms with the board of directors frequently gets elevated, perpetuating the “survival of the un-fittest” as the new CEO starts a similar cycle.
He believes, in other words, that in the highly technical chip industry, innovative engineering matters far more than financial metrics. That belief is perhaps the single thing that most differentiates Jensen from his peers.
Nvidia did not allocate many people or resources toward AI development until he saw significant signals indicating what could be possible. Then, he moved with a speed and totality of purpose unmatched by the competition.
A former senior executive at a large software company said that he was always struck by how you could talk to multiple Nvidia employees and they would never contradict one another. The message from the top was consistent, and Nvidia staff learned it and made it their own.
Nvidia’s merit-based, adaptive, and agile compensation philosophy has played a role in keeping turnover exceptionally low. In fiscal 2024, Nvidia reported a turnover rate of under 3 percent in an industry where 13 percent is the average, according to LinkedIn.
His executive staff chuckles about a habit of Jensen that has remained constant over the decades. Whenever one of them returns from a trade show, gaming event, or trip to Taiwan, he corners them and asks, “So, what did you learn?”
Bryan Catanzaro, the Nvidia executive, explained that LUA is a warning sign that Jensen’s patience is growing thin. When he says it, Jensen wants the employee to stop and do three things: Listen to the question. Understand the question. Answer the question.
