Today’s Chapter is based on the book “The Nvidia Way: Jensen Huang and the Making of a Tech Giant” by Tae Kim.
Jensen Huang is a Taiwanese-born American entrepreneur who co-founded NVIDIA Corporation in 1993 and serves as its founder, president, and CEO. Under his leadership, NVIDIA became a leading provider of graphics processing units (GPUs) and emerged as the central engine behind the artificial intelligence (AI) boom.
Here’s what I learned:
Whiteboarding
“Clear writing gives poor thinking nowhere to hide.”
— Shane Parrish
One of the key concept we can learn from Jensen Huang is his obsessive use of the whiteboard. While most companies use Powerpoint decks to prepare presentations, Huang prefers using a whiteboard so that he can jump in mid-meeting with a marker in hand to sketch, erase and sketch again. This isn’t just a preference, but a philosophy on how most ideas come to life at Nvidia. Tae Kim writes that “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.”
This concept is an important part of the Nvidia’s corporate culture. By using a whiteboard to present at meetings, every employees cannot hide behind prepared slides; they need to think out loud, in real time, in front of everyone. This can easily expose those that do not truly understand the topic at hand.
“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.”
— Tae Kim
This concept of whiteboarding comes from the fact that Jensen Huang loves teaching and the whiteboard is his chalkboard. As Tae Kim explains, “In another life, Jensen Huang might have been a teacher. His preferred medium is the whiteboard: at many of the meetings he attends at Nvidia, where he has been the CEO since he cofounded the company in 1993, he will leap up, his favorite chisel-tip, dry-erase marker in hand, and diagram a problem or sketch out an idea—even if someone else is speaking or whiteboarding themselves at the same time. In fact, he alternates between teacher and student, fostering a collaborative ethos among his employees to develop their thinking and solve the issues they face.”
Similarly, the whiteboard is an analogy often used at Nvidia to represent Nvidia’s way of handling mistakes. As a matter of fact, in the company, the past, whether it was a glorious success or a humiliating failure, is simply material to be erased. By doing so, employees don’t become complacent on their recent success and do not have decision paralysis due to previous failures.
“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.“
— Tae Kim
This reminds me of what we have learned from Bejamin Franklin who once said, “Drawing is a kind of universal language, understood by all nations. A man may often express his ideas, even to his own countrymen, mòre clearly with a lead pencil or bit of chalk than with his tongue.” As a matter of fact, Franklin understood that writing is an important part of learning. By writing about a topic at hand, you must be able to compress your ideas into words which requires both understanding and thinking. As such, writing is a great process to understand things better yourself and to identify the topics that you understand from those that you do not know what you are talking about. The reason I started this blog is precisely for this purpose of forcing myself to think and to understand deeply what I learn from these books that I read.
“A good writer doesn’t just think, and then write down what he thought, as a sort of transcript. A good writer will almost always discover new things in the process of writing.”
— Paul Graham
Finally, writing is a great tool for better decision making. In fact, by keeping a decision journal at hand, you will be able to collect feedbacks from your previous decisions in the hope of making better decisions in the future. Writing it down on a journal is crucial as it allows you to review all the circumstances and accessible knowledge you had at the time of your decision and to truly evaluate it without being obstructed by hindsight bias.
“Go down to a local drugstore and buy a very cheap notebook and start keeping track of your decisions. And the specific idea is whenever you’re making a consequential decision, something going in or out of the portfolio, just take a moment to think, write down what you expect to happen, why you expect it to happen and then actually, and this is optional, but probably a great idea, is write down how you feel about the situation, both physically and even emotionally. Just, how do you feel? I feel tired. I feel good, or this stock is really draining me. Whatever you think.
The key to doing this is that it prevents something called hindsight bias, which is no matter what happens in the world, we tend to look back on our decision-making process, and we tilt it in a way that looks more favorable to us, right? So we have a bias to explain what has happened.”
— Daniel Kahneman
Speed of Light
“A maniacal sense of urgency is our operating principle.”
— Elon Musk
Jensen Huang does not believe in what most people would call a worklife balance. In fact, he believes in obsession. One of the core philosophy at Nvidia is the concept of “Speed of Light”, which means measuring your performance not against what the competitors are doing or what you’ve done previously, but against the absolute limits of what if physically possible. Kim mentions that “Since Nvidia’s founding, Jensen has insisted that all Nvidia employees work at the “Speed of Light.” He wants their work to be constrained only by the laws of physics—not by internal politics or financial concerns. Each project must be broken down into its component tasks, and each task must have a target time-to-completion that assumes no delays, queues, or downtime. This sets the theoretical maximum: the “Speed of Light” that it is physically impossible to exceed.“
This core belief most likely comes from Jensen Huang’s work ethic. Born in a family of immigrants, Huang was extremely hard working, often working from 9AM to midnight, and he expected his team at Nvidia to match his own intensity.
“There may be people smarter than me, but no one is ever going to work harder than me.”
— Jensen Huang
It is important to note that this philosophy of “Speed of Light” was actually born from necessity, especially in the early days of the company. Nvidia was often in lack of capital and Huang often told his employees at every monthly company that “We’re thirty days from going out of business.” While this may not be the case anymore, to avoid complacency, Huang kept the culture of working at the speed of life so that every staff continue to feel the urgency of a startup even when the company was worth hundreds of of billions. Fear and anxiety became Huang’s favourite motivational tools.
Similarly, employees knew they had to keep working at the speed of light and to not become complacent as Huang was extremely competitive and he needed Nvidia to win at everything even against itself. Tae Kim writes, “Andrew Logan, Nvidia’s director of corporate marketing, remembers how one of Nvidia’s chips came in second place for a computer magazine awards feature. In his prior job at S3, executives would be happy if their products finished in the top three. Not at Nvidia. “The first time we came in second place, Jensen sternly told me: Second place is the first loser,” Logan said. “I never forgot it. I realized I’m working for a boss who believes we have to win at everything. It was a lot of pressure.””
“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.”
— Tae Kim
This obviously reminds me of Elon Musk who once said, “You must be extremely tenacious. Work like hell. You have to put in eighty-to one-hundred-hour weeks every week. This will improve your odds of success.” As such, it is not surprising that Musk, similar to Jensen Huang, isn’t too found of the idea of a balanced work week. He mentions that “Nobody ever changed the world on forty hours a week.”, and he clearly puts this principle to the test. As a matter of fact, Musk was well known for setting aggressive timelines using it as a motivation for his employees to work harder and more efficiently.
“You need to work. Work hard. Like every waking hour. Particularly if you’re starting a company, you need to work super hard. Do the simple math: Somebody else is working fifty hours a week and you’re working one hundred. You’ll get twice as much done in a year. 54 If other people are putting in forty-hour workweeks and you’re putting in one hundred, what takes them a year, you will achieve in four months.”
— Elon Musk
Furthermore, in order for his companies to achieve the deadlines set by his maniacal approach, Musk had to implement a system for them to work fast and efficiently. To do so, he elaborated an Algorithm inspired from engineering in order to speed things up. He mentions, “I have everyone at my companies rigorously implement a five-step process for engineering. I call it The Algorithm. I’ll list the steps, then explain. The order is very important. Make your requirements less dumb. Try very hard to delete the part or process. Simplify or optimize. Accelerate. Automate.”
First, he believes that most of the requirements are dumb and that it is primordial to question them and see why they were set in the first place. He explains, “Whatever requirements or constraints you do have must come from a person, not a department. You can’t actually ask a department. You have to be able to ask a person, and the person putting forth the requirement must take responsibility for that requirement. Otherwise, you could have a requirement made up by an intern two years ago off the cuff, or someone who isn’t even at the company anymore. You must know the name of the real person who made every requirement. Many times we’ve had dumb requirements, dug into them, and discovered no one currently working in that department agrees with the requirement. These things are often way more silly than you think. So step one is make your requirements less dumb.”
Second, you often need to eliminate some steps to make things faster. As a matter of fact, Musk was well-known among his employees to often go through a rampage of deleting things. He was never conservative about these things as he believed that “If you’re not adding deleted things back in 10 percent of the time, you’re clearly not deleting enough.”
Third, you need to optimize every single steps that are essential. And once that is done, you can start on step four and five which are to accelerate and automate. Musk warns to not skip over the steps. As he explains, “do not go faster until you have worked on the other three things first. I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted. Speeding up something that shouldn’t exist is absurd. If you’re digging your grave, don’t dig it faster. Stop digging.”
Focus on the Mission
“Mercenaries think opportunistically; missionaries think strategically. Mercenaries go for the sprint; missionaries go for the marathon. Mercenaries focus on their competitors and financial statements; missionaries focus on their customers and value statements. Mercenaries are bosses of wolf packs; missionaries are mentors or coaches of teams. Mercenaries worry about entitlements; missionaries are obsessed with making a contribution. Mercenaries are motivated by the lust for making money; missionaries, while recognizing the importance of money, are fundamentally driven by the desire to make meaning.”
— John Doerr
A final lesson we can learn from Jensen Huang is about organizational design. First of all, while most companies are build like a pyramid with layers of management, Huang prefers a flat model. He deliberately built Nvidia as a flat organization where the mission is the ultimate authority. He explains that “Over the years, I realized what was happening, how people protect their turf and they protect their ideas. I created a much flatter organization.” As a matter of fact, Huang believes this structure avoids backstabbing and political infighting within the company.
To make this work, it is primordial to encourage transparency within the company. To do so, Huang has established a few unusual practices. One of these practices is called “Top 5 Email”, where employees at every level must send weekly updates on their priorities. This isn’t about micromanagement, but for Huang to detect corporate weaknesses before they become crises directly from the source.
“The “Top 5” emails became a crucial feedback channel for Jensen. They enabled him to get ahead of changes in the market that were obvious to junior employees but not yet to him or his e-staff. “I’m looking to detect the weak signals,” he would tell his employees when asked why he liked the Top 5 process. “It’s easy to pick up the strong signals, but I want to intercept them when they are weak.””
— Tae Kim
Second of all, an important key phrase at Nvidia is “The Mission is the Boss.”, meaning that decisions aren’t made to please a senior executive or to meet a short-term goal. They are made to serve the customer and to advance the company’s core objectives. As such Jensen Huang often told his employees “ that their ultimate boss was the mission itself. The idea was to make decisions for the good of the customer, not to boost the career of the executive above them.“
Huang elaborates that “The concept of the mission is the boss makes a lot of sense because ultimately we’re here to realize a particular mission, not in service of some organization. It got people thinking about the work and not the organization. The work, not the hierarchy.”
Finally, you need to hire missionaries not mercenaries. As a matter of fact, hiring raw talent is one of the key component of Nvidia’s success. This is crucial because as Huang explains, “Good programmers want to work with other good programmers. So once the quality of programmers at your company starts to drop, you enter a death spiral from which there is no recovery. In technology, once you have bad programmers, you’re doomed.”
“In a sense, that is the Nvidia Way in its purest form. It is the unwavering belief that there is tremendous reward in doing your job the best you can. It is the drive to persevere amid adversity. Or, as Jensen put it when looking directly into my eyes: the secret to his company’s success is nothing more than ‘sheer will.’”
— Tae Kim
This reminds me of Brac Jacobs who once said that a CEO’s most important job is recruiting. He explains that “CEOs tend to get credit for the accomplishments of the teams they lead, but in reality, the most important thing a CEO does is recruit superlative people who have a combination of impressive traits. Talent is a must of course, but it’s equally important to hire quality people who are capable of constructive interactions with others.”
So what are traits that Jacobs look for when hiring? He believes in four non-negotiable traits: intelligence, hunger, integrity and collegiality. Miss any one of these characteristics and the candidate is out. As he once said, “Make your hiring choices as perfect as they can be because there are few mistakes costlier than hiring the wrong person.”
Personally, I believe integrity to be the most important of these traits. As Warren Buffett once said, “Intelligence, energy, and integrity. And if they don’t have the last one, don’t even bother with the first two. I tell them, ‘Everyone here has the intelligence and energy—you wouldn’t be here otherwise. But the integrity is up to you. You weren’t born with it, you can’t learn it in school.” Here’s what Jacobs has to say about integrity: “I’ve learned three important lessons about integrity over the course of my career. First, if someone’s willing to lie about small things, they’re usually willing to lie about big things. It’s a lot of work to communicate with someone you don’t trust to speak truthfully, where you have to constantly wonder whether they’re lying, and why. And more critically, trustworthy employees are leadership’s eys and ears in business operations. Dishonest employees blind management to the reality of what’s going on. The second thing I’ve learned is that, sooner or later, liars get caught. That’s why I believe honest people are more successful in the long term than dishonest people. I’m chasing success on a massive scale, so I can’t afford to have liars on the team. They pose an existential threat to the entire company, and the team can sense that, even if they don’t know anything specific. Honest employees make it easier for everyone to relax. And third, honest people don’t have to tell you how honest they are. Instead, they show integrity through their actions. Most reputations for integrity come from the cumulative effect of someone doing what they say they’ll do, and being straightforward in how they speak. These are the kinds of cues we look for as someone moves through the hiring process.”
“While there’s little about these three leaders that seems to connect them on the surface, they’re nearly identical in possessing the four qualities I seek in every hire: intelligence, hunger, integrity, and collegiality. If a candidate is deficient in any one of these four, that’s a risk I don’t take. If I find someone who scores high in all four qualities, and has the skills for the role, I snap them up.”
— Brad Jacobs
Furthermore, Jacobs is a believer in hiring people who are motivated to make a lot of money. He explains that “CEOs can give their employees experience and advice, but you can’t pay the mortgage with advice. Compensation is the most effective tool I have to motivate employees. If a candidate says to me, “I’m not motivated by money,” I suspect either they’re not being candid or they lack the hunger that’s necessary to succeed in what is, after all, a profit-driven enterprise.“
It is clear that Jacobs fully understands the power of incentives. Once you have great employees working for you, it is important to set a compensation system in place in order to retain these great talents. Bonus point if the incentive structure is aligned with the company’s goals. As Jacobs once said, “That’s why I’ve “overpaid” almost every direct report I’ve ever had to ensure I had top-tier people in place. When I pay someone a big bonus or see the value of their equity keep rising, I have the satisfaction of knowing it’s a twofer, because I’ve been careful to align that person’s incentive structure with the company’s goals. The only way to earn windfall money in my companies is to make outsized contributions to value creation.“
This philosophy creates a virtuous cycle where motivated employees drive company success, which in turn leads to greater rewards for them. It is the ultimate alignment of interests, making a good compensation system one of the smartest investments a leader can make.
“And that’s the bottom line of a compensation structure that aligns the interests of the people in your organization with the interests of your company and its shareholders. Employees are happier and have more reason to work hard. Managers are more motivated to devise creative solutions to challenges. The company is better positioned to make gains in operational excellence, market share, and profitability.”
— Brad Jacobs
Beyond the Book
Listen to "#403 How Jensen Works" by Founders Podcast
Read "The Surprising Reason Writing Remains Essential in an AI-Driven World" by Farnam Street
Read "Decision Journal: Template and Example Included" by Farnam Street
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