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Why NVIDIA is a shitty model for a startup

Beyond the billion-dollar playbook

NVIDIA's success has - somehow - become a template for every would-be startup founder. Amazon's logistics are touted as the solution to problems of scale for 2 person companies. Everyone with a pitch deck tries to apply the wisdom of Steve Jobs circa 2005 to the problems of Steve Jobs circa 1976.

There's a fundamental flaw in this line of thinking. A cognitive dissonance that the airport book cohort have conveniently chosen to ignore. The lessons from multi-billion dollar companies rarely (I'm being charitable) translate to early-stage startups.

It's misguided advice that relies on the "scaling fallacy" - the belief that there are principles that can be universally applied to every company, regardless of size, industry, or context. But what works for a global technology company with thousands of employees and billions in revenue doesn't work for a startup operating out of a garage. It might provide the founder with a Pinterest-style aspirational mood board. But it offers very little else. 

NVIDIA has become a darling of the AI revolution, and as a result, the favourite case study of Very Online business coaches. Their success is often attributed to their laser focus on developing cutting-edge graphics processing units and their early bet on the potential of AI. Business gurus are quick to extrapolate from this, advising startups to "find their niche" and "bet big on emerging technologies."

But NVIDIA had the resources to invest heavily in R&D, the market presence to influence industry standards, and the financial cushion to weather years of uncertainty. Most startups, by contrast, are operating on shoestring budgets, fighting for every customer, and living quarter to quarter.

There’s a complete disregard for context. Decisions don't happen in a vacuum. They're influenced by a myriad of factors: market conditions, competitive landscape, regulatory environment, and even geopolitical forces. 

Amazon's famous "two-pizza team" rule - that teams should be small enough to be fed by two pizzas - is another classic example. It's a cute anecdote that's been repeated ad nauseam in tech circles. But the context gets lost in translation. Amazon was trying to solve the specific problem of bureaucratic bloat in a rapidly growing tech company. For a small startup where everyone already knows each other and wears multiple hats, this "rule" is not just irrelevant—it's fucking harmful if it leads to artificial constraints on collaboration.

The most insidious aspect of the billion-dollar business worship is the rampant survivorship bias. We study and glorify the companies that made it big, forgetting the thousands that failed along the way. And it creates a distorted view of what leads to success in business.

When we look at NVIDIA's success in AI, we're not seeing the countless other companies that bet on emerging technologies and flamed out. We're not privy to the near-misses, the pivots, and the lucky breaks that contributed to their success. By focusing only on the winners, we create a false narrative of inevitability and replicability.

This survivorship bias leads to oversimplified advice that ignores the role of timing, luck, and unique circumstances. It's easy to say "innovate like Apple" or "disrupt like Uber," but these platitudes ignore the complex realities of building a business from the ground up.

Startups have the benefit of agility. They can pivot quickly, experiment with new ideas, and adapt to market changes faster than their larger counterparts. Instead of trying to emulate the processes of a tech giant, startups should focus on leveraging their ability to move fast and stay close to their customers.

Pre-scale companies have the advantage of deep, personal connections with their customers and communities. While NVIDIA worries about global supply chains and international regulations, a startup can focus on building relationships and solving specific problems for their immediate market.

Instead of looking to multi-billion dollar companies for wisdom, startups and small businesses would be better served by focusing on fundamentals. Cash flow, customer satisfaction, and sustainable growth are universal principles that apply regardless of size. They should embrace their constraints, recognizing that limited resources can breed creativity and force efficiency in ways that bloated corporate budgets never could.

We all want to believe that there's a secret formula to success, a set of rules that, if followed religiously, will lead to guaranteed triumph. But reality is far messier, far more context-dependent, and far less predictable than these narratives suggest.

When you come across yet another LinkedIn post extolling the virtues of some tech giant's management style or a Twitter thread breaking down the "secrets" of a billion-dollar company's success, take it with a grain of salt. And then add a pound more. 

The next great startup success story won't come from slavishly following the playbook of today's tech giants. It will come from an entrepreneur who understands their market deeply, responds to their customers' needs creatively, and builds a business that's uniquely suited to its time and place. 

Maybe someday, the business gurus will be writing about your success story, trying to distil your unique “journey” (why is it always a journey) into easily digestible LinkedIn posts. 

But you'll know better. 

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