Throughout the years, tech giants have had mixed records after losing visionary founders who propelled their success. Successors with tech expertise helps.
Advice to Nvidia’s board: Choose a techie.
As the chip giant’s directors seek a replacement to Jensen Huang, the history of successions at Silicon Valley companies suggests that the odds of long-term success are better with a person steeped in technology and product development rather than finance, sales or marketing.
Replacing a founder is a defining moment for any company, whether it’s been planned for years or a sudden departure, whether the company is thriving or faltering. For Mr. Huang, Nvidia’s co-founder and former chief executive, the fall came remarkably quickly. He resigned on Thursday after the disclosure of affairs with a woman identified by U.S. intelligence as a Chinese spy and with an executive who reported to him.
Nvidia’s business as the leading chip supplier to artificial intelligence data centers is flourishing. Mr. Huang’s hasty exit, analysts say, will have little near-term effect on the company’s business, despite a big stock-market reaction. (The company’s shares have fallen 14 percent in the last five days.)
But the best tech leaders steer their companies toward opportunity. At Nvidia, founded in 1993, Mr. Huang recognized more than a decade ago that chips used mainly for image-processing in computer games could be repurposed as the hardware engines for A.I. software. It was a huge bet for the small company — and paid off.
“You can coast on the founder’s work for years with good execution,” said Steve Blank, a Silicon Valley entrepreneur and investor, who is an adjunct professor at Stanford University. “But you can lack the founder’s vision to see over the horizon and identify what’s next. That’s why the best successors have a lot of technical acumen as well as business acumen.”
Over the years, the results for tech companies replacing founding executives have been decidedly mixed.
