Microsoft Chairman and CEO Satya Nadella on Empathy and Lessons He Learned the Hard Way

The entire day was all these coding interviews. And at the very end, the last question the guy asked me is, hey, you're crossing a street, a child falls, what will you do? I eventually blurted out, I'll call 911. And he gets up and he says, when a child falls, you pick them up and hug them. And he walks me out. You need more empathy. I said, oh my God, I think that's it. I'm not— definitely not getting this job.

Welcome to Confession, where I invite tech veterans to share their painful lessons. We all connect through shared pain, and I've had more than my share of big mistakes in my career. I'm Ali Partovi, and I run Neo, a venture fund and mentorship community for startup founders. In this episode, I sit down with Satya Nadella, legendary CEO of Microsoft and a dear friend of mine. We each share confessions about things we did wrong, And what we learned from them. I think you'll really enjoy it. This is Confession. Let's begin. Thank you so much for doing this, Satya. Welcome to Confession.

Lovely to be with you, Ali, again, and happy to do this.

I'd love to start by just learning a little bit about your life. Where were you born? Take me back to what little Satya was like.

You know, I was born in India. I was born in a city of Hyderabad, which is very different today than even it was when I was growing up there in the '70s and the '80s. For an Indian middle-class kid, I did have a pretty privileged life. I had a very— a father who worked in the Indian Civil Service, a mother who was a professor of Sanskrit. They were very academically accomplished people. I was the only child. So in some sense, they gave me a lot of room, confidence to explore, find my own path. My early passions were, I was very provincial in some sense when growing up. I don't think I even had the dream of ever leaving the city.

Wow.

I was obsessed with playing cricket. I thought that's kind of my calling and that's what I'll do. No way. And I was smart enough to recognize that I was not good enough to ever sort of really make it as a professional cricketer, but I was going to be a good club cricketer. And then I was going to get a job in a little bank there and live my life. For some reason, that's not how it panned out. Luckily for me, I guess. A few years back, my high school certificate, my daughter found it lying somewhere. We were moving places or what have you. And she looks at me and says, what? These are your marks? And I was distinctly remembering my father also looking at my scorecard and also laughing at it. Okay. So I'm one of those guys who both my daughter and my father sort of said, man, this guy's pretty mediocre when it to academics, my parents sort of greatly influenced the ability to continuously learn, perhaps. If there's one attribute, it's the version of Satya each year. It's slow, but it's better. Each year I was better than the previous year. For anyone who starts slow, it's okay as long as you keep getting better.

Was there any story of mischief? Did you ever get in trouble as a kid?

Yeah. I mean, I had this quiet confidence And I wanted to do my thing and be left alone. But there was one thing that triggered me were bullies, right? So anyone who tried to do anything, that is when I somehow reacted that was not the normal reaction I would otherwise have, right? Because that's the only time I think my parents were called into the school to explain what the heck happened. Like there was this one kid, we were at a You know, in the playground, and he was trying to push me around, and I pushed him back and he fell, and it was a bit of a disaster.

Do you remember this person's name?

I don't remember the person's name. It was, I think, in second grade.

This was in second grade?

Yeah, this is in second grade.

You got in trouble for knocking out a bully.

Knocking out a bully. And it's, and I've had incidents like that where, yeah, I do react pretty negatively to anyone who provokes me For the wrong reasons, but I'm not easily provoked.

Okay. Note to self, don't bully Satya. Well, take me into your path to the United States and your career. How did your career begin?

Thanks to a little bit of push from even my father, he had bought a Sinclair ZX80 when I was probably in 10th grade at that time. And that was my first introduction to even computing and software and And I kind of was into it, but I was not much of a tinkerer. I was not a builder. I was not doing— I mean, I was in the aero modeling class, I remember, and none of the planes I built flew as far as I could tell. So obviously I didn't have that mechanical talent to build. But computers, at least I felt like, wow, this is the first thing that I had agency. And luckily, I remember getting into 2 colleges, one in mechanical engineering and then one in at that time, what was called electronics and communications engineering. And I had a big choice to make, and my father pushed me saying software is the future, or electronics is the future. I'm thinking, man, this guy's an economist. He doesn't know a damn thing. What is he advising me on engineering? But it was great foresight because he pushed me into this track. Oh my gosh. So slow and steady, I started learning, getting better. So I came to the States, to do my master's actually in electrical engineering. But then in the first semester, a friend of mine who were also from my same undergrad college had switched to computer science. I remember taking a class with— I wrote a massive amount of Lisp code. The coding stuff started coming a lot more naturally to me at that stage. And so I switched majors. I graduated and then got into Sun. I worked for a couple of years at Sun. So anyway, so the thing, the way I describe it sometimes is It is American technology, broadly speaking, reaching me growing up in India.

Right.

And it's the American immigration policy, enlightened American immigration policy that let me come live here. I mean, first learn, study, and live here.

And then contribute. Great. So take me through you. How many years have you now been at Microsoft?

I joined Microsoft— 30 plus? Yeah, 35 years. So I joined Microsoft in '92 and yeah, it's been basically a lifetime.

The purpose of this conversation is to talk about, you know, painful moments that you maybe haven't shared before, or lessons learned, mistakes you've made. So I'd love to have you, you know, take you back to think through across that 35-year arc. Are there themes or specific stories that you look back thinking, oh man, I messed up, or where you learned something, you know, a tough way?

Yeah. I mean, there are many, Ali, in the sense that There are a couple of different arcs that we can pull the thread on, right? I mean, like the thing that I have talked about, but it's still, I think, one of the formative stories of my journey is, you know, you worked at Microsoft for a brief time. So there's this last interview, it's called the As Appropriate interview. The guy who was doing my interview, his name was Richard Tate. I distinctly remember he was a Scottish guy, just an unbelievable human being who unfortunately has passed since. The entire day was all these coding interviews on the whiteboard and all kinds of memory management and algorithms and blah, blah, blah. And at the very end, the last question the guy asked me is, hey, you're crossing a street, a child falls, what'll you do? And I said, oh God, is this some variant of The Traveling Salesman that I don't know about?

Computer science challenge.

This is some computer science challenge. I went everywhere except for the thing. So I kind of tried to— oh, then I eventually blurted out saying, I'll call 911. And he gets up and he says, when a child falls, you pick them up and hug them. And he walks me out. You need more empathy. And that was his word. And I said, oh my God, I think that's it. I'm definitely not getting this job. There is a fascinating thing that somehow he felt like he needed to deliver that message to me. That was the last question. I did get the job.

That's so powerful, Satya. People ask me what you're like, and I reported to you for a year, something like that. And the word empathy is always either the first or top few words that I mention. And it's surprising that someone gave you that lesson so starkly and at such a—

Yeah, it's a hard thing, quite frankly. I kind of understand even that and a lot more now, Ali. In fact, I would say that the most formative thing that happened just on that arc, even because even at Microsoft, One of the most formative things that happened to both Anu and me, I was 29 years old when Zane, our son, was born and he had cerebral palsy and he had a tough life. He passed a few years ago.

I remember.

I was mostly about, oh my God, why did this happen to us? Why did this happen to me? Why do we have this tragedy and this, that, and the other? And then it was actually watching my wife, Struggled through it all. In fact, taking Zane up and down 520 to every therapy possible and being there for him is when I realized that nothing had happened to me except Zane needed a lot of help and that I need to now see the world through his eyes and understand that and be helpful as a parent, as a father. And that maybe the thing really started. getting me to even think about, like, what does it mean to be a manager? In fact, one of the things that you triggered for me was the memory of my— the manager whom I was working for. His name was Mark Cruz. The call he made to me the day Zane was born, because we were trying to figure out— he was in NIC ICU and it was sort of all of a sudden and we were absolutely not prepared. And I remember him saying, hey, take all the time you want and don't worry about work. Right. Just those few words of this one manager at a time when you most need it. I think back at it, right? Even the company, the insurance that Microsoft had, this kind words of a manager just give you all of what you need in terms of support. And I look back at it and to your point about even the confessions, the biggest regrets I have are times when I don't have empathy. And it's hard. You make these calls, you kind of are obsessed about something. You go into a meeting, you really don't understand. don't listen, don't see it through other people's eyes, and you're judgmental and what have you. So yeah, that's one arc. I don't think it's ever finished. In fact, I think being human is to sort of have increasing levels of empathy because life teaches you, right? It's not like, oh, we are born with empathy. It's just life through every day gives you the ability To have more empathy for more of what is happening around you. I remember it was my first job where I was managing people. There was this lady who worked for me, and I just could not get myself to recognize what she was struggling with. And I remember she coming to me multiple times even and asking for help, and except one I didn't care. I didn't listen. I just wanted the job done. And so the level of— when I look back at it, you know, I'm quite frankly, you know, stunned at both my ignorance of my job and also more importantly, regret what it may have done for her, right? Because I do subsequently, I don't recall the entire thing, it's just so far back, but I remember she left Microsoft after a few years after that. I don't remember whether she left at that time or a little later, but it has bugged me that what was my impact of not being there as a lead, helping her out when she was asking for help?

Right.

It is about like some simple thing, right? Hey, I need to coordinate with another team and I need to get that done. I was just mostly an absent leader who was just barking orders,

right?

Versus being the one who was even helping.

What emotions does it bring up for you?

The emotional side of being a leader is that, right? Which is you, you kind of are gonna make mistakes. You have to have the courage to learn from your mistakes, right? I think that's the thing. It's not like you're going to be perfect. But to me, that's the other part of the Microsoft journey is how do you build the courage to confront your own mistakes, fixed mindset, even big ones, especially ones like this, which are about soft skills that are the most important skills. They're the hardest skills in some sense. It's all about being able to get people to be able to do their very best working with you, around you. Yeah. And I obviously failed at it many times over the years, built more of that skill set.

Again, for what it's worth, I think it's your top trait or one of your top traits, empathy.

I remember another more consequential meeting. This was maybe 2008, '09, maybe. Bill called a meeting. We— I was at that time running what became Bing later on, and this was an acquisition our enterprise business was making, and they were trying to buy some kind of a parallel data warehouse team. I looked at it. It is completely architecturally stupid in that time to go buy that. This was this other team sort of making some decision which made no sense. I sat in this review. I distinctly remember this. In fact, it haunts me to think that I may be in a review where there's somebody in that meeting who sees the future a lot more clearly than I do and the other person presenting, but does not really advocate for it. And so that's what I did. I just kind of, kind of got outta that meeting and I said, ah, this is such, such, so it's such, such, such a waste of time.

You said you sat in this review, you saw that there's an opportunity and a right path, and other people were taking a different path and some different group had their own agenda and you could have stood up and banged the table or said, you guys are making a mistake.

How do you do that? The thing is, in a large company, let's face it, there are different groups, there are different incentives, but you work for one company. And your job as a leader is not to say, I work. Like this owner mindset is like at some point, Steve Ballmer had once said this to me, at some point you transition from just working at a place to feeling like I'm one of the owners. It's not about like, am I on the cap table and exactly what my number is? Right. It's more a mindset, right? Because life's not lived by just being so transactional about everything. Because at the end of the day, we all perish and nobody's going to look at any balance sheet or income statement. And it's going to be like, hey, How do you live your life? And so that's the thing. This is what is fascinating about us as humans. We are irrational. And so that's the thing. How do you develop that courage or the owner mindset to go fight for what you feel is the right outcome for the company, but do it with an approach that doesn't trigger the amygdalas of everybody else?

So you were sitting in this meeting. thinking, should I tell the other people they're dumb? Or basically, should I—

Yeah, that wouldn't have helped. So this is the thing. In fact, I had enough of a skill that I don't want— I knew that if I tried to attack the other team's idea, that wouldn't go anywhere too. That would be considered like, hey, this is another group that's just attacking. It'll be quote unquote internal politics. So one of the skills that I think you have to develop is how to somehow still persist. Like if I look back, if I had to play the tape again, here's what I would've done. I should have gone and met that executive offline and persuaded them, right? Made my best case, not to Bill or Steve or go over the top, but go to the person and try to make it their idea.

Right.

Right. Put aside my thing. Let me go try and influence this person. to say, hey, this is a better call. And in fact, even one better step I could have done, right? I look back at it. I should have said to that person and said, hey, you know what? The big data platform underneath Bing, you know what? I'm gonna reorg this to you, right? You don't need to buy this parallel data warehouse that's going nowhere, but the future is this. Now it's your team.

So you said, but though, that it haunts you. Like, was there this meeting where you were like, at this moment, should I speak up? And then you were afraid and didn't—

Yeah, I mean, especially now I sit in my seat, it's a thing that I think about. I don't think I have a perfect answer.

Right.

But to create an environment in which somebody feels like, wow, I always want to go for the global maxima, and to have that be a cultural norm, it's a tough thing to orchestrate.

Global maxima meaning basically what's good for Microsoft as a whole. In the long term, not what's good for my group.

That's correct.

In the short term.

Yeah. One of the things I think a lot about is the incentives are super important to drive human behavior, but you also have to, from time to time, transcend your incentives narrowly defined. Because the reality is, at the very end of it all, You're not going to be defined by your narrow incentives. And that is the most interesting challenge, I think, in the workplace.

By the way, I think I've told you, working for you, you were by far the best boss I had. Almost, I'd say the only boss that I actually loved working for.

When you had come with the LinkExchange acquisition, '99, 2000 is when we worked together. And you had this idea that, hey, Doing

search

advertising was going to be big. And this was pre-Google even. Pre-Google.

Yeah.

We had that product. What was it called? Ad—

It was a conceptual product called Keywords. And our idea was that search was not yet considered a big business.

Yeah. In fact, you made me— I don't know if you remember this. You asked me to send a mail to Larry Page and say, hey, do you want to really let us do Keywords on Google Search?

Yeah.

And I sent it. He never replied.

Interesting. Yeah. At the time when I joined, when Microsoft bought our company, Microsoft had shifted from focusing on software to we have to win the internet. It had kind of already defeated Netscape in the browser wars. And the top 2 companies that Microsoft was worried about were AOL and Yahoo. I remember like all these conversations about how do we beat them? And I was like, we should be worried about this little startup named Google and we should be worried about search. And there weren't enough people who saw it that way. I saw it that way, not because of some sort of genius, but because I had been working— my startup worked with these small businesses who would, they would have given their left arm for a chance to be at the top of search results, even of a second-tier search engine, let alone the big ones like Yahoo.

No, I think it's a, there are many, I mean, there's many strategy pieces, but let's set aside that stuff. But the thing that that incident, and that is repeated a couple of different times for me, even as sort of working with you at that time, we tried to champion it. I tried to champion it. We tried to sort of internally go try to work it. I remember the big trade-off there was we were making a bunch of money on banner ads in what was MSN Search. And the idea was to get some remnant inventory even to bootstrap keywords. And we couldn't because we had like an entire revenue plan and this is another team and all of that. But the interesting thing is when I look back at it, Ali, I gave up too, right? And I've seen that.

At the same time, this experience was very frustrating for me in that I, I came with an owner mindset. I had been a founder and I had this idea that I thought was going to be really big on the internet, maybe bigger than everything else, you know, that was happening on the internet and I couldn't get other people to see it that way. And, you know, I was kind of an arrogant 26-year-old going around doing it the wrong way, probably pissing off a lot of people. And, and you were, I think, in this rare place of you could see it and supported me, but probably couldn't prevent me from all the mess-ups I was making in terms of the interpersonal. Approach.

There are 2 sets of things. There's stuff that you could have done better. There's stuff that I could have done better. And if I focus on what I could have done, if I look back at it, I should have gone, right? And done what I just sort of said, right? Which is I should have gone and really worked the leadership of this other team, uh, which we tried. I tried a little bit, but not maybe as much. I mean, think about it, right? Because we are looking, you know, we are sitting here in 2026 and sort of talking about it as just one other little thing.

Right.

This could have been the thing that made the entire difference. In fact, the entire arc of Microsoft's thing was we won the browser war only to lose the web, right? Because we never got—

Yeah.

In fact, we lost the browser even after that because of that one mistake, which is we didn't understand that the economic value is all in search as the organizing layer of the web. And then that power could only be sustained if you had a monetization model, which was auction engine. And when I look back at it, you saw it clearly and through your sort of evangelism of that, I saw it. In fact, 100%, I got it. But I gave up and that bugs me. I regret that a lot when you see it. So if I had to sort of pull out a lesson, learned, it's that, you know, having, when you see it clearly, having the courage not to let it go, or being, having the, you know, being persistent with it. Of course I wanna play the long game, but you know, sometimes you resist playing the long game. And that's where I think founders are unique in that sense, right? Which is founders are always, you know, by mindset, you've created something from nothing. And that I think is the difference between, you know, you working versus founding. But you know, that founder mindset, owner mindset, is what you need to even bring into any workplace.

So my side of this story, I remember this intense frustration because it was so clear to me that search was going to become the most important thing. And probably to— probably what hurt me was that I would say it in these exaggerated terms like, this will be bigger than anything else on the internet, you know? And the person there who was thinking about automobiles or travel or so on, CarPoint, I was like, this search will be bigger than all of that. And probably insulting whatever that person thought was, you know, was more important. I felt the only person who really saw it was you, actually. Yeah. And so there's this glow of, okay, this person gets it and sees me. I felt very seen and supported, but I would then— I was in California. I would like make a pilgrimage to Seattle every month or so trying to pitch these large groups or individual groups. And they all didn't see it. And I think to some extent they were all put off by how arrogant I was because I was probably acting like, I'm smarter than you are, to all these people. I think instead of trying to help them see it, I was trying to find exactly what you said. I was trying to find someone above who would tell them to change.

Yeah. But one of the other things that also taught me, I mean, in its own interesting way, when you're at the top in particular, The one way you have to create room is by taking risk on your back. Because if you look back at it, right, the big decision at that time, right, from going from making whatever CPM rates we were making on some banner ad because we were just slapping it on front of results to saying, no, no, let's do keywords on an auction, which was going to be a long tail. And, you know, the auctions were gonna build, would've been a short-term revenue drop, right? And there was a sales force that was comped and what have you. And so you needed to make a decision which was going to be obviously short-term problematic.

Yeah. And unpopular with the sales force.

And unpopular with the sales force. And even you can't punish the sales force for it. So one thing that I did take away is it's very hard to say, why don't we do the new thing, which is high risk, and expect people in the organization to do it when you yourself as a leader are not willing to take it on your back. And that being explicit on that, at the top you should have a complete thought and you should take all the risk. And at the bottom you should have complete empowerment, right? That to me is how a company should be run, right? Which is, you should not be like, hey, you know, you expect at the bottom, To have all the risk,

right?

Only the empowerment is all at the top. That's not the way to run an organization.

So, you know, Satya, in that, that experience for me is one of the things I'm ashamed of that I've never shared publicly was, so I'm proud of having had an idea that was prescient and huge, but not only I failed to make it work within Microsoft, I was ultimately basically asked to leave. You know, I, I wasn't exactly fired, But I think somebody above said to you, you have to tell this person to just stop working and stop sending emails and stop pissing people off. And I was essentially fired. I think the only time in my career that I've been, and I've never told anyone that I was fine financially because I sold my company, but I'm definitely not proud of the fact that I had an idea that could have been the monetary engine, the size of what Google built. And it went nowhere, you know, and that's definitely something I'm ashamed of. And it was, you know, it was a very weird feeling of like, I sold my company, I did well, I'm super smart. And look how I effed it up as far as having real impact that I could be, you know, like you said, when you, at the end of your life, it's not your, it's not your bank account you're proud of, it's your impact. And this particular thing. Did not go to any place. Google had that impact.

Thinking about these things, which is whether it's the empathy, it's this ability to have courage and persistence. And quite frankly, the other arc for me is over the 35 years of doing, learning, failing, learning again, is this notion of complete thoughts. is why do we make these mistakes individually or as organizations? It's because we don't complete the full arc of what it is, right? Which is we kind of, let's say you saw, hey, here's the way things can come together in terms of search being the organizing layer. And then, you know, an auction engine being the monetization engine. Right. That was it. All of it had to click. And in fact, one of the other things that Steve had once said to me, it's not like in Microsoft we get obsessed about all the tech and so on. He's like, no, the go-to-market, the brand, you have to have—

The whole picture.

The whole picture. The more of a person of authority you are, it becomes even more important to have complete thoughts, right? It's not, oh, I have an idea. That's not good enough. Or I know I see part of the picture. It's not good enough. Even right now, people run around and say, oh, I'm AGI-pilled. I say, okay, what the heck does that mean? You have to sort of really think about it at every layer of how is it going to play out, not only in terms of the economics, but also its impact and also for its society. Having a complete thought is important. There is lots with this AI wave. There are massive changes, right? I mean, the income statement of Microsoft going forward is going to look very different. It's a much more capital-intensive business. Which now there's real marginal costs in software. Our categories are all being redefined. So some of the ways we are even thinking about in ensuring that the company is able to sort of manage this transition, and in fact, the only reason why I think Microsoft is at 51 years into our existence still here doing things that are relevant at the frontier, so to speak, is because Sometimes we got it perfectly right. Sometimes we got it late, but on average, we have a better average than most businesses.

Well, Satya, thank you for coming to Confession. You've talked about standing up to bullies, making airplanes that didn't fly, remembering to pick up a child if they fall. What are you feeling now about divulging some of these stories?

Ali, for me, is being able to approach one's work and one's life as having some form of a deeper meaning that you ultimately live with. But in there, you are able to reflect on it, and not because you want to be proud of the impact or what have you, but you feel that when the full arc is retold, at least by yourself, you felt like, yeah, I learned. And that's when I go back to the very first thing I said, which is each year, if you look back at it and say, I am better than last year, And that's a great satisfaction to have, which is that means that it's worth pursuing what you're pursuing.

Well, thank you so much for doing this. It's been wonderful.

Thank you so much.

If you enjoyed this conversation, please subscribe to Confession wherever you get your podcasts. In an upcoming episode, I'll be interviewing Luana Lopez Lara, co-founder of Kalshi. She has an amazing story and shares a lot of intimate moments behind the ups and downs of building Kalshi.