To re-iterate: What I believe PaulG is saying is that there is a crucially important phenomenon that we don't yet understand, and naming it will facilitate the process of bringing it into focus so that we can help more companies be successful.
His footnote has a painful resonance: "I also have another less optimistic prediction: as soon as the concept of founder mode becomes established, people will start misusing it."
This is exactly what has happened to the Agile methodology.
Founders focus on the strategic goal. Managers focus on tactical goals. Rules and processes are put in place to efficiently achieve these tactical goals. The problem is, in certain situations, these local process are at odds with the broader goal. Only the Founder has the authority to break the bureaucratic rules.
My favorite example is from the film Zulu when the British quartermaster adamantly dispenses ammo per the rule book and a long queue of desperate soldiers form up. Nevermind the British were out numbered 10 or 20 to 1 and should be firing their rifles as quickly as possible and using up all their ammo as quickly as possible.
The thing is this is hard to pull off even for the actual founders. For starters its just hard, and tiring(and even pointless) to keep jumping over the ever increasing bar. Even more so when you are aging, know you are going to die and you are better off enjoying some of that money you earned, in the time and health that remains. At that point, you let things go on autopilot and begin to reduce engagement with your work.
The middle managers and employees you hire don't have incentive to even care this much. They are neither paid this high to care, nor have much to lose if they don't. Younger people show some passion because they wish to learn, but once they have enough of it, they go on the same mode.
To summarise. For people who made big money making a little extra doesn't matter all that much. People who don't get paid, don't even bother to try.
This has become more popularised by DORA, but Westrum divides cultures into "Generative", "Bureaucratic", and "Pathological". Someone who finds a mistake is praised in a generative culture, ignored in a bureaucratic one, and blamed in a pathological one. The conventional "management"-type detail-hiding hierarchy would be absolutely stereotypical of bureaucratic or pathological cultures depending on the goal.
From that point of view I think this is better understood than you'd think, but possibly not well communicated.
Good founders will want to learn or at least understand all tasks that sets their business apart without becoming micro-managers, when their become overburdened by details in certain areas the default action should be to delegate to someone they _trust_ with doing in the area rather than just hiring someone with a CV and charisma that _implies_ that they are good at handling that area.
This probably often works well for most founders initially when they only need to delegate practical tasks that they know how to measure directly.
However once the money stakes, and most importantly number of people grow. The tasks needed to be delegated are managerial rather than practical so the founders become faced with another kind of delegation that they have less proficiency in.
This is probably where things go awry, at least some of their early promotions or delegations probably didn't thrive as managers, faced with failures they start seeking out managers from the managerial class from the outside rather than risk finding the right people with domain knowledge to promote.
That doesn’t matter much to the successful company, it makes more than enough money to cover the inefficiency, and the inefficiency isn’t causing any real trouble - it just means that a lot of people are being paid either to not produce very much or to produce things that will end up being thrown away.
Most executives and high level managers are used to this environment. You don’t actually need to be lean or very effective, you just need to pretend to be and know that whatever the company’s main revenue source is will cover you whatever you do. As long as you can tell a good story internally to justify your position.
Turns out that doesn’t transfer well to startups that actually need value out of every dollar spent.
If a large, successful company operated extremely cleanly, wouldn’t that increase stock price even further?
What are the disincentives to doing so (beyond the need for requiring more from people)?
An expert told him to hire experts to keep growing it. Now he's down to two locations, high in debt and uncertainty.
Corpo bois are not founders, they know nothing of growing a startup. The have never produced value from thin air. They are just good at playing the corpo role. Job security is their main concern.
If a founder is exceptional and all of the other stars necessary for a startup to succeed have aligned, this may be a good approach. But then we are just back to the question YC has always tried to answer: what makes a founder exceptional?
What about the founders who failed _because_ they were in "founder mode"?
I am not sure this article represents the beginning of a paradigm shift like it seems to think it does.
Through fractal management, a visionary leader can have a better chance to ensure that the vision is translated into practice at the various levels of detail.
Fractal management is only part of it, though as it is a technique, but it doesn’t cover the enormous skin in the game founders have about the success of the company. For many founders, the company is their baby(I am projecting here) and they want to make it succeed. Contrastingly, many of the professional fakers instead see it as just a job, and a step on the ladder. Principal/agent. Without genuine care, and cohesive vision, fractal management can quickly devolve into chaos. It is high reward and also higher risk!!! Maybe that’s why only the founders do it but not their VPs. I wonder if any VPs at Airbnb are doing anything remotely similar to what Bryan Chesky is doing as management style? (Honestly I have no idea)
I am sure that many founders failed also because of it as they might have been missing the charisma, clarity and conviction to pull this off.
(PS. Take my ideas with a big serving of salt, I am a founder but not at a large organization, and the article mainly focuses on large orgs)
The argument seems to be that if you understand the business as deeply as the founder does, you can get away with selectively breaking some conventional management wisdom.
That's what the article is about. The "common knowledge" is that it doesn't scale at all, that as soon as you become an established company you need professional managers. Paul provides counterexamples that prove it can scale and when it does it benefits the company immensely. He is hesitant to recommend this management mode outright because he doesn't know:
- what exactly do these founders do that makes their management more effective than business administration - what the limits of founder management are - how to trace the limits across the org chart
https://www.tomshardware.com/news/nvidia-ceo-shares-manageme...
Every conversation loses information. Something is always lost in translation, even among excellent communicators. If you only rely on your direct reports to get information about your organization you will be flying blind. This will happen in situations where everyone has the purest intentions. Add on top politics and personal interests and the problem compounds.
Here are a few tools I’ve used to get a richer understanding of what’s going:
- skip level one on ones
- metrics
- using the product as a user
- occasionally looking at a few “low level” artifacts like customer support threads, slack conversations, PR reviews, or user stories.
The observations from the above activities are invaluable sources of information. You cross reference it with what your direct reports tell you. You challenge them based on your first hand observations. Ask a lot of questions, and when they can’t answer them, encourage them to also become more intimately involved in their part of the organization.
No single perspective is enough to understand what’s going on
This is not micromanagement. This is being aware.
But if the founder gets hit by a bus it's going to drop to 2% or die. Professional management is like a lot of software tools, you can build a better framework yourself that is better suited to your usecase but no one else knows how to use it or can learn in a reasonable amount of time.
This isn't saying management is always the right route. A founder can lead for 30+ years, but they could also quit or get hit by a bus tomorrow so its not always irrational for shareholders to pick the "less efficient" option here
Set up organization, process, systems, etc such that 99% of the staff becomes more or less interchangeable in the long run. This allows organizations to outlive their founders.
There's a lot of management "common sense" which is oriented to that 20% solution and denying that 80% is even possible. I don't think the framework is impossible to learn as much as that the lessons needed are culturally out of alignment with how the professional management class speak. MBA courses have a lot to answer for.
So, if I get this right, hiring is done by the founder, who is not capable of choosing good people in a sea of fakers, and because of founders incompetency the advice is bad?
I do agree that every founder/CEO should have a tool for gauging how their company is behaving out of their bubble, but I see this new mode as a dangerous proposition which will invite all sorts of paranoid founders/managers to take micromanaging/abuse to a whole new level.
Maybe a better question founders(VCs) should be asking themselves is why are there so many "professional fakers" in top/middle level positions, instead of figuring out how to augment their behavior?
Not saying there is a contradiction, just a piece missing somewhere in the essays logic.
Your concern is valid, but since the company is their "baby", they care more than those for-hire professionals who can go to greener pastures.
While I do admit that I didn't fire people as quickly as I should have, most of our structural problems came from employees simply doing what was best for them and bad for the company, and most of them not even realizing or caring to think about the long-term consequences of their actions. My main lesson was that almost nothing can be delegated except to other founders or some exceptionally rare adults. Success in scaling seems to be actually more in making sure the things you do are simple enough that employees can't mess them up.
From founder reactions I've had when telling this, I think a lot more people have come to internalize similar beliefs, but none will publicly say them since they don't want to risk PR backlash.
There's a weird cognitive dissonance I've run into where career advice from most people on HN boils down to "Companies don't care about you. Optimize your own total comp. Jump ship when opportunities come up. Don't bother with loyalty." And then on the flip side you have founders who expect employees to act like the company is their family, but with zero reason to do so.
I think there must be a better way to get employees, and especially executives, to care about a company's long-term success rather than about quarterly goals and near-term comp. I'm not sure what that is, but I think it might need to be related to shares in a profit-sharing plan rather than traditional equity shares.
No leader should expect anything different from their people. It is your job to align the incentives so that what is best for the employee is to do those things that are best for the company. If you are relying on people to do what is not best for them out of loyalty to a corporation/startup/vision, you do not have an accurate pulse of the modern work force.
And yes, when a leader or company looks like it is going sour, sometimes employees act in bad faith for their own self-interests. When that happens, question why -- what is it that makes them think bad faith actions are more beneficial than helping the company. Don't just fire and forget... do some self-critique to find out why someone who was smart enough to be hired in the first place lost faith in your leadership. There are likely important lessons there.
I've seen this play out a lot as well with management. It's a classic principle/agent problem and one of the best solutions i've seen is flatter orgs where everyone has a primary work responsibility beyond pure management.
+1. I see this over and over.
No surprise there. If you can’t align incentives, then you are going to have trouble getting people to do what you want. Blaming the employees for a company failing is like blaming gravity for a building falling.
I think what I am remembering is this story from Joel Spolsky. Good read. https://www.joelonsoftware.com/2006/06/16/my-first-billg-rev...
Sharing how impactful the event/talk/whatever was, without the actual content, lots of name-dropping to build credibility, selective repackaging of conventional, well-known wisdom and a conclusion that fits nicely with exactly what SV executives want to hear == every Paul Graham post in the past 5+ years.
Well the message is "be excellent and next year you'll be there too". A failure to reward great employees out of fear of picking favorites is IMO one of the big problems of modern corporate management.
An impact of an outstanding employee is an order of magnitude bigger than that of an average one. You should reward people accordingly and openly. Here "accordingly" can literally mean "an order of magnitude bigger comp" and "openly" means you tell everyone this guy is rewarded because he works so well.
Instead what often happens is "here's a 20% raise but don't tell anybody so they don't think you're special. We're all equals here".
You seem to be looking for a checklist where none exists. As many people have outlined in this thread, the difference is a founder takes everything about the company personally as an extension of themselves, and as a central point who can keep everything aligned. A manager ensures that directives given from top are followed and results delivered to the best of their abilities and any prevalent constraints.
When starting up, the founder needs to (1) know what should be done, (2) be able to do it themself, and (3) do it and confirmed it's done. When scaling up, the founder still needs to (1) know what should be done, (2') know who are able to do it, and (3') arrange for those to do it and confirm it's done.
What is called manager mode is just a failure in either (1), (2) or (3). And what is called founder mode is just trying to remedy such failures by exerting themself instead of fixing the structure, thus, also not effective.
Sounds like chesky and pg want to turn the tide on that dominant culture in software companies. And I couldn't agree more! A big problem IMO is that most "professional software managers" are taught a management style that focuses on risk. Risk-aversion permeates every decision from compensation to project priorities. It's so pervasive it's like the air they breathe, they don't even realize their doing it. This is how things run in 99% of companies.
So, my fellow hackers. There is a better way. It's neither the Steve Jobs model nor the John Sculley model. Looks like pg has not yet found it. I hope he does, though. It would be great for YC to encourage experimentation here.
* CEO/founder should engage directly at multiple levels rather than only interact with the company through their direct reports. (Same applies at every management level, btw)
* Delegation is good, and it should happen in proportion with trust.
* The dominant culture at many tech companies is flawed and sub-optimal.
Bad points:
* "Founders feel like they're being gaslit from both sides". The two supporting points could both be true: "VCs who haven't been founders themselves don't know how founders should run companies, and C-level execs, as a class, include some of the most skillful liars in the world." However, it does not follow that the only option left is "Steve Jobs Style."
* "an annual retreat for [...] the 100 most important people"... I have trouble envisioning an effective org chart with lots of people at the top who would not also be in the "top 100" list. If your department heads are not your most skilled operators, then... maybe that's a good problem to fix.
* Assuming that the skills and intuition that make a founder successful will 100% apply to the very different job of being the chief of a 2000-person tribe. We should not assume that.
On average, everyone has an equal chance of needing to learn something new to succeed in a new situation-- founders included. Don't let pg's founder flattery go to your head.
Their product is straightforward feature-wise, and pushing a low-teen megabits per second of static video data on the internet in a somewhat timely manner is not a huge technical challenge nowadays (or 10 years ago).
Doing stuff like real-time video streaming, where you have to encode and push video to users with very low latency requirements (like Google Stadia) or with moderately relaxed latency but broadcast to a lot of users, like Twitch, or having a mind-bogglingly huge library like Youtube, is probably orders of magnitude harder.
I do like their shows, and probably a lot of technical wizardry VFX goes into making them, but getting the bytes to the end user is not it.
I'm sure there's a lot of adversarial smarts there, where brilliant engineers come up with incredibly complex solutions to simple problems, and it requires even more brilliance to make things run smoothly, but I'm sure their problems could be solved with simple pragmatic engineering.
Here is a person that recognized the problems of the stage pg was talking about, undertook a deliberate study of them, was successful enough in managing them, and then went on to found and grow Netflix.
Most founders have not previously taken a company public, especially via Hasting’s humble route. Having done so would enable him to prevent exactly the kind of problems pg is referring to while still being himself.
Jobs and Hastings have very different personalities and methods, but both probably achieved the same function within their organizations.
Bear in mind he's also responding to Brian Chesky's case study, which we're probably not going to get to hear much more about.
Whether orgs are run in manager mode or founder mode depends on whether there is a founder level leader available and nature of the changes that need to occur for the organization to remain competitive. Some orgs or sub-orgs cannot afford to have a founder making radical changes, because the risk this will lead to an exponential rise in defects for end customers is greater than the potential benefit.
PG tailors to startups and for startups the risk of the wrong product is generally much greater than the risk of product defects. So I tend to agree with his points here.
But, I predict that once Reed Hastings leaves Netflix, the company will begin to decline.
Take the iPhone: a product so good at a time when there wasn’t much like it. A guaranteed success. You’re going to have talent rally around it and get excited for it to succeed. But that’s been done, and in the Phone landscape, there’s never going to be such an event again.
So in general, it’s never one size fits all. We can learn from the greats, but it’s best to develop our own, situational ideas along the way.
> If a person on your team were to quit tomorrow, would you try to change their mind? Or would you accept their resignation, perhaps with a little relief? If the latter, you should give them a severance package now and look for a star, someone you would fight to keep.
I agree with some of the other replies. That Hastings was very aware of two things - He's not the best manager - Corporate manager's are full of bs
IMO, the "keeper test" and some of the other famous and/or controversial policies at Netflix are a direct approach at avoid "manager mode".
We can find a thousand companies where founders returned and made the company bigger, but what about those where the founder blocked growth and they never rose to prominence in the first place?
This footnote was what got me: > [1] The more diplomatic way of phrasing this statement would be to say that experienced C-level execs are often very skilled at managing up. And I don't think anyone with knowledge of this world would dispute that.
I've not founded startups. I just work in them. I'm not even a terribly important worker. AI bots are absolutely coming for my job.
But this is when I know a company has left "actually a startup" mode in the way that I can enjoy it and thrive in it, and when it's transitioned to "a growing, professionalizing company" mode, in which I wish them the best, but GTFO because I hate working in companies like that:
As soon as there are three layers of management between me and the CEO, all of whose roles primarily require them to prove that they are somehow "managing" my work, even though they don't have the first clue how to do my work, the company isn't in its startup stage anymore. It's a whole different kind of company, and not one I choose to stay in. I just go find somewhere else to help get to that stage.
"Professional managers" and "startups" are incompatible. Startups have to be able to move and pivot so fast that there's no use for a "manager" who doesn't actually know how to do the work of those they manage. They're going to be called on to fill in for those people far too frequently. They're dead weight if all they know how to do is "manage."
There is eventually a stage when you want those people, but trying to move to it too early, around your C or D when the VCs are telling you that you should, is fatal. Everyone who made the existing thing good is going to get crowded out by sycophants who don't have the deep cultural knowledge of and commitment to your product. All they know how to do is blow smoke up the right skirts at the right times.
> There are things founders can do that managers can't, and not doing them feels wrong to founders, because it is.
And to be honest this hn comment section scares me, as it feels like people are discussing Paul’s new clothes without actually voicing out what they are talking about.
What the hell is “Founder mode”, exactly?
When you assign a person to a problem (hr policy, infrastructure scaling, new UX capability) they will treat that problem as most important, and if then they break it down a certain way and delegate parts those people will do the same with their respective parts. Like a game of telephone eventually what's actually important and what people think is important will drift apart, and before you know it a lot of people are working and doing stuff that doesn't really matter or is even counter productive.
A founder who can hold the whole business in their head and inspects the whole company at all levels continuously will spot and challenge/correct these drifts.
I think it was from Creativity Inc I read that Steve Jobs would challenge engineers about things and if the engineer stood up to him and made their case and it made sense and fit into the vision Steve would commend them and give them the autonomy, at least for that decision/project, but if the engineer folded or couldn't make a case for why it was the right decision he would steamroll them.
So I think founder mode is basically inspecting and challenging the company at all levels to maximize progress towards realizing a vision, and only people who are great visionaries and can also understand and judge the vision-alignment of unlimited micro decisions across many disciplines are able to operate this way.
But in general I think it's clear: founder mode here means having strong opinions about all parts of the company. Maybe it's a technical founder telling salespeople what they should emphasise in their sales pitches, or a nontechnical founder giving directions on choice of technical architecture. (And I think either of those examples would provoke different reactions in most people here).
A founder can wield this to effect changes that would be nearly impossible without it. In this sense, a founder can solve some problems in every part of the organization that no manager can. If a founder delegates everything to managers, or cannot identify problems best addressed with this founder's tool, then you are setting up managers to be ineffective in some situations that could have been solved by the founder stepping in. I think this is also part of what makes founder-led companies different generally. Professional managers do not have this tool at their disposal to solve organizational problems.
It requires judiciously picking when and where to leverage this power. Applying it unnecessarily will have the effect of disempowering your managers, and now you have a new organizational problem.
I’m sad about that because I was very interested in the title.
To some extent, the concept must remain vague because its meaning will vary from one company to another. Typically, there are one or two critical aspects that are most important for a startup or company, and the founder must be involved in those areas in a way that conflicts with the usual corporate structure or hierarchy.
Anyways, this is how I understood it.
It could be that the moral authority stems from having as much of a full picture as a single person can have over the entire lifecycle of the company, but I think a lot is also just the effect of "I got you here."
I'm glad pg named this effect, since I've talked about the related phenomenon for CTOs with many people.
This same thing happens with marketing. Budgets get set. Agencies get hired. Branding and creative campaigns get developed and show up on the doorstep of the CEO hundreds of thousands of dollars deep. In engineering. In customer support. In finance (we have to do this, because the forecast cycle requires it; we can’t do that, because we don’t have the budget).
In founder culture, the founder gets down and dirty in the roadmapping process. They will give direct feedback on how a customer issue is routinely handled, or a design choice, or a creative campaign. Or a technical standard - Gates and Jobs both famously did this incisively and decisively. I’m no huge fan of Zuck, but it’s clear how much involvement he has with product and design for example. He famously bought Instagram because he wanted to, and understood its importance to facebook’s future, not because a strategy team identified it and a corp dev team engaged and investment banker to analyze and negotiate it. Mark Pincus was like this at Zynga too- ask anyone who was there.
Why is this important? Because people all the way down the organization don’t usually have the same nuanced understanding of the product, the market, the company strategy, the positioning, as you do. They will make decisions that optimize their subsystem but are sub optimal to the system. I had a customer support manager recently ask me if he could move a set of things that was causing a lot of load on his team to our law firm. The law firm of course charges 10-30xx per hour what a customer support agent makes. Even if you do a good job evangelizing the company mission and hiring non-mercenaries and whatnot, again and again and again you will see people wanting to “professionalize” their teams in ways that add more process, slow things down, and attenuate impact.
So If you let your company get into manager mode, you really lose control of the boat. And if you try to operate in founder mode after hiring a bunch of managers, they pissed because they don’t want to be micromanaged. But if they were crushing it, you wouldn’t need to.
I think the best founders are able to navigate this dynamic effectively, whether that’s by being able to effectively make a jump to a more delegated model, or building a team that can leverage their strengths without snuffing their hands-on involvement, or taking back the wheel at the right time.
A good counter example I can think of is Yahoo, when Jerry Yang took back over after Terry Semel retired. Manager culture had deeply set in there, and was not reversible despite Jerry’s good efforts and some great executives who were aligned to it. (And yes, the big, Steve Jobs inspired, “fix the company retreat” they did was literally “VP’s and up”.). As someone who worked there, was not a VP, but likely would have been in a “top contributing employees” cull by different measures, it was extremely painful to experience.
I would note that it takes a lot of energy to sustain this mode and be a leader through it, or to make changes in this direction to course correct.
He does clarify, in the linked reply, that he didn't provide examples or go into detail about what exactly "founder mode" is or how it should be done because it needs a lot of research and would more or less require a whole book to explain.
So we tried twice over 3 years with 2 different VP's. Both paid $300-400k and sourced through recruiters who charged $75k in recruiter fees. So we were getting what any VC would consider cream of the crop VP of Sales.
Yet both of them failed spectacularly. We went from closing business every month to (both times) sales stalling and flat lining.
The 2 VP's were smart people and they had seen success at prior companies similar to ours in size and scale and maturity (and deal size, sales cycle length, B2B, etc). So what was the problem?
Simply put, what worked at their prior companies didn't work at our company. And both of the VP's wanted to push us the founders as far away from the sales group as possible so the VP's could retain full autonomy with their team. Onboarding both VP's was a miserable experience because, both times, they clearly weren't interested in internalizing the hundreds of failed lessons (and success stories) that had gotten us to this point. So after a while we saw the whole sales team slide back into old behaviors and tactics that we as founders knew didn't work (because we'd already learned those lessons).
By the time founders get to the point of bringing in outside management, they've probably been running the company for many years. The fatal problem is when founders bring in outside managers who don't bother to understand the tactics the founders used to get the company to the stage its at, and instead they come in wanting to replicate experiences they had a prior companies, because that's what's comfortable for them.
Unfortunately, on the flip side, promoting from within isn't a much better option, either. I've seen it happen multiple times where extremely high performing IC's are promoted into Lead or Manager roles, and the company 1) immediately loses a high performer because they're now focussed on managing people which is usually a totally different skillset than whatever made them a high performing IC, and 2) the manager fizzles out after 1-2 years because they aren't practiced at basic management tactics like delegation, quit, and go back to an IC position at another company.
It's incredibly difficult to convert an IC into a manager. And it's also incredibly challenging to (successfully) bring in a manager who wasn't first an IC at your company.
"Founder Mode" to me is figuring out how to scale your company in a way that doesn't lose the "magic sauce" that got the team to where it is. "Magic sauce" being culture, processes, systems, tactics, lessons, knowledge, etc that founders used to get the company to where it is before needing managers to scale people.
"Founder led sales" ... "Founder led engineering" ... "Founder led marketing" are all dirty words when talking to VC's, PE, potential acquirers, because anything "Founder-led" isn't scalable and relies on the founder working at the company to work. Maybe "Founder mode" is a stage of a company where the focus is figuring out how to scale "Founder led X" beyond what has historically been seen as practical.
He's right. I've worked in small and large companies and started one. The whole idea of hiring smart people and letting them do a good job is total nonsense. It doesn't even make sense in theory, let alone practice.
2. Break the rules if the rules are stupid. Pay excellent people out of band, for example.
3. Directly fire people for incompetence and accept that some of them will sue you. Whatever. Rather pay the settlement than pay the cultural cost of keeping losers around.
4. Don't accept that some things are too detailed for the CEO to understand. Either the person can explain it to you or you have the holy authority to overrule them.
Ultimately, founder mode is about confidence, courage, and competence. It only works if you're good, and founders who are weak will obviously kill their companies if they try to do this.
So act wisely.
Edit: this is being downvoted, which I think proves the contrarian point PG is making.
The other fatal flaw is that in larger orgs there is almost no existential risk to the organization from individual behavior. All the cloaks and daggers will get sorted out in the wash and Amazon will still be just fine. But this is not the case for a scaling startup. Bad individual behavior — prioritizing career progression over company success — especially at the expense of other employees, can and does sink smaller companies.
I think the stage of scaling is something that industry experience doesn’t provide a ready supply of employees to hire for. There are too many variants of startup company, too many weird starting structures, and the critical periods too short and intermittent.
The other variable not discussed here is the environmental constraints. An established org can be managed because the environment is relatively stable. The customer base is more of a constraint and the financial expectations are better integrated. A startup is still trying to execute various transitions at this point, often from loss-leading to not, and this introduces more opportunities for chaotic regimes that need to be tightly regulated.
I don't think that's bad behaviour (the 'especially at the expense of others' deliberately aside) - that's correct behaviour? Unless it's your company. But the key is, ideally, to have goals aligned such that the prioritising personal progression means doing great things for the company.
1. It's about incentives. If I own substantial equity of a company and I consider it "my child", the reward for doing a good job will be much greater than if I was a hired manager. The reward is not just financial but also self-worth and reputation.
2. Selection bias. When we talk about "founders", we really mean founders that have built successful companies. This criterion selects only those founders that are remarkably good at their jobs. They are good CEOs in general and also good fits for their specific companies.
3. Deep knowledge of the company and the business. For example, they remember all of the things that were tried but didn't work.
4. They are much more willing to shape the company and have a high degree of control. If I'm a hired CEO, I'm managing someone elses organization, it doesn't feel ok to make drastic changes. My mental setting is that I'm trying to please my boss (shareholders, board). I'm not willing to tinker and try something with a high risk of failure, I want to manage someone else's property seriously and responsibly.
[1] https://www.apolloadvisor.com/unconventional-leadership-of-j...
[2] https://en.wikipedia.org/wiki/Management_by_wandering_around
AirBnB is basically a web site and a customer service operation. They don't own or run hotels.
Netflix started like that, but now they also create content. The web site part is basically operating a server farm with a halfway decent interface. The negotiation with content providers part is crucial to success. Netflix also creates content. That works more like a VC operation.
Movie making is interesting as a management problem. Strip away all the glitz, and it's a project business where a new team is formed for each project, they do a complicated one-off, and then disband. This works partly because of standardized roles and tasks. Sometimes it doesn't work, and whoever's funding the thing has to be funded for failures.
These are all industries where the question of what to do dominates the mechanics of doing it. Compare, say, a railroad, an auto company, or an aircraft company, where ongoing execution dominates. YC tends not to fund that type of company.
The book doesn't use the phrase founder mode, but it discusses the transition from a founder oriented company to a culture oriented company in detail.
The human analog works well here. Advice for parenting a baby, toddler, child, or teenager is all different. People's needs change over time. At a certain point people become adults and need mentoring more than parenting.
Almost every article on how to run a company fails to qualify the stage of growth that the company is in. Once you start thinking about how companies evolve over time (somewhat predictably), it changes your perspective. PG is right in the correct context. Those advising AirBNB are also correct, in the right context. Following either piece of advice blindly is just living in a cargo cult.
https://www.amazon.com/Managing-Corporate-Lifecycles-Ichak-A...
(Like any business book, it's at least 20% BS, but the remaining 80% is quite good. If you do read the book, do not read the first few chapters and assume you've gotten the whole idea. The book has a very good paradigm on worker profiles and what is needed in different stages of growth in its later chapters.)
We concluded that they were high-level managers with little hands-on experience, accustomed to having large teams to execute their plans. They were often slow to recognize their lack of progress, or didn’t recognize it at all, and frequently spoke about the need for more "strategic" actions when what we really needed was to focus on executing key priorities.
So I related to PG's post.
And I keep coming back to how important organising above the Dunbar number is and how bad economics etc is at this.
This resonates for me - and it’s still just grasping in the dark - but they seem to revolve around the idea that with software a company is no longer a lot of Dunbar number tribes working together through politics of their representatives (managers) but that action through the whole company can be co-ordinated through software (I even have the idea that the workers are CPUs so the coders are new managers).
Anyway the point is that founder mode might mean simply acknowledging that software runs / orgnaisies a company more than anything else - and building for that. What’s more important if your whole company is software controlled - relations between managers or the whole-org-test-rig?
Edit: apple famously has a run-book that is insanely detailed - basically instructions on how to run the org that builds the iPhone - this is software running a whole compmay. And if it’s software, it can be in one repo and that repo can be owned by Steve Jobs. Conceptually- that’s founder mode…. Maybe :-)
Hm, so a company in founder mode is like a monorepo with all projects, software, documentation, branches, processes, owners, contributors, activities, tests, issues, pull requests and code reviews.. Consolidated, visible, under source control.
Following that analogy, a company in manager mode is like many repos independently developing, collaborating with each other when needed but mostly siloed and managed separately. Maybe like microservices..
> workers are CPUs so the coders are new managers
An organization as a form of parallel computing with humans. It feels like this could yield some insights by digging deeper into the concept.
Chesky and Jobs are obviously managerial outliers for their extreme accomplishment. Anytime one cites Jobs as a guru I'm reminded of an evaluation Bill Gates made about Jobs, to the effect of: entrepreneurs think Steve Jobs was an asshole, so they can be one too. But they're not Steve Jobs.
Even then: Airbnb in Founder or Manager Mode efficacy is very hard to disentangle from Airbnb and Covid. With no Covid, manager mode continues - would it be worse off? Hard to say. Apple has done exceptionally well (at least financially) under Jobs' successor Cook, surely in manager mode.
As other commenters note there are ample examples such as Nvidia (or Valve, Bloomberg, many others) which run as surprisingly flat but scaled organizations.
Fear of the ossifying effects of bureaucracy is a consistent theme in PG's essays for good reason. Finding ways to incentivize/align middle managers with the same urgency a founder has is another. "Founder mode" in the wrong hands drives away other good managers and is perhaps best used in the Ben Horowitz framework of Wartime instead of Peacetime for companies.
But boy I really do wish to have seen the original speech, surely more replete with details that answer my objections. I love the professional liars observation, they are the antagonists to both good founders and good managers.
So what happens I think is that most business value is brought about by a very small percentage of a company's actual day-to-day productive output. However, as a company grows, you do need this additional people because without them the company will start losing value. But a very few people and very few work in the company actually adds value and gets the company to the next step. So imagine something like apple the iMac when they launched it and then the iPhone and then the iPod drove the company into what we know it to be today. But if they didn't have all of the other managers and stuff who were pushing papers and getting things going, the company wouldn't even exist. The founder really needs to know what matters in the company no matter how large it gets and how to go to the next step in the company and that will take very very little of the company's actual outputs. Figure out who are directly responsible for creating those outputs and create a direct relationship with them. Going through the mbas and the paper pushers is secondhand information and usually they are tampered with.
1. Steve Jobs approach:
- Multiple teams tackling the same problem with different approaches (done for Mac OS X and iPhone)
- Let the best approach win
2. Nat Friedman's take:
"The cultural prohibition on micromanagement is harmful. Great individuals should be fully empowered to exercise their judgment. The goal is not to avoid mistakes; the goal is to achieve uncorrelated levels of excellence in some dimension. The downsides are worth it"
- Have a separate early adopter version of your product even when your company is big
- Founders taking customer calls (Eric Yuan, Zoom)
- Checking customer notes on X (Brian Chesky does this)
- Reading external cold emails from customers to the CEO, and replying to some (Steve Jobs and Bezos did this)
4. Stay connected to the reality of the company
- Anyone internally can email the CEO and suggest ideas, critique things
5. Have redundancy
- For any areas of the company that are critical, run two separate versions for as long as possible
- Humans have two of basically everything critical (except the brain, likely due to energy constraints): reproductive organs, hands, legs, eyes, ears, nostrils, why don't companies
Wasn’t this obvious? I’ve been in the software industry for long enough to distinguish people who do actual work from those who don’t. All the VPs I’ve encountered share the following traits:
- huge paychecks
- they hire others under their supervision to do the actual job
- you don’t actually know what their job is because they all delegate
So, it always seemed to me that being a VP always meant: no matter what you do (good decisions or bad ones) you are getting paid tons of money. It’s worse when these VPs come from faang-like companies: they are treated like gods who know everything and you cannot contradict them.
I have also worked with a couple who I am not sure what they did. And a couple that I think were actively harmful by not taking actions, letting problems steep, and pursuing pie in the sky solutions ("we could expand from our core product to offer our $internl_tool_that_barely_works, let's overly fund that while customers churn on quality issues")
And fwiw, I have yet to have a positive experience from an ex-googler and it is more of a toss up with former amazon folks. They are simply too used to white glove systems that have had, literally, billions spent developing these systems to the custom problems of these mega orgs.
Here's what we say on our jobs page [1] - strongly inspired by Chesky + Gumroad + nordic office culture:
> We operate with a fairly flat hierarchy and operate with high trust of each other. The code, copy, or designs you make will often go straight to production with little discussion or modification. Everybody is welcome to give their opinions, inputs, and ideas on the product.
> Our style of work isn't for everybody. You have a lot of freedom in how to work, but not a lot of freedom in what to work on. There isn't much mentorship, community, or discussion. If you need help, we're quick to respond and help - but if we don't hear from you, we assume things are going well.
On the footnote about "Founders who are unable to delegate even things they should will use founder mode as the excuse" - a learning I've had is the importance of operating with a high degree of trust within this system. I set the objective but then can't focus too closely on the tactics. So, I shouldn't second-guess the libraries an engineer decides to use when building a ticket.
"Founder mode" only works if you can modulate where you make decisions. You need to grant some autonomy to people in making their own decisions. That's not to say that the Founder can't override somebody on something detailed like a button label - but those should be about setting the bar for quality of execution, not putting yourself in the critical path of everything. Founders should focus on the decisions that matter, not being a gatekeeper for every little change.
That’s it, folks. As always, the devil’s in the details, not the Startup School maxims.
As Ed Catmull said, (lightly paraphrased) “everyone says story is everything, even if their story is drek…once you reduce an idea to a concise phrase you can use it without risk of changing behavior. What really matters is, what are you going to do about it?”
The whole idea of this article hinges on this sentence. What disasterous thing happened exactly? Considering the premise seems to be missing, dare I say, this article seems to rhetorical.
Airbnb struggled for a while (in his opinion) until he changed his management style organized the whole company around a release cylce (and other bits I cant remember) and taking on much bigger responsibility for design (UI UX). its super interesting stuff. its not new actually and I saw him speaking about multiple times on youtube. https://www.perplexity.ai/search/brian-chesky-interview-orga...
In other words, "founder mode" worked after a failure of "manager mode".
Yet, would Apple even had continued to exist to this day had Steve not been fired?
From the essay, one thing is obvious, "founder mode" looks very different for a 20 person company than it does for a 2000 person company.
> Obviously founders can't keep running a 2000 person company the way they ran it when it had 20. There's going to have to be some amount of delegation. Where the borders of autonomy end up, and how sharp they are, will probably vary from company to company. They'll even vary from time to time within the same company, as managers earn trust. So founder mode will be more complicated than manager mode. But it will also work better. We already know that from the examples of individual founders groping their way toward it.
The question that I have is, "is it possible for a founder to discover what 'founder mode' is for a 2000 person company, without going through some form of 'manager mode' as the company scaled from 20 to 2000"?
What would be even more interesting is comments from founders/employees of startups where "founder mode" persisted as the company scaled up from 20 employees. Were these companies successful? Do they continue operating successfully?
I think what founders know, but what managers do not, is the formula. They're missing one of the key components. The perspective of your customer (what their business is, and the understanding of what is and what isn't important to them), and an understanding of how to deliver it (what capabilities does your customer have, how do they like to do business), and finally a perspective on how to deliver that value (an expertise in product).
Many people are experts at "delivering" or they're experts at understanding their customers PoV, or they're experts at understanding how to do business with those customers. VERY FEW "professionals" have all 3... but you can tell a great story to other non-experts using only 2 of the points, and making up a reasonable sounding point for #3. Or worse, they become experts on selling to YOU (the founder) how to do these things.
Often what happens is that the engineering that made it a cool demo in the beginning, is pushed aside, and once funding and a variety of product managers and sales people start chiming in, users and genuine value proposition is forgotten in favor of things that sound huge for the business, in theory. Not seen it materialize in practice yet.
It takes experience to see something awesome, and still drill into who asked for it, what problem is it solving, what value is it generating for the end user, etc.
It's easy to forget that sometimes even something super cool is not that useful and when the rubber hits the road, no-one will pay for it.
I was promoted 7 times at Google to VP for basically doing what you write in the first sentence (at scale). Then I meet people who were laid off and felt they operated the same way.
The main difference seems to be I worked in areas that literally couldn’t afford to have the kind of managers and leaders that would ding people (vs support people) for doing this, so they didn’t. The other folks worked in areas that made enough money that the culture could afford to be shitty, and it would take a long time to matter. So it was.
my experience is that eventually the company circumstances change which requires different cultures to operate differently to still be successful. Either they do or the company dies.
PG mostly seems to be suggesting that we should try hard to avoid the shitty cultures in the first place rather than accept it as an artifact of scale. I’m not sure I believe that’s possible past a certain size but I do think it’s interesting to try. But for now, I mostly come down on the side of build smaller companies that are worth more.
1. Company: follow this cultural principle that has become high-status because some successful people and organizations have done it recently.
2. You: okay, I've genuinely internalized this principle and applied it to my situation and here are the results.
3. Your manager: not like that!
So what is the alternative to top down? Another model is that the persons in an organization act in two roles. First they effectuate. They take effective action. The people 'in situ' know what the situation is. Secondly they act as sensors. They provide information to others. And groups can act in the same way.
We humans evolved by being very good at this model. There were no CEO's in small communities. There were no schools that taught you how to be a hunter gatherer or make cheese.
Yes I know that large corporations and armies have in the past scaled better. Perhaps that is because we have had better technology to give orders better than to collaborate.
The (mythical) Mythical Man Month tells us that New York City cannot exist. And no corporation runs NYC. So clearly it cannot exist. Right? Yet it does. Perhaps we need to understand how. My attempts have started with 'Hidden Order' by John Holland. Don't follow it. Just use it as a starting point.
Now go tell Sitting Bull.
delegated authority is fragile in the face of people making mistakes or just prioritizing their own interests over the interests of the group—as people often do. markets, published reproducible experiments, generosity, and gossip also suffer from those, of course, but they're better at self-correcting
It also often causes (or is caused by) eccentric behavior (or mental issues) - but it's been done since forever, and when it's successful, we call it "visionary." When it's not, we call it "toxic."
Yep, that is the key problem.
"Hire good people..." is good advice. If it is failing for so many startups, then the quote above is what is really going on -- startups are failing to hire good people. If they had been succeeding, the advice would have worked. What should be getting asked is how to identify what "good" is for a specific founder's vision. It won't be the same "good" as the next person, and definitely not the same "good" as larger corporations with different histories.
Teaching founder mode sounds as simple as teaching creativity or how to be an individual. Founders are most likely are made up of people divergent of social thinking in some way and have a non-verbal need inside trying to get out.
Founder mode is fed by an intense focus, desperation, and insight. Which are all difficult to teach.
The whole thing feels off to me. Isn't the VCs that try to stop Founder mode. I think SV has a slew of carcasses of companies that founder modeded to death.
Us “fakers” get 0.1% if we’re lucky and then pg writes an essay saying we’re not trying hard enough. We are.
Of course the founder is highly motivated, they can become a billionaire if all goes well.
And the VC guys are essentially holders of a diversified basket of lottery tickets requiring that they attend some board meetings and give advice.
For the IC level, especially if not "founding engineer", the upside is an EV+ outcome where you make what, 10% more than if you just went the MAG7 route? The downside is you work 2x harder to make 50% less than the MAG7 route and ends in a layoff where your last paycheck doesn't even clear.
This philosophy of involvement follows through the entire org structure not just from CEO to the farthest position down the org tree.
Let's not let this be a rug to sweep poorly-behaving founders behavior's under, as there are plenty of those out there (key: successful founders).
Jensen Huang (Nvidia) engages with only direct reports.
So I'm thinking that although he might engage only with direct reports, he's accessible to his company in a general sense.
https://www.tomshardware.com/news/nvidia-ceo-shares-manageme...
Less than one quarter of companies that go public do so with their original CEO.
Most people would say that indicates Founder Mode doesn’t generally work as companies scale.
It looks like Graham feels that it’s because too many founders listen to common wisdom and eventually get pushed out / leave?
I honestly don’t buy it. In order to scale, companies have to learn how to operationalize more and more processes. This fundamentally looks like “hiring people and giving them the space and authority to operate.”
I feel like his entire post could have been reframed as “just as VCs know there are relatively few excellent founders and identifying them is hard, there are similarly few excellent executives and identifying them is also hard.”
You cannot get involved in every decision as a CEO of a large company. Suppose you did a skip level meeting. Who is going to gaslight you more, the lower level person or your direct report with a massive stock award who is incentivized for the company to succeed? far from clear.
I like to jokingly call founder mode: "fine-grained multi-level oversight". Others might call it the derogatory "micromanagement".
That doesn't mean I control every decision, or that I don't give people space to be creative. What it means is: for whatever is most important for the business, I get involved with the details. The goal is that when I move out of that area, the team I worked with is able to operate closer to founder mode than when I started.
The issue is that vision fundamentally can't be communicated by telephone, or all at once. You're trying to get to a point on the map that most people can't see. The path to it is the integration of all of the tiny decisions everyone makes along the way.
If you only course correct from the highest level you'll never get there.
AMD was successful in some ways in those days, and unsuccessful in others, so I'm not sure what conclusion to draw here, except that it wasn't so unique for Steve Jobs to have contact with the lower ranks in order to get feedback from outside his bubble.
So you no longer have the permissive open structure of a small company, but are still small enough that the founder is arbitrarily/implicitly making a lot of decisions that have on paper been delegated.
For ICs/people lower down the org chart this is extremely disheartening because you end up reporting to someone who doesn't actually make the decisions, but instead shields you from the decision maker & the decision making process.
I've seen this in ~200-1000 person size orgs.
PG did not go far enough here. The problem isn't 'bad advice', the problem is that advice is no substitute for thinking. Neither is looking at what Steve Jobs did at Apple for that matter: what really works is to think about all of this, considering problems from multiple angles.
However, as Bertrand Russel said:
“Most people would rather die than think and many of them do!”
Which also applies to businesses!
Indeed, another prediction I'll make about founder mode is that once we figure out what it is, we'll find that a number of individual founders were already most of the way there — except that in doing what they did they were regarded by many as eccentric or worse.
The so-called common sense is common sense that ordinary people do not have. When we say that someone has common sense, we are actually saying that he has common sense that ordinary people do not have. People think that it is easy to have common sense, but in fact it is very difficult.If this really is the way founders describe it, it sounds more like a blame game: I, as the founder, was successful on my own when the company was small; now I have organised the company into a kind of small sub-companies that are not as successful; ergo, the pseudo-founders I hired for these sub-companies are impostors.
Rather, I think that we are "simply" dealing with fundamental management problems that have nothing to do with whether a company is relatively new or a century old, or run by a founder or run by a manager. It is more about size and managing innovation on a large scale, the flow of information and, to borrow terms from the military, a well-balanced command and control between strategic, operational and tactical levels.
That is another profound truth that's just lost entirely. Data is not information. And information is not data (reality). We must have the ability to both "see" the real data and also recognize the translation of that data into information to make good choices. The more layers in your org, the harder it is without feedback mechanisms that allow the bottom, reality-facing side of your org to pass on critical stuff without the interpretation and loss of middle-layers. Remember, you are an org too, a 37-trillion cell org that coheres as one in such a beautiful way you think of yourself as one "I" Long way before we find principles that allow us to do the same with companies and countries.
Also:
> Ideas are always matched up with bottom-up data.
That does not hold, I can have a myriad of ideas not grounded in reality
1) loss of control when hiring a professional manager without intrusion to sub organization, because you rely on the manager provided information. If the manager is not straightforward, the sub organization may become a black box, where issues can go unseen
2) Lack of access to the frontline people and their understanding, which is opened by the Jobs like key people meeting across the org
3) Id also imagine that if you have a founder with deep domain knowledge, who has worked across all aspects of business, going fully hands off with the details, and replacing decision makers with more generic managers potentially from other industries, means that lot of expertise gets disconnected from the relevant decisions.
Ultimately the outcomes are all about the decisions and the decisions are all about understanding, which is all about the information. As such, it's not surprising if cutting the seasoned founder from both key mid level decisions and the firsthand information flows brings disadvantages.
I'd over all interpret the article to be about how hands on the founder should be about the different aspects of the business rather than the leadership, as implied elsewhere
Founders and first group of employees are the creators. The ones who often care deeply and want to bring new ideas to life, creating value for customers (and eventually shareholders) - Higher risk for this group.
As the company grows but is still early on the journey, the next group tends to also care and often want to protect whats been built while helping creating new value. This group likely wants to earn a bit more having joined later. This group are taking less risk as there are likely already a few rounds raised at this point.
The company continues to grow and starts hire more staff to help it operate at scale. These people are disconnected and tend to arrive to extract more value than the groups before them. These are often managers or extra execs, more sales teams on commission etc.
This new group is not here to defend whats built and often arent as invested in the idea. They didnt join out of a burning desire to see the world get better - they are here to earn well and push their careers.
I think this is where founder mode helps. It keeps the ones who care deeply about the business, the idea, the customers, the world, the employees etc in the know. They keep their finger on the pulse and can help steer everyone away from just chasing personal gain. They can bring back the guiding principles that may have been diluted through various levels of "those who don't care as much".
I think early employees - those taking the most risk aside from the founders - could also be leveraged here. In fact, I think those early employees could be considered mini-founders if they are are still around at later stages.
I would instead split on the employee: are they in a competitive position where 1) direct performance can be evaluated directly, and 2) multiple other people have a substitutable role and can thus fill in for any deficiencies / blind spots? Or instead is the employee’s seat a functional internal monopoly, where they have exclusive control over some key resource or process.
If it’s the former: management is trivial because evaluation is trivial and deficiencies don’t spread. But the latter case requires extreme vigilance from the CEO. This category encompasses all middle management. This vigilance cannot be delegated because the roles reporting to the CEO are definitionally the most susceptible to rent-seeking.
The challenge is that a portion of people in the first spot will always seek to maneuver into the second spot.
Is there a recording? It's very frustrating to read things like this and not be given a link.
This essay by pg is the closest you’ll get to a blog post discussing its main points.
-- Steve Jobs
I worked for a VP and CTO who embraced this advice literally: They wanted to hire smart people and have them decide what would be done. They took it to so much of an extreme that they washed their hands of the responsibility for deciding and executing anything. Their job, they thought, was to call us to meetings and then ask a lot of questions about what we were going to do.
The problems became immediately apparent when we lacked the organizational authority to actually get important things done. We could write the software, but we needed the VP and CTO to actually use their positions in meetings to get agreement from other departments about the important cross-organizational factors of getting software implemented and adopted.
Instead, it was never-ending circles of Socratic method questions: What do you need to succeed? How will your team accomplish that? Who can you talk to make that happen? Whenever we tried to make it clear that we needed them to do some work in the organization, we got a lecture about learning how to be self sufficient and get things done ourselves.
Not surprisingly, little got done. We wrote the software fine, but any time we encountered issues that required VP or C-level collaboration we hit a wall. You can only defer to IC employees to tell you what to do for so long. Beyond that point it’s just laziness.
This is also a stark contrast to how Steve Jobs actually operated, which by all accounts was extremely demanding, dismissive, and command-and-control with him at the center.
I agree with Graham about the management mode described being a very bad (trusting “professional” managers and being completely hands off from their responsibilities). And being a founder myself who saw it working first hand at the acquirer of my last company, I see that management in this mode is not worried about the company long term success.
But I’m not sure how founder mode is new or how this is different from what Andy grove suggests in High output management. Among other things, he says that the supervisor should be more or less hands on depending on the “task relevant maturity” of her direct reports.
Maybe by seeing the presentation it would be clearer.
Thanks
The modes don't exist. You either figure out how to effectively manage the company in front of you, or you don't.
First, I don't think Founder Mode works as a name. He's saying all the founders are being told to grow their company the wrong way—the Manager Mode way. Chesky is unique in that he's ignoring them. Most Founders are doing Manager Mode not "Founder" Mode.
It's possible the name could work because it describes what Founders should be doing rather than what they're currently doing. It's meant to capture that people who start a company have a much different interest and emotional investment in the mission and company. This distinction is important (and has been told many times). I'm not sure that model holds so tight anymore. Being a tech founder today is a mainstream and maybe default path today for many, it's not a weird one that you'd have to be crazy about what you're trying to build in order to attempt. Founders are choosing founding first and searching for ideas second, and then pivoting those ideas as a best practice of founding.
Pick a random company that's sent you a recruitment email—look at what they say they do and then ask yourself how many people might be excited about that. Take an interview with a small one, you have a good chance you'll talk to a founder or someone quite high—this person frequently does not seem interested in this. Even without a successful product or an exit, the VC round is paying them a good salary to startup. A recent thought I've been having is there's a little more opportunity now to treat founding as a salary job, not really an equity play.
"As Airbnb grew, well-meaning people advised him that he had to run the company in a certain way for it to scale." The problematic norm to me in tech is the opting for organizing functionally (dividing into engineering, design, marketing. etc.) to scale. Related to this is the problem with PMs at most companies. If they're good ones, they should be leaders. Yet they don't own much nor manage anyone (they're ICs with no reports). And so Chesky removed them or guided them to something more specific like PMM.
I have knowledge of how management worked in a Musk company, and this "Mini Me" phenomenon was entirely real. People saw how Elon did things, and tried to emulate him at their level. This almost always crushed team dynamics, and led to the least technically capable making important technical decisions.
Elon (eventually) recognizes bs like this and makes those folks walk the plank; but... the damage is done, and must be un-done. There is a cost to allowing "Mini Me"s outsized influence.
What about all those companies operating in founder mode that ended up being a disaster? What about all other companies that transitioned away from founder mode and worked even better afterwards? Both categories are conveniently neglected.
Take Apple for example.
Steve Jobs is mentioned 3 times in the essay. He seems to be the main prototype for a CEO in founder mode for pg.
Yet, in the book Steve Jobs by Walter Isaacson, Jobs is quoted as saying:
"I am very proud of the many products we have created, but the thing I am most proud of is creating the company that was able to create the products. I think of Apple as the most important work of my life."
This statement reflects Jobs' belief that the culture and company he built at Apple were his greatest achievements, as they allowed for continuous innovation long after any single product launch. And long after his death Apple is still thriving.
So is Apple still in founder mode with Jobs gone or is Apple in a different mode that pg hasn’t recognized?
[1] https://healthio.notion.site/How-Cargo-Cult-Thinking-Nearly-...
The process of fulfilling that vision requires open exploration, a willingness to go places along the way they didn’t expect, and to continue looking ahead.
It isn’t constrained by current products, markets or customers. The memory of how the current company came from something seemingly much less remains fresh.
It is much more of an idiosyncratic winding journey, but potentially more impactful, than iteratively looking for paths that bump numbers.
I built what I wanted and needed. Directed things in the way I wanted them to go. Changed an entire industry.
Don't let MBAs run your company, because they generally only care about the numbers, not about the product. If it's a good product, it sells itself.
Edit: At one point, we brought in a CFO that kept on trying to insist we go another way (advertising.. you just keep chasing that). Maybe we would have made more money that way, but now the profit is at 4x expenses
These businesses usually don't grow that much, but they are very stable over time, even across economic downturns, because the owners/founders think long term.
I am curious, though, if anyone knows some more of the specifics that Chesky shared about the "disasters" that resulted from the bad advice he followed in the past. I ask because I've seen two bad, but very different, scenarios:
1. One is to hire really smart people and just "let them loose", but without overarching guidance or direction. While I got burned by this model in a past job in my own career, I think a good well-known example of this currently is Google's "WTFs" around product management, i.e. lots of products launching with fanfare then get killed shortly thereafter, bizarre and confusing product naming schemes (Google Wallet/Android Wallet/GPay/Google Pay anyone? I honestly don't even remember), new product launches but then old, easily fixable bugs/feature requests that languish for years.
2. The other model, which is more of what PG seems to be hinting at, is the "John Sculley" model, i.e. treating employees like to interchangeable widgets, thinking of your org structure as black boxes with only specific interface points, etc.
That is, I've seen both of these models fail, but in very different ways, so I'm curious what happened at AirBnB.
In Joel Spolsky's blog about his Excel review by Bill Gates. Gates knew enough about Excel/123 and company to make sure if the person knows what he is talking about. Same can be said for 6-page memo culture of Amazon.
But even assuming you can get good people in the door, the problem with giving them room is that you’re often creating something static and giving them ownership of it. When the world suddenly turns sideways and potential needs to flow through multiple people’s fiefdoms, at the very least you’ve created a lot of friction, but at worst you’ve erected impenetrable walls. That these problems can often only be solved by founders isn’t a surprise: when you create a a top down structure that doesn’t work, you can only fix it from the top. It’s exceedingly hard to delegate the one power that matters, which is the ability to reshape the business rather than optimise parts of it. If you can work out how to scale that without conflict then you can probably solve world peace while you’re at it.
- emotionally involved - visionary or pioneering - optimistic - gritty or determined - domain experienced - competitive - strong negotiators - strong communicators - self-starting (priority setters) - intuitive, and - self-assured (perceived experts)
I'm sure others will disagree with this list inone way or another, but I have mentored, counseled and invested in startups for 15 years; I have dozens of friends who started companies; and I founded a successful company myself. Most if not all of these characteristics are present in the founders I know who have been successful.
If you want to start a business, and you are not a person well described by these characteristics--then my advice is to get more work experience and find opportunities (in or out of work) to develop these characteristics in yourself.
When the time comes for you to talk with investors--let alone the need for these skills to found your startup--these are the qualifications and qualities in you that they will be looking for.
What is the essence of Steve Jobs' management style?
As a multiple-time founder and also someone who post-founding has worked in the C-Suite from small to midsize companies, what I usually see are founders with narrow skillsets and little to no developmental pathway to improve beyond their core skills. Helicoptering is frequent and at times, very destructive because Founder Mode requires significant interpersonal skills the larger that organizations get. "Micromanaging" is often seen as "telling me how to do my job even if you have no idea how to do my job". And if your VC wants you to scale significantly, there really aren't a lot of good examples of Founder Mode doing that, but there are indeed a lot of examples of non Founder Mode doing it and a huge ecosystem/culture that supports it.
Managers don't have this safety net; failures will be evaluated more critically and they probably aren't the types to win at all costs. So they are more focused on avoiding fatal mistakes that will lose them their jobs, but don't end up achieving as much on average.
In a sports analogy, founders play to win and managers play not to lose.
But it's a spectrum not black and white. Every founder has to delegate and every founder has to bring on great people to do the work and let them breathe. I think its about freely enabling bold projects while minimizing the fear and anxiety at all levels, and figuring out the decision making and execution structure that works the best.
https://www.reddit.com/r/ycombinator/comments/1eu574f/got_fu...
This should be screaming evidence that the standard way businesses are run filters out the most capable and most effective people from executive positions. This is the kind of thing you would expect profit-driven enterprises to actually care about, but no such luck because the executives who are positioned to make this change are exactly the people who should get replaced with extremely capable oddballs.
Well, yes, because generally somebody who is actually 'the most capable and most effective' will simply be running their own business, why would they waste time climbing the ranks to work for somebody else's yacht?
The filter exists because whilst PMCs can't build the ship, a founder can, they're fine at keeping it away from the rocks enough for relevant parties to extract wealth and guard it from the risks posed by hotshot up and comers.
Remeber the avg corp is relying on regulatory capture and offshore Java, maybe wrapping OpenAI if it's YC funded - there's barely double digit innovative tech companies for this mythical employee to even captain.
Experience. Experience and wisdom is what trumps the exuberant overconfidence of an ignorant youth.
You say this like it’s not the intended outcome? If you have money, do you really want to invest in a high variance strategy that relies on a genius pulling rabbits out of a hat? Or do you invest in a sure thing? MBAs are very reliable at extracting value from successful firms. The continued success of the enterprise is a non goal. Same exact thing with Scrum. You have value locked up in some innovative software? Run Scrum on it for a few quarters until the juice is all sucked out, then move on, having reliably delivered features right up until the wheels fell off. It’s not about value creation, it’s about value extraction. Different game, different rules.
Every startup actually discourages this, which is why so few startups have great young managers.
> Seniority trumps ability.
Assume that it's very hard to forecast a manager's fit and future performance. With a new CEO, manager mode is the less-risky proposition. Spread risk around by delegating more. The founder has a proven track record leading the company, making founder mode usually preferable.
In other words, the non-founder CEO may just be one of the professional fakers that the essay mentions as plausible subordinates. There's a ton of research literature on adverse selection of CEOs. Some of it goes back decades, so there's always the question of whether the selection process has improved over time. But there will always be people that excel at getting selected and promoted.
The way this hypothesis differs from the essay's is in boiling down to actual performance. A high-performing non-founder does not need manager mode, while a low-performing founder would be better off with it.
The managerial perspective is "just pay people more to motivate them" or otherwise "strong vision will motivate".
But paying someone more (at least beyond a class threshold) is only likely to motivate them in the short term. After a few months, they go back to hedonistic baseline.
"Strong vision" is just corpo-speak for corpo-speak. Real vision comes from a founder pushing as many sides of the company as possible, often by example rather than meetings.
Interestingly, our United States seems to have this problem. Genius and scrappy founders establish a government now overtaken by incompetent suits.
It may be the natural way of things. Success leads to complacency leads to incompetence. Eventually new players take over and the cycle repeats. Creative destruction and all that.
1. If you think you have it bad with the “professional fakers” in the US, try an alternative reality were they can’t legally be fired, or even demoted (e.g. Sweden).
- Startup. Doesn't know how to make money yet, or if it does, is still learning how to execute its vision. It's essential to have a small team of maximally competent people, so recruitment is cautious. Employees are pets, not cattle. Projects are executed in time linear in the man-hours required
- Scale-up. Has found an opportunity so big that it needs to occupy it as fast as possible, before the competition does. Recruitment has to take risks. Large critical projects are executed in time proportional to the square root of the man-hours required[1].
- Established business. Has big battalions, but does not grow them very quickly. concentrates on not losing its market position. Recruitment optimizes for fungibility. Projects are executed in time linear in the man-hours required.
Each of these requires a different skill set from leadership.
[1] McConnell, "Software estimation - Demystifying the black art"
This is why I still strongly advocate that, at some point in your career, you may consider reinventing the wheel if needed.
> In effect there are two different ways to run a company: founder mode and manager mode.
An interesting video [1] from Logically Answered referred to CEOs of type manager mode as Vanilla CEOs. In short, the video raises questions about innovation versus stability; while these Vanilla CEOs excel in financial growth, they may lack visionary leadership that is a built-in feature in the founder's DNA.
_________________
Founders can sometimes be walking contradictions of being hyper self critical and also have supreme confidence. Going from a 50 employee startup to being a part of a multinational corporation is a “corporate shock” that makes a founder think they are out of their depths and should just follow the corporate’s lead.
The founder vs manager mode definitely resonates with me. However, the lack of concrete success stories of “founder mode” (whatever that may mean) leads to most founders giving up their reigns to the horde of corporate MBAs and quietly quitting after their holdback period is over.
Why exert so much effort trying to paddle a canoe and steering against the giant cruiseship that is the mothership corporation, when you should just go start another company and reap your potential reward.
1) Those who try their very best to contribute more than they extract. They want to be compensated fairly to be sure; but they see their role as to bring value to the organization that is in excess to what they are paid in salary and benefits.
2) Those who want to extract as much as possible in return for as little value as they think they can get away with.
These attitudes exist at all levels from the CEO down to the lowest contributor on the organization chart.
Whether you use 'founder mode' or 'manager mode' to lead; building a culture that hires, keeps, and promotes the first type and tries to avoid the second, is critical.
No company of any reasonable size can only have the first kind, but many an organization that should have been successful, will go under when the second kind becomes pervasive.
Consider the famous Osbourne Effect[1], so named after a founder who blew it spectacularly.
Or how about the famous fraudsters whose schemes got so large because they lacked basic controls? (Ponzi to Madoff, but also Elizabeth Holmes and SBF)
Or how about Jack Welch (GE) and David Calhoun (Boeing), lauded for years until their damage came to light?
Or maybe, smart engineers who found companies just aren't generally that good at hiring.
Probably, but before we assume that Steve's management style was unabashedly good at scaling... well, it reminded me of this story from a former Apple employee:
https://techreflect.org/2019/05/horsey/
---
There used to be a weekly meeting with Steve Jobs to go over user interfaces and workflows for macOS [...] with the higher ups [...] After this meeting, there would be a “debriefing” where one or more of the attendees of that meeting would report to the underlings. Sometimes that included people like me. [...] What was fun about these debriefings is that they were like a game of telephone.
1. Steve might say something in the weekly meeting
2. Someone would jot down what they think he said
3. The notes might get passed to someone else who would go to the debriefing
4. Someone in the debriefing would relay their version of what was written down
The debriefing was a meeting often consisting of puzzled looks.
One time an icon change was being proposed. The note we got in the debriefing was that Steve said it was “horsey”, which prompted endless discussion:
• What does horsey mean?
• Is horsey good or bad?
• How do we make something less or more horsey?
• Is the horsey-ness something minor that needs tweaking or so major that it needs to be redone?
• Did anyone just ask Steve what the hell he meant?
[...] People would sometimes present the same content [to Steve at next week's meeting] and Steve would magically “change his mind” but I often wondered whether [...] what appeared to be a change of mind was just a message that was garbled in the first place.
There was definitely an element of control as well. Some of the higher ups who had closer access to Steve wanted to exercise more control than perhaps they had. For example, the horsey comment could be tweaked to fit a change someone below Steve felt needed to be made. Since not everyone had speed dial access to Steve, it was easy to take advantage of any ambiguity.
https://www.joelonsoftware.com/2006/06/16/my-first-billg-rev...
- Management
- Leadership
- Coaching
It seems that Graham wasn't aware of this and believes him and his buddies are the first to identify the latter roles, albeit as "Founder".
It wouldn't surprise me that the sophistication of management theory in SV startup scene is so low. It seems that most startup-scale innovation in SV comes from talented ICs rather than well-managed projects. Isn't that the theory behind "startups" in the first place?
The big tech players definitely have some genuinely excellent managers. It just hasn't trickled down to the YC level apparently.
Same with “hire smart people and let them work”. When salaries are relatively low, consequences are limited and incentives are well aligned, that approach works. As soon as any of those things change, then the “manager mode” fails dramatically.
As someone who ascribes to “manager mode” most of the time, I’m going to start looking more at places where the assumptions break and (carefully) try out “founder mode”.
To me this points to a secondary problem further down the line in hiring. Why are you getting a bunch of professional fakers?
Maybe in hiring people (including founders) tend to look at a lot of secondary indicators: where the person went to school, past companies they've worked for, etc. Instead they should be looking at primary indicators around how they have actually done or might actually do the job. That is much harder to evaluate though, which is why people fall back to secondary indicators.
Without units on these "results" I have, literally, no measure to these implied figure(s) of merit being derived from a specific management style.
Additionally, depending on one's personal perspective and context, the same figures could be wonderful or horrible.
I will proffer, in a prior very successful (angel to S1) org, short (< 15min) skip-level meetings were the norm and it was considered "odd" to even schedule a meeting (outside of all-hands) with more than 2 other people.
Firstly, I’ve never read more generalizations or stereotypes in a PG post. So manager mode is when a person sits at the top of a company, speaks to X direct reports and cares nothing about how they do their job. I’ve never seen anyone successfully manage like this. A skillful manager knows when to dig into ridiculously minute details and when not to.
Secondly, this post says Founders can do some things managers cannot and then listed no examples of what a non-founding leader or manager cannot do. I would think this could be true but mostly based on influence/respect/gravitas.
Thirdly, so when someone tells me to hire good people, why does that result in hiring professional fakers? What? So founders hire professionals and managers hire professional fakers?
Seriously, this post makes no sense and sounds like it’s written by someone who has no idea what a non-founding human does in their job. I think we can all agree that there are good founders and bad founders. In fact, there are many many more bad founders than good, given that most founders don’t get very far - hence the existence of incubators which operate to buy a ton of out of the money options because most will fail. There are also good managers and bad managers. So, have we learned anything here?
Hire good people, let them do their job, trust but verify, override their approach when necessary, dig into details when you need to.
One systemic problem in the more mature parts of the industry seems to me the layering of management over leadership. Maybe one needs more of the former than the latter but without the latter in each layer it is impossible to turn a larger ship on a new course or adjust speed.
Can you imagine being the 101st to 110th most important and not getting an invite, while people with lower rank do?
I suspect the value of such a tradition is only able to be captured in very large organizations, otherwise it’s just a morale-destroying exercise for 80%.
I've worked for mid-level leadership in large companies (maybe 1,000 people reporting to them) that basically just cast spells and hope the magic gets done by the people on the ground. I've also worked for leadership at the same level that invests time every month to have skip level conversations 2-3 levels removed in the org chart. There is a material difference, in my experience, in the timeliness and consistency of how things get executed in the latter.
Micro-management isn't always the worst thing. Sometimes it's necessary.
"hire good people and give them room to do their jobs." is not orthogonal to running your start-up as a founder...or is it, and I'm doing it wrong?
I'd love to understand where someone like Satya Nadella would fit into this example. He isn't the founder, but he runs the company as if he is, doesn't he? So "founder" isn't the correct description.
I hope a link to the talk is made public, so we can decode what Brian is saying for ourselves.
What a long post to write "Well if you hire the wrong people they will drive the company into the ground"
>Hire good people and give them room to do their jobs. Sounds great when it's described that way, doesn't it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground.
>One theme I noticed both in Brian's talk and when talking to founders afterward was the idea of being gaslit. Founders feel like they're being gaslit from both sides — by the people telling them they have to run their companies like managers, and by the people working for them when they do. [...] , and C-level execs, as a class, include some of the most skillful liars in the world.
Those 3 paragraphs are similar to the description from Slava Akhmechet in an 2018 HN comment[1] and matches my experience :
>When there is a lot of money involved, people self-select into your company who view their jobs as basically to extract as much money as possible. This is especially true at the higher rungs. VP of marketing? Nope, professional money extractor. VP of engineering? Nope, professional money extractor too. You might think -- don't hire them. You can't! It doesn't matter how good the founders are, these people have spent their entire lifetimes perfecting their veneer. At that level they're the best in the world at it. Doesn't matter how good the founders are, they'll self select some of these people who will slip past their psychology. You might think -- fire them. Not so easy! They're good at embedding themselves into the org, they're good at slipping past the founders's radars, and they're high up so half their job is recruiting. They'll have dozens of cronies running around your company within a month or two.
>From the founders's perspective the org is basically an overactive genie. It will do what you say, but not what you mean. Want to increase sales in two quarters? No problem, sales increased. Oh, and we also subtly destroyed our customers's trust. Once the steaks are high, founders basically have to treat their org as an adversarial agent. You might think -- but a good founder will notice! Doesn't matter how good you are -- you've selected world class politicians that are good at getting past your exact psychological makeup. Anthropic principle!
Anyone who's critical of, which is to say critically aware of, the underlying nature of capitalism will get what I'm saying.
Elon Musk (who proofread PG's post) is a master at extracting money from society and its government, while extracting labor from workers for minimal pay.[1] Zuck is a master at extracting money from society (by maximally playing to people's addictive tendencies and selling their attention to companies who want to extract more!). These types are driven by money and power, not by bettering society, though as masters of extraction they are masters of selling themselves as the latter.
Compare them to people who are driven not by money but by a desire to contribute: Albert Einstein, Tim Berners-Lee, Linus Torvalds. If capitalism/markets were efficient, Albert Einstein would have been the richest person in the world, not Musk. The inventor of the web would be worth a lot more than the inventor of a web app that prey's upon people's addictive tendencies. Linus Torvalds' baby runs the internet (and android phones) yet his net worth is... Remember how Microsoft said open source was un-American, akin to communism? Now Microsoft is a master at extracting money from open source.
Capitalism's measure of net worth (money in the bank) does not correlate to actual net worth (positive impact on society).
---
[1]: btw, how is the Founder Mode he instituted at what was formally known as Twitter working out?
Management of an enterprize (in general) aims to identify and exercise available options for "creating value" - in whatever terms that is measured. This "options space" is vast and founders versus managers are intimate with very different subsets.
Venture capital (VC) is fundamentally at odds with good business. VC demands exponential growth from a finite world; something has to give. What usually happens is the company grows to the point that it's impossible to keep the "professional fakers" away. Then the Iron Law[1] kicks in, or enshittification[2], or both.
Do you want the benefits of a small company (sustainability, happy employees, happy customers, good products)? Then build a small company. If you want the opposite of those things but also lots of money, try your hand at the VC blackjack tables. Maybe you'll be lucky and this time, it will be different.
[1]: https://www.jerrypournelle.com/archives2/archives2mail/mail4...
[2]: https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys
The difference in this case between a "founder" and a "manager" is more about understanding the nuts and bolts of the business and being able to lean on that understanding in ways that require you to cut through the org chart.
Is it surprising that leaders who don't understand a business and aren't willing to engage across the full depth/breadth of the business are less effective than those that try to treat everything as an abstract cashflow machine?
Manger mode is "hire good people and give them space to do their job". Founders mode is Steve Job's way "<same as manager mode> + make those good people feel important".
There are many founders, who failed to scale their sturtups, because they did something wrong. But it is not because they ALL in fact did the same mistake. It is just many of them can match their particular mistake with the vague concept of "bad manager mode advice".
The downside is that when he died he left an organization that relied on that strong founder making things work.
Bob Iger is a delegator that handles the business, he doesn’t get deeply involved in the creative direction, he needs good creative leadership to report to him.
It's funny, because a lot of people think about a small number of bad decisions during his tenure (the amount spent on EuroDisney, souring the Pixar relationship) but I actually think Eisner's run at Disney is one of the best non-founder stints at a large company in modern American business.
Delegation was obviously in play, but responsibility was never diffused. At the end of the day, there was a direct chain of responsibility from you all the way up to Bezos, and he wouldn't hesitate to send one of his personal fixers in if things were going off the rails in a particular branch of the organisational tree.
His core concept is that one should slowly delegate responsibility. Not delegating anything is like the Offensive Lineman standing still. In that case the defense just runs around around you.
Instead he suggests that you move back slowly, offering resistance the way an O-Line does.
This seems very complimentary to what Paul mentioned.
In my simplified view, founders care about the company like it’s their baby. On the other hand, managers tend to focus more on their own careers, their teams, and external relationships. This is natural since they know they’ll likely move on to a different company at some point.
The founder of the company stands to make generationally life changing money, the people they hire do not.
Founder mode works because the founders are willing to spend every waking moment on work. They have time to get into the details of everything. And it's worth it for them because success could mean billions. It could mean they are set for life, as is the next 10 or 100 generations of their family.
Steve Jobs -- Billionaire. Brian Chesky -- also a billionaire. Bill Gates, Mark Zuckerberg, Jensen Huang . Basically anyone you would name as successfully running a company in founder mode is most likely a billionaire. It's worth it to them to scarface everything to spend every waking moment on work.
But the people they hire don't have that incentive. Especially not anymore, with the way VCs are getting better at extracting value from companies. Exits for early employees aren't nearly life changing as they used to be, and exits for later employees at the stages we are talking about here are even worse.
https://www.palladiummag.com/2024/08/30/when-the-mismanageri...
Trained managers have learned how to continue to extract value from some discovered market, rather than create new value chains.
Founders are "content" oriented, managers are "process" oriented.
But I think the type of leadership this essay talks about comes from personality traits that are mostly determined by the end of one's adolescence: grit, obsessiveness/perfectionism, and vision.
I've found that a lot of wisdom PG passes on is novel, not 'conventional'; moreover the observation he offers is not something I would have been able to obtain through my own life experience, and I very much appreciate him putting his thoughts out into the world for us to learn from.
"Whatever founder mode consists of, it's pretty clear that it's going to break the principle that the CEO should engage with the company only via his or her direct reports."
Whatever happened to "Management by Wandering Around"? Usually credited to HP but Shakespeare had Henry V do it (see act 4 scene 1) and there are probably even earlier examples.
Specifically, I wonder if the reason "founder mode" strikes singular founders as a resonant story, is because it's representative of a story that can even have a singular narrative. The alternative (what pg calls "manager mode" of hiring the best people and letting them work) is perhaps one where there's more narratives unfolding and exploring the space. This could lead to either success or failure. Some spaces have less of a singular story, because they run and persist and thrive based on having multiple stories working together. Sometime the stories are dissonant. I've been in companies where the strength felt like it was in how a balance of things existed together, without the need to collapse them into a single totalizing narrative. This unresolved dissonance in a community can be either a weakness or a strength. The ability for a place or an organization or a community or a culture to hold contradictory truths, this allows a culture to hold within arms-reach an archive of more tactics and strategies (some useful in the current moment, some not), from which to call on when the environment changes, and new needs arise. That's how vibrant ecologies work.
Anyhow, this is a bit of a riff, and I imagine some people might be strongly opposed. I am not saying it's good or bad to be in founder mode. I'm saying it depends. But founder mode will tend to create singular founders who have a loud story to tell. The story is maybe less clear and loud when the other mode prevails and leads to success. It looks like a hundred ppl succeeding together, and no one person has the answer as to why, nor do they all agree on what that is. So it means that narrative will be more diffuse and less boosted.
Maybe more holographic in a metaphorical sense, where the information is encoded throughout a social fabric like a diffraction pattern, and no one person holds the whole narrative or truth, which emerges from the interaction of many narratives, both aligned and opposing (likely in small ways below the surface).
Context: I co-founded a tech community in Toronto (now ~7000 people), which for almost 9 years has run weekly participatory civic events (50-70 attendees), literally without ever missing a week yet. To put it lightly, we've learned a bit about distributed leadership, and my comments comes from that experience. It's very different from company modes, but some companies run on principles I feel quite aligned on.
Life is random, there are no unconditional rules for success in competitive spaces. Discretion is always key. Sometimes luck plays a role: PG’s silly LISP startup as a prime example.
screenshots/links to new paul graham essay
[1] https://hbr.org/2020/11/how-apple-is-organized-for-innovatio...
Some of it is survivorship bias - often influenced by privilege/luck - being confused as skill or insight. Some of it is people who aren't very reflective, scientific or logical in their thinking making poor guesses or estimates with a lot of unmerited confidence. Some of it is more cynical: if somebody is buying, they're selling.
As a civilisation we still aren't great at root cause analysis of success, it seems.
https://drive.google.com/file/d/1DLtJAShDN54ooPWpBspHPV98rh2...
Musk as a founder-like role (he wasn’t actually a founder) has the incentives to make this happen. in this case, he had a specific milestone to reach to get a very lucrative bonus. at the same time, he had a lot of stock and would not want to do anything that would damage the long-term prospects of the company. Whereas an executive might go after a bonus without worrying about long-term negative effects. Even if an executive has stock options, they might not vest and even though they are an executive, the founder and others are creating the fate of the company and the value of the options, not just them.
I see why all the hidden elements need to be just so or the whole thing is meaningless.
Maybe I'm just talking out of my ass, but it's rare to find someone that truly gets things rather than just going through the motions. If you do, its likely they have their own idea.
It feels like every decision I make gets resistance from people who live their lives in mediocrity. If they really knew the best course of action they'd be the one in charge and I'd be the one trying to give the mediocre advice.
I'm so tired, but nobody else is going to do it right.
The solution here, like most dialectics, is to do both: hire people who are not just smart, but who actually care for their part of the business in a way founders wish they could do if they had the time, intelligence, and grace.
As a non-founder, I'm so glad when the founders hire someone who cares enough to get their job done that I can rely on them and focus on my job -- and I aspire to be someone who others are glad to rely on. But from even two steps away, that is indistinguishable from the principles of division of labor and the practice of mutual political respect that strangle companies in bureaucracy. But the two situations are night and day, and obvious to those who live it.
So I think the difference is not whether the founder can reach down a level, but whether they -- or the COO or whoever plays this role -- can arrive on any scene and quickly tell if it's BS. Then when everyone knows BS is not safe and that commitment is respected, they'll find the courage to not play games.
So then a company runs well not because the founder is good, but because people understand and buy into what good means for the business.
https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
lots of posts, even one this month https://news.ycombinator.com/item?id=41214180
That makes sense.
Being C level exec in another firm does not guarantee success. In fact, it might even be a dismerit for a startup.
anyone find this talk he's referring to?
Those are two very different things.
Look to Oracle as an example of a “founder mode” company that is not founder led.
First, Tim O'Reilly wrote a superlative piece in 2013, "How I Failed."[0] I cannot recommend this piece highly enough, and it had enormous impact on me as a founder. Its message is quite a bit more complicated than the Graham piece: there are times to stand your ground and resist conventional wisdom (HR in O'Reilly's piece), and there are times when expert practitioners of that conventional wisdom will save your bacon (the CFO in O'Reilly's piece). And the truth is more complicated still in that O'Reilly's specifics may or may not be the ones that a founder needs to apply to their own situation.
Second -- and I recommend this whenever anyone mentions Jobs -- is Randall Stross's "Steve Jobs and the NeXT Big Thing"[1], a history of NeXT written at Jobs' darkest hour. An extraordinary book that will leave you with a much more nuanced view of Jobs: not only in terms of his strengths (definitely those!) and his weaknesses (here in spades!) but especially the way that the NeXT experience surely informed Jobs's (much more successful) return to Apple. (It is a galling failure of the Issacson biography that he spends so little time on NeXT.) Selfishly, I would also recommend our Oxide and Friends discussion of the book.[2]
Third (and finally): a very common specific mistake that technical founders make is how they build out a go-to-market team. This isn't discussed nearly enough, and I was on a podcast episode of Software Misadventures ("Ditching the Rules to Build a Team that Lasts"[3]) with my own co-founder (who came up on the go-to-market side) in which he elaborates on this mistake -- and how founders can avoid it.
[0] https://www.oreilly.com/radar/how-i-failed/
[1] https://www.goodreads.com/en/book/show/226316
[2] https://oxide-and-friends.transistor.fm/episodes/next-object...
[3] https://softwaremisadventures.com/p/oxide-ditching-the-rules
I think the common thread between the two blogs is context and detail are important. I kind of think “Founder mode” is just doing your own diligence on your decisions rather than trusting heuristics or outside third parties. The “HR lawyers” or the “professional managers” are probably not nearly as tied to the company as the founder, and therefore unwilling to wade into the details and rely on such heuristics or “playbooks” for decision making or advice giving.
Tim does raise a salient point though in that finance functions are often overlooked or under invested, and siloed division. The whole company probably does not need to know the daily cash balance of the company, but team members should maybe think a bit more carefully about relative rates of return on their invested time or money, and “finance” is a good framework for doing just that. The best CFOs (or people more generally) look for that context (and help others do so too), so they can understand intuitively the impacts of potential decisions. Meanwhile, the professional managers run away from the detail and prefer to rely on playbooks and heuristics like the Conjoined Triangles of Success.
I don’t think it always has to be that way though, you just need people to care enough to wade into the depths of detail and care as if they were a founder.
Throughout my career I've seen a lot of managers willfully focus more on crafting a narrative of "everything is fine" than fixing problems -- usually by hiding and mismeasuring known problem areas for example. At first I thought those were bad apples, but I came to realize those managers' managers are perfectly content with this type of dishonesty, because they get credit if it's not caught, and can wash their hands of it if they have plausible deniability.
So multiple times I see a founding team who's utterly sincere, and then a huge management chain that believes in nothing, couldn't care less about customers, and treats the whole job as a game/performance, and some very sincere engineers. And I just think to myself... "How does the C level not see this?"
Most professional managers are BS artists. Perhaps Chesky hired of bunch of those. The conclusion is not to run everything yourself, but maybe hire better managers.
A late stage founder or a professional manager ceo has amassed stuff that they can lose more easily than stuff they potentially can gain. To continue to behave in the same way, they must be willing to take a lot of risk. And a lot of normal people don't want to take such risks.
Only really crazy people – be it a founder or a professional manager – will disregard game theory dynamics and work against their own apparent self-interest and take huge risks. And they tend to expect people around them to take similar huge risks along with them. We call them unreasonable people. And only really unreasonable people can make huge changes in society. This is by definition true because only such people will behave in an outlier manner, and if they do so with a huge amount of capital and power in their control, they can change societies in big ways. If we think that is working well, we celebrate them; and if we think it is horrible, we write cautionary tales about them. It is possible to have both perceptions to be held by different groups of people at the same time.
All the rest about hiring good people and letting them do etc is all just details of dynamics emanating from this unreasonable risk taking ability a person can manifest. I don't believe this can be turned into a playbook that can be taught in a management school. Management schools already teach how to take risks such that downside doesn't befall on the person who went to management school and instead falls on others. Everyone can subconsciously sense this about MBAs and hence the reaction they get. As companies become big and have a lot of external players with skin in the game (aka stakeholders) who are at a distance, they want these MBA types to manage that risk in such a way that it doesn't befall them. That's fundamentally very different from a founder who is not at a distance, but within. Still, founders also do the same when it is them vs their employees. In this aspect, it is all relative.
Another rebuke is how the communist party filled a religious or even feudal void to some extent - Lenin's tomb in Red Square being a perfect example. I can assure you that though the Politburo felt that was a needed measure, they did feel a bit silly and embarrassed about having to do it.
Why was all of this felt necessary within the Politburo? The answer is simple, in fact the answer is somewhat answered in this essay, if parallels are allowed for. Before the revolution, all revolutionaries were true believers who faced prison, exile and death fighting against impossible odds for years and decades. Those who join the party after the success of the revolution are always feared to be the parallel of the middle manager MBA managing up. A Gorbachev, a Yeltsin. The cadre around Deng Xiaoping who reversed his purge from the party and then put him in power.
A very different circumstance, but in many ways analogous.
Interestingly, the most successful managers I've seen have themselves been founders. They had both autonomy and organizational trust, and also tenacious creativity, which led to significant successes. This binary notion of "are you a Manager™ or are you a Founder™?" is a false dichotomy and leaves great people out.
A founder mentality has certain recognizable characteristics: doing whatever it takes to succeed, applying creative solutions to challenging problems, going outside your lane to win, and putting in energy well beyond the standard 9-5 expected of a standard employee. You can hire talented people with such qualities AND build an organization with trust and autonomy. Bringing it back to Chesky's disastrous results with delegation, I'd ask this: Did he just hire bad people?
This dichotomy may at worst cause an entire generation of new founders to ignore really fantastic advice, "Hire really great people, and give them the support and space to succeed." This is not antithetical to: "Oh, and those people should look like founders." It's a Both, not One-or-the-Other.
All this said, I do think PG is touching on something super interesting, which is an almost anthropological understanding of "The Founder", and view that as a very important area of discourse and study for the next generation of great companies.
The point that both PG and BC are really trying to say is that rigid, hierarchical employee types are detrimental to company's long-term success, and instead you should be building your team with hungry, bright, and creative problemsolvers who aren't afraid to break artificial rules to succeed. But you sure as hell be building an organization with trust and giving those founder-types everything they need to succeed.
A lot, I mean a lot of people with middle incomes have bought desirable homes in nice locations and rent them out. There are many aspiring families, young couples priced out of the market because of this.
Sure, this option was always a thing but the people who rent these properties out do not improve the community or unit they purchased and they rent out to anyone. This weekend a Airbnb guest kicked my door front door open. I pulled a gun on him and he apologized and said he was messing around but I wouldn’t have to deal with this if I didn’t live near short term rentals.
Hotels needed a check to their power but I’m not sure if 15 years from now Airbnb will have been good for the median person. It sure helps the wealthy however.
No. The hierarchy works. There are two key things most managers miss. Learn the skill of hiring and firing well and (perhaps more importantly) incentivize them properly.
Most startups fail. So they commonly get advice about how not to fail. Most of them still fail. That doesn't mean the advice was bad. Founders are gamblers and the odds suck.
If founders weren't looking for someone to tell them how to run their businesses or trying to rid themselves of their pesky responsibilities, this situation would be different. But that's a story that most founders don't want to hear.
"The startup can build and extend, but the startup never invents anything. That preciousness lies in the lonely mind of a [founder]." -PG Steinbeck /s :D sorry
I think, for once, pg is dead-on with this post, and I'm glad it's being brought to light. Too many managers and founders live in fear of the dreaded "micromanager" label and stand back and watch their companies turn to crap.
The thing is - if you have a vision for what's needed to make your product or company truly successful and the people working for you aren't hitting the mark, you have to get in the trenches and make it work.
Here's the dreaded scenario:
Your company is working on a new product (or a new version or whatever) and you, the stalwart CEO, have left it to your team to build without getting too into the mix lest you be labeled a micromanager. It's not going in the right direction and for whatever reason it's not hitting the mark.
Do you have the cajones to tell the team to go back to the drawing board, even if your delegated manager thinks it's going well? The launch will be late, the team will be annoyed ("Damn that CEO getting into our business again"). I bet a lot of CEOs don't, and this is why companies turn to crap over time. pg's point here is that the CEO needs to be willing to think like a startup CEO and be willing to go into founder mode and get his or her hands dirty to make sure the product nails it.
This is hard but necessary!
Groups of people that work together share a common purpose, that is aligned with the individual purposes of all the people that make up the group. A great leader helps remind people that they can cooperate and all win, and uses the clear purpose to cut through bullshit. There are few people in the world that can do this.
What's the definition of 'good people' in the sense that nobody knowingly hires 'bad' people. And to my other points (below) how is someone with (very very generally) no actual business experience (or very little ie in or out of college) supposed to know if someone is good (or just faking it even with embelished references) if they don't themselves have an idea of what 'good' is? (Also how well they are able to read people.
> You tell your direct reports what to do, and it's up to them to figure out how. But you don't get involved in the details of what they do. That would be micromanaging them, which is bad.
If you are a startup founder typically you wouldn't be able to anyway because a) You don't know their job and b) You actually don't know that much about business (or operating one) to begin with.
> judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them dr ive the company into the ground.
To my first point because they don't know enough don't have enough actual experience to even know how to vet someone. Welcome to the business world where actual time in business does make a difference.
> Steve presumably wouldn't have kept having these retreats if they didn't work. But I've never heard of another company doing this.
While Steve might have had other reasons for keeping the retreats the fact that PG has never heard of another company doing it could just be because Paul only reads what he reads AND not every company talks about things they do in a public way.
For all his problems, my example of this would be Elon Musk and SpaceX. He learned about the space industry and identified the constraint keeping the space industry down. Every launch provider was trying to maximize the performance of their rockets. To maximize performance each rocket was basically a bespoke work of art, this made rockets expensive, which lead to high costs, which reduced the number of customers. Musk chose to make a rocket that did NOT maximize performance, instead focused on reducing the cost of each launch. The most expensive part of a rocket are the engines, so SpaceX focused on making Merlin engines at low cost. Rockets are expensive, why are they thrown away? To maximize performance. Since SpaceX had already abandoned maximizing performance at all costs, the opportunity to reuse rockets became clear. Use leftover fuel margin to attempt to land and reuse the rockets.
Once Musk believed SpaceX's reuse was going to work. He moved onto a new major constraint, customers. SpaceX did not and does not have enough customers for the launch volume they are able to support. They looked at the opportunities and decided that a large constellation of satellites providing fast internet access in LEO would be profitable if launches were now cheaper. So SpaceX created Starlink to take up launch volume.
This general problem has so very many guises! Delegation affords so much, but trust sure is tricky. (This even applies recursively to, say, taking advice from anyone who "seems to" have studied all there is to know about abstraction/modularity or "human delegation optimization" which is, basically, https://en.wikipedia.org/wiki/Demarcation_problem.) It may be the single most central problem of the human condition and is probably a https://en.wikipedia.org/wiki/Wicked_problem .
More directly related to the article, one main impediment is that humans are sneaky & tricky enough that if fakery is incentivized (it almost always is -- due to the thermodynamics of doing vs. faking), then this informs the viability of whatever Rules / protocols you try to establish. https://www.slatestarcodexabridged.com/Meditations-On-Moloch does a better job at extending the conversation than I ever could in an HN comment.
Manager mode is utter BS. MBA books and management coaching teaches people to occupy a higher position in the org chart and to define rules, bureaucracy, and measurement of whatever they are managing. Tech companies have a perverted form of this where IC track and manager track are separate - so managers are only defining rules, bureaucracy, and measurement of people - stack ranking them.
Of course this method is flawed. We all inherently feel so. But no one asks why this is flawed. It is flawed because MBA-style box management is trying to impose boxes - which is orthogonal to innovation. Innovation literally means thinking/doing work outside the box.
As an example, lets say that your 10 layers of management has hired a whole bunch of innovators but then said that they will be stack ranked against each other every 6 months based on criterias and hiring committees. This is a BOX - that is preventing ANY work that may require working OUTSIDE THE CONFINES OF THE BOX.
Imagine a situation where a project is at 6 months performance review BOX boundary but still needs 2 weeks of slow rollout to ensure it doesn't crash on customers. In FOUNDER mode, the team is encouraged to take those 2 weeks to ensure that customers get a good experience - because it matters. In BOX management mode, these 2 weeks are going to appear as a fail for the stack rank committee gods. The nuance of the 2 weeks is lost. Instead, the management chain will ensure that the stack rank is executed perfectly - thus causing the people WHO CARED about the service and customers to depart - voluntarily or involuntarily.
Ultimately, NO ONE is happy with the BOX management mode of work. Employees feel like their work and insight is undervalued, C-Suite is unhappy about causing customer issues, teams are unhappy because the BOX is hurting morale and causing sabotagey environments. The only people who seem to be ok with this is the 10 layers of BOX managers whose entire existence depends on perfect execution of the BOX.
https://hbr.org/2004/01/managers-and-leaders-are-they-differ...
https://hbr.org/2016/06/do-managers-and-leaders-really-do-di...
https://hbr.org/2022/09/the-best-managers-are-leaders-and-vi...
Almost every HBR "Must Read" series on enterprise management says the same thing as this blog post. The business world has been talking about this stuff since the 90s.
I think the key difference is that a founder has a much better understanding of the company as a complex system. This understanding includes not just how people think it works at a certain point. It includes all the previous attempts, reasoning behind those attemps, the context of past failures and successes, the personal dynamics behind those choices.
Complex systems are notoriously hard to understand. Seeing the system develop from zero to complexity is an experience and perspective that is impossible to replace. Even most early employees don't have a comparable understanding.
Of course not all founders know everything about all the key components of their businesses, but the founding team does have a much much better understanding than other person. I think that's why founders get frustrated with ineffective things. While most others have to account for unknown unknowns and give others benefit of doubt, the founders have a much better and robust understanding of why things happen the way they happen.
The difference between management and leadership may be more about where you focus and how you engage others. Being a founder and being a leader is different in how well you understand the system.
It is perhaps possible to interpret these articles as saying anything whatsoever, but they don't seem to specifically say what Paul's article says.
> There are as far as I know no books specifically about founder mode. Business schools don't know it exists.
> …what they were being told was how to run a company you hadn't founded — how to run a company if you're merely a professional manager. But this m.o. is so much less effective that to founders it feels broken. There are things founders can do that managers can't, and not doing them feels wrong to founders, because it is.
Founders have to lead themselves and other while going from 0 to 1.
I’m not sure what you are saying is accurate.
Even if Paul was rewriting a topic… more than one writer writes about a topic for their readers, no?
The MBA form of management using people as process .. is increasingly less applicable and in need of updating .. where software increasingly can push papers and connect people and processes.
We don’t see this much in management consulting or MBAs very much. Maybe there’s a benefit to leaving how the world was.
There’s a saying (which I’m sure has an English equivalent) where I live that goes something like “It’s the owner’s gaze which fattens the cow”.
Owner vs manager is the original “AI alignment problem”, usually taught as the principal-agent problem in business schools, and is very real. SV-type founders are, by and large, meaningful owners in their enterprises and thus heavily invested (literally) in the company’s performance. Professional managers, leaders or not, are just selling their labor. There is a whole field of management science about designing proper compensation structures to make CEOs better aligned with shareholders, but you get that quicker by making them the same person.
Of course there’s a whole other world of majority shareholders leveraging their position to extract value from minority shareholders, which is just another version of the same problem.
All this to say, you’re right that there’s prior art about what he’s writing, but its the principal-agent problem, not leaders vs managers, and in general business literature does not equate the issue of founder ownership with the PA-problem (obviously any undergrad can link the two issues, but that’s not how they’re usually approached)
I'm not sure it is.
Let's look at those three links:
1. The first of these dovetails -- not the same, but on the same hunt -- with Graham's piece, and is an excellent read.
- Unconventional wisdom
2. The second is formulaic anecdata consultjunk, the same method incurious journalists use covering politics through "focus groups".
- Conventional wisdom
3. The third uses the same formula, and while more effort (think "polling" or "survey" instead of "focus group") in an attempt to elevate from anecdata to study, seems not to have read or understood the first.
This third one is also contrary to the (often rejected while not yet disproven) theories* of Elliot Jacques, that people have sweet spot time horizons, and most can only flex +/- 2 horizons. As this article bullet lists (because of course) how to "shift from a leader/manager mindset to a lead/manage one and balance the two skillsets" it applies solely the manager rubric to action, through the lens of a manager that doesn't understand Graham's piece or the first article, almost irreconcilable with Graham's stance or the first HBR piece.
- Conventional wisdom (orthodoxy, even)
PG article and first link are not conventional wisdom, though it might sound that way to Taylorist thinking.
- - -
Perhaps the lack of awareness Graham keeps noting is to be expected.
Seems unusual for serial startup entrepreneurs who have built firms from $0 to $B to have also individually joined and worked up to C-level in "institutions" (50+ years old, and 5K - 100K+ employees, not just other tech unicorns still bearing Founder imprints) after learning the startup experience that lets them see management practice through a "it doesn't have to be like this" lens, making it rare to find the perspective necessary to delve into Graham's take or the difference between these three HBR articles.
Perhaps it's not only that management culture is a distorted bubble (PG: "VCs who haven't been founders themselves don't know how founders should run companies, and C-level execs, as a class, include some of the most skillful liars in the world").
Perhaps it's that founders with institutional perspective are themselves unicorns.
---
Footnote:
* Elliott Jaques' "Stratified Systems Theory of Requisite Organization" suggests that individuals have a natural "sweet spot" time horizon for decision-making at work (which should align with the time horizon of the decisions' scope and impact), and most can only communicate up or manage down within a range of one or two levels above or below their own optimal horizon. — https://en.wikipedia.org/wiki/Requisite_organization
> It could make a big company feel like a startup
Nope, not true in my book. I would not like to be in any company that "selects" a small group of elites to a hawaii or las-vegas "retreat". then, said elites would propagate their new-found retreat wisdom from their cult-leader down to the plebs.
Whether or not you are a founder, if your strengths tend toward understanding the business domain and implementation, then you probably should lean more hands on. If your strengths lean more towards the management side, then hiring strong people to manage parts of the company.
Of course, which works better is very company and culture dependent. Larger conglomerates that don’t have a focused mission probably shouldn’t have leaders that aren’t geared toward that.
That might be personal bias, but I think the idea that PG is developing here already stem a lot in the Agile movement (not the software one, the general one). The problem is that, as PG mention, there is probably not one founder mode, but more like a set of them. This makes their academic description harder to conceive.
Companies hiring the wrong team members may well be the bigger problem. Plenty of companies succeed by building great teams. Plenty fail by hiring the grifter class.
I do agree that CEO/founders need to learn that being "in" the business is required longer than expected.
The board members and initial contacts have much to do with the initial clients and the network effect it creates. It doesn’t matter if you have an excellent product. Without the initial boost of early adopters, you’ll struggle to survive. That’s why many founders go to SV or well-known startup incubators: the networking it creates is priceless. Of course, you’ll need to create a valuable product -and that’s the problem of many opportunistic startups leveraging current trends. Many startup pieces of advice I read seem to ignore the fact that you need money and contacts to have visibility in the right places (SV, elite university/circle).
While Paul Graham is a legend and I look forward to learning from his experiences, I believe that people in a position of privilege tend to overlook the advantages that come with their position.
For example, it is true that Steve Jobs started in a garage. However, both Apple founders were living in the epicenter of computing companies at the time. They both worked at HP and had contacts with people at Stanford. If you had built a personal computer in a garage in Latin America at that time, it would have been like a tree falling in the middle of nowhere.
I think truth seeking is more important than any particular mode of operation. Founders are more likely to do this because they genuinely want to win the entire game, not just Q3.
I think I've already seen a few managers walking around in founder's garb. Again, these people are professional liars. They're going to be hard to spot unless you're looking for it.
My next venture will probably involve unconditional dictatorship with hair trigger termination policies for deceptive behavior. Until then, I'll be working smaller contract jobs and otherwise scraping by.
Paul Graham here claims that C-level types are all professional liars and that the ideas behind standard management strategy is worthless. I agree. Where I disagree is the idea that founders are any different. They are just a different flavor of the same thing. This concept of founders mode is just another nice-sounding theory that can never be proved, that makes for captivating talks and blog posts and eventually management books but will fail to produce anything with any kind of consistency. It’s the yet another cargo-cult trend for the group desperate to prove they are the next Steve Jobs.
I’m not even sure I buy into the Steve Jobs mythos. Every random process will have statistical outliers for no other reason than randomness, but hey become canonized and their words and lives are studied like scripture and we try to divine the path to emulate them. Many of us understand that top performing hedge fund managers are statistical flukes that are getting lucky rather than systemically beating the market. But we hold out against the idea that startups and founders are a similarly chaotic system. I wonder if it’s because this is a forum for startups and not hedge funds?
there's different ways to success and it depends on a lot of factors you can't anticipate or control. ex-post rationalizing it and generalizing it into self-help / business book snippets of wisdom is laughable.
this reminds me of the time where every middle manager suddenly thought being a steve jobs brand of asshole is the path to business success
It is really hard to put in practice because of all the gravitational pull towards mediocrity.
though, to be fair he said it would take a year to do so: https://x.com/paulg/status/1830300111232188626?s=46&t=8sSeDI...
What was the point of the article? Don't delegate important decisions to the people below you, except for when you do? What PG is suggesting is a founder should understand all problem spaces the company exists in, better than any other employee in any position, in perpetuity, because no-one could possibly understand anything better than the founder. If you want labour to scale, you need to let people actually do their job.
Involving oneself at all levels of the company is by no means at odds with avoiding micromanagement. Likewise, neither is empowering people in your company with degrees of creative freedom that are aligned with the vision.
SV dogma dictates selecting for hustle, which is merely one trait in the equation. There's a lot of people out there with great hustle, executing on visions that aren't worth a damn. Some of these people then land large funding rounds and find themselves unsure of what to do, and end up succumbing to VC pressure to do something stupid that's wholly incongruent with their business (as opposed to the stupid things which are wholly congruent). For example, hiring bloodsucking C-suite and V-suite types.
Here's how I'd select if I ran an accelerator, in no particular order:
- Minimum 5 years working on the project already, ideally a decade
- Founder has decided it's what they want to do with their life
- Has a list of the first 100+ people they're going to hire picked out, with detailed explanations of who these people are and why they make sense
- Has a plan to sell each independently wealthy person on that list on why they'll be happy working the project when money isn't their primary concern
- Has a plan to sell investors who hopefully aren't VCs (because most suck)
- Has otherwise found VCs that don't suck
- Solid character; kind human being with principles
- Decent hustle acceptable; high perseverance required
Suffice it to say someone fitting these criteria probably wouldn't even get that precious 10-minute YC interview. Neither would most of the so-called eccentric folks out there. They'd be deemed failures. Or crazy. Especially the solo founders.
Speaking of dogma, there's a lot of emphasis placed on both coming up with business ideas and then externally validating those. Any founder that has a legitimate, deep-seated vision will find those concepts offensive. After all, Jobs is famous for the following quote:
'Some people say, "Give the customers what they want." But that's not my approach. Our job is to figure out what they're going to want before they do.'
I omitted the rest, which was an apocryphal misquote of Henry Ford. Of course, Jobs was also needlessly ruthless and cruel. However, despite being an asshole, he was at least a world-class vision guy.
Good to know he's still held in high esteem by these people.
Do people consider the following people to operate in Founder Mode:
- Elon Musk?
- Larry Ellison?
- Mark Zuckerberg?
- Marc Benioff?
- Drew Houston?
Never heard the nonsense idea that it’s good or frequent advice to step back and let people do their thing in a startup.
Its that simple.
Or, they are where to play the game with some other sociopaths who know the silly rules are silly but lead to great TC if you play (and somewhere in the background there’s a company/product). Rinse/repeat because the median HBS grad needs a job somewhere!
I am surprised it apparently took a groundbreaking speech for a very experienced VC to grok this.
Probably a great example of founder mode?
I looked up this company Airbnb. I always used VRBO, which predates Airbnb by over a decade. I booked entire houses months in advance for extended stays.
According to this blog post Airbnb grew. But the stock is down over 8% even after the latest market rally. What's going on.
The question I have is what Airbnb grew into. The company has been around for a while. I let Big Tech show me the latest news. I did not ask for negative news, just any news.
Below is what I got. I must be missing why this Airbnb CEO is doing a good job and is worth listening to in spite the company's name appearing in all of this bad press.
https://www.theglobeandmail.com/business/commentary/article-...
https://www.bbc.com/news/articles/cevj77rdp89o
https://www.kansascity.com/news/local/article291610590.html
https://finance.yahoo.com/news/vrbo-nick-saban-ad-trolling-2...
https://www.kake.com/home/city-of-wichita-looking-to-add-law...
https://www.click2houston.com/news/local/2024/08/26/man-shot...
https://www.houstonpublicmedia.org/articles/news/crime/2024/...
https://globalnews.ca/news/10723835/airbnb-hidden-camera-san...
https://www.businessinsider.com/restoration-train-car-airbnb...
https://www.outsideonline.com/culture/love-humor/airbnb-moun...
https://lfpress.com/news/local-news/jail-sentence-sought-for...
https://www.wxxv25.com/four-arrested-after-shooting-at-gulfp...
https://nypost.com/2024/08/20/lifestyle/i-stayed-in-a-1-a-ni...
https://buffalonews.com/news/local/business/gov-kathy-hochul...
https://www.summitdaily.com/opinion/letter-to-the-editor-fri...
It goes on. The reply will likely be "The reason is ... and this has nothing to do with Airbnb. Airbnb is doing fine. I love Airbnb. And so on." This is a forum sponsored by the Silicon Valley VC firm that financed Airbnb so I expect HN commenters will defend the company's actions or inaction.
Would rather just never appeal to authority - whether founder or manager. Nobody knows anything. All you can do is present a case for trying X and try it - might work, might not, iterate on what does.
Given that the environment is essentially "trying stuff", staff the team with good triers: People who can build, sell, and those who can manage releases and the day-to-day to keep people building and selling and managing the current thing.
I worry that this post will inspire founders everywhere to start micromanaging worse than before. As an IC, what's worse - having a manager? Or having a micromanaging founder who plays the role of manager/dev/everything else?
This is the Chesterton‘a Fence applied to running companies. It’s somewhat dark-comedy counterpart is the “always has been” meme.
You also have to take into account the % of bad actors involved online and elsewhere who want to misdirect you, misguide you, and ultimately to make you fail. Healthy skepticism and distrust helps a lot.
Elon put this great, in 2018:
> Communication should travel via the shortest path necessary to get the job done, not through the "chain of command." Any manager who attempts to enforce chain of command communication will soon find themselves working elsewhere.
Anyone can raise problem with him & he will fix it directly.
AirBNB is a company that’s entirely built upon getting around regulations and destroying wealth (but passing on the costs onto others).
Good people coming in to the company assume it provides some actual value so they don’t make decisions that are net negative and just ensure passing on the cost to others.
But this isn’t something that’s gonna be stated outright so it largely remains within the head of the founder so the ideas that make the company work also remain within the head of the founder which is why they’re essential for the company to tick.
"This is Mark Zuckerberg reading that Paul Graham asking and being like, I’m going to show everyone how alive we are. I’m going to change the name [from Facebook to Meta]. Does Sundar Pichai have the authority to turn off google.com tomorrow? They have the technical power, but do they have the authority? Let’s say Sundar Pichai made this his sole mission. He came into Google tomorrow and said, 'I’m going to shut google.com down.' I don’t think you keep this position too long. Now, does Mark Zuckerberg have that button for facebook.com? I think he does. And this is exactly what I mean and why I bet on him so much more than I bet on Google."