Founder Mode
paulgraham.com
paulgraham.com
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.
No, "the waves that can be used are not the eternal waves," they built a miracle and made people use it.
The photon came after, for instance.
It is mostly nonsense built on top of nonsense, I believe. To be honest, the miracles of Jesus, as described in the Gospels, sound more reasonable.
I find the Tao has a knack for describing my atheist worldview in exactly the way the Bible doesn't. "Where is he who has been born king of the Jews? For we saw his star when it rose and have come to worship him."
Because it does not affect those truly embracing it.
Having an excuse is not going to save bad business run by bad people. It might let them slide a bit more but ultimately it is not doing the job for them.
- they are not magic solutions to a fundamentally flawed business, or a business that is building the wrong thing
- they are not solutions to people issues
To a great degree if you have the right business and people treat each other like humans, you don't need a methodology, just keep doing whatever you are doing.
I don't want all the fuss anymore.
It's all just such a mess now.
No more fuss and endless mess,
Mind at ease, clear skies.
Exactly what happened with Product Market Fit. With the current AI buzz, I see everyone and their nana preaching about how their product has PMF. If you had PMF, you'd have onboarding teams, not sales teams.
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 extreme conservatism employed by managers to prevent failure - can only be summed up as "success at any cost". The consequence is decisions that spread the pain far and wide.
Unfortunately, these managers are not accountable for these consequences.
It's no winder that solutions take longer, cost more, are sub-optimal at almost every level. Furthermore, they very painful for the poeple who have to suffer these solutions. But hey, some unrelated manager-chain can claim success.
The worst of it is, these managers rinse-and-repeat at their next gig!
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.
And there's a difference between working with curing cancer or optimizing people wasting money in Candy Crush
Lots of people are just tuned out. And just don't care. With or without the comp.
>>It comes back to the work itself being interesting and whether you actually care about the field that you are working in.
There was this HR in a company here in India. She spoke at length about what attracted people to IT. Basically the employees wanted the realisation that they were creating tremendous value for the company, at the same time earning very high, and of course wanted work life balance. It was more or less impossible to achieve this. There aren't even enough projects of substance to make this happen. At least not for everyone, all the time. The net result was people tuned out, or just don't involve themselves enough at their work, or associate the outcome of their work at personal level.
Another additional factor how quickly the product/projects get shut down/eol in our industry. There are not many things that last for years that you take pride building them.
What we are talking about is people who care about the success of the business and pleasing customers, versus people who are optimizing for "corporate success" (ladder climbing).
You can find both types of people everywhere, at all levels. So it really is about "hire the best people". You just have to have the right measure of "best".
Oh I can totally picture this being used as an excuse for bad micromanagement! Unfortunately a lot of people are more interested in "doing the label" than developing a deep understanding of why they'd do something and how to apply it correctly.
And yes, I know I just described cargo-culting ;-)
How people can take someone so self-indulgent and -absorbed seriously is beyond me. I am sure he is great at his job of nurturing start-ups, but what he had to say, he already said a long time ago.
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.
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.
The lack of any scientific rigor means we have founders floundering when building companies. For now we can just point to individual cases like Steve Jobs or Valve and have to guess why what they did worked. We are in the snake oil period of corporate governance.
-- It may well be that, beyond the obvious, it depends on the broader social (how society is structured) and financial context, and the spirit of the times. The same could be said of all sorts of "how to's": how to get rich, how to be successful in life (the vagueness of which already throws a wrench into the engine of exploration), how to win at soccer/football/whatever sport or skill you are interested in.
While technology may open new horizons with capabilities that were not there before (think 4G and true mobile internet experience), one might ask why, looking back at the "primitive" ways sports were trained for and played 50 years ago, nobody had the intuition to propose ways of training and playing that are closer to what we see today. It did not require new technology, it needed a different way of thinking about the problem. But what scientific research, such as the one you propose to use to study how organizations win, would have allowed this thinking to emerge? And the same will probably be pondered 50 years from now when their ways will be compared to ours.
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.
Everything was done by committee in increments of the 1-hour recurring meeting once a week. You could be on 10 of these recurring meetings for 10 different projects.
The first part of every meeting was a recap of last meeting. The middle part was about 20 minutes of trying to make progress on blocking items while the ex-BigCo managers came up with excuses for why they didn’t do their part yet (usually it was because they had too many meetings). The last 20 minutes was a performative exercise where we decided on action items for the week which we all knew were unlikely to get done.
The company went on like this for years after I left until they ran out of extra funds to keep the charade going. The management scattered to other “startups” where I’ve heard they’re continuing to repeat the same games.
These people are not the smart ones, but the ones who are really good at doing "company politics" and "playing political games" (which are very different skills from being smart).
My personal opinion is that it is rather a sign of smartness to see through all of this. But unluckily the people who are capable of this lack the political power and backing of other people to get "dangerous" for these "ladder climbers" (or if they do become dangerous, it is for the same reasons easy to "get rid of them" (e.g. fire them)).
If they were actually smart they’d figure out how to set up an employment situation that they don’t mind that also has the pay/status that they want.
Congrats, you are very smart and know how to manipulate symbols real good. Try cashing that check at the bank.
"I'm so much smarter than them."
"Well they have a yacht and 3 homes."
Who used their smartness better?
Was it a new space startup in the Bay area?
What you describe sounds like a "founders just came together" trying to impersonate the IBM org chart without having figured out product-market fit yet, or even earlier than that.
If you get the wrong people in the beginning, it can throw you into a wrong trajectory that's almost impossible to correct later.
When hires have no skin in the game besides their wage (which they're legally bound to receive until terminated, regardless of business outcomes), and have minimal material share in success, they are going to play different games to preserve that wage
If you want people to act like partners in the business, make them partners
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)?
Executives are solving for their job, not for the company's success.
Second, it’s also about redundancy, having more employees covers you from key man syndrome where your operations could be adversely affected by an employee leaving. Even if it means you technically have more employees than you need at a bare minimum.
Third, I’d argue that the level of “efficiency” required by a startup simply isn’t sustainable in the long run, unless you want everyone to burn out. Successful companies likely span a spectrum of efficiency, but none of them need to be on the far efficient end like startups do, and that’s better for everyone working there.
Yep, just look at 3M for instance. They were already an established chemical manufacturer, but they could afford to have some people spend their time investing adhesives. One of these was a total failure for the desired application (they wanted a strong adhesive for aerospace, they got a weak but reusable adhesive), but then they spent more time looking for applications for this, and now everyone and his dog uses 3M Post-It Notes.
Working out how to motivate people whose individual impact now has near zero impact on the stock price.
This is 100% bad from a country/market level but is what you get when you let local optimizations trump capitalism. In some sense that local optimization also isn’t bad - it’s not uncommon that that behavior is also what lets efficiencies be extracted.
In other words, in many ways all of this is inevitable behavior as things grow and a lot of it are themselves (perhaps inevitable) symptoms of the mechanics at play rather than the mechanics themselves.
In other words, once “founder mode” is documented, you’ll have everyone claiming they’re doing founder mode same as how everyone says they’re now doing agile or whatever other fad you want to pick and you’ll be back at square one until someone then invents “strategic founder mode” or “growth founder mode” and claims to have figured out how you can spot that vs what everyone is just pretending to do right now.
Is it really 100% bad? Do people really think that the goal of humanity is to work in the most efficient way to extract the most economic value from everything possible? Can't we just be content being 50% efficient and use the other 50% of that effort to chill with family and friends and talk about films or something?
If your sole objective is to „number goes up“, you sacrifice everything which is not trivially quantifiable.
I’m not convinced this is necessarily true. JIT implies making all of your buffers more obvious, and you will want to reduce unnecessary buffers to save cost, but maintaining some buffers for the sake of resilience isn’t incompatible with JIT supply chains. The problem comes when you combine short-term oriented management with JIT supply chains; if you quantify the cost of a buffer, you make it easier for that type of management to make that kind of decision.
Toyota, for example, is one of the firms that popularized JIT, but they don’t usually run into the same short-termist problems that afflict other firms. Relatedly, Toyota’s senior management have all spent decades if not their entire careers at Toyota and still includes members of the Toyoda family. Those guys are probably not going to play fast and loose with resiliency just to make quarterly numbers look good. They are going to look at the quantified and understood cost of their resiliency buffers and say, “removing this buffer might save lots of money next quarter but in the long run that represents a risk to a company I intend to pass down to my grandchildren so I won’t do it”. Whereas a different manager at a different company might say, “this will definitely make the next quarter’s numbers look amazing and if there are consequences in the long run, either I’ll have switched companies or I can just say it’s not my fault”.
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.
Also, the more reach the less control (by design/definition) and QC is always a risk in that scenario.
Skilfully timed when growing and succeeding. Unlucky timing when failing.
The odd one manages it but too many just end up with low talent, low invested staff slopping out bad food that has none of the implementation or taste that funded the expansion and the whole things slowly collapses in on itself.
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.
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 not to say the goal should always be to scale or become as big as possible, but it's interesting to think about.
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)
https://www.tomshardware.com/news/nvidia-ceo-shares-manageme...
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
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.
Whether it's a good thing or a bad thing depends on your experience with it, mostly.
Management self-help guru Tom Peters (of In Search of Excellence fame) built a whole method around it, called Management by Walking Around. It differs from Gemba Walking in lacking a specific focus.
But I like what you've proposed here as a virtual "walking around" a lot more! The kinds of things you're describing are a lot closer to the pulse of what's going on than seeing what's on random peoples' screens at random times.
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?
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.
This is the main aspect I think, that everyone keeps missing. The “professional fakers” work first and foremost for themselves. They make great decisions, for them. But not necessarily for the company.
Not saying there is a contradiction, just a piece missing somewhere in the essays logic.
Upon reflection, if each sheet of each report, on average, dealt with about the same dollar value of things as the other sheets in its stack, then his system, far from being madness, would've just been an early, analogue and low-pass-filtered, lo-tech "business intelligence" dashboard.
In the former, you are immediately aware of what they're doing and why, because they're telling you! You can ask questions if their reasoning doesn't sound convincing, intervene early if there's disagreement as to what should be done, and decide whose project takes priority. Steve Jobs was a very active CEO in this regard. Bullshitters will not survive long in such an organization.
The latter, on the other hand, is often taken to imply that you should not intervene unless absolutely necessary -- which often means, until it's too late.
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.
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.
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.
Just gotta keep it up as you scale. At around 200-300 employees your job in leadership is simply telling the same story over and over again to different constituencies in different ways, for years.
Money isn't buying love.
You can hire a prostitute, she will work for you, but she will still not love you.
This is the same with companies.
Someone recently hinted at the opposite angle: Give them a lot of money and their motives would move to safeguarding their jobs, which results in a higher level of corporate politics.
That's how you obtain incentive alignment, when you genuinely believe that working hard as possible for the company is in pursuit of something greater.
This is impossible to do for yet another tax/hr/finance/billing startup, and why companies with big missions like SpaceX et al have no problem hiring.
I wasn't expecting them to do something bad for themselves, merely to simply do what I was explicitly asking and paying them for (and we paid above-market salaries). Too often communication was conveniently misinterpreted in obvious bad faith to justify them using some expensive AWS feature, or simply ignore the core message in the request. This was hidden for a lot longer than it should have been since Covid forced us to go remote all of a sudden and people would vouch for one another.
Honestly, I think now that there simply isn't a way to align most employees with you, and that the secret to successful start-ups is only going for the easy to execute things, that don't rely on the qualities of your employees (or you have 100mil raised and your problem is naturally a good challenge for them).
+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.
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.
There's always something better I could have done as the person in charge, obviously. I've done a lot of reflection and self-critique, please believe me, and I realized I've made a lot of mistakes, from which the situations could have been recovered though.
Putting my faith in employees, expecting them to do maybe 80-90% of what I was doing as an employee 10 years earlier created an almost unrecoverable situation, that burned the entire runway to unscramble. Yet if I say that my biggest lesson was never to put trust in employees, as it's most likely impossible to create a good incentive system for them, most people won't believe me, as I'm sure you won't either.
I've come to think that the burden is no longer on anyone to create incentive systems, it's on society to reintroduce some morality. Only a limited amount of businesses have the luxury of aligned incentives.
Why would I grind at a startup where the best case scenario I am getting a payout I could get at FAANG without any of the risk?
I have been through a successful exit as a SWE and you can be sure that the founders did everything in their power to maximize their own payout and minimize my payout. In a company of 40 the founders got a payout of 100x any other individual at the company, even those who were there early on and stayed until the exit. I got a (taxable) payout of ~300k and the founders got 40mil. The money was life changing for the founders, but for everyone else it was just a nice bonus.
Now I just work at BigCo and make 400k/yr, every year.
But then there are generals who lead soldiers to die so that a war is won. So at least there exists another mode of leadership not covered by your statement.
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...
https://www.techemails.com/p/bill-gates-tries-to-install-mov...
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.
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.
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".
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.
It looks very selectively at one successful category of enterprises and then generalizes this onto all.
But:
What about all those founder mode companies that went terribly wrong?
What about all the companies that function well in “non-founder” mode? Apple today is a perfect example.
I don’t think it’s about founder/non-founder either but about some underlying fundamental principles that PG hasn’t figured out yet.
Baseball recruiters have the advantage that they can go watch a pitcher toss a few balls. For most roles in a company you can't get that direct knowledge of someone's skills prior to hiring. After hiring someone who is actually an expert needs to sit with the new hire and assess them critically.
As a founder, sit in the first several meetings with the new sales guy. Did they come prepared knowing who to talk to? What their budget likely was? What their pain points likely were? Did they hear what the client asked and respond accordingly? Or did they did misunderstand the domain, need, request, etc.? Did they leave with notes and follow-up items? If you didn't come away impressed release them and move on. After 3 or 5 meetings you'll have confidence that they are the right fit.
After that, let them do their job and move on to addressing the next challenge. Once someone has shown themselves to be a good hire, protect them.
Yes, for the most part. But also: trust but verify
Figure out how much time you can spend on re-verifying, and do it in a random sampling basis. This will look different depending on the roles, but it’s whatever you need to do to verify, first-hand, the job is still being done correctly.
This will likely be a very small percent of your time, but the key is that it needs to be non-zero.
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.
But, I predict that once Reed Hastings leaves Netflix, the company will begin to decline.
We're at covid peak ATH again. Anyone who bought the dip in 2022, is looking like a genius with fantastic gains.
The more money Netflix has, the more they invest into better content. People look at the base metrics, which is why they are investing... along with a healthy dose of dump money into stonks that are earning more than interest rates. Once the fed starts to cut rates, things go even higher.
_But_ the stock is way up and their subscriber count keeps increasing. They have obviously found a formula that keeps the masses happy. And they are succeeding despite heavy competition. Can't argue with the facts.
Chesky's experience instead says to me that as managers we should be be wary of all advice and management styles and playbooks. For sure it's good to listen to advice and learn about management but life and managing a business are so much more complex than any set of rules or observations can describe.
In fact, since every organization's situation is unique, then managers should take all advice and accepted wisdom with a pinch of salt and forge ahead with their own unique set of principles for their own unique set of challenges. This is what Chesky deduced.
I would also go one step further and assert that it's a positive sign if a founder goes against the grain and breaks the rules - success is more likely than if they follow the established way of doing things. This is innovation.
Perhaps this is the 'founder mode' that PG is trying to uncover: think different.
I agree with you, I think. pg's point was that "Steve Jobs Mode" is the opposite of founders letting their C-level execs roam free. I don't agree.
I think the improved model is "free roaming managers with lots of transparency and accountability."
"Free roaming" and "no accountability" are a recipe for disaster.
But a CEO/exec/manager who reaches 2, 3, or more levels into their org and gives specific direction is a recipe for mismanagement. It violates the golden rule: don't create a role with two bosses.
Right, but on the other side, in the military they told us: "You can delegate authority, but you can't delegate responsibility." If part of the CEO is to be a manager for the C-suite, then he needs to be able to evaluate how the CxO is behaving as a manager; and that would seem to imply looking 2 or 3 levels down to see what's going on beneath them.
That's not to say the CEO should go around randomly countermanding orders and giving new ones. The CxO can't do their job that way. But it does mean that the CEO should have a clear picture about what's going on, form their own opinions, and either give guidance / constructive criticism or fire where appropriate.
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.
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* 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.
Cracked engineers, designers, growth people, AEs... the best ICs shouldn't necessarily be in management positions. Yet, the CEO should neither be air-gapped from those people nor managing their work/career on a day to day basis.
"Crack": adj., first-rate; excellent: a crack shot. https://www.dictionary.com/browse/crack
"Cracked": no such meaning https://www.dictionary.com/browse/cracked
(edit) see the urban dictionary definition in the sibling comment.
You have people who are most important to a:
- a project. - a problem. - the organization.
And I think we can divide organization into internal and external. When you divide like that, you’ll usually end up with four very different lists with some overlap at an upper management level.
None of the four areas are more important than others. If your software problem has a month long outage, that’s a huge problem. But that’s different from if you only have two months of runway left or if nobody has cleaned your office in a month. And since the problems are different, the people involved should be different too. Then you’ll end up with a lot of different hierarchies of most important people depending on what lens you’re looking through.
In Jobs’ case, his personality was probably strong enough that didn’t matter but broadly it can be helpful to officially say, “this person is important even though they don’t manage anyone”. It helps with fairness so that people don’t have to seek out the “secret” ways of being important, and it can accelerate decision making in the absence of someone like Steve Jobs
Many of the people at the retreat last year were happy exactly where they were, because they were contributing the project/team/company/etc exactly how they wanted to be. This was especially true of the senior engineers in attendance. Just because you’re a top performer, it does not follow that you also want to be a top-level executive.
> ...Just because you’re a top performer...
Do you just trust performance reviews for finding them? My experience in BigTech that those can't be always trusted. It seems getting good reviews is a skill and some people are better at it while some others might not even care about ratings at all.
Finding “true” top performers requires much more effort than your average mid-large company wants to spend. You need a collaborative effort between individual contributors, line managers, VPs, and the C-suite to get a good idea of who the most important people in the company are. And part of that is politics (making sure that everyone knows who you are and why you’re important) - there’s always a chance that a super critical person slips under the radar.
As an engineer I can tell you who the most important people in my section of the org chart are off-hand, in order of importance. As in, people without whom my org would fail, or at least flounder. Some of them are engineers, some of them are sales/business liaison, some of them are “management” (but frequently do a hell of a lot more than “just” manage). I don’t think a traditional performance review would identify all of them as being mission-critical, but it would probably identify them all as performing at least as expected for their roles.
I know at least one fairly critical junior engineer[0] that maybe isn’t the fastest or most efficient worker, but is learning fast and could easily be a top-tier engineer with the right support and growth opportunities. Fortunately my company did identify this and has given them a number of opportunities (including an invite to the retreat, among many others), but a standard performance review would probably score them as “adequate” or whatever other mid-tier. The way this happened for us is frequent “skip-level” meetings, 1-1 or 1-many, as well as quarterly team retreats with all members (up to the VP) present. This allows 3 levels of employees to all interact, and if you keep on top of this as a senior manager or VP (with either an engineering background or an open mind, which all people in this scenario have) it becomes fairly straightforward to find these people. It’s not a formula, or a set of rules/identifiers, or even some guidelines that are followed, which makes it tricky to make this “fair” - it relies on everyone involved having good judgement.
[0] I know “critical junior engineer” doesn’t sound great, but it’s what happens when you have a rag-tag team of engineers building a product from the ground up with minimal support from the rest of the company (and thus few resources), and then hit it big and suddenly have a largely successful product on your hands that was written by essentially 4 people. Each one of those 4 people are non-overlapping domain experts, and it just so happens that 3 of them are senior engineers and 1 is a junior. Over the last 6 months this has been improving, but a year ago, it literally was 1 critical junior engineer who was the only person who knew about 20% of the product.
In every case I've seen with healthy leadership, you could just ask who the top people are. Up to about 200-person size groups, you could ask any leader (even the top group leader) and they could just tell you. Because they generally know who is doing what, how difficult the various things are and who is turning in consistently outstanding work. (If the leadership can't do this, they might not be paying close enough attention.)
Performance reviews can serve many different purposes, but I don't think this is one of them.
I was reacting to the idea that the "top execs" are generally not the people you'd want. There was an undertone in pg's description that seemed to me like, "SJ hated those stupid and ineffective managers so he bypassed them to invite the people doing the real work."
I've worked in places with some ineffective managers, and at bigger companies I've witnessed a few ladder-climbing sociopathic liars, so I get the sentiment.
I just think it's more useful to figure out how to remove those ineffective people, or better yet build a cultural immune system that rejects them, rather than bypass them.
department heads spend all their time organizing groups of people. if organizing people better is your company's competitive advantage, then sure, putting your best people in those seats is probably best. but if your company's competitive advantage is that it makes better optical instruments, produces gasoline more cheaply, demolishes buildings more safely, or makes better-tasting food—you'd better let your best operators spend a lot of their time grinding mirrors, operating refineries, annotating floor plans, or cooking. if they spend all their time organizing people, your company will lose its competitive advantage
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.
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.
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.
I think it's important to have the distinction between delivering video content and the in-app experience. I do think streaming VOD is way easier than live content.
I agree there's nothing in there that's not understood from an engineering/technology perspective. It's not fusion or curing cancer. But scale and complexity compound simple engineering problems. There monitoring, there's billing, there's machine learning, there's software lifecycle, multitude of different devices types and networks, all of that at extreme scales that need to work pretty reliably.
• You have deals with N big media companies who each have their own restrictions on who can stream what from where. The list is constantly changing, so permissions to view media are locale-specific and revokable; you need a way to say “okay this person is not allowed any more to do that.”
• Multiple-screen detection emphatically needs to be rock solid. Someone is going to unplug their Roku player when their laptop says “you're watching from too many screens,” and by the time they get back to their laptop you need to be detecting them as streaming from 0 screens. At the same time a hiccup in this process shouldn't cause like 3% of your users to get a big streaming interruption as they don't seem to be online.
• You have to recommend stuff based on what this person has watched. An acquisition team needs to do cluster analysis on this to get new stuff to fill all of the different clusters of interests that emerge in your user base.
• People will search for shows you don't have. (Because of point 1, the big media companies only permit access to a fraction of their backlog.) You have to know this media that you don't have access to, well enough to recommend something related that might keep the user on Netflix instead of hopping to another service.
• All of this has to happen on pretty low latencies when someone starts up Netflix. That is, anybody who jumps into Netflix should see a personalized view of what they were watching, what they can watch, filtered by your allow lists and not cached on their device, within just a few seconds.
• All of this has to be portable to all of the different platforms Netflix supports.
Yeah, international media content licensing is very likely Netflix's moat. I'd wager starting a streaming service, and getting the big studios to host their content is pretty much impossible.
Recommender systems are pretty well studied, and anyways, I'm sure it's significance for Netflix is overrated. People (including me) tend to watch the show everyone's talking about. It's a much more hairy issue for a site like Youtube, where users upload decades worth of content every day, and the site has to figure out what to show to which viewers, where the content's shelf-life might be measured in days, so building up collaborative filtering data might not be feasible.
All the other technical issues are probably non-trivial, but I don't think any of them requires world-changing engineering prowess.
Most engineering is non-trivial. If I attempted to design a washing machine, I'd probably fail miserably, and figuring how to do it well probably took collectively thousands of engineer-years. Doesn't mean it requires exclusively unicorn engineers.
For comparison, I can tell a MacBook is better than a Windows laptop in 100 different ways. I can tell that the touch screen UI and self driving features in a Tesla is 15 years ahead a Toyota, but I cannot tell Netflix is better than its competitors.
Thats where the engineering problem goes from trivial to extremely complicated. Lots and lots of people demanding a similar quality of service across a wide pool of content on a wide pool of devices.
And that doesn’t even fully cover last mile issues.
Yeah, typical corporate development, where often the smallest of changes can be a nightmare:)
- I'm not really sure Stadia can be called a "technical achievement at scale". Mainly because it didn't achieve all that much scale to begin with. Definitely a technical achievement in cloud gaming. But the implementation at scale is something that I now see Sony and Xbox working toward (along with their console partners - hardware and software).
- Youtube, definitely, given the content base, the number of active users at literally anytime, is a monumental achievement. But so are a bunch of porn websites. And I know the porn industry doesn't have a good rep. Even in engineering. Still, porn sees more active users than Youtube and netflix combined, albeit, on a bunch of different websites, but a few large enough websites that are comparable to Youtube in terms of active users, and catalogue size. Also, these companies manage to host all of this content and delivery it all over the world on a much smaller budget than Youtube. Not to take away any of Youtube's achievements, but from a technical point of view, I do think the porn industry wins. To begin with, porn streaming is older than youtube, but quite a few years actually. Additionally, from what I've heard, some of the popular live streams on OnlyFans (and similar websites) see more concurrent viewers than most YouTube live streams.
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.
> 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?
Businesses and markets are really complex and it's difficult to look at individual businesses or decisions and make definitive claims. It takes a lot of time and research to pick apart the different factors that correlate most strongly with success.
Does that mean PG's observations are worthless? Not at all. Between today and those research papers being written, we need to make decisions based on observations that we or others make. Some of those things will be helpful, some will be harmful and some will be irrelevant. We do the best we can with the information we have access to.
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.
Good technical writing is especially important now. I guess you can try to train bots on the codebase itself, but unless that's pretty well documented, I wouldn't expect as much from that as training them on good technical documentation.
Either you freelance and work for multiple companies or you add other skills to your portfolio.
For example
- creating videos of your articles/docs
- hosting events like hackathons or meetups
- developing libraries or integrating the product with popular platforms
> 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?
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.
This.
"Pay excellent people out of band, for example." why not fix the band ?
i generally consider myself a hard worker and i have done plenty of overtime in my career. i would feel pity for anyone who felt this way about any company, unless they were literally curing cancer or giving us infinite energy.
yuck
We must have different expectations for the failure rate of startups.
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).
Whatever the "it" is that constitutes a startup's purpose often can't be fully articulated in mission statements, OKRs, core values, etc. Either it's simply ineffable, or it's a metamorphosizing snapshot of the leading edge of a rapid process of discovery. Expecting such an already-abstruse concept to faithfully percolate down a rigid reporting chain is ridiculous, like sending old-English scrolls via carrier pigeon to narrate a live sporting event.
But communication of the "it" still has to happen, if imperfectly. So someone in founder mode would naturally focus on delivering the most faithful and timely version of "it" to the points in the organization where it'll have the most impact and be least susceptible to corruption in transit. Today that might be to a UX engineer. Tomorrow it might be to the board. It's a kind of plate-spinning that aims to reduce skew from the latest version.
I don't know -- I've never worked at a strongly founder-driven company. I'm just trying to figure out what the essay means.
It's always bothered me to no end that PG has his essays read by others prior to posting. This isn't academia (or an application to college or a job application) and he's not writing for a journal and requiring peer review (or comments or suggestions). Fine it's his own style apparently.
Now what would be very interesting is to see some of the reply comments on the drafts of the PG essays (and how extensive they are).
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.
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.
The lesser title attracted candidates who were happy to take direction from founders, and the founder still stays in the “head of sales” seat.
Once the sales manager is ramped up, grow as much as possible then bring a VP to oversee it all, but with a larger team already in place it will be harder for them to mess up what’s working.
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.
I’m sad about that because I was very interested in the title.
I'd rather a C- college essay that is saying something right than an A+ that is very convincing bs. A decent number of well rated business books are the latter.
Nearly none of these comments are grounded in his actual text.
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.
The best example I can think of is the Costco founder threatening the newly arrived CEO who complained they were losing money on the hot dogs.
To me that is the single best example of Founder Mode.
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.
I would really underline the ability of the founder to have this pretty unique ability to see and set the strategic direction of the startup which requires a lot of abstract thinking with the tactical and operational skills to make sure you earn money right now.
Thanks!
I've also seen founders that weren't really at a level where they could "founder mode" and micromanaged things badly. Those founders are the ones that tend to apply the bad advice pg discusses and who can't really tell the difference if they've hired a good or not so good person and whether they're doing a good job or not.
I totally agree that you need people with the ability to hold the big picture in their head. This can be the entire company but it can also be one product or project within the company. Trying to construct this picture out of pieces in multiple people's heads is vastly inferior and is a factor in the failure of projects/products and companies. You can't separate vision/what/how across people.
What I don't think we want to take away from this is that the founder is always right or that you shouldn't hire good people and let them do their job. I don't think these two statements are accurate. The "founder" (or manager) does need to make sure that things come together, i.e. you don't have engineers building the wrong things. But you do need good people and you do need to let them do their job.
Ray Dalio describes these people as "Shapers", and maybe using a new term is the right way to go.
So putting this term to work, Paul's point is that the best way to run a company when the leader is a shaper isn't going to be the same as when the leader isn't a shaper. And to your point not all founders are Shapers and not all Shapers are founders.
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.
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.
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.
Sidenote: the fact that someone came up with another typology or classificator does not mean they know how to predict the outcomes in any way. It is the same exact MBTI style of pseudo-science which polluted tech and business world for decades. For someone urging others to read more, you’ve surely read something about the hindsight bias?[0]
> Objectively, original post had little to no details in it to link it to any kind of typology.
And nobody suggested that it did.
> predict the outcomes in any way.
And nobody suggested that it did.
> MBTI > pseudo-science > hindsight bias
Ok, you do you.
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.
I'd probably describe that as "bad behavior" as you hire people believing they'll focus on improving things inside the company, inside of focusing on padding their CV. Of course, wouldn't be bad if it's both, but selecting the latter in front of the other seems non-optimal for the employer.
If you go through enough people like that, you end up with a ball of software spaghetti that anyone working on will struggle with, instead of a polished architecture ready to nimbly be changed when needed.
So everyone picks what will look good on their resume in a few years, not what actually solves the issue in the most optimal way possible.
At the IC level sure, it is your manager’s job to create alignment. At the hiring level pg is talking about, they are deciding which of those people to bring in, and they think about it in at least as much detail as you when you design the intricate functions of the next product you ship.
Think about it like this: you have the chance to build a product that wins every trial but you won’t get anything more in the process, or you can design a product that is less competitive and sends you personally $<meaningful_amount> every time it is trialed, whether or not they buy. Assume no one will ever be able to definitively prove which one you did.
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.
In both we are seeing how professional management can decimate a company with several decades of history. e.g Boeing.
Management incentivised to grow stock market value. look, if the incentives are wrong then you get distortions. A good example with "founders" is wework.
Wework's innovation was two fold:
zeroth) vast funding
one) run the company like a mystery cult
two) Have beer in a shared office
Everything else is exactly what a shared office company does. WeWork's entire incentive was to grow as fast as possible and get as many customers as possible. No one cared about business fundamentals, because WeWork wasn't a buisness. It was a commodity to be traded by softbank.
Buisness fundamentals have been royally fucked by changes in finance. Stock buybacks, limp monopoly actions, toothless market regulation, have all meant that profit is one thing, but share price is everything.
The capitalism that made boeing et al is not the capitalism that we live in now.
The CEO got a really good exit package from Softbank.[1]
[1] https://en.wikipedia.org/wiki/Adam_Neumann#Business_career
Netflix started as a disk distribution 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.
You don’t really believe that, do you?
I'm the technical co-founder. Under me, we have three squads. Two of them are led by managers who were promoted internally from individual contributor roles. These managers still do some hands-on coding occasionally when needed, but they primarily focus on delegating tasks to their teams as much as possible. The third squad has a manager without coding responsibilities, whom we hired to test a new squad structure. It's been going really well—his squad is performing excellently, and I've been able to delegate some cross-functional tasks that used to fall on me, like collaborating with the sales team when clients have technical requirements for renewing their accounts or documenting releases and bug fixes to share within the company.
So in terms of the technology area of our company, our lower-level managers are performing considerably well. We’re implementing frameworks and routines that are really helping to advance our company’s managerial maturity. We’re also working to apply these practices to other, less structured areas, so your proposal could be very timely.
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
We have neuroplasticity :')
I would think you could get chatgpt to rank the emails in some way…
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.
I'm at a startup that is at an earlier stage than your two examples. Our CEO hired a VP Eng on a tight schedule and didn't give the engineering team an opportunity to interview him. I was definitely suspicious, especially given past experiences with the "professional manager" types we're all discussing here. The day I knew it was going to be fine was the day I went into the shop early, discovered that the lights were already on, and found him in the back laying out a bunch of holes to drill in an aluminum plate.
"Uhhhh what's up man?"
"The mounting plate from the contractors didn't fit right so I'm making a new one. I know you guys have electronics to mount and test today and don't want you to be blocked"
"...need a hand?"
That's correct. They do nothing, but when that nothing is actually done well, it shows.
Unfortunately, this is not common.
... but I explicitly stated what they did and it was not nothing
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.
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!
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.
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.
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
Now go tell Sitting Bull.
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.
You have catch the wave; otherwise you do a lot of paddling.
The other question I have been asking myself is regarding the SJobs retreats. They definitely happened during the Macintosh era but were they used during the second era. My impression is that they created a toxicity. It makes sense that CEO of large organization will hear names through the grapevine and want to get direct input.
I see the founder to be idiosyncratic and there is alway tension be that a desire for consistent environment. I think a good founder is able to compartmentalize the idiosyncratic from the supportive resource mechanics were humans like consistency.
No doubt SJobs was in Founder mode when he had all the CNCs at NeXT painted black and distorting the machine's tolerances.
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).
But the brain does not walk down and presses the 'r' key itself, that would make the finger redundant, and it would be a distraction for the brain. The brain also doesn't talk to the finger and tell it how to move to the 'r' key step by step, as that would be micro-management and piss the finger off.
What the brain needs to do is to enthuse the finger so that the finger acts in a way the brain would have acted - the "finger as the extended brain".
Now a good leader can manage to enthuse not just one finger, but 20 "fingers" - and all their transitive reports. (No wonder successful biz leaders are similar to cult/sect gurus that can seem to distort reality.)
As a founder and later a C suite exec - you really can't make this black and white. As a founder there is no greater feeling than hiring someone and finding out they can do a subset (ideally a large subset) of your tasks better and more efficiently than you. What you can not/should not do is walk away from that area of the business and never look back. You should still be invested and collaborative. A creative founder that can think from first principles should be able to contribute positively to any level of initiative even when they are not the most experienced person in the room. They should also be able to convey why an idea should buck convention and understand the consequences of it from the domain experts they hired.
Not to be that guy but if you're hiring fakers than you're not hiring good people to do their jobs.
The reason why you can't hire good people is because they don't care about money, and from what I've seen bringing money into the equation actively drives them away.
This is not something that a company like YC wants to hear because it means that their whole raison d'etre is flawed. I'm willing to bet that if the Paul Graham who wrote On Lisp met the Paul Graham who wrote this article, he would have some pointed questions about what went so spectacularly wrong in his career that he sold out so completely.
God knows that the me from 10 years ago would have similar questions and he'd be deeply unhappy about the answers.
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.
I'm completely sure that writing said email would deeply upset the reporting chain thus bypassed, plausibly in fired on the spot for unrelated reasons when they noticed.
Huang defies management best practices and doesn’t do 1:1 meetings at all.
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
> Ideas are always matched up with bottom-up data. >>That does not hold, I can have a myriad of ideas not grounded in reality
You are right. What I should clarify is that there is a process that always matches it up. You can have all those creative ideas, but you "know" at the same time that those are not real. You (except in some cases/pharmacologically altered) are not hallucinating like current LLMs (and some large orgs) do
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
Realistically tell yourself that 10x developers are a silly myth and the people you were able to hire for pennies from the local demographic are the superstars, and try not to hang your business model on them actually being the best in their field. As long as you don't fact check that against reality it'll be OK.
Thankfully almost no one is the best in their field :) You probably can't afford the best, you probably don't need the best, you probably can't keep the best happy, you definitely don't have problems that need the best.
That being said if you pay dollars instead of pennies you can find some decent folks and maybe save some money in the long run :)
You don't need the single best, you just should aspire as high a concentration of n * x for n>1 (2x, 10x, ...) as your talent to raiase funding permits.
But don't forget it's not all about "best coding"; you want people best in different things (PM, UX, architecture, security, databases, algorithms, compilers, documentation, networking etc. - also depending on what the product is about) - a diverse team of rock stars.
As for how you attract them - same way you attract anyone else. Give them something they want. For these people it’s agency, freedom and high level guideposts. For a productive big corp employee it’s clear guidance, timelines and a hierarchy to adhere to.
You have to become a superstar first.
I had the good luck of living down the street from the AirBedAndBreakfast founders in San Francisco in 2008 and we'd commute together to our Tuesday night YC dinners in Mountainview.
I picked up early that Nate was already a superstar coder, Joe was a superstar designer, and Brian was a superstar designer and salesman.
I knew I was not, and had to double down and practice, practice, practice.
Craftsmanship comes first. It took those guys decades of practice at their crafts before they founded AirBedAndBreakfast.
Think of Paul Graham. Before he created HackerNews and YC, he had already written and published a book on Lisp! A master craftsman.
Craftsmanship comes first.
If you are not a master at your craft, don't even waste your time trying to recruit superstars. Instead, spend your time on practice.
I’m starting to think paying attention to what is happening is undervalued.
AFAIK Florence Foster Jenkins spent her whole life taking singing lessons, and this was the result:
many superstars aren't even good at doing the expected when it would be a good idea, often because of drug addictions
this happens for two reasons. one is that if you're selecting people along two axes, the more harshly you select on one axis, the less candidates remain to select along the other, unless the axes are perfectly correlated. the other is that, whether you're a candidate selecting strategies or a judge selecting candidates, two axes along which you can select are mean and variance. in any event where you take the best of multiple trials, the top performers will almost always have high variance, not just a high mean
The ability to pay attention is where the unexpected comes from in my judgement. The whole world looks at something and tunes out early because they think they understand. An individual that is truly paying attention notices all the subtleties that that can be used for a fresh solution.
My point is that an inconsistent superstar is not as good as an individual with a consistently fresh solution.
Going out one more layer I thought the topic was how to have a stable organization with consistently fresh thinking. I responded to a topic discussing how to attract superstars. I believe anyone has the capability of being a superstar in the right environment.
whether 'an inconsistent superstar is not as good as an individual with a consistently fresh solution' depends on the situation. if you're in a situation where that's true, you're not looking for superstars, and you shouldn't try to intrude your decision criteria into discussions about people who are
> I believe anyone has the capability of being a superstar in the right environment
that's, i'm sorry, just bullshit. the wrong environment can prevent you from being a superstar—imagine if madonna had been born before recorded music, or in taliban-governed afghanistan—but the reverse is obviously false. no environment could have converted me, this body, into madonna or messi or jimi hendrix or bruce lee or meryl streep or jeff dean. that's pure wishful thinking
i don't think the discussion is about how to have a stable organization of any kind. it's about how a startup can kick ass. to what extent stability promotes that is a point under debate, not a premise we have stipulated. i can tell you that there is some degree of chaos that makes kicking ass impossible, but from experience, it can be remarkably high, and stability inevitably trades off against chasing superstars. that's because superstars are unpredictable by nature—not just when they fail but also when they succeed! a new product line that obsoletes everything your startup has done so far is a lot of instability, and it's what you are hoping for if you are trying to hire superstars in a startup
ignoring that is just self-deception, and trying to impose obviously ridiculous redefinitions on the conversation in order to cover it up doesn't do the discussion any service. if you want to argue that chasing superstars is a dumb idea, which is a reasonable point of view and correct in many situations, then make that argument—don't try to redefine common terms to conceal the disagreement
Heavily agree. But paying attention to what is happening _in nature_.
Pay little attention to what is happening in symbolia.
I got rid of my cell phone 2.5 years ago after my daughter kept saying "no phone dadda". Forces me to pay attention to nature and real world every moment I'm not at my computer. Huge life improvement in every way.
And it's also easy to speculate in a forum about super stars and "10x coders" and what team you should have.
But in reality, you have to play with the cards you have been dealt with. You can search for better folks, but until you find them, the show must go on.
In many card games, being dealt 8 Aces means losing the game, and the same is true for startup teams with all-alpha animal "leaders" who are all super smart but cannot agree on anything.
/s
But companies should be honest with themselves about what they need. Everyone still seems obsessed with being able to pretend they somehow got the absolute best deal on the employment market instead of interviewing for the position itself.
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.
> 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.
Would it be fair to diagnose this as an issue where the tech side of the business ran in an open, proactive way but other departments had a top-down mentality that required interfacing with the head of your department?
In other words - do you think it is a necessary/desirable feature that ICs need organizational authority from the CTO to push major changes? I get that given how the rest of the org functioned, it would have been much better to have more top-down mentality from the CTO. But is there a better equilibrium where this is not required?
If tech is trying to make changes that impact another major business area, and chaos needs to be avoided, then if you want to avoid executives being involved then members of that org need to be empowered to agree on those changes. However if you do that without structure it’s easy to just end up with organizational chaos as you wind up massively multiplying the communication channels that need to be pushed lower in the org. Someone needs to limit and direct the people responsible for those decisions if they’re not going to make them themselves.
But in researching this, it’s all pretty ambiguous but a decently relevant HBR article came out of it:
https://web.archive.org/web/20150209203853/https://hbr.org/2...
The quote does say "I" so there is an inherent assumption there. The problem with taking any quote and "best practice" at face value that can be applied anywhere is always incorrect.
> There's a few Steve Jobs quotes which have tanked the tech industry.
So hence it's like the hype trains an social media driven development. People need to think. Don't blame Jobs for it.
That doesn't stop people trying.
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?
At best there are some reasonably good heuristics.
Unless your company is a baseball team
[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.
Has Cohen actually improved the company? Revenue keeps falling, year by year, and other than having more cash on hand - not much seems to be changing.
Seems to me that every positive thing that happened to the company, can be credited to the pumping of the stock. The fundamentals haven't changed much.
Please explain how it is a meme-stock in 2024 and what that even means? What's the definition? Like how is GameStop not a "real" stock or "real" company?
It has 4 billion cash on hand (for 10B market cap company), no debt and is profitable. It had NONE of that before RC bought himself in. How is that a declining company? Or how does this fall under "not much seems to be changing"?
Also "every positive thing that happened to the company, can be credited to the pumping of the stock" makes no sense at all. 3 of the 4 billion cash on hand was from stock offerings that happened this year. On 0 news. Every single spike in the past 3 years was on 0 news. You can keep blaming "pumping", that's fine. But you'll have to specify who's doing the pumping and why to make that statement have any meaning. It's unlikely that household investors are doing 100+ million volume A DAY in a company that issued around 300 million stocks total (referring to the 300%+ spike days this year on 0 news).
They have little debt, and lots of cash at hand, but seemingly no good core business model.
If they can convert this, great - but they're not much more worth than the cash they have. If they can't use that money to grow, then what good is it?
2. Went from 0 cash + debt, to 4 billion cash and no debt.
Within 3 years.
So what do you expect from new CEO's and BoD who jump into a "dying brick & mortar" and turn it around like that? Like if the above is "nothing", "not good enough" and "declining", what does "good enough" look like to you?
IMO this is nothing short of a leadership miracle. The company would not have existed by now if it wasn't for Ryan Cohen. Who by the way has a salary of 0 USD. For the past 3 years.
Like why is he doing this for no salary? hmm?
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.
Maybe I'm being naive, but I think a large part of running a successful business is having a well defined niche / problem you solve. Getting to that point comes with a bunch of barriers and risks, and joining an organization that has that already figured out seems like it can have some advantages?
Because their role in a company is support like CFO, CIO, CPO, CMO (and honestly CEO). The startup lifecycle where "person or people who make or design the product muddling along the other business functions until they're big enough to need someone specialized" doesn't really work for an accountant.
Experience. Experience and wisdom is what trumps the exuberant overconfidence of an ignorant youth.
Every startup actually discourages this, which is why so few startups have great young managers.
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.
> 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.
I also hadn’t heard about him sending fixers in; was that an escalation to sending a question mark email or was it part of the normal process? I know you’re probably aware of this but for other people reading this discussion I feel I should elaborate: if some problem at Amazon, usually customer-facing and often a complaint from an actual customer, landed in Jeff’s inbox and caught his attention, he would forward the email to whoever was responsible for the situation, adding “?” as his sole commentary. I think he just forwarded the email to one of the S-team and it would get passed down the org chart until it reached the relevant manager but everyone in that chain would keep the issue at front of mind until it was resolved. And if you were the manager that actually owned the issue, it was now your top priority. The expectation was that not only would you address the customer’s immediate problem but that you would root-cause the problem and address it as categorically as possible.
Come to think of it, maybe this is a good example of founder mode.
Besides, the goal here is not that Bezos knows every detail; it’s that he knows enough of the details that a subordinate isn’t going to be able to bullshit him. And once he has trusted subordinates with a long history of not bullshitting him, he can offload some of the “understanding details” to them, so however difficult it was to try and bullshit Bezos, it’s going to be even harder to bullshit a team of Bezos and a trusted lieutenant.
And ultimately you can develop a skill or a technique for not being bullshitted even without knowing any of the relevant details ahead of time. Just as there are techniques to bullshitting a person, like handwaving and glossing over inconsistent or inconvenient details, there are also counter-techniques for not letting people bullshit you, like demanding all of the inconvenient details that people seem to be glossing over or trying to hide.
That’s the mentality that gets you with a Boeing CEO who doesn’t know that airplanes need redundancies. I think you can expect more from a great founder. In particular, people who have worked with Jeff Bezos have said that he is incredibly smart and broadly competent.
Probably more important is an intrinsic curiosity. Jeff Bezos seems like the kind of guy who really enjoys learning about aerospace manufacturing techniques or rocket engine design or distributed systems or supply chain management. If you’re smart and intrinsically curious, these deep dives aren’t really that much time and effort. If you’re the stereotypical MBA midwit, it’s outside your comfort zone and what you enjoy and it will be an ordeal.
> They have to be able to build a management team of properly incentivized highly skilled professionals.
It helps to remain involved with the details until you can tell who’s trustworthy. Once you have other trustworthy people to help you manage the details, of course you can delegate more and more of the work to them, and enlist them to help you with the deep dives.
> Time in the day is limited, if you are delving into details on X and Y, that means at that same time you are not spending time on Z.
Right. The flip side is that Jeff Bezos delegated a lot of the day to day operational management to the S-team so he had more time for deep dives. In other words, rather than focusing his attention broadly on the top level big picture, he scanned for problems and when he found one and spent his attention narrowly examining them one by one. Which, again, sounds like exactly what a curious person would do! Spending all of your time focusing on the exact same high-level overview over and over again sounds really boring because you never get to learn anything, and it’s the learning that’s the fun part.
When I worked there, Bezos held a weekly S-team meeting where the execs all came fully briefed to answer any questions about ongoing issues in their departments. That flowed on down the chain: Andy Jassy had an AWS-wide meeting the day before to gather the relevant data from each of his teams, and that meant that every major AWS team had an internal rollup meeting on Mondays to prepare for Jassy's meeting...
Most of the question mark emails seemed to target more specific issues (mostly customer pain points). The fixers were more for big organisational or tech problems. If your division was significantly behind schedule on a product launch, or your production system had significant failure rates, you were liable to have a Senior Principal engineer and/or a new VP airdropped into your org, with significant leeway to get shit done
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.
I really liked this talk from Patreon's CEO about bad advice: https://youtu.be/JTpBFiW5PBo
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.
"often turns out to mean is: hire professional fakers and let them drive the company into the ground."
That's not low risk, that's higher risk. Letting the founders continue in Founder Mode can be both lower risk, and higher expected value, at the same time.
> hiring good people and letting them do etc is all just details of dynamics emanating from this unreasonable risk taking ability
I think not. Instead, the founders have unique insights: in the product, in the business domain, in the people in the company - which lets them do Founder Mode things a professional CEO cannot.
Sth else:
> only really unreasonable people can make huge changes in society.
Nice way of phrasing it :-)
It depends on how the founder and their investors perceive risk. If they have the risk appetite to stay in founder mode at scale, even when they have a lot to lose, then they do. But most don't. That's my point. And so, they take the advise to derisk for themselves – they take some money off the table, they hire professional managers and delegate, they take their new found time and money and put it elsewhere.
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.
What the hell kind of messing around is that? Did he think he was at the unit he rented that came with door-kicking privileges?
They leave trash in the hallways or smoke in the corridors. When you’re on vacation people act a little more free spirited.
I can afford it, but non tech/banking (the normal people) have moved inland to much worse spots. I only have 2 live-in neighbors on my floor of 8 units; the rest is Airbnb/Some guy who bought the unit to ‘invest’.
I talk with the owners because they occasionally need my physical presence to do something. But all these units would have been families - like they were in the early 2010s.
https://www.cbc.ca/player/play/video/9.6428660
their claim. Developers built to the market, the market being people wanting an investment rental property. The prices got so high that no one can afford to rent them so investors are losing money. It used to be, mortgage payment = $x. rent = $x+($500-$1000) but now it's rent = $x-($500-$1000). Further, they aren't sellable because they were never designed to be a good place to live long term.
at least that's my summary.
They didn't explain if all this is true why the prices haven't dropped 30-80% to the price that people might be willing to buy things they don't really want. As in "hey, this place is way smaller than I want but the price is really low and the location is great". As it is now it's more like "this place as way smaller than I want and even if I could afford it it's not worth the price"
I'm curious if the same thing happened in other cities.
1. Privacy
2. Your own kitchen
Hotels still don’t cut it. Usually a stay needs to exceed some length of time needs (due to the cleaning fee typically being flat in Airbnb’s) before it becomes worthwhile. But if you’re in that camp (4+ people, 4+ days) it becomes pretty worthwhile. The cost savings on food alone makes it back up pretty quick, plus there are other savings usually related to parking being included etc.
Have you tried Residence Inn 2-bedroom suites?
There aren’t many of them in any given location, but they are absolutely amazing for 4 people when you can get one.
My experience has been positive, and my friends and family who have tried it were also impressed.
In your description, you might be doing it only for a short holiday but when you travel long term, living only in hotels is truly awful.
Airbnb is the only way to consistently be able to rent a full place without having to go through traditional renting agencies which require oh so much paperwork, even for just a month.
The alternative is finding privates on Facebook but with that you just can never be sure.
If a country doesn't seem to have good Airbnb options, booking.com can provide similar-ish experiences (kitchen + homey vibes).
And if I had kids, I think Airbnb/homestay would make even more sense to me than hotels.
Together with that, I really don't like having to "fight off" cleaners wanting to clean my room every single day. Even putting up the do not disturb sign doesn't always work.
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.
It’s so conventional that he de-listed the article but keeps it published and available by URL
> By promoting themselves from data to code, hijackers on September 11th promoted box-cutters into 400,000 lb. incendiary bombs
Published September 2001
i want to give pg a lot of credit for clear thinking here, but of course if he'd suggested locking cockpit doors in august 02001 instead of september, that would have been significantly more impressive
your original summary of https://paulgraham.com/hijack.html was not correct
The code/data rhetoric is not exclusively an earmark of Lisp. A primary concern in security are situations in which what is intended to be data allows for a surprising malicious use whereby it effectively becomes a way to program behaviors into the software which processes the data.
For instance, Winamp being exploited by loading a specially crafted MP3 playlist file is an instance of data becoming code; no Lisp in sight. Code being a flipside of data, in the context of security, is simply the consequence of the Von Neumann model.
Graham is arguing for compartments; exactly why we use containers and such. The main idea is that the passenger cabin should be sandboxed away from the cockpit, which isn't earth-shattering.
Where he mentions Lisp is this:
> The defense that does work is to keep code and data in separate places. Then there is no way to compromise code by playing tricks with data. Garbage-collected languages like Perl and Lisp do this, and as a result are immune from buffer overflow attacks.
This point seems bungled. Garbage collection is no panacea. Bugs in a garbage collected run-time can expose applications to exploitable attacks. The advantage in Perl and Lisp is that the application programmer is not writing low-level buffer manipulation routines from scratch. That stuff is in the language run time, where we debug the low-level implementation code once, and have thousands of applications use the debugged thing. If a hole is found, we fix it once, and close the issue in thousands of apps once they upgrade to the new run-time.
Garbage collected languages do not necessarily keep code and data in separate places. Moreover, non-garbage-collected languages do that. The C language can easily be implemented in a conforming manner such that the data areas (automatic storage (a.k.a. stack) and dynamic (malloc) are not executable. C keeps code and data separate. Functions are not objects. In some C implementations, like certain DSP chips, functions are in a separate space; you cannot cast a function pointer to char * and access the function image, because the resulting pointer will be interpreted in a different memory area. Of course, C data can contain pointers to functions, which can be redirected if overwritten.
Lisp data can also contain function pointers: e.g. a closure object with a pointer to code and to an environment. If that is stored in a heap somewhere where an array is also stored, and the run-time has a bug which allows array overrun, it could perhaps be exploited.
as you know, though, there is a connection between this kind of security and garbage collection. specifically, if you're using a language that bounds-checks all array accesses, so array overruns are impossible, but relies on that same application programmer to free pointers manually, you can have a use-after-free bug, where a function pointer is written into heap space previously occupied by an array (or other data structure) to which a pointer still exists. if the attacker can cause writes to happen via that pointer, they can still break your security
garbage collection is a perfect guarantee against use-after-free bugs, unless of course the garbage collector is buggy. it's not the only possible solution; alternative solutions include statically allocating everything (abjuring dynamic allocation completely, like cobol), linear typing, never deallocating anything, and mlkit's region-based memory allocation are some alternatives which have been used. garbage collection is the most popular and probably the most practical
so it's not just that we have thousands of applications use the same debugged low-level buffer manipulation routines. it's also that we have thousands of applications use the same debugged garbage collector
i want to point out that even without having code and data in the same memory space, there are a variety of things an attacker may be able to do. when non-executable stacks, aslr, and w^x protections started being implemented, attackers started returning into libc; function pointers that point into the middle of libc would work just as well. (return-oriented programming might be more difficult, unless the thing being used-after-freeing was a large stack-allocated variable, which would be unusual.) and of course if there are shell commands, sql commands, java bytecode, or the like in data memory, overwriting them with malicious data may be just as good as uploading malicious machine code
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.
As with any complex system, you have to be careful about degrees of freedom, too many and it can break down and too little and it can get seized.
I think the founder not only motivates people to work on the correct thing by doing this, but the founder also directly experiences feedback from working with people lower on the org chart, enabling them to steer the company with more accurate information.
To my mind the CEO job at scale is 4 things - Keeping the fight fair-- The leadership and executive management should argue viciously, The CEO should make sure these conflicts remain constructive and aligned with company goals
Holding the vision true-- There's a risk of mission drift, continually reinforce and refine the company's vision, make sure all leaders remain aligned with longterm goals
Enforcing strategic adherence-- A strategy is only as good as its execution. ensure the leadership team not only understands the strategy but implements it across all levels of the organization. Manager of Leaders
Deal with the real world-- Q-calls, investor relations, supply chains/vendors/etc.
This is often the problem I have with business advice, it's general but not generally applicable. Scale matters probably most in the context, followed by the type of business.
I imagine from what I read about Steve Jobs, Elon Musk and Jensen Huang is that all three of them have/had unconventional management style in the sense that they're often amongst the IC's. Obviously you can't do that with all of your 30.000 employees, but I think they're just picking the teams that are most crucial at a certain point.
For example if Steve Jobs is managing Apple while launching the iPhone, I imagine he's talking to the VP of Sales in the management meetings, but he's not on the sales floor, nor is he sitting with MacOS dev teams or making sure motivations are high in the customer service department. But I bet you could find him in weekly iPhone design team meetings, and maybe he'd be shown progress on iOS every month and have a 3-hour brainstorm with a core team of senior devs on that team. Maybe they'd pull him into procurement meetings to make sure the capacitative touch screens would be made in the quantity they needed.
You'd have your VP's, directors and senior management making sure the ship sails, but you'd have the founder CEO present where they can have most impact, which just isn't in those top level meetings.
http://timesofindia.indiatimes.com/articleshow/111457691.cms...
This is a great talk by Brian on why he is CEO, he has a bit of a chip on his shoulder about designers not being CEOs from what I gathered: https://www.youtube.com/watch?v=V6h_EDcj12k
At the least, they said you need to hear directly from the people on the ground to know what they’re experiencing. The people on top could talk to them about what they learned.
Additionally, companies like IBM and FedEx used to give rewards to employees for ideas to improve the company. It was often a percentage of what those ideas made or saved up to a certain cap. A bunch of people would usually collect the max reward whenever this way implemented.
Those are a few examples that I saw show up in many places.
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
Both PG's post and your point about his experience creating a rare perspective are spot on. While I think PG's "Founder Mode" concept needs further exploration, he's on to something I never saw in the typical HBR-type literature. It mirrors my experience being a startup founder acquired into a decades-old F500 tech company.
As a senior executive it took me quite a while to figure out how this huge, well run company really worked and I always felt my understanding of the important ways it was different from my startup were unique and distinct from the standard business writing. I hope this Founder Mode distinction is developed further because there really is something new and valuable here. As you've pointed out, the problem is only a few hundred people have experienced the journey from successful tech startup founder to senior exec inside a decades-old, >5K employee global tech giant.
For me it was profoundly eye-opening while being both fascinating and alienating. Once inside the giant, I saw many things not working (of course), but I also saw other things which definitely seemed to kind of work but in entirely 'upside-down' ways from my prior experience. It's like the systems (and ways of thinking behind them) had evolved differently in an alternate universe. They were much more complex, less efficient and strangely opaque. But these bizarre constructions did scale and were (mostly) working, while being unpredictably unreliable in mysterious ways. When asked to run them, or worse, improve/fix them I found myself completely lost due to their alien anatomy. I couldn't fix them because, to me, they were "not even wrong". Yet to everyone around me, they just seemed normal.
Systems like this were the source of that simultaneous fascination and alienation. It caused me to question my core premises about 'how things work', which I'd formed over decades of experience across three successful startups, evoking feelings similar to PG's reference gas lighting. This experience repeated itself several times and the profound feeling of alien "otherness" is the strangest thing I ever experienced in business. Even now, I find it difficult to convey a true sense of. And it's the one thing I've never come across anyone talking about until PG's Founder Mode.
To be clear, I'm not talking about the usual nonsensical org chart stuff one finds in lurking in most big orgs. This is about the deeper structures and dynamics that make complex processes fundamentally work in balanced, self-correcting ways. What I've always called "The right people, in the right process, with the right feedbacks." Echoing PG's post, in my experience, these essential structures can only be fully understood vertically across levels from high to low. And across degrees of granularity from the macro to the micro. As a founder in my startup, instantly jumping between these scales while building or fixing such a system, is when I'd often hear push back from employees or even board members who came from traditional business backgrounds. While obvious to me, they just didn't seem able to see how these disparate things were connected in a deeper, crucially important way. Perhaps being able to see things in this dimension and determine which are essential to the business, is a key part of Founder Mode.
I'd be very interested to compare notes. I'm username at alphabet's service.
> 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.
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.
https://www.wallstreetzen.com/stock-screener/founder-led-com...
Not everyone can be a leader.
But in my experience a good founder doesn’t necessarily make a good leader. Not a CEO anyway, but it depends on the role of the CEO. If the the CEO is “chief strategy and opportunity officer” then some founders are often quite well suited to it.
But we should bear in mind that all founders do not have the same skill set. Woz was also a founder of Apple and a great engineer but not a CEO.
At this moment, you can decide that you are starting a company. You are now a founder.
(This is why Founder is historically an unprestigious job that smells a lot like Unemployed, though the startup hype cycle of the last 15 years changed that.)
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)
A recent science fiction series explores this exact concept against a tableau of post-democracy communism, socialism, fascism, and libertarianism:
The Owner Trilogy, by Neal Asher: https://www.goodreads.com/book/show/24087399-the-complete-ow...
(The read of it is something like Altered Carbon meets The Expanse.)
> 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.
Just to be clear, there is nothing wrong with that, but commitment goes both way.
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.
So, a book on "founder mode" could include multiple chapters on leveraging your network to scale your company.
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."