This is conventional wisdom.
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.
Counter-example: Reed Hastings, co-founder and the CEO of Netflix for 22 years, famously did the opposite of what pg is saying. Reed insisted on a particular style of employee freedom & responsibility that IMO set the benchmark for innovating year after year and avoiding micro-managers, even as it scaled up past 2000 engineers. This story still has not been fully told. Reed was closely involved but perhaps the opposite of Steve Jobs.
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.
Good points in pg's essay:
* 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.
There are many very good reasons why the top 100 most valuable people would not be the department heads.
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.
I don't think there's any reason to believe IC's who follow the "cracked engineer" manifesto would be in the top percentile. It's basically a guideline to make people more manageable and has little to do with engineering talent.
I have no idea what you're talking about. Cracked is just slang for insanely talented, ergo...
I've only heard the term in reference to https://posthog.com/founders/cracked-manifesto
Which is the same thing. You've also heard them called rockstars or x10 before. They are referring to the same folks, but calling them "easy to manage" is a hilarious statement.
Characteristics like "Stay optimistic at all times", "Make people feel excited and energized", and "Behave in a completely authentic way" are not really things I associated with rockstar/10x engineers (which is also a complete BS label for different reasons).
I like this comment because I think it does a good job of demonstrating four kinds of important people.
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.
The top 100 people also include low level employees who know the day-to-day reality and won’t bullshit you the way mid-level managers will. And no: all the people who are going to respond to this and say the problem is to hire good, honest, no BS managers, good luck with that. It’s like saying the way to make money in the stock market is to buy low and sell high.
My company of ~1600 currently does annual retreats with 90-110ish people. All of the C suite and their direct reports, but also a good number of engineers and other ICs, as well as some “line-level” managers, and 10 people who have been identified as “up and comers” (usually ICs relatively early in their careers, but not exclusively - over the last decade, probably 30-40% have been managers of some sort who were well into their careers but identified as key people in the organization for a number of reasons).
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.
The issue is that we don’t have a clear understanding of what “founder mode” truly entails.
But, I predict that once Reed Hastings leaves Netflix, the company will begin to decline.
Has the company not already declined? I've been subscribed for years, but I cant remember the last time I watched something on it. The next time I do a round of canceling subscriptions, there is a very real chance it's gone. I have so many other subscriptions, I'm just not sure it's important enough to me anymore to make the cut.
Have you looked at the stock price recently?
I'd argue decline lags value fundumentals. Sears decline took decades. The early metric is probably "viewer hours" per customer or some use base metric. That will probably dip before the revenue dips.
I don't think Netflix is for you and me. I can't remember the last time I watched a Netflix show. The content is bad, the UI is bad, everything is bad compared to what I remember of the early Netflix days.
_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.
Zoom out on the chart. Sear's stock looks nothing like Netflix. Sears was killed by totally different circumstances.
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.
PG's commentary is interesting but I think he is leaning towards an unsatisfactory conclusion. He's trying to simplify management into modes but in reality life is more complex and nuanced.
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.
It's a bit off topic, but I've never understood while people hold Netflix as some engineering Holy Grail.
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.
It’s not straight forward at scale
Care to elaborate? Most things boil down to client side features like streaming the video with HLS or DASH, even if it's not live just to get the encoding benefits. DRM is its own thing.
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.
Take those low teen megabits and scale it through $x users in $y locations streaming $z content items. Consider that 15% of those $x users will take to the internet to complain about problems. Also consider that once you’re a big enough name, mainstream media will cover those complaints on slow news days. Finally consider that a large portion of budget goes into constantly maximizing x, y and z.
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.
Slightly bigger challenges Netflix faces:
• 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.
Hastings is rather unique in the current founder era in that he had previously founded a company, recognized he did not have the ability to manage it, attempted to step down, and then was told by his board to figure it out. He went on to essentially succeed in this and take his company public.
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.
I agree and I’m following you right up to your last statement. I’m doubtful that Jobs and Hastings had similar functions or operated similarly. I worked with Reed but not with Steve. I know a few people who interacted with Steve, and their stories don’t sound anything at all like how Reed operates.
I don't know nearly enough to make a firm claim here but I don't think what you're describing sounds like a definitive counter example. There's a big difference between giving lower level employees creative freedom and letting c level executives have free roam over their domain with little oversight or Founder involvement.
...letting c level executives have free roam over their domain with little oversight or Founder involvement.
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.
Steam (Valve) too.
I don't think this is incompatible with what Graham is saying. Netflix has a famously distinctive organization and management style; I don't know if it's literally Reed Hastings' stamp, but you can imagine it might be. Towards the end of the post, Graham talks about how he's not saying there won't be delegation; it just won't be black-box cookie-cutter delegation, into "engineering" and "marketing" and "sales" and "support". It rang pretty true to me.
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.
I think it’s important to gleam some insights from past successes, but ultimately these “case studies” have over factors. For example, the time with which Apple, Netflix, Facebook, and so on, flourished. Where talent existed, what the landscape looked like, is quite possibly totally different than anything today.
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.
I bet that Reed Hastings has a sub organization at Netflix that is run in founder mode, even if most of the organization is run in manager mode.
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.
I have a feeling the other alternative is just indiehacking + AI. Little management needed, much smaller companies.
"We hired truly great people and gave them the room to do great work. A lot of companies [...] hire people to tell them what to do. We hire people to tell us what to do. We figure we're paying them all this money; their job is to figure out what to do and tell us."
-- Steve Jobs
How do you guys actually hire the superstars to join your startup as the early employees/partners? And not just the typical friend you know who's "a pretty smart guy" and his friend and so on
actually hire the superstars to join your startup as the early employees/partners?
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.
Don’t think of people as superstars. Think of them as individuals that are able to pay attention and consistently meet expectations.
I’m starting to think paying attention to what is happening is undervalued.
'individuals who consistently meet expectations' is not only not the same thing as 'superstars', it's nearly the opposite. doing the unexpected is a defining attribute of superstars. an individual who consistently meets expectations is incapable of simultaneously being a superstar. they must exceed them, and to an astounding degree, to qualify as a 'superstar' by any normal definition of the word
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 only difference between what you wrote and what I wrote is that you removed the first filter and critiqued my comment becuase the second filter failed.
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.
i mostly agree with your first filter, but your second filter excludes all superstars, turning your comment into nonsense as a whole
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
I disagree superstars are human one should expect failures from humans.
This only works up to a point, if you lack talent.
AFAIK Florence Foster Jenkins spent her whole life taking singing lessons, and this was the result:
I might agree Florence wasn't paying attention.
paying attention to what is happening is undervalued.
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.
Wish I had listened to my 2.5 YO.
It really is. People have a hard time balancing focusing on their deliverables vs truly paying attention (either broadly or deeply). I tend to err toward the attention side which makes me a terrible task deliverer, but I think on balance paying attention has been more valuable.
maybe the superstar idea is somewhat of an illusion, and they are actually just some pretty smart friend of the founder?
Yep. Friends of the founder also get more political/social leverage in the org, so they get more resources to execute their ideas, and their results are valued more highly by leadership.
Either they're the founders or friends thereof or you're struck-by-lightening lucky.
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.
try not to hang your business model on them actually being the best in their field
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 :)
It's easy. They all happen to live in SF and be working on a YC start-up...
/s
You become friends with pretty smart guys that have the potential to become superstars. Which superstar will join a wannabe startup?
Instead of thinking of them as some superstar, think of it like hiring an IC - you want someone who can, and will ship, especially in the face of ambiguity. If you hire a mega talented engineer who specialises in designing fault tolerant distributed systems, you’re going to build a fault tolerant distributed system. If you hire someone who ships scrappy features and doesn’t leave a giant mess behind you, you have a much better chance of success. Finding those people is the same as finding any other developer.
But then you hear about stories of employees coming to Steve’s office to give a presentation about how such and such technology isn’t possible, then Steve says yes it is figure it out, and they do.
That's a case of an employee telling what not to do
"Rectangles with rounded corners are everywhere!"
The problem with Steve Jobs advice like this is that it doesn’t work out of context.
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.
There's a few Steve Jobs quotes which have tanked the tech industry. The quote "If I'd ask customers what they wanted, they would've told me a faster horse." for example is absolutely horrible advice for 90% of companies. It implies you understand your customers business better than they do. For simple B2C businesses, that might be true. For complex B2B businesses, it's very likely not true. If your founder spent decades doing the job of his customers, and (s)he know a better way to do it using new tech, it JUST might be true. Rarely is that the case though.
Great comment, curious to hear more about your perspective.
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?
Delegation is great but you need to win the culture war. You need alignment, and passion for the same goals or else it doesn't matter how good the people are.
This whole article is written around one key sentence:
> 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?
1. Be the ultimate judge of what excellence means to the company. Enforce this directly, in direct communication with people doing both a good and a bad job, instead of rigidly relying on chain of command.
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.
2. Break the rules if the rules are stupid.
This.
Fix the rules if the rules are stupid"
"Pay excellent people out of band, for example." why not fix the band ?
These are your personal essay points, not what was in the piece itself.
Based on pg's other work, I would guess that previous drafts of this essay had concrete examples, but they were removed after deciding that including them would make the discussion all about those specifics.
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).
Is it possible this essay about founder mode is itself written in founder mode?
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.
Couldn’t agree more. He’s talking about a management style in such a nebulous way, when I would imagine his experience and proximity to so many founders/companies could provide a little more concrete substance. This feels like a first draft, and should have “Dig deeper” written in red across the top
A founder lives their company as the most important thing in their life, it's an extension of their life and they live and breath the company. A manager instead is being given a responsibility and will try their best to fulfill the role. A founder will never rest if they know there's an issue to be solved in the company, while the manager has a life and know they can move forward in case. A founder will not be intimidated by any internal policy or rule if they believe they need to change something. A manager will try to play by the rules, and in case try to modify them through influence. A founder is basically a ruler who truly care about the success of the company (not necessarily about the happiness and fulfilment of the people taking part in the company). For a funder the Company comes first, before anything else.
As someone who runs a company, this article resonated with me. This stuff happens in every department and has a lot to do with how the company is run day to day. If you think about the major deliverables of a department - and pick any department - “manager culture” says the head of that department produces the deliverable internally, getting feedback from stakeholders outside their team perhaps, but “owning” the decision. Thus the product roadmap is “owned” by the product team, and the person the VP PM or CPO reports to is a passive recipient of it even if they have input or feedback on it. But that cascades downward: in manager culture, the mobile roadmap is owned by the mobile PM, the internal tools roadmap is owned by the internal tools PM, and so on. They all buy into manager culture, where autonomy is viewed as a defining aspect of their impact and importance, and to take away that autonomy is to undermine them and risk losing them (“micromanaging, which is bad”).
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.
Agree completely, this is an essay without a thesis, or any valuable evidence or argument. This is a C- college essay at best.
I’m sad about that because I was very interested in the title.
As our company scaled, 7-figure ARR, the common refrain was it was time we hire a VP of Sales to help make our sales process "repeatable, scalable, blah blah".
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.
A founding CTO is more effective than a hired CTO, because the founding CTO has more moral authority to create a consistent system. In other companies there's infighting between people (senior engineers, senior managers) with different architectural preferences (e.g. microservices vs monoliths, Java vs Python). These senior people get half what they want, meaning half your system works one way and half the other. A CTO can hold to their singular vision.
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.
My ex colleague is still fuming after several years about case where professional manager decided to program parser that we decided was 8 story points. If this manager would have been founder it would probably have been normal stuff about founder spearheading initiative.
After two unsuccessful but still alive start-ups, I've come to very similar conclusions. Absolutely every single time I've tried to say to it anyone other than a founder I was met with disbelief that eventually turned into accusations of not knowing how to be a leader.
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.
How did you incentivize people to do what was best for the company rather than only for themselves? What percentage of it did they own? Why should they ignore their own self-interest in favor of your company's long-term success?
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.
It's not about how much they get. The reality is that you can give 100k extra to a software engineer, he will still prefer his kids and wife.
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.
I think this is a great analogy.
+1.
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.
Why should they ignore their own self-interest in favor of your company's long-term success?
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).
Engineers should always be considering the business impact of their decisions, but it's also the job of management to create and enforce that culture at every single level. On the other hand, it is also suffocating to talented engineers to have to try and predict how their bosses would do something and emulate that instead of just doing the work, and I think this push-pull is where most engineering managers fail their employees. Too little control and the less engaged/talented engineers will make decisions that tank the project, too much micromanagement and velocity tanks. With that said, regardless of where engineering management sits on the continuum of control, outcomes will suffer if managers are just simply bad at engineering and making business decisions, which is also often the case.
Long term thinking + high quality story telling.
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.
This is why most of the actually meaningful companies are "mission driven" (the phrase has been coopted).
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.
most of our structural problems came from employees simply doing what was best for them and bad for the company
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.
This is especially when there’s less VC money available to support mediocre outcomes. It’s also on the founder to disclose the realities of the startup to employees. If we don’t raise money, we can’t pay salaries. If we don’t make a product, we won’t find customers. If we don’t find customers, we won’t raise money. It’s a never ending cycle until someone does the hard work to break the loop.
> ... 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 ...
+1. I see this over and over.
employees simply doing what was best for them and bad for the company
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.
Where the founders are also acting in their self interest but have enough correlation between self and company that this works out? If so non-trivial equity to non-founders might have the same properties, provided they haven't already been savaged by founder liquidity preferences.
When a company is successful, by which I mean it turns a healthy profit and eventually even enough to go public, it ends up sustaining a lot more employees doing a lot less than a smaller, leaner company that can’t afford inefficiency.
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.
I’ve had a lot of conversations over my career about this general topic, and I still haven’t been able to answer:
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)?
It takes effort, requires goodwill, has damaging implications to internal politics and ultimately is not the best way to maximize tenure at C-level roles.
Executives are solving for their job, not for the company's success.
Once a company becomes successful, it attracts the second kind of people in Iron Law of Bureaucracy.
An upper-level employee wants many employees under them. Then they can argue for a higher salary and have a good line on their resume.
What are the disincentives to doing so (beyond the need for requiring more from people)?
Working out how to motivate people whose individual impact now has near zero impact on the stock price.
Maintaining a good structure is a cost on its own. A good analogy is how most many engineers think "if I spend two days writing documentation then I'll save one hour figuring out things later, resulting in net gain of negative fifteen work hours, great job".
I’d add to the other replies by saying that this isn’t just pure inefficiency - it’s the ability to try things and get them wrong without dying. Often several things. If one of them works out, maybe they justify the rest - just like investing in startups, ironically.
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.
A really special failure mode is to hire management from proper grown up companies to implement real processes for your aspirationally-real startup. Serious economic misunderstanding on multiple levels and a popular choice nevertheless.
My first exposure to big company management was, ironically, at a startup. They hired their C-level executives from big companies. Those executives hired VPs and extra layers of management who were also from big companies. Very quickly we had a deep org chart where ICs could be 5 steps removed from the CEO even though they hadn’t decided exactly what product we were going to build.
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.
Honestly, the people that put in these processes are the smart ones. Useless as they are, they do climb the ladder, get good titles, and good pay.
Hah! I have seen and cleaned this up several times now; spend 80% or more of the total lifetime spend of the company in say year 4-6 after you got some basic traction, borrowing like crazy, gain literally nothing, fire everyone involved, start over with skeleton team, rebuild something useful out of the ashes.
Yeah but when your company gets a real challenge, you find out if you’re filled with builders or comp optimisers.
Conversly, I have seen a fair number of start-ups creating very inefficient setups and processes - having some knowledge on how to do things effectively and efficiently is something that needs to be acquired.
I struggle to see "founder mode" as something that scales. Is there not some self-selection bias occurring here, given the audience "included a lot of the most successful founders we've funded"?
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.
It clearly doesn't scale infinitely, which is why PG says you still need to delegate.
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.
I think I have made a poor choice by using the word "scales". I do not mean within the lifetime of the company -- that much is clear -- but scales across different startups, founders, and niches.
Steve Jobs scaled it. Brian Chesky, maybe the Zuck and Elon? There are multiple examples.
I would be interested in hearing about Wolfram Research too, if someome knows.
Maybe one way to think of it is fractal management where a manager would have deep read-write interactions with few skip levels. HBR style says read everywhere, write only direct reports. And it makes for a good software design except that humans are not computers, but there is a shared global context - the company vision and mission.
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)
I think we too often look at Jobs and say “look it works” instead of looking at the 90% of start ups that fail.
What is described here is for me a competent technical manager. As they scale, it is just that their focus cannot be on everything at the same time so they need to pick what is the most important and help a specific team at specific times. It also means that they need a good bullshit detector to dodge those that are skilled at "managing up" and know the real underlying state. Unfortunately the organizations tend to follow Peter's principle and you end up with incompetent managers everywhere that just "manage" and don't understand what is made or how.
why are we so fixated on scaling companies? there are certainly more companies that simply failed because they thought they needed to put in the organizational structure to be huge rather than doing what startups are supposed to do - be plucky and creative and work work hard and create something of unique value. that's enough to get you your 9 figure exit. maybe companies have lifecycles, and maybe blowing out an org chart 4 levels deep is a problem for the next team?
Isn’t the point of founder mode that it doesn’t scale? It’s the wrong mode in all cases except the one where the founder is still in charge. It doesn’t scale, but it doesn’t need to.
One of the contenders for the biggest company in the world is doing it well at scale.
https://www.tomshardware.com/news/nvidia-ceo-shares-manageme...
The premise of this is that advice to hire "Hire good people and give them room to do their jobs" is bad because that turns into "hire professional fakers and let them drive the company into the ground".
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?
Also, I'm 99% sure that Steve Job once said (paraphrasing): "We don't hire talented people to tell them what to do, we hire them to tell us what to do". Which to me sounds like "Hire good people and give them room to do their jobs". So there is a discrepancy here as Steve Job is also used as an example of a "Founder Mode" CEO.
Not saying there is a contradiction, just a piece missing somewhere in the essays logic.
I believe it was Henry Ford, or maybe both.
henry ford was also pretty far from this warren buffett mode of letting the upper management of the company do what they want. very deeply involved in every level of the company, much like steve jobs
Letting your employees tell you what you need to do is not the same as giving them room to do what they want.
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.
I believe you're right. That was the piece I was missing. And it makes a big difference indeed.
I think because you can't give C-level/(senior) manager candidates whiteboard interviews. The answers are all "it depends" and also depend on how the person explains it. Not to mention tech founders are usually technical people who are not used to bullshitters.
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.
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.
Staying in the details is different from micromanagement. It’s the difference between understanding (and deeply caring) about what’s happening vs. telling ICs how to solve a problem. You can’t be a good leader, mentor, or decision maker if you’re not invested in the details.
are we talking about steve jobs here? iphone in the fishtank steve jobs? roundrects are everywhere steve jobs? because that sounds pretty close to telling ics how to solve a problem
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.
Jensen Huang (Nvidia) engages with only direct reports.
I'm not sure he is a good example. He has 55 direct reports and that is not normal. My best manager nearly burned herself out with 28 direct reports, most of which were individual contributors as opposed to managers. Between what I have read and experienced, you can have more ICs under you the more senior and autonomous they are, but there is a limit and limiting direct reports to 8-12 is a good rule of thumb. It gives time to meet individually every two weeks, which Huang doesn't do
He is a good example exactly because all exceptional executives are super unusual. Gates, Jobs, Musk, Bezos. They are nothing alike.
Huang defies management best practices and doesn’t do 1:1 meetings at all.
It's easy to sail a boat when the wind is behind you. It's during storms that you can see outstanding captains. When Nvidia was firing part of the CUDA core devs 3 years ago, he wasn't considered a genius internally.
In 2010, my wife was interviewing CEOs as part of a school project. She emailed Jensen Huang out of the blue, to his email address @nvidia, and got a response and a live interview. There were a few others who were almost as accommodating, but, looking back on it from time to time, I'm still surprised by Jensen's openness and accessibility.
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 pretty sure the CEO of a tech company would be responsive to emails from individual contributors. At least below some frequency.
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.
I was reading that he encourages people from the lower levels to also interact with him.
https://www.tomshardware.com/news/nvidia-ceo-shares-manageme...
Doesn’t match my experience
He’s also got 55 direct reports
The big thing missing from pg’s essay is how the professional managerial class has this big filter where only those who are willing to jump through hoops for 20 years get to the c-suite. In businesses of any size it’s just not possible to get promoted straight up the ranks in your 20s no matter how good you are. Seniority trumps ability. Founders are excluded from this filter process and to nobody’s surprise founders tend to be very different from professional managers but more than that: highly effective founders are nothing like each other either.
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.
filters out the most capable and most effective people from executive positions
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.
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
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?
pubmed centrals? politico-media complexes?
it’s just not possible to get promoted straight up the ranks in your 20s no matter how good you are. Seniority trumps ability.
Experience. Experience and wisdom is what trumps the exuberant overconfidence of an ignorant youth.
Businesses periodically have to reinvent themselves in order to survive. But it's hard for experienced executives to accept that the playbook that worked for 20 years no longer does. Businesses fail when executives refuse to accept that their accumulated wisdom and experience has lost its value. Exuberant youthful ignorance isn't everything but neither is being an excellent navigator of a world that no longer exists.
Worryingly sounds like the US government!
It does (rarely) happen though. Example: how Ryan Cohen (self-made billionaire founder of Chewy) got himself into a different established company. He bought enough shares for himself, took over the board of an established company and put in some of his own, replaced the shitty CEO (by himself) and turned an established declining company around to profitability and possibly long-term growth.
VP of marketing? Nope, professional money extractor. VP of engineering? Nope, professional money extractor too.
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've worked with two amazing VPs of eng, one of which unified our ops and dev teams in purpose and goals, and the other was able to re-focus us from firefighting to sustainable growth in engineering projects. They were worth, literally, their weight in gold to the success of the company. These happened at a hundred person eng dept and a 300 person eng org if I recall.
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.
They were worth, literally, their weight in gold
That's correct. They do nothing, but when that nothing is actually done well, it shows.
Unfortunately, this is not common.
They do nothing
... but I explicitly stated what they did and it was not nothing
I've worked with two amazing VPs of eng
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?"
What are you quoting?
Seems like it's supposed to be a reply to https://news.ycombinator.com/item?id=41415637 by jasode, which is in turn quoting https://news.ycombinator.com/item?id=18003253 by coffeemug in 2018.
Founder mode examples I've noticed:
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
I don’t really understand why companies block lower level people from emailing ceo…
I would think you could get chatgpt to rank the emails in some way…
chatgpt (or an equivalent) may also be able to write an email crafted to get to the top of that ranking.
Well once ai agents become independent, and they start becoming full time employees, they should be allowed too…
Because the judgment of tens of thousands of individuals on the importance of their particular issues and the framing of said issues in a way the CEO can understand does not correlate with their disposition towards emailing the CEO.
Thats fine. But why not allow it anyway. Ceo can still ignore…
(except the brain, likely due to energy constraints)
We have neuroplasticity :')
We need to go a bit further than just calling out lying: the people who both appear qualified due to larger-organization experience, and who are looking to escape to a startup role, are often those whose techniques depend on the naïveté of others. They have lived in an environment where new employees are fungible. Employees are not fungible in a startup.
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.
Bad individual behavior — prioritizing career progression over company success
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 think we've all came across people who chose technologies based on not what would be the best for the problem at hand + what they have the most experience with, but instead what is trendy today and can help them get hired in the future at the next workplace.
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.
Unfortunately, I suspect the structure of the tech industry has kinda made this inevitable. If you need to jump ship every few years to get a meaningful wage increase, and companies are happy to drop the axe on an entire team because profits went down 0.01%, the incentives are to do whatever's needed to keep yourself hireable at all costs.
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.
It sounds like you have never been in the position of e.g. establishing hiring protocols and used those not to get the best people into the company, but instead to ensure that no one who has the potential to outperform you gets hired.
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.
It’s a balance. If you have people who only care about their career and not the company, you end up with misalignment. That’s why hiring people who are intrinsically motivated matters so much. People who demand personal growth without having proven themselves are likely less aware of the purpose of their employment. I’ve experienced this at companies where many people have only worked at late-stage, pre-IPO companies where neither the realities of early-stage or public markets exists.
Our understanding of organizations completely derives from military and manufacturing. It is essentially top down. Heck, our whole society and schooling is top down. Someone else knows more than you and is better at things than you are. So if you want to be good at something, you follow. Guess what?
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.
Dawn of Everything by Graeber and Wengrow elaborates at length on this, pulling in recent research and reevaluating old anthro and archaeological work
I think the emergent order we see in society and how we could use it to effectively organize our work exists in the background thoughts of Brian Robertsons Holacracy. He mentions it in his introductory talk at TEDx.
Absolutely
you're describing societies, not companies. societies rely on forms of collaboration that are more resilient than delegated authority. liberals often point out markets—i don't have to depend on the goodwill of the butcher and baker, etc.—but other forms like charity, science (including open-source software), and reputation systems are also crucial to enabling nyc to exist
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
I thought it was a great start to an idea. I think it went sideways once it decided founder mode could be studied and taught.
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.
I don’t think he’s suggesting we can teach how to be a good founder in general. Just that we can study and then teach the difference between managing a team as a founder vs general management practices
There's also the concept that companies that succeed, succeed despite themselves.
You have catch the wave; otherwise you do a lot of paddling.
I'm sort of a believer in that. Since it prioritizes being lucky.
I could sort of see that but that is almost too much common sense. Be a supportive of your precious founder.
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.
I think there's a property which is hard to describe. But i've seen the opposite property countless times at companies. People, and leaders who are building "cool demos". Things that tell a great story, but somehow never materialize into any material revenue for the company. I've seen these guys move up into higher and higher positions, and yet the projects they build are simply great stories. The higher up the org you go, you'll find leaders who have refined this expertise into a really compelling, really easy to follow along story. But it just never materializes into revenue, and half the time it doesn't even materialie into a real product.
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.
I have done the building in quite a few of these.
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.
Yeah, the opportunist managers are attracted to fresh value like sharks to blood. They always destroy it because they're trying to add in something that's good for their business (great story for upper management) but is either not wanted or even repulsive to the customer. It usually comes at the expense of the core value proposition.
People, and leaders who are building "cool demos". Things that tell a great story, but somehow never materialize into any material revenue for the company.
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.
Is there a recording / transcript of Chesky’s talk or even a blog discussing its main points anywhere?
There won’t be. Talks given to YC batches are off-the-record, to allow maximum candidness.
This essay by pg is the closest you’ll get to a blog post discussing its main points.
He talks about some of these things on Lennys podcast from a few months back here https://www.youtube.com/watch?v=4ef0juAMqoE
Listen to the Lenny’s newsletter podcast episode with him, he goes through what I assume are similar topics - https://www.lennysnewsletter.com/p/brian-cheskys-contrarian-...
I am writing a book about an idea - software literacy is a new form of actual literacy and will be as impactful.
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 :-)
Do you have any more information on the run-book concept?
Using Dunbar number as an indicator for the conpany growth and how to use this number to form better org structire is a valid idea
I’m unable to keep up with book updates because both of the links on your profile are broken
I wonder how much bad advice for startups is out there. I don't think it is just about scaling a startup.
There is a lot of bad advice about almost everything people are interested in: learning, nutrition, exercise, personal finances, career development, how to code, how to write, relationships, running a business...
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.
Exactly. There can be many, many reasons why something worked for someone else but won't work for you. There are so many variables at play. Plus, a lot of advice isn't individualized.
I really liked this talk from Patreon's CEO about bad advice: https://youtu.be/JTpBFiW5PBo
Another problem with advice is that in lots of cases the person giving the advice has absolutely no skin in the game. If the advice is bad, it’s only the advice-taker that suffers.
When I first joined the corporate world, I finished some tasks for my team and immediately went to other teams to ask if they needed help with anything. Astonishingly, this was met with backlash. This was at a heavily culture driven company with a core value of "self employed mentality" and "breaking down silos". I don't blame my manager, it probably made him look bad in that environment. The corporate world has done its darnedest to beat the founder out of me.
Yeah, this is common. The cartoon version is:
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!
The larger the company the more inconsistent the experience is because nobody is really truly held accountable to culture when they can (pretend) to produce business results. Even places that theoretically want to care usually just put it lower on the priority list and end up not caring by default.
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.
The essence of Founder Mode is simple: The founder's principal duty is to communicate a vision to their team and ensure that vision is executed faithfully to the spirit of the vision. This is precisely what Jobs did effectively and why he was successful.
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.
But wasnt Jobs fired and replaced by a Pepsi CEO because he was so toxic the company was running aground ?
Most references to Jobs' management style refer to his second term, presumably after he matured a bit.
This is why people love working for Elon Musk.
Anyone can raise problem with him & he will fix it directly.
This is why people love working for Elon Musk.
On HN, placing the /s annotation after a sentence is often encouraged to denote sarcasm.
I would think sarcasm is inappropriate in public discourse.
Gervais principle, like it or not,… has been pretty accurate IMO
yep, my first though as well here - and one of my favorite reads.
lots of posts, even one this month https://news.ycombinator.com/item?id=41214180
I just read about it below, and can now correlate with some personal experiences. Thanks for sharing.
https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
>The way managers are taught to run companies seems to be like modular design in the sense that you treat subtrees of the org chart as black boxes. 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.
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!
One might say the same of founders, but with respect to the org they are a part of: society. Founder? Nope, professional money extractor.
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?
I’m not sure the web an Linux can be judged with todays valuation in mind. Both succeeded through openness not capitalism. Einstein was from a whole different society.
Walt Disney worked in founder mode. That was partly enabled by his brother running the purely “business” end that would have taken up much of his time. So Walt was able to get involved all the way down to the smallest details.
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.
When talking about Disney, I also think it's worth tossing Michael Eisner into the mix as a comparison point for a non-founder who operated in something really close to the "Founder Mode" that the article describes. He got involved in creative decisions, and - speaking to the article's mentioning of micromanagement - famously said that 'micromanagement is underrated.' His style seems close, at least, to the style the article mentions.
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.
I agree, although maybe Eisner was a bit of a hybrid, and was able to be a bridge between the founder model that Disney relied on for years and the current structure.
He followed this advice and the results were disastrous.
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.
yeah for sure he invented a premise to then write an article about something thats rhetorical. how does that thinking make sense.
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...
Professional managers will absolutely run a company at 20% optimization while founders might get to 80%.
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
A benign summary of what professional management brings to large orgs is essentially variance reduction.
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.
Oh, that's easy: "founder mode" means the founder is hyperfocused (or in the oldspeak, obsessed) on his work (with his company) and optimizes (micromanages) everything. We know that already. Perfection demands micromanagement. Steve Jobs was actually doing that - reaching down the ranks and directly helping (molesting) people doing some piece of a larger product he particularly cared about.
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."
Musk is a good example of this. Amazing visionary; also extremely toxic.
OTOH (writing from 20-year working experience with two thirds of it in early stage startups) more often than not founders are not actually competent technically or otherwise. And “letting people do their job” at best means a permission to speak up and endlessly argue with conflicting opinions from colleagues, but not a permission to execute if that means commanding others to do something, because the delegation of power to do that is not being given due to the aforementioned lack of expertise and inability to judge if an idea is good or bad.
I think a lot of companies get stuck in a "mess middle" where they've outgrown founder mode, but the people brought in to be responsible for various parts of the org chart are not actually empowered.
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.
OTOH (writing from 20-year working experience with two thirds of it in early stage startups) more often than not founders are not actually competent technically or otherwise. And “letting people do their job” at best means a permission to speak up and endlessly argue with conflicting opinions from colleagues, but not a permission to execute if that means commanding others to do something, because the delegation of power to do that is not being given due to the aforementioned lack of expertise and inability to judge if an idea is good or bad.
I think a lot of companies get stuck in a "mess middle" where they've outgrown founder mode, but the people brought in to be responsible for various parts of the org chart are not actually empowered.
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.
The reason founders are different is because they generally own enormous chunks of the equity. Everything matters to them and the rewards of success are enormous.
Us “fakers” get 0.1% if we’re lucky and then pg writes an essay saying we’re not trying hard enough. We are.
I think this is under discussed/not understood in startup land, particularly by the young. Maybe this is by design.
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.
Brian Chesky gave a talk
anyone find this talk he's referring to?
Also looking for it..
This "Founder Mode" seems more like "Victim Mode" looking for someone to blame.
That sounds like you maybe read the post with a very preconceived idea. I didn't see anything there that seemed like "looking for someone to blame".
I've been occasionally mentioning this book on HN since I read it. Linked below. The book is about how companies evolve and how teams of people work together. It uses human growth as an analogy and fairly accurately describes how companies fail or thrive at different stages. It's older at this point, but it's about human behavior and group dynamics, which don't change rapidly.
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.)
I think the BS/quite good split for business books is more like 80/20 or maybe even 90/10.
One of the reasons Europe is falling behind in tech I think is that founders are pushed to manager mode much earlier, and going founder mode when the shit hits the fan is just about impossible [1].
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).
Can confirm, I know of a small tech startup in southern EU that was founded by an American MBA wannabe type. Immediately after getting a mid sized B2B contract he pivoted into manager mode, expecting to grow to 200 people rapidly, and as one might expect the entire company imploded from disfunctionality in less than a year. Of course that was not the only issue that sank it, but I'm sure it contributed.
It’s pretty clear why “hire good people and let them do their jobs” wouldn’t work for AirBNB.
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.
Yup. Uber, Airbnb, Spotify…All these companies we glorify for essentially being a well polished middleman are like this. Glad someone else sees it like it is.
Is there a good resource on the management methods of Steve Jobs as indicated by the essay?
The thing about Jobs is that he's become whoever you want him to be. If you believe yourself a visionary, he's the one to emulate. But, conversely, you can't visit Linkedin for a second without seeing the Jobs quote about hiring smart people and getting out of their way. (Ironically, considering the point of this essay.)
I think the vast majority of businesses are run in "Founder Mode," and maybe the majority of start ups. That's why they don't make it. The books about delegation from the HBS crowd are in some respects a reaction to that default mode.
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.
You don’t think the HBS crowd has kind of a vested interest here? They are on the top of the professional faker totem pole for god’s sake. :)
I think the idea that managers are professional liars are something boards need tackle head-on if they want to see stock prices rise.
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?"
Well put as always. Here's what I think is the primary alternative hypothesis.
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.
"Thanks to...Elon Musk...for reading drafts of this."
Good to know he's still held in high esteem by these people.
Is there a point to this article? It sounds like waffle.
Hi, exited founder here. I recently learned more about “uniqueness bias”. And I’m so glad I did, because I now realise that (with all due respect to pg) this is what propels people, upon observing some trend/possible causation, to insist that they have “discovered” something powerful and unique, hey in this case let’s call it “founder mode”. Whereas the reality is that it’s infinitely more likely that the world of business has, in fact, considered and evaluated various similar management techniques over the past few hundred years. I often find that the vast majority of these new “insights” are usually just common sense.
I think it's related to the job market atm. Everyone is hired in a stretch position at very high comp. This is true for VPs, directors, ICs etc. Because of this it's less viable than it was as a manager to be fully hands off.
I've thought about this topic a lot before. The concept of a founder vs manager "mode" doesn't resonate with me, but the message boils down to this: founders have more freedom to approve high risk/high reward initiatives, while shielding everybody else on downside. It's "their company" and their job can stomach some turmoil in the name of winning.
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.
This is absolutely true, and it’s surprising how little literature there is on this topic (I think founder is not synonym to leader so HBR articles are not 100% relevant).
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.
Manager mode assumes that workers clock in and do what they can to drive the company forward. But there is no altruism among workers. Their decisions are for themselves first and for the company second.
God do I like the web style
the "david brooks" of business strikes again. simple, digestible "wisdom" that goes down easy, but is ultimately self congratulatory and too general to be meaningful. reading these posts is exactly the "fake work" paul grahm wrote about avoiding :P
Good to see this essay, it resonates a lot with me after a hard week with staff which fortunately had a positive outcome in the end thanks to what I've come to believe is important. Having been through several disasters as a founder and come through: scaling is possible through clear, direct communication and setting heuristics that are important to you as the founder, and having senior management develop processes. Iterate through each failure, develop stronger heuristics and documentation, communicate and communicate and communicate again and again to your team and you should find that over time it's embedded in culture as if it were written in stone. "Hire good people and let them do their job" has only worked for me once we were in full agreement on the outcomes, including budget, time, resources and how we treat each other.
For example, Steve Jobs used to run an annual retreat for what he considered the 100 most important people at Apple, and these were not the 100 people highest on the org chart. Can you imagine the force of will it would take to do this at the average company? And yet imagine how useful such a thing could be. It could make a big company feel like a startup.
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%.
This 100% matches my experience.
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.
I'm not surprised this theme would be popular with founding CEOs but not really sure what the promised "Ground-breaking Management Mode you Won't Believe!" actually is. Is it take your favourite employees on a retreat, don't worry about the message this sends? Stop hiring mediocre middle managers and do... something else? Run a giant public company like a 20-person start-up, only don't? Delegate yet stay in control of everything?
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.
I’m thinking of the metaphor between Newtonian and general relativity. At low energies, masses and velocities the two theories correspond in predictions with little discrepancy. If the velocity/mass/energies increase dramatically, then Newtonian physics will fail to give accurate predictions.
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”.
There is a huge survivorship bias in this start-up wisdom space. And none of these gurus mention it. Probably because it is not good for the brand.
Checks out from this old account of a BillG review:
https://www.joelonsoftware.com/2006/06/16/my-first-billg-rev...
Their advice could be optimistically summarized as "hire good people and give them room to do their jobs." He followed this advice and the results were disastrous. So he had to figure out a better way on his own
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.
_________________
From an execution perspective, I believe it makes more sense to start from the top down. Workers should believe that their boss is a boss because they can synthesize ideas.
Was really hoping this would be a new major mode for Emacs.
Here’s an audio version if anyone prefers listening instead
https://drive.google.com/file/d/1DLtJAShDN54ooPWpBspHPV98rh2...
One of the first things that was emphasized in a recent "Management 101" seminar (taught by a HR grunt) was that effective "management" consists of 3 roles:
- 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.
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.
Or maybe, smart engineers who found companies just aren't generally that good at hiring.
I learned a lot from Brian Chesky's interview with Lenny's Newsletter and by seeing the failures of "manager mode" at mid-stage tech companies.
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.
I joined Glean recently and found out that hiring really smart people and letting them cook is a legit strategy, not sure if it disproves this article.
Do you have a link for the full talk?
Maybe management style is just not that important compared to other factors, like product vision and strategy? Perhaps founders who are so good at those other things can lead companies to success in spite of mediocre management? That would explain the lack of consensus.
Paul graham is nothing but another corporate shill who has ruined the lives of others to benefit a few. Why does our industry keep following advice from people like this? Stop putting this guy on a pedestal. Manager mode, founder mode blah blah blah. Seriously. Next year he will write something else contradicting this point of view. Just read his essays. It’s all nonsense and we end up supporting it. Stop making Silicon Valley people some god like person to follow. It’s ridiculous.
I disagree with a lot of things pg has said but this essay is SPOT ON.
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.
I get the criticism of manager mode but does this article really articulate what founder mode is? Does it deliberately not specify it in order to leave it to Chesky's talk?
I feel like this article is reaching towards similar conclusions:
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.
Jensen Huang of NVIDIA uses stochastic sampling instead of status reports[1]. Kind of sounds like the same thing. Dig deep stochastically into the organization. Also sounds like "management by walking around," which was the style at HP under Hewlett and Packard[2]. I think the reason professional managers dislike these methods is they lack technical understanding of what the business actually does and instead focus on the financial aspects.
[1] https://www.apolloadvisor.com/unconventional-leadership-of-j...
[2] https://en.wikipedia.org/wiki/Management_by_wandering_around
Tony Fadell’s idea of a Parent CEO vs Babysitter CEO in Build comes close to this founded mode concept but I am so glad PG memed the founder mode concept into existence, and talk about the gaslighting. And I bet he is right about there are many founders operating somewhat that way already but without a shared mental model and a name to it.
It is really hard to put in practice because of all the gravitational pull towards mediocrity.
There is a more charitable explanation for the different outcomes than assuming that the professional management class are all “fakers”. Every business has to decide how much of their org chart and processes should be industry standard and how much should be proprietary. Those businesses that do everything the standard way are too similar to competitors to provide greater value. Ideally, you want your competitors to misunderstand why you are doing things differently.
AirBnB is contributing massively to the housing crisis. I can’t wait until their parasitic business is banned from every continent! Paul Graham is buddies with Peter Thiel btw
Having started three companies, and got a successful exit on the third, the solution is to be opinionated
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
hacker news glorifying paul graham for glorifying his startups with survivorship bias is getting really old
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
The take away is don’t blindly follow a certain style, there really isn’t a template for success which is often completely diffufor each person/team/culture/business model combination
Manager mode sounds like magical thinking mode.
As a hybrid MBA-Dev-PhysicsPhD who has refused to give up my technical and scientific skills to join the caste of managers, this resonates deeply with me. My guess to the effectiveness of “founder mode” is that this it legitimizes skill-boundary-crossing. When even competent engineers become MBAs, they can get disavowed by fellow engineers, and all level of technical input is “micromanaging”. But having full-scope founder-level rights to call BS at all levels, and do real time risk assessments af low levels while automatically matching it with the company mission, is so uniquely valuable, that the lack thereof is enough for me to posit that to be what we see when management changes. - It isn’t universally applicable, you do need to be gifted in the various aspects of the company, but still.
smh. his idea that he both doesn't think anyone has ever thought of "Founder Mode" before while simultaneously thinking that the founders are the ones responsible for a company's success or failure through something like sheer force of will or a better carrot and stick. I donno. Companies are successful mostly because of who they hire... and timing (also known as luck).
Reminds me of most small businesses.
So he had to figure out a better way on his own, which he did partly by studying how Steve Jobs ran Apple.
What is the essence of Steve Jobs' management style?
I have a feeling that Apple's unique organizational structure[1] will likely share a lot what Paul is describing as "Founder Mode"
[1] https://hbr.org/2020/11/how-apple-is-organized-for-innovatio...
Your characterization using the phrase "conventional wisdom" is demeaning.
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.
Bring Back Steve Jobs!
I think there's just a fundamentally different level of "care" between founder, and manager. Just like that of a parent vs teacher.
“So far it seems to be working. Airbnb's free cash flow margin is now among the best in Silicon Valley”
And their reputation is going down the pan; from being banned in touristy cities to ridiculous cleaning fees, AirBnb rejecting critical reviews, people misrepresenting offerings, prices going up and more and more rules until it’s cheaper and better experience to go to a hotel again.
Just the time for a Silicon Valley VC to come out writing about how they are capitalism-ing very well.
Nice conclusions but remarkably devoid of any useful advice
Imagine being so close to understanding something, but your whole identity requires you to not understand it.
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
After dumping on a lot of pg's recent essays that I found to be quite myopic, I really liked this one and thought it was insightful.
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.
I have a different resolution for the paradox about letting good people do their thing vs. micromanaging. PG’s resolution is to split on the CEO - are they a founder or a professional manager?
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.
I struggle to see this different from the manager vs. leadership discussion. Founders need to give direction and shape where the company is going. This is not new e.g. the situational leadership model advices a more directive style during the initial phase and even competent, experienced newcomers to a team start at low performance and require help.
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.
What struck me from reading Elon Musk’s (he proofread this essay) biography is that he would do things that you could obviously hire someone else to do. For example, to make the Tesla car line more productive. His heavy involvement seems to be a way to create decisiveness and quickly iterate. if something goes wrong, the blame is on him, and he’s the founder and chief executive. Whereas if an employee attempted to do some of these things they might have to write up a detailed report and rationale and possibly even conduct studies. in probably less time than someone would normally finish their studies and report (let alone make any changes) Musk had iterated to tripling the throughput of the Tesla factory.
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.
Eehhh... this overlooks the fact that a company not reaching its expected potential should, by default, change what it's doing. Suggesting that more startups could avoid failure by changing management style is true...and fairly obvious.
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.
In Germany, there is a very related term called Mittelstand [1], which denotes long-standing businesses with similar values of nimbleness and long-term focus, instead of short-term gains as in manager-mode companies.
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.
Saying “hire good people and give them room to do good work” is bad advice is the same as judging a dish while using half a recipe. It’s execution centric and execution alone is never enough, you need direction. A strategy, a vision, a need. Without a need from a customer it’s nothing.
A common western rebuke to countries that had communist revolutions were that the revolutionary leader stayed in power for decades until their death. Joseph Stalin. Mao Zedong. Fidel Castro's power passed to his brother five years before he died, so he does not fit the cookie cutter mode fully.
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.
Even as an early-stage founder, I get advised by smart people including investors, other founders, and past coworkers to hire other people to “help” me with hard problems. There has been some fantasy in the past decade that you become good at something as either a manager or IC or company - then get compensated highly, in perpetuity, to oversee others who do the hard work from that point forward. Today it’s being replaced by the new Brian Chesky ethos of accountability. I hope to see it bring back more aspirational builders back to the world of tech, replacing bloat and complacency. There is no easy button to creating outsized returns, so we should stop pretending.
Isn't Twitter doing much better now Musk has returned it to Founder mode?
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.
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.
What a crock.
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.
This sort of glosses over that Jobs was pushed out of Apple for good reasons the first time around. His second coming was spectacular but Founder Mode Apple in the 90s would have crashed
Contacts who were at Tesla during Series A told me Elon Musk did the same thing having hundreds of one on ones with engineers
When it comes to employees at every level; there seems to be two general attitudes that can make or break a company.
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.
Reminds me of this:
https://www.reddit.com/r/ycombinator/comments/1eu574f/got_fu...
A founder is inherently more motivated than any manager or employee. Thus, the more hands-on the founder can be with as many employees as possible, the more that motivation will propagate throughout the company.
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.
what this often turns out to mean is: hire professional fakers
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.
This article could be said to be a discussion of the "start-up business" realization / concretization of generic problems in human societies which are also themselves instances of https://en.wikipedia.org/wiki/Module / https://en.wikipedia.org/wiki/Modular_design / https://en.wikipedia.org/wiki/Systems_analysis and "imperfect abstraction" problems (like https://en.wikipedia.org/wiki/Leaky_abstraction).
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.
"Founder Mode" vs "Manager Mode" sounds like a false dichotomy the way it's discussed here.
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?
"Skip-level" meetings will become the norm instead of a practice so unusual that there's a name for it.
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.
I think the most important thing a founder brings is to "not give up". The journey of most startups that innovate is complicated, unknown and unusual. Traditional management is not made for this. I have always felt that "pivot" comes from "founder mode" itself. It is one way of keep trying, even when a founder accepts that the original idea is not working well. Many founders have attempted and failed multiple times to finally get to something that works. This value is less visible in any other domain of management.
It’s interesting that Graham doesn’t seem to say what Founder Mode looks like in any capacity, other than referring to a few outlier founders.
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.”
I've decided a while back that I will never work with these kinds of "professional" liars ever again. The lies will always accumulate and ruin every goddamn thing. I'd rather be unemployed and barely scraping by than worry if some psychopath is going to piss away 10 years of my hard work.
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.
Founder mode is implementing cliches well (hire pros, empower with agency) and manager mode is implementing them poorly (hire fakes, watch them fail)
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?”
turns out to mean is: hire professional fakers and let them drive the company into the ground.
What a long post to write "Well if you hire the wrong people they will drive the company into the ground"
This is a good piece in that there is absolutely truth to it -- but it's also a bit dangerously non-specific in that it potentially leaves founders with the notion that whatever they happen to think is tautologically correct. To supplement this piece, I would make three specific recommendations that I think tack into the same themes (namely: mistakes founders make -- including trusting the wrong people at the wrong times), but with quite a bit more detail.
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
yyy but also remember survivor bias: for every AirBnB, there's dozens of companies whose founders ran them into the ground for all the usual reasons, of which "lack of scaling" is both a lazy umbrella and also a subset of the failure modes, including burnout, malfeasance, pivoting too quickly or too slowly, etc.
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?
If I'm reading this correctly, a few themes PG touches here are:
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
I think an interesting question this raises is what are the differences between effective founder mode companies and manager mode companies in terms of communication structure and how can this be modelled and analysed (e.g. using some kind of network analysis of a temporal graph).
Sounds like bad recruiting.
I wish other “founder mode” examples were given other than Steve Jobs.
Do people consider the following people to operate in Founder Mode:
- Elon Musk?
- Larry Ellison?
- Mark Zuckerberg?
- Marc Benioff?
- Drew Houston?
I think people are conflating “founder mode” with “founder led”.
Those are two very different things.
Look to Oracle as an example of a “founder mode” company that is not founder led.
There are three different kinds of environment:
- 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"
George Hotz calls this "the button" on his last Lex podcast. <https://youtube.com/watch?v=dNrTrx42DGQ&t=5247>
"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."
Steve Jobs used to run an annual retreat for what he considered the 100 most important people at Apple, and these were not the 100 people highest on the org chart. Can you imagine the force of will it would take to do this at the average company? [...] Steve presumably wouldn't have kept having these retreats if they didn't work.
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.
Some theories about what makes the founder mode effective:
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.
I wasn't expecting Elon Musk as a proofreader for PG's essays. To me that's interesting just by itself.
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.
I am beginning to think we could a learn a lot about organizational principles from complex minds. Our current organizational principles for companies, city-states, countries are very early in our exploration of these. Complex minds, on the other hands, are here after a multi-billion year journey. We are just learning more about them. One fundamental principle is that you have to be in touch with "reality". The more layers of computation you have, the harder it is without the right feedback. Even impossible. In companies you lose that feedback loop with the "hire good people, treat their divisions as black-boxes" approach. In countries you lose that with autocratic central command. Complex minds simply cannot afford to do that because the moment you start hallucinating (imagine a reality that is not grounded in the real) you become lunch. The feedback mechanisms ensure that top-down expectations (ideas) are always matched up with bottom-up data.
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.
While the problem description of how to scale a small company to a larger one and the solution offered of skipping the corporate hierarchy every now and then and being careful about delegating too much autonomy have merit, the main reason given by the author as to why the black box model of leadership is problematic does not seem very convincing to me, to say the least: "... 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."
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.
I carefully reviewed all three of these articles. While it's possible that I still missed something, I did not find any material that aligns with the unique point of Paul's post. Nothing that says leaders may have to directly engage with employees underneath their direct reports to understand what is actually going on in the company.
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.
Maybe I misinterpreted Pauls blog post, but what i got was: Mangers != Leaders, Leaders != Managers. Management and Leadership need to be well understood in any organization. Good Mangers can be good leaders. The CEO is often the manager of the leadership. This is effectively what they teach in the Harvard MBA.
Yeah I think you did. You can't just switch founder for leader. A great leader would inspire the organization to work productively and effectively, but that's not what distinguishes the founder. The founder would make sure the organization is actually working on the most effective thing, and I think what Paul tries to convey is that one of the tools the founder uses to accomplish this is crossing the organizational tree (i.e. skip-level meetings).
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.
But what scale are we talking about? I've scaled from zero to IPO a couple of times, I've never seen past a few k people, airbnb is at 38,000. The only real world stuff I know to get about leadership and management at 38,000 people is learnings from harvard. I thought Brian was saying he manages his leadership team tightly, not that he spends a lot of time with ICs? I think that's conventional advice, manage your leadership team well? What is skip level at this scale? CEO going to sr. director level? I don't mind having lunch with a VP but I can't imagine doing work with them from the C level?
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.
Okay, I've only scaled to 30 people so far, so anything I say is just me interpreting things I read.
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.
"Their partnership began when Jobs appointed Ive as Apple's senior vice president of industrial design in 1997. Ive described their daily routine, saying, "We worked together for nearly 15 years. We had lunch together most days and spent our afternoons in the sanctuary of the design studio."
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
No, PG knows what a "leader" is and knows how to choose his words. He is identifying the difference between professional managers and founders in the context of running an org
But even PG goes back on that by saying "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." So what he is saying is managers should talk to their reports. He writes like this is some groundbreaking realization, but to me I'm not even sure what he's getting at. For example he pushes back against the idea of hiring and letting them do work, but then says don't micromanage them, so which is it?
There is a balance between letting people run free, and controlling every tiny decisions. You have to keep the direction and vision, and you have to make sure everyone is going toward that. But you shouldn't trust they will do it by themselves (they may not have internalized it as much as you do either) and you shouldn't trust your ability to deal with every detail of the complex system you are trying to build. If you hired specialists that's also because you were lacking some abilities, not just because you want extensions of yourself by lack of time. And if you hired generalists that's because you needed glue to make the whole operation work with a level of understanding that you can't allocate your time to, and because you may lack the variety of skills that allow for efficient communication with the specialists.
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.
When he says "That would be micromanaging them, which is bad" he is describing the traditional view. He continues, "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..."
There’s been many news stories, business articles, and studies suggesting that. I don’t know how popular they are in management literature. I just know many stayed promoting this with high resistance from big business, management people, etc.
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.
Synthesizing conventional wisdom into readable blog posts is Paul Graham's specialty though. It clearly has a market.
Was it conventional wisdom when he published an article suggesting that lisp knowledge would have prevented 9/11 hijackers from succeeding?
It’s so conventional that he de-listed the article but keeps it published and available by URL
what's the url? usually pg thinks lisp knowledge makes people more likely to succeed, not less
https://paulgraham.com/hijack.html
Published September 2001
aha, this is awesome! and indeed the solution he suggests (locking the cockpit door) is the only one of the various security measures put in place to prevent a recurrence that is generally agreed to have been effective rather than just security theater
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
Thanks for explaining my link back to me
sure, i hope it helped you understand it. thanks for the link! i don't remember if i read it at the time or not
Well the blog post said that some other wisdom was conventional wisdom, I'm not sure what the conventional wisdom he was pointing to is, I was just saying, people have known how to build, grow and manage enterprises for a little while now, I'm not sure why Ron Conway was so flabbergasted. Maybe he didn't make notes because he'd read some Patrick Lencioni. ;)
Leader and founder is not the same thing.
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.
Anyone can be a founder.
Not everyone can be a leader.
Not everyone can be a founder.
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.
I think there is an interesting question in: should more founders be public market CEOs leading their vision? That is a super interesting question imo. We had a lot of discussion about this at DigitalOcean pre ipo, it's the main reason I left, and after I left the CEO was still my best friend and after a lot of conversation, he didn't feel like public market exec sounded that interesting either, the whole founding leadership team switched over. I'm not sure about the other guys, but a couple of us basically said "we're founders not public market execs" and bowed out. I say kudos to Brian, Jeff Lawson, Matthew Prince etc for doing both, because I've heard that the job in the public markets can get brutal.
https://www.wallstreetzen.com/stock-screener/founder-led-com...
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.
I think you’re being too dismissive of a third kind of player that is neither “leader” or “manager”, which is “owners”.
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.)
HBR is certainly conventional, but the content is pretty much indistinguishable from what a LLM would tell you. There's a reason its popular among HR careerists, the PMC, and MBAs. All the content just reads like generic self help literature to me. I far prefer the casual nature of a blog post from someone like pg.
LLMs excel at regurgitating conventional wisdom. Paul, on the other hand, is doing it poorly.
TLDR. The first article says managers are political infighters who work in an organization whose primary purpose is self preservation. Leaders are transformative and defy the historical inertia and offer novel solutions.
The article says exactly the opposite. The central point is that a founder runs a company differently from a “professional manager”
I’d say HBR reading leaders often lead an existing company that they weren’t the founders of. Or maybe it’s not a founder led company anymore.
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.
But when pg says something the fanboys get excited!