Founder Mode
Paul Graham shared a profound observation at a recent event where Brian Chesky from Airbnb delivered a memorable talk. Many founders in attendance agreed that it was the best they'd ever heard. Even Ron Conway, a legendary investor, was so engrossed that he forgot to take notes. Rather than recreating Brian’s talk, Paul wanted to delve into a crucial question it raised—why conventional wisdom on scaling startups often leads founders astray.
Founder Mode vs. Manager Mode
As Airbnb scaled, Brian followed well-intentioned advice: "hire good people and give them space to do their jobs." The results, however, were disastrous. To correct the course, Brian studied Steve Jobs' approach at Apple. This shift in mindset worked, and Airbnb's free cash flow margin is now one of the best in Silicon Valley.
Many other successful founders echoed this sentiment. They, too, had been advised to manage their companies like traditional managers as they grew, only to find that it hurt their businesses.
So why does this advice fail? Paul suggests it's because the advice applies to professional managers, not founders. There are unique things founders do that feel intuitive and right to them, and when they stop doing them, it feels wrong—because it is wrong. This led Paul to identify two distinct ways to run a company: Founder Mode and Manager Mode.
Here’s a simple comparison to make sense of the difference:
Breaking the Norm
One insight from Brian’s talk and from other founders is that following conventional advice felt like being gaslit—pressured to run their companies like professional managers, even though it led to failure. Founders intuitively knew something was wrong, but the pressure from investors, advisors, and even their own teams was overwhelming.
Paul argues that what we need is a better understanding of Founder Mode. There’s currently no handbook on how to run a company as a founder. Business schools teach only Manager Mode, and the vast majority of advice founders receive is geared toward people who didn't build the company they are running.
Learning from Eccentrics
Steve Jobs’ unique approach to running Apple offers a glimpse of what Founder Mode might look like. For instance, Steve hosted an annual retreat with the 100 most important people at Apple—not based on their position in the hierarchy, but on their influence within the company. This kind of retreat fostered a startup-like energy even as the company scaled.
Many founders have likely stumbled onto parts of Founder Mode in their own eccentric ways. But instead of being seen as pioneering, they are often regarded as difficult or unconventional. As we learn more about Founder Mode, we will realize that many of these eccentricities were, in fact, the keys to success.
The Path Forward
Founders running a 2,000-person company won’t operate exactly as they did when it was 20 people. Some delegation will always be necessary. But Founder Mode will differ in its approach to delegation, culture, and decision-making. It will be more complex than Manager Mode, but ultimately more effective. Once we understand it, we’ll be able to guide founders on how to run their companies more like Steve Jobs and less like John Sculley.
The exciting thing is that we’re just beginning to uncover the principles behind Founder Mode. Despite the bad advice founders have received, look at what they've already achieved. Imagine what they’ll accomplish once we truly understand how to help them run their companies the right way.
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