Founders are often encouraged to delegate the day-to-day management of their companies to professional managers as their businesses grow. However, this advice can sometimes lead to disastrous results.
The Dilemma: Why Management Advice Fails Founders
Hello! I’m Olga Fedoseeva, a founder and author of UnitiQ Insights and Advice. Paul Graham’s latest essay, “Founder Mode,” has been a hot topic recently, sparking discussions and debate across the board. Some are in full support, while others are critical. I decided to translate it and offer some insights from my perspective.
Last week, at a YC event, Brian Chesky, the co-founder of Airbnb, gave a talk that left everyone in awe. Many founders I spoke with later said it was the best talk they had ever heard. Even Ron Conway, a well-known investor, was so captivated that he forgot to take notes—something he’d never done before. Instead of recapping Chesky’s speech, I want to dive into one crucial issue he highlighted.
The core of Chesky’s message was that the conventional advice on managing large companies is deeply flawed. As Airbnb grew, Chesky was inundated with suggestions on how to scale the company properly: “Hire great people and give them the freedom to do their work.” Chesky followed this advice, but instead of leading to success, it nearly drove Airbnb off a cliff. Realizing that this approach wasn’t working, he sought a better way forward, in part by studying how Steve Jobs ran Apple. Chesky applied similar principles, and so far, this approach has paid off—Airbnb’s free cash flow margin is now among the best in Silicon Valley.
As I spoke with other successful YC-backed founders at the event, a pattern emerged. Many had received the same conventional advice about management: step back, hire experienced professionals, and let them take over. But rather than helping, this guidance often led to setbacks, stalled growth, and internal confusion. It puzzled me—why were these founders, all of whom had successfully built innovative companies from the ground up, being led astray by this well-meaning but harmful advice?
After reflecting on this, I realized that founders were being told to manage their companies as if they were hired CEOs, not the original creators of their vision. This standard management style is far less effective for founders because it undermines the unique instincts and drive that only they possess. Founders have a different connection to their companies—a deeper understanding and commitment that professional managers can’t replicate. Suppressing these instincts doesn’t just feel wrong; it can derail the company’s trajectory.
Essentially, there are two distinct approaches to running a company: Founder Mode and Manager Mode. For the longest time, the assumption—even in Silicon Valley—was that to scale a startup, a founder must transition into Manager Mode. However, the experiences of countless founders and their visible distress when attempting this transition reveal a different truth: scaling doesn’t have to mean stepping back.
Last week, at a YC event, Brian Chesky, the co-founder of Airbnb, gave a talk that left everyone in awe. Many founders I spoke with later said it was the best talk they had ever heard. Even Ron Conway, a well-known investor, was so captivated that he forgot to take notes—something he’d never done before. Instead of recapping Chesky’s speech, I want to dive into one crucial issue he highlighted.
The core of Chesky’s message was that the conventional advice on managing large companies is deeply flawed. As Airbnb grew, Chesky was inundated with suggestions on how to scale the company properly: “Hire great people and give them the freedom to do their work.” Chesky followed this advice, but instead of leading to success, it nearly drove Airbnb off a cliff. Realizing that this approach wasn’t working, he sought a better way forward, in part by studying how Steve Jobs ran Apple. Chesky applied similar principles, and so far, this approach has paid off—Airbnb’s free cash flow margin is now among the best in Silicon Valley.
As I spoke with other successful YC-backed founders at the event, a pattern emerged. Many had received the same conventional advice about management: step back, hire experienced professionals, and let them take over. But rather than helping, this guidance often led to setbacks, stalled growth, and internal confusion. It puzzled me—why were these founders, all of whom had successfully built innovative companies from the ground up, being led astray by this well-meaning but harmful advice?
After reflecting on this, I realized that founders were being told to manage their companies as if they were hired CEOs, not the original creators of their vision. This standard management style is far less effective for founders because it undermines the unique instincts and drive that only they possess. Founders have a different connection to their companies—a deeper understanding and commitment that professional managers can’t replicate. Suppressing these instincts doesn’t just feel wrong; it can derail the company’s trajectory.
Essentially, there are two distinct approaches to running a company: Founder Mode and Manager Mode. For the longest time, the assumption—even in Silicon Valley—was that to scale a startup, a founder must transition into Manager Mode. However, the experiences of countless founders and their visible distress when attempting this transition reveal a different truth: scaling doesn’t have to mean stepping back.
The Emergence of Founder Mode
To my knowledge, there isn’t a single book dedicated to the idea of Founder Mode. Business schools don’t cover it, and all we have so far are anecdotal examples from founders experimenting on their own. But now that we can identify it, we can start to define and explore it. My hope is that in the coming years, Founder Mode will be as studied and understood as traditional management techniques.
Traditional management teaches leaders to treat various departments like modular components, akin to black boxes. Managers give high-level directives to their teams, expecting them to figure out the specifics. Direct interference in their work is seen as micromanagement, a major faux pas in the corporate world.
“Hire great people and let them do their jobs.” It sounds perfect on paper, but in practice, it often turns into this: hiring those who are great at appearing competent but may not genuinely align with the company’s vision. This approach can quickly lead the company down a dead end, draining its potential.
A common theme I noticed in Brian’s speech and subsequent conversations with other founders was a sense of being undermined—gaslit, in a way—by those around them. On one side were external advisors insisting they should manage like professional CEOs, and on the other were the senior managers they hired, who often had their own agendas. When everyone around you disagrees, it’s easy to start questioning yourself. But this is one of those rare instances where the conventional wisdom is simply wrong.
Traditional management teaches leaders to treat various departments like modular components, akin to black boxes. Managers give high-level directives to their teams, expecting them to figure out the specifics. Direct interference in their work is seen as micromanagement, a major faux pas in the corporate world.
“Hire great people and let them do their jobs.” It sounds perfect on paper, but in practice, it often turns into this: hiring those who are great at appearing competent but may not genuinely align with the company’s vision. This approach can quickly lead the company down a dead end, draining its potential.
A common theme I noticed in Brian’s speech and subsequent conversations with other founders was a sense of being undermined—gaslit, in a way—by those around them. On one side were external advisors insisting they should manage like professional CEOs, and on the other were the senior managers they hired, who often had their own agendas. When everyone around you disagrees, it’s easy to start questioning yourself. But this is one of those rare instances where the conventional wisdom is simply wrong.
The Strengths of Founder Mode
Founder Mode breaks away from the traditional notion that a CEO should interact with their company solely through direct reports. Instead, it normalizes skip-level meetings—where the CEO engages directly with employees at all levels. This seemingly small change opens up numerous opportunities for better alignment, innovation, and a stronger sense of connection within the company.
Steve Jobs, for instance, would host annual retreats with the 100 most important people at Apple, not necessarily the ones with the highest titles. Imagine how unconventional—and powerful—this is in a typical corporate setting. This approach re-infuses a large company with the energy of a startup. Jobs wouldn’t have continued these retreats if they didn’t work, but it’s rare to see this done elsewhere. Is it a good idea? We still don’t have a definitive answer, which shows just how little we understand about the nuances of Founder Mode.
Founders can’t run a company of 2,000 people in the same way they did when it was just 20. Delegation is inevitable, but the extent of that delegation will vary depending on the company and its current needs. These boundaries are flexible and will shift over time as managers earn the founder’s trust. Founder Mode will always be more complex than Manager Mode, but it also has the potential to be far more effective, as evidenced by the successes of founders who have embraced this style.
Steve Jobs, for instance, would host annual retreats with the 100 most important people at Apple, not necessarily the ones with the highest titles. Imagine how unconventional—and powerful—this is in a typical corporate setting. This approach re-infuses a large company with the energy of a startup. Jobs wouldn’t have continued these retreats if they didn’t work, but it’s rare to see this done elsewhere. Is it a good idea? We still don’t have a definitive answer, which shows just how little we understand about the nuances of Founder Mode.
Founders can’t run a company of 2,000 people in the same way they did when it was just 20. Delegation is inevitable, but the extent of that delegation will vary depending on the company and its current needs. These boundaries are flexible and will shift over time as managers earn the founder’s trust. Founder Mode will always be more complex than Manager Mode, but it also has the potential to be far more effective, as evidenced by the successes of founders who have embraced this style.
The Future of Founder Mode
I predict that as we continue to explore Founder Mode, we’ll find that many founders have already adopted its principles intuitively. Often labeled as quirky or overly involved, these founders have, in reality, been ahead of the curve in understanding how to keep their companies aligned with their original vision.
Ironically, the fact that we still have so much to learn about Founder Mode is encouraging. Consider what founders have already achieved, even when pressured by outdated advice. Imagine what could happen when we fully understand how to harness their unique strengths. They could lead their companies with the passion of Steve Jobs rather than falling into the safe but uninspired path of a typical professional manager.
Ironically, the fact that we still have so much to learn about Founder Mode is encouraging. Consider what founders have already achieved, even when pressured by outdated advice. Imagine what could happen when we fully understand how to harness their unique strengths. They could lead their companies with the passion of Steve Jobs rather than falling into the safe but uninspired path of a typical professional manager.
Paul Graham’s Observations
- A more diplomatic way of stating the problem with senior executives would be to say that they are often highly skilled in managing internal dynamics. Few who know the corporate world would argue against this point.
- If offsite retreats became commonplace, even in mature companies dominated by internal politics, we could eventually quantify corporate culture shifts by examining which levels of staff are invited.
- On a more skeptical note, once Founder Mode gains recognition, there’s a risk of it being exploited. Some founders might refuse to delegate even when necessary, citing Founder Mode as a justification. Conversely, non-founder managers might try to adopt founder-like behaviors without the right mindset, often with negative consequences. The structured nature of Manager Mode, at least, contains the damage a poorly suited CEO can inflict.
My Thoughts on This
Graham’s essay offers a compelling look into why the standard playbook for management often fails founders. The idea that founders should morph into professional managers as their companies grow is deeply flawed. Founders aren’t just managers—they’re visionaries, deeply connected to their companies' missions in ways that professional CEOs can’t replicate.
The key challenge for founders is finding the balance between staying connected and avoiding micromanagement. As companies expand, the founder’s role must evolve, allowing space for others to lead while still keeping the founder’s vision at the heart of the company. Founder Mode isn’t about rejecting conventional management outright; it’s about redefining leadership to fit the founder’s unique strengths.
Ultimately, embracing Founder Mode could revolutionize how startups scale. It’s not just about changing management practices; it’s about nurturing the original spirit and drive that made the company successful in the first place. When founders lead with the same intensity and purpose that they had on day one, they turn their companies into powerful, resilient organizations that can maintain their innovative edge, even as they grow.
The key challenge for founders is finding the balance between staying connected and avoiding micromanagement. As companies expand, the founder’s role must evolve, allowing space for others to lead while still keeping the founder’s vision at the heart of the company. Founder Mode isn’t about rejecting conventional management outright; it’s about redefining leadership to fit the founder’s unique strengths.
Ultimately, embracing Founder Mode could revolutionize how startups scale. It’s not just about changing management practices; it’s about nurturing the original spirit and drive that made the company successful in the first place. When founders lead with the same intensity and purpose that they had on day one, they turn their companies into powerful, resilient organizations that can maintain their innovative edge, even as they grow.
Empowering Founders: How UnitiQ’s Expert People Strategy and Executive Search Services Drive Successful Scaling
In challenging situations like those described, where founders struggle with traditional management advice and the complexities of scaling their companies, fine-tuned Executive Search Services and a solid People Strategy become crucial. At UnitiQ, we understand these challenges intimately because our experts have worked directly with founders, guiding them through difficult transitions and leadership dilemmas. We don’t just fill roles; we align leadership talent with the unique vision and culture of your company. Our experience has shown us that finding the right executives and shaping an effective people strategy can make all the difference—not just in top leadership but across the entire team. We’re here to help founders maintain their influence and drive while ensuring the organization scales successfully, preserving the core values that made it special in the first place.
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