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.
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.
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.
> 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.
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'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
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.
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’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.
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.
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.
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.
Let's ignore the fact that GameStop is a meme-stock.
Has Cohen actually improved the company? Revenue keeps falling, year by year, and other than having more cash on hand - not much seems to be changing.
Seems to me that every positive thing that happened to the company, can be credited to the pumping of the stock. The fundamentals haven't changed much.
Let's not ignore the fact that you call GameStop a meme-stock.
Please explain how it is a meme-stock in 2024 and what that even means? What's the definition? Like how is GameStop not a "real" stock or "real" company?
It has 4 billion cash on hand (for 10B market cap company), no debt and is profitable. It had NONE of that before RC bought himself in. How is that a declining company? Or how does this fall under "not much seems to be changing"?
Also "every positive thing that happened to the company, can be credited to the pumping of the stock" makes no sense at all. 3 of the 4 billion cash on hand was from stock offerings that happened this year. On 0 news. Every single spike in the past 3 years was on 0 news. You can keep blaming "pumping", that's fine. But you'll have to specify who's doing the pumping and why to make that statement have any meaning. It's unlikely that household investors are doing 100+ million volume A DAY in a company that issued around 300 million stocks total (referring to the 300%+ spike days this year on 0 news).
The long short of it is that revenue keeps falling, they're barely making a profit, and at best, they're just inching toward a net positive. They've been losing money for the past 6 years, and this year they're looking to make a small profit.
They have little debt, and lots of cash at hand, but seemingly no good core business model.
If they can convert this, great - but they're not much more worth than the cash they have. If they can't use that money to grow, then what good is it?
1. They went from 400 million in losses to profitable.
2. Went from 0 cash + debt, to 4 billion cash and no debt.
Within 3 years.
So what do you expect from new CEO's and BoD who jump into a "dying brick & mortar" and turn it around like that? Like if the above is "nothing", "not good enough" and "declining", what does "good enough" look like to you?
IMO this is nothing short of a leadership miracle. The company would not have existed by now if it wasn't for Ryan Cohen. Who by the way has a salary of 0 USD. For the past 3 years.
> 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?
Because their role in a company is support like CFO, CIO, CPO, CMO (and honestly CEO). The startup lifecycle where "person or people who make or design the product muddling along the other business functions until they're big enough to need someone specialized" doesn't really work for an accountant.
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.
The problem is that very few manager-capable younger folks can truly embrace the thing that has to be done to become a great manager, and that is to cease being an IC.
Every startup actually discourages this, which is why so few startups have great young managers.
> the standard way businesses are run filters out the most capable and most effective people from executive positions
You say this like it’s not the intended outcome? If you have money, do you really want to invest in a high variance strategy that relies on a genius pulling rabbits out of a hat? Or do you invest in a sure thing? MBAs are very reliable at extracting value from successful firms. The continued success of the enterprise is a non goal. Same exact thing with Scrum. You have value locked up in some innovative software? Run Scrum on it for a few quarters until the juice is all sucked out, then move on, having reliably delivered features right up until the wheels fell off. It’s not about value creation, it’s about value extraction. Different game, different rules.
This is great, pithy phrase. Thank you to share it. Where I work, when I look up the ranks (always, always "old" people), I feel like many of these people could just stop coming to work, and I would not notice for weeks or months. "Zero fucks given" to anyone below them, unless it is ticking a box for their year-end review. Does anyone else feel this way?
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.
> Ideas are always matched up with bottom-up data.
>>That does not hold, I can have a myriad of ideas not grounded in reality
You are right. What I should clarify is that there is a process that always matches it up. You can have all those creative ideas, but you "know" at the same time that those are not real. You (except in some cases/pharmacologically altered) are not hallucinating like current LLMs (and some large orgs) do
> 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...
>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.
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
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.
> 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.
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"
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?
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.
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.
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
WRT https://news.ycombinator.com/item?id=41417363 the story I heard about Ford management vs GM management was that Ford had a "system" which involved looking around at the heights of various stacks of reports in his office and intervening where he felt things were out of whack.
Upon reflection, if each sheet of each report, on average, dealt with about the same dollar value of things as the other sheets in its stack, then his system, far from being madness, would've just been an early, analogue and low-pass-filtered, lo-tech "business intelligence" dashboard.
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.
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
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.)
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.
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.
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.
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.
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.
the way i'm thinking about it: could apple be the size it is today, in terms of market cap and or influence, being strictly ran in "founder mode"? i'm even skeptical steve jobs could have taken it here.
that's not to say the goal should always be to scale or become as big as possible, but it's interesting to think about.
The actual scope of what Steve Jobs would be doing if he were still alive and serving as CEO today doesn’t seem like it would be much more than it was when he was alive though.
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.
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)
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?
Because you don't want your company to fail because you failed to scale while your business was growing? What a terrible reason to fail; that's an own goal.
For it to be a paradigm shift, there would have to be some definition of the new paradigm in the article, but it really only describes what it's not (regular management). Will go out on a limb and say that this seems to be a little bit of self-indulgence by successful people.
> 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"?
That's what the article is about. The "common knowledge" is that it doesn't scale at all, that as soon as you become an established company you need professional managers. Paul provides counterexamples that prove it can scale and when it does it benefits the company immensely. He is hesitant to recommend this management mode outright because he doesn't know:
- what exactly do these founders do that makes their management more effective than business administration
- what the limits of founder management are
- how to trace the limits across the org chart
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'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.
(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 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 :-)
Hm, so a company in founder mode is like a monorepo with all projects, software, documentation, branches, processes, owners, contributors, activities, tests, issues, pull requests and code reviews.. Consolidated, visible, under source control.
Following that analogy, a company in manager mode is like many repos independently developing, collaborating with each other when needed but mostly siloed and managed separately. Maybe like microservices..
> workers are CPUs so the coders are new managers
An organization as a form of parallel computing with humans. It feels like this could yield some insights by digging deeper into the concept.
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.
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.
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?”
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[ 3.2 ms ] story [ 368 ms ] threadThis essay by pg is the closest you’ll get to a blog post discussing its main points.
Some of it is survivorship bias - often influenced by privilege/luck - being confused as skill or insight. Some of it is people who aren't very reflective, scientific or logical in their thinking making poor guesses or estimates with a lot of unmerited confidence. Some of it is more cynical: if somebody is buying, they're selling.
As a civilisation we still aren't great at root cause analysis of success, it seems.
I really liked this talk from Patreon's CEO about bad advice: https://youtu.be/JTpBFiW5PBo
Jensen Huang (Nvidia) engages with only direct reports.
So I'm thinking that although he might engage only with direct reports, he's accessible to his company in a general sense.
I'm completely sure that writing said email would deeply upset the reporting chain thus bypassed, plausibly in fired on the spot for unrelated reasons when they noticed.
Huang defies management best practices and doesn’t do 1:1 meetings at all.
https://www.tomshardware.com/news/nvidia-ceo-shares-manageme...
The other fatal flaw is that in larger orgs there is almost no existential risk to the organization from individual behavior. All the cloaks and daggers will get sorted out in the wash and Amazon will still be just fine. But this is not the case for a scaling startup. Bad individual behavior — prioritizing career progression over company success — especially at the expense of other employees, can and does sink smaller companies.
I think the stage of scaling is something that industry experience doesn’t provide a ready supply of employees to hire for. There are too many variants of startup company, too many weird starting structures, and the critical periods too short and intermittent.
The other variable not discussed here is the environmental constraints. An established org can be managed because the environment is relatively stable. The customer base is more of a constraint and the financial expectations are better integrated. A startup is still trying to execute various transitions at this point, often from loss-leading to not, and this introduces more opportunities for chaotic regimes that need to be tightly regulated.
I don't think that's bad behaviour (the 'especially at the expense of others' deliberately aside) - that's correct behaviour? Unless it's your company. But the key is, ideally, to have goals aligned such that the prioritising personal progression means doing great things for the company.
I'd probably describe that as "bad behavior" as you hire people believing they'll focus on improving things inside the company, inside of focusing on padding their CV. Of course, wouldn't be bad if it's both, but selecting the latter in front of the other seems non-optimal for the employer.
If you go through enough people like that, you end up with a ball of software spaghetti that anyone working on will struggle with, instead of a polished architecture ready to nimbly be changed when needed.
So everyone picks what will look good on their resume in a few years, not what actually solves the issue in the most optimal way possible.
At the IC level sure, it is your manager’s job to create alignment. At the hiring level pg is talking about, they are deciding which of those people to bring in, and they think about it in at least as much detail as you when you design the intricate functions of the next product you ship.
Think about it like this: you have the chance to build a product that wins every trial but you won’t get anything more in the process, or you can design a product that is less competitive and sends you personally $<meaningful_amount> every time it is trialed, whether or not they buy. Assume no one will ever be able to definitively prove which one you did.
This should be screaming evidence that the standard way businesses are run filters out the most capable and most effective people from executive positions. This is the kind of thing you would expect profit-driven enterprises to actually care about, but no such luck because the executives who are positioned to make this change are exactly the people who should get replaced with extremely capable oddballs.
Has Cohen actually improved the company? Revenue keeps falling, year by year, and other than having more cash on hand - not much seems to be changing.
Seems to me that every positive thing that happened to the company, can be credited to the pumping of the stock. The fundamentals haven't changed much.
Please explain how it is a meme-stock in 2024 and what that even means? What's the definition? Like how is GameStop not a "real" stock or "real" company?
It has 4 billion cash on hand (for 10B market cap company), no debt and is profitable. It had NONE of that before RC bought himself in. How is that a declining company? Or how does this fall under "not much seems to be changing"?
Also "every positive thing that happened to the company, can be credited to the pumping of the stock" makes no sense at all. 3 of the 4 billion cash on hand was from stock offerings that happened this year. On 0 news. Every single spike in the past 3 years was on 0 news. You can keep blaming "pumping", that's fine. But you'll have to specify who's doing the pumping and why to make that statement have any meaning. It's unlikely that household investors are doing 100+ million volume A DAY in a company that issued around 300 million stocks total (referring to the 300%+ spike days this year on 0 news).
They have little debt, and lots of cash at hand, but seemingly no good core business model.
If they can convert this, great - but they're not much more worth than the cash they have. If they can't use that money to grow, then what good is it?
2. Went from 0 cash + debt, to 4 billion cash and no debt.
Within 3 years.
So what do you expect from new CEO's and BoD who jump into a "dying brick & mortar" and turn it around like that? Like if the above is "nothing", "not good enough" and "declining", what does "good enough" look like to you?
IMO this is nothing short of a leadership miracle. The company would not have existed by now if it wasn't for Ryan Cohen. Who by the way has a salary of 0 USD. For the past 3 years.
Like why is he doing this for no salary? hmm?
Well, yes, because generally somebody who is actually 'the most capable and most effective' will simply be running their own business, why would they waste time climbing the ranks to work for somebody else's yacht?
The filter exists because whilst PMCs can't build the ship, a founder can, they're fine at keeping it away from the rocks enough for relevant parties to extract wealth and guard it from the risks posed by hotshot up and comers.
Remeber the avg corp is relying on regulatory capture and offshore Java, maybe wrapping OpenAI if it's YC funded - there's barely double digit innovative tech companies for this mythical employee to even captain.
Maybe I'm being naive, but I think a large part of running a successful business is having a well defined niche / problem you solve. Getting to that point comes with a bunch of barriers and risks, and joining an organization that has that already figured out seems like it can have some advantages?
Because their role in a company is support like CFO, CIO, CPO, CMO (and honestly CEO). The startup lifecycle where "person or people who make or design the product muddling along the other business functions until they're big enough to need someone specialized" doesn't really work for an accountant.
Experience. Experience and wisdom is what trumps the exuberant overconfidence of an ignorant youth.
Every startup actually discourages this, which is why so few startups have great young managers.
You say this like it’s not the intended outcome? If you have money, do you really want to invest in a high variance strategy that relies on a genius pulling rabbits out of a hat? Or do you invest in a sure thing? MBAs are very reliable at extracting value from successful firms. The continued success of the enterprise is a non goal. Same exact thing with Scrum. You have value locked up in some innovative software? Run Scrum on it for a few quarters until the juice is all sucked out, then move on, having reliably delivered features right up until the wheels fell off. It’s not about value creation, it’s about value extraction. Different game, different rules.
That is another profound truth that's just lost entirely. Data is not information. And information is not data (reality). We must have the ability to both "see" the real data and also recognize the translation of that data into information to make good choices. The more layers in your org, the harder it is without feedback mechanisms that allow the bottom, reality-facing side of your org to pass on critical stuff without the interpretation and loss of middle-layers. Remember, you are an org too, a 37-trillion cell org that coheres as one in such a beautiful way you think of yourself as one "I" Long way before we find principles that allow us to do the same with companies and countries.
Also:
> Ideas are always matched up with bottom-up data.
That does not hold, I can have a myriad of ideas not grounded in reality
> Ideas are always matched up with bottom-up data. >>That does not hold, I can have a myriad of ideas not grounded in reality
You are right. What I should clarify is that there is a process that always matches it up. You can have all those creative ideas, but you "know" at the same time that those are not real. You (except in some cases/pharmacologically altered) are not hallucinating like current LLMs (and some large orgs) do
The whole idea of this article hinges on this sentence. What disasterous thing happened exactly? Considering the premise seems to be missing, dare I say, this article seems to rhetorical.
Airbnb struggled for a while (in his opinion) until he changed his management style organized the whole company around a release cylce (and other bits I cant remember) and taking on much bigger responsibility for design (UI UX). its super interesting stuff. its not new actually and I saw him speaking about multiple times on youtube. https://www.perplexity.ai/search/brian-chesky-interview-orga...
>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!
[1] https://news.ycombinator.com/item?id=18003253
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?
Teaching founder mode sounds as simple as teaching creativity or how to be an individual. Founders are most likely are made up of people divergent of social thinking in some way and have a non-verbal need inside trying to get out.
Founder mode is fed by an intense focus, desperation, and insight. Which are all difficult to teach.
The whole thing feels off to me. Isn't the VCs that try to stop Founder mode. I think SV has a slew of carcasses of companies that founder modeded to death.
You have catch the wave; otherwise you do a lot of paddling.
The other question I have been asking myself is regarding the SJobs retreats. They definitely happened during the Macintosh era but were they used during the second era. My impression is that they created a toxicity. It makes sense that CEO of large organization will hear names through the grapevine and want to get direct input.
I see the founder to be idiosyncratic and there is alway tension be that a desire for consistent environment. I think a good founder is able to compartmentalize the idiosyncratic from the supportive resource mechanics were humans like consistency.
No doubt SJobs was in Founder mode when he had all the CNCs at NeXT painted black and distorting the machine's tolerances.
Wasn’t this obvious? I’ve been in the software industry for long enough to distinguish people who do actual work from those who don’t. All the VPs I’ve encountered share the following traits:
- huge paychecks
- they hire others under their supervision to do the actual job
- you don’t actually know what their job is because they all delegate
So, it always seemed to me that being a VP always meant: no matter what you do (good decisions or bad ones) you are getting paid tons of money. It’s worse when these VPs come from faang-like companies: they are treated like gods who know everything and you cannot contradict them.
I have also worked with a couple who I am not sure what they did. And a couple that I think were actively harmful by not taking actions, letting problems steep, and pursuing pie in the sky solutions ("we could expand from our core product to offer our $internl_tool_that_barely_works, let's overly fund that while customers churn on quality issues")
And fwiw, I have yet to have a positive experience from an ex-googler and it is more of a toss up with former amazon folks. They are simply too used to white glove systems that have had, literally, billions spent developing these systems to the custom problems of these mega orgs.
I'm at a startup that is at an earlier stage than your two examples. Our CEO hired a VP Eng on a tight schedule and didn't give the engineering team an opportunity to interview him. I was definitely suspicious, especially given past experiences with the "professional manager" types we're all discussing here. The day I knew it was going to be fine was the day I went into the shop early, discovered that the lights were already on, and found him in the back laying out a bunch of holes to drill in an aluminum plate.
"Uhhhh what's up man?"
"The mounting plate from the contractors didn't fit right so I'm making a new one. I know you guys have electronics to mount and test today and don't want you to be blocked"
"...need a hand?"
That's correct. They do nothing, but when that nothing is actually done well, it shows.
Unfortunately, this is not common.
... but I explicitly stated what they did and it was not nothing
So, if I get this right, hiring is done by the founder, who is not capable of choosing good people in a sea of fakers, and because of founders incompetency the advice is bad?
I do agree that every founder/CEO should have a tool for gauging how their company is behaving out of their bubble, but I see this new mode as a dangerous proposition which will invite all sorts of paranoid founders/managers to take micromanaging/abuse to a whole new level.
Maybe a better question founders(VCs) should be asking themselves is why are there so many "professional fakers" in top/middle level positions, instead of figuring out how to augment their behavior?
Your concern is valid, but since the company is their "baby", they care more than those for-hire professionals who can go to greener pastures.
This is the main aspect I think, that everyone keeps missing. The “professional fakers” work first and foremost for themselves. They make great decisions, for them. But not necessarily for the company.
Not saying there is a contradiction, just a piece missing somewhere in the essays logic.
Upon reflection, if each sheet of each report, on average, dealt with about the same dollar value of things as the other sheets in its stack, then his system, far from being madness, would've just been an early, analogue and low-pass-filtered, lo-tech "business intelligence" dashboard.
In the former, you are immediately aware of what they're doing and why, because they're telling you! You can ask questions if their reasoning doesn't sound convincing, intervene early if there's disagreement as to what should be done, and decide whose project takes priority. Steve Jobs was a very active CEO in this regard. Bullshitters will not survive long in such an organization.
The latter, on the other hand, is often taken to imply that you should not intervene unless absolutely necessary -- which often means, until it's too late.
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.
Anyone can raise problem with him & he will fix it directly.
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.
If a founder is exceptional and all of the other stars necessary for a startup to succeed have aligned, this may be a good approach. But then we are just back to the question YC has always tried to answer: what makes a founder exceptional?
What about the founders who failed _because_ they were in "founder mode"?
I am not sure this article represents the beginning of a paradigm shift like it seems to think it does.
The argument seems to be that if you understand the business as deeply as the founder does, you can get away with selectively breaking some conventional management wisdom.
that's not to say the goal should always be to scale or become as big as possible, but it's interesting to think about.
Through fractal management, a visionary leader can have a better chance to ensure that the vision is translated into practice at the various levels of detail.
Fractal management is only part of it, though as it is a technique, but it doesn’t cover the enormous skin in the game founders have about the success of the company. For many founders, the company is their baby(I am projecting here) and they want to make it succeed. Contrastingly, many of the professional fakers instead see it as just a job, and a step on the ladder. Principal/agent. Without genuine care, and cohesive vision, fractal management can quickly devolve into chaos. It is high reward and also higher risk!!! Maybe that’s why only the founders do it but not their VPs. I wonder if any VPs at Airbnb are doing anything remotely similar to what Bryan Chesky is doing as management style? (Honestly I have no idea)
I am sure that many founders failed also because of it as they might have been missing the charisma, clarity and conviction to pull this off.
(PS. Take my ideas with a big serving of salt, I am a founder but not at a large organization, and the article mainly focuses on large orgs)
https://www.tomshardware.com/news/nvidia-ceo-shares-manageme...
That's what the article is about. The "common knowledge" is that it doesn't scale at all, that as soon as you become an established company you need professional managers. Paul provides counterexamples that prove it can scale and when it does it benefits the company immensely. He is hesitant to recommend this management mode outright because he doesn't know:
- what exactly do these founders do that makes their management more effective than business administration - what the limits of founder management are - how to trace the limits across the org chart
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.
[1] https://usefind.ai/jobs
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.)
And I keep coming back to how important organising above the Dunbar number is and how bad economics etc is at this.
This resonates for me - and it’s still just grasping in the dark - but they seem to revolve around the idea that with software a company is no longer a lot of Dunbar number tribes working together through politics of their representatives (managers) but that action through the whole company can be co-ordinated through software (I even have the idea that the workers are CPUs so the coders are new managers).
Anyway the point is that founder mode might mean simply acknowledging that software runs / orgnaisies a company more than anything else - and building for that. What’s more important if your whole company is software controlled - relations between managers or the whole-org-test-rig?
Edit: apple famously has a run-book that is insanely detailed - basically instructions on how to run the org that builds the iPhone - this is software running a whole compmay. And if it’s software, it can be in one repo and that repo can be owned by Steve Jobs. Conceptually- that’s founder mode…. Maybe :-)
Hm, so a company in founder mode is like a monorepo with all projects, software, documentation, branches, processes, owners, contributors, activities, tests, issues, pull requests and code reviews.. Consolidated, visible, under source control.
Following that analogy, a company in manager mode is like many repos independently developing, collaborating with each other when needed but mostly siloed and managed separately. Maybe like microservices..
> workers are CPUs so the coders are new managers
An organization as a form of parallel computing with humans. It feels like this could yield some insights by digging deeper into the concept.
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?”