From: allin
The concept of “founder mode” was brought to prominence by an essay from Y Combinator co-founder Paul Graham, based on a talk given by Airbnb CEO Brian Chesky [09:07:37]. Chesky stated that conventional advice for running a large company—to hire good people and give them room—resulted in disaster for him, leading him to study Steve Jobs’ approach [17:11:39] [25:05:41]. Paul Graham defines two philosophies for running a company:
Manager Mode vs. Founder Mode [09:44:06]
- Manager Mode: This is the conventional business school approach, where leaders hire capable individuals and empower them to do their jobs without micromanagement [09:47:58].
- Founder Mode: Characterized by less delegation and a more hands-on approach [10:12:00]. It can involve “skip-level meetings,” where the CEO meets directly with employees who report to their managers, bypassing the managers themselves [10:15:32].
Initial Reactions and Criticisms [10:39:10]
Chamath Palihapitiya found the essay confusing and lacking specifics, suggesting it provided an “excuse” for failures rather than a solution [10:46:27] [19:00:27]. David Sacks noted that the concept of a hands-on approach from leaders is “hardly new” [13:17:10]. He recalled PayPal’s “no MBA hiring rule” over 20 years ago, as MBAs were perceived to bring a traditional management toolkit less applicable to startups [13:22:20].
Sacks criticized the “founder mode” branding as “overly simplistic and mannequin view of the world,” suggesting it perpetuates the idea that “Founders always right and everybody else in the ecosystem…they’re either Liars or fakers” [16:09:50]. He argued that this narrative, while having “some truth to it in the 1990s” where there was a prevailing view to hire professional managers for scale [17:08:43], is now “antiquated by at least 15 years” [17:29:43]. Peter Thiel’s creation of Founders Fund 22 years ago was explicitly to emphasize that founders “should be in charge” [17:12:44] [48:54:55].
“If you’re constantly just saying that well Founders know everything Founders always right is that actually helping them or is it actually reinforcing a mentality that oh I don’t have to learn anything because that all the great Founders have been learning machines but if they had been told throughout that you’re always right don’t worry about it then they may not have learned the same way” [49:37:04] — David Sacks
Managerial Principles and Archetypes
Chamath emphasized that successful leadership boils down to the courage to change what isn’t working and ruthlessly attack problems from first principles, without nostalgia or sunk cost [11:12:12] [12:41:24]. He cited leaders like Nikesh Arora (Palo Alto Networks), Shantanu Narayen (Adobe), and Satya Nadella (Microsoft) as examples of non-founders who have added “trillions of dollars of market cap” [11:53:30].
David Sacks referenced Andy Grove’s 40-year-old book, High Output Management, which posits that “the output of a manager is the output of that person’s team” [14:09:07] [14:21:07]. This means the goal is to maximize team output [14:43:08], finding the right balance between micromanagement and excessive delegation (dubbed “infinite delegation” [14:57:37]), which can push important work to inexperienced people [15:08:04].
David Friedberg differentiated between leading and managing:
- Managing: A manager asks subordinates what they are going to do, leading to a “bottoms-up model” and a “diffusion of responsibility” [20:39:15].
- Leading: A leader states “here’s what we are going to do and here is how we are going to do it,” synthesizing input from subordinates to set clear direction and allocate responsibility [21:16:30] [21:30:17].
Fredberg noted that while founders often feel the authority to set direction [22:21:40], there are “great leaders that have run organizations that are already scaled” [22:35:10] like Satya Nadella, Sundar Pichai, and Tim Cook [22:26:00].
The Role of Experience and Adaptability [23:56:56]
For early-stage companies (year zero to year one), success is about building a product with “product velocity” and deeply understanding customer problems [28:07:05]. Experienced managers often struggle to achieve product-market fit due to relying on biases from past experience [29:26:01] [25:30:00]. Often, “neophytes” with no prior industry experience, like the founders of Airbnb, Uber, SpaceX, and Tesla, are the ones who disrupt industries with novel approaches [29:30:04].
However, scaling these companies requires significant expertise, tactics, and specialized focus [29:56:00]. Founders must learn to delegate to highly capable people who can run departments [30:16:03]. Mark Zuckerberg’s approach at Facebook involved giving his team “air cover” to “cook” and iterate relentlessly, adapting to unique contexts [30:56:07] [31:42:07].
Successful founders are described as “intellectually promiscuous” and “learning machines” [42:54:27] [49:49:09], constantly re-evaluating conditions and adapting their playbook [43:09:47]. Jeff Bezos, for example, demonstrated intense intellectual curiosity and adopted innovative hiring techniques like “bar raisers” from conversations [43:51:00].
The Bolt Payments Case Study
The story of Bolt, a payment startup, was presented as a cautionary tale related to founder behavior and startup challenges and failures [32:56:19]. Despite generating only 300 million loss [33:52:03], Bolt raised funds at an 300 million [34:50:00].
Founder Ryan Breslow, after stepping down, was reportedly involved in a plan to raise 14 billion valuation (500 times revenue) with a “pay to play” clause for existing investors [35:00:26] [35:43:00]. This was seen as an example where the “founder mode” justification could enable “bad behavior” if not grounded in objective standards and a focus on winning outcomes [38:13:30].
“The problem with that branding is I think it’s an overly simplistic and mannequin view of the world where it kind of fits into really all of the the PG essays and and the YC model which is Founders always right and everybody else in the ecosystem especially traditional managers they’re they’re either Liars or fakers and that basically has been the mannequin model that Paul gron pumping out for decades” [16:07:35] — David Sacks
Conclusion
While “founder mode” seeks to empower entrepreneurial vision, the discussion highlights the complexity of successful leadership. It requires a rare “intellectual and psychological archetype” [42:12:12] capable of thinking from first principles, adapting to unique company circumstances, and continuously learning, rather than rigidly adhering to a label or blindly delegating [23:16:47] [42:26:40]. The historical trend in venture capital and startup strategies has shifted towards supporting founders to remain in leadership, but this necessitates that founders “level up” their management skills [18:07:44].