Founder Mode

5 min readSep 15, 2024

Last week, Paul Graham, Y Combinator co-founder, dropped his latest essay titled “Founder Mode” which got a lot of online noise with people defending and challenging it in equal measure.

Graham’s essay is based on a recent talk at Y Combinator by Brian Chesky — co-founder and CEO at Airbnb. Chesky talked about the flaws in conventional wisdom when it comes to scaling companies. The advice that Chesky followed initially was to “hire good people and give them room to do their jobs.” He found that this approach didn’t work for Airbnb, with managers doing more bad than good. Chesky then took an alternative approach which is what Graham refers to as “founder mode” in his essay:

In effect there are two different ways to run a company: founder mode and manager mode. Till now most people even in Silicon Valley have implicitly assumed that scaling a startup meant switching to manager mode. But we can infer the existence of another mode from the dismay of founders who’ve tried it, and the success of their attempts to escape from it.

In the essay, Graham explains how managers are trained to tell their direct reports what to do, leaving it them to figure out how to do it:

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.

I agree with Graham that there are plenty of well-intentioned managers out there that are far removed from the actual work. These managers will ‘assign’ a piece of work and expect a direct report to get on with it. I see this as a narrow take on management.

In contrast, I believe that managers who operate as leaders will actively get involved in the actual work, through coaching or crafting the work. For example, I do regular working sessions with people where we’ll work through the details of an opportunity or challenge together. Hands-on management doesn’t always have to be bad. There will be situations where it makes sense to be highly directive and that can be anything from a crisis situation all the way through to helping someone perform routine tasks. My personal preference is to coach people to achieve an outcome or resolve a challenge. To coach effectively, I need to understand the detail or work through related tasks to develop a better understanding.

I can see Graham’s point about how founders are different to managers. Founders are entrepreneurial, decisive and directive. The great founders that I’ve had the privilege of working for all excelled in executing decisively on emerging opportunities. They demonstrated a bias for action grounded in a detailed understanding of the opportunity or challenge in front of them.

However, as companies grow, founders will inevitably have to change the way in which they run their companies and trust in others to continue pushing the business forward. For founders to have this trust they will need to hire talented people across the organisation who:

Act as a founders in their own right — acting decisively, proactively and with a strong understanding of the outcome to achieve.
Complement the founder in areas where the founders has gaps or simply lacks time to focus.

In this scenario, the founder shares behaviours with managers and thus it becomes easier to interact more effectively with cross-organisational team members to achieve shared results.

Based on my own observations and experiences (trust me, I’ve got the t-shirt!), I believe these aspects are critical for founders and their managerial hires to consider if they want to want avoid disappointment or — worse — if they want to avoid their companies being mismanaged:

Timing — Whenever I interviewed for roles at startups in the past I’d always ask founders why they felt the time was right to hire a product manager. This question doesn’t only apply to the hiring of PMs: the key principal is to understand whether founders are ready to share or delegate certain responsibilities.

Awareness — For managers to meet expectations, founders need to be clear about their own strengths and weaknesses. I believe that managers can work effectively with founders as long as founders are clear with managers about the specific results and contributions expected of them. Instead of hiring in their own image, I’ve seen great founders looking for people that could complement them in specific areas whilst still sharing common traits (entrepreneurial, decisive and detail oriented). What exactly this looks like will vary per company — as Graham explains in his essay:

Obviously founders can’t keep running a 2000 person company the way they ran it when it had 20. There’s going to have to be some amount of delegation. Where the borders of autonomy end up, and how sharp they are, will probably vary from company to company. They’ll even vary from time to time within the same company, as managers earn trust. So founder mode will be more complicated than manager mode. But it will also work better. We already know that from the examples of individual founders groping their way toward it.

Close to the work — As the number of (direct) reports grows it becomes more challenging for founders and managers to stay close to the work. Not impossible though: whether you run working sessions or an offsite meeting, you use these interactions to connect with the detail of the work and provide direction where needed. A good leader (notice how I deliberately don’t use the word ‘managers’ here) holds their direct reports accountable for results and isn’t afraid to actively get involved in the work required to achieve these results.

Main learning point: The tension between founders and their team members will continue to play out. This isn’t a bad thing. Founders will keep wanting to ‘move fast and fix things’. No matter how experienced people are, it’s healthy to go through the process where founders and team members figure out how to best work together to achieve shared results.

Related links for further learning:

Founder Mode

Written by MAA1