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Founder Mode

paulgraham.com

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Re: Founder Mode

#121

Post by hobs »

JonChesterfield wrote: post #100
Chance-Device wrote: post #88

When a company is successful, by which I mean it turns a healthy profit and eventually even enough to go public, it ends up sustaining a lot more employees doing a lot less than a smaller, leaner company that can’t afford inefficiency. That doesn’t matter much to the successful company, it makes more than enough money to cover the inefficiency, and the inefficiency isn’t causing any real trouble - it just means that…

A really special failure mode is to hire management from proper grown up companies to implement real processes for your aspirationally-real startup. Serious economic misunderstanding on multiple levels and a popular choice nevertheless.

Hah! I have seen and cleaned this up several times now; spend 80% or more of the total lifetime spend of the company in say year 4-6 after you got some basic traction, borrowing like crazy, gain literally nothing, fire everyone involved, start over with skeleton team, rebuild something useful out of the ashes.

Re: Founder Mode

#122

Post by cb321 »

This article could be said to be a discussion of the "start-up business" realization / concretization of generic problems in human societies which are also themselves instances of https://en.wikipedia.org/wiki/Module / https://en.wikipedia.org/wiki/Modular_design / https://en.wikipedia.org/wiki/Systems_analysis and "imperfect abstraction" problems (like https://en.wikipedia.org/wiki/Leaky_abstraction).

This general problem has so very many guises! Delegation affords so much, but trust sure is tricky. (This even applies recursively to, say, taking advice from anyone who "seems to" have studied all there is to know about abstraction/modularity or "human delegation optimization" which is, basically, https://en.wikipedia.org/wiki/Demarcation_problem.) It may be the single most central problem of the human condition and is probably a https://en.wikipedia.org/wiki/Wicked_problem .

More directly related to the article, one main impediment is that humans are sneaky & tricky enough that if fakery is incentivized (it almost always is -- due to the thermodynamics of doing vs. faking), then this informs the viability of whatever Rules / protocols you try to establish. https://www.slatestarcodexabridged.com/Meditations-On-Moloch does a better job at extending the conversation than I ever could in an HN comment.

Re: Founder Mode

#123

Post by neom »

mdorazio wrote: post #115
mihaic wrote: post #75

After two unsuccessful but still alive start-ups, I've come to very similar conclusions. Absolutely every single time I've tried to say to it anyone other than a founder I was met with disbelief that eventually turned into accusations of not knowing how to be a leader. While I do admit that I didn't fire people as quickly as I should have, most of our structural problems came from employees simply doing what was best…

How did you incentivize people to do what was best for the company rather than only for themselves? What percentage of it did they own? Why should they ignore their own self-interest in favor of your company's long-term success? There's a weird cognitive dissonance I've run into where career advice from most people on HN boils down to "Companies don't care about you. Optimize your own total comp. Jump ship when oppor…

Long term thinking + high quality story telling.

Just gotta keep it up as you scale. At around 200-300 employees your job in leadership is simply telling the same story over and over again to different constituencies in different ways, for years.

Re: Founder Mode

#125

Post by hobs »

JonChesterfield wrote: post #103
ackbar03 wrote: post #93

Earlier quoted context omitted.

How do you guys actually hire the superstars to join your startup as the early employees/partners? And not just the typical friend you know who's "a pretty smart guy" and his friend and so on

Either they're the founders or friends thereof or you're struck-by-lightening lucky. Realistically tell yourself that 10x developers are a silly myth and the people you were able to hire for pennies from the local demographic are the superstars, and try not to hang your business model on them actually being the best in their field. As long as you don't fact check that against reality it'll be OK.

> try not to hang your business model on them actually being the best in their field

Thankfully almost no one is the best in their field :) You probably can't afford the best, you probably don't need the best, you probably can't keep the best happy, you definitely don't have problems that need the best.

That being said if you pay dollars instead of pennies you can find some decent folks and maybe save some money in the long run :)

Re: Founder Mode

#126

Post by jodacola »

Chance-Device wrote: post #88

When a company is successful, by which I mean it turns a healthy profit and eventually even enough to go public, it ends up sustaining a lot more employees doing a lot less than a smaller, leaner company that can’t afford inefficiency. That doesn’t matter much to the successful company, it makes more than enough money to cover the inefficiency, and the inefficiency isn’t causing any real trouble - it just means that…

I’ve had a lot of conversations over my career about this general topic, and I still haven’t been able to answer:

If a large, successful company operated extremely cleanly, wouldn’t that increase stock price even further?

What are the disincentives to doing so (beyond the need for requiring more from people)?

Re: Founder Mode

#127

Post by ajb »

There are three different kinds of environment:

- Startup. Doesn't know how to make money yet, or if it does, is still learning how to execute its vision. It's essential to have a small team of maximally competent people, so recruitment is cautious. Employees are pets, not cattle. Projects are executed in time linear in the man-hours required

- Scale-up. Has found an opportunity so big that it needs to occupy it as fast as possible, before the competition does. Recruitment has to take risks. Large critical projects are executed in time proportional to the square root of the man-hours required[1].

- Established business. Has big battalions, but does not grow them very quickly. concentrates on not losing its market position. Recruitment optimizes for fungibility. Projects are executed in time linear in the man-hours required.

Each of these requires a different skill set from leadership.

[1] McConnell, "Software estimation - Demystifying the black art"

Re: Founder Mode

#128

Post by rvnx »

mdorazio wrote: post #115
mihaic wrote: post #75

After two unsuccessful but still alive start-ups, I've come to very similar conclusions. Absolutely every single time I've tried to say to it anyone other than a founder I was met with disbelief that eventually turned into accusations of not knowing how to be a leader. While I do admit that I didn't fire people as quickly as I should have, most of our structural problems came from employees simply doing what was best…

How did you incentivize people to do what was best for the company rather than only for themselves? What percentage of it did they own? Why should they ignore their own self-interest in favor of your company's long-term success? There's a weird cognitive dissonance I've run into where career advice from most people on HN boils down to "Companies don't care about you. Optimize your own total comp. Jump ship when oppor…

It's not about how much they get. The reality is that you can give 100k extra to a software engineer, he will still prefer his kids and wife.

Money isn't buying love.

You can hire a prostitute, she will work for you, but she will still not love you.

This is the same with companies.

Re: Founder Mode

#129

Post by gregwebs »

What struck me from reading Elon Musk’s (he proofread this essay) biography is that he would do things that you could obviously hire someone else to do. For example, to make the Tesla car line more productive. His heavy involvement seems to be a way to create decisiveness and quickly iterate. if something goes wrong, the blame is on him, and he’s the founder and chief executive. Whereas if an employee attempted to do some of these things they might have to write up a detailed report and rationale and possibly even conduct studies. in probably less time than someone would normally finish their studies and report (let alone make any changes) Musk had iterated to tripling the throughput of the Tesla factory.

Musk as a founder-like role (he wasn’t actually a founder) has the incentives to make this happen. in this case, he had a specific milestone to reach to get a very lucrative bonus. at the same time, he had a lot of stock and would not want to do anything that would damage the long-term prospects of the company. Whereas an executive might go after a bonus without worrying about long-term negative effects. Even if an executive has stock options, they might not vest and even though they are an executive, the founder and others are creating the fate of the company and the value of the options, not just them.

Re: Founder Mode

#130

Post by neom »

This is conventional wisdom.

https://hbr.org/2004/01/managers-and-leaders-are-they-differ...

https://hbr.org/2016/06/do-managers-and-leaders-really-do-di...

https://hbr.org/2022/09/the-best-managers-are-leaders-and-vi...

Almost every HBR "Must Read" series on enterprise management says the same thing as this blog post. The business world has been talking about this stuff since the 90s.

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