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Founder Mode

paulgraham.com

261–270 of 772 posts

Re: Founder Mode

#261
post #130

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.

> This is conventional wisdom. I'm not sure it is. Let's look at those three links: 1. The first of these dovetails -- not the same, but on the same hunt -- with Graham's piece, and is an excellent read. - Unconventional wisdom 2. The second is formulaic anecdata consultjunk, the same method incurious journalists use covering politics through "focus groups". - Conventional wisdom 3. The third uses the same formula, a…

> Seems unusual for serial startup entrepreneurs who have built firms from $0 to $B to have also individually joined and worked up to C-level in "institutions" (50+ years old, and 5K - 100K+ employees, not just other tech unicorns still bearing Founder imprints) after learning the startup experience that lets them see management practice through a "it doesn't have to be like this" lens

Both PG's post and your point about his experience creating a rare perspective are spot on. While I think PG's "Founder Mode" concept needs further exploration, he's on to something I never saw in the typical HBR-type literature. It mirrors my experience being a startup founder acquired into a decades-old F500 tech company.

As a senior executive it took me quite a while to figure out how this huge, well run company really worked and I always felt my understanding of the important ways it was different from my startup were unique and distinct from the standard business writing. I hope this Founder Mode distinction is developed further because there really is something new and valuable here. As you've pointed out, the problem is only a few hundred people have experienced the journey from successful tech startup founder to senior exec inside a decades-old, >5K employee global tech giant.

For me it was profoundly eye-opening while being both fascinating and alienating. Once inside the giant, I saw many things not working (of course), but I also saw other things which definitely seemed to kind of work but in entirely 'upside-down' ways from my prior experience. It's like the systems (and ways of thinking behind them) had evolved differently in an alternate universe. They were much more complex, less efficient and strangely opaque. But these bizarre constructions did scale and were (mostly) working, while being unpredictably unreliable in mysterious ways. When asked to run them, or worse, improve/fix them I found myself completely lost due to their alien anatomy. I couldn't fix them because, to me, they were "not even wrong". Yet to everyone around me, they just seemed normal.

Systems like this were the source of that simultaneous fascination and alienation. It caused me to question my core premises about 'how things work', which I'd formed over decades of experience across three successful startups, evoking feelings similar to PG's reference gas lighting. This experience repeated itself several times and the profound feeling of alien "otherness" is the strangest thing I ever experienced in business. Even now, I find it difficult to convey a true sense of. And it's the one thing I've never come across anyone talking about until PG's Founder Mode.

To be clear, I'm not talking about the usual nonsensical org chart stuff one finds in lurking in most big orgs. This is about the deeper structures and dynamics that make complex processes fundamentally work in balanced, self-correcting ways. What I've always called "The right people, in the right process, with the right feedbacks." Echoing PG's post, in my experience, these essential structures can only be fully understood vertically across levels from high to low. And across degrees of granularity from the macro to the micro. As a founder in my startup, instantly jumping between these scales while building or fixing such a system, is when I'd often hear push back from employees or even board members who came from traditional business backgrounds. While obvious to me, they just didn't seem able to see how these disparate things were connected in a deeper, crucially important way. Perhaps being able to see things in this dimension and determine which are essential to the business, is a key part of Founder Mode.

Re: Founder Mode

#262
post #253

Counter-example: Reed Hastings, co-founder and the CEO of Netflix for 22 years, famously did the opposite of what pg is saying. Reed insisted on a particular style of employee freedom & responsibility that IMO set the benchmark for innovating year after year and avoiding micro-managers, even as it scaled up past 2000 engineers. This story still has not been fully told. Reed was closely involved but perhaps the opposi…

The issue is that we don’t have a clear understanding of what “founder mode” truly entails. But, I predict that once Reed Hastings leaves Netflix, the company will begin to decline.

Has the company not already declined? I've been subscribed for years, but I cant remember the last time I watched something on it. The next time I do a round of canceling subscriptions, there is a very real chance it's gone. I have so many other subscriptions, I'm just not sure it's important enough to me anymore to make the cut.

Re: Founder Mode

#263
post #169

Earlier quoted context omitted.

I carefully reviewed all three of these articles. While it's possible that I still missed something, I did not find any material that aligns with the unique point of Paul's post. Nothing that says leaders may have to directly engage with employees underneath their direct reports to understand what is actually going on in the company. It is perhaps possible to interpret these articles as saying anything whatsoever, bu…

Maybe I misinterpreted Pauls blog post, but what i got was: Mangers != Leaders, Leaders != Managers. Management and Leadership need to be well understood in any organization. Good Mangers can be good leaders. The CEO is often the manager of the leadership. This is effectively what they teach in the Harvard MBA.

No, PG knows what a "leader" is and knows how to choose his words. He is identifying the difference between professional managers and founders in the context of running an org

Re: Founder Mode

#264
the "david brooks" of business strikes again. simple, digestible "wisdom" that goes down easy, but is ultimately self congratulatory and too general to be meaningful. reading these posts is exactly the "fake work" paul grahm wrote about avoiding :P

Re: Founder Mode

#265
> 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.

What was the point of the article? Don't delegate important decisions to the people below you, except for when you do? What PG is suggesting is a founder should understand all problem spaces the company exists in, better than any other employee in any position, in perpetuity, because no-one could possibly understand anything better than the founder. If you want labour to scale, you need to let people actually do their job.

Re: Founder Mode

#266
post #265

> 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…

[dead]

Re: Founder Mode

#267

Counter-example: Reed Hastings, co-founder and the CEO of Netflix for 22 years, famously did the opposite of what pg is saying. Reed insisted on a particular style of employee freedom & responsibility that IMO set the benchmark for innovating year after year and avoiding micro-managers, even as it scaled up past 2000 engineers. This story still has not been fully told. Reed was closely involved but perhaps the opposi…

I don't know nearly enough to make a firm claim here but I don't think what you're describing sounds like a definitive counter example. There's a big difference between giving lower level employees creative freedom and letting c level executives have free roam over their domain with little oversight or Founder involvement.

Re: Founder Mode

#268
Some theories about what makes the founder mode effective:

1. It's about incentives. If I own substantial equity of a company and I consider it "my child", the reward for doing a good job will be much greater than if I was a hired manager. The reward is not just financial but also self-worth and reputation.

2. Selection bias. When we talk about "founders", we really mean founders that have built successful companies. This criterion selects only those founders that are remarkably good at their jobs. They are good CEOs in general and also good fits for their specific companies.

3. Deep knowledge of the company and the business. For example, they remember all of the things that were tried but didn't work.

4. They are much more willing to shape the company and have a high degree of control. If I'm a hired CEO, I'm managing someone elses organization, it doesn't feel ok to make drastic changes. My mental setting is that I'm trying to please my boss (shareholders, board). I'm not willing to tinker and try something with a high risk of failure, I want to manage someone else's property seriously and responsibly.

Re: Founder Mode

#269
I think it's related to the job market atm. Everyone is hired in a stretch position at very high comp. This is true for VPs, directors, ICs etc. Because of this it's less viable than it was as a manager to be fully hands off.

Re: Founder Mode

#270
I think there's a property which is hard to describe. But i've seen the opposite property countless times at companies. People, and leaders who are building "cool demos". Things that tell a great story, but somehow never materialize into any material revenue for the company. I've seen these guys move up into higher and higher positions, and yet the projects they build are simply great stories. The higher up the org you go, you'll find leaders who have refined this expertise into a really compelling, really easy to follow along story. But it just never materializes into revenue, and half the time it doesn't even materialie into a real product.

I think what founders know, but what managers do not, is the formula. They're missing one of the key components. The perspective of your customer (what their business is, and the understanding of what is and what isn't important to them), and an understanding of how to deliver it (what capabilities does your customer have, how do they like to do business), and finally a perspective on how to deliver that value (an expertise in product).

Many people are experts at "delivering" or they're experts at understanding their customers PoV, or they're experts at understanding how to do business with those customers. VERY FEW "professionals" have all 3... but you can tell a great story to other non-experts using only 2 of the points, and making up a reasonable sounding point for #3. Or worse, they become experts on selling to YOU (the founder) how to do these things.

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