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Founder Mode

paulgraham.com

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Re: Founder Mode

#491

Post by IAmGraydon »

I’m at a loss as to how this is getting so many upvotes. A typical hierarchy is bad because you keep hiring “professional fakers”? I don’t know…maybe work on that? The hierarchical structure is key to the most powerful companies, organizations, militaries and governments on earth. But the guy who ran AirBNB was bad at hiring so now we can reject all of that.

No. The hierarchy works. There are two key things most managers miss. Learn the skill of hiring and firing well and (perhaps more importantly) incentivize them properly.

Re: Founder Mode

#492

Post by TimTheTinker »

ozim wrote: post #456
gregfjohnson wrote: post #446

I grew up seeing founder mode first-hand. My dad founded Celestron, and he operated just as Paul is describing. At my current company, I see the CEO doing the exact same thing, which gives me great hope. Huge contrast from my previous start-up, for which I have great anti-hope unfortunately. (Current company is Zap Surgical Systems, with Dr. John Adler as the founder.) I've seen John everywhere, all day every day. I'…

I don’t think it is a bad outcome with misusing a concept. Because it does not affect those truly embracing it. Having an excuse is not going to save bad business run by bad people. It might let them slide a bit more but ultimately it is not doing the job for them.

But it does make it more difficult to talk about a concept when it's been (re)defined and argued about and gaslit about instead of what PaulG is doing: providing a simple definition backed by some real-world examples that actually are founder-mode being done more or less right.

Re: Founder Mode

#493

Post by portn0y »

gregfjohnson wrote: post #446

I grew up seeing founder mode first-hand. My dad founded Celestron, and he operated just as Paul is describing. At my current company, I see the CEO doing the exact same thing, which gives me great hope. Huge contrast from my previous start-up, for which I have great anti-hope unfortunately. (Current company is Zap Surgical Systems, with Dr. John Adler as the founder.) I've seen John everywhere, all day every day. I'…

That crucial thing was probably being lucky enough to be born 50 years ago before all the low hanging work we take for granted had been done.

Re: Founder Mode

#494

Post by fakedang »

gregfjohnson wrote: post #446

I grew up seeing founder mode first-hand. My dad founded Celestron, and he operated just as Paul is describing. At my current company, I see the CEO doing the exact same thing, which gives me great hope. Huge contrast from my previous start-up, for which I have great anti-hope unfortunately. (Current company is Zap Surgical Systems, with Dr. John Adler as the founder.) I've seen John everywhere, all day every day. I'…

> His footnote has a painful resonance: "I also have another less optimistic prediction: as soon as the concept of founder mode becomes established, people will start misusing it."

Exactly what happened with Product Market Fit. With the current AI buzz, I see everyone and their nana preaching about how their product has PMF. If you had PMF, you'd have onboarding teams, not sales teams.

Re: Founder Mode

#495

Post by computerdork »

bongodongobob wrote: post #486
bikamonki wrote: post #473

A friend bootstrapped his fastfood tiny chain to 5 locations and a couple of mill in revenue in two years. Low financial leverage, happy customers. An expert told him to hire experts to keep growing it. Now he's down to two locations, high in debt and uncertainty. Corpo bois are not founders, they know nothing of growing a startup. The have never produced value from thin air. They are just good at playing the corpo r…

What did they do that was so bad that it cost him 3 locations?

Am also wondering if part of the problem might have been timing. Did have 5 locations during the pandemic?

Re: Founder Mode

#496

Post by tgtweak »

campbel wrote: post #471
tgtweak wrote: post #465

You do need to hire great people and give them room - but that doesn't mean you ignore them and let them operate their business unit like a separate organization... You need to be involved as a CEO or other key decision maker. This philosophy of involvement follows through the entire org structure not just from CEO to the farthest position down the org tree. Let's not let this be a rug to sweep poorly-behaving founde…

If you want to scale out, you need to have other be responsible for chunks of the operation. And they won't be responsible unless they have autonomy. This doesn't mean 100% free reign, but it does mean giving up a certain amount of control.

"trust but verify" goes a long way here, and simple management techniques like goal set and review (OKRs, etc) address the "professional fakers" issue - ironically one of the first things you should learn in formal management.

As a founder and later a C suite exec - you really can't make this black and white. As a founder there is no greater feeling than hiring someone and finding out they can do a subset (ideally a large subset) of your tasks better and more efficiently than you. What you can not/should not do is walk away from that area of the business and never look back. You should still be invested and collaborative. A creative founder that can think from first principles should be able to contribute positively to any level of initiative even when they are not the most experienced person in the room. They should also be able to convey why an idea should buck convention and understand the consequences of it from the domain experts they hired.

Re: Founder Mode

#497

Post by rawgabbit »

gregfjohnson wrote: post #446

I grew up seeing founder mode first-hand. My dad founded Celestron, and he operated just as Paul is describing. At my current company, I see the CEO doing the exact same thing, which gives me great hope. Huge contrast from my previous start-up, for which I have great anti-hope unfortunately. (Current company is Zap Surgical Systems, with Dr. John Adler as the founder.) I've seen John everywhere, all day every day. I'…

I don’t believe it is that mysterious or revolutionary. What PG is describing is the “optimization of local maximum” problem.

Founders focus on the strategic goal. Managers focus on tactical goals. Rules and processes are put in place to efficiently achieve these tactical goals. The problem is, in certain situations, these local process are at odds with the broader goal. Only the Founder has the authority to break the bureaucratic rules.

My favorite example is from the film Zulu when the British quartermaster adamantly dispenses ammo per the rule book and a long queue of desperate soldiers form up. Nevermind the British were out numbered 10 or 20 to 1 and should be firing their rifles as quickly as possible and using up all their ammo as quickly as possible.

https://youtu.be/8xjCX_TXkyU

Re: Founder Mode

#498

Post by KaiserPro »

crop_rotation wrote: post #483
Animats wrote: post #479

Much of this hinges on what the company does. AirBnB is basically a web site and a customer service operation. They don't own or run hotels. Netflix started like that, but now they also create content. The web site part is basically operating a server farm with a halfway decent interface. The negotiation with content providers part is crucial to success. Netflix also creates content. That works more like a VC operati…

> an auto company, or an aircraft company, In both we are seeing how professional management can decimate a company with several decades of history. e.g Boeing.

> professional management

Management incentivised to grow stock market value. look, if the incentives are wrong then you get distortions. A good example with "founders" is wework.

Wework's innovation was two fold:

zeroth) vast funding

one) run the company like a mystery cult

two) Have beer in a shared office

Everything else is exactly what a shared office company does. WeWork's entire incentive was to grow as fast as possible and get as many customers as possible. No one cared about business fundamentals, because WeWork wasn't a buisness. It was a commodity to be traded by softbank.

Buisness fundamentals have been royally fucked by changes in finance. Stock buybacks, limp monopoly actions, toothless market regulation, have all meant that profit is one thing, but share price is everything.

The capitalism that made boeing et al is not the capitalism that we live in now.

Re: Founder Mode

#499

Post by maayank »

IAmGraydon wrote: post #491

I’m at a loss as to how this is getting so many upvotes. A typical hierarchy is bad because you keep hiring “professional fakers”? I don’t know…maybe work on that? The hierarchical structure is key to the most powerful companies, organizations, militaries and governments on earth. But the guy who ran AirBNB was bad at hiring so now we can reject all of that. No. The hierarchy works. There are two key things most mana…

How to fire well?

Re: Founder Mode

#500

Post by openrisk »

There better be a "founder mode" because "manager mode" is just a proxy for a firm that is run by lawyers, accountants, consultants and bankers. Sharp operators all of them, but none of them cares one iota what the organization actually does.

Management of an enterprize (in general) aims to identify and exercise available options for "creating value" - in whatever terms that is measured. This "options space" is vast and founders versus managers are intimate with very different subsets.

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