Why everyone in tech is talking about ‘founder mode’
Paul Graham (left) and Brian Chesky (right) said founders should be hands-on, not delegate too much.
As the internet puts brat summer to bed, founder mode is taking center stage.
On Sunday, Paul Graham, a writer and the founding partner of startup accelerator Y Combinator, penned a 1,050-word essay that has taken tech and business communities by storm.
He asked: Why are startup founders directed to run their large companies like managers, delegating to their direct reports, rather than getting involved like they did in earlier stages of their companies?
Graham said operating in “manager mode” over “founder mode” is anathema to companies.
“What this often means is to hire professional fakers and let them drive the company into the ground,” he wrote.
A prime example of a tech titan embracing founder mode is Nvidia cofounder and CEO Jensen Huang, who has 60 direct reports and still eats in the company cafeteria.
Graham credited Airbnb cofounder and CEO Brian Chesky for sparking the idea and most of the arguments in the blog. At a recent Y Combinator event, Chesky spoke about how conventional advice on building and scaling up a startup is broken. He said, as he has before, that investors and outside managers just don’t have the insights that founders do. He said that splitting companies into organizational chart tiers — isolating founders from anyone but their direct reports — often kills the business.
While belittling manager mode might shock management consultants, Graham’s post tracks with Silicon Valley’s modus operandi. Tech culture has always venerated founders and lean teams. Venture capitalists try to outdo each other in funding rounds to appear the most “founder friendly” — investors who won’t meddle much. Would-be founders dream of the day when they can peel away from drab Big Tech and start their own Next Big Thing, unconstrained by bureaucracy.
And it’s a long weekend with little else going on online. The internet craves buzzy nomenclature, dividing people into camps, and the chance to rake in the likes with a viral follow-on post.
‘Gaslit’ founders
Chesky’s talk hit another nerve with the founders in the room and then with Graham’s online readers. The Airbnb exec said founders are constantly being “gaslit” — first by outside voices asking them to run the company like managers, and then by employees who don’t like the manager’s way.
Chesky is the only remaining Airbnb cofounder at the company, and while much of his leadership has been praised — he led a major round of pandemic-era layoffs with empathy and has tried to refocus the hospitality giant — the stock has fallen over 15% since its 2020 initial public offering.
There are also notable exceptions to positive founder mode: Sam Bankman-Fried and Elizabeth Holmes were both founders who operated with autonomy, then ignominy.
On the other hand, Satya Nadella and Tim Cook are both outside managers touted with turning their companies around — in both cases, building on the legacies of strong founders.
Thinkfluencers’ time to shine
Graham’s essay brought Chesky’s speech outside the YC room and into the rest of the world, where it exploded online. Now, investors, wannabe thinkfluencers, comedians, and founders are all weighing in.
One basketball star-turned-investor, Baron Davis, likened being a founder to being an athlete.
https://mobile.twitter.com/BaronDavis/status/1830774690589364372?ref_src
Another investor was quick to come up with one of the tastiest examples of founder mode: Costco’s deal of the century, which has withstood inflation thanks to one cofounder’s clear instructions to his CEO: “If you raise [the price of] the effing hot dog, I will kill you.”
A tech newsletter writer pre-empted what dating a tech bro would look like this week.
https://twitter.com/netcapgirl/status/1830706744307167271/photo/1?ref_src
Some users rang warning bells about what’s next for Tech Discourse, now that founder mode is officially a hit.
Custom domains have been purchased.
And of course, unofficial merch has already dropped.
https://twitter.com/subh10/status/1830430892604653792/photo/1?ref_src
