New Delhi: Investor and Startup Guru Paul Graham’s recently published essay titled “Founder Mode” has been widely discussed by start-up ecosystems across Silicon Valley as well as in India. In the widely-discussed essay, Graham challenged conventional B-school wisdom and favored the concept of “founder mode” instead of the “manager mode”.
Graham’s essay is inspired by Airbnb CEO Brian Chesky and critiques traditional startup advice.
The co-founder of accelerator Y Combinator, Graham calls all leaders to run their companies in the “founder mode” instead of the “manager mode”. He says, “In effect there are two different ways to run a company: founder mode and manager mode.”
The co-founder of accelerator Y Combinator further says, “There are as far as I know no books specifically about founder mode. Business schools don’t know it exists. All we have so far are the experiments of individual founders who’ve been figuring it out for themselves. But now that we know what we’re looking for, we can search for it. I hope in a few years founder mode will be as well understood as manager mode.”
Graham believes that micromanaging a business is bad. “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.”
According to Graham sometimes hiring people and giving them room to do their jobs is like hiring fakers and letting them drive the company into the ground. He says, “Hire good people and give them room to do their jobs. Sounds great when it’s described that way, doesn’t it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground.”
Graham also talked about the idea of being gaslit. “Founders feel like they’re being gaslit from both sides — by the people telling them they have to run their companies like managers, and by the people working for them when they do. Usually when everyone around you disagrees with you, your default assumption should be that you’re mistaken. But this is one of the rare exceptions. VCs who haven’t been founders themselves don’t know how founders should run companies, and C-level execs, as a class, include some of the most skillful liars in the world.”
The co-founder of accelerator Y Combinator said that founder mode will be more complicated than manager mode but it will work better. “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.”
Graham was also of the view that many of the founders have been regarded as eccentric or worse. He says, “Indeed, another prediction I’ll make about founder mode is that once we figure out what it is, we’ll find that a number of individual founders were already most of the way there — except that in doing what they did they were regarded by many as eccentric or worse.”
Graham opines founders to run their companies like that of Steve Jobs. “Curiously enough it’s an encouraging thought that we still know so little about founder mode. Look at what founders have achieved already, and yet they’ve achieved this against a headwind of bad advice. Imagine what they’ll do once we can tell them how to run their companies like Steve Jobs.”