A Founder Is Doing a Different Job Than a Manager
The standard scaling advice tells hired managers how to stay out of the way, not founders how to stay involved.
paulgraham.com · Founder ModeAt a gathering of startup founders last week, Brian Chesky, who leads Airbnb, described how the standard advice for scaling a company had been disastrous for him. Paul Graham, an investor who works with founders like Chesky, writes that he had been puzzling over why so many successful founders told the same story.
Then Graham thought he saw the answer. “What they were being told was how to run a company you hadn’t founded,” he argues. “In effect there are two different ways to run a company: founder mode and manager mode.”
Manager mode, as Graham describes it, is what professional managers are taught to do. You treat each branch of the organization chart as a sealed box. You give each deputy a target and leave how to reach it to them, and you stay out of the specifics, because stepping into the specifics would count as micromanaging, which is considered bad.
That sounds clean and respectful, Graham writes, but it misunderstands what a founder does. A founder built the company. "There are things founders can do that managers can't, and not doing them feels wrong to founders, because it is," Graham writes.
Graham writes that "till now most people even in Silicon Valley have implicitly assumed that scaling a startup meant switching to manager mode." His point is that the switch itself is the mistake.
Questions people ask
What exactly does manager mode look like day to day?
Graham describes it as working only through direct reports. You assign outcomes to those deputies, leave the methods to them, and avoid getting involved in work further down. In management teaching, staying out of those details is treated as respect for autonomy.
Why would that approach hurt a founder-led company?
In Graham's account, Chesky followed that advice and the results were disastrous, and founder after founder at the event said the same advice had damaged their companies. Graham's explanation is that the method is meant for running a company you did not found. For founders, he writes, following it feels broken because there are things they can do that managers cannot.
Does founder mode mean founders should never delegate?
No. Graham writes that founders cannot keep running a large company the way they ran it when it was small, so some delegation has to happen. What changes, he writes, is the rule that a chief executive works only through direct reports. Skip-level meetings that skip over layers of management, he predicts, will become normal.