Paul Graham – I’m not buying what you’re selling. Why are you asking us to suspend belief that management doesn’t work and only founders can lead companies to success?
I read through the founder mode blog post, and it left me profoundly sad. Sad? Yes, because Brian Chesky, at least as Paul Graham portrays the talk (I can’t seem to find a video of the talk anywhere), is bucking conventional wisdom to avoid managing and advocating for more of a hands-on approach as a leader. The so-called ‘conventional wisdom’ they disguise is that this advice doesn’t scale and leads to worse outcomes. Propping up “founder mode” as the next great leadership style is a fool’s errand.
I’m sad because Paul seems to selectively forget success cases for non-founder run companies, e.g. Microsoft (Satya), Apple (Tim), Amazon (Andy). These are not small companies with a combined market cap of ~$8 T. That’s $8,000,000,000,000. What are these “manager mode” companies doing from which start-ups could draw inspiration? Obviously, the above companies have been successful, what is the logical basis for this argument?
The key failure in logic in the argument of “founder mode” vs “manager mode” is conflating a company being “run into the ground” that conventional management simply doesn’t work. Looking deeper, a great manager will dissect and investigate why. Is it an easy process to investigate what’s broken? No. However, building a company whose success is inextricably bound to a particular leader (founder mode) is super dangerous (especially to shareholders).
The danger of relying solely on a single leader highlights the need for robust systems that transcend any one individual. A successful way to ensure smooth operation in business is creating auditing mechanisms to roll-up status and risks in various business units. These recurring auditing events help leaders to stay informed and ask questions to tweak execution (a project is taking too long, or is going off the rails) and act as a forcing function to hold the business leaders accountable to the reporting and risks. Unfortunately, it takes courage to hold people accountable.
A case study, when I worked at Amazon, there was great company lore around how Jeff Bezos would show up to six-page review meetings. He would allow the least senior people (after reading for 20 mins) to give comments on the doc before asking his questions. This gives oxygen for other ideas and sets an example that Jeff isn’t the most important person in the room. Jeff Bezos, at Amazon scale, couldn’t possibly dive deep into each business frequently. He was able to scale and trust leaders by establishing mechanisms which improved the successful outcomes (e.g. six pager reviews and operations / budget planning). Examples of great successes that have been driven through the six page process are Kindle, Amazon Prime, and every Amazon product which has launched since 2004. These documents because of the rigorous review process drive clarity of thought in the decision making process of what to build for the customer, how and why.
The success of Amazon’s structured approach raises a critical question: why then, should we rely on the singular vision of a founder when a well-designed management system can achieve so much more? Why am I skeptical of “founder’s mode”? Because I have worked at companies where the founder was deeply entrenched in “founder mode” philosophy. Every new product idea and innovation had to pass through this founder. Being the single decision maker and hands-on certainly didn’t improve the outcomes because the company still struggles to this day.
A more nuanced thought around “founder mode” is whether companies are creating the right structures (and mechanisms) to succeed even in the absence of their founders.