Y Combinator co-founder Paul Graham has struck a chord with numerous people after sharing his insights on certain Silicon Valley myths about founders managing the businesses they founded. In an essay published on his website, he wrote about a talk given last week by Airbnb co-founder and CEO Brian Chesky.
While introducing, Graham first mentioned that Chesky's talk was on conventional wisdom about how to run larger companies is mistaken. He elaborated upon how Chesky said that certain people told him to "hire good people and give them room to do their jobs," however that did not work out well. So he had to figure out a better way, which he did partly by studying how Steve Jobs ran Apple. (Also Read: Elon Musk breaks down how X's algorithm really works and why it gets it wrong)
"Why was everyone telling these founders the wrong thing? That was the big mystery to me. And after mulling it over for a bit I figured out the answer: what they were being told was how to run a company you hadn't founded — how to run a company if you're merely a professional manager. But this m.o. is so much less effective that to founders it feels broken. There are things founders can do that managers can't, and not doing them feels wrong to founders because it is," wrote Graham in his essay.
Founder mode vs manager mode, according to Paul Graham
In Silicon Valley, most people have assumed that the former is necessary in order to scale up a firm. However, he continued, founders feel that this advice is shattered because they are able to achieve things that managers cannot. In the meantime, neither business schools nor literature teach the founder mode. But he claimed that some of its fundamentals—which advocate giving direct reports instructions and staying out of the specifics to avoid coming across as micromanagers—can be deduced from the issues that the founders faced when operating in manager mode.
{{/usCountry}}In Silicon Valley, most people have assumed that the former is necessary in order to scale up a firm. However, he continued, founders feel that this advice is shattered because they are able to achieve things that managers cannot. In the meantime, neither business schools nor literature teach the founder mode. But he claimed that some of its fundamentals—which advocate giving direct reports instructions and staying out of the specifics to avoid coming across as micromanagers—can be deduced from the issues that the founders faced when operating in manager mode.
{{/usCountry}}He added, "Whatever founder mode consists of, it's pretty clear that it's going to break the principle that the CEO should engage with the company only via his or her direct reports. 'Skip-level' meetings will become the norm instead of a practice so unusual that there's a name for it. And once you abandon that constraint, there are a huge number of permutations to choose from."
In the end, he added, "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."