Tag Archives: Y Combinator

False Choice – Founder versus Manager

False Choice - Founder versus Manager

GUEST POST from Robyn Bolton

Paul Graham, cofounder of Y Combinator, was so inspired by a speech by Airbnb cofounder and CEO that he wrote an essay about well-intentioned advice that, to scale a business, founders must shift modes and become managers.

It went viral. 

In the essay, he argued that:

In effect there are two different ways to run a company: founder mode and manager mode. Till now most people even in Silicon Valley have implicitly assumed that scaling a startup meant switching to manager mode. But we can infer the existence of another mode from the dismay of founders who’ve tried it, and the success of their attempts to escape from it.

With curiosity and an open mind, I read on.

I finished with a deep sigh and an eye roll. 

This is why.

Manager Mode: The realm of liars and professional fakers

On the off chance that you thought Graham’s essay would be a balanced and reflective examination of management styles in different corporate contexts, his description of Manager Mode should relieve you of that thought:

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.

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.

Later, he writes about how founders are gaslit into adopting Manager Mode from every angle, including by “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.”

Founder Mode: A meritocracy of lifelong learners

For Graham, Founder Mode boils down to two things:

  1. Sweating the details
  2. Engaging with employees throughout the organization beyond just direct reports.  He cites Steve Jobs’ practice of holding “an annual retreat for what he considered the 100 most important people at Apple, and these were not the 100 people highest on the org chart.”

To his credit, Graham acknowledges that getting involved in the details is micromanaging, “which is bad,” and that delegation is required because “founders can’t keep running a 2000 person company the way they ran it when it had 20.” A week later, he acknowledged that female founders “don’t have permission to run their companies in Founder Mode the same way men can.”

Yet he persists in believing that Founder, not Manager, Mode is critical to success,

“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 instead of John Sculley.”

Leader Mode: Manager Mode + Founder Mode

The essay is interesting, but I have real issues with two of his key points:

  • Professional managers are disconnected from the people and businesses they manage, and as a result, their practices and behaviors are inconsistent with startup success.
  • Founders should ignore conventional wisdom and micromanage to their heart’s content.

Most “professional managers” I’ve met are deeply connected to the people they manage, committed to the businesses they operate, and act with integrity and authenticity. They are a far cry from the “professional fakers” and “skillful liars” Graham describes.

Most founders I’ve met should not be allowed near the details once they have a team in place. Their meddling, need for control, and soul-crushing FOMO (Fear of Missing Out) lead to chaos, burnout, and failure.

The truth is, it’s contextual.  The leaders I know switch between Founder and Manager mode based on the context.  They work with the passion of founders, trust with the confidence of managers, and are smart and humble enough to accept feedback when they go too far in one direction or the other.

Being both manager and founder isn’t just the essence of being a leader. It’s the essence of being a successful corporate innovator.  You are a founder,  investing in, advocating for, and sweating the details of ambiguous and risky work.  And you are a manager navigating the economic, operational, and political minefields that govern the core business and fund your paycheck and your team.

Image credit: Pexels

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