We Are Not The Same: The Obligatory Post on “Founder Mode”

[Updated 9/23 to include link to a Brian Chesky interview discussing Founder Mode.]

Founder mode became all the rage last week, following a Brian Chesky speech (whose contents are seemingly not available online) and a Paul Graham blog post about that speech.

Since everyone’s weighing in on founder mode, and a few long-term readers have specifically asked for my take, that will be the subject of this post.

Founder-mode is defined in opposition to manager-mode, the conventional wisdom as taught in business schools, about how to manage an organization. The basic idea is that b-school teaches managers to delegate and empower, lest they be guilty of micromanagement. But, in founder mode, founders dive heroically into details penetrating the gaslighting of their value-destroying C-level execs, which include — and this is an actual quote — “some of the most skillful liars in the world.”

Let me start by saying I have a 270+ degree view on this problem: I advise and sit on boards (so a well meaning advice giver), I’ve been the CEO of two startups, and I’ve also been one of those (presumably duplicitous) C-level execs. But the one thing I’ve not been is a founder. I’ve worked with plenty of them. I’ve been appointed CEO of a company with a founder staying on the team for years alongside me.

Without re-stating the article or the debate about it, let’s just cut directly to my take:

First, we are not the same. It’s an excellent point and one that needs stating. Now, usually I cover it from the other side. And I’ve gotten myself into (at times, deep) trouble by not recognizing these differences. As a professional manager:

• You have less moral authority to drive change. It’s not your baby after all. You have positional power, but not necessarily moral authority.
• You are replaceable, some might say disposable. You’ve been hired to do a job and we can hire someone else if and when we need to.
• You get fewer mulligans. You have more short-term accountability. Hired CEOs should think in quarters. Founders (perhaps unless you’re public) should think in years. Or maybe even eras.
• You are assumed to be around for an evolutionary phase. If you’re proven in the $20 to $100M size range, maybe we run with you to $200M. But at some scale, unless you’re absolutely crushing it, the board will ask if now’s the right time to hire the next-phase booster CEO.

Second, founders should therefore manage differently from professional managers. Why wouldn’t they? They have more moral authority. They are forever. They are irreplaceable. They get more “lives” as a result. And they have no “sell by” date stamped on their forehead. They are — and I think A16Z had a lot to do with swinging this pendulum back — presumed to be the best person to run the company. Just knowing these differences, how could you ever argue that founders should run a company the same way as a professional manager?

Third, I find most of the arguments against the conventional management wisdom to be strawmen. In business school, I wasn’t taught to never do skip-level meetings or to only meet with the executive staff. I did learn, from both school and work that “listen bottom-up, direct top-down” was a great way of operating. I wasn’t taught to hire great people and get out of their way. I was taught to try and make a distinction between delegation and abdication because you need to empower executives to take on their own challenges, but still hold them accountable for results.

I wasn’t taught that you couldn’t have 60 direct reports, but we did discuss the pros and cons of a large span of control. (And personally, I’ve always hated 1-1s but that started back when I was in technical support and forced to have them with my manager.) I did learn that managers would game me with metrics (i.e., “what gets measured, gets managed” — and not always in a good way). And I did learn to use metrics and surveys to see inside organizations and cut through the layers and find out what customers and employees were thinking.

I take massive exception to the characterization of C-level execs as gaslighters and liars. Yes, they try to paint their organization in the most positive possible way, but the good ones understand the difference between spin and lies. And they answer direct questions with short, direct answers.

Now I don’t doubt what Graham says is true. That many founders get well meaning advice about becoming more hands-off with the business and that can result in founders feeling pushed up and out of their own businesses. And I do believe that people are too quick to accuse bosses of micromanagement — and bosses too quick not to push back.

Aside/example, back when I was a $1B CMO: “Well WTF is my job anyway if not to ensure all our marketing output is of high quality? The marketing quality buck stops here. And who is some PR flack with two years’ experience to accuse me of micromanagement? And, in a true quote: “you say this is a hostile work environment? Well, let me think. Actually, you know what? I want it to be a hostile work environment for people who write like you do.” Yes, I wasn’t about to win any sensitivity awards, but I did have a sense for what my job was, despite the hinderance of being both C-level and an MBA.

But I feel like it’s a giant game of telephone where the signal gets lost across the hops. Think: yes, you need to empower people more and I might have said “get out of their way,” but I never actually meant to not inspect their work or meet with their direct reports. I suppose the real moral here is to have deep conversations with your advisors. So you get beyond the slogans and soundbites into what they really mean. For what it’s worth, I’d argue that Chesky seems to agree, based on this video released subsequent to the Founder Mode brouhaha.

While Silicon Valley is the world’s finest innovation machine and one of the world’s finest wealth creation machines, I don’t think we’re a paragon of managerial practice. Thus, to infer causality between “founder mode” and “great businesses” is a bridge too far. We make great businesses. We have some great managerial ideas (e.g., OKRs, pod organizations, or going back to shortly after the big bang, The HP Way). We’re strong on disruptive strategies and systematic expansion strategies. But to say that great technology businesses were created because of, irrelevant to, or in spite of our management practices, I’m not sure. Don’t be too quick with invoking post hoc, ergo propter hoc when you see an appealing idea in Silicon Valley.

I’ll close by citing one response to Founder Mode that takes a data driven approach to these questions, based on research with 122 founders, 50 personality elements, and 46 different areas of 360-degree feedback. It’s an article worth reading and concludes that the benefits of founder mode are largely a myth.

Much like the myth — that I first learned about in business school — that captains should grab the yoke and fly the plane alone in an emergency. It turns out that cockpit crews get far better performance by maximizing teamwork and communication in emergency situations. Coincidentally, this practice is called CRM (crew resource management).

I understand the attraction of founder mode. It sounds cool. But while it’s more romantic to imagine the founder grabbing the yoke to drive the company, it’s more effective to have a strong team working together to face challenges.