Paul Allen’s Post

Managing your startup or leading it? This is the question many founders find themselves grappling with nowadays. The common belief is that a startup initially needs founders to lead, take risks, and innovate. Once established, they are expected to switch off Founder Mode and turn on Manager Mode. Paul Graham, an English-American computer scientist, writer, entrepreneur, investor, and most notably the co-founder of the startup accelerator Y Combinator, recently penned an essay on Founder Mode. “What they were being told was how to run a company you hadn't founded—how to run a company as a mere professional manager. But this approach 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," he said. Founder Mode vs. Manager Mode There are essentially two ways to run a startup: Founder Mode and Manager Mode. Founder Mode is a creative, visionary, and strategic mindset. It’s about thinking big, setting long-term goals, and imagining the future of the company. Manager Mode is operational, task-focused, and structured. It involves managing teams, day-to-day tasks, and focusing on immediate objectives. Many founders mistakenly believe that scaling their startup requires a shift to Manager Mode, which can be detrimental. Most business schools don’t even acknowledge that this distinction exists. They teach that: “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.” The notion of hiring good people and giving them the freedom to do their job sounds ideal, but in practice, it can lead to hiring professional fakers who eventually steer the company into the ground. Founder Mode breaks the conventional wisdom that a CEO should only engage through reports and skip-level meetings. Elon Musk is a prime example of a founder who doesn't follow this traditional approach. The reality is, founders can't manage a 2,000-person company the same way they did when it had only 20. Delegation becomes necessary, but Founder Mode, while more complicated, often proves to be more effective. What do you think? The Essay: https://lnkd.in/dWxmR4hc

Are you a founder or are you a manager? Paul Graham writes "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. There are as far as I know no books specifically about founder mode. Business schools don't know it exists. All we have so far are the experiments of individual founders who've been figuring it out for themselves. But now that we know what we're looking for, we can search for it. I hope in a few years founder mode will be as well understood as manager mode. We can already guess at some of the ways it will differ. 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." Most of us founders (I qualify to call myself one) are tuned to risk taking unlike managers who spend eons planning without knowing how to do things. Quoting Master Yoda here “Do or do not. There is no try (or manage)" #startup

How do you run startups? "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." Founder mode or Manager mode? co-founder of Y Combinator Paul Graham just penned one of this essays on this point. If you have never read Paul's essays, they are in my view extremely provoking, interesting and empowering. When you get investors or someone telling you how you should run your startup - ask yourself, what patterns does this person have to tell you what and how. Are you pre-product market fit or post? Be careful with who you take advice from including from VCs. Surround yourself with other founders and maybe some investors who actually know from experience how to successfully build companies. Thanks for the shout out on this essay Caffeine Daily https://lnkd.in/eDXE-MAM

Not all organizations need to be run the same. Leaders and CEOs are often given the same insight: "Hire good people and get out of their way." That may work for "professional" managers who have a shallow understanding of different domains under them, but for founders as well as leaders with deep domain knowledge, it's often better to dive deeply into issues and solve problems together with the team. This is called "Founder Mode." It can be much more effective than hiring good people and hoping that problems get solved by everyone else. Paul Graham, one of the best thinkers about startups, here reflecting with his thoughts on this topic, after Brian Chesky's insightful YC talk this month. https://lnkd.in/gDkZRjQb

CEO vs Founder. People in my information bubble are discussing an article by Paul Graham https://lnkd.in/dxfn5CBm “Brian Chesky's talk at a YC event challenged conventional wisdom on scaling companies. He argued that typical management advice, like “hire good people and let them work,” harms startups. Instead, Chesky proposed “founder mode,” where founders stay deeply involved, inspired by Steve Jobs' approach. This method, still evolving, appears more effective than traditional management.” In my humble opinion, a founder and a CEO have different methodologies for achieving effectiveness. A founder manages assets and a CEO manages operations. The founder is interested in investing as little as possible and getting as high a return on investment as possible. There is usually a risk involved. For the CEO to be effective he needs as many operational resources as possible to mitigate risk and minimize market risk. The best way to minimize risk is not to take risks, that is, not to engage in a risky strategy. If one person tries to hold these two opposing paradigms in their head, it leads to internal conflict, frustration and unwarranted business decisions. Unfortunately, startups are small businesses. And the vast majority of small businesses are run by CEOs and founders in the same person. Only after they become a large company does it become possible to split these functions between two different people. One of the approaches I've proven to solve this problem is to realize at every moment in time from which position you are making a particular decision. If your business is a “one-actor theater”, a simple understanding of “what role I'm in right now” has a good effect on business results. 

If you haven't had time to read Paul Graham's latest article on "Founders Mode", please go read it. It's worth your time. Cheers to all the Founders out there who have stucked to their guns. The following 3 points made by PG reasonated with me and I am interested to hear about what you think. For stories about hiring professional fakers and skillful liars (PG's words. see below) who led the company astray, please send them to my Whatsapp or DM me. Compiling these stories for a book idea to document Startup cock-up war stories. 1. "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." 2. "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." 3. "One theme I noticed both in Brian's talk and when talking to founders afterward was the idea of being gaslit. Founders feel like they're being gaslit from both sides — by the people telling them they have to run their companies like managers, and by the people working for them when they do. Usually when everyone around you disagrees with you, your default assumption should be that you're mistaken. But this is one of the rare exceptions. 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." https://lnkd.in/gfvEek_C

Interesting point from Paul Graham. Having seen first hand on how a founder of a 400 people company tried to build up middle management and struggled with "founder mode" vs "manager mode", handling this balance is critical to scaling up the people side. Here are the key insights 1. There are two distinct ways to run a company: "founder mode" and "manager mode." Conventional wisdom has largely assumed that as startups scale, they need to transition from founder mode to manager mode. However, this transition often leads to suboptimal results. 2. In manager mode, the company is run in a modular way, treating subtrees of the org chart as black boxes. The CEO tells direct reports what to do and lets them figure out how, without getting involved in the details. This approach, while sounding good in theory, often leads to hiring "professional fakers" who can drive the company into the ground. 3. Founders who have tried to switch to manager mode as their companies grew have often found it damaging. They feel gaslit from both sides - by those telling them to run their companies like managers and by the people working for them when they do. 4. Founder mode breaks the principle that the CEO should only engage with the company via direct reports. "Skip-level" meetings become the norm. This allows for greater flexibility and adaptability in running the company. 5. Steve Jobs' annual retreat for the 100 most important people at Apple (not necessarily the top 100 on the org chart) is an example of a founder mode practice that can make a big company feel like a startup. However, it's rarely seen in other companies. 6. Founder mode will be more complicated than manager mode, as it requires figuring out the right balance of delegation and autonomy. However, it will also work better, as evidenced by the success of individual founders who have been moving towards it. 7. Many successful founders were already practicing elements of founder mode, even if they were seen as eccentric for doing so. Imagine what founders could achieve if they were given guidance on how to run their companies more like visionary founders (e.g. Steve Jobs) rather than professional managers. Founder mode represents a paradigm shift in how we think about running companies as they scale. By learning to better balancing founder mode vs manager mode, we may be able to unlock even greater potential in startups and help founders maintain the agility, vision, and culture that made their companies successful in the first place. https://lnkd.in/gi9gk5iH

"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." Please forgive the Paul Graham link: this is a genuinely good point about running companies. And I don't think it's limited to startups: the dichotomy isn't between "founder mode" and "manager mode", but between purposeful companies built to be communities aiming at a focused goal and institutions that can move slower and less efficiently. Skip-level meetings should be normal. Flat hierarchies are good. Everyone in a company should have the ability to have the ear of the CEO if they need it - and, likewise, the CEO should be able to freely talk to anyone in a company. A good idea can come from anyone; people with exceptional talent can show up anywhere on the org chart. Less regimentation and less bureaucracy allow those people to flourish - and, in turn, allow the organization to make better choices. It's also a representation of what matters to an organization. Hierarchies emerge from people who care about hierarchy and chains of command; flatness emerges from people who just care about getting stuff done. The latter, in my view, always makes for a better place to work.

"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." Authored by Paul Graham, this well-articulated essay introduces a concept called Founder Mode- a way in which Founders should run their company (which is different from how Managers typically run companies). Link: https://lnkd.in/gwytEtQN #founders #managers #startups

A good post from Paul Graham that raises a relevant question. Startups are often advised to "hire good people and give them space to do their work". Sounds like the right strategy. But it doesn't work for #startups. He says - In effect, there are two different ways to run a company: founder mode and manager mode.  There are things founders can do that managers can't, and not doing them feels wrong to founders because it is. So what is it that Founders do that's different from professional managers? Paul says we don't know yet. Steve Jobs would hold a retreat of 100 of his best people every year. Not senior managers or organizational leaders; but 100 people who made Apple tick. That may have worked for Apple. Your startup may require a different strategy. I think there are two critical phases a startup has to surpass before becoming an organization. 1) A time when a startup starts gaining customers outside of the founder's network 2) A time when the organization starts functioning without the founder's direct intervention What do you think Founders have to do differently from Managers to make their startup work well? https://lnkd.in/gMVRn5H3 #entrepreneurship #strategy