Through Chesky’s words, Graham conveys that the professional management advice startup founders receive during the growth phase often leads them to failure. The most emphasized advice is to “hire good people and give them room to do their jobs.” The idea is, “Hire good and successful employees, give them space to do their jobs. Otherwise, you’ll become a micromanager and fail.” Chesky reportedly received this advice, implemented it, and found the results devastatingly bad.

As someone who has consumed Brian Chesky’s talks and writings, I tried to understand this statement beyond the simple proposition that “hire good people and give them space” is bad advice. I recalled his podcast with Lenny. In this podcast, he talks about how founders need to dive into details and describes himself as a CPO (Chief Product Officer) rather than a CEO. He says he’s involved with every detail and part of his product. In other words, he entrusts the company to a founder mentality rather than a manager mentality.

The essay mentions that Brian set aside the managerial advice he received and instead researched and applied what Steve Jobs did with his founder mentality. This brings me to a Steve Jobs clip I watched just last week.

Steve Jobs says that people who manage growing companies are sales and marketing people (sometimes the good profiles we hire), product people are sidelined (sometimes the founders who should be focused on the product), the monopolized product understanding (perhaps Airbnb’s crisis period) focuses on sales and marketing, and this leads companies to destruction. He gives examples of IBM and XEROX. He said that the people managing these companies (once startups) had no idea about good products.

I think Chesky re-evaluated Steve Jobs’ product approach and positioned his entire playbook around the product. In fact, I’m not just thinking this, he defines it himself as “Airbnb’s new playbook” in Lenny’s podcast.

Returning to the essay, Graham mentions that all YCombinator entrepreneurs, whom we can call the world’s most effective founders, received similar advice and got bad results, discussing this all day. When PaulG wondered why everyone gives founders wrong advice, he came to the following conclusion.

The advice entrepreneurs (founders) receive is advice for professional managers, not for founders. Being a founder is not the same as being a professional manager. He mentions that almost all MBA programs and books give advice about management. There are no books that give advice and information about being a founder.

Paul G introduces two great terms here: “founder mode” and “manager mode”. He states that until now, most firms in Silicon Valley thought that growth meant entering manager mode. The traditional understanding assumed that as a startup grows, it needs to transition to a “professional” management style. This means transitioning from a company run by the founder to one run by professional managers.

He mentions that the advice positions employees hierarchically, communicates what to do through reports, and tells them not to deal with the process. This is exactly what I’ve read in the last 10 books. For example, in Dan Martell’s BuyBackYourTime book, it says to tell employees what, not how. Although in that book, it was suggested that after telling what, employees should come to the founder with 3 suggestions and one recommendation. To be honest, I’m a bit confused :)

Reading this, a contradiction came to my mind. Steve Jobs talks about the importance of working with A players. Chesky, on the other hand, takes Jobs as an example but says that hiring A players and giving them space is bad advice. But Jobs emphasized that hiring talented people was critical, but he believed in directing and motivating them. He didn’t do this under a hierarchy.

The article mentions that Steve Jobs had a retreat every year with 100 people he considered important in the company. These 100 people weren’t the top 100, but 100 people from different levels, which is another example showing the difference between founder mode and manager mode.

In traditional management, CEOs only communicate with top-level managers. This is manager mode. In founder mode, you should communicate regardless of level. Similarly, founders can have meetings by skipping one level down.

When I researched these retreats a bit, I came across the following quote from Steve Jobs: “These retreats give employees in the company the opportunity to work side by side with founders and share their ideas in a relaxed environment.”

Presumably, if this were in manager mode, managers and their teams would have meetings, and the result would be communicated to the CEO with an ugly powerpoint (presumably keynote) presentation, and nothing would be concluded.

Of course, he notes that there will be a difference between managing a company of 20 people and one of 2000 people. He emphasizes the dynamic and adaptable nature of founder mode. This mode should evolve with the company’s growth, but should continue to preserve the founder’s vision and impact. Despite being complex, he argues that this approach is more effective.

I think Paul G’s advice here is a bit superficial :) He himself says that many founders unknowingly apply founder mode management, and we’ll learn the details in the future. The founder approach is an approach that’s unappreciated in the last 10 years and now, but will be advised about in the future. Paul Graham is excited that there’s a lot to discover and learn in founder mode, drawing attention to the yet undiscovered potential of founder mode.

In the startup ecosystem I’m in, I think founders share very little. There’s usually such a pattern; when in the early-stage, while looking for investment, lots of sharing, great ideas come. Suggestions and criticisms can be easily written to the ecosystem and people. Everyone approaches positively as incoming. There’s more talk about product excitement. After getting investment, these shares stop during the growth phase. You’ll see that 9 out of 10 startup founders don’t talk about the product and their products. No one talks about bad experiences. As incoming, they speak away from criticism and politically. You can’t feed enough from the podcasts and interviews they attend, it’s not as real as before. Usually after they sell their business or get old, maybe after they have nothing left to lose, they continue to feed and share information again. This time they get lynched :) Most founders need to listen to this advice earlier. That’s why I hope realistic shares made by open minds like Brian Chesky increase.