Founder mode vs. manager mode

Paul Graham's essay begins by setting the scene. In a dimly lit room, with the weight of a hundred battles etched into the faces of the audience, Airbnb CEO Brian Chesky stepped onto the stage at a Y Combinator event and spoke words that cut through the fog of conventional wisdom like a well-honed blade.

The air was thick with anticipation, and when he was done, there was a stillness, a rare moment when the noise of Silicon Valley’s constant chatter fell silent.

Chesky didn’t just give a talk; he delivered a truth that every founder in that room felt deep in their bones. Ron Conway, the investor who never stops writing, was so struck that he forgot to take notes. It was that kind of moment, the kind you don’t forget.

The lesson was simple and brutal. As Airbnb grew, Chesky followed the advice that so many well-meaning advisors had given him: hire good people and give them room to do their jobs. It’s the kind of advice that sounds good over a drink, the kind that comes with a knowing nod and a pat on the back. But in practice, it was a disaster. The company started to drift like a ship without a captain, and Chesky knew he had to find another way.

So he did what any sensible man in his position would do — he looked to Steve Jobs, a man who knew a thing or two about building something that lasts. Chesky started to run Airbnb like Jobs ran Apple, with an iron grip on the wheel, and it worked. Now, Airbnb’s free cash flow margin is among the best in the Valley, a testament to the power of doing things your way.

As Chesky spoke, you could see the recognition in the eyes of the other founders in the room. They had been through the same thing, had heard the same advice, and had watched as it led their companies down the wrong path. The question that hung in the air was why? Why had they all been told the wrong thing?

The answer, when it came, was as clear as day. The advice wasn’t meant for them. It was meant for the managers, those hired guns brought in to run companies they didn’t build. For founders, who had poured everything into their creations, this advice felt wrong because it was wrong.

There are two ways to run a company: founder mode and manager mode. For too long, says Paul, people in the Valley have assumed that scaling a startup meant switching to manager mode, letting go of the reins, and stepping back. But for founders, this approach felt like a betrayal of everything they had built.

Founder mode is different. It’s hands-on, it’s personal, and it’s not afraid to break the rules. It’s not about hiring good people and stepping aside; it’s about staying involved, about knowing every detail of your company, and about being unafraid to skip over layers of management to get things done. It’s about running a company the way you did when it was just you and a handful of others, back when every decision felt like life or death.

Steve Jobs understood this. He didn’t run Apple like a manager; he ran it like a founder, even when it grew into a behemoth. He would gather the 100 most important people in the company, not by rank, but by their importance to the mission, and he’d bring them together for a retreat. It was unorthodox, but it worked. It kept the company sharp, kept it feeling like a startup even as it grew.

In the end, founder mode is still a mystery, something that we’re only just beginning to understand. But one thing is certain: it works. And once we figure it out, once we can teach founders how to run their companies like Jobs instead of some professional manager, there will be no stopping them.

The room, filled with some of the most successful founders in the Valley, buzzed with the realization. They had been fighting against the current, trying to fit into a mold that wasn’t made for them. But now, they could see a different way, a way that played to their strengths, that let them lead their companies the way they were meant to. It was a good thought, a strong thought. And it could make all the difference.