Y Combinator co-founder Paul Graham made headlines Sunday for trying to break the Silicon Valley convention that founders run the companies they start.
In an essay posted on his website, he recalled a talk last week from Airbnb co-founder and CEO Brian Chesky that many attendees said was the best speech they had ever heard.
“The theme of Brian’s talk was that the conventional wisdom about how to run a big company is wrong,” Graham writes. “As Airbnb grew, well-meaning people advised him that to scale the company, he needed to run it a certain way. Their advice, optimistically, was ‘hire great people and give them room to work.’ He followed this advice, with disastrous results.”
So instead, Chesky added, he studied what the late Apple co-founder Steve Jobs did when he was running the company.
The talk was attended by many Y Combinator-backed founders, who told Graham they received the same common sense that delivered similar results.
“Why everyone was telling founders the wrong things was a big mystery to me,” he writes. “After some thought, I found the answer: they were telling them how to run a company they didn’t start – how a mere professional manager would run a company.”
Graham argued that you can run a company in either manager mode or founder mode. Most people in Silicon Valley have assumed that the former is necessary to scale a startup. But he added that this advice is “broken” for founders because founders can do things that managers can’t.
Founder mode, on the other hand, isn’t taught in books or business schools, but he said some of its principles can be inferred from the problems founders faced in manager mode, which teaches you to tell your direct reports what to do and not get involved in the details to avoid coming across as a micromanager.
While it seems fine on paper, Graham says manager mode often results in “professional imposters” ruining companies, and as a result founders feel gaslighted by advisors and employees who encourage it.
“VCs with no founder experience don’t know how founders should run their companies, and their C-suite ranks include some of the world’s best liars,” he said.
While the exact outline of Founder Mode isn’t entirely clear at the moment, Graham made some predictions, such as skip-level meetings, in which top executives meet with employees without their direct managers, becoming the norm.
Certainly, he acknowledged that as the company grows, founders will need to delegate some duties, and founder mode will be more complicated than manager mode because of the varying degrees of autonomy.
But founder mode will do better, he added: “In fact, my other prediction about founder mode is that once we know what it is, we’ll find that many founders were already pretty much at the cutting edge of it, except that their approach was viewed by many as unorthodox or worse.”
Airbnb and Y Combinator did not immediately respond to requests for comment, but Chesky reposted Graham’s tweet, which linked to his essay. In 2013, Chesky recalled that a “CEO Council” had helped him, and more recently revealed an informal tradition of creating work duos for Airbnb employees.
Meanwhile, serial entrepreneur Howard Lerman wrote on X that many founders were “profoundly inspired” by the essay.
“I know that I am. Starting a company is the only thing I can do and what I’ve always wanted to do,” he wrote.