‘Founder Mode’
Paul Graham:
The theme of Brian’s talk was that the conventional wisdom about
how to run larger companies is mistaken. As Airbnb grew,
well-meaning people advised him that he had to run the company in
a certain way for it to scale. Their advice could be
optimistically summarized as “hire good people and give them room
to do their jobs.” He followed this advice and the results were
disastrous. So he had to figure out a better way on his own, which
he did partly by studying how Steve Jobs ran Apple. So far it
seems to be working. Airbnb’s free cash flow margin is now among
the best in Silicon Valley.
The audience at this event included a lot of the most successful
founders we’ve funded, and one after another said that the same
thing had happened to them. They’d been given the same advice
about how to run their companies as they grew, but instead of
helping their companies, it had damaged them.
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.
★
Paul Graham:
The theme of Brian’s talk was that the conventional wisdom about
how to run larger companies is mistaken. As Airbnb grew,
well-meaning people advised him that he had to run the company in
a certain way for it to scale. Their advice could be
optimistically summarized as “hire good people and give them room
to do their jobs.” He followed this advice and the results were
disastrous. So he had to figure out a better way on his own, which
he did partly by studying how Steve Jobs ran Apple. So far it
seems to be working. Airbnb’s free cash flow margin is now among
the best in Silicon Valley.
The audience at this event included a lot of the most successful
founders we’ve funded, and one after another said that the same
thing had happened to them. They’d been given the same advice
about how to run their companies as they grew, but instead of
helping their companies, it had damaged them.
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.