What Founder Mode Really Means

we did a special event just for growth stage, late stage YC founders. Yes. You know, so picture a room, couple hundred people Yep. You know, pretty full. Yep. All the founders of late stage, growth stage YC companies. Companies making tens of millions or hundreds of millions. Not that companies.

Some dollars. When you think of YC companies, may be thinking, oh, you know, two person startups. No, not that. These were the these were the folks that have hit product market fit. Yes. And who have a lot of employees. Yes. And we brought them together to like learn from each other and share notes.

Yes. And so of course, Brian Chesky was one of the speakers that we had there. Yes. Because he is a hero of running a late stage company and Yeah. Going through all sorts of things. And the prompt, as I understand, that he was given was give a talk specifically tailored for the later stage companies. Yes. Right?

Like, for what you went through with Airbnb, What do people need to hear that are also late stage founders? Yes. Okay. So that's the setup that it's worth mentioning. We were we were Pretty setup.

Yes. And I think that the core message that I really think is hard for early stage founders to understand is that when you're a late stage founder and you have to hire executives and then layers of management, it's hard to have a feeling for what's happening in your company.

You know, you very quickly hit Dunbar's number and none of the people include people who are maybe talking to customers or writing actual code or making designs, especially if you don't curate that list well. And there are a lot of people who are slowly starting to feel like, you know, almost like they're operating a marionette. Right?

It's not my own hands and my own eyes anymore doing the work in a company. I'm like so separated. It's hard to understand what's happening. And I think that's a problem that a lot of later stage founders have. And so that's really kind of Yep. The the kickoff was like, hey, are you feeling like that?

Yeah. Well well, again, the context is if you're a later stage founder, I experienced this at my startup and I know you did It is very typical for your investors and your board to say, hey, you need a big management team. Yes. You need to delegate and you need to hire all these experts. Yes. And they know better than you and so you need to stay out of the details.

And again, you would never investors would never say this to a two person team. So again, to the extent people out there in the world are trying to understand how this relates to their tiny startup, it does not. It doesn't. It's just, you know, if you scale Yes. Scaling means hiring executives and delegating major parts of your business and kind of assuming they know better than you Yes.

Because they have a fancy resume. Yes. Okay? And so the real point Brian was trying to make, and then PG in his blog post, I would argue, was, hey, this thing that is considered conventional wisdom about how to operate a growth stage startup.

seems wrong. And no one's ever talked about that before. Gee. And and I would argue that there's been some critique on this point. I think that act that critique is accurate. I don't think there's a business book you can find that says like, you know what the greatest CEOs did? Hire a bunch of zechs and went on So, like, I don't actually think anyone is arguing the other side. No.

That's a strong answer. Right. No one's arguing. No one's arguing that. I think it's much more like, oh, hiring executives in management's hard. Yep. And when you don't do it well,.

you kinda get in this trap. Yeah. And I think a lot of what Brian was trying to do is give people advice and like, how do you get yourself out of this trap? Yeah. Well, here's a really concrete example or rubric for it. It's just how many layers of management there is relative to how large your company is. Yes. I was even reading an article recently that Amazon's about to do a big reorg.

Kind of sounds like it was influenced by founder mode, if I'm real. Maybe not. Maybe it's a coincidence. But they're just trying to look at how many layers of management between Yes. The the entry level folks and the CEO Yeah. And just try to move several layers. And what's hard to understand when you have an org that's like a 2,000 plus people is.

it sounds so counterintuitive, especially because it's a software company. Just knowing what's going on is really hard. Like, just like, you would be shocked at the questions that a startup can answer about its users and its products that a large company Yep. The answers are tricky.

And, like, I've heard of companies, you know, hiring consulting firms because, like, we don't really know how to answer the question, who are our users?

McKinsey will tell you.

Let's pay McKinsey to find out who our users are. Yeah. It's really tricky. And like that doesn't like it's hard. It's really, really hard. I think the other thing that people don't realize is that when a company gets to these thousands of people, bureaucracy slinks in. And bureaucracy isn't a government problem. It is a organizational problem.

More How many people need to weigh in on a decision? How many people need to approve a decision? Yes. How much how many additional pieces of approvals are created because one bad thing happened once? Yes. So there's now all this red tape because this one thing happened ten years ago. There's ten years of one off bad thing Yeah. It's never happening again.

They just pile up. Yes. Okay. And then suddenly the things that are important which are, you know, talking to your users,.

understanding what the complaints coming in from customer service are, using your own product, understanding how your product fails people. Like those things it's it's weird to say it out loud, but those things somehow get shoved down the list and it's easy to trust other people.

Like, hey, I need to manage this bureaucracy and it's your jobs to do what I used to do, which is like serve the customers. And I think that mentality is is is wrong. It's very, very wrong. It's interesting because, you know, Parker from Rippling came to talk to YC and gave a similar talk actually to Brian's He illustrated what he does when a problem gets to his desk.

And I I love this explanation because he's basically like, look, if I'm seeing a problem, many, many people below me did not fix it. Right? And he's like sending some message.

Like, if a problem is sneaking all the way up the, the chain to get to me, sending some message all the way down and expecting the person at the bottom to like hear it, that's never gonna And so he has this technique where he takes every layer of management all the way down to the individual contributor doing the work and they all together go and talk to the individual contributor and figure out what the hell is going on and how do we fix it.

And there's like a subtle message that anyone below him could have done that exercise without him and maybe the problem would have gotten to his desk. And I think that like that's one of many techniques of founders that founders used to cut through that bureaucracy and to figure out what the hell is going on.

And I think a lot of what Brian's was really saying is that like you gotta figure out your technique for cutting through the bureaucracy you've built. Yes. To figure out what's going on. And if people are preventing you from doing that, that you hired Well, he made an interesting point that.

he was disinvited from his own meetings at his own company because he was seen as causing problems and not, you know. So again, this was one of his points, which was the bureaucracy was so big that it was trying to keep me out of it. And it was my own company. And so again, is this relevant to a two person start up? No. Is this relevant to a 10 person start up? No. It's a stretch.

Okay? I don't think so. No. Not even close. No. Right? What of dysfunctional setup you have. So this is very clearly for what happens when you have such a large number of humans in your organization Yes.

That the founder is sort of put on the sidelines Yes. And told to just stay in their lane Yeah. And no longer be involved in the mechanics of running their company. And it's interesting is like I would flip it around because I think when you hire great managers.

and great executives, you get a very different Yep. Vibe. When you hire great managers and great executives, they understand the power and the authority of a founder and they often are trying to figure out how to use the founder, use the CEO to accomplish some goal Yeah. Versus trying to build some fiefdom or trying to protect, you know, the the founder from what's really going on.

And I think that it's really hard to hire really good executives. Not only are they rare, but there are a lot of big companies that pay a lot of money. And so for a start up, even at a hundred million of revenue, what's the likelihood they're gonna nail the best executives? Like, it's really, really hard. It's really, really hard.

And I think this is why that talk was so relevant to the people in the room is like, you get people trying to figure out how to manage their kind of b and c graded executives and it ain't going well. I will be so lucky to have this problem. Yeah. Is the problem you are. This is great. Yes. Yes. I will say this.

I think one of the threads that this took, which I found weird, was it changing it from a conversation about executives and management versus founder CEO to a conversation about investors versus a founder CEO, which was weird. It was kind of like, oh, at the board, we know what to do and the founder's not doing it.

I thought that was kind of a weird take on it, but I think if you're an investor commenting on founder mode, maybe it's easiest to just make yourself the main character. Yeah. Didn't get that either, honestly. Yeah. But that wasn't actually part of the comp Like, there was no point in the conversation where it was like, oh, my investor told me to do this and I disagree with it.

Like, that was irrelevant. And I do think that, like, if your investors are telling you what to do, you have a problem. It's just it's different than this. There's.

a different there's a different name for that problem. Yeah. It's a different problem.

It has nothing to do with this. Any.

idea that goes viral and gets popular Yeah. Becomes a sort of like Rorschach test where everyone sees in it Yeah. Their own thing. Yeah. And they inadvertently, a lot of I saw a lot of projection. Yes. Where you could kinda tell Yes. Who Yes.

Who was a little triggered by some of this stuff. Because Yes. I think they may have saw themselves in it. I don't know. It was it was fascinating to watch all of the Yeah. The news cycle about this because I feel like I learned a lot about people's Yeah. Minds that they didn't mean to reveal by the reaction of the founder mode essay. Yeah.

And it was so weird because it was kind of like, I didn't realize this would be a conversation for Twitter at all. Exactly. And so I think this is a good a good tip for just consuming the news or consuming things on Twitter in general, which is to realize when something gets sufficiently viral, it gets decontextualized Yeah.

From the person that said it and what the context was and just turns into, like basically a flame war You click click about whatever a clickbait flame war about whatever your preferred topic is. Yes. You know, oh gee, here's something that's getting viral. Let's weigh in on it with my preferred thing that I'm mad about. Yes.

I remember when the essay first went out, being like, oh, everyone's gonna weigh in on this. You could just tell Yeah. That this is gonna be one of those things. So remember, friends, don't fall for the clickbait, I guess. Yeah. Yeah. Fake news is fake news. And and I do think that, like, if you're one of the very, very few founders who do have this problem, like,.

you should talk about it. You might be surprised at other people having this problem. And, like, I think the really encouraging thing from Brian's talk is that it doesn't matter how big your company is and how big your bureaucracy is. Like, you can change it. Yep. And, you can start running your company again. Well, the key thing is he was saying this was my fault. He wasn't passing the buck.

The point of the story is I made a mistake. Yeah.

Learn from me. Yes. Don't do what I did. Yes. It wasn't to blame people working at Airbnb. No. Only one person messed up. Yeah.

Brian. Yeah. And he was owning it. Yeah. That was the message. Yeah. Alright. Great chat.

Sounds good. Thanks.