The Main Problem With Founder Mode Is The Name
For years, engineers have had the same complaints about professional managers as Paul Graham.
I've never felt compelled to read much of Paul Graham's writing. Yet, it was hard to ignore everyone criticizing his post on "Founder Mode". A lot of criticism came with excerpts. The odd thing to me was that there felt like a big disconnect between the excerpts and the criticism, which led me to reading the post in full myself.
The one that I saw as most common was a couple of paragraphs that everyone seems to think promotes micro managing.
The way managers are taught to run companies seems to be like modular design in the sense that you treat subtrees of the org chart as black boxes. You tell your direct reports what to do, and it's up to them to figure out how. But you don't get involved in the details of what they do. That would be micromanaging them, which is bad.
Hire good people and give them room to do their jobs. Sounds great when it's described that way, doesn't it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground.
On the surface, the sentence "That would be micromanaging them, which is bad." is stated as a poor justification for a certain management style. But just because he uses the avoidance of micromanagement as a bad justification does not mean he is promoting micromanagement. People can be overly fearful of micromanaging, but that doesn't imply micromanagement is good.
If he's not promoting micromanagement, then what is he promoting? If hiring smart people and letting them do their thing doesn't work, then isn't the only alternative to micromanage them?
There is a big difference between understanding the business well enough to keep the company going in the right direction and micromanaging. To understand that difference, we have to compare the mindset of "professional managers" with startup founders.
Fun fact: all startups are terrible ideas. Every single one of them. Think about going to a big company's executive team and convincing them to burn money for 7-10 years before making a profit. How many of them are going to say yes no matter how "good" the idea is? For every Xbox decision (which lost money for an entire console generation before seeing real success), there's a hundred Stadias (which Google could only stomach losses for a couple of years). Even then, it's usually when there's a feeling that it has to be done. Microsoft was worried Sony could use Playstation as a Windows competitor one day.
Startups are a triumph of optimism over what many would consider good sense. To even have a chance of success, people involved in startups (founders, investors, employees, AND customers) have to believe that it'll work despite all the evidence that it won't.
Not only that, but the startup has to do something very different than what everyone else is doing. You're not going to make a successful startup in 2024 by making an operating system and copying what Microsoft did in 1984. Microsoft wasn't going to be successful in 1984 by copying what IBM did in 1964. A startup needs to have a vision that's different from the current consensus in the business world.
Trying new things and committing to them is pretty scary. If a million other people have chosen to do things differently, how delusional does a startup founder have to be to still try? Consequently, how well do you think someone with that mindset would do climbing the corporate ladder/pyramid?
Professional managers by definition have seen success climbing the corporate pyramid. They did so not by trying something completely different from everyone else, but by doing what everyone else does. They may do it better, but they still trend toward what the business world's consensus says to do. I'm honestly amazed at how many of the people criticizing "Founder Mode" are software engineers. How many times have we all had to work for a manager who did non-sensical things that slowed down development? How many times did we hear "it's just how it is done" as the reason given? How many times are we blindly following a process defined by agile consultants versus a process that actually works?
It is professional managers that also micromanage the most. They want development "estimates" accurate to the hour. They want to track every sub-task with how long it took to complete. They want metrics from number of pull requests to code coverage (versus testing actual user functions). They do this not because it gets us better software or products, but because it presents well when they report to their boss.
Paul Graham writes in his post that no one knows what "Founder Mode" really is. I'm going to make the claim that I do: it is the practice of thinking critically. Build an intution about how the world works, how it affects your business, and then make decisions based on that analysis. It doesn't matter if your analysis has different results than everyone else's, do it anyway. Don't assume the crowd is smarter than you.
Steve Jobs is used as an example of founder mode. Steve Jobs was a notorious micromanager, but I'd argue Apple's success was despite this and not because of it. The brilliance of Steve Jobs was his understanding of people and workflows. In a decade, the iPod, iPhone, and iPad were all released and each changed the technology landscape. MP3 players, smartphones, and tablets were all things that existed before. Steve Jobs just saw the flaws in the products at the time and went about fixing them. A professional manager would have probably argued that a smartphone (which was really just Blackberry at the time) was for serious business people doing serious business. A person who thought critically would have looked at the assumptions made in that statement and seen the flaws.
What has Apple done since Steve Jobs? Made $150 earbuds? Released yet another streaming service? Put out a VR device that functions like every other VR device? Apple is not exactly suffering as a business, but many big companies run by professional managers also see profit growth. Lack of innovation doesn't mean business failure. It just leaves a gap for a startup to fill.
The use of Steve Jobs as an example isn't to say everyone should micromanage. The argument is that every business leader, founder or otherwise, needs to actually understand the business well enough to keep it on track. Think of a professional manager who doesn't really understand the business and is put in charge of it. What can they do to make an impact? Cut costs. Not understanding the business means they don't understand how to make investments to actually grow it. All they can do to show that they're doing something is to cut costs to make the numbers improve.
Look at AMD, which at one point was looking like a has-been compared to Intel. That company saw years of cost cutting under professional managers and was on track for bankruptcy in the mid-2010s. Put in Lisa Su as CEO, someone who understood the business well enough to make the necessary investments, and the company is now viewed as far ahead of Intel. Consequently, Intel is going through that same cycle and only time will tell if Pat Gelsinger understands the business as well as Lisa Su.
There's also aspects that make a company unique that get removed under professional management. This article on the decline of Green Mountain Coffee reminds me a little of Google. In the past, Google was THE place for a software engineer to work. It was where you could get paid a lot of money to build interesting and meaningful things. It was where many engineers aspired to be. I suspect Google has been under the influence of professional managers for a very long time because in 2024, Google is just a place to make a lot of money. Building interesting and meaningful things requires an understanding of the business and vision. Professional managers can only do what other businesses do. Google hired when other tech companies hired. Google laid people off when other companies laid people off. Bard/Gemini was ready for launch in 2021 and sat on a shelf until ChatGPT publicly launched.
Google's revenue will still grow, as Apple's revenue continues to grow, but the inability to attract talent with anything but cash will leave gaps for startups to fill.
The only problem with the term "Founder Mode" is that it exists as a term and it sounds like something out of Silicon Valley. Anything out of Silicon Valley has been really easy to hate lately. Ignore the trappings around Paul Graham's essay and really read it though. The complaints made there are from the view at the executive level, but every rank and file employee, especially engineers, has had those same complaints for decades.
Side note: I realize that I also have a tendency to make terms. I just tried to relabel the corporate ladder to the corporate pyramid in this post. But seriously, look at any org chart. Isn't a pyramid a better descriptor?