Y Combinator co-founder, Paul Graham, on Sunday, shared his insights on a unique management style, known as “Founder Mode.”
What Happened: Graham took to X, formerly Twitter, and shared the blog post, mentioning a “talk” given by Airbnb CEO, Brian Chesky, at a Y Combinator event, where the latter challenged conventional wisdom about running large companies.
Graham said that at the event Chesky shared his experience of following traditional advice to “hire good people and give them room to do their jobs,” which led to disastrous results for Airbnb.
He found success by studying how Steve Jobs ran Apple Inc., a strategy that has resulted in Airbnb’s free cash flow margin being among the best in Silicon Valley.
Graham’s post delved into the concept of “Founder Mode” versus “Manager Mode” in running a company.
He argued that the traditional “Manager Mode” often feels broken to founders, leading to the exploration of “founder mode” as a more effective alternative.
Graham suggested that founders should adopt a more hands-on approach, breaking from conventional hierarchies, much like Jobs did with his annual retreat for Apple’s top contributors.
“There are as far as I know no books specifically about founder mode. Business schools don’t know it exists. All we have so far are the experiments of individual founders who’ve been figuring it out for themselves,” he stated.
Tesla and SpaceX CEO Elon Musk also shared Graham’s post on the social media platform X, endorsing it as “worth reading.”
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Why It Matters: The “Founder Mode” management style discussed by Graham and Chesky draws heavily from the leadership style of Jobs, who was known for his ability to say “no” to distractions.
Jobs’ leadership was instrumental in saving Apple from bankruptcy in the 90s, using simple strategies to turn around the company’s fortunes. During this period, Apple’s stock declined by 58% while Nasdaq was witnessing strong growth.
Despite being a billionaire, Jobs chose to take a $1 annual salary from Apple from 1997 until 2011. His focus was on turning Apple profitable again and working together with Microsoft, where both companies could make money.
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