Management professor assesses Paul Graham’s ‘founder mode’

Over the long Labor Day weekend, a 1,000-word blog post by Paul Graham, co-founder of startup accelerator Y Combinator, hit a nerve in Silicon Valley. The essay, edited by the likes of Elon Musk and AirBnb (ABNB) CEO Brian Chesky, urges startup founders to adopt a more hands-on leadership style, which Graham calls “founder mode,” as opposed to “management mode,” in which founders engage with their companies only through their direct reports.

Graham noticed that many of Y Combinator’s most successful founders have something in common: At some point, they were told to go into “manager mode” and delegate as their companies grew, which then hurt their business. “There are things founders can do that managers can’t, and not doing them feels wrong to founders because it is,” he wrote, adding that founders should instead engage in the details, spend time with employees, and chart their own leadership path.

The essay was viewed more than 20 million times on X over the weekend and has won widespread praise from tech executives. “We need founder-mode companies in all industries,” Shopify CEO Tobias Lütke tweeted in response to the blog post. Howard Lerman, former CEO of tech startup Yext, noted that the founder population was “absolutely fired up” by Graham’s essay. Jared Friedman, a partner at Y Combinator, predicted that Graham’s suggestions would become “one of the go-to pieces of startup advice that everyone knows.”

Not surprisingly, Graham’s message resonated with founders “for whom conventional wisdom hasn’t worked,” Risa Mish, a management professor at Cornell University’s Johnson College of Business, told the Observer. “It comes down to something very basic, which is that one size never fits all,” she added.

Famous CEOs in “Founder Mode” and “Manager Mode”

In his essay, Graham praised Chesky’s recent talk, in which the Airbnb cofounder spoke of his failure with manager mode and his admiration for people like Steve Jobs, who is known for his hands-on approach. It’s not the first time Chesky has made such comments. During an October podcast, the Airbnb CEO praised the skills of founders compared to professional managers, saying their passion, knowledge, and control over startups are unmatched.

Musk has also been outspoken about his belief that CEOs should remain on the “front lines” of their companies. Nvidia’s (NVDA) Jensen Huang also maintains a hands-on leadership style, reportedly writing hundreds of emails to employees every day and regularly checking in on junior employees. And Meta’s Mark Zuckerberg has long been involved in his company’s day-to-day operations. During a February podcast, he described his lack of belief in delegation as his most controversial leadership tip, urging founders to “make as many decisions and get involved in as many things as possible.”

But some tech leaders have acknowledged that founder mode comes with its own set of complications. For starters, maintaining that executive mindset as a company grows can be difficult. Chesky himself admitted in October that one of the problems with founders is that “most of them can’t scale to run a giant company.”

And companies can’t be run by a founder forever, because “they don’t live forever,” according to Airbnb’s CEO. After Steve Jobs died in 2011, for example, he was replaced by Tim Cook, a professional manager. And Microsoft, now led by Satya Nadella, hasn’t been run by a founder in 25 years. Not all companies fit into either founder or manager mode, according to Mish, who noted that manager-led startups still often adopt a hands-on, personalized culture across departments. “It could be as simple as the difference between a team trying to build new things versus a company focused on building out existing products and revenue streams,” she said.

In his essay, Graham argued that there have been no books written about founder mode, while business schools “don’t know it exists.” Mish doesn’t necessarily agree. Almost every business school has an entrepreneurship program focused on starting and growing companies, she said. “We’re very intentional about the fact that you can’t have a ‘one size fits all’ approach to any aspect of a company, whether it’s structure, whether it’s culture, whether it’s thinking about talent—there’s always more than one way.”