On the “Founder vs Manager” Syndrome

At a Y Combinator event, Brian Chesky touched on an important idea: as soon as a company starts growing, it’s commonly believed that founders need to “hire good people and give them freedom to work” so they can scale the business and lead the company to a bright future. The problem is that this advice most often leads to disaster.

When Airbnb began scaling, Chesky realized that classic management principles for large corporations don’t work for startups. He decided to go his own way, inspired by Steve Jobs’ approach, who didn’t just skip-level meetings with employees, but took the top 100 most important Apple employees on retreats regardless of their formal positions.

The point is that there are two ways of managing: “founder mode” and “manager mode.” Most people teach transitioning to the second when business grows, but this leads to failure. Founders should remain in “founder mode,” which implies deep involvement in processes and rejection of standard approaches.

We sincerely try to maintain a culture of intrapreneurship, but even at our modest scale, the pull toward an abundance of processes and rules creates strong resistance, especially when people come from more mature corporate cultures.

Why “Good” Advice Turns Out to Be Wrong

Paul Graham highlights a key problem in his essay: most advisors tell founders how to run a company they didn’t found.

The classic managerial approach works like modular programming: you tell your direct reports what to do, and they figure out the details themselves. Don’t get involved in the details - that’s micromanagement, and micromanagement is bad! Sounds reasonable until you start seeing the results in practice.

In practice, “hire good people and give them freedom” often turns into “hire professional fakers and let them drive the company into the ground.” Meanwhile, founders feel like victims of gaslighting - everyone around them says they’re managing wrong, while the company loses what made it special.

The Foreign Body Effect

Here what happens in practice: an experienced manager from a large corporation joins, and the first thing they do is implement “best practices”: weekly status reports, responsibility matrices, and formalized decision-making processes. On paper, everything looks professional, but the magic disappears.

What worked at IBM or McKinsey creates a feeling in a startup like trying to make a living organism work like a machine. Processes become more important than results, and meetings more important than work. People stop experimenting and making quick decisions - after all, there’s now a “right way” to do things.

This is especially painful in technical teams. Developers who used to be able to discuss a feature with the founder in the morning and roll out a prototype by evening now have to write specifications, coordinate with product managers, go through architecture reviews, plan sprints... By the time of release, everyone had forgotten why the feature was needed.

Skip-Level as the Norm, Not the Exception

One of the most striking features of “founder mode” is direct connection with people at all levels of the company. In traditional management, skip-level meetings are so unusual they have a special name. In founder mode, this is the norm.

Steve Jobs annually gathered the 100 most important Apple employees for a retreat - but these weren’t the 100 people at the top of the org chart, but those who actually influenced the product. Imagine the willpower needed to pull this off in a typical corporation! HR would have a heart attack just thinking about violating hierarchy.

But the result is obvious - a company of 2,000 people feels like a startup. People know each other, understand the common goal, and can directly reach whoever makes decisions. Information doesn’t get lost or distorted passing through a chain of intermediaries.

Gaslighting from Both Sides

Graham very accurately describes founders’ feelings: they’re being gaslighted from both sides simultaneously. Advisors say: “You’re managing wrong, you need to delegate.” And hired managers say: “Don’t interfere, we’re professionals, we know how.”

And the founder starts doubting themselves. Maybe they really don’t know how to manage? Maybe their intuition, which led the company to success, has now become an obstacle? Maybe it’s time to step aside and let the “adults” take control?

This is especially toxic because it goes against the entrepreneur’s nature. A founder can’t help getting into the details - this isn’t pathology, it’s their superpower. They feel the product and customers better than any hired manager. Their “micromanagement” is actually a deep understanding of what matters.

Delegation vs. Involvement

Traditional wisdom says: to scale, you need to delegate. But there’s a difference between delegating execution and delegating thinking. A founder can hand over execution, but shouldn’t hand over understanding of what needs to be done and why.

In “founder mode,” the boundary of autonomy doesn’t run along the org chart, but along competencies and trust. Some people get complete freedom of action in their area, others work under close supervision. And these boundaries can change - not once a year during reorganization, but constantly, as people earn or lose trust.

This is more complex than a clear hierarchy. But it works better because it accounts for reality: people are different, tasks are different, situations are different. Universal recipes don’t exist.

The Authenticity Problem

There’s another dimension to this that often gets overlooked: authenticity. When founders try to switch to “manager mode,” they’re essentially playing a role that doesn’t fit them. They start speaking in corporate buzzwords, holding meetings they don’t believe in, making decisions based on frameworks rather than intuition.

This inauthenticity is immediately felt by the team. The people who joined because they believed in the founder’s vision suddenly find themselves working for someone who sounds like every other corporate executive. The culture that attracted top talent starts eroding from the inside.

We’ve seen this happen repeatedly. A passionate founder gets convinced they need to “professionalize,” starts mimicking behaviors they’ve seen in other companies, and gradually becomes a stranger in their own organization. The irony is that they’re trying to become better leaders by abandoning the very qualities that made them effective leaders in the first place.

The Context-Switching Tax

One underappreciated cost of “manager mode” is the context-switching tax. In founder mode, decisions flow naturally from deep product understanding and customer empathy. In manager mode, every decision requires briefings, analysis, committee review.

The founder who used to make ten good decisions in an hour now spends ten hours making one mediocre decision. Not because they’ve gotten worse at decision-making, but because they’ve been convinced that their natural decision-making process is somehow illegitimate.

This slowdown compounds exponentially. In fast-moving markets, the difference between making decisions in hours versus weeks can mean the difference between winning and losing.

What Lies Ahead

The most encouraging part of this story is that we’re only beginning to understand what “founder mode” actually is. Look at what founders have already accomplished working against the headwind of bad advice! What will happen when we learn to tell them how to run companies like Steve Jobs rather than John Sculley?

Perhaps in a few years, “founder mode” will be as well-studied and described as traditional management is today. Books will appear, case studies, training programs. But for now, we can only observe the experiments of individual founders and learn from their experience.

In our company, we try to find balance: we implement minimally necessary processes but preserve the ability to make quick decisions and experiment. We encourage people to reach out directly to whoever can solve their problems, regardless of hierarchy. We try to remember that the process should serve results, not the other way around.

This is work in progress. Sometimes it works, sometimes it doesn’t. But the main thing is we now know there’s an alternative. And that’s already a lot.

The key insight is that scaling doesn’t have to mean losing what made you successful in the first place. It means finding ways to preserve and amplify those qualities while adding the structure necessary to coordinate larger efforts. It’s harder than following a playbook, but the results speak for themselves.

We’re entering an era where the most successful companies might be those that figure out how to stay in founder mode longer, rather than those that transition to manager mode faster. The implications of this shift could reshape how we think about organizational design, leadership development, and business education.