Why “founder mode” is a rebranding for micromanaging, top-down leaders
From Brian Chesky to Paul Graham, is the founders vs managers battle real?
Image generated with Midjourney
We’ve all been following the drama over the past few months: product management has been in the eye of the storm, beginning with Airbnb CEO introducing his new playbook without PMs, and culminating with a Paul Graham essay that glorifies this approach as the new “founder mode” paradigm, a valid alternative to “skillful liars” managers.
My recent post on the topic questioning the approach received polarized reactions, with PMs and company leaders unsurprisingly in favour of more empowerment, and a few founders (the minority, to be fair) raising more or less legitimate objections. Here are the top ones:
“You cannot label founder mode as micromanagement.”“Airbnb is worth $70+ billion, so Chesky must be right.”“You’re not a founder and you cannot understand this matter” (you’re right, that’s the funniest).“A company’s market cap is not an indicator of the CEO’s performance.”
As I will explain in this article, there is really nothing new in this whole story.
Anatomy of the “founder mode”
After deciding to bring some clarity into this mess, I spent a few hours during the weekend going once more through Brian Chesky’s playbook at Lenny’s podcast to break down his — so-called novel — approach. Here is a recap for you:
The product management function has been dismantled. Chesky considers himself the CPO of Airbnb, but with the product function not being there anymore, he doesn’t hold a CPO title.The program management function has been strengthened, on the other hand.The CEO calls the shots on every single feature in the product, together with his group of top 30 executives.The CEO owns a 2-year rolling roadmap, and the teams can only work on roadmap features, releasing every 6 months.Every week, the CEO personally reviews the status of those features, using a green-yellow-red status report created by the aforementioned program managers.If things are not on track to ship, the founder personally jumps in to fix the issue at hand.A/B testing is still happening, but it’s secondary to (likely the CEO’s) hypotheses and intuition.
Chesky believes he should run Airbnb like Steve Jobs ran Apple. He also mentions having merged PMs with PMMs in order to work on the overall product messaging better. While some people gave this aspect importance, I don’t see it as worth of notice as it’s redundant to the first point above.
Another “breakthrough” introduced in the playbook is that managers need to be in the details, and also competent in their specific domains. I am going to dismiss this one too as nonsense, since I have yet to see a job description looking for managers without experience in their area, or requiring them to ignore what’s going on in the company.
Is founder mode something new?
Looking at Chesky’s playbook, I guess anyone can see how a spreadsheet with yellow, red, and green statuses is nothing groundbreaking really! The resonance that has been given to Chesky and Graham’s approach as something new is, in my view, vastly overblown.
But let’s go in order and have a look at the main points we can take away from Chesky’s founder mode:
Centralized decision-making, as opposed to empowering product teams.
“I stopped pushing decision-making down. I pulled it in.”Output over goals and outcomes. Chesky does not mention any goal system like OKRs in Airbnb. He doesn’t need one, as he believes that by calling the shots on every single feature he can personally make sure the product goes in the right direction.
“Metrics are going to be subordinate to the calendar.”Micromanaging through project management. That’s the natural consequence for leaders who think they’re always right and whose only concern is speed of execution. They end up obsessing with green, yellow and red status reports and Gantt charts in a constant attempt at pushing product teams to deliver against deadlines.
“What everyone really wants is to be able to row in the same direction really quickly.”
By distilling all the above, we get to the final formula:
founder mode = centralized decisions + output over outcomes + micromanagement
That doesn’t strike as shockingly new, right? Correct, we’ve all been there in countless organizations, especially startups. Yet Graham goes as far as positioning this as an entirely new paradigm, literally believing he’s discovered something that nobody knew existed before.
It’s clear that the CEO is the top manager of a company, therefore “founder mode” is simply a style of management. Not only that, but it’s also the most trivial form of management: as a founder, you oversee everything personally, and people are mere executors of your ideas. If there is a decision to make, or a problem to fix, you have to jump in personally to make an arbitrary call.
Differently from what Graham believes, this approach is well known to business schools as poor, dysfunctional management, and the alternative to that is of course good management. If you are a founder, that’s harder, though, because it requires empowering teams in doing their job, and putting in place ways of working that enable your people to make those difficult decisions and fix those problems. Without you. Like you would do. Better than you.
In essence, the CEO adopting an individualistic management approach like founder mode sees the team as a an execution machine for their ideas, and answers the call: “How can I make sure the team delivers efficiently what I want?”. Whereas empowering leaders see themselves as part of the team, and respond to the question: “How can I make sure teams effectively contribute to our objectives?”.
In the picture below, I made it easy to see where founder mode falls within the management spectrum:
Founder mode in the management spectrum, author Paolo Lacche
Is founder mode really more effective?
Now that we understand that Graham’s founder mode has actually been there forever, it is still legit to wonder if it’s anyhow working, and especially if, as he claims, it’s more effective than traditional management for scaling companies.
As Graham points out, every company obviously starts in founder mode, and I have tons of respect for entrepreneurs like Chesky who are able to change an entire industry and impact millions of people. But to respond to one of the objections in my post comments “He took Airbnb from zero to $73B, so he must be right”, the question here is whether that approach actually helps the company scale from that point.
I also agree with Graham on the reasoning that every company is unique in finding its balance over time, but when it comes down to picking a side I personally believe founder mode to be bad management and, as such, unfit for a scaling company. As a leader, I never want to be the smarter person in the room, and I stand for good, empowering management. I am also convinced there are several advantages for companies to go this way:
People are better motivated when they feel their impact.Everyone is aligned around shared goals.There’s no bottleneck to innovation.
When we look at the data, since the adoption of the new playbook, Airbnb did not get anywhere close to the 10x growth Chesky talks about in his playbook. On the contrary, their stock went down 19% in the last year, with profits declining 15% in 2024.
Airbnb stock chart, source Google Finance
Another example of a superhuman CEO trying to scale in founder mode is Elon Musk, who has reviewed Graham’s essay as well. Looking at Tesla, its stock has been going down over 20% in the last two years with sales slumping for several quarters in a row. X, a company which is also being managed by Musk in “founder mode”, has been losing millions of users and over $500 million (or 80%) in yearly revenue since he took over.
Moreover, even for those who would like to rightfully consider Airbnb results positive, there’s a huge price on culture companies managed this way have to pay.
We can get a glimpse from a few Glassdoor reviews I found, all subsequent to Chesky’s new approach:
“Apple with worms. Brian controls everything, which is fine but his ‘intuitive, gut, creative instinct’ goes against data and yet no one will tell him ‘no’. You are micromanaged to death and not allowed to have any ideas on strategy.”“The CEO is a lovely human, but unable to steer the ship in a world vastly more complex than his mental models. The Board should bring in a mature decision-maker who can make tradeoffs and has managed a business, not a religion.”“Executive leadership team is inept, lacks vision, shows no curiosity. C-suite create toxic and political culture. CEO is an egomaniac trying to be Apple.”“The CEO should be listening to his people — the people he hired to do a job — rather than making top down decisions arbitrarily based on his ‘gut’.“Micromanagement. No impact. Top down culture.”“Toxic working environment due to poor leadership”
Founders vs Managers, a foolish war
One final, but pivotal point to address is the notion of founders being in a league of their own, almost with superhuman abilities. At the climax of his leaderistic delirium Graham writes: “There are things founders can do that managers can’t, and not doing them feels wrong to founders, because it is.” This pairs well with some of the comments on my post that essentially say “You’re not a founder; you can’t get it.”
Founders are people like everyone else, and as such, they come with their own qualities and limitations. There’s a long list of widely successful tech founders who run their companies in empowering and inclusive ways, or decide to hire leaders who are able to. Only Paul Graham seems never to have heard of them.
In comparison to Airbnb’s decline in the past years, its competitor Booking.com, a company led by one of its long-tenured managers, saw its stock go up 103% with continued profit growth over the same period. Booking is also well known for its culture of experimentation, where everyone can deploy and test their code in production.
Even Google founders decided to bring in Eric Schmidt as CEO, who harvested ideas from every single employee in the company and turned Google into a world icon of innovation.
Bill Gates, one of the few tech founders of the same caliber as Steve Jobs, also stepped down, and he established such a culture of empowerment at Microsoft that one of his software engineers would later succeed him as the CEO. I was lucky enough to work as a product manager under Satya Nadella’s leadership, who grew the company 10x (this time for real) taking it from $300 billion to $3 trillion. On his first day as CEO, he wrote:
“Every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this.”
Overall, I believe “founder mode” is not a thing. Paul Graham is totally wrong on this one, and the battle between founders vs managers exists only in his head. In practice, every founder becomes a manager the very moment they decide to step up as the CEO of their companies.
And from there, the only debate worth having is between good vs bad management.
In my next post, I will expand more on the root causes of bad management with a special focus on scale-ups.
Apple with worms: why “founder mode” is a rebranding for micromanaging, top-down leaders was originally published in UX Collective on Medium, where people are continuing the conversation by highlighting and responding to this story.
