The meaning in-between "Founder Mode"

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Paul Graham named a thing1 this weekend and set the Tech world ablaze. Good thing we can search for it now2. A old new polarizing dichotomy. If you’re scaling a company it’s a choice between Founder mode or Manager mode </s>.

Is there any in between?

What follows is my interpretation on the meaning in-between the words in his essay.

Throw out your misperceptions and you’ll be fine. (And who’s stopping you from throwing them out?) — 12. XXV

Commander’s Intent

Admittedly my knowledge of the military is thin but I have read a lot about commander’s intent. In the Marine Corps Warfighting Publication (MCWP) 5-1, it’s defined as:

The commander’s personal expression of the purpose of the operation. It must be clear, concise, and easily understood. It may also include how a commander envisions achieving a decision as well as the conditions that, when satisfied, accomplish the purpose.

It is one of the most important parts of a broader set of activities that encompass the execution of successful military operations.

What’s at stake for scaling a business is not remotely close to fighting a war. Despite the often made analogs3 I hope it stays that way.

The above figure, however; parallels how to effectively plan any operation. Especially one of consequence.

I learn best from examples and so here, in precise terminology, is a written example of Commander’s Intent.

Purpose: Restore the Blueland border.

Method: Maneuver through existing or created gaps to bring our combined arms combat power to bear against the Orangeland 102d and 103d Armored Brigades and the 401st and 402d Artillery Regiments.

End state: The Northern Operations Group defeated. Our forces positioned along the Orangeland/Blueland border prepared to continue offensive operations in Orangeland, if directed.

You and I might not understand all the terminology but these five sentences are clear.

In Graham’s essay we don’t specifically know what Brian Chesky said4.

The advice he received and that Graham optimistically summarized and quickly vilified by suggesting it damaged many other companies was: "hire good people and give them room to do their jobs."

It’s likely that none of the “good people” (read: hired professional managers) were sitting in the room that day but if they were, rhetorically I’d wonder:

• First: Did they have a clear understanding of what their jobs actually were?
• Second: Were these jobs aligned to the commander’s founders purpose for the organization?
• Third: If the answers affirmed the above then why was it so damaging?

It doesn’t matter what “mode” you operate in if there isn’t singularly shared clarity of purpose.

And just because you have a Vision, Mission, Strategy and set of objectives doesn’t mean they’re completely understood.

Ensuring clarity of purpose and fostering continual organization renewal is the distinction of leader mode, not founder or manager.

One thing I’ve learned through working directly for two founders and via operating a business as a “step parent” is the most difficult challenge in leadership is the signal loss from:

• Translating what is in one's brain into words

• Having those words be received and understood by the right recipients

• Having actions / results occur in the right order of operations

• Checking in to confirm what you thought would happen actually did (aka being in the details)

Incentives

A founder in Tech, especially one operating a venture capital style business, by definition will hold a disproportionate amount of equity relative to anyone else.

Even when there is growth through the dilution many businesses require to scale — and in the extreme success cases IPO — retaining at least 10% of common stock is the norm.

A “manager”, on the other hand, is lucky to a have a fraction of a percent if they join post Series A and much less if joining after successive financing rounds.

There is nothing intrinsically wrong with this, so the thinking goes.

The original entrepreneurial risk was taken by the founder(s) and so goes much of the potential spoils.

But when it comes to what they can do, as Graham, rightly points out — there is a big difference.

The founder is definitionally the owner and can decide how the company should be run. If the cards are played right, with dual class stock structures5, they can do so for life.

The point: ownership conveys both care and control. There is no expectation that this is a stepping stone to the next paycheck.

If there was more ownership to go around6, perhaps there would be more care and less risk to “hire professional fakers” as Graham puts it.

In conclusion

The essence of Graham’s “discovery” is that each company is unique and needs vary significantly.

Applying templates, “best practices” or hiring folks who may over index on past experience without proper clarity of purpose or aligning incentives can work out poorly.

Because many situations require nuanced evaluation, not cookie cutters.

And that in spite of the advice received Chesky learned that if he wanted to be an excellent owner he had to really lead the way differently7.