Brian Chesky gave a lecture at last week's YC event on the topic that some traditional concepts of managing large companies are wrong. Paul Graham published the content of Brian Chesky's speech in the article 'Founder Mode,' which has been recognized by many industry leaders. Musk also retweeted it, saying it's worth reading.

Here are the key points of this article:

• There are two ways to manage a company: founder mode and professional manager mode. Founder mode is far superior to professional manager mode because founders can do things that professional managers cannot.
• The traditional ways that founders are advised on how to manage large companies are wrong because founders are taught how to be professional managers, which means managing a company that they did not start themselves.
• Founder mode requires managers to be involved in every detail of the company's business.
• Founder mode breaks the pattern of CEOs only interacting with the company through their direct subordinates. 'Skip-level' meetings become the norm rather than an occasional occurrence.
• Founder mode also requires a certain degree of delegation.

Paul Graham said:

"I completely changed the way I manage the company. I used to be very hands-off, thinking my job was to formulate the global strategy and allocate capital. But, I also became very passive, the less I got involved, the easier it was to run into problems.

Then I decided to do something different, I got involved in every detail of the company, Airbnb wouldn't do anything beyond my personal capabilities, that's what Steve Jobs did at Apple."

Brex CEO Pedro Franceschi also expressed that transitioning to founder mode was the best decision he made, the company's growth rate is now twice as fast as a year ago, and annual expenses have been reduced by 70%:

"In practice, this means that the company's management must work at all levels like founders."

Here is the full text content

At a recent YC event last week, Brian Chesky gave a lecture that everyone present found memorable. After the lecture, I spoke with several founders, all of whom agreed that this was the best speech they had ever heard. Even Ron Conway forgot to take notes for the first time. I don't intend to recap Brian's speech here, but rather to discuss a question he raised.

Brian's lecture was on the traditional misconceptions about managing large companies. As Airbnb developed, many well-meaning people told him that it was necessary to manage the company in certain ways to make it expand. In short, these suggestions can be summarized as: hire excellent people and give them space to work. Brian followed these suggestions, but the result was disastrous. So he had to find a better way himself, drawing inspiration in part from how Steve Jobs managed Apple. At present, Brian's approach is very effective, and Airbnb's free cash flow profit margin is currently among the top in Silicon Valley.

The audience of this event includes many of the most successful founders we have sponsored, who have also experienced the same situation. They have also received similar advice on how to manage a company, but these suggestions not only didn't help their companies, but also caused harm to them.

Why is everyone giving these founders wrong advice? This confuses me. After thinking about it, I found the answer: the traditional way that everyone gives to founders to manage a big company is wrong because founders are told how to be a professional manager, to manage a company that is not their own. However, the effect of the professional manager mode is far inferior to the founder mode, and founders feel that this way is failure. Founders can do things that professional managers cannot do, and not following the founder mode makes founders feel wrong, because it is indeed wrong.

In fact, there are two ways to manage a company: the founder mode and the professional manager mode. So far, even in Silicon Valley, most people believe that expanding a startup means switching from the founder mode to the professional manager mode. However, from the disappointment felt by founders who tried the professional manager mode and their efforts to escape from it, we can infer the existence of the founder mode.

As far as I know, there are currently no books specifically discussing the founder mode, and business schools are also unaware of the existence of the founder mode. What we have now are just some experiences discovered by founders themselves. But since we know what we are looking for, we can start exploring, hoping that in a few years, the founder mode can be widely understood just like the professional manager mode. We can already guess the differences between the founder mode and the professional manager mode.

Professional managers are usually taught to manage companies in a modular way. Professional managers tell subordinates what to do, and then let subordinates figure out how to do it themselves. Professional managers do not get deeply involved in the specific details of subordinates' work. This is considered micromanagement and is not good.

"Hire exceptional people and give them space to do the work." This description sounds great, right? But in reality, according to reports from founders, this often means: hiring professional fraudsters who ruin the company.

I noticed that Brian's speech and my subsequent conversations with founders mentioned a feeling of being "mentally manipulated." Founders feel like they are being mentally manipulated by two parties—one is the people who tell them they must manage the company like professional managers, and the other is their employees when they actually do so. Usually, when everyone around you disagrees with you, you assume you are wrong, but managing a company is an exception. Venture capitalists who have never been founders don't know how founders should manage a company, and the group of C-level executives includes the world's best liars[1].

Whatever the founder mode is, it will apparently break the principle that CEOs only interact with the company through the chain of command. "Skip-level" meetings will become the norm, rather than a very unusual practice. Once you give up this restriction, there are a lot of combinations to choose from.

For example, Steve Jobs once held an annual retirement party for what he considered the top 100 people at Apple, who were not necessarily the top 100 executives in the company. Can you imagine how much determination it would take to do this in a typical company? However, just imagine how beneficial such a practice could be. It could make large companies feel like startups. If it didn't work, Jobs would clearly not continue hosting these retirement parties. But I have never heard of any other company doing this. Is it a good idea or a bad one? We still don't know. That's why we know so little about the founder model.

Clearly, founders cannot manage a company of 2000 people the way they managed 20 people. Some degree of delegation is necessary. The boundaries of autonomy and how clear they are may vary from company to company. Even within the same company, it can vary based on the trust gained by the management. Therefore, the founder model is more complex than the manager model, but also more effective. We have learned this from the methods explored by individual founders.

In fact, another prediction I have about the founder model is that once we figure out what it is, we will find that many founders are already close to or are implementing it, but when they do these things, they are considered eccentric or bad.

Interestingly, the fact that we know so little about the founder model is actually an inspiring thought. Look at the achievements founders have already made, yet they have done so in the face of resistance to misguided advice. Imagine once we tell them how to manage their companies more like Steve Jobs rather than John Sculley, what they could achieve.

A more diplomatic way to put it is that experienced C-level executives are typically very adept at managing upwards. I don't think anyone who understands this world would disagree.

If the practice of holding such events becomes so common that even politically driven mature companies start doing it, we can quantify the aging of a company by the average depth of the invitees on the organizational chart.

I also have another less optimistic prediction: once the concept of the founder model is established, people will start abusing it. Founders who cannot delegate even what should be delegated will use the founder model as an excuse. Or non-founder managers will decide they should act like founders. This may work to some extent, but when it doesn't, the results can be disastrous, at least modular management methods limit the damage that a bad CEO could cause.