Founder Mode is everything wrong with venture capital
In a viral 2023 interview, Airbnb founder Brian Chesky explained the differences between company founders and everybody else in business.
He discussed how founders are often given bad advice by consultants and others who try to help build out startups, and made a big deal about something he called ‘Founder Mode.’
But what is ‘Founder Mode?’ And why is it nonsense?
Founder Mode
Chesky differentiates between what he calls ‘Founder Mode’ and ‘Manager Mode,’ explaining that “a founder brings three things that a professional manager doesn’t have.”
“First,” he says, “they’re the biological parent. So you can love something but when you’re the biological parent of something, like, it came from you, it is you.
“Second, the founder has permission. I could rebrand the company and a professional manager would probably come and say ‘I can’t do that,’ but I know how we named it, I know how we branded it.
“The third thing that a founder brings is you built it so you can rebuild it.”
Outside of this, a large portion of the podcast is Chesky suggesting that far too much time is spent by companies analyzing as opposed to innovating.
Of course, all of this sounds great until you dig in.
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No distance
The reason that startup culture is so different from larger corporations is that new companies need to be scrappy to survive. They can’t simply focus on building a product and distributing it.
Large corporations shift their focus once they’ve established themselves to ensure that employees are taken care of and the longevity of the company is ensured.
What Chesky wants is for founders to retain the ability to morph — and possibly destroy — the company they create, regardless of how large it has become.
What he doesn’t realize, however, is that giving a founder carte blanche to make all decisions isn’t necessarily a good thing and often leads to disastrous results (see Elizabeth Holmes, Sam Bankman-Fried, or Do Kwon).
His failure to grasp this makes sense, given he’s been steering the ship at Airbnb since day one.
Company Cult(ure) of Brian Chesky
Chesky also claims he wants to build in the same vein as Walt Disney and Steve Jobs and repeatedly states that their leadership skills and innovative thinking processes have kept their companies relevant to this day.
This may be true, but it’s also forced Disney to reckon with a history of mistreating employees and hurting animators, and it (briefly) got Steve Jobs fired. Being an authoritarian CEO and founder has its benefits and pitfalls, even for the best, and it should be understood that there are consequences for having the final say and making controversial decisions.
Unfortunately, Chesky doesn’t want founders to face those consequences because he believes they’re owed the ability to steer the company they founded. ‘Founder Mode’ is ‘Dictator Mode,’ as becomes clear later in the interview.
According to Chesky, “Eventually I can not join the meeting but people know what I would say.
“The moment I can not be in the room and the same action happens as if I was in the room, that’s the moment that goes from management to culture.”
What he’s describing isn’t company culture at all, it’s something far more sinister: a cult of personality. Chesky wants to live forever, and not in a heavily metaphorical way. He wants anyone working for Airbnb in the future to imagine that he’s there, giving direction from above.
It’s his vision, his company, his ideas, and his dream — every employee, from now until forever, will need to understand that.
Laughably, after making it clear that the majority of his concerns appear to revolve around his legacy and having complete freedom to do what he wants with his company, Chesky has the nerve to state that “most companies need more creativity and a little more heart and soul.”
It doesn’t seem particularly creative or soulful to dictate orders to the point that every employee imagines you’re omnipresent.
Is Chesky out of touch? No, it’s the children who are wrong
Thinking that I’d missed some context and hopeful that someone better informed than myself could expand on the ideas put out there by Chesky, I read a blog post by famed venture capitalist (VC) and technologist Paul Graham. I was… disappointed.
While Graham doesn’t bother to expand on the Founder Mode concept any further than ‘if you aren’t a VC in Silicon Valley, you wouldn’t get it,’ he does say something else that’s quite telling.
“Usually when everyone around you disagrees with you, your default assumption should be that you’re mistaken. But this is one of the rare exceptions.”
It is jarring to see a wildly successful, prominent name in finance and tech quite literally do the Principal Skinner meme, in writing, publicly, confidently. “Am I out of touch? No, it’s the children who are wrong.”
Ultimately, founders are human and fallible and it turns out that even those of us outside of venture capital and Silicon Valley understand that. But it seems like maybe the founders in Founder Mode aren’t listening and don’t care to hear when they’re wrong.
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One last note: Airbnb is down almost 50% from its all-time highs. How’s that for ‘Founder Mode’?
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