It’s also true that when one of those pioneering companies matures and faces challenges, its founder has a unique ability to make bold decisions and stick to the original vision when others ask him to take a less risky course. To be sure, there are cases where companies have struggled when founders have been replaced by managers. Remember Yahoo? And of course, there’s Apple, where the founder came back and restored the company to its former glory and beyond.
But there are plenty of counter-examples, too. Apple isn’t having a hard time under Tim Cook. And consider Microsoft. Its CEO since 2014, Satya Nadella, has been with the company all his life, working hard in various divisions since 1992. He’s not a founder, no. But he has taken the company to new heights. Although Bill Gates is still revered at Microsoft, no one at the company wants him back at the top.
And God knows there are plenty of cases where it wasn’t the impostor managers, but the stubborn founders who brought a company to ruin. I guess Travis Kalanick could have benefited from listening to the boring managers. His replacement, a guy with a management style, has made Uber profitable.
The fact is that not everyone is Brian Chesky and no one is like Steve Jobs. The vast majority of companies never take off and instead fade into ignominy. Very few founders ever get to the point where investors demand they retain adult supervision to manage growth, because only the rarest of companies ever get to that point.
It’s fun to talk about founder mode, perhaps for the same reason some of us read Ben Horowitz’s pornographic texts with our noses pressed against the window. Founder mode, which Graham predicts will one day appear in management texts, actually only applies to the most exceptional founders, those whom Steve Jobs once described as “the crazy ones.” Their companies aren’t called unicorns for nothing.
Time travel
In 2007, I participated in a Y Combinator cohort of 12 companies (starting next year there will be four cohorts a year, with hundreds of startups). It was already clear that Graham, who was extremely practical, had developed his views on the primacy of founders. My article was published in Newsweek under the headline “Boot Camp for Billionaires.”
Every Tuesday during the program, Y Combinator hosts a chili or stew dinner for startups. At this first one, Graham and (cofounder Jessica) Livingston hand out gray T-shirts emblazoned with one of Graham’s more pithy admonitions: MAKE SOMETHING PEOPLE WANT. A second black T-shirt is given only to startups that achieve a “liquidity event” — that is, a buyout by a larger company or an initial public offering. It reads: I MADE SOMETHING PEOPLE WANT.
