Decoder is on my very short list of must-listen podcasts every week. Their episodes are usually interviews with CEOs and leaders about how they structure their teams, how they make decisions, and how they navigate tricky issues facing their business.
Last week’s guest was Brian Chesky, CEO of Airbnb. In their conversation, Chesky goes deep into what “founder mode” means to him. If you haven’t heard that term before, it was popularized by Paul Graham’s essay reflecting on a talk Chesky gave at a YCombinator event:
The theme of Brian’s talk was that the conventional wisdom about how to run larger companies is mistaken. As Airbnb grew, well-meaning people advised him that he had to run the company in a certain way for it to scale. Their advice could be optimistically summarized as “hire good people and give them room to do their jobs.” He followed this advice and the results were disastrous. So he had to figure out a better way on his own, which he did partly by studying how Steve Jobs ran Apple. So far it seems to be working. Airbnb’s free cash flow margin is now among the best in Silicon Valley.
…
In effect there are two different ways to run a company: founder mode and manager mode. Till now most people even in Silicon Valley have implicitly assumed that scaling a startup meant switching to manager mode. But we can infer the existence of another mode from the dismay of founders who’ve tried it, and the success of their attempts to escape from it.
There’s been a wide range of interpretation of what Founder Mode means - as swagger, as micromanagement/tyrannical bosses or as the veneration of long hours/no delegation. So it was great to hear how he’s actually thinking about it at a company the size of Airbnb. So much of what he said resonated with me. His overview begins with this:
- Chesky:
- If I could summarize founder mode in like a couple sentences, it’s being in the details. It’s that great leadership is presence, not absence. It’s about a leader being in the details. And if you as a leader aren’t in the details, guess what? Your leaders aren’t in the details and their leaders aren’t in the details. And one day you’re gonna wake up and you have 50 year olds managing 40 year olds, managing 30 year olds, managing people two years out of college doing all the work with no oversight. And you have these four unnecessary layers and you have no experts in the company.
So the antidote to this is to try to be as functional as possible. We are a functional organization. Functional just means expertise based, not general management based. And so I’m the only non-functional person in the company. All functions roll up to me. I generally think the CEO should be the chief product officer of the company. And here’s the heuristic. Like the most important thing a company does is make a product. If the CEO is not the expert in the product, then why are they the CEO? Said differently, I should not be the CEO of SpaceX because I couldn’t be the chief product officer because I do not understand rocketry. So maybe I’m a good CEO, but I can’t be the chief product officer. There may be some exceptions, but I generally think that’s the case. And then your leaders shouldn’t just be quote managers. And I put managers in quotes. They should be in the details. If we were a military, like a battalion, the cavalry general should know how to ride a horse. Like it’s crazy that they don’t. And leaders shouldn’t be fungible. So it’s really about being in the details.
(transcribed using Whisper)
Ignoring the ageism, most of this resonates with me. My best experiences have been with leaders who are in the details, who are users and experts on the products we’re building, and bring hands on expertise at a detailed level. This includes my time at places like ESPN, not just the startups.
At scale, things definitely get tricky. Disney started consolidating all of the media networks and content distribution into one technology organization back around 2017. It was a period of significant, regular restructuring as the company systematically executed this transition. It wasn’t fun, honestly. Chesky’s overview gave me a new appreciation of why the model can work better and likely does work better now for Disney, after the consolidations are complete.
They cover a lot of ground - his inspirations for structuring the company this way, his thoughts on product management vs program management, and a few other tidbits. Really fascinating episode, strongly recommended.