It’s also true that when one of those groundbreaking companies matures and faces challenges, a founder has a unique ability to make bold moves and stick to the original vision when others push for a less risky course. There are certainly cases where companies have struggled when founders are replaced by managers. Remember Yahoo? And of course there’s Apple, where the founder returned and restored the company to its former glory and beyond.
But there are plenty of counterexamples. Apple isn’t exactly struggling under Tim Cook. And consider Microsoft. Its CEO since 2014, Satya Nadella, was a lifelong member of the company, having worked his way through various departments since 1992. Not a founder, no. But he took the company to new heights. While Bill Gates is still revered at Microsoft, no one inside the company wants him back at the top.
And God knows, there are plenty of cases where it wasn’t the fake management people, but the stubborn founders who ruined a company. I think Travis Kalanick would have benefited from listening to the stubborn managers. His replacement, a kind of management guy, made Uber profitable.
The fact is, not everyone is Brian Chesky, and no one is Steve Jobs. The vast majority of companies never get off the ground, and fizzle out in disgrace. Very few founders reach the point where investors demand adult oversight to manage growth, because only the rarest companies ever get there.
It’s fun to talk about founder mode, perhaps for the same reason some of us read Ben Horowitz’s founder-porn with our noses pressed to the window. Founder mode, which Graham predicts will one day appear in management texts, really only applies to the most exceptional founders, the ones Steve Jobs once called “the crazy ones.” Their companies aren’t called unicorns for nothing.
Time travel
In 2007, I was embedded in a Y Combinator batch of 12 companies. (Starting next year, there will be four batches per year, with hundreds of startups.) It was clear by then that Graham, who was extremely hands-on, had developed his view of founder primacy. My story appeared in Newsweek under the headline “Boot Camp for Billionaires.”
Every Tuesday during the program, Y Combinator hosts a chili or stew dinner for the startups. At this first one, Graham and [cofounder Jessica] Livingston distributes gray T-shirts emblazoned with one of Graham’s most pithy admonitions: MAKE SOMETHING PEOPLE WANT. A second, black shirt is given only to startups that reach a “liquidity event”—a purchase by a larger company or an IPO. It reads: I MADE SOMETHING PEOPLE WANT.
