Founder Mode vs. Manager Mode: The False Dichotomy Shaking Silicon Valley
Comparing Brian Chesky's Insight to Andy Grove’s High Output Management
The News
The term "founder mode" has recently gained traction across the internet thanks to Airbnb's CEO, Brian Chesky’s remarks on stage and a subsequent article by famed investor, Paul Graham. This concept, which emphasizes a founder's hands-on approach, seems to be a new and modern take on management. However, when we peel back the layers, we find striking similarities with the tried-and-true principles of Andrew Grove's seminal work, "High Output Management,” (written by a non-founder corporate CEO in the 1980s). In this article, we'll explore how these two philosophies, rather than being at odds, actually complement each other.
The Concept
Understanding Founder Mode
Chesky is arguing that when it comes time to scale a business, founders are often encouraged to transform from “founder mode” into “manager mode.” Articulating the differences between these management styles is important and still a little unclear, but we can identify at least one attribute of founder mode – CEOs should be more involved in the details. All we have to go on is Paul Graham’s article:
The way managers are taught to run companies seems to be like modular design in the sense that you treat subtrees of the org chart as black boxes. You tell your direct reports what to do, and it's up to them to figure out how. But you don't get involved in the details of what they do. That would be micromanaging them, which is bad.
Whatever founder mode consists of, it's pretty clear that it's going to break the principle that the CEO should engage with the company only via his or her direct reports. "Skip-level" meetings will become the norm instead of a practice so unusual that there's a name for it. And once you abandon that constraint there are a huge number of permutations to choose from.
While it provides valuable insight into the experience of many founders, Graham acknowledges that there is still much to learn about this new distinction. He also concedes that there's undoubtedly a difference between managing a small startup and running a larger organization.
Obviously founders can't keep running a 2000 person company the way they ran it when it had 20. There's going to have to be some amount of delegation. Where the borders of autonomy end up, and how sharp they are, will probably vary from company to company. They'll even vary from time to time within the same company, as managers earn trust. So founder mode will be more complicated than manager mode. But it will also work better. We already know that from the examples of individual founders groping their way toward it.
Understanding High Output Management
On episode 195 of the All-In Podcast, David Sachs references Andrew Grove's High Output Management while discussing this very topic. Widely regarded as a management bible, the book has been essential reading material for business leaders worldwide (in fact, we loved it so much at Pareto Labs that we created an entire course around it!). Grove, the former CEO of Intel, offers a systematic approach to effective company management, centered on a few key principles.
First, Grove's model emphasizes effective delegation without abdicating responsibility, ensuring that leaders stay engaged in the areas that have the greatest impact. Interestingly, Grove suggests delegating tasks you're most familiar with. This aligns with the concept of "founder mode," where founders are hesitant to delegate tasks they don’t fully understand to so-called experts. Monitoring is difficult if you don’t understand the task and the output it should generate. Both approaches seem to emphasize the importance of closely monitoring team tasks rather than taking a completely hands-off approach. Grove comments on this in High Output Management:
Given a choice, should you delegate activities that are familiar to you or those that aren’t? Before answering consider the following principle: delegation without follow-through is abdication. You can never wash your hands of a task. Even after you delegate it you are still responsible for its accomplishment, and monitoring the delegated task is the only practical way for you to ensure a result. Monitoring is not meddling but means checking to make sure an activity is proceeding in line with expectations. Because it is easier to monitor something with which you are familiar, if you have a choice you should delegate those activities you know best.
Grove repeatedly emphasizes the distinction between abdication, proper delegation, and meddling—where micromanaging hampers the team's effectiveness. The ultimate goal is for a manager to achieve maximum "managerial leverage," a term he uses to describe how a manager can multiply their own output through their team by focusing on three key activities:
Delegation: assigning tasks and enabling the team to execute.
Making High-Impact Decisions: focusing on decisions that have the largest impact since you can’t get involved in every little decision.
Training and Coaching: investing in developing your team so team members’ individual outputs multiply.
Secondly, the core principle at the heart of Grove's methodology is that a manager's output, or performance, is directly tied to the collective output of her team. When the CEO clearly defines company goals, priorities, and key metrics—along with how output is measured—it becomes much more difficult for “fakers,” as Graham refers to traditional managers, to thrive. This idea is also fundamental to understanding Objectives and Key Results (OKRs), a monitoring system Grove pioneered that has since been widely adopted by many companies, particularly in the tech industry.
The third concept to understand is Grove’s black box metaphor. He explains managing team processes via a black box with inputs (labor and resources) going into the box, processes happening inside the box, and the output (result of the processes) coming out the other side. Interestingly, Graham also uses the term "black box" to describe the flawed approach of "manager mode" in his article. It makes me wonder—could this be a subtle critique of Grove, or is it just a coincidence?
Check out this great animation by venture capitalist, Michael Dearing, about how the black box works.
The core idea is that while the processes inside the black box are hidden, good managers don't just accept that. Instead, they create windows—metaphors for metrics—that allow them to see what’s happening. If the metrics aren’t showing the desired results, it’s a signal that the box needs to be opened and fixed. Elon Musk, for example, famously slept on Tesla’s factory floor as he worked tirelessly to resolve production issues—this was his way of "opening the box" to address the problems because the metrics weren’t where they needed to be. While Elon is Tesla's founder, you don’t need to be a founder to take this approach. In this case, “founder mode” and “good manager mode” seem to be interchangeable.
What about "skip-level" meetings? Grove introduced this concept 40 years ago and strongly advocated for it. Any good manager should build relationships and regularly meet with employees beyond their direct reports. For those who follow Grove’s teachings, this is neither new nor controversial. As a non-founder in a large corporation, Grove implemented this practice without any backlash—only a 4,500% increase in stock price.
The Example
Because the main theme of Graham’s article centers around the concept of delegation, our example will focus on effective delegation according to Andy Grove, which emphasizes assigning responsibility while maintaining oversight through monitoring, ensuring the delegated task aligns with the desired outcome.
And because I’m the father of two young boys, I see everything through the lens of parenting now :-) – so I’ll pull an example from that realm. Imagine a situation where you want to teach your child responsibility by delegating a chore—say, tidying up his room.
Clear Expectations. When delegating the task, you don't just tell your 7-year-old to "clean the room." You provide clear expectations of what “cleaning” means—putting toys in their bins, books on the shelf, and clothes in the laundry hamper.
Empowerment and Autonomy. Just as Grove recommends delegating tasks that match the capabilities of the person, you assign a task that your 7-year-old is capable of completing without constant help. You empower him to do it on his own but provide the tools and guidance he needs to succeed.
Monitoring without Micromanaging. Grove stresses that delegation doesn’t mean stepping away entirely; it requires monitoring. In this case, after your child starts cleaning, you might check in halfway through the process—asking if he needs help or giving light guidance if something is missed. However, you don’t hover or take over the task (as that would be micromanaging). The goal is to observe and help him stay on track while letting him retain control of the task. It’s important that the parent knows something about how to clean rooms and what a clean room will look like when complete.
Follow-up and Feedback. Once your child finishes cleaning, you review the work together. You provide feedback: if the task was done well, you praise him, reinforcing positive behavior. If something was missed, you point it out in a supportive way and ask him to fix it. This follow-up ensures that the task meets the expectations, similar to how Grove suggests managers should review delegated tasks to ensure they align with organizational goals.
Learning and Growth. Over time, as your child gets more comfortable and efficient at cleaning his room, you may need to check in less often, just as Grove describes that tasks can eventually be delegated with minimal monitoring as trust and competence grow. This allows your child to gain independence while ensuring that the task continues to be done correctly.
Conclusion
In conclusion, it’s possible that Chesky was given poor advice when told to “hire good people and give them room to do their jobs.” However, this advice likely needed more explanation and nuance and should have come with a hard copy of High Output Management. In my opinion, the real distinction isn’t between "founder mode" and "manager mode," but rather between "good management" and "bad management." A great CEO will:
Clearly define the vision and establish key metrics (north star) for measuring output.
Evaluate managers based on their team’s output.
Align the organization around these key metrics.
Maximize managerial leverage through effective delegation (plus monitoring!), decision-making, and coaching.
Conduct “skip-level” meetings.
Dive into critical details when necessary.
Ultimately, there's nothing new or revolutionary in Graham’s article—Andy Grove’s management frameworks remain as relevant today as they were 40 years ago. It’s encouraging to see Silicon Valley revisiting and discussing these timeless principles. If you haven’t read the book yet, do yourself a favor and pick it up at your local library (or at least watch the Pareto Labs course on it). It’s absolutely worth your time.
The Quiz
What processes do you experience at work that can be described using the black box metaphor (Inputs, Processes, Outputs) and what are the key metrics you measure (windows into the box)?
Feel free to write in the comments or reply to the email!