(2024-12-17) Majors Founder Mode And The Art Of Mythmaking

Charity Majors: “Founder Mode” and the Art of Mythmaking. Earlier this year I started writing a piece on why “hire great people and get out of their way” is such terrible, dangerous, counterproductive advice to give anyone in a leadership role. Then Paul Graham dropped his famous essay on “founder mode”, inspired by a talk given at a YC event by Brian Chesky.

A month and a half later, we all got to see what the fuss was about. Keith Rabois interviewed Brian Chesky at a Khosla Ventures event in NYC and posted the ensuing 45 min video to YouTube, calling it “Founder Mode and the Art of Hiring”.

What I should have done: put my head down and finished the fucking piece. 🙄 What I actually did: ragetweeted a long thread from bed, read a bunch of other people’s takes, then went “well, all the bases seem to be covered” and lost all interest in finishing.

The gripping tale of Airbnb’s dramatic rise, crash, and rebirth

Chesky starts off by relating a story about how Airbnb in its early years hired way too many people, way too fast, and buckled under all the nasty consequences of hypergrowth (blitzscaling). Lack of clarity and direction.

You never want to let a crisis go to waste, so Chesky seizes the opportunity to restructure the company and make a bunch of massive changes.

So it’s 2019, and it’s just starting to dawn on Brian Chesky that he has this massive clusterfuck on his hands. But Airbnb is barrelling towards an IPO, so he feels like his hands are tied. Then COVID hits. Airbnb loses 80% of its business in 8 weeks

This is an incredible story. I want to hear this story. The problem is that he somehow manages to tell it in the most aggravating possible way, where he is a lone hero, buffeted by mediocrity and held back by his own employees at every turn.

He talks about the people who worked for him in supremely belittling terms — “C players”, “incapable”, “mediocre”, “worst people”. And he takes absolutely zero responsibility for the corporate disaster that developed in slow motion under his watch, while taking ALL the credit for its recovery. (2023-09-09) Itamar Gilad On Linkedin Why Did Airbnb Kill Product Management]

How might another person have told this story?

I mean…if it was me, I might have started off by confessing that “Wow, I did not do a good job as CEO for the first decade of running my company

Instead, the way he tells the story, the problem is always everyone else, and the solution is always more Brian Chesky.

It took me a month to make it through the entire recording
I’ll be honest, I made it about three minutes into the video before I blew my fucking top and closed the tab. It made me so angry. This fucking guy. It pushes all my buttons.

this attitude he has, where the buck stops literally everywhere but him — is one I find so fucking repellent. Ethics aside, I also feel like it constitutes a material risk to any company when the CEO is so lacking in humility and self-awareness

There is good advice inside, and there are reasonable principles embedded in this talk. Chesky seems to have successfully turned his company around, after all. That’s a really hard thing to do!

My apologies for the extremely long quotes, but I think they set the stage well. (Lightly edited for readability.)

let’s take the major points he makes, one at a time, and mine them for gold nuggets

The story, in Brian Chesky’s words

problem with being a CEO is I think almost all the advice and everything they teach at like Harvard Business School…is wrong

it was amazing for a bit, from like 2009-2014. It was awesome. It was fun. It was exciting. And then one day it was horrible. And that day went on for like six years

I’ve never been to Harvard Business School, but I would be pretty surprised to learn that they don’t cover things like organizational structure, span of control, or operational efficiency.

We had a company where we were like a matrix management organization. And so like we had all these different teams. And by the way, there’s no governor of how many teams there are

(The “governor of how many teams there are” is whoever leads your People team or HR, btw, who in turn rolls up to the CEO. Again, org design is a pretty traditional and well-studied aspect of operating a company.)

So let’s take a marketing or creative department. There’s a team in Airbnb doing graphics and different parts of the site need graphics, advertising needs graphics. And when it was five teams, the five teams would ask the graphics department for graphics and they’d have like five requests. And then pretty soon it’s 20 teams and once it’s 20 teams…they’re like the deli, there’s a line out the block

To sum up: before the pandemic, Airbnb seems to have had multiple business divisions, each of which had its own GM and a whole ass org structure, with its own engineering, design, marketing teams, etc. This seems wildly weird and inefficient and crazy to me, given that Airbnb only has one product, which is Airbnb? But, they did. So yeah, I am unsurprised that this did not work well.

You should have as few employees as possible

“So what did I do? The first thing I did is I went from a divisional structure to a functional organization.

our goal was to have as few employees as possible... And the reason why is that every person brings with them a communication tax.”

I feel like this should be really fucking obvious, but I guess the legacy of hypergrowth companies proves that it is not: You should ALWAYS have as few employees as possible.

Which brings us to our first lesson on efficiency.

for your average VC-funded technology startup, “we want a small, lean, elite, highly skilled team” is like saying “you should eat vegetables.” (VCs are usually the ones most responsible for the blitzscaling model)

Your managers should be subject matter experts

You don’t manage people, you manage people through the work

The disgust in his voice when he says the word “managers” is palpable. And it’s gross. You can talk about the importance of managers being highly skilled in their domain — and I have, many times! — without treating people with contempt, or disparaging them in public for performing the exact jobs that, again, your own company defined and hired them to do, and they faithfully did, for years.

for a long time we had managers. And one day I woke up and I realized I had 50 year olds, managing 40 year olds, managing 30 year olds, managing interns, doing the job with all these layers that weren’t adding any value

Again, I’m not sure where he gets this idea that at “most tech companies”, the head of design is just like…hired from Starbucks or something for their people management skills?

“The best way to get rid of meetings is to not have so many people”

People do incur coordination costs, but just to be clear, there are lots of ways to get rid of meetings, no matter how many people you do or don’t have, and you should absolutely be investing in some of them in an ongoing way. For example, Develop a rich written culture and rituals around async work

Synchronous meetings are one of many, many ways to coordinate between people and groups. There are others. Explore and experiment.

“I got rid of all quote managers or they left the company and we said you can only manage the function if you’re an expert. So like the head of design has to actually manage the work first.

B players hire LOTS of C players, not just a few but a lot, because those are the kind of people that like building empires.

Maybe don’t call your employees “C players”, “incapable people” or “non world class”

as a friend of mine put it: “I am prepared to argue that he has no theory of mind for any actor at the company that is not the CEO. The search for the deep truth can stop, Brian doesn’t actually know what people are.”)

So you need three incapable people because one incapable person can’t actually do all the work. But now three incapable people are just going in three different directions, creating all these meetings and all this administrative tax.”

acknowledge the fact that there are real challenges here. It’s extremely difficult to evaluate people who are more skilled than you are in the interview process, and harder still to evaluate those who are skilled in a different domain.

Constraints fuel creativity. Constraints also fuel efficiency. One of the biggest pathologies of hypergrowth is that when money is free, and everybody is telling you to go go go, grow grow grow! discipline tends to fly out the window.

Great leadership is presence, not absence

How do you know if they’re doing a good job if you’re not in the details? You should start in the details. And no one does this

A-fucking-men.
…Except for the one small fact that Chesky keeps repeating, “no one does this”. My dude, everyone does this. Nobody just hires an executive and sets them loose and doesn’t look over their shoulder for a year. What the flying fuck?

Christine and I learned a long time ago not to tell our execs, “I’m not going to tell you how to run your org.” The goal is to do the work to be in alignment so that you don’t have to tell someone how to run their org, because you have a shared idea of what “great” looks like — and what “good enough” looks like — and you can catch deviations early, while they’re easy enough to fix.

But what does that mean exactly? Fortunately, he’s about to tell us.

“I review every single thing in the company. If I don’t review it, it doesn’t ship.”

I took a playbook of Steve Jobs, Elon Musk does this, Jensen Huang does this, Walt Disney does this, all of them do this

let’s listen to someone who does have believability. Here’s what Reed Hastings says in “No Rules Rules: Netflix and the Culture of Reinvention” (share price: $921): “There’s a whole mythology about CEOs and other senior leaders who are so involved in the details of the business that their product or service becomes amazing. The legend of Steve Jobs was that his micromanagement made the iPhone a great product... We don’t emulate those top-down models, because we believe we are fastest and most innovative when employees throughout the company make and own decisions. At Netflix, we strive to develop good decision-making muscles everywhere in our company — and we pride ourselves on how few decisions senior management makes

His co-author, Erin Meyer, chimes in: “People desire and thrive on jobs that give them control over their own decisions

OMG, confusing!! Evidently ALL of them do NOT do it. What even IS the moral of the story here?! Well…it’s not a simple one, unfortunately. It turns out that you can’t just copy what Brian Chesky did at Airbnb, or what Reed Hastings did at Netflix, and paste it into your company and expect the same results. Bummer!

There are many paths up the mountain

This is an architecture problem.

Either can work. Both have tradeoffs and implications

Your architecture will only work if it solves for your problems, utilizing your resources, values, and contingencies. It needs to be authentic, consistent, and internally coherent. This doesn’t mean you can’t learn anything from either of these companies.

And I can tell you right away that as an employee, one of these models looks a whole hell of a lot more appealing than the other.
But wait — it gets worse.

Should the CEO interview every candidate?

I think you should interview every candidate until the recruiting team stages an intervention

Well. If this is the kind of company you’re choosing to build, then I suppose you may as well be consistent.

The thing is…I have talked to so many people who work at companies where the CEO insists on interviewing every candidate. It seems to be a trend that is gaining steam rather than losing steam, much to everyone’s misfortune.

Which means that I have personally heard so many anguished stories from angry, frustrated engineering managers who have had their decisions overturned by arrogant CEOs who lacked the skills to evaluate their candidate’s experience, who were biased in blatant and embarrassing ways, who were so fucking overconfident in their own judgment that their teams are constantly having to compensate and apologize and mop up after them.

“If they would come work for you, they’re not good enough. They’re only good enough if they come to work for me.”

The irony is…I am actually the world’s hugest proponent of skip level 1x1s.

I’ve said that I think skip levels are like end-to-end health checks. It’s important to open a line of communication and explicitly invite critical feedback and bad news

But this attitude towards hierarchy that locates the CEO at the center of every universe, and ranks people in importance according to their proximity…it’s just gross. It’s an attitude that’s contagious

Executive hiring fails when you hire someone at the wrong stage

they were managing instead of building, and you didn’t know that

Yes, execs can fail because they are managing instead of building, but they can ALSO fail because they are building instead of managing. I’ve worked with execs who operated like they were effectively the most senior IC in the room, and they had…extreme limitations as leaders, let’s put it that way.

Overall, this is a solid point. Being a CMO that takes a company from $1-10m or $10-$50m is a very, very different skill set than taking a company from $50 to $250m, or through an IPO.

References are critical for building confidence in your hires

“I actually prioritize references over interviewing…Andreeson Horowitz would tell me, you should do 8 hours of reference checks per employee.”

Agreed. I’ve said many times that if I had to choose between interviews or references, I would pick references every time. (Fortunately, you don’t have to pick!)

You should always probe into people’s weaknesses and areas of development. Everyone has them, there’s no shame in that.

A basket of interviewing tips and tricks

Here’s how I would put it: you want to hire people for their unique strengths, not their lack of weaknesses. If they’re strong where you need them to be strong, it’s okay if they aren’t equally superpowered at everything — that’s why we build teams, to supplement and balance each other out.

There is no such thing as the ‘best people’

he does this over and over again, talking about people like they exist on some index you can stack rank or something.
Here’s one small mental hack that makes a world of difference: remember that you are trying to hire the right people to join your team/org/company.
Not the “best” people.

Building a world-class team is about more than just hiring

The team, the culture, the sociotechnical systems you hire them into are going to exert a gravitational pull over all of the people you hire

Sociologists have a term for the cognitive bias that causes us to predictably, consistently over-emphasize individual agency and attributes and underestimate situational factors: the FAE, or Fundamental Attribution Error. This whole interview is sopping with FAE energy.

Hypergrowth is hazardous to your company’s health. (blitzscaling)

Chesky mentions hypergrowth only once and briefly, towards the end, but it’s a vital piece of context if you want to understand the Airbnb story.

In hypergrowth mode, you solve every problem by throwing more resources at the system.

*Hypergrowth encourages a raft of bad habits, and attacking every problem by hiring more people is one of them.

This is not good for anyone, except perhaps venture capitalists. The externalities are dreadful.*

The CEO-centric view of the universe

One of my least favorite things about YC is the way it seems to pursue extremely young and inexperienced founders.

It looks like Brian Chesky was about 26 years old when he cofounded Airbnb. He has basically been a CEO for his entire career. And this is, I think, a great example of the kind of blinkered perspective you get from someone who has no real idea what it’s like to sit anywhere else on the org chart.

After watching the first 40 minutes of this talk, one might reasonably wonder if Brian Chesky understands that being CEO of a company means being accountable for its outcomes.