Greetings friends. It’s been a minute, but I think I’m back. One might even say I’m SO back. Since my last post (190 days ago), I’ve launched two companies, became a full stack developer, video content creator, and podcast host. Lmao. If you aren’t using AI to become Neo in The Matrix by now, I don’t know what to tell you. Anyways, this week we are talking about..
Founder Mode
Founder Mode, the article written by Paul Graham this summer, which was subsequently put through the ringer by every person in tech, was a sort of ambiguous description of what it means to be in Founder Mode, versus Manager Mode. The joke in the tech/VC world was that he never truly defines what is actually is, which is why everyone had to weigh in with their own thoughts, and why yours truly could also not resist the masculine urge. That being said, I think I have an orthogonal take driven by the efforts of the last several months launching two companies in rapid succession.
Quick aside on launching companies in today’s market. As I remarked on our nascent podcast, Modern Leverage, “you are your own VC” in today’s climate. Meaning, you could assume the power law would endure in the same fashion as a VC placing 100 bets, as you launching 100 companies. The fun fact is that with AI, and short form video algorithms, it is so much easier (and faster) to find product market fit, that you (yourself) could have an idea, spin up an app, create some video, and see if it resonates with anyone, all in a manner of days. One could argue that this is not Lindy, but many startups operate for years, spending millions of investor dollars, and ultimately making no money and going to zero. That timescale has been drastically shortened, and to boot you don’t need to take investor funding to accomplish it. Paraphrasing Nikita Bier “Exit value to a founder of a consumer app rivals that of a VC backed org with multiple dilutions”. Meaning you could have 100% equity in a $100k ARR app, which would be the same as 10% of $1M ARR app. The 90% in dilution it might take to grow 10x doesn’t cover the opportunity cost. Anyways back to the post..
In trying to define Founder Mode of course everyone first looks to some of the best founders to see what makes them so great. Is Zuck’s CEO position given more internal goodwill and authority due to his status as Founder? Is he thusly able to exact his will on the organizational vision, and pivot hundreds of millions of shareholder dollars from VR to AI, with nary a raised eyebrow? No, because someone in a Manager role, say Satya Nadella from Microsoft, can also execute such a plan. Founder Mode is not so dictatorial in its nature. Also, I don’t think that examining mature organizations printing billions of dollars will uncover the essence of a thing that is defined by forging nothingness into somethingness. We aren’t analyzing the space race, we’re theorizing on the Big Bang.
Manager Mode is powerlifting, Founder Mode is Pilates.
In powerlifting you have a solid mass of muscle that you use to move big shit around. It’s raw aggression, a physics problem contingent on caffeine x calories x vanity x psychosis. Pilates is all about using hundreds of tiny muscles that you’ve never used before or knew existed, looks easy, isn’t, and makes you fit, in all the non-obvious, context-switching ways that actually matter.
Being a Founder means you do EVERYTHING. You’re building the actual product, and if you’re not, you’re PMing with a microscopic lens, either way you’re tapped into every minutia of UX, and every possible permutation of user events that could result in disaster. You’re doing the marketing, which means you’re creating content, talking, writing, filming, editing, sourcing material, repurposing material, ideating, networking, posting on a half dozen social accounts, or generally just available 24/7 to the general public. You’re spending Sunday afternoon replying to 289 messages to keep leads warm, setting up future calls during time periods when you have no idea if you’ll be available, making everything up on the fly, because there is no playbook. There is no playbook because your product has never been created before, you’re solving a problem that hasn’t been solved. And there are millions of problems to solve to solve that problem, and ChatGPT has not yet been trained on the near future where you solve it, so it can’t tell you what to do. You’re a dandelion clock, with winds swirling everywhere, but if you embrace the chaos, you develop muscles you’ve never used before, or knew existed, and you keep all your seeds for another season. What comes out the other end is a Founder. A person you could put in any business situation and they will find a way out to the other side. It involves cunning, ingenuity, relentlessness, and sheer disregard of reality. Because the reality is there is a very slim chance of this working, it’s dumb of you to try, no one understands when you can’t go out for drinks after volleyball on a Saturday because “I have to keep momentum going” and, to quote Adam Sandler, “they’re all gonna laugh at you”.
I want to dig just a tiny bit deeper though, and triangulate the more philosophical, sociological, and, dare I say, psychological reasons for why one would subject themselves to such horror. And, why it’s absolutely imperative that more people do so.
Everything good is on the other side of something difficult.
Technology makes things infinitely easier, it’s stated purpose is just that. Automated life into luxury. A person in near poverty in America today, with only basic access to supermarkets and the internet, lives better than King Louis XIII did in 1610. It would be very simple to pleasure ourselves to death, and quite frankly, the objective measure of exactly how simple it would be increases exponentially over time, precisely on the same curve as technology. And the only reason that curve is exponential and not linear is that there are people working every day to create new technology, develop new processes, create new companies, and push things above that trend line.
Another side note, sorry, I haven’t written in so long.. Some have argued that we’ve been stagnant in technological progress over the last 20 years. “We were promised flying cars and we got 140 characters”. Yes, much of the progress of the last 2 decades has been digital alone. Bits and not atoms. Obviously the release of the smart phone, parlayed into social media, parlayed into consumer apps and digital advertising made such a mockery of economics and marginal cost that anybody with any sense would (and still should and could) of course spend their time building their fortune there. Zero marginal cost of scaling customers has become zero marginal opportunity cost of building companies, going back to the “you are your own VC” analogy. Those with fortunes made on the backs of digital ad dollars and bored of that world are, thankfully, turning to new problems in the physical world, like nuclear, fission, solar, and all the other cool things upstream of literally everything. The digital revolution makes this return to atoms possible, but alongside that, there is still an infinite frontier in any direction you look.
“Problems are inevitable, but they are also soluble… Given the right knowledge, we can always make progress and improve our condition. This is the beginning of infinity.” - David Deutsch
So what is this je ne sais quoi that makes people yearn to found a company?
We have to look at a couple of things that I have written about in the past. First, Mimetic Theory, which says that human desires are imitative, meaning we want things because others want them, leading to rivalry and competition. Second is Social Dominance Theory, which proposes that societies create and maintain group-based hierarchies where certain groups dominate others, driven by social, economic, and ideological forces. These are both innate in human nature, which explains the deep desire to go above and beyond, to explore, to solve problems that haven’t been solved. To dismiss this as egocentric would be to dismiss all of humanity, along with it the evolution of consciousness, compassion, and empathy. Everything good is on the other side of something difficult. Causing conflict through competition for no other reason than to assert your social dominance by solving a novel problem achieves more than just status, it actually benefits humanity, and is necessary for its progress. If you want to decelerate, pause AI, de-growth, capture things “regulatorily”, and look at the world in a zero-sum fashion, this life is not for you. But, enigmatically, risking failure, or solvency, or looking like a fool, is the only way to achieve great things. And, also enigmatically, the passionate pursuit of progress, driven by status, is the literal only thing making the world a better place for everyone. If you see someone dead on this hill, its me.
Manager Mode is not to be forsaken, however. As stated before, there are tremendous managers steering massive ships doing the heavy lifting to ensure the crew gets safely to the perpetually distant horizon. There are entrepreneurial individuals inside of organizations, doing mini-founder modes. There are organizations that ensure they only hire or promote people with those tendencies, despite the fact that they usually don’t last long before setting sail on their own ship.
The real contrast is not between Founder Mode and Manager Mode, but what Manager Mode inevitably submits to, which is the Professional Managerial Class (PMC). When ships get big, humans need ways to inflict their social dominance (they are, in fact, human), but lack the risk-on nature of the Founders. This leads to the prioritization of career stability and hierarchy over agility and actual progress, potentially slowing down innovation. Hiring more people underneath you is, in many circles, considered high status (see: all tech company org structures prior to Nov 2021), and the surest way to self preservation. Whereas the mantra of Founders is “if 20% of things aren’t breaking all the time, you aren’t moving fast enough”, the PMC pumps the breaks by instilling processes, approvals, and bureaucracy. The enigmatic “noble egoic” nature exists in the PMC too, their only fault is that they bear no downside risk. If everything good is on the other side of something difficult, then, by the Inverse Property, avoiding difficulty inherently means not achieving those good things. The status games thus played within the PMC (and in society writ large), amount to a “horizontal hierarchy”, which I wrote about previously. These games are essentially just politicking, and provide no substantive value except perceived status within a niche community. This status is not recognized by a greater collective (except for the dollars they accrue), and is in fact looked down upon by those outside the niche community, thus granting it the “horizontal” designation I donned it with.
Founders hate politics. The PMC depends on it.
It is impossible to forge something from nothing without stepping outside the comfort of established systems and processes. Founders are the Big Bang, the Beginning of Infinity, the Alpha. The PMC is the End of History, pleasuring ourselves to death, the Omega.
Build more companies. Solve more problems. Or don’t. It doesn’t matter (it does). Either way, they’re all gonna laugh at you. So might as well.