Paul Graham and the Cult of the Founder

"Founder Mode" is such garbage.

Paul Graham has been bad for Silicon Valley.

Without Paul Graham, we would not have YCombinator. And YCombinator is, chiefly, the Cult of the Founder. Silicon Valley would be so much better off without it. The companies that came out of YCombinator would be better off if their leaders weren’t so convinced of their own moral superiority.

And this has been a long time coming. YCombinator’s malign influence can be traced back to its very first class.

The photo below is of YCombinator’s first cohort, in 2007. You can see a young, tall, lanky Alexis Ohanian in the back left row. Sam Altman stands in the front, arms crossed, full of unearned swagger. Paul Graham (the proto-techbro) is to Altman’s right, dressed in an outfit that screams “goddammit I reserved this tennis court for half an hour ago!”

To Altman’s left is Aaron Swartz. Aaron cofounded Reddit, but left the company when it was sold to Conde Nast. He couldn’t stand the YCombinator vibes. I first met Aaron a couple years later, after he cofounded the Progressive Change Campaign Committee. He would go on to cofound Demand Progress and successfully wage a major campaign against SOPA/PIPA, all while contributing to Creative Commons and RSS and blogging and making a dozen other types of good trouble.

It occurs to me that Aaron and Altman represent two archetypes of what Silicon Valley might value. Sam Altman embodied the ideals of the founder. He so impressed Paul Graham that, even though Altman’s company (Loopt) was a failure, Graham named him the the next President of YCombinator. Say what you will about the guy, but he has a remarkable flair for failing upward.

Aaron, meanwhile, was a hacker in the classical sense of the word. He was intensely curious, brilliant, and generous. He was kind, yet uncompromising. He had a temper, but he pretty much only directed it toward idiots in positions of power. When he saw something wrong, he would build his own solution.

Aaron died in 2013. He took his own life, having been hounded by the Department of Justice for years over the crime of (literally) downloading too many articles from JSTOR. Upon his death, the entire internet mourned. Books have been written about him, documentaries have been produced. It felt back then as though there was this massive, Aaron-shaped hole. There kind of still is, even today.

Sam Altman and OpenAI have scraped practically the entire Internet. JSTOR, YouTube, Reddit… so long as the content is publicly accessible, OpenAI’s stance appears to be that copyright law is only for little people.

For this, Altman has been crowned the new boy-king of Silicon Valley. It strikes me that in present-day Silicon Valley, thanks largely to the influence of networks like YCombinator, is almost entirely Altman wannabes. Altman is the template. It’s him and Peter Thiel and Elon Musk and Marc Andreessen and David droopy-dog Sacks. They have constructed an altar to founders and think disruption is inherently good because it enables such marvelous financial engineering. They don’t build shit, and they think the employees and managers who run their actual companies ought to show more deference.

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I’ve been thinking about this lately because Paul Graham’s latest essay, “Founder Mode,” has been making the rounds. The essay is, on one level, an ode to micromanagement:

Hire good people and give them room to do their jobs. Sounds great when it's described that way, doesn't it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground.

But more than that, its a paean to the ethereal qualities that elevate “founders” from the rest of us.

There are things founders can do that managers can't, and not doing them feels wrong to founders, because it is.

(…)

Founders feel like they're being gaslit from both sides — by the people telling them they have to run their companies like managers, and by the people working for them when they do. Usually when everyone around you disagrees with you, your default assumption should be that you're mistaken. But this is one of the rare exceptions. VCs who haven't been founders themselves don't know how founders should run companies, and C-level execs, as a class, include some of the most skillful liars in the world.

Graham comes to this realization by hanging out with his founder buddies. These are some of the richest men in the world! And sometimes, the people around them push back on their ideas! But those people aren’t founders. It just isn’t right, for a founder to be questioned like that.

The single practical suggestion in the essay is that companies should follow in the footsteps of Steve Jobs (of course) and hold retreats of “the 100 most important people working at [the company],” regardless of job title. Graham insists this is unique to Jobs, that he has never heard of another company doing it. Dan Davies counters that this is, in fact, quite common, remarking:

“When I was at Credit Bloody Suisse, they used to have global offsites with 100 key employees from different levels (…) I don’t necessarily want to gainsay Paul Graham’s experience here, but if VCs are in the habit of imposing the kind of structures that he describes on their portfolio companies, then I think every business school prof in the world would agree with me that they are being dicks and should stop.”

The mood that animates Graham’s essay, though, is just sheer outrage that professional managers might constrain the vision and ambition of founders. In Graham’s rendering, the founders are akin Steve Jobs, while the professional managers are like John Sculley. (Nevermind that young-Steve-Jobs was a horrendous manager — not just in the sense that he was a cruel boss, but also in the sense that his products didn’t hit their sales targets and the company bled money. The notion that young-Jobs failed, older-Jobs succeeded, and he maybe learned something in between contains too much nuance for the YCombinator-class.)

Notice that, in this rendering, the story of Apple becomes Jobs-vs-Sculley, rather than Jobs-vs-Wozniak. The original legend of Apple is that the company combined Jobs’s once-in-a-generation talent for envisioning the trajectory of consumer technologies with Steve Wozniak’s generational skill for building an ahead-of-its-time product. And then it cast aside Woz, because he got in the way.

The Silicon Valley of the 1980s, 90s, and even the 00s still culturally elevated hackers like Woz. The “founders” (entrepreneurs, really) didn’t understand the tech stack, but they knew how to bring a product to market. Steve Jobs couldn’t code for shit, and for much of its history, Silicon Valley revered Woz as much as it did Jobs.

Aaron was, in a sense, my generation’s equivalent of Woz. It isn’t a perfect analogy. But as archtypes go, it fits well enough. They don’t even try to produce Aarons anymore. Everyone is trying to be Sam frickin’ Altman now.

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YCombinator was one of the major sources of that cultural change, because YCombinator proved so effective at perpetuating its own mythology. Paul Graham developed a successful formula: bring together the best young entrepreneurs with the best potential ideas. Tell them they are special. Give them advice, connect them to funders, do everything in your power to help them succeed. Most of the companies will fail, but you can trumpet the ones that succeed as proof of your special skill at identifying the character traits of true founders. (In practice, this is quite simple: Paul Graham and his successors — Sam Altman and Garry Tan — just look for people that remind them of themselves.)

Notice the self-reinforcing nature of this model. If you have a ton of resources, and you get to pick first, it’s a lot easier to pick winners. Peter Thiel is a good example — much of Peter Thiel’s vast fortune comes from having been the first guy to invest in Mark Zuckerberg. Good for him, but he was also basically the first guy given the opportunity to invest in Mark Zuckerberg. Declaring that this wealth is due to a unique capacity to identify the special qualities of founders is a bit like saying the San Antonio Spurs are a uniquely well-run basketball franchise because they drafted Victor Wembanyama. We can recognize their good fortune without constructing a whole mythology around “Spurs mode.”

And YCombinator has indeed spawned many successful companies. It counts the founders of Reddit, AirBnB, Doordash, Dropbox, Coinbase, Stripe, and Twitch among its alumni. But less clear is how these companies would have fared in the absence of YCombinator. Did Paul Graham impart genuinely original knowledge to them, or just fete them with stories about what special boys they all were, while open the doors to copious amounts of seed funding?

The Cult of the Founder says that founders are all Steve Jobses. They are unique visionaries. They can make mistakes, but their mistakes are of the got-too-far-ahead-of-society variation. Non-founders just cannot understand them. Other techies can’t either. The most talented hackers in the world are really just employees, after all.

We could dismiss the Cult of the Founder if not for the tremendous capital that it has accumulated. The Cult of the Founder only really matters because of the gravitational force of money. To the Founder-class — Graham, Andreessen, Musk, et al — this is proof of their special brilliance. They’re rich and you’re poor, and the difference is their special skills and knowledge. But of course its more complicated than that. They have all that money because we created institutional rules that they learned to exploit. They get to invest early in promising ventures and cash out huge returns before the company ever has to think about generating a profit. They’ve found a dozen different ways to never pay taxes on those windfall profits. And existing regulations are for other people.

This is all of a piece with Andreessen’s techno-optimist manifesto and Balaji Srinivasan’s batshit bitcoin declarations. A small, cloistered elite of not-especially-bright billionaires have decided that they are very, very special, and that the problem with society these days is that people keep treating them like everyone else.

The tech industry was never perfect. It never lived up to its lofty ambitions. But it has gotten demonstrably worse. And I think the fork-in-the-road moment was when the industry stopped trying to celebrate old-school hackers like Aaron Swartz and started working full-time to build monuments to Sam Altman instead.

Paul Graham did that. More than anything, Graham’s cultural influence has been elevating and exalting “founders” as a unique and special boys. And the broader tech industry is worse off as a result.