Keith Rabois explains “Founder Mode” and its similarities to how PayPal was run in the early days

“At PayPal, we never promoted anybody based on their management skill. We promoted everybody based on their craft. So if you wanted to run the design team, you had to be the best designer. If you wanted to run the engineering team, you had to be the best engineer. If you wanted to run product, you had to be the best product person. The CFO had to be the best finance person.”

The elimination of middle management from company org charts that Airbnb founder Brian Chesky talks about and Paul Graham’s viral essay Founder Mode, Keith argues, “re-popularized ideas that are pretty old school… It’s the antithesis of hiring someone whose expertise is managing versus someone whose expertise is building.”

Keith points out that Elon Musk has always run his companies in “founder mode” with the slashing of headcount by 80% and promoting individual contributors to managers at X being perhaps the most prominent example.

But Apple has been run this way for a lot of its history too:

“At Apple you get promoted by mastering something. Not by being a generalist… Apple collates and collects a bunch of people who are literally the best in the world at 26 different things and mixes them together. That’s a much better model.”

When asked what to do if, say, the best salesperson can’t grow into a VP of sales, Keith replies that most people should be able to and you should try it anyway:

“Sometimes its mentoring, pairing them with the right person, giving them the right feedback. But at least if you promote that person, you’re not going to demoralize your team because everybody knows that they were the best salesperson… They may have to learn how to coach and mentor other people, but you have enthusiasm and energy from the rank and file.”

He contrasts this to the alternative scenario:

“If you bring in someone who’s never hit a quota, never proven that they can sell product X, and you’re like ‘Oh, you’re the new manager.’ Sometimes people are like, ‘Who the hell are you?’ And it’s a very valid critique.”

Full video: Chris Vasquez “Keith Rabois on Trump Vs Kamala, Founder Mode & Mastering time like Elon Musk“ (Oct 2024)

P.S. We’ve put together a YouTube playlist with every Keith Rabois insight we’ve ever shared. You can watch it here: “Best startup advice from Keith Rabois“