There's a fundamental point missing in this analysis. That is the difference in skin in the game and upside/downside game theory dynamics for people involved. An early "founder" by definition has a lot of upside and very little downside and have a lot of ownership. And hence they behave in a particular way. They are actually taking very little risk.
A late stage founder or a professional manager ceo has amassed stuff that they can lose more easily than stuff they potentially can gain. To continue to behave in the same way, they must be willing to take a lot of risk. And a lot of normal people don't want to take such risks.
Only really crazy people – be it a founder or a professional manager – will disregard game theory dynamics and work against their own apparent self-interest and take huge risks. And they tend to expect people around them to take similar huge risks along with them. We call them unreasonable people. And only really unreasonable people can make huge changes in society. This is by definition true because only such people will behave in an outlier manner, and if they do so with a huge amount of capital and power in their control, they can change societies in big ways. If we think that is working well, we celebrate them; and if we think it is horrible, we write cautionary tales about them. It is possible to have both perceptions to be held by different groups of people at the same time.
All the rest about hiring good people and letting them do etc is all just details of dynamics emanating from this unreasonable risk taking ability a person can manifest. I don't believe this can be turned into a playbook that can be taught in a management school. Management schools already teach how to take risks such that downside doesn't befall on the person who went to management school and instead falls on others. Everyone can subconsciously sense this about MBAs and hence the reaction they get. As companies become big and have a lot of external players with skin in the game (aka stakeholders) who are at a distance, they want these MBA types to manage that risk in such a way that it doesn't befall them. That's fundamentally very different from a founder who is not at a distance, but within. Still, founders also do the same when it is them vs their employees. In this aspect, it is all relative.
"often turns out to mean is: hire professional fakers and let them drive the company into the ground."
That's not low risk, that's higher risk. Letting the founders continue in Founder Mode can be both lower risk, and higher expected value, at the same time.
> hiring good people and letting them do etc is all just details of dynamics emanating from this unreasonable risk taking ability
I think not. Instead, the founders have unique insights: in the product, in the business domain, in the people in the company - which lets them do Founder Mode things a professional CEO cannot.
Sth else:
> only really unreasonable people can make huge changes in society.
> That's not low risk, that's higher risk. Letting the founders continue in Founder Mode can be both lower risk, and higher expected value, at the same time.
It depends on how the founder and their investors perceive risk. If they have the risk appetite to stay in founder mode at scale, even when they have a lot to lose, then they do. But most don't. That's my point. And so, they take the advise to derisk for themselves – they take some money off the table, they hire professional managers and delegate, they take their new found time and money and put it elsewhere.
A late stage founder or a professional manager ceo has amassed stuff that they can lose more easily than stuff they potentially can gain. To continue to behave in the same way, they must be willing to take a lot of risk. And a lot of normal people don't want to take such risks.
Only really crazy people – be it a founder or a professional manager – will disregard game theory dynamics and work against their own apparent self-interest and take huge risks. And they tend to expect people around them to take similar huge risks along with them. We call them unreasonable people. And only really unreasonable people can make huge changes in society. This is by definition true because only such people will behave in an outlier manner, and if they do so with a huge amount of capital and power in their control, they can change societies in big ways. If we think that is working well, we celebrate them; and if we think it is horrible, we write cautionary tales about them. It is possible to have both perceptions to be held by different groups of people at the same time.
All the rest about hiring good people and letting them do etc is all just details of dynamics emanating from this unreasonable risk taking ability a person can manifest. I don't believe this can be turned into a playbook that can be taught in a management school. Management schools already teach how to take risks such that downside doesn't befall on the person who went to management school and instead falls on others. Everyone can subconsciously sense this about MBAs and hence the reaction they get. As companies become big and have a lot of external players with skin in the game (aka stakeholders) who are at a distance, they want these MBA types to manage that risk in such a way that it doesn't befall them. That's fundamentally very different from a founder who is not at a distance, but within. Still, founders also do the same when it is them vs their employees. In this aspect, it is all relative.