Paul Graham’s essay on founder-mode vs manager-mode is about how the advice to “hire good people and give them room to do their jobs” doesn’t work well for founders in practice. Some of the blame, according to the author, is that professional managers and CEOs are really good at faking it and if founders only talk to their direct reports, they will be ineffective.
While the essay is light on examples, I recognize this pattern from being a founder and having lived through Stripe’s hyper-ish growth from hundreds to thousands of employees. The principal-agent problem is the hardest thing to mitigate and, at a fast growing company, most of the bad behavior of managers will be covered up by inertia. As a founder it is difficult to keep things moving without getting into the details yourself. Getting into the details can be upsetting for managers and employees who don’t understand why this is actually a good thing (maybe even the only thing founders can do to counteract the principal-agent problem).
The reason founder-mode is so effective is because they 1) have full context and history of the company in their head 2) care a lot to a degree that borders on obsession and 3) are willing and have the authority to make changes that break systems/processes/rules when they don’t make sense.