Notes on 'Founder Mode'

Most founders are in “founder mode” — and most of them fail anyway.

You’ve probably seen, if not already read, Paul Graham’s new essay: Founder Mode.

The gist? There are two ways to run a company as it scales: in “founder mode” or in “management mode.” Founder mode is about staying directly involved, keeping a tight grip and doing things your way even as a startup grows. Management mode, on the other hand, classically preaches to “hire good people and let them do their jobs,” among other things. According to Graham, when founders are gaslit into adopting management mode as they scale, it leads to bad outcomes—a lesson Airbnb’s Brian Chesky learned the hard way.

I’m all about founder’s acting like founders, but I think the specific gripes against management mode, e.g. delegation, are overfitted. I don’t think things like “being in the details” can be monopolized by founder mode either. And with the way companies are being built now, with less resources able to accomplish more, ‘founder mode’ is just more feasible, regardless of whether it should dominate or not. Maybe the real question should be “what founder mode consists of” — i.e. the details of how you distinctly operate in founder mode (something Graham admittedly doesn’t yet define) — and not just what’s wrong with management mode.

With this context, here are my lightly-edited notes on “founder mode.”

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Most founders are in “founder mode” and most of them fail anyway.

• Most early-stage startup founders are in founder mode by default. Small teams, low stakes, tight control. (Or in other words, it’s not particularly rare for founders to be in founder mode). And the more credentials, hype, funding, or success a founder has, the more advisors and investors tend to encourage them to operate in founder mode, i.e. do whatever they think is best, largely how they think is best (and stay in it for as long as it’s working).¹

• Many founders are first-time founders with zero management experience. Hence, when it’s time to scale and they decide to adopt some “managerial” attributes, they still struggle to adapt. Early-stage founder habits linger and pervade all things when perhaps they shouldn’t and there’s inexperience with management, exacerbating scaling issues of bloat, bureaucracy, and inefficiency.² “Founder mode” can’t save you from learning how to manage.

• Founder mode has a dark side risk that can hurt the company and employees. Founder mode shouldn’t give founders free rein to be unchecked dictators, micromanaging employees they’ve promised autonomy to, pushing their latest whim as the next big strategy, or dismissing feedback from their team. Enough founders operate this way, and it’s chaotic and corrosive.³ (It’s often in the best interest of investors to push the extremes; I’ve heard enough people in Silicon Valley say that the near-sociopathic founder is successful.)

Companies don’t fail because founders switch leadership modes. They fail because the mode switch is set up to fail, ill-timed, and rigid.

“Management mode” isn’t a failure just because it’s too hands-off or managerial or someone else tells you to consider it. But here are a few scenarios when classic management mode does go wrong, and in particular for inexperienced founders (and hence gets a bad rep):

• There’s no clear vision and strategy for the company. Without this, delegation won’t move the company forward cohesively. Management mode doesn’t work without shared understanding.⁴

• The people being managed aren’t the right fit for the job. Either you’ve hired the wrong people (e.g. too many late-stage executives into an early-stage environment) or people whose leadership style doesn’t work well with yours. Management mode doesn’t work if you don’t hire well.

• The context is evolving while the “leadership mode” stays rigid. If the company’s context is changing but leadership remains static—like losing product-market fit while sticking to management mode—it’s a recipe for disaster. A shorthand might be this: when the company is unstable, you don’t have product-market fit, or it’s trending wrong for some reason, founder mode is imperative. On the other hand, when the company is stable, you have product-market fit, the company is stable and trending right, manager mode works.

  Management mode doesn’t work when the company isn’t predictably working.

The best CEOs (founder or not) know how to switch between founder mode and management mode — and when they need either one.

• Founder mode is akin to the wartime CEO mode. Management mode is more akin to peacetime CEO. The catch is that startups — and companies of any size really — never reach a point where they’re always in peacetime. Hence the best CEOs are those who can switch modes and blend as needed. (And yes, I’m suggesting even non-founders can embody founder mode, especially ex-founders).

• “Founder mode” and “management mode” can’t be seen as static opposites. Founder mode itself should evolve as the company and context evolves, and the same with management mode. Rigidity of either leadership mode equals failure. Experimentation plus feedback loops are a founder’s best friends.

A founder’s unique leadership style will put them in their zone of genius and make them happy (mostly).

• Founders need to find their own ideal leadership mode—an adaptive mix of founder mode and management mode that feels right.⁵ A founder’s leadership style has to fit to keep them energized, motivated, fulfilled, and successful. If you love being in the details, being hands-off will hurt. If you thrive on big-picture thinking, micromanaging will drain you. Without founder-leadership style fit, you risk burnout, disengagement, and ultimately, failure.

• The tricky part? It takes practice to figure out. Second-time founders have more clarity about their leadership style, where they’re flexible, and where they’re not. If you’re a first-time founder, let “founder mode” guide you, but resist the temptation to dismiss all other modes and simply hide behind it.

Maybe what I’m saying here, at a minimum, is that just being in “founder mode” doesn’t make you a good founder by default (see the failure rate), and being bad at “manager mode” doesn’t make manager mode inherently bad. (If I’m being critical, I’d say founder mode sounds like it’s describing a good founder and manager mode is just describing a bad manager.) And I say this as someone who has every interest in running my startup my own way, has no interest in managing large teams, and is broadly cynical about “executive” parlance.

The founder that can be what we’re hailing as ideal ‘founder mode’ is a rare find. Not only this, but ‘founder mode’ isn’t the ideal mode for every state or stage of the business.
It feels like what we’re actually trying to define is a new and improved management mode suitable for high growth teams with novice founders as leaders — a founder equipped for level 2 of the game — a founder that isn’t afraid to stay in founder mode yet knows when to dip in and out of manager mode. That has a clear vision, hires well, and is adaptable.

Don’t blame a prescribed ‘mode’ for your failures or look for one to save you. If I wanted to be poetic about it, I’d say the mode doesn’t make the man, the man makes the mode, and his own bed.

Paul Graham’s call to action is to define what exactly founder mode consists of — so perhaps these notes are in service of that goal. Let me know what you think.

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If you like thinking about these kinds of things, two other good reads for you:

• Sam Gerstenzang’s reply to Founder Mode — his core points are that Graham’s essay has a sampling bias in the founders that underlie the theory (“craft oriented founders”) and great people (employees) want high agency, autonomy, and specific guidance (not omniscient micromanagement).

• Hiten Shah’s reflection on the double-edged sword of founder mode — how he found himself “throwing Hiten bombs” and embracing it the wrong way.

1. To be clear, I’m not blaming founder mode for startup failures, but my point is that it’s not a rare savior, and you can’t really blame the entire concept of management mode for failures either (the execution matters!).

2. I fear that suggesting a startup’s failure just means they did founder mode wrong is too generous unless you give management mode the same benefit of the doubt? The argument feels more like the rectangle-square-relationship: All startups that scale successfully operate in founder mode, but not all startups in founder mode scale successfully. To buy into this though we’d need a much more specific definition of founder mode.

3. The belief in “founder mode” should be grounding and empowering, not an excuse for leaning into the darker base extincts and eventual hubris of unchecked dictators.

4. “Delegation” gets a one-size-fits-all bad reputation. The vision should always remain firmly in the founder’s grasp; it’s really only execution that you should delegate.

5. Yes, the hands-on, unique, non-scalable things may look “eccentric or worse” to everyone else. Founder mode feels right to you, even if it doesn’t look like any other founder’s mode.