What is “founder mode”?

Key points:

• If you’re still using X/Twitter, you’ve probably been reading about “founder mode” for the last week.
• The term was coined by Paul Graham, a British-American computer scientist, entrepreneur, and tech investor, to describe the mannerisms, management characteristics, and capabilities of the mindsets and approaches of many founders.
• The tech industry is now debating the merits of “founder mode” versus the well-known, business-school mode known as “manager mode” and at what point “manager mode” takes over, if indeed it ever should.

Nobody disputes the concept of “founder mode” or the intrinsic benefits and necessities it affords frenetic start-ups. The question is whether and when “manager mode” takes over.

Conclusion? Not enough is known about “founder mode” to make a call, though the feeling is that the argument has more than merit.

Overview

As start-ups scale and become growth businesses, there has long been a Silicon Valley argument that this is the time for the adults to be in the room and for the founder to stand aside.

The argument is that with their MBAs, business-school training, and " manager mode,” the adults will adopt established strategies and business structures to allow the business to scale.

Essentially, what propelled the start-up under the founder's leadership is no longer suitable for a business that now has an org chart.

Observations of “manager mode.”

When it comes to “manager mode”, there isn’t much debate:

• Manager mode is the classic business school approach: org charts are boxes; stay in your lane, hire good people and let them do their work. (With the risk that the business hires “professional fakers” who harm the company.
• The CEO engages only with direct reports.
• The micro-management is done away with at the CEO level.
• The adults are in charge.

Observations of “founder mode.”

If you haven’t watched Silicon Valley, do yourself a favour. It’s brilliant.

The series follows the journey of Richard Henricks, a programmer who creates a start-up called Pied Piper. The show explores the humorous struggles and absurdities of the tech industry in Silicon Valley: competing with larger competitors, the endless pursuit of funding, and the eccentric personalities of tech entrepreneurs.

If you’ve watched the series, you’ll understand the wild and fluctuating behaviour of many of these tech bros. And so introducing “founder mode”:

• Founders are all over the company, all the time.
• “Skip-level” meetings, all the time.
• Founders feel “gaslit” when told to run their start-up in “manager mode”.
• Founders can’t stand VCs without founding experience who don’t get it.
• If you ask if you are in “founder mode”, you aren’t.
• “Founder mode” is for the exceptions; most founders are terrible. Conversely, every start-up that becomes successful is, by definition, an exception.
• “It’s easier for me to make every decision than hire competent people I can trust, set the right incentive structure and then hold them accountable.” (Which is fine if that gap in your leadership capabilities exists.)
• “Founder mode” is switching on a dime and knowing how and why to rebuild the start-up from scratch.
• “Founder mode” isn’t micromanagement. It’s clarity. (A contentious area of debate).
• “Founder mode” does not give a founder permission to be an asshole to their team. (Also contentious, though shouldn’t be).

So what is the debate?

Essentially, the argument from many founders is that when they stepped aside and the managers came in, things went to shit. That whatever X-factor “founder mode” was adding to the mix was now lost.

If you look at many of the most successful start-ups, such as Airbnb, these have never traded the X-factor for management alone.

Where to for “founder mode”?

The tech industry has long understood the characteristics of many founders; it just hasn’t been documented, understood, or labelled.

The best and worst bits of “founder mode” will be analysed as a management and leadership style, especially as a longer-term management style.

It is unknown how it will apply more broadly—outside of a small subset of start-ups that have benefited from “founder mode.”

The asshole/god complex will not be part of the equation.

How it applies to female founders is, sadly, unknown.