3 months ago
17
It’s hard to go for a few days online without finding a new trend and this one seems to be at the intersection of LinkedIn and Twitter, a place where VCs and tech bros get together to find new ways to make life less fun. The latest term is “Founder Mode”, that seems to want us to live life like Steve Jobs. Jokes apart, the term was popularised by programmer and writer
Paul Graham
who is known for his influential essays and books on technology and start-ups.
Graham writes: "At a YC event last week Brian Chesky gave a talk that everyone who was there will remember. Most founders I talked to afterward said it was the best they'd ever heard. Ron Conway, for the first time in his life, forgot to take notes. I'm not going to try to reproduce it here. Instead I want to talk about a question it raised.
The theme of Brian's talk was that the conventional wisdom about how to run larger companies is mistaken. As Airbnb grew, well-meaning people advised him that he had to run the company in a certain way for it to scale. Their advice could be optimistically summarized as "hire good people and give them room to do their jobs." He followed this advice and the results were disastrous. So he had to figure out a better way on his own, which he did partly by studying how Steve Jobs ran Apple. So far it seems to be working. Airbnb's free cash flow margin is now among the best in Silicon Valley."
Founder Mode
, as described by Graham, refers to a distinct way of running a company that's different from the traditional "
manager mode
" typically taught in business schools and followed by professional managers. According to Graham, the conventional wisdom suggests that as startups grow, their founders should transition to a more hands-off, managerial approach: hire good people and allow them the autonomy to do their jobs. However, this advice often leads to poor outcomes for founders because it overlooks the unique strengths and instincts that founders bring to their companies.
Graham argues that the approach for founders—what he calls "Founder Mode"—allows them to stay deeply involved in the company's operations, breaking away from the traditional management style that discourages such involvement. In Founder Mode, leaders are more hands-on and involved in the details, even engaging in "skip-level" meetings, where they interact directly with employees at all levels rather than just their direct reports. This approach is more aligned with the founder's vision and values, and often results in a more cohesive and motivated
company culture
.
Essentially, Founder Mode embraces the idea that founders should leverage their unique position and insights to guide their companies actively, rather than adopting the more detached style typical of hired managers. Graham suggests that this mode of operating is more effective for startups, as evidenced by the success stories of founders who resisted the shift to a traditional managerial style and instead developed their own ways of leading.
Founder Mode in 10 points:
- Active Involvement: Founders in "Founder Mode" stay deeply involved in all areas of their business, particularly during the early stages. This differs from the common practice of delegating responsibilities to managers, as seen in "Manager Mode."
- Fast Decision-Making: Founder Mode prioritises swift decision-making, avoiding the bureaucratic delays that can occur in larger companies. Founders are expected to make quick decisions to adapt strategies as required.
- Preserving Vision and Culture: Founders actively work to shape and preserve the company’s vision and culture, ensuring alignment with the startup's original goals and values.
- Direct Communication Channels: Instead of adhering to strict hierarchical structures, founders engage directly with various levels of the organisation. This includes "skip-level" meetings, where founders bypass direct reports to communicate directly with lower-level employees.
- Challenging Conventional Wisdom: Founder Mode often involves pushing back against conventional management advice, which may not suit a startup's unique requirements. Founders are encouraged to trust their own judgement and experiences rather than relying solely on external expertise or traditional practices.
- Fostering Innovation and Flexibility: By remaining closely involved, founders can create an environment that promotes innovation and adaptability, crucial for startups navigating rapid changes and uncertainties.
- Scaling Challenges: One challenge of Founder Mode is its potential inefficiency as the company expands. The hands-on approach that works well with a small team may become a hindrance in larger organisations, necessitating adjustments or a shift to more scalable management methods.
- Building Trust and Transparency: Successful Founder Mode requires cultivating a culture of trust and open communication within the team. This helps to avoid the pitfalls of micromanagement and ensures that everyone is aligned with the company's objectives.
- Balancing Involvement and Delegation: While staying deeply involved, founders must also learn to delegate effectively to prevent becoming overwhelmed or causing a bottleneck in the company's growth. The balance between involvement and delegation will differ from company to company and evolve as the business grows.
- Evolving Role with Technological Advancements: With the advent of AI and new management tools, the need for a hands-on, high-intensity leadership style may change. Future leadership could blend the proactive engagement characteristic of Founder Mode with the efficiencies offered by AI-driven processes.
