Founder mode vs. manager mode: Finding your startup's sweet spot
How to capitalize on founder mode to scale the generalist way
Social media is abuzz with Paul Graham’s blog on founder mode. For those founders too busy building startups to get caught in the controversial conversation, in short, YC cofounder Graham asserts that startups that attempt to scale in manager mode fail, and those that scale in founder mode succeed. Founder mode means, simply, to manage “how we do” across every nook and cranny of your business, instead of leaving it to managers to do this important and trusted work. At its most extreme, this conversation is an argument for relentless micromanagement. While others remind founders that, more practically, this is easier preached than practiced.
The answer, as is true with most things, lies in the context. founder mode and manager mode aren’t binary opposites, black-and-white modes of working that succeed or fail in a vacuum. Great arguments are made for gradations of these modes, like that from Henrik Torstensson. “When a startup has reached sufficient scale, a great executing manager likely does better than a bad to medium executing founder.” In our years of experience working on and in startups, being effective in either mode comes down to two key factors: access to information and level of expert execution.
how DO you… unlock the power of founder mode when scaling an organization outside of yourself?
Build founder mode operating practices into manager mode through expert internal product management
Why This Works
By the nature of limited resources, founders start working as generalists. Their access to information on the entire happenings within an organization is high. They have full control over how. At scale, the forced shift to manager mode means that generalist founders are relying too much on specialists who are siloed in information and can execute only in their lane without seeing the effect on the whole. Bottling the generalist magic from the early days and disseminating it deeply into the fabric of the organization maintains the benefits of founder mode while shifting to a manager-led organization for scale.
Why Do This Now
If Paul Graham is right (which… if history tells us anything he probably is), founder mode will become the preferred way of building startups. And with humans supercharged with AI, the division of execution and management will continue to morph over time. Getting good at building the right kind of founder mode organization lays the groundwork for the rest of the organization to grow.
how We Do: Strong internal product management to build founder mode organizations
Tools 🛠️
Leverage work productivity tools that prioritize access to cross-functional information: Jensen Huang can have 60 direct reports not because he’s having 60 1:1 meetings per week, but because he’s leveraging tools and systems that allow for the dissemination of information to those that report to him. Developing effective information management systems, such as project management tools or a well-oiled Slack system, is crucial to ensuring that information flows smoothly from the founder down, across the org to support effective decision-making. Founder mode works because founders have not only the vision but also the most complete picture of the organization. The more people who have access to this picture, the better managers can become, allowing them to in essence predict what a founder wishes to occur.
Rules (Process) 📝
How you we do everything is the unlock for founder mode: Founders who are leading the charge in founder mode are working in efficient, effective, well-leveraged ways that allow them to prioritize and make expert decisions as much as possible. Invest in your team’s processes – and buy into them! – so you’re preserving founder mode, getting a clear picture of how everyone is doing what they’re doing to ensure high-level management isn’t decreasing the quality of execution.
People 🫶
Build a team of founders, not managers: At scale, manager mode becomes perilous because of both a lack of ownership (no one cares more than the founder) and a lack of holistic insights (over-specialization missing the generalist ability to both zoom in and zoom out). A team of all generalists can be just as perilous for a scale-up, but one generalist founder surrounded by a sea of specialist managers does not an effective startup make. To effectively bring managers into founder mode, empower them with ownership over the mission and a clear idea of how their piece of the puzzle is connected to all of the others.
Actually Actionable
Power vs. Force as a Startup Leader
Summary: Emphasize influence over authority by aligning your leadership approach with the team's values and mission.
Actionable Step: Develop a leadership strategy that focuses on inspiring and motivating rather than exerting control.
Thoughtful Questions: Best Practices
Summary: Utilize open-ended and thoughtful questions to foster deeper team engagement and problem-solving.
Actionable Step: Incorporate regular sessions where team members ask and answer thoughtful questions to enhance collaboration.
Using Build-in-Public Practices for Startup Growth
Summary: Sharing your startup's journey publicly can build community support and provide valuable feedback.
Actionable Step: Start a "build-in-public" initiative by sharing progress updates and soliciting feedback from your audience.
Looking for Real Efficiency: Build Processes That Work
Summary: Identify and streamline core processes to eliminate inefficiencies and improve productivity.
Actionable Step: Conduct a process audit to identify bottlenecks and implement streamlined workflows.
Prioritizing Internal Product Management
Summary: Effective internal product management ensures that team efforts align with the startup’s goals and user needs.
Actionable Step: Assign dedicated internal product managers to oversee project alignment and goal setting.
Decision-Making That Optimizes Collaboration
Summary: Collaborative decision-making can enhance buy-in and improve execution across teams.
Actionable Step: Establish a decision-making framework that includes inputs from diverse team members to foster collaboration.
Amplifying Leadership Through Process
Summary: Strong leadership is amplified through efficient and well-structured processes.
Actionable Step: Create and document processes that enable leadership to focus on strategic initiatives.
How Do You Communicate Changing Your Strategy?
Summary: Effective communication is key when altering strategic directions to ensure team alignment and understanding.
Actionable Step: Develop a clear communication plan to articulate strategy changes to all stakeholders.
How Do You Transform Founder Habits for Scalability?
Summary: Transitioning from founder-led operations to scalable processes is crucial for growth.
Actionable Step: Identify founder habits that inhibit scalability and develop a transition plan to delegate effectively.
Can You Use Your Operations to Improve Culture?
Summary: Operational practices can shape and reinforce a positive organizational culture.
Actionable Step: Integrate culture-building activities into daily operations to foster a strong, cohesive team environment.
Improve How You Operate by Making Data-Driven Decisions
Summary: Data-driven decision-making enhances operational effectiveness and outcomes.
Actionable Step: Implement data analytics tools to monitor key performance metrics and inform decisions.
Before you go
As you take in this week's insights, remember that the power of founder mode lies in its ability to keep your vision at the forefront and maintain a holistic understanding of your startup. This approach isn't about micromanagement—it's about fostering a culture where everyone, from top to bottom, has the clarity and context to execute with purpose. Scaling a startup in founder mode means infusing the generalist mindset throughout your organization, ensuring every team member understands the bigger picture and contributes to it.
Lean into founder mode, but stay adaptable. Encourage your team to adopt this mindset, prioritize access to comprehensive information, and keep the startup spirit alive even as you grow. The goal isn't to be rigid in your leadership style, but to preserve the elements of founder mode that drive innovation, agility, and cohesive decision-making.
So, how will you harness the power of founder mode in your startup today? Embrace the generalist approach, leverage your unique insights, and guide your team with the same vision and passion that sparked your journey.
Writer: Britt