I recently read Paul Graham's blog post on Founder Mode and had some thoughts around it. Traditionally, founders are advised to build a team of direct hires, give them space to execute, and run the company through these hires. Paul Graham refers to this as Manager Mode.
As startups transition from experimenting to growth and scaling, they need to implement robust processes and operational efficiencies to offer greater value to the market. Building organizational systems around the founder can be effective during this phase, but it comes with a caveat—the founder may lose the holistic and deep understanding of the frontline (customers, markets, problems) that they had during the 0-1 stage.
I believe organizational systems should continue to be built with Manager Mode in mind, but strategically, founders shouldn't rely solely on their direct hires to run the company. Instead, they should remain directly involved in critical projects. These projects often revolve around high-impact problems, growth constraints, and key product decisions. Founders can play the role of designers, structuring solutions that drive better performance and results.
This balance—delegating certain responsibilities while staying hands-on with critical problems, projects, and products—creates a more effective mode for founders. Being entirely in Founder Mode on every activity within the organisation can place unnecessary constraints and on founders and their time, such as involving them in even the most stabilized aspects of the business.
The Three Buckets of Startup Activities
I see important activities in a growing startup falling into three different buckets:
Experiments | Stabilized Systems | Chaotic Situations
Experiments are the lifeblood of innovation. These initiatives help unlock unknowns, achieve product-market fit, new products and explore new areas of growth for the organisation. To build a resilient, innovation-first company, experimentation must be woven into the culture from day one.
Stabilized Systems are sections of the business that have achieved a degree of market fit , process stabilisation and can scale. These can be run by experienced managers and operators who thrive in structured environments. These systems will evolve through minor improvements and scale. Delegation to the right leaders who can build, evolve and maintain these scalable machines that deliver growth from these systems is critical for the company.
Chaotic Situations represent the unforeseen risks and challenges that hit the company across various functions. These risks can jeopardize the company's success if not handled properly. Founders need a quick-thinking, hands-on team of advisors around them to navigate these turbulent moments and emerge stronger. It takes hands-on leadership, problem solving as well as open collective wisdom to get through these situations.
The Role of a Founder
As a founder of a growing, scaling, and thriving organization, it is essential to delegate stabilized sections to direct reports and executives, allowing them to operate in Manager Mode. However, the founder should remain hands-on in managing critical experiments and chaotic situations.
Running the entire company in Manager Mode isn’t ideal. Founders can lose touch with reality and the intricate workings of the business. On the other hand, Founder Mode isn't a one-size-fits-all approach or a template to follow. It’s about deeply understanding your organization and developing a unique leadership style that suits your company’s needs. The goal is to build a great, sustaining organization.
Not every founder can or should design their own leadership style amidst the whirlwind of work that surrounds them. Brian Chesky, who originally discussed the concept of Founder Mode, is a designer by background. He approaches building things, experiences, and processes from a designer's perspective, which explains why he has crafted his own unique approach to running a company.
The hard truth about running organizations is that there is no one style or mode that fits all.