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It’s the phrase on the tip of everyone’s tongue: founder mode.
The term was coined – or at least minted – in a recent blog post by YCombinator cofounder Paul Graham, summarizing a talk by Airbnb founder Brian Chesky.
“The theme of Brian’s talk was that the conventional wisdom about how to run larger companies is mistaken,” he wrote. Rather than hiring people to manage his business, and setting up a traditional hierarchy, Chesky followed Steve Jobs’ example by spreading himself across the entire business, engaging with as many areas as possible and staying close to the day-to-day detail, even as the company scaled.
The term took root almost immediately, putting a name to a concept many many founders and their employees will acutely recognize, and igniting a culture war over the topic of micromanagement. Search queries for the term have spiked in the last week.
Skip to the beat
Founder mode relies on a steady stream of “skip-level” meetings, where leaders engage with rank-and-file workers directly, rather than through their managers in a traditionally hierarchical approach.
“I think Paul is getting at something important – the founder’s sense of responsibility, identity, and ownership which non-founder managers typically lack,” says Peter G. Klein, professor of entrepreneurship at Baylor University’s Hankamer School of Business.
Klein is also the co-author of Why Managers Matter: The Perils of the Bossless Company. Founder mode certainly doesn’t create a bossless company, but it has been established by Graham as in direct opposition to “manager mode”– where you hire the best people and let them get on with managing their own teams.
This polarization creates a dangerous and nonsensical “straw man of nefarious manager culture”, author of The Manager’s Path, Camille Fournier, wrote in a Medium post. Ed Batista, an executive coach, has said the backlash to manager mode is because people don’t manage properly.
Scaling founder mode
“As Paul points out, there are many advantages to direct, hands-on control by founder-owners,” says Klein. Flat organizations, when run well, can operate incredibly smoothly, and give employees a sense of autonomy that can improve wellbeing and therefore performance. But it’s hard to scale, and comes with some significant drawbacks.
“Managers and employees don’t like being micromanaged. Founder-owners are responsible for firm-level strategy and governance, which leaves them less time and capacity to keep up with the latest technical details,” says Klein.
That could mean situations similar to X, formerly Twitter, after Elon Musk acquired the social network and micromanaged many engineers out of the organization with demands like code reviews from the CEO.
Good entrepreneurs should be able to traverse the whole business, and charismatic leaders willing to get into the trenches with their workers have got results in the past. But taken too far, or executed poorly, this approach can breed resentment and make staff feel watched over and lacking in autonomy, especially if that leader is prone to sudden shifts in focus.
“In general, I advise owners and managers to be wary of the latest organizational trends, especially when they come with a lot of hype,” Klein says. “Management can be a very faddish business, especially in the tech sector where Holacracy, Agile, just-in-time delivery, and a host of similar management practices come and go.”
