The term “Founder Mode” has emerged as a new leadership and management concept in the startup and tech industry especially within Silicon Valley. Several notable CEOs of famous companies like Airbnb and Apple have declared it a beneficial approach. But with advantages, it has some challenges, so read on to learn about real-life examples of company owners who followed it and how it helped them.
What Is Founder Mode, and How Is It Different From Manager Mode?
The co-founder of Y Combinator Paul Graham has coined the term “Founder Mode” recently. Let’s unveil its true meaning.
Founder Mode: In this style, the founder or CEO is closely involved in every part of the business. It is like a parent who knows everything about their child. The CEO manages everything such as daily operations and makes vital decisions about the company. The deep understanding and hands-on experience with the company can help the founder run the company in the appropriate direction.
Manager Mode: This approach is about delegation. In this, the CEO relies on a team of professionals to manage daily tasks. To do it, founders usually hire skilled people and give them directions. They do not participate in managerial matters. However, critics are not in favor of this approach because they think we hire people who “act like professionals” but they don’t make a real difference.
Company Owners Who Embraced Founder Mode
Several high-profile founders have followed Founder Mode with great success. Paul Graham is one of its strongest advocates. In his essay on founder mode, he stated that founders like Steve Jobs of Apple, Brian Chesky of Airbnb, Jeff Bezos of Amazon, and Elon Musk of Tesla Motors have seen tremendous positive impacts of Founder Mode. These founders have refused to conform to traditional management norms because of their ineffectiveness.
Brian Chesky revealed that following the conventional approach (Manager Mode) had nearly derailed his startup. When he became completely involved in all his company’s matters, he was able to bring back his company to its original form and make it profitable. Some critics say that Founder Mode is not absolutely perfect but it has some disadvantages as well.
Benefits of Founder Mode
This approach yields numerous benefits for startups and early-stage companies, as given below:
- Direct Communication: This style is best to foster direct communication between the founder and employees to handle issues and make decisions swiftly.
- Cultural Cohesion: With its direct approach, founders can instill their vision, values, and passion into the company’s culture.
- Informed Decision-Making: Founders have a unique understanding of the business, so this mode allows them to make decisions that align closely with the company’s original vision.
- Motivation and Morale: By seeing the founders getting involved in the company matters, it can inspire employees and boost their morale. This way, there will be greater passion and commitment to the company’s mission.
Challenges of Founder Mode
Other than some benefits, this mode also comes with its own set of challenges. One should consider these before fully embracing this approach:
- Burnout Risk: Managing all aspects of a business can be overwhelming. So, founders could feel tired because a single person can’t handle too many tasks.
- Scaling Difficulties: It can be a challenge when a company grows and becomes bigger. Therefore, effective delegation is necessary to avoid operational bottlenecks.
- Micromanagement Pitfalls: If not managed carefully, employees may feel discouraged, undervalued, or over-controlled, hence it can create frustration and harm team morale.
- Dependency on the Founder: Too much reliance on company founders can become problematic. They provide direction, and if they are unavailable or away, no work or progress will happen.
In a nutshell
To cut a long story short, founder mode is a compelling method of management. However, experts recommend that keeping a balance is crucial to take full advantage of both styles. Entrepreneurs and company owners should first evaluate their unique circumstances, and then adapt their leadership styles to run and flourish their companies appropriately. At ABC BootCamps, our mentors will guide you in selecting the best management style. Join us now!
