Reflecting On “Founder Mode”

Since Paul Graham’s fascinating article on Founder Mode, I’ve been reading/rereading his article and listening to Brian Chesky talk about his re-wiring of AirBnB.  I’ve also been wary of way too many pundits jumping on the bandwagon with their thoughts about Founder Mode as the miracle cure to our business woes. (Let me be clear, neither Paul, nor Brian talk about it in that way.)

I have to confess, it took me some time to wrap my head around what they were talking about. Part of it was the jargon around “Founder” and “Manager” modes. Part of it was my question, “But what does this mean to very large well established companies, where the founder may be long gone?  Surely the principles are not unique to these Founder led companies!”

Implicitly, I thought, “This Founder Mode” cannot be something exclusive to Founder led companies. The majority of large high performing companies in the world are no longer founder led! What about companies that have been around 50, 75, 100 years? Or there are some companies that have existed for hundreds of years? What about these very large companies that have consistently been one of the top performers in their markets?

Are they missing something? Can only the cool companies still led by their Founders play this game? What happens when they leave? Can the principles of Founder Mode be applied to any organization?

I started breaking down the key principles of Founder Mode, outlined by Paul and Brian. I may not have them all, but the things that stood out to me included:

• Obsessive customer focus.
• A focus on agility and speed.
• Constant innovation and experimentation.
• Working deeply in the business, rather than on the business.
• A strong focus on work flow, rather than organizational blocks
• Hands on leadership, working to solve problems, address issues, dream of new possibilities–with the teams responsible. In some sense managing the business not focusing on managing people.
• Massive employee empowerment, encouraging each person to adopt the same mindset as the founder. Along with this massive trust.
• Building an organization obsessively people obsessively aligned with the values, culture, and purpose of the company.
• Driven by a long term vision of what the organization could achieve, not obsessing on month to month, quarter to quarter adherence to metrics.

There may be a few more, but I think that covers the most of them. Paul, and to a lesser degree, Brian contrast Founder Mode with Manager Mode. As you might guess, it’s the antithesis of everything in Founder mode.. I’ll come back to this later.

But as I studied these I thought, “I’ve seen these principles before! These aren’t new!  I’ve been studying these, working with these for decades!”

Reflecting back, I’ve seen them in the works of Jim Collin, Tom Peters/Bob Waterman, Peter Drucker, Alfred Sloan and other leading thinkers on high performance businesses. I’ve been privileged to see these principles at work in many of the organizations I’ve worked in and in many of my clients. Most of these are well established, very large businesses. They are usually public companies who have been through several iterations of leadership. Typically, there were the innovation and market leaders in their category. They were the companies, their competitors aspired to be more like, but seldom could achieve.

I started feeling more comfortable with the concepts Paul and Brian talked about. I had seen and experienced them in non-founder led companies from medium to gigantic size. Many had gone through cycles, sometimes losing their way, reverting into “Manager Mode,” then correcting themselves. Just like many Founder led companies tend to default to Manager Mode, while the founder is still there.

I tend to refer to this mode of operation as High Performance Innovation. Jim Collins outlines it in his categorization of companies that go from good to great, speaking of Level 5 Leadership.

I prefer to think of this mode of operation as aspirational to all organizations, not just those Founder led Unicorns. It makes much more sense to me, particularly since I have seen in many varied organizations.

Having said this, Founder Mode or High Performance Innovation is rare, and it is very difficult to sustain. It takes the unwavering commitment of everyone in the organization to achieve it.  It is tough work, but work that everyone in the organization revels in, because of its impact over the long term.  But, as both Paul and Brian describe, when everyone is operating in this mode, there is an energy level, and excitement, commitment to achievement that is astounding. 

And the principle underlying Founder Mode is building organizations that have a lasting impact, and not focusing on Market Cap, Unicorn Status, or Exit Strategies!

It’s too easy to revert into Manager Mode. And we see this mode in the majority of organizations. Hierarchical org charts, strict adherence to “chain of command,” people at all levels working on the business rather than in the business. We see lack of trust, lack of engagement, adherence to the rules, focus on the short term, and doing what needs to be done to get by.  Manager Mode revels in sky rocketing bureaucracy, titles/position, meaningless metrics.  Manager Mode revels in meetings, measuring status by busyness and how many meetings can be crammed into a day.  And it’s not new, but we’ve seen it for decades/centuries.

Manager Mode gives us comfort, because it is biased to the status quo.

Who am I to critique Paul Graham or Brian Chesky, on their views about the uniqueness of Founders Mode?  They are, each, wildly more successful than I.  And I understand their bias because most of their work has been extraordinary success as Founders.  But I, also, know they probably recognize the same characteristics have always existed as part of High Performance Innovation—regardless of the business or whether it is still founder led.

And this is the most important lesson to learn about Founder Mode.  There are lessons that each of us can bring into our organizations and workplaces.  They are lessons that have been researched and proven in high performing organizations across every industry, market, region, for decades.  Again, it is tough work that requires total commitment from the entire organization, not just the leaders.

Let’s step back from the jargon and fashionable coolness of Founder Mode.  But let’s understand the underlying principles and how each of us can apply them within our own organizations and teams!

Afterword:  Here is the link to Paul Graham’s great article, Founder Mode

Afterword:  Here is a link to an outstanding discussion with Brian Chesky, Founder Mode

Afterword:  It took me a few attempts to  train this AI discussion on these principles.  There is one big hallucination, early in the recording, but it doesn’t impact the discussion.  It’s actually a really good discussion.  Enjoy!