People who build startups into successful larger companies are disruptors by nature. One doesn’t create new things without the intensity and drive to push through obstacles and overcome resistance to change. It’s especially difficult to successfully navigate the structural challenges of increasing scale.
“Founder Mode” was coined by Paul Graham of Y Combinator, referring to founders who remain deeply involved in their companies. This is in contrast to “Manager Mode” (characterized by structure, convention and functional specialists/managers) that typically accompanies growth. The problems of founders not being able to let go and not being able to manage at scale are well documented. In contrast, Graham explains problems caused by bringing in the wrong people to help manage growth and offers examples of well-known founders who had to get back into the ring to save their companies.
Core Principles of Founder Mode
Hands-On Management. Founders drive vision through direct involvement. High founder involvement can inspire employees.
Direct Interaction. Leaders in Founder Mode typically engage in skip-level meetings to keep them connected to staff and operations.
Innovation and Vision. Heavy founder involvement fosters quick decisions, agility and culture preservation.
Challenges
Scalability Issues: As companies grow, the founder’s hands-on approach may not scale well. He or she could become a bottleneck for decision-making and won’t have the time to manage all details effectively.
Risk of Micromanagement. There’s a fine line between being involved and micromanaging. If not balanced correctly, it can lead to employee burnout or a lack of autonomy, stifling innovation at lower levels.
Delegation Dilemma. Founders often need to learn to delegate effectively to ensure long-term sustainability, especially as the business grows beyond their capacity to manage all details.
Selection Risks. Founders face challenges selecting people who will support their culture and vision while bringing the necessary skills to expand the company’s structure to handle growth. If you empower the wrong people, they’ll drive your business into the ground. See Graham’s article linked above for elaboration.
Hiring for Founder Mode: Traits that Predict Success
Founders are often difficult to work for due to their intensity, demanding nature, hands-on style and impatience for results. It’s difficult but possible to find talent that thrives in Founder Mode companies. Starting with first principles, we know that best predictors of effectiveness for any job are the I-Competencies: problem-solving ability; good interpersonal and communications skill; integrity; and work ethic.
Other Essential Traits
Adaptability: Ability to thrive amid rapid shifts in strategy and roles.
Vision Alignment: Passion for the founder’s mission is crucial.
Initiative: Ability to keep momentum without constant oversight and be a self-starter in general.
Risk Tolerance: Comfort with uncertainty.
Problem-Solving: Ability to generate quick, practical solutions to complex problems.
Communication: Ability to communicate clearly and directly in flat hierarchies with a wide range of personalities.
How to Recognize Good Candidates
Behavioral Interviews: Past actions predict future fit (past behavior predicts future behavior). Look at the body of work.
Psychometric Testing to assess problem-solving aptitude, ability to get along with people, stability and conscientiousness. Low scores signal poor fit.
Observations: Work samples and interviews reveal cultural alignment.
For Candidates Considering a Founder-led Company, Ask Yourself:
Can you handle demanding, results-focused leaders?
Do you adapt quickly to unpredictable settings?
Can you solve novel problems efficiently?
Are you aligned with the founder’s vision? Can you fully support the founder’s mission and culture? Do you truly believe in what the company is trying to do?
We help founders make good decisions by hiring the right people…and avoiding the wrong people. And we help people make early and mid-career adjustments to find the right path to greater personal growth and professional development. Sometimes that involves striking out in a different direction and shifting into Founder Mode. Or it may be a case of finding a more suitable environment.
Get in touch for a free consultation.