Explore the critical differences between Founder Mode and Manager Mode leadership styles. Learn why some CEOs thrive while others falter, with real-world examples from Amazon, Uber, and Microsoft—and discover strategies to lead effectively through growth transitions.
Shira Abel is a Go-to-Market Consultant with Alchemist Accelerator, the Founder of leading marketing consultancy Hunter & Bard, the creator of The Perception Formula, and a distinguished Lecturer at UC Berkeley's Sutardja Center for Entrepreneurship and Technology.
What’s the best way to manage a company as it grows?
Paul Graham’s ‘Founder Mode,’ breaks down why founders should run companies differently than managers. If you don’t know who Paul Graham is, he co-founded Y Combinator. I respect his views on startups. In this post, we explore Founder vs Manager Leadership Strategies to help CEOs and executives excel during company growth transitions.
Founder Mode introduces the concept of “founder mode” versus “manager mode,” arguing that the assumed transition to manager mode as companies scale leads to failure for founders. Founder mode, while largely undefined and more complex, involves deeper engagement across all levels of the company, and seems to work better for founder-led organizations. Graham suggests we’re just beginning to understand this approach, which could lead to even greater achievements by founders, but warns it might be misused or misunderstood as the concept gains traction.
My favorite parts of this post were the Notes on the bottom:
Regarding his statement that executives are skilled liars, he notes “[1] The more diplomatic way of phrasing this statement would be to say that experienced C-level execs are often very skilled at managing up. And I don’t think anyone with knowledge of this world would dispute that.”
Founder Mode is just being figured out, so there’s time for it to be turned into best practices. However, he also gives a warning:
“[3] I also have another less optimistic prediction: as soon as the concept of founder mode becomes established, people will start misusing it. Founders who are unable to delegate even things they should, will use founder mode as the excuse. Or managers who aren’t founders will decide they should try to act like founders. That may even work, to some extent, but the results will be messy when it doesn’t; the modular approach does at least limit the damage a bad CEO can do.”
What he didn’t do in his post is break it down with examples, so that’s what I’ll do here:
Here are some real-life examples of the different Modes in action. Founder vs Manager Leadership Strategies have been a game-changer for companies like Amazon and Microsoft.
Jeff Bezos is practically the poster child for Founder Mode done right. Here’s why:
CEOs like Jeff Bezos demonstrate why visionary leadership is a critical part of growth-stage success, making it a prime topic for leadership workshops and keynote speeches.
While Travis grew Uber to impressive heights, his version of Founder Mode ultimately derailed:
Satya Nadella thrives in Manager Mode as Microsoft’s CEO. Since taking the helm in 2014, Nadella has transformed Microsoft’s culture and strategy, leading to unprecedented growth and innovation. He is in many ways, focusing on things that Founder Mode appreciates. His success can be attributed to several factors:
In contrast, many view Steve Ballmer’s tenure as Microsoft’s CEO less favorably, despite his notable achievements. While Ballmer was an excellent operator who increased revenue significantly, he struggled in several key areas:
The success of CEOs like Nadella in Manager Mode can be attributed to several factors:
Manager Mode often fails for founding CEOs, even though it works well for hired executives like Nadella. Here’s why:
Founders who channel their mode correctly wield incredible power. Bezos showed us how a founder’s vision and deep involvement can drive a company to unprecedented heights. But Kalanick’s story is a stark reminder that Founder Mode without checks and balances can lead to serious problems.
The key is to harness the passion, vision, and hands-on approach of Founder Mode while also building systems and teams that can scale. Successful leaders balance Founder Mode and Manager Mode, adapting to each stage of company growth.
Remember, folks, there’s no one-size-fits-all approach here. The best founders are the ones who can adapt their style as their company evolves, keeping the best parts of Founder Mode while learning to delegate and build strong teams. It’s a tightrope walk, but when done right, it can lead to some impressive results.
Now go out there and crush it, whatever mode you’re in.
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