What is Founder Mode? All the details on Paul Graham’s phrase that techies are talking about

There’s been a heated debate in Silicon Valley and among techies across the internet recently: which is better, founder mode or manager mode? The term “founder mode” was coined by Paul Graham, co-founder of Y Combinator, in an essay published this month. The debate revolves around the question: which approach is more effective? Is it the hands-on method, where the founder is actively involved in the day-to-day operations of the company, known as founder mode? Or is it manager mode, where work is delegated to executives and founders take a back seat? But the intense debate isn’t the only thing that this essay has sparked—the internet is now also awash with founder mode memes and merchandise.

What is founder mode?

“In fact, there are two different ways to run a company: founder mode and manager mode. Until now, most people, even in Silicon Valley, have tacitly assumed that scaling a startup means moving into manager mode. But from the disappointment of founders who have tried it and the success of their attempts to escape it, we can infer the existence of another mode,” Graham notes.

Essentially, founder mode is a state of intense focus and productivity that startup founders must achieve when building their companies. It’s not just about working hard; it’s about developing a mindset where everything else takes a back seat to the company’s growth and success. Graham describes founder mode as a time when founders should be fully immersed in their work, often to the exclusion of other activities and distractions.

In the essay, Graham also pokes fun at business schools that don’t train their students to be founders, but only managers. “As far as I know, there are no books that deal specifically with the founder mode. Business schools don’t know it exists. All we have so far are the experiments of individual founders who have figured it out for themselves. But now that we know what we’re looking for, we can look for it. I hope that in a few years, the founder mode will be as well understood as the manager mode. We can already sense some of the differences.”

One of the best examples of the founder mode Graham cites is Airbnb’s Brian Chesky. He recently talked about how being less involved in day-to-day operations led to bigger problems at his company. “The less I got involved, the more I got sucked into problems. And when I got sucked into a problem, it was about 10 times as much work,” Chesky said on a recent podcast. When he realized this, he decided to take a different path: “I’m going to be involved in every single detail. And Airbnb isn’t going to do more than I can do personally,” Chesky said. This change in strategy seems to have paid off, because according to Paul Graham, Airbnb now has some of the best free cash flow numbers in Silicon Valley.

Founder mode vs. manager mode

The concept of “founder mode” is embodied by several high-profile leaders across various industries. Steve Jobs is one of the most famous examples. Jensen Huang of Nvidia is another, known for managing an incredible 60 direct reports and ensuring he stays closely involved in every aspect of the company. Elon Musk’s deep dive into the workings of his numerous ventures is also an example of founder mode, as is Mark Zuckerberg’s hands-on approach at Meta. Sam Altman, who is taking the lead at OpenAI, follows a similar path.

“Whatever Founder Mode is, it’s pretty clear that it will break the principle that the CEO should only interact with the company through his or her direct reports. ‘Skip-level’ meetings will become the norm, rather than a practice so unusual that there’s a name for it. And once you drop that restriction, there are a huge number of permutations to choose from,” Graham notes.

Brian Chesky says, “Jony Ive and Hiroki Asia from Apple inspired me to adopt founder mode.”

According to a New York Times report, Dan Rose, a former executive at Amazon and Meta, said that both Jeff Bezos and Mark Zuckerberg were known for their micromanagement style. These leaders were deeply involved in the details of their companies’ products and operations, setting a standard where autonomy was not expected and any resistance often resulted in employee firing.

Meanwhile, many argue that the idea of ​​founder mode glorifies unhealthy work habits and promotes a culture of overwork. Many technologists believe that while founder mode can be effective in the short term, it should not be viewed as a long-term strategy. They argue for a more balanced approach where founders can maintain high productivity without sacrificing their health and personal lives.

The Information’s founder, for example, believes that founders still need strong managers. She noted that even Steve Jobs, known for his deep involvement in every detail of Apple’s business operations, relied heavily on Tim Cook. Cook ran Apple’s massive manufacturing operations, which became a critical part of the company’s success.

According to Sam Gerstenzang, an X user, Founder Mode is very similar to micromanagement, but the difference lies in the tasks, the work output and the way in which it is carried out.

Another startup investor cited Microsoft under Satya Nadella as a prime example of an exceptionally well-executed “manager mode.” Nadella’s leadership has been praised for turning Microsoft into one of the most valuable companies in the world. Tim Cook also operates in manager mode and has successfully turned Apple into a trillion-dollar company.

Female founders have difficulty getting into founder mode

In the midst of all this, Brian Chesky published an interesting post where he says that many female founders have pointed out that they don’t have “permission” to operate in founder mode. Chesky says there are several documented cases where a female founder was fired for micromanagement. “Female founders have reached out to me in the last 24 hours and told me that they don’t have permission to run their companies in founder mode like men can. This needs to change,” Chesky wrote in the post.

Meme-fest in founder mode

The “founder mode” debate has also taken a humorous turn on social media, with many joking that it’s just a fancy term for micromanagement. One user on X quipped, “Everyone loves founder mode this weekend until the average CEO applies it on Tuesday.”

While the debate continues, it is clear that both founder and manager modes have their merits. The key may be to balance the hands-on approach of a founder with the execution skills of a strong management team, creating a dynamic that fosters both innovation and growth.