Founder Mode is Sexy, Manager Mode is Scalable
There is something sexy and appealing in running your company as the omnipresent founder. But if you want to scale, you may have to take a different approach.
My friend Jeremy, not his real name, sent me a link to Brian Chesky’s interview on Lenny’s Podcast with an all-caps message:
THIS GUY GETS ME. THIS IS WHAT I’VE BEEN DOING! FOUNDER MODE, BABY!
I had no idea what he was talking about so, I opened the video link and casted it on the TV, while doing the dishes.
In the following hour or so, Brian Chesky, the co-founder of AirBnB, made his case for the superiority of the founder mode.
Paul Graham, the celebrity investor, hails Brian’s talk as a manifesto for uprising founders who break the shackles of management. It has been too long that professional managers with little stake in the success of growing startups have been calling the shots. Founders, the real stakeholders in their businesses, need to reclaim their power and let their vision shine through everything their organization does.
But is it really the managers or the management practice the issue? Could it be that founders tried to manage, sucked at it, and decided to call the practice sour grapes?
I try to answer these questions below. More importantly, I’d like to give you more information of how each mode works, so you can make your own informed decisions.
In the beginning there was the founder mode
As a startup founder, you run a small team whose main job is to discover a product-market fit. Everything is up in the air, things change quickly and dramatically.
You, the founder, have to stick your dirty little fingers into every single thing taking place. Your motivation is not mistrust or micromanagement. It’s because even seemingly small developments can have a big impact on your business’s future. It’s also because you are the vision driver and the Chief Alignment Officer.
You operate in a founder mode. It is how you need to do things at the startup stage.
But startups are not Peter Pans. The good ones eventually grow up and turn into real scalable businesses.
Steve Blank wrote in The Startup Owner’s Manual that startups are just a temporary stage, a period of discovery successful companies grow out of. When this eventually happen, you, the founder, have to change how you do things.
Then came the manager mode
As your business grows, it increasingly starts to rely on processes and procedures to get things done. Hacking through customer onboarding is tolerable during the startup days. So is being laissez-faire with your books. The volumes are low and you can easily catch up.
As you operations scale, the non-systemized, inefficient way of doing things will eat your head and your margins. In many cases, the sheer volume makes it impossible to operate without the right level of automation.
As it scales, your business doesn’t only grow in number of customer or transactions or whatever your revenue driver is. It also grows in complexity. As things get complex, they require more specialized expertise. Forecasting your cash flow becomes more than a Sunday afternoon exercise you can hack through while re-watching If with your seven-year-old. For one, you don’t have the time, and for two you don’t have enough domain knowledge to do it right. You need to hire a professional.
The same story takes place across all areas of your business. In no time you’re running a full-fledged organization with several leaders responsible for several divisions. You call yourself a CEO and unlike in your startup days, it feels like you really are. You have entered the manager mode. You’ve built an organization, delegated work and driven alignment on the vision and business goals.
But it often feels like it’s not your company anymore
Sometimes, it feels like you’ve delegated so much that you’ve lost power. You used to walk into a random conversation, have a meaningful exchange of ideas and walk away everyone is on board with what you thought was the right course of action. You simply can’t do this anymore. You don’t have the depth of knowledge and the wealth of context to be truly effective in every single conversation.
Not being able to dig your head into the minutia is actually a good thing. It forces you to focus on the important strategic decision-making - the place where you add the most value.
While everything is going right, you can’t help but feeling that everything is going wrong. You feel like you’ve lost control. What you say doesn’t always go. Now you have to have “discussions” with people and simply going to an engineer and asking her to build a feature causes drama in the C-suite. It’s your company and you can’t even pick the accent colour for the logo.
In many cases your gut is right: things are not going well. Your senior management is not aligned, everyone is out for themselves and this division translates into subpar business results.
And you make a u-turn
In this state of mind, you make the call to go back to the founder mode. This was when you felt in charge. Of everything. Including the accent colour for the logo. It’s your company building your vision, so being involved into everything makes sense. Whether you add value in any conversation doesn’t matter because you have the moral authority to have a say and be listened to. You are the genius founder who knows best.
This is how it may feel on the inside. On the outside you look like an arrogant tyrant.
Is it you or the manager mode
Judd Antin writes that proponents of the founder mode, like Brian Chesky and Paul Graham, have gotten it wrong. They argue the founder mode is superior at any stage of building a business. Could it be because they suck at management?
“Where Brian, Graham, and all those founders see a failure of manager mode, I see a failure of founders.”
It’s a failure on the founder’s part to adapt and evolve to the situation of running a scaling business. Managing people, especially a lot of them, is one of the hardest jobs in the world. To do it right, you have to develop a range of ambiguous skills with long feedback loops:
Put your ego aside,
Build empathy and ability to listen,
Create a worthy vision and communicate it in a convincing way,
Negotiate points of view and incentives to align everyone on the team.
It’s easier to be the busybody founder with undisputed genius insight who sprinkles magical wisdom wherever he goes.
If you suck at management, it’s logical to get better at it, not to blame the practice for your failings. This is, of course, if your ego lets you admit your deficiencies.
So, what to do next?
Get better at managing people. It’s one of the hardest things you’ll have to do, so you may as well start working on it now.
The most successful business in the world are being run by professional managers. They tend to use more or less the same management practices but with different flavours. There are thousands of books written on the practice and most of them cost less than your venti Caramel Macchiato.
If you can afford it, hire good professional managers. They won’t solve every problem your business faces but they will help you build a robust business (if you select the right people for the right job).
If you can afford it, get a business coach. All successful CEOs have one. In fact, through their career they’ve had many. Bill Campbell was the coach of Steve Jobs, Larry Page and Eric Schmidt. Hiring him today will be impossible (he passed away in 2016) but learning from his practice is a close second.
Most important of all: think critically about the advice you get. Successful entrepreneurs and VCs are experts only in their domain.