Paul Graham’s essay on founder mode has gone viral this weekend, with people I follow sharing their takes like Shreyas Doshi and Cedric Chin and Ed Batista. I felt like chiming in as well, as it draws together several threads of thinking I’ve had over the years, and ties into my current thinking about the executive mindset (check out my upcoming webinar and masterclass workshop to learn more!).

So what is founder mode? Graham describes it as an experience of founders revolting against the conventional wisdom of “hire good people and give them room to do their jobs” because they feel like they are being “gaslit” by “the people telling them they have to run their companies like managers” and by “C-level execs [who are] some of the most skillful liars in the world”. The advice to delegate and let leaders run their own domains without interference is too simplistic – it works poorly if you hired bad leaders with their own agendas, but is absolutely the right thing to do if you have a values-aligned leader whose judgment you trust. The Situational Leadership concept feels relevant here, as a reminder that most founders that Graham is talking about (including Graham!) have never had a good manager, so don’t actually know what good management looks like.

Shreyas and Cedric criticize the essay for being vague and ill-defined, and even Graham admits that the concept will be misused. But I think the essay is resonating with people because it is naming an emotional response: “That’s what I feel!” It’s not about a business system that can be tested, but about the feeling some founders have about the phenomenon that when they scale their companies, they are given advice by so-called experts (board members and the skillful liar executives), and it’s bad advice. And they know it feels wrong but they question their own expertise, so they follow the advice and it turns out disastrously. When they instead follow their finely tuned intuition about their business and ignore the “experts”, they can often fix the issue. So the essay is getting an emotional response because it is naming the feeling of this experience of letting the judgment of others overrule one’s own intuition.

Of course, most founders shouldn’t trust themselves and should listen to the experts because they don’t know what they don’t know (even Larry and Sergey eventually appreciated hiring Eric Schmidt). And, of course, I’m biased in that I pitch myself as an expert that founders and executives should listen to, even though I haven’t sat in their seats as a founder or executive (see my postscript below if you want to know why you should keep reading).

What I like about the essay is that it has started a good discussion about who is believable (to use Ray Dalio’s term as described by Cedric Chin) about leadership effectiveness. I interpret Graham’s essay as saying that founders shouldn’t believe people just because they say they’re good at something (because C-level execs are skillful liars) or because they have money (board members are often venture capitalists who got their seats because they are good at sales and raised capital from limited partners, not because they are actually good at running companies). But then who should they believe? Whose advice should they listen to?

Graham says “founders” but he has an obvious bias as a former founder, and as somebody whose Y Combinator business model depends on founders choosing his capital (cue the Upton Sinclair quote “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”). It’s in his interest to make founders feel special.

But founders often do have something special – tacit or implicit knowledge about their business (read Cedric Chin’s series on tacit knowledge for the research on this topic). They built the business from the ground up, and have a deep intuitive understanding of how all the different pieces connect together in a way that nobody else does. When something isn’t working, they have a “sixth sense” of where the problem is because they have done all the jobs and still retain direct lines of communication deep into the org where they hear from the people doing the actual work. They don’t just trust what they’re told, but can feel when something doesn’t make sense, and will open up the “black box” of a function to poke around in the details until they uncover what’s broken. In other words, instead of trust implicitly, their stance is to trust but verify.

This is partially because founders are incentivized differently than everybody else at the company: if the company succeeds, they will get the preponderance of the credit and financial benefits so they are more motivated to win than anybody else. Other people at the company can say “That isn’t my job”, but the founder’s job is to make the company succeed, and they will get disproportionate compensation if they do.

Because of those disproportionate incentives, founders also tend to be resourceful. They do things that don’t scale. They figure out what they can deliver with the resources they have (Cedric describes this as effectual thinking) rather than pine for what they don’t have. They bias towards action and learn from trying things rather than theorizing. I once coached a founder who realized he had made poor hires at the VP level because he kept asking himself “they say they need 10 people and 6 months to do this, and I could do it myself and get what I need in 3 weeks. What am I missing?” Eventually he took over, got his necessary result, and let those VPs go; they were waiting for perfect conditions to deliver an idealized result, and he was relentlessly focused on what he needed right now. Great example of a founder using his knowledge of the business to drive results rather than listen to so-called experts who weren’t actually delivering impact.

An effective “founder mode” of leadership would scale those characteristics of founders to other leaders at the company. Here’s a few ideas of what founders might want to do:

• Teach others the tacit knowledge that they have as founders. This could be as simple as having somebody shadow you while you do tasks, then watching them do it and giving them feedback until they can do it to your standards (an approach recommended by several founders).
• Clearly communicate their spiky point of view to align decision making across the company. Founders have implicitly built the company in a way that reflects their values and beliefs, but to effectively scale their leadership, they need everybody to make decisions the same way without them being present. My standard example is Zuckerberg’s “Move fast and break things” because quality and execution speed are both good things, and a team could get in a debate over every feature launch of which to prioritize; instead, Zuckerberg made the decision once at the top and settled the issue. I’ve called this Principled Leadership in the past, as great founders like Herb Kelleher act so consistently that everybody in the company can model their thinking and do the “right” thing without being told.
• Hire and onboard executives aligned with those values and principles. If they don’t trust the new executives to make decisions independently, they won’t delegate to them and will remain the bottleneck. But to consciously search for people who can earn their trust requires what Jerry Colonna calls radical self-inquiry, the ability to dive deep within oneself and articulate the unspoken values and priorities. With that self-knowledge, they can share what they believe in and find the leaders who share that perspective.
• Reinforce that alignment by designing explicit business incentives to hold people accountable (as described by Patrick Lencioni in his book The Advantage) (I have also described this as a necessary skill of effective managers). Steve Jobs would tell his Apple VPs that “Somewhere between the janitor and the CEO, reasons stop mattering” for not succeeding – the VP’s job was to deliver results, not make excuses. He incentivized them to be resourceful and to think like a founder.

This sounds like a great set of characteristics, so I can see why people are responding positively to “founder mode”. But let’s look at how founder mode can go wrong.

• The founder holds onto an initial set of beliefs and behaviors long after it is functionally useful to the company. “This is how we do things” quickly becomes a limitation. They think they still have a fingertip tacit knowledge of the business when they are actually no longer in sync with the current customers and employees, and they interfere with the people who have that knowledge.
• They believe in their own judgment and intuition even in the face of actual experts. They can’t find any leaders that they trust, micromanaging them and questioning them until the only leaders who stick around are insecure “yes” people who can’t get anything done on their own.
• They say they want independent leaders but can’t resist parachuting in with little context to offer their perspective based on their intuition. Sometimes the founder does know better because they have additional context or historical knowledge, but I see that as a failure to share such information with the leaders making the decision.
• They want to stay involved in every aspect of the company but that means they become a bottleneck for every decision in every function. The company slows down because they can’t get out of the details. As Jerry Colonna once quipped, “The CEO says ‘Gosh darn it, why can’t everybody make decisions without me?’ And then, ‘Darn it, I don’t want them making decisions without me.’”

So to return to my title question, “founder mode” will be effective when the founders are self-aware enough to understand how to make their implicit knowledge explicit by transferring context and principles to their leaders to make independent but aligned decisions. “Founder mode” also empowers founders to not just blindly trust their leaders, but to open up the “black box” of functional teams to dive into the details for company-critical initiatives. For this to be effective, the founder must have the clarity to know what’s most important so they can focus their attention there rather than getting involved in everything – they must treat their attention as insanely valuable and focus on the work _only_ they can do.

One unique advantage that founders have is that they can update the values and beliefs of the company, something I learned from Tobi Lütke of Shopify in this podcast interview. Professional managers might feel they have to stick to the company culture and beliefs that were present when they arrived, but founders have the cultural power to just change values or principles that no longer serve the company if they are conscious enough to update their beliefs and let go of what brought them to initial success. In other words, great founders identify and communicate useful beliefs throughout the company (“Move fast and break things” or the Amazon leadership principles) to align decision making, and then let go of them when they are no longer useful (as Zuckerberg eventually did by deleting “break things”). I’m influenced here by an essay I read recently describing strategy as a series of beliefs which need to be updated as the situation changes.

Another is that they set the standards by which other leaders are measured aka What You Do is Who You Are. I had a discussion on LinkedIn recently where a friend wondered whether every organization would inevitably be dominated by professional liars at the executive level because those people were so good at managing perception. I commented that Google had pretty great leaders when I was there – it was the only place I’ve ever worked where I looked up the management chain and said “Yeah, those people are smarter than me and work harder than me and deserve to be my boss”. But that seems to have all fallen apart in the last five years as everybody I know at Google seems miserable because it has become a cesspool of political infighting. What changed? I suspect Larry and Sergey were adamant about holding leaders accountable to their standards, and they wouldn’t let bullshit stand – they would keep asking questions until they got an answer that satisfied their technical understanding (and they had the chops to keep pressing). Sundar doesn’t seem to have that capability or will to push through the resistance, so people who tell a good story despite not achieving results are flourishing, and “the standard you walk past is the standard you accept”. Founder mode matters because they set the standard of behavior, and care too much to let unacceptable behaviors continue.

In the end, I don’t think “founder mode” and “manager mode” are meaningful labels despite Paul Graham’s viral and meme-worthy essay. They are both simplistic approximations of what it takes to be an effective leader. Founders can learn from professional managers. Managers can learn from founders. In both cases, look for evidence that the person giving advice is believable, and has actually achieved success using that advice, not just read it in a book. Plus, it’s rare for advice to apply unconditionally; understand in what context that advice worked, and figure out how to apply that advice to your own context. That sort of complexity is not viral or simple, as evidenced by this 2200+ word post, but that’s a result of operating in a complex and fast-changing world.

P.S. Speaking of believability, why should you listen to me? I spent 6 years as the Search Ads Chief of Staff at Google, leading business strategy and operations for one of the most profitable businesses in history while working with and learning from top Google executives. I took what I learned and have spent the last five years coaching executives to be more effective and impactful, and you can read what they say about my coaching in their own words on LinkedIn. I help executives and founders think through difficult and ambiguous situations many times a week, and therefore have developed my own intuition about what is effective to lead organizations ranging from 10-person startups to big tech behemoths like Google and Meta. In other words, I have had the deliberate practice “reps” to instantly recognize patterns from having seen them play out dozens of times in different leadership settings.