Founders Create Managers

There’s a new pg article making the rounds called “Founder Mode”. The biggest surprise to me is how, despite saying almost nothing, it has attracted wide attention; possibly because people love to be given new ways to separate and stereotype one another, especially if this reinforces their belief about themselves as good and virtuous.

The article goes to pains to create a straw man of nefarious manager culture: these managers are “taught” (by whom? Is the idea this happens in business school? Do we need to explain to SV people that there has been a huge amount of writing and research on building and running good companies that goes far beyond Taylorism?) to turn the company into black boxes that you manage via outcomes. But when you do this, all that happens is that the black boxes are run by “professional fakers” who drive the company into the ground. To avoid this trap, you must run your company through some nebulous method called “founder mode.” (What is it? No one can say! But it’s definitely not “hire smart people and get out of their way”, even though that’s basically what Jobs claims to have done).

My assertion is that “founder mode”, naively applied, creates the very conditions that lead to those nefarious professional managers. I’ve seen it happen at companies big and small with founder-type leaders. The process goes something like this:

The founder leader is a passionate details person. They care deeply about the company, of course, and the product, and want to be involved in everything. This works out ok but there are areas that, despite their talent and intelligence, they can’t quite master an understanding of. Unfortunately, their belief that they need to be in the details and have opinions about everything leads them to a huge weakness. When you don’t really understand something well, but you want to sound smart about it, what do you do? You go to someone you trust that does know it, and launder their opinions as your own. And so long as this person really does know their stuff well, this isn’t a bad idea.

But, over time, smart senior executives realize that you have these blind spots. Instead of giving you the full picture about their areas, they tailor the information to what they know will resonate with you. You may try to check in with other people on this, but the bigger the company gets, the less time you have to double check their work; and anyway, the best sharks in executive leadership know to stack the bench with their flunkies who can be trusted to tell the founder only what that executive wants you to hear.

This information bubble, combined with the belief that their own judgment will win out in the long run, sets this type of founder leader up for manipulation. The manipulation comes when you refuse to “hire smart people and get out of their way,” and instead you “hire smart people and micromanage them until they learn how to manipulate you so that they can do whatever they think is right and you will be blind to the consequences.” Because smart people are going to do what they think is right, and you are never going to perfectly outmaneuver them.

The only solution to this is to think early and often about the systems of accountability you have to set up. This is much, much harder than micromanaging details, because every system of accountability you set up will eventually be gamed. So in addition to accountability, you need to foster a strong, ethical company culture that encourages transparency while allowing for some mistakes.

Bryan Cantrill says it well in this post:

Founders seeking to internalize Graham’s advice should recast it by asking themselves how they can foster mutual trust — and how they can build the systems that allow trust to be strengthened even as the team expands.

Indeed, if “founder mode” is a real thing at all, it is merely the recognition that there is no one-size-fits-all system to running a successful company, and if you want to do it well, you have to keep evolving the approach to meet the current needs.

Enjoy this post? You might like my books: The Manager’s Path, available on Amazon and Safari Online, and Platform Engineering: A Guide for Technical, Product, and People Leaders, coming out fall 2024!