Why founder mode beats manager mode: Redefining start-up leadership

A new approach to leadership has emerged recently in tech circles – though it’s one that can be applied to businesses in any sector. “Founder mode” is a term coined by Y Combinator co-founder Paul Graham in late 2024. It captures the fundamentally different way that a company’s founder will run a business when compared to the way a professional manager would approach the same challenge. It’s a concept inspired by the experiences of Airbnb CEO Brian Chesky, who found that following conventional management advice nearly tanked his rapidly scaling company.

Chesky’s experience mirrors exactly what successful founders often tell me – in founder-led organisations, ‘traditional’ approaches are nothing short of disastrous, highlighting many things founders must avoid. The result for founders is a straight fight between founder mode and manager mode, where the textbook is the first thing to go out the window.

The traditional manager mode – and why it’s bollocks

In manager mode, the CEO puts their professional manager hat on and does what’s expected of the top dog – hire talented people and give them room. They can then hide behind the org chart, only emerging from their ivory tower to talk to their direct reports, and avoiding ‘meddling’ as if their share options depended on it. They treat different departments as black boxes – pass on instructions, instead of choosing to manage milestones personally and let others figure out what to do. Hands-off oversight is the best way to run companies after all, right? It’s what’s taught in lots of business schools around the world and there’s no shortage of management consultants queueing up to make that very same point.

On paper, it sounds reasonable. In reality, most founders who’ve adopted the approach have found it to be disappointingly shite. Why? Graham’s article noted that the vast majority of founders he interviewed shared a common story – it was once the senior executives rolled into the office that things started going wrong. The problem is that when trying to hire good people and let them do their thing, it’s very easy to hire professional fakers who will drive your company into the ground.

The really f**ked up thing is that founders who try and work in manager mode often end up doing so against their own instinct. They talk to VCs and industry veterans and a whole heap of other senior people , who all offer the same advice: Professionalise and delegate. Yet when they do? Everything starts going to shit.

Those experienced C level execs they’ve hired at great expense? Well, turns out they’re great at managing up, saying the right thing to the board and looking impressive in meetings. Sadly, they’re crap at leading teams or shipping products. Hence Graham’s term ‘professional fakers’.

Does this mean manager mode is complete nonsense? Not at all, but using it in a startup is like trying to rewire your house with a spanner. It’s the right tool in the wrong place. Manager mode works well in large companies (which is why it’s implicitly assumed that manager mode is the REASON those companies got so big).

It does not work well in a fast-evolving startup. In fact, it introduces dangerous blind spots. It puts distance between the founder-CEO and the coalface, introducing middle managers who lack the founder’s vision.

The founder mode mindset

Flip to founder mode and the tone changes. The founder-CEO is back on the tools all of a sudden – they’re across the details, in the rooms, elbow deep in the code, the copy, whatever it is that the company does. They’re not sitting at the top of the org chart – they cut across it. No black boxes. They’re connected to the truth across the entire company – and let me tell you, having operated like this in some of my previous companies, it feels f**king fantastic.

I know it’s a cliche to point to the way that Steve Jobs ran Apple back in Silicon Valley’s heyday, but there’s a reason his leadership style is seen as one that even great leaders could learn from. He remained intimately involved in product decisions even as the company grew. Famously, he would hold an annual retreat with the 100 most important people at Apple, regardless of their rank. He didn’t care about pay grades or politics – if you had ideas that were important, he wanted you to compare notes with others who could help you make them reality.

That’s the true mark of founder mode. It’s absolutely NOT about one person controlling every aspect of every department and micromanaging every decision. It’s about where the boundaries are drawn. Successful leadership like that of Steve Jobs sees the CEO selectively choosing critical areas to stay deeply involved in, and can do so with the authority that only a CEO can bring. While most large companies add layers, Jobs skipped them. He worked directly with the right teams and kept Apple fast, focused and scrappy.

But Steve Jobs isn’t an outlier. Other tech leaders operate in similar ways. Elon Musk sits with his engineers and makes them answer for their work – heresy for a textbook CEO, who probably wouldn’t even know where the engineering department was. Brain Chesky at Airbnb tried the hands-off approach and saw everything tank. So he immediately stopped playing professional manager and took back the wheel. Airbnb, reset to factory conditions of founder mode, went from wobbling precariously to record profits by 2023.

Examples like these might seem like an incredibly high bar to an inexperienced founder looking to keep the wheels turning (and the lights on) as their company scales. However, the likes of Jobs, Musk and Chesky are founder mode leaders to look up to. They inject vision, speed and unity into their organisations by using advantages that only a founder-CEO tends to have. And they are advantages that you have too:

Comprehensive knowledge

As the founder, you’ve seen it all. You’re not stepping into a new company, a new sector, a new environment. You’ve been there for every major call since day one. Product, technology, customers, team – it’s all in your head. It’s knowledge you simply can’t buy in, and it’s why YOU are the best person to spot problems and opportunities.

Moral authority and vision

You built the thing, so you’ve earned the right to question sacred cows and carry out deep dives into whatever parts of the business you damned well want to. After all, they were your assumptions to start with. This ‘founder’s courage’ means you can keep innovating and leading from the front – you’ll quickly find that your own people are more likely to rally behind a new idea from the visionary founder than they would be if the idea comes from a senior manager.

Innovation over optimisation

Startups live or die by finding new product cycles. Founders are more naturally oriented towards innovation while professional managers are more about optimisation and efficiency. They’ll find ways to make an existing product as good as it can be (and that’s not always the wrong thing to do). Founders will find gaps for new products, making sure the company doesn’t stagnate.

Why manager mode flops in founder-led companies

The key reason why manager mode techniques fail in a founder-led startup that’s scaling fast is context. Most people would agree that it would be totally insane to drive an oil tanker using the same technique you’d use with a jet ski. But many founders I deal with have been given bad advice that suggests they do exactly that – negating all the advantages their agility gives them, without the benefits that an oil tanker enjoys precisely because of its sheer size.

A startup is a growing organism where the only constant is change. Founders in those organisations can predict and solve challenges that outsiders just can’t, and they can respond to problems with a speed and agility that would be completely hamstrung by formal processes.

The trap with manager mode is layers. Add too many too quickly and you’ve built a bureaucratic prison for yourself. You get cut off. Your perception of reality becomes only what your middle managers want you to see, a rose-tinted set of updates designed to make them look good above all else. They’ll tell you what you want to hear even when every single indicator on their dashboard is pointing in the wrong direction.

You don’t have to play that game. Stay engaged at multiple levels, cut out the filters and go and see the work. Use your moral authority to lead, innovate and pivot. Returning to the Apple example I mentioned earlier, John Sculley’s time as CEO saw stagnation and pretty much every growth indicator flatline. When Steve Jobs returned, he brought his founder mode mindset with him. He broke rules, slashed product lines, and delivered tech powered product development that changed the world (the iPhone and iPad disrupting two HUGE industries with ease). He even opened retail stores while the rest of Silicon Valley sat back waiting for the move to fail (spoiler alert – it didn’t).

Jobs was able to do all this because he was Apple’s co-founder. He had the history. He was connected at every level, rather than hiding behind the org chart. As a result, he had the team’s trust. When he had ideas, people moved. You have that same authority in your company.

Of course, the reality is that only ever operating to one extreme isn’t going to result in leadership perfection. Good leaders know that the only ‘right’ way to run a company depends on the situation. They change gears and – crucially – they are able to evolve their style from founder mode to manager mode as the company scales. There are times when innovation is what’s needed, and there are times when structure and shape become essential.

Understanding that middle path and how to walk it is one of the ways that good leaders become great leaders. It’s not a path you find on day one, and it’s not one that stays consistent as your company evolves. The terrain shifts beneath your feet as you move from ten people to fifty, from fifty to two hundred, from Series A to profitability. What worked brilliantly at one stage becomes the very thing holding you back at the next. The founder who can’t see this ends up fighting yesterday’s battles with today’s resources.

When the time comes to scale, bring in the right people to the right roles and build a structure that helps you grow without losing the founder’s fingerprint. This means being brutally honest about what you’re actually good at versus what you think you should be good at. It means recognising that the scrappy, all-hands approach that got you here won’t be what takes you there. But it also means understanding that structure without soul is just bureaucracy, and process without purpose is just paperwork. It’s still the same company – it’s just growing in a different way, learning to run before it forgets how to walk.

The debate isn’t about theoretical absolutes. It’s about scaling without losing your soul, about building something bigger than yourself without becoming smaller in the process. There isn’t a single answer – coaches like me wouldn’t have jobs if there was and no business would ever fail. If leadership were formulaic, we’d all be following the same playbook and achieving the same results. But the graveyard of startups is filled with founders who either held on too tight or let go too fast, who mistook control for leadership or delegation for abdication.

Great founder-CEOs build great companies by being flexible – knowing when to bring intense one-day energy and when to install ‘boring’ systems and cadence that allow rhythm and routine. They understand that inspiration can’t be scheduled, but execution can. They know when to be in the room and when their presence actually slows things down. They recognize that some fires need their immediate attention while others are learning opportunities for their team, even if the lesson comes with a cost.

They delegate in areas where they aren’t the expert and allow great managers to do their thing. Managing people is different to building products or closing deals. This isn’t weakness – it’s wisdom. It is its own skill, and pretending otherwise is how founders end up with talented teams that underperform. The founder who needs to be the smartest person in every room has already limited how smart their company can become. But delegation without context is abandonment. You don’t just hand someone the keys and walk away. You give them the context, the constraints, the principles that matter, and then you trust them to drive. You hire people smarter than you in their domains, then you actually let them be smarter than you. That’s harder than it sounds, especially when your identity is wrapped up in being the person with all the answers.

But they stay connected to the areas that make the business what it is. For some founders, that’s product. For others, it’s culture, or customer relationships, or the technology itself. These are the non-negotiables, the things that would fundamentally change if you weren’t paying attention. Not everything matters equally, and great leaders know the difference between what needs their attention and what needs their absence. They protect the essence while letting go of the edges.

Get it right and you won’t just grow – you’ll stay sharp while you do it. You’ll build something that scales without becoming soulless, that gets more capable without getting more corporate, that grows in revenue and headcount while somehow feeling more focused than it did when it was just you and a laptop. That’s the prize. Not perfection, but coherence. Not balance, but the right imbalance at the right time. The best founder-CEOs don’t choose between founder mode and manager mode – they master the transition between them, moving fluidly based on what the moment requires, never forgetting that both versions are them, and both are necessary.

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Written by business coach and leadership coaching expert Dominic Monkhouse. You can order your free copy of his book, Mind Your F**king Business here.