Founder Mode vs. Manager Mode

When it comes to managing a business, there are typically 2 schools of thought with staunch defenders on each side:

1. Delegation
2. Hands-on management

(The latter is sometimes referred to as micromanagement.)

In his recent article Founder Mode, Paul Graham (founder of startup incubator, Y Combinator) compares the hands-on management approach (Founder Mode) with the traditional delegation approach (Manager Mode).

Graham took a contrarian view on the subject and sided with the hands-on Founder Mode approach for running a company. So what is this and why should you care?

First some definitions

• Founder Mode – hands-on management style, getting into the details at every level of the company
• Manager Mode – manage output through the efforts of direct reports (i.e. delegate and manage)

Why should this matter to you?

Running a company and managing people is challenging and tiring, it's a blend of science and art. When it comes to management, self-awareness is critical. Management styles likely need to change as a company grows and needs new skills:

• From $0-2m in revenue – very hands-on owner with knowledge of every detail and action
• From $2-10m in revenue – owner probably needs to relinquish oversight of entire functional departments (sales, marketing, service, ops, admin, etc.)
• From $10-50m in revenue – layers of middle management are likely kicking in... it's possible the owner may not know everyone in the company at this phase
• Beyond $50m in revenue – owner may need to step back and ask if they're the right person to take the business from $50m to wherever it goes next (a very hard thing to do if you're the person who took the company from $0-50m)

Here's what Graham had to say:

Here are some tips and takeaways on this topic...

• Know which stage you're in – Be hyper-focused on the details in the early (or smaller) stages of your company and transition to a manager/delegated approach as things get more complicated.
• Focus on systems over goals – Build clear processes and systems for your team to follow. This ensures consistency without you needing to be involved in every step.
• Have a north star – What's the one thing your company is obsessed with? The clearer this is, the easier it will be for anyone (founder, owner, employee) to make decisions regardless of founder mode vs. manager mode.
• Hire people you can delegate to – Work with people you would trust with autonomy. Give them responsibility over specific areas of the business. Start small and gradually give more responsibility as they prove themselves.
• Automate wherever possible – Automation is an underrated tool in small business. It eliminates the need for delegation or constant oversight.
• Communicate clearly – Be clear and explicit when communicating to your team. Everyone should know what's needed of them and when/why you're digging into details (or not).
• Set Metrics – Instead of managing every task, focus on measuring outcomes. If your team is hitting key performance indicators (KPIs), you can be confident they’re on the right track.

As a small business owner, it’s crucial to find the right balance between being hands-on and letting your team take the reins. Founder Mode is a reminder that deep involvement is essential at times, but knowing when to step back is just as important.

Send a reply if you need help working through this in your business. We're here to help.