Founder mode, Innovation, and Why Women are Well Positioned to Lead
When all businesses are being disrupted by Gen AI, Founder Mode is required to stay competitive, and women are fantastic at a nurturing (not dominance-driven) form of Founder mode.
👋 Hi! I'm Yue. Chief Product Officer turned Leadership Coach. My personal mission is to help women and minorities break through to the C-suite. Subscribe to get future posts in your inbox.
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Two weeks ago, the conversation about founder mode vs. manager mode of leadership took Silicon Valley by storm. The crux of the argument is that there are two different ways to run a company: founder mode and manager mode (source). Manager mode is: “Hire good people and give them room to do their jobs”. Founder mode is how Steve Jobs ran Apple and Elon Musk runs his businesses. They’re in the details, they go straight to the experts regardless of their seniority in the organization, and they run with contrarian hypotheses. The recent conversations revolve around the idea that conventional wisdom about how to run larger companies, which is in manager mode, is mistaken. I agree with this, in part — there is an important distinction around how the phase of the company affects the type of management mode required.
Engaging manager mode too early kills innovation
Most startups when they reach the growth or scaling phase hire experienced managers and switch to manager mode. This typically happens around the time they raise a series C round of venture funding. Transitioning from finding product-market fit to scaling often leads to shifting from founder to manager mode. This shift in culture and priority then leads to a wave of exits from early employees, who see the ceiling on their career growth or do not prefer operating in manager mode with more process, reporting, and role definition.
I saw this at Thumbtack when we raised our growth round of funding. I had grown with the company from 1st PM to Product Lead for the entire supply side of the marketplace. Then, they hired a Chief Product Officer, along with a slew of other C-level executives: CTO, CMO, CFO… The belief was that the team that got them here, will not get them there (to IPO). All of a sudden, we had to “grow up” as an organization. Formal job descriptions, leveling, operational and product reviews became a part of the daily lingo. We also grew headcount very quickly, and suddenly there were a lot more people in the building with a whole lot less context and history on average. We lost a lot of the ownership and just-try-it-out mentality. It was replaced by a culture of raising ideas but staying within your role — that while you are encouraged to have ideas and get them heard, it isn’t your job to test them out or advocate for them. Your job was to define your role and then do your job, not to go make something happen because you think it’s the best for the company.
Switching from founder mode to manager mode is very effective at scaling a product or business that is working well. If you have a new car everyone loves and now you need to make 10,000 of them, manager mode allows you to effectively break down the car you created into different pieces, put more people on each piece, and get more cars to more customers faster. However, this doesn’t work if 1) your product isn’t a sum of its parts like a car, making it difficult for three people to actually 3X the output or 2) you have not exactly figured out the recipe for reaching new customers that is repeatable.
Founder Mode is required when the core product isn’t ready to ONLY scale
Marketplaces like Airbnb, Thumbtack, and the Apple App Store are difficult products to break down into parts and have many people working on the product separately. The second and third-order effects of a marketplace increase the complexity of any change and coordination costs. At Thumbtack, a local services platform that matches homeowners with home services, when you make a large change that drastically affects the types of local services on the platform, you also affect the type of customers you might attract. It’s fine to make smaller, more confined changes in manager mode. However, when you make more sweeping changes that introduce completely new dynamics into a marketplace, you need to be in founder mode. It takes a founder-mode leader to get into all the nitty-gritty details, bring in the true subject matter expert who has all the historical context of what had been tried (not the highest-paid person), and work through every scenario trade-off to find the best solution. Often, the answer does not already exist because you are building something new and different, so creativity is critical.
Founder mode is required to find new growth channels
If your company hasn’t quite figured out certain acquisition channels for scaling, you still need founder mode. Thumbtack was heavily reliant on SEO for acquisition at the time we hit the growth phase. We brought in manager-mode leaders to try to scale, and they did fairly well scaling the proven SEO channel. However, they failed to find new acquisition channels because finding new growth channels is not manager-mode work. For Thumbtack, manager mode led to a more stagnant period of growth for many years, with difficult decisions and novel strategies increasingly harder to implement. When the company is in manager mode, you don’t have the people in leadership or on the team who would just “do it”. Instead, everyone prefers 100 meetings with 1000 people to ensure that everyone’s aligned and then make a multi-quarter plan to do it in 3 years.
Founder mode is exactly what made the startup successful against large incumbents in the first place, so it’s perhaps unsurprising that returning to founder mode in the right ways would allow a struggling company to find growth. A failure to do so means the company will suffer.
GenAI Transformation Requires Founder Mode
Similar to the concept of the Innovator’s Dilemma, popularized by Clay Christensen in 1997 (has it been almost 30 years?!), founder mode vs manager mode comes down to whether your priority is to innovate or maintain. If there’s a large competitive threat, a new technology that changes business dynamics, or you need to launch a new product line, it’s better to be in founder mode. If you’re ensuring the company is humming along 20% growth year-over-year, then manager mode is great for retention and employee satisfaction.
With the introduction of GenAI, many companies will lose their product-market fit. Implementing GenAI is not just about saving money. It’s about restructuring your entire product and business operations and monetization model so that you best leverage this powerful new technology to its fullest. I would argue that every company needs to go back to Founder Mode (at least in its innovation arm) to figure out how to best handle this shift in the business landscape.
The Nurturing Form of Founder Mode
Many women executives and leaders have spoken out about how operating in Founder mode either doesn’t work for them or leads to a ton of backlash. The main argument is that society expects women to be more collaborative, making it harder to assert authority across the organization. They are more quickly labeled as aggressive or viewed as not collaborative. The qualities that are essential in founder mode —decisiveness, ownership, urgency— are penalized when displayed by women.
Reflecting on my experiences, I have seen women executives lead in Founder mode successfully. The critical difference is that rather than taking a dominance-based approach (popularized by men), they have found a nurture-based approach.
Let’s take Moms as an example. When the kids are doing well at running their routine, moms are in manager mode. We give them clear goals and a vision and let them run with it. When our kids struggle or misbehave, moms are in founder mode. We dive deep into the issue, work shoulder to shoulder, and are directive when needed.
There are some elements we can draw from this simple example about how women can successfully turn on Founder mode:
Always give the why: If you’re switching from manager mode to founder mode, make it explicit and give the reason. When you pull aside your kid to work through bad behavior, you start with the facts. Describe the situation from your perspective to help them see all the different sides of the problem. Together, you lay out facts of the situation: what happened, what progress have we made or not made, what do you know and not know. Do not cast blame or point figures. Do not make them feel like they’re inadequate. Instead, focus on understanding the situation together — two heads are better than one.
Approach from a genuine desire to see them succeed: Moms are, well, moms. We know that they always want the best for us and that they have our best interests in mind. This is a powerful backdrop from which to make direct feedback or comments. In the workplace, if you’re engaging in founder mode, it’s important to state this directly and repeatedly. “I am here to help you.” “I’m here to work with you to make this project successful.”
Be in it together: It’s important to make the process feel less like a battle of they did this and you want to do something else, and more like a partnership. You are in the weeds asking for details, yes, but you are asking for details so you can be the best thought partner, brainstorming partner, and extra pair of hands. The framing and intention make all the difference.
With this context, a female leader can push for urgency (e.g. put your shoes on so we’re not late for school!), dive into the details (e.g. tell me about your day), and be direct about what needs to happen next (e.g. you need to go do X) without incurring the full cost of being labeled as aggressive or not collaborative. They are respectful and kind but firm in how they work in founder mode.
I have seen women executives succeed in this more nurturing lens of founder mode and not give up on any of the attention to detail, urgency, or directness in the process. I hope this gives a blueprint for other women founders and leaders to follow as they find Product-Market Fit in their Founder mode.
Christina Awad, Asha Sharma, Nikki Pechet, I’m thinking of you as I write this. =)
Thank you for being here this week with me. Like like, comment or share this post if you found it useful. See you next week at 3:14 pm!
Yue
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