Quick disclaimer: this post was several nudges down in my backlog, but because Paul Graham and Brian Chesky lit the internet on fire with the Founder Mode post, I pulled this up as shockingly, I have a lot to say about the topic. 😎 

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Also, if you prefer watching unedited footage of people yammering about these topics, my excellent friend Giff Constable (take his courses on Maven!) and I started an impromptu weekly live chat centered around the topics I write about here. You can check it out on Giff’s Youtube channel.

Ah founders, those rare 🦄 unicorn beasts that the tech industry cult of personality loves to raise on the highest pedestal.

The narratives are compelling: companies willed into success by visionaries like Steve Jobs, wily strategists like Jeff Bezos, technical innovators turned huge scale operators like Daniel Ek and Mark Zuckerberg; or hard-charging entrepreneurs like Elon Musk.

When statistics and narrative are at odds, we love to go with the emotionally captivating stories: the perseverance of the single messianic individual and their heroic acts is solid gold for a textbook dramatic arc.

But for every Zuck, Elon and Ek the startup graveyard is full of passionate founders who tried beating the odds, only to fall flat on their faces.

Inversely, the history of business success knows many triumphs by mercenaries, solid teams, and even boring bean-counters successfully scaling businesses over years and decades.

So, maybe it’s less about the founder and more about a mindset of innovation, urgency and risk appetite—“founder mode”—balanced with careful deliberation and sound strategy, all applied in appropriate proportion for where the company is.

The problem: too much or too little “Founder Mode”

It’s likely not surprising that I have passionate views here. As a “professional scaler” I’ve staked my personal brand on 0-to-1 founders needing to hand over the reins at the appropriate time to someone specializing on the 1-to-10 journey. Assume extreme bias and digest accordingly.

But, I’m going to do my best to be unbiased about this: both because I’ve seen companies struggle with TOO MUCH founder mode and TOO LITTLE founder mode. Sometimes simultaneously.

What’s worse—mea culpa!—as an inexperienced grasshopper, I’ve personally been guilty of throttling founder mode at companies, treating it as a bug in the system, holding back transcendent, empowered orgs from soaring like the butterflies they are.

As a result, I’ve unknowingly added friction and inertia to organizations whose scarcest resource is time and most desired commodity is short term results.

What makes founders unique?

Let me stop here for a second to briefly explain how I understand “founder mode” through the lens of what I’ve seen in the dozens of successful founders I’ve worked with.

“Founder mode” is a close sibling of the classic “Wartime CEO” concept: a mode of operating where the downside is meaningful (going out of business) but the upside is asymmetrically big (coming out on top in a winner-take-all market)—with very finite runway to land at one of these outcomes.

Some of the characteristics that define how a founder generally acts are:

• A bias for action and an extreme sense of urgency. A founder’s natural take is to think through every initiative that’s supposed to take 3 weeks and ask how it could be done in 3 days—better yet, 3 hours!

• Ownership. Acting as if their entire future, net worth and professional credibility is hinging on the success of the company.

• Thinking wide and deep. Looking at the company across all of its functions from the macro to the tiniest of micro minutiae (also subsequently working roughly 23 hours per day, 7 days a week)—some would call this micromanaging, others “strong alignment.”

• Superhuman risk appetite. Founders are generally very low in risk-aversion and have a “go big or go home” mentality.

• Positivity bias. You could also call this hubris—but founders start everything from a perspective of any given outcome being achievable given enough hustle and cleverness.

Obvious disclaimer: all founders are different. These are common traits of successful ones overly generalized through pattern recognition. Your mileage may vary.

All of these are inherently positive traits for a founder. Without them, there would be no startups. In order to be a successful startup founder, you need a mix of a willingness to work insanely hard, above-average intellect, killer instinct, and out-of-this-world hubris to be foolish enough to start a new venture—and to be talented enough to get it off the ground.

But… as with most positive traits, these come with downsides.

• Bias for action → A lack of patience. No time to “measure twice, cut once” and a general unease with things that take time.

• Ownership → Overcommitment. If I’ve learned anything from playing poker, it’s that you playing games you can’t afford to lose causes you to play terrible poker.

• Thinking wide and deep → Micromanagement. A single individual’s excellence in every aspect of minutiae doesn’t scale, nor do strategies deploy well unless they can permeate the ranks and withstand some game of telephone.

• Superhuman risk appetite → Ignoring small wins. If you’re driven by the endorphin rush of breaking new ground and swings for the fences, you ignore the cumulative benefits of getting the small multipliers just right over a longer period of time.

• Positivity bias → Downside ignorance. In the early days when the cost of mistakes is low, why even think of the downside?

In the early days of a company, these negative traits are of very little concern. On the contrary: none of them really matter. The positive aspects of founder characteristics reign supreme.

It’s only in the long run and at larger scale that the detrimental effects start creeping in: urgency to get things done created unmanaged product debt, a lack of patience on long term investments creates a “treadmill growth” effect, and premature expansion fragments the organization.

Story time: learning to appreciate founder mode

Background: my journey into Product Leadership

Before I jump into my actual story, I need to provide some context:

I was originally supposed to be a math teacher, but in the madness of the dot-com boom, I got sucked into software engineering instead. I’m by nature a highly analytical person and a systems thinker to my core. It’s no surprise I was smiling ear-to-ear when I first read Donnella Meadows’s Thinking In Systems.

My issue is that I get infatuated with abstractions rather than the things themselves. I seek to understand through patterns.

My entry point into “Product” originally came through working with Nokia as they were early adopters of Scrum around the time of the Agile Manifesto. My first frame of reference of “Product” was the “Product Owner” role.

So, as I shifted from engineering management to product management and further on to product leadership, my brain was very much biased to the operational side: getting the org model, the processes and the systems correct in my mind was the sole precursor to success.

I had also played a lot of poker, so I was conditioned to playing correct poker instead of winning poker: trusting that if you kept doing things right, it would be rewarded over a long enough series.

You can see this from all my old articles on Medium. All my attention was on getting the supporting structures and frameworks correct.

All about doing things right, not at all about doing the right things.

Boy I wish my DeLorean could hit 88mph. I’d have a bone to pick with my younger self…

Founders

Either I’m lucky, have incredible intuition, or I have a knack for betting on great jockeys.

I’ve had the privilege of working for some pretty incredible founder-CEOs. Especially Derek Flanzraich (Greatist, also a subscriber so 👋 hi Derek!), Ankur Nagpal (Teachable) and Dan Johnston (Workstep) have been incredible examples having Founder Mode up the wazoo—combined with the humility to understand when their superpowers become cryptonite.

I’ve chosen to join their companies driven primarily by a desire to join these impressive individuals. While working with top shelf founders is never easy, it has always been rewarding and fulfilling.

Working closely with these founders taught me invaluable lessons, often through mistakes I hope not to repeat.

Teachable 2019

I joined Teachable after a year in venture capital, serving the portfolio of Insight Partners. I was riding high on my newfound pattern recognition (see above: my bias for systems thinking) and strategic acumen after observing the one-and-the-only Shelley Perry in action.

Teachable in 2019 was a rapidly scaling company empowering tens of thousands of knowledge entrepreneurs, clocking at around ~$15MM/y of annual revenue at the time. It was already buckling at the seams with the hallmarks of issues I had grown accustomed to sorting out for Insight’s portfolio—lack of well-articulated strategy, fragmented go-to-market, undefined ICP, slowing down pace of R&D, massive tech debt etc—so I was bullish, bordering on hubris, that my bag of tricks was going to be a silver bullet.

It’s funny to read back at some of Ankur’s own writing from the time. Especially this blog post.

Despite the company being built on the back of Ankur’s instinct, grit and hustle, its messiness had made it clear that it was time for a generational change in the way it was operated.

But, I would soon learn the hard way that Graham and Chesky are absolutely correct in their assessment that completely losing “Founder Mode” is a death knell for a company.

As I joined, Ankur was all too eager to hand over the baton of running the show to new leaders. And I was all too eager to grab it.

I started establishing all the things I thought were absolute essentials to success at this stage:

• Processes: Spent a lot of time evolving the software development lifecycle, the collaboration between eng/product/design, estimation approaches and bug triage frameworks. The whole Lean/Agile playbook.

• Research: I established very formal research processes ensuring information is collected using unbiased methods and persisted for ease-of-access by everyone.

• Team empowerment: Established a proper pod structure and PM/PD/EL pod leads, wanting to ensure all teams were fully empowered in their strategic lanes.

• Strategy: I brought the whole product team together for an elaborate, multi-month process of assessing our existing business, ICP and create a new product strategy on a blank slate.

In all this, I neglected leveraging arguably the biggest differentiating asset we had: the individual whose superior market insight and incredible instincts had brought the company into existence. Not only was Ankur originally a knowledge entrepreneur himself, he had literally had early Teachable customers crash his couch in the early days when visiting NYC. All that to say was that he was as tapped into the industry as anyone could ever be!

I fell right into the classic Product Leader trap: “if we set up the right systems and do things right, invariably we’ll accelerate the company’s success.”

We spent a lot of time getting the org correct, established mature working methods… but in a way that treated existing lore and founder instinct as “HiPPO” or “exec swoop & poop”. The normally very outspoken and opinionated Ankur held back on his opinions and “founder mode” driven opinions.

The company needed systems and strategy, but the rushed transition wasted time on planning instead of execution.

Basically what happened was that we went from Founder Mode to Manager Mode all too rapidly and way too drastically. The company needed systems and strategy, but the rushed transition wasted time on planning instead of execution. We were sharpening our axes instead of chopping wood. This created too much inertia and delay at a time when opportunity cost is everything.

Not to self-flagellate too much, the outcome was still very positive: we were able to tighten our ICP considerably helping the company get out of its growth treadmill of high churn / escalating acquisition needs, start attacking some of the blockers for slowed down R&D—and most importantly, capture as much of the Covid-19 lockdown momentum—while also successfully being acquired by Hotmart Company at a very healthy valuation.

But, if I were able to turn back the clocks, I would do a few things very differently:

• Encourage Founder Mode: Instead of happily grabbing Ankur’s baton, my instinct should’ve been pushing him in the other direction—ensuring I spend more time helping him scale vs. trying to extract him from the picture. I should’ve created safe ways for him to assert his views into our short term tactics and longer term strategy, without triggering my team’s HiPPO protection instincts.

• Exhibit Founder Mode: I’ve got more on wartime/peacetime coming up in later chapters, but everything I did was straight out of the peacetime playbook. I should’ve modeled more urgency and celebrated institutional learning / instinct to my team.

Basically if I had spent 50% more of my time early on coaching Ankur to continue playing a meaningful role in the Product’s evolution the first 6 months would’ve been quite different and the momentum even greater.

Takeaways

📈 For Professional Scalers

If you’re coming into a company that’s ready to flip from startup to scaleup as a new executive, here are my key tips for you in working with founders and the rest of the early team:

• Respect Founder Mode: While your role might be set up to be diametrically opposed to the prevailing instincts of the company, you need to realize that the existing momentum is wholly created by that early instinct, hustle & grind. Your worst mistake is to try rushing the transition and leveraging the good parts.

• Embrace the wisdom of the ancients: As great as you might be at pattern recognition and systematic research, the organization is filled with quiet institutional knowledge—and it probably really sucks at articulating or documenting it. It’s your job to siphon it out! Not just the founder, but other keystone individuals around the org, regardless of seniority or department.

• Spend way more time with the founder than you think you should: Pound-for-pound your best path for building a future that’s aligned with the past is to tirelessly spar with the founder and interview them on every twist in the road thus far—and their hot takes for the future.

• Pay respect: It can be appealing to 💩 on some of the more immature decisions of the past (tech debt that’s silly in hindsight, immature product decisions etc), always remember that all the decisions before, good and bad, have still led to where you are. Never ever speak ill of the past.

• Assume its wartime and put points on the board: Even if there’s tons of money in the bank, and all charts pointing northeast 📈 , the only capital that can make the transformation happen correctly is trust. Building trust is usually only achieved in an early stage org by playing the short game and nailing the details. Make sure you put some early points on the board. The First 90 Days is an excellent read.

• Support systems and structures are important, not urgent: You absolutely need to mature the organization’s working method—and as a seasoned Product practitioner you entire brain might be shouting at you to start fixing all the gaps right away. Try to turn that signal off—there’ll be a time and place for those long term cumulative returns.

😎 For Founders

• Recognize the limits of your scaling: If you’re reading this, you’re probably already aware. No matter what Paul Graham says, bringing in seasoned operators is a necessity after a certain scale.

• Do it earlier than you think: Don’t wait for the company to completely fall apart to bring in seasoned leadership. You probably won’t be able to afford top-shelf talent early on, so consider finding a great fractional CPO that can carry you over the transition and help you hire the right long-term leader when the time is right.

• Don’t rush the transition: You got the company where it’s at, don’t assume you can just hand over the reins to someone else overnight. You are still a necessary component in the mix. See points #1 and #2 above as missing the cues might mean burning yourself and your org out—and it’s always harder to pull a recovery. Work with your new leader/partner to ensure you remain plugged in in a healthy way—and demand they don’t go whole hog “manager mode”.

Ok chumps, let’s do this…

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Tommi
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