What is the difference between founder mode and manager mode?

Why founder mode is not the holy grail for entrepreneurs growing their business

Yannick Dillen

By Yannick Dillen

Professor of Management Practice

19 November 2024

A recent article by Paul Graham – entrepreneur, investor and founder of Y Combinator – sparked an important entrepreneurship discussion by highlighting the distinction between “founder mode” and “manager mode.” In the initial stages of a business, “founder mode” is characterised by creativity, rapid decision-making, and innovation. The founder focuses on product development, team building, and overcoming early challenges. As the business grows, “manager mode” becomes essential – and this requires structure, planning, and operational discipline. Professor of Entrepreneurship Yannick Dillen says founders who excel at breaking conventions and taking risks often struggle with the day-to-day management that a scaling business demands. This necessitates a shift from hands-on involvement to more structured leadership.

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Why is it challenging for founders to transition to “manager mode”?

Yannick Dillen: “Founders often struggle with this transition because their strengths lie in visionary thinking and risk-taking, rather than in the structured routines of operational management. Many founders feel compelled to stay closely involved in every aspect of the business, which can stifle growth as they resist handing over control. As Paul Graham notes, founders who remain in “founder mode” too long risk impeding the company’s scalability. Recognising the importance of delegation becomes critical – and allowing others to take on operational responsibilities enables the business to meet the demands of growth.”

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How to let go of founder mode – and move to manager mode

Making the move from founder to manager can be tough. But if you want your business to succeed – it’s a move you have to make. This video tells you everything you need to know to make it happen.

How can founders maintain leadership while allowing their company to scale?

Yannick Dillen: “Founders can preserve their leadership by redefining their roles to focus on vision and strategy, entrusting operational responsibilities to a capable management team. Some founders shift to roles like “visionary” or “chairman” – and leave the daily operations to an experienced CEO or operational manager. Companies such as Google and Microsoft exemplify this approach, where founders moved away from daily management and brought in professionals to handle the operational side. That shift allows them to concentrate on guiding the broader vision and strategic direction of the company.”

What benefits can a founder’s shift in mindset bring to a growing business?

Yannick Dillen: “When founders let go of day-to-day tasks, they unlock the potential for sustained growth and stability. This shift allows them to focus on long-term strategy, innovation, and the company’s overarching vision. By empowering skilled managers to handle operations, founders not only enhance the company’s efficiency but also ensure their own role evolves to support continued involvement aligned with their strengths. Ultimately, this shift lays the foundation for a resilient, adaptable business that can continue to flourish without compromising its founding vision.”

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Yannick Dillen

Yannick Dillen

Professor of Entrepreneurship