When Paul Graham’s “Founder Mode” essay went viral, it sparked conversations across the startup world, especially among early-stage founders. Based on a talk by Brian Chesky, co-founder and CEO of Airbnb, “Founder Mode” encourages founders to maintain a hands-on, scrappy approach to running their companies—even as they scale. The essence of Founder Mode is simple: avoid becoming bogged down by traditional, corporate-style management practices, and instead, stay relentlessly close to the core of the business. For early-stage startups, this concept can be transformative.
The idea resonates because it emphasizes agility, creativity, and a high level of personal involvement from founders. This is in stark contrast to the often rigid structures of larger, more bureaucratic companies. For early-stage startups like Butter, which are likely already operating in “Founder Mode,” the question becomes: How can we continue to harness this approach as we grow? What are the specific strategies and principles we should follow to maintain this mode of operation?
This post will explore the key implications of operating in Founder Mode for early-stage startups. We’ll cover actionable insights such as resisting early professionalization, staying scrappy, avoiding the pitfalls of overhiring, delaying middle management, and staying deeply connected to the product.
What Is Founder Mode for Early-Stage Companies?
Founder Mode, at its core, encourages founders to maintain the mindset that drove the creation of their business, even as the company matures. It resists the tendency to “professionalize” too early, where businesses can become bogged down by layers of management, overhiring, and excessive processes. This approach is essential in early-stage startups because growth can be derailed by unnecessary complexity.
In the early days, it’s all about surviving and iterating quickly, so the more streamlined and hands-on your approach, the better. As you scale, staying in Founder Mode keeps you close to your product and customers, while allowing you to make fast, critical decisions without layers of bureaucracy slowing you down.
Founders who successfully stay in this mode continue to solve problems with the same urgency, resourcefulness, and creativity they had on Day 1. For companies like Butter, embracing this mindset may be critical as you build and scale.
1. “Professionalize” Very Late
A common mistake for early-stage startups is trying to “professionalize” too early. This might mean introducing layers of management, standardizing too many processes, or implementing formal systems that hinder the flexibility and speed that startups thrive on. In Founder Mode, the recommendation is clear: professionalize as late as possible.
In practical terms, this means:
- Minimize bureaucratic processes: Keep your systems and processes lean so you can pivot quickly and remain agile.
- Focus on outcomes, not process: Don’t get caught up in how things should be done; instead, focus on what needs to get done.
- Don’t hire senior executives too early: Experienced professionals from larger corporations may not always be the best fit for the hustle required in an early-stage company.
Example: Consider the example of Airbnb, where Brian Chesky famously resisted the temptation to bring in experienced executives in the early days. Instead, he focused on solving the core problems with a small, tight-knit team. By keeping things scrappy and resisting formalization, Airbnb was able to grow without losing its innovative spirit.
2. Be Scrappy—Solve Problems Yourself
Founder Mode also means embracing scrappiness. In the early stages of building a company, founders should not be afraid to roll up their sleeves and solve problems directly, even those that might seem below their pay grade. From managing customer support to assembling furniture in the office, no task should feel too small.
This principle is particularly important because:
- It builds a culture of ownership: When founders are involved in the day-to-day problems, it sends a clear message to the team that everyone should have skin in the game.
- You remain closer to the core of the business: By solving problems yourself, you stay connected to the operational details that drive the company.
Example: When Stripe was first starting out, the founders, Patrick and John Collison, would personally review customer accounts and even write code to fix issues. This scrappy, hands-on approach helped them maintain a deep understanding of their customers and product, enabling them to iterate faster than their competitors.
3. Delay Hiring Middle Managers
One of the most distinctive characteristics of Founder Mode is delaying the introduction of middle management. In traditional organizations, middle managers serve as the conduit between leadership and employees. However, for early-stage startups, having managers who do not directly contribute to the core work can create inefficiencies and slow progress.
The key takeaway here is that in Founder Mode, everyone should have a clear, hands-on role. The goal is to remain lean and ensure that all team members are directly contributing to the product or service.
Here’s why delaying middle management matters:
- Improved communication: With fewer layers of management, communication stays direct and efficient.
- More agile decision-making: When team members are directly involved in executing tasks, decisions can be made faster and with more context.
- Better resource allocation: You can allocate limited resources to product development, marketing, or other critical areas rather than unnecessary management positions.
Example: Basecamp, a project management tool, operates with a philosophy of staying small and lean, which involves having very few layers of management. The company has consistently operated with fewer employees than similar tech companies, but their output remains high because everyone on the team is directly responsible for delivering value.
4. Avoid Overhiring—Stay Small for As Long As Possible
Another key tenet of Founder Mode is resisting the temptation to scale the team too quickly. Many startups believe that hiring more people will solve their problems, but overhiring often leads to inefficiencies, dilution of culture, and unnecessary expenses. Staying small forces your team to focus on what’s truly important and be creative in solving problems with limited resources.
Some strategies to avoid overhiring include:
- Hire only for mission-critical roles: Focus on roles that are directly tied to your product’s success and avoid hiring for positions that can wait until you are larger.
- Outsource where possible: Use freelancers, contractors, or third-party services for non-core tasks to keep headcount low.
- Cross-train your team: Encourage your team members to wear multiple hats, fostering versatility and a deeper understanding of the company’s operations.
Example: GitHub, during its early years, operated with a very small team despite rapidly growing demand for their product. Instead of hiring aggressively, they kept the team small, using automated tools and systems to handle tasks that would typically require more headcount. This approach helped them maintain efficiency and a strong company culture.
5. Always Stay Close to the Product—Don’t Delegate the Core
One of the most critical aspects of Founder Mode is staying ultra-close to the product. As companies scale, it’s easy for founders to shift focus to fundraising, management, or strategic partnerships. While those are important, you should never fully delegate the responsibility of the product to someone else.
Why this matters:
- Founders know the product better than anyone else: You had the original vision, and staying involved ensures that vision is executed properly.
- You can iterate quickly: When you are directly involved in the product, you’re more agile in making adjustments based on customer feedback.
- Prevents misalignment: If the product team goes in a different direction from your vision, you may lose what made your company special in the first place.
Example: Steve Jobs at Apple is perhaps the most famous example of a founder who remained deeply involved in the product. Even as the company grew into one of the largest in the world, Jobs was notorious for his involvement in everything from design decisions to marketing campaigns. His ability to stay close to the product was a key driver of Apple’s success.
6. Prioritize Customer Feedback Over Investors
In the early stages, founder-mode companies prioritize customer feedback over investor expectations. While securing funding is crucial, it’s essential to focus on delivering real value to users. Too often, startups become preoccupied with pleasing investors and scaling too quickly, losing sight of the most important stakeholders—customers.
Listening to customers keeps the product grounded and ensures you’re solving real-world problems, not just catering to investor pressures.
Example: Slack’s early pivot from a gaming company to a communication platform was driven entirely by customer feedback. Founder Stewart Butterfield listened closely to early users, iterating based on their needs, rather than blindly following investor expectations. This focus on user feedback was crucial to Slack’s eventual success.
Conclusion
For early-stage startups like Butter, Founder Mode isn’t just a management style—it’s a survival tactic. By delaying professionalization, staying scrappy, avoiding overhiring, postponing middle management, and staying closely involved with the product, founders can maintain the agility and creativity that gave rise to their company in the first place.
Operating in Founder Mode means constantly asking yourself: Am I staying true to the core vision? Am I solving problems directly? Am I still involved in the most critical parts of the business?
The longer you can maintain Founder Mode, the better positioned you’ll be to scale successfully without losing what made your startup special in the first place.
Looking to Stay in Founder Mode and Scale?
At SaaSlaunchr, we specialize in helping early-stage startups scale while keeping the Founder Mode mindset intact. Let’s work together to create a growth strategy that fits your vision and goals. Schedule a call with me today!
Curious about the impact we can make? Check out our success story on how we helped a SaaS business significantly increase website traffic by implementing a strategic growth marketing plan. Read the case study here.
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