Why companies need both Manager Mode and Founder Mode to succeed | World News – Times of India

It feels impossible to go a few days without a new buzzword chuntering out of Silicon Valley, which is then adopted by everyone across the world because we live in a world where we wholeheartedly import America’s universal grammar, cultural zeitgeist, and relative morality. Just when it appeared we had gotten over the ponderous debate about when AI would take over our lives — like our meaningless lives are worth taking over — we were hit with a new term: Founder Mode.
As a boarding school lad, I assumed that Founder Mode was where one waited the entire year for Founder’s Day when we’d finally be served food that would be palatable for human consumption.But it turns out it’s something a little different. In the start-up world, the term was coined by Y-Combinator co-founder Paul Graham after a speech by Airbnb founder Paul Chesky. But to fully understand the concept, one needs to go back a little.

Peter’s Principle and Dilbert’s Principle

Long before he was cancelled for being a Trump supporter, Scott Adams, came up with Dilbert’s Principle, a corollary of the Peter Principle.
For the uninitiated, Peter’s Principle has nothing to do with Christianity or losing one’s uncle too early to become an arachnid-themed superhero with great responsibility and power. It refers to a concept in management developed by Laurence Peter that suggests every individual rises to their level of incompetence in any corporate hierarchy. It was clearly meant as satire, but as a precursor to Poe’s Law, it became the gospel truth.
Meanwhile, Dilbert’s Principle argues that the most incompetent people in an organization — those with no tangible skills other than mouthing buzzwords — are instantly promoted to management to limit the damage they can do to the company’s balance sheet.

Manager Mode: A New World Order

Business schools came up with MBAs — a degree that serves no purpose other than to complicate processes to the point of inanity — to protect the rest of humanity from these folks. Sadly, somewhere down the line, some naïve person started paying them too much, and suddenly MBAs were in charge of everything.

They get lateral entry into bureaucracy (much to the chagrin of our Sir Humphreys), telling journalists how to write and ruining various service industries like cabs and food delivery services by giving tech solutions with huge discounts thanks to VC money. It’s a model that collapses the moment the VC realizes he’s been taken for a ride, and no one really needs a PS5 in 10 minutes.
They encompass what is known as Manager Mode: a way of life in which one “strategizes” instead of doing actual work and delegating tasks to everyone else while taking credit. Most CEOs fall under this category, whose most strenuous task is usually writing “Approved” on emails and reminding their assistants to write prompts on ChatGPT for LinkedIn posts that fellow managers will then comment on for “better reach.” Obviously, one is exaggerating a little bit.
It’s a great job, if you can suffer through business school and shut down all your functioning senses.
The professional wisdom so far — definitely conceived by a consultant who charges exorbitant hourly rates — is that once you build a start-up, you hire competent managers to make it grow.
As Graham writes: “The way managers are taught to run companies seems to be like modular design in the sense that you treat subtrees of the org chart as black boxes. You tell your direct reports what to do, and it’s up to them to figure out how. But you don’t get involved in the details of what they do. That would be micromanaging them, which is bad. Hire good people and give them room to do their jobs. Sounds great when it’s described that way, doesn’t it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground.”
He adds: “One theme I noticed both in Brian’s talk and when talking to founders afterward was the idea of being gaslit. Founders feel like they’re being gaslit from both sides — by the people telling them they have to run their companies like managers, and by the people working for them when they do. Usually, when everyone around you disagrees with you, your default assumption should be that you’re mistaken. But this is one of the rare exceptions. VCs who haven’t been founders themselves don’t know how founders should run companies, and C-level execs, as a class, include some of the most skilful liars in the world.”

Founder Mode: The Rise of the Deviants

However, there were people — like Graham and Chesky — who weren’t particularly happy with this world order. In some sense, they are deviants. Another Adams concept from the same book argues that we are actually a civilization of six billion ninnies where most worthwhile things were designed by a few thousand savants. Earlier, these deviants would be born into families with no means to pass on their ideas, but all that changed with the printing press and later the internet, which ensured that not only was every great idea noted down but also disseminated globally. This connected geniuses, even autodidacts, across the world to make things better. Obviously, these deviants weren’t particularly thrilled with people who write “approved” in emails calling the shots, at times even forcing them out of companies.

Some popular examples of people who operate in Founder Mode include Jensen Huang (Nvidia), Elon Musk (Tesla, Starlink, and X), Mark Zuckerberg (Meta), and Sam Altman (OpenAI). The OG examples include Steve Jobs (Apple) and outside of tech, Howard Schultz (Starbucks), who turned a local Seattle coffee chain into a global conglomerate for overpriced coffees. Garry Tan, President and CEO of Y-Combinator, also pointed out that even Kamala Harris, the Democratic Vice President, operates in Founder Mode, which her discomfited staff called a “prosecutorial leadership style.”

Religion vs. Evolution

At times, Founder Mode vs. Manager Mode is reminiscent of an old debate in vogue during the noughties — simpler times when Democrats were pro-free speech and Republicans blamed video games for violence — between Intelligent Design, which evolved from Creationism, and Evolution, which evolved from scientific consensus and facts. Or, more simply, religion vs. evolution.
Let me explain.
While the basis of all theology is a leap of faith, it became a leap of fancy when several American high schools wanted to teach Intelligent Design as a science on par with evolution and the Big Bang to explain the origins of life and the universe.
The Flying Spaghetti Monster is the most hilarious rebuttal to the denizens of Intelligent Design, but its fallacy was most eloquently dispelled by Richard Dawkins’ The Blind Watchmaker, where he shows how the mammalian eye evolved from skin that could only differentiate — unlike Anakin Skywalker — between light and dark, and then underwent minor modifications to become a remarkable organ.
Manager Mode is like religion, where someone discovers a new idea(a start-up), gathers adherents (Messiahs, Prophets, Apostles, Angels) to spread the gospel, and gets funded by VCs (people who realize religion is a useful tool for getting work done). This has been the norm for a while, and it functions for most models, which is why the biggest companies in the world operate in Manager Mode.
Founder Mode, on the other hand, operates more like evolution. Just as nature tinkers when needed, without us fully realizing why, founders make seemingly irrational moves — like adding a wheel to an MP3 player or pivoting a graphics company into an AI behemoth — resulting in groundbreaking innovation.
Evolution follows a similar path, working in ways that are hard to conceive, like the evolution of the human brain. The brain is a calorie-guzzling organ that seems unnecessary, [word it better] yet its development was made possible by cooking food, allowing our ancestors to consume more calories and, in turn, develop this remarkable organ. As V.S. Ramachandran wrote in Phantoms of the Brain: “There is something distinctly odd about a hairless, neotenous primate that has evolved into a species that can look back over its own shoulder and ask questions about its origins. And odder still, the brain can not only discover how other brains work but also ask questions about its own existence.”

Just as nature evolves without a clear plan, Founder Mode embraces this type of tinkering. It thrives on risk, innovation, and unexpected breakthroughs, even if no one, not even the founder, can fully explain why at the time.
In the end, the debate between Founder Mode and Manager Mode mirrors many of the age-old tensions between innovation and tradition, or evolution and religion.
Both are equally necessary. While evolution might explain our place in the universe and how it came to be, religion is what binds us and allows us to become the dominant species of this planet.
While scientific processes can explain adequately why we are here or why we exist, religion helps many people find a purpose in life and also binds us together with its remarkable stories.
So, while the Big Bang, evolution, the primordial soup et al will always accurately explain how we came into existence, the great stories of religion will help us sleep peacefully and function coherently as a society.
Ergo, just as we need both evolution and religion, we need Manager Mode and Founder Mode.
Manager Mode ensures stability, order, and predictable growth, which is crucial for large organizations. And without large organisations – the bulwark of capitalism – we wouldn’t be living the life of relative peace and comfort that exists today compared to the days of yore when 99% of the population served the 1%. Whether one wants to admit it or not, the “have lots” have improved the lives of “have nots” more than the “have thoughts” who just lament the existence of “have lots” and how much more money they have than “have nots”.

On the other hand, we also need the evolutionary leaps of Founder Mode, where a Steve Jobs, or a Jensen Huang, or an Elon Musk comes around to shake things up, creating ungodly inventions that would never be conceived by a manager.
The key to long-term success in companies or civilizations may lie in striking the right balance between the two. Let Manager Mode keep the machine running, but always leave room for the disruptive, evolutionary spark of Founder Mode to take the world forward.
But, the fact remains that while Manager Mode has been broken down into an exact science, Founder Mode still functions like a sage on a mountain.

As Graham writes: “Indeed, another prediction I’ll make about founder mode is that once we figure out what it is, we’ll find that several individual founders were already most of the way there — except that in doing what they did they were regarded by many as eccentric or worse. Curiously enough it’s an encouraging thought that we still know so little about founder mode. Look at what founders have achieved already, and yet they’ve achieved this against a headwind of bad advice. Imagine what they’ll do once we can tell them how to run their companies like Steve Jobs instead of John Sculley.”