What Is Founder Mode? And How Can CEOs Use It? (updated for 2027)

What is founder mode?

Maybe you’ve heard the term “founder mode” and wondered, what the heck is that? Or maybe you knew what it was back in 2024, but haven’t tracked what’s happened since. Either way, this article is for you.

Founder mode is the idea that the founder should stay connected to the details of the business as the company scales, rather than hiring a bunch of executives and “getting out of their way.” This means staying close to key decisions as the company grows, particularly those related to the product and customer experience, while protecting the beliefs and standards that made the company special in the first place.

Paul Graham popularized the term in 2024 after hearing Airbnb CEO Brian Chesky talk about his challenges scaling the company. But the underlying question is one most founders eventually face: how do you give ownership to people on your team without losing connection to the most important areas of the business?

I struggled with this while scaling Classy. And now, working with hundreds of founders and CEOs through Highland, I see how easily people get pulled toward one of two extremes. Some hand off too much and lose their connection to the business. Others hand off too little and become the bottleneck that holds the company back. AI is making that second one even more interesting. CEOs now have access to more information than ever, and they can do more of the work themselves. But it’s a double-edged sword. Just because you can do something doesn’t mean you should.

At its core, founder mode is about what altitude you operate at as your business grows. When should you get closer to the work, and when should you step back? Getting that balance right is one of the hardest parts of becoming a great CEO.

“Hire great executives and get out of their way” 

This is what countless business gurus have been telling young founders and CEOs for decades. The advice always sat wrong with me, but I followed it anyway as we scaled Classy into the hundreds of people. And guess what happened? It blew up in my face.

Part of the problem was that I didn’t know how to manage the executives I was hiring. As we grew into the millions in revenue, I started bringing in C-level leaders from companies like Atlassian, Okta, and Redfin. They were older than me and had more experience. What was I going to teach them about sales, marketing, or product? Getting out of their way felt like the mature thing to do. I could focus on the vision while they ran their respective functions. Here’s what I missed. I didn’t yet understand my own responsibilities as CEO, and without the right leadership, those same experienced executives became ineffective at best, and in some cases, actually took the company backwards.

My job as CEO had changed, and I hadn’t realized it yet. Ironically, given the subject of this article, I think of this transition as going from founder to proper CEO. From builder to scaler. To do that I needed to spend more time architecting the conditions for these executives to succeed. I couldn’t just let them run free, carbon-copying what they’d done elsewhere. That doesn’t work. They needed clarity on the company’s purpose, direction, and priorities, an operating rhythm that everyone could sync to, and a deep understanding of the standards that helped make the company special in the first place. Without this alignment, it didn’t matter how talented each individual was. They would naturally take their function in whatever direction felt most comfortable to them. And who could blame them?

Chesky described a similar problem. As Airbnb grew, he followed advice to hire great people and give them lots of room to operate. Pretty soon he felt disconnected from what was happening inside his own company. His experience helped inspire Graham’s essay, Founder Mode, which challenged the assumption that scaling requires the founder to elevate, backfill themselves with seasoned executives, and mostly stay out of their way.

The reaction to Graham’s essay was intense, and dare I say, liberating. It gave founders a name for something many had experienced but didn’t know how to escape. This was especially true at VC-backed or PE-backed companies, where the founder becomes highly impressionable as the company hits new scaling challenges. “It’s time to bring in the adults,” said every board member ever.

But Graham’s essay also left plenty of room for interpretation. For some, it became an excuse to abandon delegation altogether and made micromanaging cool in a very Steve Jobs-esque type of way. Some went as far as to say executives weren’t needed at all and every manager should report directly to the CEO. That work-life balance was a crock of shit and everyone in the company should work as hard as the founder. More recently, this mentality has found common ground with the renewed enthusiasm for 996, the schedule where employees work 9 a.m. to 9 p.m., six days a week.

That’s a pretty convenient interpretation if you’re a founder who already has issues letting go.

Founder mode vs. manager mode

In his original essay, Graham contrasts founder mode with what he calls “manager mode.” Manager mode is the conventional approach to scaling a company: hire experienced executives, give them responsibility for their respective functions, and manage the business primarily through those direct reports. The CEO gradually moves further away from the day-to-day work, focusing on vision, capital allocation, and managing the executive team.

Founder mode challenges the assumption that this is the only way to scale. Instead of limiting their involvement to direct reports, founders stay connected to the people, products, and decisions that matter most, even as the organization grows.

But here’s where the distinction gets misunderstood. Manager mode can become too hands-off, while founder mode can become an excuse to stay in all the details, all the time. Neither extreme works. There are times when you need to go deep, and times when you need to step away. Knowing when to change altitude, and how to do it without undermining your team, is a skill most CEOs learn the hard way. I sure did.

Take the product roadmap. You’d expect your product leader to own it, right? In extreme manager mode, the CEO learns about the roadmap from the product leader. In extreme founder mode, the product leader learns about the roadmap from the CEO. There’s no collaboration in either case.

But in founder mode, the way I think Graham and Chesky intended it, the CEO builds the roadmap hand in hand with the product leader, making sure it lines up with the company’s Northstar: its mission, values, vision, strategy, priorities, and standards.

This is also why I’m careful about turning “manager mode” into a criticism of professional management itself. Experienced executives can make a company dramatically better. I needed them at Classy. The problem wasn’t the executives. It was my ability to lead them.

Protecting your Northstar

Graham’s essay focuses on founders and the many advantages they bring. As a founder myself, I don’t like thinking of myself as a special snowflake. But most would agree that founders have a gift for building and creating things from scratch. Zero to one, as Peter Thiel calls it. And much of the company’s core ideology (what I call the company’s Northstar) comes from the founders.

In the early days your Northstar is felt more than documented. A small team and close proximity to the founders create an almost magical working environment. The team sees the founders build, sell, support customers, and put out fires. It’s leading by example in its purest form, and it’s the most formative period in a company’s existence.

That changes as you grow. New employees learn from managers who weren’t necessarily around when the company’s DNA was forming. Something that once felt obvious becomes open to interpretation. Over time, the company can gradually lose the qualities that made customers and employees choose it in the first place.

That’s why documenting your Northstar matters so much. It makes the early-day magic accessible to everyone in the company, giving people a shared understanding of what makes the company special and a framework for knowing what to preserve and what to evolve.

It’s also the antidote to both extreme manager mode and extreme founder mode. If your team fully understands your company’s Northstar:

• Purpose: Why are we here?
• Direction: Where are we going?
• Priorities: What’s most important?
• Progress: How are we doing?
• Standards: Are we holding the line?

…they can apply it to their own role. This gives them the context to make better decisions, while giving you more confidence that those decisions will align with the company’s direction.

For example, at Classy, one of our product standards was simple: “It’s their brand before ours.” We built fundraising software for nonprofits, and our job was to strengthen their relationship with their donors. That meant giving organizations control over the look and feel of their fundraising pages, even when putting our own brand front and center might have helped Classy.

I’ve written about a conversation with a new product manager who asked why we didn’t make our logo more prominent. It was a reasonable question. But once she understood the principle behind our decision, she had a way to evaluate future decisions herself. We could discuss design choices against a shared standard instead of debating my personal preferences every time. Multiply this across hundreds of people and it becomes one of the most important tools you have.

One of the central premises of founder mode is that founders have certain instincts that others don’t. I think there’s truth to that. Founders have spent years developing an intuitive understanding of what makes their company special, often through thousands of decisions, mistakes, and customer interactions. But intuition is hard to delegate, especially when you’ve never explained the reasoning behind it.

Then founders get frustrated when their team makes decisions they wouldn’t have made. But how could they know? If everyone needs you in the room to understand what great looks like, you haven’t made your Northstar accessible enough.

And here’s where founder mode requires some humility. Not every belief you developed in the early days deserves to survive forever. Some were shaped by circumstances that no longer exist. Others may have been wrong from the beginning. Your strategy will evolve, your priorities will change, and the people you hire will bring new ideas that make the company better. You need enough conviction to protect what matters and enough humility to recognize when your Northstar needs to evolve.r exist. Others may have been wrong from the beginning. Your strategy will evolve, your priorities will change, and the people you hire will bring new ideas that make the company better. You need enough conviction to protect what matters and enough humility to recognize when your Northstar must evolve.

How AI Is Changing Founder Mode

If the original founder mode debate was about how involved a founder should be, AI is introducing an entirely new question: how involved could they be?

For the first time, a CEO can pull enormous amounts of information about the company, analyze it, and act on it without going through the traditional management structure. You can read thousands of customer conversations, spot patterns in sales activity, explore product ideas, even build working prototypes yourself.

For founders who love to build, this is a dream. And potentially dangerous.

Think about it. One of the reasons founders eventually hire executives is that they can’t do everything themselves. As the company grows, the complexity becomes overwhelming. You need specialists, managers, and entire departments to get things done. AI is starting to change that equation. A founder can now get done in an afternoon what used to take several people and weeks of coordination. And we’re still in the early days.

Just because you can doesn’t mean you should 

Just because Claude has a QuickBooks integration doesn’t mean the CEO should take over the accounting department. There are far better uses of their time, no offense to all the accountants out there.

But areas that directly touch the customer are often better candidates for deeper founder involvement. My personal favorites are product and brand. These are high-leverage areas because so much downstream benefits when the founder shapes the work upstream.

There’s also a practical benefit: less rework. It’s far better to shape a new feature early than to parachute in at the end and find out the team spent three months building something you fundamentally disagree with.

The key is figuring out where your strengths overlap with the company’s greatest needs. For me, that was product and brand. For others, it might be sales or engineering.

And rather than doing the whole thing yourself, focus on the front end. Shape the idea, build a prototype, then bring your team in to make it better. AI makes it easier than ever to kickstart something without owning the whole process.

But don’t forget your other CEO responsibilities. If you’re spending all day building, who’s architecting the company? Who’s developing your leaders, setting priorities, and making sure everyone is moving in the same direction?

That’s the balance. AI can make you a better builder. It doesn’t get you out of becoming a great scaler.

Could AI replace management layers? 

Some people are taking this argument even further. In From Hierarchy to Intelligence, Jack Dorsey and Roelof Botha argue that AI could fundamentally change how companies are organized. Rather than relying on layers of management to coordinate information and decisions, AI could provide shared intelligence across the organization.

It’s a provocative idea, and I take it seriously. If AI can make information available to everyone, coordinate work, and help people make decisions, do you need a traditional management layer?

But access to information isn’t the same thing as good judgment. Two people can look at the exact same data and still disagree about what to do. Someone still has to break ties between competing priorities, develop people, set standards, and make the hard calls. AI may change how those jobs get done, and who does them. But I don’t think it eliminates them.

I’ll dig into the organizational side in another article. For now, the lesson for founder mode is clear. AI makes it easier than ever to operate at a lower altitude for longer. That may lead to flatter organizations with fewer layers of management. But it doesn’t mean you should replace your managers just because you can do more of the work yourself.

How to Operate in Founder Mode

Most founders aren’t great operators or people managers, at least not at first. I sure wasn’t. I had strong instincts for product and some innate leadership skills, but that wasn’t the same thing as leading a company with hundreds of people.

This is the jump from builder to scaler. As a builder, you contribute through direct effort. You sell, build, recruit, solve customer problems, and fix whatever broke overnight. As a scaler, you become the company’s chief architect, creating the conditions for other people to do great work, often better than you could do yourself.

Working IN and ON the business 

There’s an old piece of business advice that says founders should stop working IN the business and start working ON it. The idea is that as you scale, your attention should shift away from doing the work yourself toward designing an organization that does the work for you.

There’s plenty of truth to that advice. But most founders I coach through Highland struggle with this transition. Working ON the business isn’t nearly as tangible as working IN the business. There are always problems to solve, fires to put out, and deals to close. But working ON the business? What does that even mean?

The company’s Northstar is your answer.

Those five Northstar questions roll up into three pillars of an operating system the CEO must own:

• Clarity: A shared understanding of the company’s purpose, direction, and priorities.
• Rhythm: An operating rhythm that measures progress, surfaces problems, and keeps everyone in synch.
• Standards: Clear expectations for what great looks like and how to hold the line.

I’d argue this is some of the highest-leverage work a CEO can do, outside of maybe developing the company’s next horizon of products and services.

Here’s the irony. Going from builder to scaler doesn’t mean you stop building. One feeds the other. Scaling means working both IN the business and ON the business. I think of them as two overlapping circles. The sweet spot is where your direct involvement helps set the company up for years of success.

Your Northstar helps shape the products and services you build. And what you learn from building them helps refine your Northstar. Your purpose and standards may endure for decades, while your direction, priorities and measures of progress evolve with what you learn. The CEO’s job is to steward that loop.

Choose your altitude 

So how do you decide when to go deep and when to step away? This is where founder mode becomes more of an art than a science. There’s no perfect formula, but the right altitude depends mostly on your company’s stage.

For early-stage startups (pre-product-market fit, ten or fewer people, and under $1 million in revenue), you’re mainly a builder. Scaling comes later. Work IN the business as much as you can. You can and should still establish your Northstar, but your day-to-day altitude is naturally lower. Building the product, getting customers, keeping customers. You’re on the front lines, and everything you learn during this period becomes essential as the company grows.

Once you can reliably win and keep customers, your job starts to shift. You need to spend more time working ON the business, which means moving to a slightly higher altitude and becoming more deliberate about putting your Northstar into practice.

That means defining and maintaining the elements behind Clarity, Rhythm, and Standards:

1. Your mission and how you’re fulfilling it.
2. The values that guide behavior and decisions.
3. Your three-, five-, and ten-year vision.
4. Your strategy, core bets, and target market.
5. Three or less annual priorities.
6. The company’s vital signs and measures of progress.
7. An annual, quarterly and monthly operating rhythm that keeps everyone aligned and accountable.
8. The product, brand and performance standards that define what great looks like.

Something interesting happens when you get this right. Your Northstar starts shaping everything else: sales, marketing, product, customer support, even board meetings and investor updates. You don’t need to be in every meeting. Your team starts making better decisions and producing work that’s as good as, or better than, what you could do yourself.

A note on EOS and the visionary/integrator model: I don’t buy the idea that founders should mostly serve as visionaries while an integrator runs the business. In my experience, that split slowly disconnects the CEO from the most important parts of the company. Vision is part of the CEO’s responsibility, not a substitute for it. Founder mode requires you to work ON and IN the business at the same time.

Once your Northstar is in place and the organization is running well, you can get pickier about where you go deep. I gravitate toward forward-looking work, the stuff that sets the company up for next year and beyond. Product design is a great example.

Go beyond your direct reports 

One of the most interesting ideas in Graham’s original essay is that founders shouldn’t have to interact with their companies exclusively through their direct reports. I agree. Some of the best information comes from the people closest to the work, and the bigger the company gets, the more that information gets filtered on its way to you.

A sales rep might hear an objection that hasn’t reached the executive team. A customer support specialist might recognize a problem long before it shows up in the numbers. I also like inviting individual contributors into leadership meetings when their expertise is relevant. You get better information, and they get an opportunity to contribute directly.

But there’s a catch. Staying connected to the organization doesn’t mean bypassing the people responsible for leading it. Keep the accountable leader informed, and be clear about whether you’re asking a question, offering an idea, or actually changing direction. Your casual suggestion carries more weight than you think.

At Classy, I eventually learned that staying close to the business and developing a strong executive team weren’t competing objectives. I needed leaders who could challenge me, make difficult decisions, and hold one another accountable. And they needed a CEO who was engaged without constantly taking back control.

The goal isn’t to eliminate management layers or insert yourself into every decision. It’s to stay connected to the people and work that matter, while building a leadership team capable of making great decisions without you.

Founder Mode Isn’t Just for Founders

One thing I disagree with in the founder mode debate is the implication that only founders can operate this way. Sure, founders have certain advantages. They were there when the company’s DNA was forming, and much of its Northstar came directly from their own beliefs and experiences. But I don’t think that means someone who didn’t start the company can’t develop the same instincts.

A non-founding CEO can operate in founder mode too. It just requires a little more work upfront. Learn the company’s history and Northstar cold, but bring a beginner’s mind to the role. Spend an almost irrational amount of time with customers and the product. That’s where founder instincts come from.

Not everything the early founders did will still be correct. Companies evolve, markets change, and sometimes a fresh perspective is exactly what the organization needs. At the same time, don’t dismiss or misinterpret what made the company special. I’ve seen too many successor CEOs change too much, too soon, and damage the culture and company in the process.

There’s also a responsibility on the founder’s side of the succession plan. How do you set the next CEO up for success? How do you help them understand the Northstar as deeply as you do? Not just what you believe, but why you care so much about certain things and less about others. Those distinctions are often the hardest things to transfer.

In that sense, founder mode isn’t really about being a founder. It’s about how deeply you understand the company, how connected you remain to its customers, and how effectively you steward its Northstar.

Are You Making the Company Better?

Founder mode, manager mode, or something in between, your leadership style answers to one thing: results.

If decisions constantly wait for your approval, executives are afraid to act without checking first, or teams repeatedly redo work because your expectations weren’t clear, you’re probably the problem.

On the other hand, if your team is making great decisions without you, the company is producing consistent results, and your people love working there, you’re probably doing something right.

Founder mode, at its best, isn’t about holding on to control as your company grows. It’s about staying connected to what makes the company special while helping other people become capable of carrying it forward.

The real test isn’t how involved you are. It’s what happens because of your involvement.

Are you making the company better over time?

Are you making the company better over time?