Founder's Mode: The Essential Element to a Healthy Shareholder and Stakeholder Organism

If your organization isn't built in the image of your founder, you're setup for failure long before any cash arrives. M.Isaacs. 2024

As Paul Graham noted: "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 skillful liars in the world."

In the wake of Paul Graham's thought-provoking essay on "Founder Mode," inspired by Brian Chesky’s memorable talk as the co-founder of AirBnB I thought I might add my two cents.

“The theme of Brian's talk was that the conventional wisdom about how to run larger companies is mistaken. As Airbnb grew, well- meaning people advised him that he had to run the company in a certain way for it to scale. Their advice could be optimistically summarized as "hire good people and give them room to do their jobs." He followed this advice and the results were disastrous. So he had to figure out a better way on his own, which he did partly by studying how Steve Jobs ran Apple. So far it seems to be working. Airbnb's free cash flow margin is now among the best in Silicon Valley. Paul Graham

For myself, I have been reflecting on the unique role founders play in shaping not just companies, but entire ecosystems of value creation. I've worked with some interesting founders in the past from music creation to smarter things, and as one myself, I find this area fascinating to explore. I'm reminded that no two founders are the same, nor created equal, yet all capital looks at founders from a common lens and set of criteria - hence why investors might have such a poor winning percentage and Grahams above assertion of VC's and C-Suite executives who have never founded a company of their own. This reflection has led me to a perspective that views business through a more holistic, organic lens - one where the founder's vision serves as the essential DNA that brings life to the entire organism.

Business as a Living Organism

Imagine a business not as a machine, but as a living, breathing organism. This organism comprises all stakeholders and shareholders, both internal and external to the company. Like any healthy organism, its primary purpose is clear: to add value to the lives it touches - specifically, its consumers. This perspective shifts our understanding of business fundamentally. Without value creation that consumers desire, there is no sustenance for the organism to survive. The founder, in this biological metaphor, is akin to the original stem cell, containing the essential 'Why' - the purpose and passion that gives rise to the entire entity.

The Founder: From Subject Matter Expert to Cultural Architect

Founders are unique. They possess the original passion and will to create something from nothing but an idea. As the original subject matter experts, they create the space for consumers to self-identify with - the basis of brand loyalty. But a founder's role extends far beyond initial creation. They are responsible for establishing and maintaining the culture of the company - the internal environment in which the organism thrives. This culture acts as the connective tissue, binding the founder's passion as DNA into each employee, who then serves the needs of the consumer.

The Symbiosis of Company and Consumer

Here's where the organic metaphor becomes particularly powerful: the more the company and its employees resemble their customers, the healthier the business becomes. This alignment strengthens the bond between the company and its employees, and between employees and customers. In the most successful companies, this alignment leads to a fascinating symbiosis: the company becomes the body, and the consumer becomes the soul of the organism. Neither can exist without the other. The founder's vision and passion, carried through every interaction, every product, every service, create this harmonious whole.

Nurturing the Organism

How does a founder nurture this complex organism? By creating a vision that employees and customers can embrace and live out. It's not about dictating from on high, but about infusing every part of the organization with purpose and passion that resonates with both those who work within it and those it serves. This approach creates a positive feedback loop. As employees embody the founder's vision, they create stronger connections with customers. These connections, in turn, reinforce the company's alignment with customer needs, strengthening the entire organism.

The Challenge and Opportunity of Scale

As the organism grows, maintaining this alignment becomes both more challenging and more crucial. The founder's role evolves from being the direct source of all decisions to being the guardian and cultivator of the 'Why' that animates the entire entity. This is perhaps where the true test of 'Founder Mode' lies"- not in making every decision, but in ensuring that every decision, at every level, is infused with the essential purpose that gave birth to the company in the first place.

Conclusion: The Founder's Enduring Legacy

In this view, the most successful founders are those who can create not just a company, but an entire ecosystem that thrives on shared purpose and mutual value creation. Their 'Why' becomes the lifeblood of an organism that includes not just employees and immediate customers, but entire communities and markets. As we continue to explore what makes founder-led companies unique, this organic perspective offers rich insights. It suggests that the true power of 'Founder Mode' lies not in control, but in cultivation - creating an environment where passion and purpose align across all stakeholders, resulting in an entity that's more than the sum of its parts. The founder's 'Why,' when successfully infused throughout the stakeholder ecosystem, doesn't just create a successful company. It gives rise to a living, evolving organism that can adapt, grow, and continue to add value in ways that extend far beyond what any single individual could achieve alone.