Pros an Cons of "Founder Mode"

I recently came across an article by Paul Graham "Founder Mode" (https://paulgraham.com/foundermode.html ) ?– it resonated with me, as with many fellow founders and CEOs. Like everything, there are nuances to this mode of operation - and it can either work or backfire - which I've both experienced first-hand in the past 10 years, as we scaled SecurityScorecard from $0 to a multi-billion dollar company, now trusted by 3,000+ customers to measure and communicate risk.

My Experience: Two Sides of the Coin

I've seen both sides of the equation:

1) Hiring Executives and Giving them Space to Manage:? In the past, I hired polished executives who advised me to step back, saying I was micromanaging too much and that I wasn’t “CEO material.” So, I did. I left them alone for a few months... and the results were disastrous. They were well-liked, engaged in politics, but they didn’t drive change. We had to let some of them go, which can lead to turnover and a culture of fear, while they happily moved on to their next career gig.

I kept asking myself: Am I failing as a CEO??

But then, we'd promote an up-and-comer or hire someone else, and the results were phenomenal. In hindsight – I should’ve trusted but verified, micromanaged appropriately, and acted faster to part ways with them.

2) The Downside of Overstepping. On the flip side, I’ve learned that stepping on people's toes and inserting myself into every project creates chaos and a culture of fear. There's a delicate balance; sometimes saying that you “Operate in Founder mode” is just an excuse for a founder/CEO to avoid personal growth. As the company scales, you have to make yourself dispensable and it starts by hiring the right team and relentlessly training and aligning them (the job of a manager).

The Role of the Founder

The founder’s job is to provide vision – to see around corners in ways KPIs and obvious “customer feedback suggestions” can't show. You must also be a credible ambassador for customers and have enough conviction to challenge your Executive team and the Board when needed. Too often, even top VC investors are reactive, making decisions based on short-term fluctuations, like revenue dips or spikes. If you see a dip - things are bad - let’s sell the company. And if you closed a big deal “oh my god things are great”. In reality - even when revenue is up you could be in deep trouble, because the market has changed - and conversely “whatever problems you experience today are caused by your mistakes from 6 months ago”.

The challenge with most advice in the Books or from non-CEO executives is that while it sounds good, it doesn’t explain how to implement it. The nuances matter. When you hire smart people, how do you build a team and how do you direct them without micromanaging?

Building the Team

As a company scales, founders can’t do everything. Surrounding yourself with awesome people becomes essential - unless you want to work 24/7 without any vacation. Working harder is not the answer.? Here's what we do at SecurityScorecard.

• Any hire goes through psychometric assessments like Predictive Index and DISC.
• Mandatory written exercises, like 30/60/90-day plans for new hires. You want to see how the new-hire thinks,?

• Every hire (from an intern to C-level exec) goes through a Hiring Committee to ensure diverse opinions are factored into equation?
• For VP-level hires, we bring in a psychologist for assessments of culture fit.

While, it feels like a lot, but it has dramatically reduced turnover and improved morale (eNPS) across the company

Micromanagement: One Size Doesn’t Fit All

We manage expectations and are clear from the out-set that skip-level meetings are how we operate. It’s okay to ask a manager’s team for updates (and I will go to them directly on a regular basis), but it’s not okay to skip levels and give direct instructions to employees.?

A better term for micromanagement is situational leadership – once a hire gains your trust - you leave them alone (you may give them 10% of what you want the task to look like, and let them do 80%, coming at the end to verify the finished 10%). ? For other tasks : you may be heavily involved and checking every day.?

For example : you shouldn’t as a founder trust your CMO to put together an investor deck without your direct supervision. But you are not going to review every Blog post that a CMO writes.? So the task situationally matters - there are some tasks you closely supervise and “micromanage” and some that you don’t.

It’s critical to keep a relentless attention on the Product - how do we make it insanely great - and also market trends. If you are not talking to customers yourself as a CEO, then you are in deep trouble cause you will lose that innovative edge.?

Becoming a Provocateur

As a founder, your job evolves into that of a provocateur. You need to push your team to think differently. When they say a project will take three months, ask, “How can you do it in one month?” When they say it can’t be done, challenge them to think crazy and explore alternative ideas. The goal is to provoke the team to do the impossible - instead of spoon feeding them the answer or doing it for them - you want them to get reconditioned to think like you. If you are not happy with the answer - ask the team “If you were the CEO, what questions would you ask?”

The Right People Make the Difference

We’ve found that up-and-comers and those with a chip on their shoulder consistently outperform experienced executives. Most C-level hires with a stellar pedigree, rolodex, and playbook have failed at SecurityScorecard in various ways – either they weren’t flexible, curious, or willing to embrace a growth mindset. Or they wanted too many resources and weren’t able to adjust to our “adolescent teenage culture” - which is what most startups between 0-500M$ ARR in revenue are.?

We even created a deck titled "Why Not Work at SecurityScorecard?" that outlines all the reasons NOT to join and we try to share it with many new hires. We tell them that our culture is a fast-paced, ever-changing environment where priorities shift, and chaos is part of the process. One candidate withdrew from the process after hearing I fired his predecessor within two weeks. While that certainly may reflect negatively on us (and we learned from that) - the mistakes happen and we’d rather course correct fast.? That’s okay for candidates to self select out in the process ! I’d much rather have that than hire the wrong person.

I’d rather hire someone with fluctuating performance – someone who occasionally hits 10x – than a consistent B performer. You want to look for people who perform F, F, F, A, A, F, F - instead of B-, B, B, B, B, B - and you want to make it safe to fail and reward experimentation and risk taking. While this is an unpopular stance, at SecurityScorecard, we regularly trim the bottom 5-10% of performers, and while it’s unpopular, it improves execution and drives excellence.

Conclusion

To sum up, there’s no single right answer. There are situations where as a Founder you need to step in, micromanage, and not hire professional “managers” - and there are situations where you need to look in the mirror and ask “How do I need to grow as a leader? Perhaps the problem is me? How can I empower my team to succeed?” ? A good CEO should be a chameleon and experiment and A/B test what approaches work and which ones don’t work, and have a relentless ‘beginner mindset’ - where no matter what you achieve - you always seek to get better.