Is ‘founder mode’ or ‘manager mode’ better? Here’s what the 22 Fortune 500 companies still run by founders show

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Paul Graham News

Fortune 500,Manager Mode,Company

Founders do indeed deliver outsized stock performance—but there's a big caveat.

The buzziest buzz term in the tech world is suddenly “founder mode,” coined only days ago and fast propagating into business worldwide. Founder mode is a way of running a company—the way a founder would run it—as distinct from manager mode, the way it would be run by “merely a professional manager.” So says Paul Graham, a co-founder of the Y Combinator startup accelerator, who originated the terms in aGraham is well positioned to judge.

—The median return of the founder-CEO companies was a performance score of 202, while the median of the rest of the Fortune 500 was 92.—The founder-CEO companies delivered a median performance score of 656. Second, we know that on average, the few founder-run companies that make it to the Fortune 500 are formidably great performers, and we should know more about how they joined that exclusive club. Graham wrote in his essay, “There are as far as I know no books specifically about founder mode. Business schools don't know it exists…. But now that we know what we're looking for, we can search for it. I hope in a few years founder mode will be as well understood as manager mode.

 

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