Some theories about what makes the founder mode effective:
1. It's about incentives. If I own substantial equity of a company and I consider it "my child", the reward for doing a good job will be much greater than if I was a hired manager. The reward is not just financial but also self-worth and reputation.
2. Selection bias. When we talk about "founders", we really mean founders that have built successful companies. This criterion selects only those founders that are remarkably good at their jobs. They are good CEOs in general and also good fits for their specific companies.
3. Deep knowledge of the company and the business. For example, they remember all of the things that were tried but didn't work.
4. They are much more willing to shape the company and have a high degree of control. If I'm a hired CEO, I'm managing someone elses organization, it doesn't feel ok to make drastic changes. My mental setting is that I'm trying to please my boss (shareholders, board). I'm not willing to tinker and try something with a high risk of failure, I want to manage someone else's property seriously and responsibly.
1. It's about incentives. If I own substantial equity of a company and I consider it "my child", the reward for doing a good job will be much greater than if I was a hired manager. The reward is not just financial but also self-worth and reputation.
2. Selection bias. When we talk about "founders", we really mean founders that have built successful companies. This criterion selects only those founders that are remarkably good at their jobs. They are good CEOs in general and also good fits for their specific companies.
3. Deep knowledge of the company and the business. For example, they remember all of the things that were tried but didn't work.
4. They are much more willing to shape the company and have a high degree of control. If I'm a hired CEO, I'm managing someone elses organization, it doesn't feel ok to make drastic changes. My mental setting is that I'm trying to please my boss (shareholders, board). I'm not willing to tinker and try something with a high risk of failure, I want to manage someone else's property seriously and responsibly.