Are Founders the Best People to Run Their Companies as They Scale?

Founders bring unique qualities to their companies, often sparking creativity and setting bold visions that propel early growth. But as companies scale, the question arises: are founders truly the best people to lead the organization into its next phase? It’s a challenging question, and the answer varies based on individual circumstances, company culture, and growth stage. This article explores the traits that make founders effective leaders during scale-up, examines the pitfalls they face, and identifies key signs that indicate when it may be time for a founder to step back and let someone else take the reins.

The Strengths of Founders in the Growth Stage

Founders are inherently problem solvers, passionate risk-takers, and visionaries. In the early days of a company, these qualities are often crucial for survival and rapid growth. According to Paul Graham's concept of “founder mode,” a founder’s hands-on approach can drive a company’s success, even as it scales. Graham notes that founders can inspire an unwavering commitment from their teams, set the tone for company culture, and stay close to the product and customer experience

Brian Chesky, Airbnb’s co-founder, once remarked that traditional management advice nearly derailed his company. He followed advice to “hire good people and let them do their jobs,” only to find that his company began to drift. Instead, Chesky adopted an unconventional approach, taking a page from Steve Jobs by maintaining close involvement with the company’s direction and culture. This founder-driven approach allowed Airbnb to remain agile and customer-focused, traits that helped it thrive even during challenging times

 The Risks of Founder-Led Growth: The “Hero Complex”

Despite these strengths, not all founders can effectively scale their companies. As they move beyond early-stage growth, a phenomenon known as the “Hero Complex” can emerge. The “Hero Complex,” a term discussed in *The Hero Complex Plaguing Tech Scaleups*, describes a situation where founders or key individuals become the focal point of decision-making, a role they often fulfill to a fault. This intense reliance on a few people to “save the day” can undermine the organization’s ability to build sustainable, process-driven growth, ultimately stalling the company’s potential.

For instance, Ola Electric faced a sharp drop in its share value after a high-profile leadership dispute. This example illustrates the dangers of “key man risk,” where over-reliance on a single leader creates vulnerabilities. Companies that successfully scale recognize the need to transition from a founder-led model to a more distributed leadership structure that empowers teams, mitigates risks, and builds a resilient organizational framework. Elad Gil, author of *High Growth Handbook*, emphasizes that while founders are essential early on, different leadership is often necessary for sustained growth and operational efficiency.

A Head of HR from a tech startup in SEA (she prefers to remain anonymous) shared her experience with the “Hero Complex” during a period of rapid growth in her company, scaling from 50 to 250 employees. She observed that the founder’s belief that “no one knows the business better than them” led to a reluctance to delegate tasks or seek out fresh, strategic perspectives. “Even as the company grew and we needed more specialized leadership, the founder felt uncomfortable bringing in experienced outsiders,” she explained. “It was a missed opportunity to grow” 

Signs a Founder Should Continue Leading Through Scale-Up

While there are potential pitfalls, there are also clear signs that a founder may be the right person to lead as a company scales. Here are a few indicators:

1. Willingness to Evolve

Founders who are open to learning and adapting are more likely to succeed as their companies scale. Sharon Lim, former CEO and current Chairwoman of Browzwear (a Series C startup) pointed out that successful founders acknowledge they don’t know everything. They seek opportunities to grow alongside their companies, demonstrating both humility and resilience in the face of new challenges.

2. Strong Vision and Clear Priorities

Founders who have a compelling vision and can set clear priorities tend to fare well in the scaling process. Moses Lo of Xendit shared in a recent discussion with the SeaFounders community that during the early days of funding scarcity, he adapted by focusing on the core elements that would drive success. Lo’s ability to pivot and zoom in on critical business areas while consulting with his leadership team reflects the adaptability that is vital in a scaling organization.

3. Balanced Delegation

A founder who can effectively delegate, yet remains involved in crucial aspects of the business, often thrives in the growth stage. This approach, sometimes called “skip-level management,” allows founders to stay in touch with the front lines while empowering managers. Graham explains that founders who stay close to the product or customer experience—like Steve Jobs did with Apple—can maintain their influence without stifling the organization’s ability to operate independently

“To go from 0 to 1, you have to wear all the hats. To go from 1 to 2, you have to learn how to take them off.”  

~Allen Channing, CTO of Plenty. 

Successful founders in scale-up mode understand this shift. While hands-on engagement is essential in the startup phase, scaling requires the ability to step back, trust others, and let go of the “hero” mentality that initially drove the company’s success.

 When It May Be Time to Step Back

Just as there are signs a founder is well-suited for scaling, there are indicators that it may be time for them to hand over the reins. Here are some key signs to watch for:

1. Struggles with Operational Complexity

When a founder faces difficulties with the more operational aspects of a larger organization, it may be time to consider bringing in outside leadership. As companies grow, they inevitably require more structured processes and systems, which founders with a product-focused mindset might find burdensome or distracting. An overreliance on a “hero” approach can lead to burnout, misaligned priorities, and operational inefficiencies

2. Inability to Delegate

Founders who micromanage or cannot delegate effectively risk stalling the company’s growth. Jason Ong, an experienced operations executive, notes that founders who struggle to let go may inadvertently create bottlenecks that slow the organization down. A founder unwilling to relinquish control may be better suited for an advisory role, where they can focus on areas where their passion and skills add the most value.

3. Misalignment with Long-Term Vision

Sometimes, the company’s long-term goals no longer align with the founder’s personal vision or goals. For instance, some founders prefer the excitement of building from scratch rather than managing a large organization. Recognizing this mismatch early can help founders transition gracefully, ensuring the company’s continued growth under new leadership better aligned with its evolving needs.

Finding a Path Forward: Evolving Roles and Building Resilience

Not every founder has to completely exit their company to see it succeed in the long run. Many founders transition to roles that leverage their strengths without the day-to-day responsibilities of running the company. This might involve moving to a product-focused or strategy-oriented role, where they can continue to innovate without the pressure of managing every aspect of the organization.

For companies to thrive, founders must balance the heroic early efforts that got them started with the scalable practices necessary for sustained growth. The most successful companies adapt by cultivating a resilient organizational culture, building robust systems, and embracing distributed leadership models. As founders weigh their options, self-awareness and a focus on the long-term vision of the company are vital. By recognizing their unique strengths and knowing when to step back, founders can ensure their legacy endures while empowering their companies to reach new heights.

A big thank you to the contributors to this article:

- Sharon Lim, Jason Ong in their comments on Elena Chow’s linkedinpost 

- Paul Graham on the concept of “founder mode”

- Moses Lo, Cofounder of Xendit, and his insights from the SeaFounders community discussion as summarized by Simone Macario.

- *The Hero Complex Plaguing Tech Scaleups*  by Pranjal Kalra

Elad Gil, author of  High Growth Handbook for his perspective on leadership in scale-ups

-https://www.lisiwong.com/founder-mode-from-an-employee-perspective/

-Anonymous Head of HR at a tech startup, who shared her experience on the impact of a founder’s reluctance to delegate.