In today’s startup ecosystem, building a strong product and assembling an engaged team is just the beginning.
The real challenge lies in transforming a promising idea into a remarkable product that powers sustainable growth. Investment and initial buzz can only take you so far; the true differentiator is how adeptly a startup transitions from an idea to a fully scalable business; one that thrives on delivering extraordinary customer value while remaining profitable.
Paul Graham, Co-Founder of Y Combinator, explores this transformation in his essay ‘Founder Mode,’ where he asserts that visionary founders – such as Steve Jobs or Elon Musk – drive the breakthroughs that make companies like Apple or Tesla possible.
Graham argues that breakthrough growth is driven by a founder’s ability to operate in ‘founder mode’, a state where they are deeply immersed in their product, solving detailed problems firsthand with passion and urgency.
The real challenge lies in transforming a promising idea into a remarkable product that powers sustainable growth.
Yet, as a startup grows, it cannot rely solely on the visionary founder. As the complexity of operations increases, founders often need to shift toward ‘manager mode’, where planning, delegation and strategy become more critical. Graham critiques this shift, suggesting that the operational focus of manager mode can stifle creativity, passion and innovation.
But what if the real key to success is not a strict choice between founder mode and manager mode? After spending over 30 years helping founders grow their startups through lean thinking, I’ve found that lean creates a third mode.
This mode is about staying grounded in the product and reality, close to both customers and teams. It’s not about balancing creativity and process – it’s about empowering teams to solve real problems with clear direction, without losing touch with what truly drives customer value. Lean empowers you to scale without becoming distant from the core of your business.
The limitations of founder mode
In the early stages of a startup, founders are deeply embedded in the product. They are experimenting, iterating and searching for product-market fit. It’s the most exciting time – the honeymoon phase – where ideas flow freely, and there is little to lose.
However, once a product finds its initial market fit and demand increases, the startup inevitably faces new challenges: scaling, recruiting and formalizing processes. It’s here that many founders stumble, as the focus shifts from pure creativity to managing growth.
For many founders, this shift to operational focus – hiring, setting up processes, tracking KPIs, reducing costs – causes them to lose touch with the very spark that created their initial success. Passion wanes as the business begins to feel more like a machine to operate rather than a vision to realize.
This is the moment where the founder may be tempted to delegate too quickly, handing off critical product decisions to people who may not fully share their emotional investment in the product.
The role of chief product engineer
To prevent this loss of momentum, lean organizations adopt a role that bridges the gap between visionary founder and operational manager: the chief product engineer. Originating from Toyota, the chief engineer acts as a ‘super product manager’ who carries forward the founder’s vision while ensuring the operational efficiency necessary for scaling.
This role is not about hierarchy but influence and respect. The chief product engineer has no formal authority over the technical and functional teams but leads through their deep knowledge of the product and customer.
The chief product engineer plays a pivotal role in maintaining the emotional connection between the product and its customers.
In lean organizations, the chief product engineer plays a pivotal role in maintaining the emotional connection between the product and its customers. They understand the product’s DNA – the combination of features and emotional triggers that make customers fall in love with it – and ensure that as the product evolves, this connection is never lost.
By acting as the guardian of the product’s emotional journey, the chief product engineer enables the founder to shift from being hands-on to focusing on broader business decisions, without compromising on product quality or customer loyalty. This is why, in many cases, the first chief product engineer is often the founder or a co-founder.
Their mission then becomes perpetuating this deep, product-focused and innovation-driven culture throughout the company as it scales, by establishing a robust chief product engineer system that maintains this spirit across teams and growth stages.
Running on both modes
The true strength of startups leveraging lean principles lies in their ability to blend ‘founder mode’ and ‘manager mode,’ fostering innovation while scaling sustainably. Here’s how a startup can achieve that balance:
Cultivating product passion: The founder’s passion for the product must be embedded in the DNA of the company. As the company grows, this passion needs to be transferred to key individuals, like the chief product engineer, who can continue nurturing it while managing the complexities of scaling. But it must also spread across the company, creating a culture where everyone feels connected to the product’s mission.
Developing a product-centric culture: Successful lean startups cultivate a culture where product obsession is widespread. This means constantly engaging with the gemba, a Japanese term that describes a place where the action happens – in this case, the places where products are made, sold and used. This helps to identify new opportunities for improvement and innovation. The chief product engineer plays a central role in fostering this culture of continuous learning and improvement.
Balancing growth and innovation: As a startup scales, growth must be guided by a clear understanding of what makes the product special. It’s easy to get sidetracked by metrics and KPIs, but the real challenge is enriching the product over time. The lean approach encourages startups to focus on enhancing both product value and operational efficiency, ensuring long-term success.
Continuous improvement and adaptation: A lean organization does not rely on rigid processes. Instead, it embraces flexibility and adaptation. The founders, managers and subsequent chief product engineers all ensure that while processes are established to support growth, they remain open to continuous improvement, allowing the startup to stay agile and responsive to customer needs.
The power of blending modes
Ultimately, the most successful startups don’t just blend founder mode and manager mode, but instead build a third mode – one grounded in lean principles that stays connected to the product, fosters customer value and promotes operational efficiency and autonomy.
By embedding product passion across the company and empowering roles like the chief product engineer, startups can scale without losing the creativity and drive that fueled their initial success.
In a world where 90 percent of startups fail, this approach may well be the difference between a fleeting success and a company that builds lasting value for its customers, its team and its industry.
