Why Founders Step Away from Their Companies

The Journey of a Founder

Being a founder is not something you learn through textbooks or degrees—it’s a process of learning while doing. As time goes by, founders accumulate a wealth of lessons, becoming a self-sustaining institution with a unique curriculum shaped by successes, failures, and decisions.

Despite the challenges and thrills of building a company from the ground up, it is quite common for founders to distance themselves from their own companies, especially as these businesses begin to grow.

The Debate: Why Do Founders Step Away?

This raises a long-standing question: why do countless founders choose to step back from the companies they have built, whether willingly or not? Often, boards replace them with seasoned managers under the justification of needing to scale, advising them to appoint experienced leaders and take a step back.

This transition pushes founders away from “creating” and toward “managing,” a shift that is not always comfortable for everyone. Many founders opt to step away from creation, taking on advisory roles or engaging in innovation labs, thus distancing themselves from the core energy that once drove their company’s growth.

Instances abound where this model has been successful, such as Microsoft, which has thrived under the leadership of professional CEO Satya Nadella.

However, many examples illustrate how passion can fade, company culture can shift, and businesses may lose their competitive advantage when founders are no longer actively engaged in the creation and vision of the organisation. Consider Apple; after Steve Jobs was ousted, the company encountered innovation problems and leadership challenges until his return in 1997. Similarly, Twitter faced leadership turmoil and strategic disarray following Jack Dorsey’s initial exit until he returned in 2015 to restore direction.

Struggles of a Founder

Facing the transition from creator to manager, founders often grapple with feelings of guilt, questioning their management style and their dedication to their vision. This internal tug-of-war leads to a significant inquiry: are they a founder, fuelled by a clear vision for their business, or have they become a manager focused solely on leading others?

Balancing these roles presents challenges but also highlights an essential insight—traits that define a founder remain crucial as the business expands.

Embracing Your Founder Mode

Paul Graham’s concept of “Founder Mode” provided reassurance regarding this balance, affirming that many founders grapple with an internal conflict between the desire to innovate and the corporate pressure to manage. Over time, this clash can result in disillusionment as organisational culture shifts from creative to managerial.

Reflecting on InMobi’s recent path has highlighted the importance of maintaining involvement as a creator and innovator to uphold the company’s original vision and drive. When the instinct arises to engage deeply, founders should act on it without hesitation. Conversely, if the instinct advises stepping back while the team thrives, that too should be done without reservation.

The ultimate takeaway is that if personal instincts have guided a founder thus far, they have already navigated their own unique “founder school.” Whether the intuition suggests getting involved or stepping away, it should be followed decisively. Founders don’t start out with a handbook; they rely on instincts, which is precisely what defines them.

At the core of this journey lies a fundamental truth: remain loyal to the builder within. While external pressures may encourage management, scaling, or handovers to experienced executives, real success resides in building.