Hats for days

The day you start your company, you begin by wearing at least a thousand hats. Each hat is associated with a different job, whether that’s being the head of marketing or simply being the person who refills the coffee pot every morning. As an entrepreneur, you wear each and every one of those hats.

Each time you hire someone new, you hand them one of your hats. The CFO gets one. The sales team members each take one. The engineers, the logistics crew—each one of them gets a hat.

Now, in order to successfully hand off some of your hats, you have to find the right people to wear them. That is, unless you want to be wearing the coffee-making hat forever.

Listen to the smart guys

When we were starting Firefly in 1995, I was still wearing most of those hats. I was a 26-year-old second-year student at HBS, and while that may sound good to some on paper, what it signaled to those in-the-know was that I was probably far too inexperienced to lead a company. My co-founders—themselves graduate students and a professor at MIT—wanted a second opinion as to whether I was capable of serving as our founding CEO. To that end, one of them suggested we sit down to speak to another professor there, the legendary entrepreneur Mitch Kapor.

Kapor was (and is) a trailblazer in technology. Perhaps you know him as the early promoter of the modern spreadsheet, as well as the founder of Lotus? He invited us to his office to hear our pitch, and then asked if I might stay behind. When the rest of the team had gone, I sat facing Mitch behind his imposing desk.

“What on earth qualifies you to be the CEO of this company?” he asked.

I wish I had prepared a response—but I had not. So I answered him honestly. “I’m probably not qualified,” I said. “But I’m the best that we’ve got for now, and I’m crazy enough to kill myself trying to make it work.”

I think it was the authenticity of the response that saved me from being tossed out of the room then and there. We spoke for another thirty minutes or so, until he finally said, “You know, you just might be capable of doing the job, at least for now. But your number one responsibility must be to know what you don’t know. And when you don’t know something, go hire someone smarter and more experienced than you who does. If you do that right, you could become a real CEO.”

I never forgot that conversation.

Show your flaws

To know what you don’t know is difficult. It requires rigorous intellectual integrity and an ability to honestly inventory your own challenges and weaknesses. This is especially important right now, given the current “implosion of trust” in our society—according to Edelman’s annual global survey, people trust those in charge less than ever. In this climate, what we need is not the flawless CEO who makes every decision themselves, but a truly collaborative leader who surrounds themselves with tremendous people to whom they delegate tremendous authority—all because they knows their own flaws.

Knowing what you don’t know is an iterative process that takes real discipline and humility. It’s also just smart. The last decade’s emphasis on “knowing your strengths” and “playing to your strengths” lacks much scientific muscle behind it. Instead, studies have shown that tackling weaknesses is where real improvement lies. Being founder and CEO is a lonely job, but knowing your failings doesn’t just breathe authenticity into your role—it makes you better at doing your job. And like Kapor pointed out, it enables you to go out and find the people who are smarter and more experienced than you, who will help your company soar.

Give away the last hat

 So let’s say you’ve taken Kapor’s advice. You’ve paid attention to what you don’t know, and you’ve hired people smarter and more experienced than you who do know the things in question. Your company is growing; you’re delegating right and left; the hats are flying off your head. And one day, you find yourself with a single hat left. What next?

This should be a magical moment, but you’d be forgiven for wanting to cling hard to that final hat. After all, it feels like a core part of your identity. But what would happen if you handed off that last hat and your company actually continued on to be enormously successful? What could be a better testament to your success than to build a business that truly lasts—and lasts longer than you do?

Success does not always mean leading your company for sixty years until your ashes are sitting in a jar in the middle of the conference table. Success is when your hard work leads you to the moment when you can give out that last hat. Success is what happens when you get the opportunity to shift into a new role without your old structures crumbling behind you. In fact, if you’re crazy enough, maybe this is the time to think about starting a new business and putting on a different set of one thousand hats. But before then, enjoy the moment: looking out on a sea of people wearing hats that once were yours, and feeling the warmth of the sun upon your newly exposed—and triumphant—crown.

Why does hiring the right people matter so much? Because $10 million is on the line with each one. Find out why.