3 Hats Every Founder Wears: Why It Matters

Being a founder in a startup is messy. You often start the journey with close friends—because who else would be crazy enough to join you in this exhausting, high-risk, high-reward endeavor?

Early on, everyone picks a role. Someone becomes the CEO, others take on product, operations, or growth. But underneath it all, each founder is making a deep personal investment—of time, energy, and identity—hoping for life-changing impact, exponential growth, and, ideally, a glorious exit.

As an executive coach, I’ve sat with countless founders. One consistent source of tension I’ve observed is what I call “hat confusion.” It’s subtle, messy, and if left unaddressed, it can create drag on trust, execution, and ultimately, growth.

What Are the Three Hats?

1. The Friend Hat

This is often the most natural hat. Many founders go into business with friends, and they value that connection deeply. They want to care, support, and journey together in meaningful ways. According to Self-Determination Theory (Ryan & Deci, 2000), relatedness—the desire for connection—is a core psychological need that fuels motivation and well-being. So yes, friendship matters.

2. The Founder Hat

This is the investment hat. You’re not just an employee—you’re a co-owner. You’re giving up salary, time, and probably sleep. You're pouring in not just financial capital, but enormous amounts of human capital. In many ways, you’re the most important investor in the business. And like any investor, you're hoping for a return. This reflects what Luthans et al. (2007) call Psychological Capital—your hope, efficacy, resilience, and optimism—all of which you’re placing on the line.

3. The Function Hat

You also have a job to do. Even in a flat org, clarity around roles, responsibilities, and authority is essential for execution. You may be the CTO, Head of Product, or leading Growth. When wearing this hat, the key competency is operational excellence. Research on high-performing teams (Wageman, Hackman, & Lehman, 2005) shows that role clarity is directly tied to team effectiveness and accountability.

The Problem: Hat Confusion

This week I worked with several founder teams experiencing exactly this tension. One team had three co-founders—close friends, deeply invested, but struggling. One founder wasn’t fulfilling their role. The others were frustrated, but didn’t know how to say it. They wanted to be good friends, they wanted accountability, and they also felt the stress of protecting their investment.

The conversation was unraveling. They didn’t know how to talk to each other or from which perspective.

The Simple (But Not Easy) Solution: Name the Hat

I invited them to try something deceptively simple: name the hat you’re wearing when you speak.

It changed everything.

One founder began, “As your friend, I care about you. I’m worried.”
This opened up a heartfelt, empathetic dialogue.

Then the CEO asked permission to switch hats: “Can I put on my Function Hat for a moment?”
He addressed the role expectations and performance gaps candidly—but respectfully.

Finally, I invited them all to put on their Founder Hat and assess the status of their venture as investors. This surfaced critical questions around equity, energy, and runway—conversations that had been buried under confusion and fear.

This simple tool—signaling your current hat—brought clarity, compassion, and real traction.

Why This Works

What’s happening beneath the surface is grounded in solid leadership theory:

• Role clarity supports effective coordination and reduces interpersonal tension (Katzenbach & Smith, 2005).

• Psychological safety—the ability to be candid without fear—is enhanced when people know the "frame" of the conversation (Edmondson, 1999).

• Cognitive reframing helps people shift perspectives quickly and understand multiple truths in complex dynamics (Heifetz & Linsky, 2002).

A Practice for Founders

If you're a founder, here’s your leadership practice this week:

Start signaling which hat you're wearing—Friend, Founder, or Function—when you speak.

It sounds small, but it creates space for honest conversations, helps manage emotional complexity, and prevents costly misunderstandings.

At The Leadership Well, we say:

Clarity is kindness. And kindness brings hope.

Start with clarity. Your team—and your business—will thank you.

References

• Edmondson, A. (1999). Psychological Safety and Learning Behavior in Work Teams. Administrative Science Quarterly, 44(2), 350–383.

• Heifetz, R. A., & Linsky, M. (2002). Leadership on the Line: Staying Alive through the Dangers of Leading. Harvard Business Review Press.

• Katzenbach, J. R., & Smith, D. K. (2005). The Wisdom of Teams: Creating the High-Performance Organization. HarperBusiness.

• Luthans, F., Youssef, C. M., & Avolio, B. J. (2007). Psychological Capital: Developing the Human Competitive Edge. Oxford University Press.

• Ryan, R. M., & Deci, E. L. (2000). Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being. American Psychologist, 55(1), 68–78.

• Wageman, R., Hackman, J. R., & Lehman, E. V. (2005). Team Diagnostic Survey: Development of an Instrument. The Journal of Applied Behavioral Science, 41(4), 373–398.