Humility is the opposite of hubris and serves as its antidote. No amount of passion and expertise will eliminate your blind spots or protect you from mistakes. To the contrary, your enthusiasm for an idea is more likely to narrow your field of attention and accentuate the risk of blindness. You cannot know in your startup’s earliest stage what the customer will want, what the markets will reward, how competitors will behave, or what unpredictable twists and turns the future will bring. Accepting this reality is the essence of humility.
Warren Buffett, regarded as one of history’s best business minds, knows that his own carefully honed judgment is permanently fallible. In his 2007 annual letter to shareholders (the net worth of his firm increased by $12.3 billion that year) he outlined a series of mistakes. “And now it’s confession time,” he wrote. “It should be noted that no consultant, board of directors, or investment banker pushed me into the mistakes I will describe. In tennis parlance, they were all unforced errors.” He goes on to explain in detail a couple of questionable investment decisions. “The only explanation is that my brain had gone on vacation and forgot to notify me,” he writes. “One thing is for sure. I’ll make similar mistakes in the future.”12
The day after J. C. Faulkner and his management team decided to close down Home Free was an exercise in humility. “It was one of those unforgettable moments when I had to acknowledge my mistake and lay off ninety-five people in one day, which was the hardest thing I ever had to do,” J. C. says. “Then, I got in front of the other hundred people[in D1’s home office]. We admitted the challenges in the market. We admitted the mistakes we had made. . . we just came clean. There was no positive spin. I was obviously concerned that I would lose credibility when I explained I was wrong, but what I learned was that people appreciated the honesty. They felt good that we understood our mistakes; and it kind of humanized us a little bit.”
An investor friend of mine once explained to me why he was willing to stand behind the expansion plans of a young restaurateur. “He’s young and passionate; he has great ideas and an incredible work ethic,” he said. “But the thing that sets him apart is his humility. Although he knows a lot about the restaurant business and he has great instincts, you would never know it from how he interacts with people. He is a learning machine, and he is incredibly driven to find out what other people know. He has surrounded himself with highly experienced people, people who have accomplished great things in the industry, and he becomes a student at their feet—teach me, show me, help me understand what I can learn from you.”