CEO Leadership in the AI Era: Brian Halligan's Complete Playbook for Modern Founders

Building a successful company has become both easier and harder simultaneously. While starting a company requires fewer barriers to entry than ever before, scaling that startup into a durable, high-impact organization presents unprecedented challenges. Brian Halligan, co-founder and former long-time CEO of HubSpot, has spent years studying the job of a CEO and now serves as Sequoia's in-house CEO coach, working with dozens of the world's top CEOs. His insights reveal a critical truth: the role of a CEO today is fundamentally different from what it was 10-20 years ago, and the leaders who succeed understand that no one is coming to rescue them.

Core Traits of Successful CEOs: The LOCK Algorithm

When evaluating potential founders and CEOs, Halligan relies on a specific framework he calls the LOCK algorithm—a set of characteristics that consistently predict success in today's competitive landscape. Understanding these traits helps aspiring founders assess whether they have what it takes to lead a scaling company.

The "L" stands for lovable, though Halligan clarifies this doesn't necessarily mean universally liked. Rather, it refers to the ability to inspire followership. Would you crawl across broken glass to work for this person? This quality creates the psychological safety and motivation that teams need to push through inevitable crises. Steve Jobs exemplified this trait despite his rough demeanor—people wanted to follow him because they believed in his vision and trusted his judgment.

The "O" represents obsession with the problem being solved. Halligan notices a critical pattern: the best founders have deep founder-market fit, having thought deeply about their problem for years before starting their company. They've demonstrated evidence in their lives of going obsessively deep down rabbit holes, which is what scaling a company ultimately requires. This obsession can't be manufactured or learned—it's something founders either possess or don't.

The "C" stands for having a chip on their shoulder—a combative drive to prove something to the world. This boulder-shaped chip drives founders to take risks others won't and to challenge conventional wisdom. It's the quality that makes someone willing to bet everything on a contrarian vision when most people would play it safe.

Finally, "K" means being deeply knowledgeable about their domain. This goes beyond understanding the surface-level problem; it means understanding business strategy, competitive dynamics, and how companies actually operate. Halligan looks for founders who have spent years studying not just their specific problem but the entire ecosystem around it.

If he were to add another letter, Halligan says it would be "S" for student. The most successful fast-growing CEOs are perpetual learners who constantly absorb knowledge from multiple sources—peers, history, industry trends, and first principles thinking. They're like large language models, accumulating vast knowledge bases and applying lessons from unexpected domains. Many of today's best CEOs, like those leading Profound and Rogo, demonstrate this student mentality. They aren't know-it-alls; they're intellectually curious individuals who recognize how much they don't know.

Beyond the LOCK framework, extreme ambition appears across virtually all successful founders. They're attempting something most people would call crazy—building a subscription service for all music, creating artificial intelligence that matches human reasoning, or developing infrastructure that powers trillions of transactions. This willingness to pursue something "wild" separates founders from more conservative business operators.

Building Your Team: The 2004 Red Sox Model

One of Halligan's most powerful metaphors for team building comes from baseball. The 2004 Boston Red Sox—who ended an 86-year championship drought—succeeded by mixing homegrown talent with carefully selected free agents. The team featured high-quality, relatively inexpensive talent developed through the farm system, complemented by strategic acquisitions like David Ortiz, Pedro Martinez, and Curt Schilling. The culture worked because of this balance.

Halligan argues that most companies dramatically underrate their homegrown talent. CEOs become seduced by fancy titles and prestigious employers, bringing in VPs from Salesforce, Google, and Microsoft, only to watch them fail spectacularly. The problem is impedance mismatch—these executives expect a level of organizational maturity and process that simply doesn't exist in a 50-person or 500-person company. They've spent years in sophisticated, well-oiled machines and can't adapt to startup chaos.

Halligan himself hired so many people from these big tech companies and experienced 100% attrition. He watched cohorts cycle through: "the McKinsey cohort comes in, and we think that's going to be the answer, and then it's the Apple group, and then that didn't work out, then the Amazon group." The consulting crowd almost universally fails because founders tend to be skeptics who distrust conventional wisdom, while McKinsey alumni typically represent the opposite—conservative, process-oriented thinking.

The better approach is to identify high-potential internal candidates and give them shots at bigger roles. If it's a close call between an external executive and someone you've developed internally, the internal person should usually win. You understand their potential and weaknesses; with external hires, you're operating with incomplete information no matter how thorough your interview process. At HubSpot, approximately half the management team had been there for extended periods, which created cultural continuity and deeper domain expertise.

The Hiring Problem: Why Your Interview Skills Are Worse Than You Think

Perhaps no topic reveals CEO overconfidence more clearly than hiring. CEOs consistently overestimate their ability to interview and assess candidates while underestimating the value of high-quality reference checks. MongoDB's CEO reported averaging two C-level turnovers per year—a staggering amount of churn that most CEOs experience but rarely discuss openly.

One effective technique comes from Parker Conrad: before interviewing a C-level candidate for roles like CFO or Chief Product Officer, have them sign an NDA and review a crucial company document or board deck. Schedule a 30-minute conversation specifically about that document. If the candidate merely compliments your work and avoids challenging anything, that's a major red flag. You need someone who will challenge you and isn't a "yes person." This approach reveals thought processes and interaction styles that traditional interviews obscure.

Blind references matter enormously, but only if you ask the right questions. When people ask about "strengths and weaknesses," they're mailing it in. The powerful question is: "On a scale of 1 to 10, how likely would you be to enthusiastically rehire this person for that role, or even try to recruit them to your own company?" This forces honesty in ways generic questions cannot.

Another critical insight: avoid hiring people from big companies into roles that require different scales of thinking. When HubSpot interviewed engineering leaders, they used to have eight people rate candidates on a 1-4 scale. If four rated a candidate 4/4 and four rated them 2/4, while another candidate got all 3/4 scores, they'd hire the consistent 3/4 person. They eventually reversed this approach, realizing they needed "spiky" candidates with genuine strengths and weaknesses rather than consensus mediocrity. This change dramatically improved their hiring success rate.

The number-one mistake everyone makes: hiring people blown away by someone's resume from a major company, especially if they held a fancy title in a prestigious division. The massive impedance mismatch between expectations and reality creates inevitable disappointment. A much more effective strategy is hiring slow and firing fast. Unfortunately, most people do the opposite: they hire fast and fire slow. Statistically, at least 50% of C-level executives are gone within 18 months of being hired.

CEO Evolution: What's Different Now

The job of being a CEO has transformed dramatically. One of Halligan's CEOs, Winston, made an observation that Halligan initially dismissed but came to accept: "You can just do a lot more." With AI agents handling routine tasks, productivity tools exponentially increasing output, and software developers shipping in weeks what used to take months, the sheer volume of possible projects has multiplied. Something that historically took a year now takes two months.

This acceleration is dangerous. Halligan explains: "Let's say you found your beachhead market, and that beachhead market is really good and it's very deep, there's a lot of work to do. I think what's dangerous for companies is they hop to that second act too quickly and they lose focus on that first act." OpenAI exemplifies this problem—ChatGPT achieved incredible success, yet the company launched numerous projects simultaneously. When Gemini launched and proved more competitive, OpenAI had to refocus on its core product. This pattern repeats across companies racing to capitalize on every opportunity.

The acceleration also affects planning cycles. Planning cycles used to span a year; now they're compressed to three months. This puts unprecedented pressure on CEOs to be faster and better decision-makers. Every week brings technological shifts that make previous planning assumptions obsolete. If you spend months analyzing and planning, the information landscape changes entirely.

Halligan noticed at HubSpot that things slowed whenever hard, one-way-door decisions sat on his desk. Perhaps once a year, he'd make a major decision and walk through that door. This freed everyone else to move faster. Today's CEOs need to make these decisions and walk through those doors much more quickly than previous generations. The massive tax on optionality means that the ability to say "no" and commit to a direction has become more valuable than maintaining flexibility.

The AI-Driven Future of Go-to-Market

Despite technological revolution, enterprise sales have remained remarkably unchanged since the 1990s. Halligan expected AI-driven companies to completely reimagine sales processes, but they're hiring the same people, running the same enterprise sales processes, and using the same playbooks—they just call Sales Engineers "forward-deployed engineers." The term changed; the role stayed fundamentally similar.

However, significant changes are coming to the top of the funnel. Traditionally, companies succeeded by getting found in Google, with customers landing on websites and clicking "contact sales." This funnel is inverting. Buyers now start in ChatGPT, Gemini, or Claude, where they can research products, competitors, pricing, and implementation challenges without ever visiting your website. These AI systems know everything about your company, everything beyond that, and all your competitors.

The future involves high-quality avatars on homepages that customers can have conversations with—systems that understand everything about your products, pricing, packaging, and competitive positioning. These conversations get stored in CRM systems and scored as qualified interactions. Sales reps then follow up, but they're supported by their own AI SEs that accompany them through the entire process. Buyers will have personal AI agents that sit in Zoom calls during sales meetings, suggesting questions and flagging issues.

This represents a fundamental restructuring of go-to-market, though it hasn't fully unlocked yet. Forward-deployed engineers will likely remain critical because AI tools rarely work plug-and-play. They require significant onboarding, integration with existing systems, customization, and training specific to each customer's environment. The implementation complexity itself has become a distribution channel.

Critical Skills Every CEO Must Develop

Beyond traits and frameworks, successful CEOs must develop specific skills. Halligan identifies three areas where founders struggle most: giving hard feedback, detecting bullshit, and inspiring people. These aren't instinctive for someone in their late twenties who's never managed a team, been a sports team captain, or led any group. Yet scaling demands constant positive and negative feedback. This is deeply unnatural for many founders, but the best ones learn it rapidly.

The "bullshit detector" is a learned skill. Everyone constantly tries to sell to founders—investors, employees, board members, consultants. Developing the ability to separate signal from noise becomes critical. Similarly, inspiration is something most founders have never had to do before starting their company. Suddenly, they're responsible for motivating hundreds of people through crises and uncertainty.

The skill that trips up most founders most often, however, is the tricky conversation. When a co-founder or early leader can't scale into their new role, CEOs must have the difficult conversation about restructuring or layering in additional leadership. Imagine being 25 years old, having co-founded a company with someone you trust, and now needing to tell them you need to hire someone above them. This is extraordinarily uncomfortable, but necessary.

Halligan uses a peer-based approach to help CEOs develop these skills. At Sequoia, he divides CEOs into two groups: the "kids' table" for companies under 100 employees and the "adults' table" for larger organizations. The problems each faces are different but rhyme significantly. By bringing peers together in a safe space, CEOs can learn from each other's experiences. This "misery loves company" dynamic proves far more effective than any individual coaching. CEOs see that their peers face identical struggles, which normalizes the challenges and provides concrete solutions they can adapt.

The Halliganisms: Practical Leadership Wisdom

Throughout his 20 years as CEO, Halligan developed a collection of practical wisdom he calls "Halliganisms"—actionable frameworks that solve recurring leadership challenges. One of the most powerful is "When you have to eat a shit sandwich, don't nibble." This concept comes from Ruth Porat, Google's CFO, and means that when you must deliver bad news, do it completely rather than in incremental pieces.

Halligan predicts that within the next couple of years, private market valuations will correct significantly. Some companies will live up to their valuations; many won't. This will force massive layoffs across the industry. The temptation is to do "a little one now, grow into it, then do another in six months, then another." Instead, Halligan advocates ripping the band-aid off completely: tell everyone the bad news, acknowledge they're adults who can handle reality, and move forward decisively. Bad things happen to every company—the question is how you handle them.

Another crucial Halliganism comes from Duke basketball coach Mike Krzyzewski: "Next play!" When basketball players miss a shot, they have a natural tendency to play overly aggressively on defense and compound their error. Krzyzewski redirects their focus: forget the error, execute the next play. HubSpot actually displayed his face on slides during company meetings when making mistakes that needed quick recovery. After a catastrophic outage on the last day of March 2019 that affected all customers and caused significant churn, Halligan brought this framework to his company meeting—which he gave while crying in front of the entire organization. The point: you make mistakes, acknowledge them, and move forward.

"Never waste a good crisis" reflects how Halligan approached setbacks. Most good things that happened at HubSpot emerged from crises, because they took drastic measures to ensure those mistakes never happened again. After the 2019 outage, they completely rethought their software deployment and development processes. They haven't had a serious outage since. The lesson: when something goes wrong, over-correct. Swing the pendulum hard in the opposite direction, making it obvious to everyone what's happening and why.

"If you want to kill a plant, have two people water it" emphasizes the power of Directly Responsible Individuals (DRIs). When you ask two friends to water a plant while you're away, one of two things happens: it gets overwatered or underwatered—either way, it dies. Every CEO Halligan works with understands DRI conceptually, but many fail in execution. In a startup, everyone is in the room and knows what's happening. In a scaled company with separate sales, engineering, and product organizations, silos form naturally. Someone must own outcomes with authority to direct people across functions, even without formal management authority.

The formula that drove HubSpot's culture was: Enterprise Value > Team Value > My Employee Value. Or even better: Customer Value > Enterprise Value > Team Value > My Value. When VPs fall down, it's because they optimize for their own teams instead of the enterprise. A sales leader might push for maximum bookings because they're compensated on bookings, forcing service teams to handle downstream problems they created. This sub-optimization compounds across departments. Halligan explicitly included this formula in employee reviews and discussed it constantly. When quarterly employee net promoter surveys came back showing a department with a 30 score while others were in the 60s, he'd give feedback to that leader. Almost universally, those leaders never recovered. You lose your team's trust, and getting it back is nearly impossible.

The Scaling Paradox: From Perspiration to Inspiration

As companies scale, the CEO's job undergoes a fundamental transformation. In the startup phase, being a CEO is about 90% perspiration and 10% inspiration. You're doing every job yourself, still heavily involved in every decision, talking to customers, writing code, closing deals. You can't let go of much because so much depends on you.

In the scale-up phase, this flips entirely: 90% inspiration and 10% perspiration. You're setting vision, creating culture, communicating values, and making strategic decisions, but you're not executing the day-to-day work. Letting go is essential—the organization can't scale if you remain a bottleneck. Yet this is where many accomplished founders struggle. Halligan admits he had trust issues, only trusting a small number of people to be DRIs driving important initiatives. "That drove people crazy that I didn't have a larger trust surface," he reflects. "Every one of the CEOs I work with has the same problem. That was a scaling limit for me. I wasn't trusting enough."

The other fundamental shift involves the intensity of founder involvement. Many people romanticize startup life, but Halligan is direct about the reality: founders aren't working 9-to-6 or even the infamous 9-to-9. They're working seven days a week, always on, texting on Sunday nights. It's full-contact engagement. People talk about the 996 work schedule (9 AM to 9 PM, six days a week), but founder intensity exceeds even that. The obsession is real.

Yet this level of commitment doesn't guarantee success, and Halligan talks many potential founders out of starting companies. He points out that if he had to do it over, knowing what he knows now, he wouldn't start another company. Not because HubSpot wasn't successful, but because the sacrifice is genuine. The lack of balance and the constant pressure create real costs. At the same time, Halligan wouldn't change his experience. Looking back, he's incredibly proud of what he built, and he's glad he did it. On his deathbed, he'll look back and enjoy that journey.

The irony is that today's founders work harder than Halligan's generation. He worked 60-70 hours per week, never turning it off, and thought that was intense. Modern founders are far more hardcore. Elon Musk has clearly inspired this generation to push harder than previous founders. The opportunity to participate in massive platform shifts creates the mindset: "I'm not wasting this opportunity. I'm going all in."

There's a notable exception to founder intensity. Kareem from Clay deliberately maintains work-life balance, takes weekends off, and has a different philosophy than the obsessed founder archetype. Clay took longer to find product-market fit, but it worked out. This suggests a possible correlation between extreme obsession and speed to scale, but it's not deterministic. Different paths exist, though most successful founders follow the high-intensity model.

Learning from History: The Grateful Dead as a Silicon Valley Blueprint

Beyond conventional business wisdom, Halligan finds unexpected lessons in historical examples. He's particularly passionate about the Grateful Dead, having written a book called "Marketing Lessons from the Grateful Dead" and purchased Jerry Garcia's guitar to preserve it for future generations. The band, he argues, was "the ultimate Silicon Valley startup" despite operating in music.

The Dead started in Palo Alto in 1964, with early concerts across Stanford and Silicon Valley. They were first-principles thinkers who created an entirely new category of music—jam band, a term that didn't exist before they pioneered it. They disintermediated ticketing companies (their fans could buy tickets directly), innovated their distribution strategy, and treated music as a craft to master rather than a product to manufacture. Steve Jobs and Jerry Garcia, Halligan argues, were similar: both were craftspeople with perfectionist tendencies and ability to inspire followership around a vision.

The band's team composition offers critical lessons about spiky talent. Garcia was a bluegrass banjo player; Bob Weir came from a country music background; Phil Lesh was an avant-garde jazz trombonist; Ron "Pigpen" McKernan played harmonica; and the drummer had a marching band background. These weren't musicians trained in the same tradition. They were spiky individuals with different expertise who came together to create something entirely new. This principle—assembling diverse talent with deep expertise in different domains—directly applies to startup team building. The team shouldn't be homogeneous. You want people with sharp differences who complement each other.

Navigating CEO Responsibility and Personal Growth

Halligan's perspective on CEO responsibility shifted dramatically after a near-fatal snowmobile accident in Vermont four years ago. He drove off a cliff, and both he and the snowmobile were "smashed into a million pieces." Unconscious for an extended period, he eventually woke and—initially believing he'd lost his phone—sat freezing for hours convinced he would die in Vermont's cold. When he realized he still had his phone, he called 911 and was rescued by helicopter. The accident required multiple surgeries and left him with metal throughout his body (33 screws, he jokes, with one being loose).

That experience fundamentally altered his perspective on life and work. "Life is short. Extremely short," he emphasizes. In that moment at the bottom of the cliff, facing probable death, he made profound decisions. One was that he didn't actually enjoy being CEO of an 8,000-person company. It didn't align with his "harmonic motion," and he didn't love the day-to-day. He promised himself that if he made it out alive, he would step down. He kept that promise, handing the CEO role to Yamini Rangan, who continues to lead the company successfully.

This decision reflects evolved CEO thinking. Halligan recognizes that being a CEO, particularly of a massive organization, requires a certain personality type. It's not automatically the right path for every founder, even successful ones. His willingness to step aside despite HubSpot's success demonstrates maturity many founders lack—the ability to recognize that the company's needs might differ from his own fulfillment.

Currently, Halligan is "kind of a CEO geek," as he describes himself. He hosts a podcast called "Long Strange Trip" (a Grateful Dead reference) where he interviews CEOs about their experiences, challenges, and lessons learned. He works one-on-one with CEOs at Sequoia, facilitates peer groups through the "kids' table" and "adults' table" structure, and shares lessons from his 20 years of CEO experience. He views the mistakes he made as valuable teaching material and has compiled a comprehensive list of those mistakes specifically to help other CEOs avoid them.

His advice to anyone interested in CEO coaching or learning from the community he's built is to listen to "Long Strange Trip" and provide honest feedback. The podcast is new, and while he receives feedback from family and colleagues, he values unvarnished opinions from broader audiences. This reflects his commitment to ongoing learning—something he identifies as critical for CEOs navigating unprecedented change.

Conclusion

The role of CEO in today's AI-driven era demands a specific combination of traits, skills, and mindset. Brian Halligan's framework—looking for lovable, obsessed, chip-on-shoulder, knowledgeable, student-oriented founders—provides a useful lens for identifying potential leaders. His practical wisdom about hiring, team building, difficult conversations, and crisis management offers playbooks that founders can adapt. The acceleration of business cycles, the inversion of go-to-market funnels, and the changing nature of competitive advantage require CEOs who are intellectually curious, decisive, and willing to challenge conventional wisdom. Most importantly, today's successful CEOs recognize that while the job has never been more demanding, the opportunity to build something meaningful—something that changes how people work, live, and think—makes the sacrifice worthwhile. For founders considering the leap or CEOs navigating rapid scaling, the message is clear: prepare for intensity, build teams smarter than yourself, make hard decisions quickly, and never stop learning from the best leaders around you.

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Original source: How to be a CEO when AI breaks all the old playbooks | Sequoia CEO Coach Brian Halligan

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