I'm Eric Ries, author of "The Lean Startup" and new book "Incorruptible" – AMA

My biggest struggle with this question is that "going bad" sometimes coincides with not just financial incentives, but also more people getting value out of it. For example Spotify gradually shifting from "we make it easy to curate and share playlists" to "we make them for you to use as background music constantly." Sometimes what's bad for the early power user is great for the late adopter, and it's difficult to make any kind of broad judgment about whether the change is better or worse.

What do you say to this interpretation? In particular do you think most cases could be framed as "the key audience/customer/market has shifted"? Is it possible to find greater financial success while doing things the primary audience doesn't like?

It will be interesting to see how many of those companies remain "incorruptible". Your new book seems a bit like a sequel to Jim Collins's 2001 book Good to Great. Several of the "great" companies including Circuit City, Fannie Mae, and Wells Fargo later ran into serious problems. And from an investor perspective, as a group they have underperformed the S&P 500.

https://www.harpercollins.com/products/good-to-great-jim-col...

Eric - I've worked for NASA, ATT, IBM, HP, Amazon, and Google, not to mention a couple of startups that I started in between. None of them (except the startups, but they were brief) stayed true to their original mission. I haven't read your new book, but IMO, it's because the founders leave and the next leadership don't share the vision or values of the founders in the same way. After all, a company is a collaboration among people who want to make a contribution. When the people change, the company changes. It's inevitable.

That said, you seem to have archetypes above Costco, Patagonia, and Novo Nordisk that avoided it.

Can you comment on not what it takes to build such a company, but rather how to transform companies like those that I worked for into ones that resist gravity? Or is it too late?

I worked at Anthropic, and I wouldn't attribute much to the structure itself – so I'm wary of using it as a positive example here.

I do attribute a lot to specific people. Concretely, to much of the intitial team, who they recruited on the research/infra side, and some very close personal relationships within research/infra. That dynamic, paired with their unwillingness to accede to something against their values, is what I credit for some atypical decisions and outcomes [1].

Things regulary go "corrupt" in parts of the company; it's hard to scale without importing culture from big tech. Sometimes, the defense was ICs escalating issues, Dario talking to ICs, and then shaking things up.

But this process takes time, and it doesn't lead to a full reversal; a bad/misaligned hire has reverberating impacts. Many folks are still driven by values (even if their values are not your your values!), but scaling dynamics seem to be evolving like any other org – just at a higher employee count and revenue numbers.

I do place trust in specific people who work at Anthropic, but I wouldn't place trust in Anthropic the organization. It's an organization that's wont to change, regardless of its structure.

[1]: https://news.ycombinator.com/item?id=47174423

Just dropping in to thank you for writing this book and raising awareness around it. A lot of builders are really disillusioned by how "corruptible" the tech industry has been.

I wrote a blog post called "Revenue Model is More Important than Culture" (it made the #1 spot on HackerNews a few years ago) arguing that the way to avoid that corruption is by making sure the business model is immune to it, but having read your thoughts, I'd say your argument (structure being the dominant term) is even stronger.

> how a handful of companies (like Costco[..]) have successfully been structured to resist gravity

"I came to (Jim Sinegal) once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty," Jelineck recalled[..]. "We are losing our rear ends.’ And he said, ‘If you raise the effing hot dog, I will kill you."

That's not structure, that's leadership. They were about to change the price, but one guy at the top with authority and an opinion said no. You could say "it's structure" that there was one guy at the top with authority, but it still depends on him having the right opinion. You need both a good structure and an unwaveringly idealistic (and correct) leader.

I haven't read the new book yet, but I'd be interested in your take on Disney's trajectory over the last, say, 2 decades. It seems to have strayed pretty far from Walt's original vision, largely due to the actions of Bob Iger. He took what used to be a company that was fueled by creativity and turned it into a machine that strip mines IP and extracts value. Iger purchased IP (Pixar, Lucasfilm, Marvel, Fox) as a risk mitigation strategy since you get an established brand you can exploit on day 1. But in doing so he killed the soul of Disney, which was built on big creative bets (literally sell the car to make a movie, mortgage the house to build a park).

Hey Eric!

How often do you see companies recover from financial gravity? Or is it mostly irreversible?

How much do you attribute worsening of company values to things like professional managers, too much hierarchy, and less founder-mode; versus financial gravity?

In a case like GitHub where their focus seems less on open-source these days, should developers try to help GitHub better support open-source or should the focus be on building alternatives?

Thanks, Jake

Any thoughts on bootstrapping a SaaS in the AI era? Is it more manageable because a single person can leverage more? Or more difficult because of increased resource needs and customer demands? And also how that factors into starting an "incorruptible" company today.

For those that want to go deeper with _Incorruptible_, I've spent the past few months doing hundreds of interviews and events discussing its various themes and topics. I'm having Claude Code summarize this progress along the way at https://howisincorruptiblegoing.com/

You can also see the various accolades, reviews, and awards that it's accumulated so far.

Do you think that building what the "market wants" (finding traction/gold, and leaning into that) comes at the cost of people (not) making and promoting "things that should exist" (e.g., companies and products/services aligned with ideal visions of the world they want to be in)?

If so, how is the tradeoff justified? (Make money first, then do "ideal" things?)

If not, why not? (Other than that it's unsuccessful strategically/statistically and wasteful, I guess.)

Any elaboration/response on this theme would be appreciated. Thanks!

My book arrived today.

Q1: You have done a few friendly interviews on YouTube, but I haven't seen one that challenges you much. Do you know if there are upcoming interviews that you found pushed back?

Q2: Is the idea of shareholder supremacy fundamentally at odds with your with your preferred alternative governance structures, or is it just a time preference and risk attitude issue?

Q3: You will get sympathetic ears easily due to the subject matter. But the same book about non-profits would be a harder sell. Do you agree, and if true does that say something about the marketplace of ideas?

Is it realistic to make organizations that stay on mission long after the founder is gone?

I listened to a podcast interview you did where you talked positively about the Novo Nordisk Foundation as a successful governance story, but when I think of long lived foundations, I think of the Ford Foundation and the Hewlet Foundation that have significantly drifted from the founders' visions despite being non-profits. Many people think it is better for foundations to spend down all their resources before the founder is gone to prevent this drift and loss of efficacy.

Have you done any studies of what made long lived foundations drift on their mission despite no profit incentive?

Thanks for doing this, Eric. I'm about halfway through Incorruptible and loving it so far.

Do you have any recommendations for entity formation infra that caters to mission driven companies? Something like Stripe Atlas that can form the more complex structures? Forming a PBC is becoming more standard but tthe other structures seem more esoteric (and expensive).

I’ve been thinking about what objective harnesses can be put around governance for companies and governments as well. Transparency dashboards, clearer real-time feedback mechanisms. What do you suggest especially for governments (local, or even larger). Keep thinking AI might actually help improve our feedback mechanisms given all the noise.

Eric, really interested in how you pick the things you work on. I'm a really big fan of the concept of the Long Term Stock Exchange, but projects like that seem to me at times like paddling a canoe upstream using a spoon.

Whats your criteria? Is there an analytical component? Are you willing to work on something even if "success" is unlikely? And with all of this going on how do you have time to work on books!

thank you for your work by the way. It continues to be useful year after year to me and people around me!

Hi Eric, I worked for IMVU shortly after you left and tbh I didn't see a ton of "lean startup" ideas implemented well. And today, company is not healthy.

Why do you think IMVU never hit escape velocity?

A lot of big organizations have absorbed a Lean Startup POV -- don't debate, just ship an MVP and measure. But in practice, we're usually measuring a proxy metric, it's a short-term test, the audience may be unrepresentative and because of all this, the result doesn't generalize.

What do you think an experiment needs before it can actually be called learning? And what kinds of product questions should not be done as experiments at all?

Most books, guidance and wisdom about startups appeared during a ZIRP era. How relevant all of this remains today?

You frame corruption as financial gravity, fixable by governance design at the firm level. But the dollar's strength has been reinforced for fifty years by oil trading in dollars. Tying our money to a conflict asset implicated in war, pollution, and enormous suffering. Can any company be incorruptible inside a monetary system that isn't?

I've read The Lean Startup during undergrad and it was a bible to me at the time, thank you for your work, you got me into startup culture in a place where everyone else did not support of it.

One question I have for you is on finances, I think that still remains an afterthought in startup hustle culture, and perhaps even by design, I feel like the system is designed so that VCs keep winning and founders rarely get the exit they deserve. What is your take on that?

Your first book was my like my bible, used many of the concepts when building gomacro.ai, at the same time found it so easy to get sucked into non-lean methodology. Very hard these days to come up with a sound idea, so many people building things that nobody asked for to begin with and in the age of AI its even more so the case. Best of luck with the new one, will give it a read!

Eric - enjoyed your talk: https://www.youtube.com/watch?v=7VKliOQXQ9M&t=1s .

What can a founder do to safeguard his position, interests, and company? A couple of things that come to my mind are: have an aligned/friendly board who believe in you; second, have dual-class shares (like Meta, SpaceX, Google). Anything else you would like to add?

As AI becomes more capable, it seems like a company can be a founding charter and a pool of cash to be spent on tokens to achieve the aims of that charter.

How do you feel about these AI only companies, and how do you think they could affect the wider market?

ref: https://www.ft.com/content/b8cc4bf4-6d3c-4974-8428-9a091983c...

Just curious what other types of 'gravities' exist in organizations? In a negative gravity example, something I've seen as a social contagion is when some people start resigning it tends to spread and then the organization slowly decays (or quiets quits)

In your view, which are couple different companies that aren’t very big (not FAANG level yet), but you think will become quite successful? Which of them are mission driven and you’d be sad if they later become “corrupted”?

Any examples of corrupted companies that you’d like to share? I’m especially curious about your thoughts on Meta and Google, the biggest startups of their time and how they evolved.

Coming from the blockchain space, but wanting to build something with bright patterns, while also using DLT and crypto, has been painful, to say the least.

I would like to know how best to stand out from the toxic, finance-driven world that is defi and crypto generally, without getting rolled in with all the clowns. Of course, I know that clear messaging and verifiable, evidence-driven claims are good, but I am thinking about the more abstract, strategic side to things, which I still feel under-prepared for.

Looking forward to reading this. Still have a signed copy of The Lean Startup from an event in Seattle from 15 years ago. The book had a big part in pushing me towards doing my own lean startup just a year later, so, thank you.

Hey, Eric! I read Lean Startup many years ago when I was in my "let's do a startup" phase. My idea didn't make it, but I learned a lot and am glad I took the chance. Thanks for the motivation!

You said to "Ask You Anything," so here's my question: I have mostly stopped buying from Amazon. That includes books. I'd like to buy your next book. What's the best way to support you if I don't want to purchase through them? More generally, what's the best way to support authors that _only_ publish on Amazon without supporting Amazon itself?

Hey Eric - does it bother you all the startups in your first book you held up as examples are dead?

A company's values become even more important with AI accelerating and expanding the mission of traditional Delaware Corporations.

Do you have advice on how to use AI to help teams stay true to their values?

Having not read your book yet, in my mind there's the obvious legal support AI can provide to help navigate complex situations, but maybe there's some other groundwork in the value creation and implementation itself?

I've long been suspicious of the conflicts of interest induced by exit-orientated investment models.

I'm curious if you think cooperative businesses leveraging non-voting preferred shares, community shares and other coop investment instruments are more resilient against this type of corruption.

I'm wonder how you see the tradeoffs these models have against traditional LLC/VC models and how you would mitigate them.

Thanks for doing this - I'm an author, and my working theory is that every author is a one-person startup, so I try to think about lean startup principles when I think about the business of being an author.

How do you think Lean Startup principles could be applied to ordinary families looking to navigate the existing economic stresses we're experiencing?

Why are CEOs/CTOs not being fired or put on PIP for the ill-conceived internal AI push?

First, I have not read the book. You mentioned Novo Nordisk, but given the current context and so many changes that employees/company has undergone recently and the way it is performing, do you still think that it was a good example to include here. What factors played for it to suddenly undergo so much when you have mentioned they have been structured to resist gravity and thrive for decades -- or even centuries?

Thanks Eric - been a fan of your work for years! I remember Steve Blank bragging in his early courses that you evangelized his work to the masses. I applaud writing a book on the challenges of making a business that is net good for society. I've personally found that there are just so many forces pushing towards the status quo (make more $$), that it's really hard to create a company that prioritizes public good.

How much do you blame our values of our society for creating corrupt businesses? Are corrupt businesses just a mirror of our own values?

The question has been also on our mind. We restructure now towards a https://steward-ownership.com/ company structure (in CH). The hard challenge will be fundraising - so we are actually considering selling "Partizipationsscheine" which are stocks without a vote, but still a dividend. On a open market (maybe through polygon / base coins). I just wonder how to resolve the initial funding question on those companies. Any ideas?

What type of software businesses survive and thrive in the era of AGI? Which ones get wiped out? Is there any moat in the era of AGI?

You said build-measure-learn principles survive AI. But when an MVP costs hours instead of months, doesn't the bottleneck move entirely to distribution and customer development?

I'm about to launch a startup, do you do consulting for small companies with what I'd like to think is a big mission (likely similar to all startups lol)? In other words, is there some way to contact you and do you work with non-billion dollar startups if you find it worthwhile? Or is it more in line with 'read my books and call me when you raise your first million'?

I am a few chapters into the book, so maybe this is answered later. Don’t most people who play a part in corrupting companies get away with it? You mention Jack Welch and James McNerney, but it feels like explicit examples of corruption are rare. I imagine that many of the perpetrators move on to other boards and profit off of the decline at the expense of others?

"Darkness we don't talk about" — sir, that's just every Slack thread after an all-hands. Pre-ordering anyway!!

To what extent are the mechanisms you identified causing companies to go bad the same for non-profits, associations, political parties, etc.?

Hey Eric, I loved The Lean Startup! One of my favorite books. Really looking forward to reading Incorruptible.

Is LTSE working the way you hoped?

How do you use AI on a daily basis, and are there times when you don't?

Big fan of your work!

Let's say this has already happened and ossified across large, formerly-innovative companies that now have so much size and inertia behind them that it might take decades for one to "fail" in a traditional sense. What can be done to reverse the process?

Does "financial gravity" imply that noble missions are generally less profitable? Is there a way to align that (maybe by governments structuring the market with taxes / regulations)? Is that realistic?

What do you think are the most important problems that the US is currently facing?