Incorruptible: How Great Companies Stay Great with Eric Ries

This is the NN/g UX podcast. You almost certainly know Eric Ries from his book The Lean Startup. Eric's an entrepreneur, author, and founder of the Long-Term Stock Exchange. He spent a lot of his time recently talking to startups about better governance, and now he's written a book about it. In this episode, I talk with Eric about Uncorruptible, his book about the organizations that truly serve human flourishing, and how to create companies that succeed without sacrificing their ethics or their beliefs. If you're interested in hands-on learning about finding a new role, I encourage you to check out the NN/g Live Training and also our new self-paced courses. We have classes where you can learn more about Lean UX and job searching in UX. And with that, let's talk to Eric Ries. What were you thinking? Did you just forget how awful writing a book is? And Yeah, eventually you forget and then nostalgia kicks in. No, I I've been working on this one for a really long time and I just To me, the sign that you need to write a book is it for me it's always been like you're doing hand-to-hand combat, like one person at a time. And trying to explain something and the first like for me anyway, multiple years of trying to explain a concept one person at a time goes very badly. Takes a long time to be like, "Wait, no, what is this and how what's the how do you explain it? What is the concept? " You deal with all kind of new questions you've never heard before. People have objections They're They have new stakeholders you didn't even know that you needed to convince or whatever. You get your butt kicked. So, it's grueling to like work your way through a new concept that people have some resistance to or a confusion about. And then after a while, you start to get better at it and people start to get it a little bit more and you eventually get to the point where you're being asked the same questions over and over again where you're like, "Oh, I actually know the answer. Oh, good. I know the answer to that question. " Then the next stage after that is you can actually get people to do things and not just be entertained on the basis of the idea. And eventually get to a point where like that's pretty routine. Like it's gotten to the point where like, you know, people call me all time for advice and in 30 minutes I can get them from like, what the hell are you talking about to hey you should change how you're doing your company. Um that's pretty good and then you end those calls and people say so what else can I read about this? And you really don't want to say nothing because it makes you sound like a crazy person. You know, that's not the right answer. You people want to be like oh sure you can read this book and this book cuz it's such a well-trodden well-safe thing to do. — I didn't just make all this up while I was talking to you in the last 30 minutes. — I just felt like at a certain point nobody's writing about it. There's nothing There's literally nothing. There's nothing I can recommend to people. There's nothing you can read. do. There's obviously plenty of manifestos but nobody wants to read those. They're not practical enough for this audience. Um there are a lot of like individual company case studies so you can go like if you can find there's like a really awesome out of print book about Novo Nordisk you can read if you can get your hands on it. Okay, that's interesting. There's um a lot of academic papers you can read. But I wasn't having a lot of success getting people to look at any of that information and so that was like okay I'm going to need to figure out a way to package this for people in such a way and I was like oh no not this again. Like okay I guess I got to write a book. Yeah and the book that you wrote is called uh Incorruptible and I actually I got an arc of it which doesn't have the cool cover yet but uh I'm very excited and I am special. Um but I got to read it early and I was very excited to see the topic. Tell me um I mean I know of course about it cuz you know I read the book but tell folks a little bit about what it is and why they should read it. Sure yeah the thesis is relatively simple. For hundreds of years we who make things for a living have been building incredible value into these awesome organizations and then having that value stolen from us by losing control of the company by having it fall into malignancy and bureaucracy by having it be captured by the values of our financial system. So it's like the story of Frankenstein and his monster over and over again or if you prefer the parable of the goose that laid the golden egg. Whatever you story you want to tell, this has been going on for a really long time. And as we've increased the level of financialization in our economy, we've been making it worse. And so, part of the book the subtitle is like, you know, um why good companies go bad and how great companies stay great. So, there's like the why reader who's like, why is this happening? Why is our world going to hell around us? — Why does everything turn evil? Like what is what is going on? Like why is everything worse? Why is everything getting worse? Um and then how? The how reader. Well, if I want that not to happen in my career, what can I do about it? And the thing that really surprised me the most in putting the book together is the simple statement that most of today's best practices are value destroying. So, like that's pretty bad. Like that's not a good state of affairs to be in. And then there's the people are like, well, how do we get there? Well, you know, why is it that why why would it be that way? And I try to explain the why of it. But more importantly is for us again as builders to say, well, I think we should insist on a new set of best practices. Practices that are value creating and that respect what I call the builders intuition. That the best way to make money is to leave the world better than you found it by creating net

new value and capturing some of it for yourself. What Tim O'Reilly calls creating more value than you capture. And that simple idea, most people who encounter this book for the first time don't realize what a revolutionary they already are. So, if you have a simple belief as simple as you think that you should make products good. You think you should make your customers lives better. You think, you know, you want to solve a social problem or, you know, be it like climate change or even better. But like just something as simple as I think product quality matters. You're already so at odds with our dominant business culture that you are a revolutionary whether you admit it or not. And part of my goal is that we just start to admit that to ourselves that that's what we're doing. And then we can then use the tools that are necessary to protect that insight against people who would oppose it. It's so funny. I think that the majority of the audience of this podcast, which is as you know, UX designers, researchers, content folks, are just doing a victory lap right now. I can just picture them running around saying like, "Yes, we've been telling you this. It matters. " — to tell you. Why is nobody listening? Yeah, exactly. Very simple. And we talk a lot about, you know, aligning business models with user value so that if you actually make the product better, it does make the business better. This expands it a little bit though. I think the book expands a little bit too. We're not just making the product better in order to do this, but also I mean, I don't want to say society as a whole. Nothing is an absolute perfect good, but you know, we do want to consider the impact on it. Employees, the impact on the world, the impact on society. How is it affecting community? Those kinds of things. And so, I think you're I like to think that you're speaking the UX language. So, thank you. — I certainly hope so. I mean, it makes it would make sense. It would be logical to me. I think it's actually like you see that in in any I'll really all the knowledge work professions. Again, where a craft is at the center of it. This issue comes up again and again. And what's so interesting to me is this feeling that most people in the business have of being really disempowered. That, you know, this intuition is like neglected or shunted to the side or almost like treated in a condescending way like the dessert you get after you've done your serious business homework of like you're make you have to do make money and you have to have a business model this and that and margin and whatever. And I think part of the purpose in this book is just to help people who are caught in these systems to reclaim their own power. First of all, to feel confident that this way of working is in fact more profitable. And that these concerns people say like, "Okay, you got to build a business, but then you also have to consider these other factors, you know, the effect on the human beings that you touch. As if that's like a secondary or almost like um exhaust of the engines. Like, oh, you hope that you get lucky that you didn't create something super malign. It's like, but what people don't understand is that having a care for the human beings that you touch is a source of value creation. In fact, I would say even a source, maybe the most powerful source of competitive advantage that an organization can have. Can you give me an example of that? Oh, sure. Yeah. So, early in the book I tell the story of Sol Price. And he's kind of like, to me, the paradigmatic example of this phenomenon that's been going on a long time. He, if you studied retail, he's the father of modern retail. He created this company called FedMart, from which almost all big box retail companies are in some ways derived. Um the reason Walmart is called Walmart is cuz of what Sam Walton learned from Sol Price. Okay, so, a very important figure in the history of retail. Kind of a big deal. And he created this company in the '50s. Now, what's interesting about Sol is he was trained as a lawyer. So, he had this idea that when you're a lawyer, your client, you have what's called a fiduciary duty to your client. You have to put your client's needs before your own. Very natural idea for a lawyer. So, when he became a business person, he said, "If I'm going to be a discount retailer, who's my client? " "The customer is my client. I have an economic obligation, a fiduciary obligation, to take care of the customer. " So, he had a very clear order of battle. He said, "Look, the priority for FedMart is in customers first, employees second, investors third. " The exact opposite of what modern business theory would say is required for business success. And he built this really big company um over the course of the '50s, '60s, and '70s. He took the company public. He hated being a public company. He felt like there was short-term pressure constantly. And it's interesting, his competitors also hated him. But his own investors also were really irritated with him because he would always insist on doing what he thought was the right thing, even when it would cost him money. So, one of my favorite stories about Sol, there's tons of these stories, he was a legendary figure with which there's a lot of mythology, but one of the stories that's well attested is that when his competitors would try to drive him out of business by creating what are called loss leaders, basically product dumping, by selling products that he sold too at a lower cost, even below their own cost, losing money so as to lure customers away from him. So they'd put out they'd get ads in the Sunday circular that would be like eggs are half price or whatever it is, less than you can get at FedMart. And the

idea of doing that is you're trying to discredit your competitor who claims to be the low cost provider to say like we actually have lower costs. So he's not really on your side, you shouldn't, you know, shouldn't trust him. And Sol whenever they would do that, he would read the Sunday circulars too, and if he saw that the lower price on any product was available somewhere else, he would just put up signs in the warehouse telling people they should go shop there instead. He had a very strict idea, he thought that he could he practiced what are called capped margins. So FedMart ran on a strict 14% margin on every item. If the industry standard was 72% margins, he didn't care. He would have the lowest price, but if people started to squeeze the supplier and drive the margins down, he also would not, he just didn't care. And he's like, I think this is what's fair, this is what's right, and if you can get a lower price somewhere else, I'll tell you where you can find it. This is literally the plot to what is it, Miracle on 34th Street? — It's not we didn't he didn't come up with it is what I'm saying. Like that was that movie is from like the 30s. You know, I tell a story about a guy named Robert Owen who figured this out in the 1800s. So this has been going on a long time. This is a very simple idea that if you put uh customers and employees and your community first, if you take care of them, what Robert Owen called it, if you take care of your vital machines and not just your physical machines, how much more who are what much more wonderfully constructed, how much more will your returns be? So investing in people, taking care of the human beings in your like that's it's very obvious actually, and yet in business we get confused about it. So anyway, he took the company public, his investors were constantly on him to do more conventional retail practices, which he didn't want to do. So in order to avoid that pressure, he the company private. He arranged a much more sophisticated retail partner to put up the money to take the company private and get it out of the clutches of the public markets. But that didn't really help cuz now he had a board full of sophisticated retail investors who also were irritated that he kept spending money on the customer experience instead of on returns for investors. And they all understood this intuition that I don't think Sol ever really got. That was because his product was so trustworthy. Like customers would literally drive like dozens of miles out of their way to shop at a FedMart rather than go to an exploitative regular retailer. Because they trusted him he could screw them over if he wanted to. And they wouldn't even notice. Right? The more trustworthy his product, business model, the more opportunities to take advantage of his customers existed. So the more success he had, the more pressure he had to betray. Anyway, by 1975, the investors he'd been at this for 20 years now. FedMart was a huge and very successful company. His investors were pulling their hair out. And one day he comes to work and the locks on his door have been changed. He doesn't work there anymore. Oh. Okay. Incredible about this story first is twofold. One, the investors got their way. The company was reverted to standard retail practices. It went on a growth spree to grow faster, bigger, better, whatever. And everything turned out perfect, right? — And by 1982, 7 years later, the company was completely liquidated. They had utterly driven it into bankruptcy in like less than half the time that it took him to build it up. So much easier to destroy than to build. — And just by doing sort of best practices. Just by returning it to best practices. The recurring theme of this book is whenever anyone comes back to best practices, they get utterly destroyed. But when they deviate, they get rewards. In fact, one of the crazy stats I discovered in my research for this book is that if you take all public companies since 2008, so it's like a pretty reasonable data set now. Since 2008, companies that have been rated as having bad governance have outperformed companies that are rated as having good governance. Oh my god. So our best practice When I say our best practices are value destroying, I'm not exaggerating or like using hyperbole for effect, I think it's literally true. This is that whole like you have to create shareholder value, meaning you have to optimize for the quarterly, and you should just absolutely go Costanza on that. And do the exact opposite of that. Yeah, that's one of the worst ideas in the world. And what's interesting about it is it's relatively new idea in the grand scheme of things. Like if you have a window near wherever you are now, if you can see a tree, it's probably older than most of today's best practices. So like people treat shareholder primacy, it's called, the idea that the purpose of a corporation is to enrich its shareholders. People treat that like a pillar of capitalism, and if you oppose it like as you're some kind of weird communist, but this is a very, very recent idea. For the vast majority of the time there have been joint stock corporations at all, it was seen as completely obvious that companies existed to build things, to make things. And if you had in the 19th centuries suggested, as happened from time to time, some rich financier would show up and try to convert a company from like making a railroad or building a canal to enriching shareholders, like the courts would intervene. That was considered a crime. You can't And we you can't change the corporate charter. The courts would void your charter. It was illegal. Now it's a best practice. So in a short time we have kind of lost some pretty important guardrails around the way that organizations are formed. Yeah, and that shareholder primacy was like that was like what, 1980s? Yeah, the critical court cases that established it — Oh date to 1986. Yeah. So yeah, so I'm always People act like it's like monks in monasteries, where I'm like

"No, this is like Depeche Mode. " Okay, so like — How dare you? It's not that old. It's just a relatively recent civilization level wrong turn, and so we can turn again. There's no reason we have to stick with this idea. And in fact, what's so fascinating to me about it is unlike what was called general incorporation, which was the legal regime that this replaced, General incorporation was fought statehouse by statehouse over the course of the 19th century. So, it has a lot of democratic legitimacy because there was a lot of public debate about it. Shareholder primacy has never once in the history of the world ever been subject to a popular referendum or legislative action. It is the law of the land for no good reason. Huh. And so, if you look at the legal writing about shareholder primacy, they treat it as what they call a normative consensus. Meaning that everybody who matters has just decided that this is how it should be. Not just how it is, but how it should be. It is right to do it this way. And if you read their writing about it, it's wild. They're just like, yes, managers not only can, but should break the rules if it is profitable to do so. It's just considered a completely obvious fact of corporate life. So, uh if those of us who are builders by profession need to break this normative consensus and just say, "No, we don't agree. That's not what corporations are for. That it doesn't make any sense at all to us. And we would prefer to work in a different regime. " And just like this was cast like a hypnotic spell on a relatively small number of elite actors, so too we could cast a different one. Ooh. Okay, so I mean, I'm always up for casting a spell. Any kind of ritual incantation, if there's a demon I can summon, I am on board. Um and I think I'm going to speak for all you UXers now because that's what I get to do now is I think we're on board, too. How on earth Because okay, let's be clear here. I don't think UX designers and researchers often get the chance to like set policy at the highest levels. We I mean, once in a great while, you know, we start a company or something, but the vast majority of us join companies. So, how might we find a company that's not going to like just go evil as a little bit of a treat? Yeah, I think this is actually a really important question. And in fact in the later chapters of the book I address it head-on. That I'm like I'm a founder by nature. So I tend when I read a story or a case study about a company, I tend to tell the story from the company's point of view. You know, so someone creates Sol Price. I just told you Sol Price's story. I didn't tell it from his customers point of view. employees point of view. I told it from his point of view. That's how I'm wired. But we're all his customers, right? Cuz didn't that company turn into what? Costco? Costco. Yeah, you you definitely have been you have benefited from this and in fact in the later chapters I show how um Costco performs a substantial percentage of all the food inspections that are done in this country. So whether you shop at a Costco warehouse or not, you benefit from the mission that he established all those years ago. So but we all have tremendous power again over this normative consensus. And so first of all, first thing I would say is part of the reason why um the knowledge work um kind of craft professions, of which UX is one, um tend not to have a seat at the table at at gov at the governance level is partly because its concerns are insular. It doesn't see itself as part of this bigger conversation. And one of the things one of my goals in writing this book was to arm all employees, all professionals, everybody who cares about these things with the tools that would be needed for them to deal themselves into those conversations. So that cuz I think what happens in a lot of business cases if you're the person who's like look, we got to stand up you know, it's often falls to the designer. To stand up for the customer experience, right? And be like, "Listen, I hear that you can save 3 cents per widget if you uh screw people over, but that's the wrong thing to do. We And I think I know a lot of designers who feel almost embarrassed about it. They're like, "I'm sorry to be that person again, but just like last week when you came in here with your spreadsheet, I still don't think this is a good idea. " But meanwhile you have this person with a spreadsheet who's like, "Mwah mwah mwah mwah I can save the I'm the serious business person, right? I'm the person Yeah. who knows what business is. You don't know about business. Uh therefore you And I think a lot of people shrink in the face of that confidence and be like, "Okay, well, let's compromise. Well, let's screw him over half as much. " And you feel like, "Well, at least I got half a loaf, right? " What we need to learn to do when people like that come to us is to say, "Oh, hi. I see that you are proposing the liquidation of a critical asset. So, obviously we're not going to be doing that. And if you insist, I'd like to talk to your boss about it. And I'd be happy to talk to their the board of directors about it. Because I actually know what I'm talking about. This is not some like soft-hearted thing where I'm like, "Oh, quality is kind of important. " I like and you know, think about Again, for those who study business history, like think about how Deming talked about quality. He wasn't like, "Oh gosh, sorry. I have to be the annoying quality person. " He like was like, "If you don't build this in from the center of this product, you're not doing anything. You're destroying value. So, get out of

my office. " So, part of it is learning to speak the language of business in a way that we can drive change. But, the other thing for those who are not yet ready to take that courageous of a step, I understand. There's also — I mean we do have folks who maybe are, you know, a few years in and Yeah, I know. I It's not a great job environment right now for UX researchers. Totally. So, what people don't realize, even junior employees do not realize how much time and energy these organizations spend thinking about you and what you're going to do. Okay? You may feel like you have no power, but I have been in the room constantly. These organizations are addicted to the things that they think they need to get in order to have the success that they want. And talent is one of those things. So, it's funny. The same people who feel totally disempowered can hear their CEO like raving and railing about the talent shortage. It's like, "That's you, buddy. That's who he's Who's he talking about? " So, if you think about like So, it goes by the by the euphemism of employment brand. You know, it's just a question of what can we get away with before it becomes a talent problem. And so, you as the talent have the opportunity to make change. The easiest time is when you're looking for a job. People feel like, "Oh, I'm I'm the supplicant. I'm like a beggar. I can't make demands. " You don't have to make any demands. But here's what you can do. You can go into a job interview, and at the end of the interview they'll say, "Do you have any other questions? " And you can say, "Is this a mission-driven organization? " And the person will say, "Yes. " Almost certainly. They always say, "Yes. " And they always want to tell you about their principles. And their principles are always identical. And it's I mean, remember it was don't be evil until it was, "Well, maybe a little evil. " wasn't. Yeah. So you can be like, "Oh, great. Uh how do you know? " The person will say, "Oh, well, we have free beer on Fridays. And we do whatever. " Like whatever. Like we have blah blah. Here's our principles. And then they'll say, "Oh. " And you'll be like, "Oh, that's so cool. I'm super excited about that. Has that been written into the corporate charter? Or does the corporate charter say something different? " No. You ask this question, and almost certainly the person you're talking to will not know the answer. Okay? Cuz most people know Most founders have never read the corporate charter. I assure you whoever's interviewing you for this job has also never read it. — I don't know if I've ever read a corporate charter. I'm like, — Yeah, most people never have. So those of you have no idea what it says. But if you will read the book, you will find out that if the corporate charter does not specifically say that the purpose of this corporation is to achieve its mission, then it's just going to be shareholder primacy. And you can't trust anything that anybody says to you. So first of all, wouldn't you like to know the answer? But just find out like, is there a yawning chasm between what this company purports to be about and what it's actually about? Would you like to find that out? It could be really useful. But the reason it's important to ask these questions is not so much by the answer, but because you have now created a problem. Not a problem for you, problem for the person you asked the question to. They need to know the answer cuz believe me, if job applicants ask a question regularly, everyone who goes in for to do interviews will be prepped for the question. That's how it works. So that person will have to ask their boss. And she's going to have to ask her boss. And someone's got to Someone has to get an answer to this question. It's going to be discussed at the board of directors. Because there's the only way There's the only place this question can be answered. It will be answered. And just by asking the question. You haven't You don't even And if they say if they say, "How dare you ask such a question? " be like, "Oh, sorry. I just, you know, I was just curious. " Eric Reese told me. Yeah, I heard a podcast with Eric Reese. Sorry. You blame it on me for totally If enough people ask those kinds of questions, next thing you know, people a lot more senior than you are going to be like, "Now, why don't we have that in the corporate charter? " Can anyone give me a clear answer to why? And, you know, you have created a gravitational ripple just by asking the question. Now, is that the only question you should ask? No, I If you read the book, you will learn lots and lots of other things you can ask, like, "Why why don't we do it that way? " And again, you don't have to Before you're ready to like go on strike and demand things be have, just learn to ask the question. Same similarly, if you already have a job, first of all, you can ask it at the next all-hands. Just, "Hey, is our corporate Like, the good news is the corporate charters are a matter of public record. So, you actually you could just look it up if you want. But, No, it's more fun to ask. — It's way more It's more valuable to ask because like a lot of companies I know have not done this basic step, but they really should. And they actually they know at some level that they should. So, if an employee ask, it actually can sometimes empower the CEO to could go to his board and say go to her board and say, "You know, I know you guys I know we put this off even you don't want to do it, but like my employees are asking me about it. I don't have a good answer. I think I should think we should do it just so I can placate them. " I mean, do you think they want to not have it in the corporate charter though so they have the option to screw over their customers? — that's a great question. In fact, if you ask most employers for advice on this point, they will say, "You know, that's very nice of you to ask, but honestly, you should keep your options open. We preach the doctrine of optionality, which means — Mhm. your maximum valuation is uh accomplished by keeping your options in the future open. " And I always ask people to ask, "Does the optionality include the option to turn our customers into Soylent Green? " — Um — Yes. Oh, wait. No. That should be No, the answer should be no, right? — and no because like look, you ask people to trust me. Can we I'm like look, I understand we

have there's a lot of but can we at least take this one thing off the table and we won't do that. Most lawyers will be like you never know what you might — You never know. You never know. We might need to feed the orphans into the chipper shredder and You never know. And it's like well, I think there's some things we can know for sure. So, can we just write those whatever those things are that we know for can we write those things in the chart? So, just by provoking this question, we can find out that there are organizations that do they proactively want to keep open the option to screw you over. Again, wouldn't you like to know you work at a place like that? Uh I mean, honestly honestly, Eric, I might not. But no, I mean, I understand why one might So, that you can prepare. Be prepared to get a new job because if they can't do it, they will do it. That's been my experience. And people are constantly shocked. Like I remember someone at Google once told me that they went from they weren't just drinking the Kool-Aid. They felt like they were like I felt like I was serving the Kool-Aid. Yeah. And then I got ruthlessly and remorselessly laid off one day. Mhm. And I was like for what? Wait, was it all a lie? Like the most important lesson to me in the book is this a principle I call it's always too early until it's too late. Mhm. And this applies to companies but applies to careers, too. In the at the beginning, the stakes are actually a lot lower. It's easier to do these things and to like if you're like taking your very first job, like pick a job with a company where you're going to be able to grow with that company and become more like the person you want to be. Because the research shows that we become more like whoever we spend time with. And people who go like oh, this is a hot rocket ship company I got and you're like they're a bunch of rapacious but I got to go over there because I need that it's like you're going to become more like that over time. Is that really what you want? And if there's some people who are like yeah, I want to make money whatever it may be necessary. It's like well, great. God bless you. I don't I can't help you. It's fine. Yeah, yes this is not for you then. If you're if you answer those questions with yes, that rapacious sounds fantastic. — Sounds fine. much money is that? I know there are people like that in the world and I I wrote this book not to try to persuade any of those people to be different. I don't have time for that. Instead, my goal is for people who already have a sense of what I call that builder's intuition, that already know what the right thing to do is, I want to create for those people, for you, to have the power to see your ideas and your values through. And I think it's I know it's hard to believe that this power exists when you haven't exercised it, but I've seen it up close and personal. First of all, there are companies that are actually committed to this and by reading the book you can determine the things to ask in an interview to find out if a company is serious or not. There's like 20 things in this book you can just ask. Do you I say you say you're mission driven, but do you do this? Oh, no, sounds more like mission hopeful to me. Right? So, okay, find out. You'll be able to find out. If you can't find a job at a mission driven company, you can take whatever job you have to take and try to push that company to be more mission driven. But, the most important thing is although many people listening to this do not think of themselves as a founder, the other thing you'll notice if you read the stories in the book carefully is that most of the people who started the most consequential companies, like Sol Price, had a different career before anyway. So, people sometimes unexpectedly become founders. And when those people become founders, their pre-existing ethos, the philosophy that they bring with them to entrepreneurship is actually the deciding factor in whether the company goes good or not. So, even if you're not sure, if there's even the remotest possibility that this might be you one day, you better get some practice with it. You better start thinking through these issues to get more familiar with it. Like I said, not only will it help your career because you'll be part now you'll be like able to discuss much more advanced topics, the topics that are discussed in the board room, not just um you know, elsewhere in the organization, but maybe one day you'll become independently wealthy because you'll be able to take one of these insights and apply it to your own organization. So, you're saying start the company you want to see in the world? Is that uh Worked out pretty well for me. I don't see why not. It really has. Um so, speaking of which, uh what what are you up to these days other than going on lots of podcasts to talk about Well, I am 100% on this book tour right now. But yeah, in the last few years I've been increasingly working on writing and researching this book although you know, I also still have a day job at the long-term stock exchange although I don't run the company day-to-day anymore thankfully. And I also help create a AI research company called Answer AI. And you know, and I've I just continued my daily practice which is people come to me for advice on how to start a company, on how to make their company more innovative, how to bring these ideas into different kinds of organizations. It's kind of the blessing of being known as the Lean Startup guy is when people have an idea that I'm someone they're likely to call. So to me it's like that's my that's what keeps me going really is like the daily practice of getting to work with so many different kinds of people who in their own small way are trying to make the world a better place. Are you see are you seeing more companies asking about this now? Well, no. I asked them about it. You Oh, you're asking them directly. That's what I was asking — learned to ask the right question because what's so interesting to me is when I ask founders like a couple years ago I started asking people just has anyone talked to you about governance yet? Mhm. And they would be like, what huh? Like and like sometimes they'll be like

you mean like our politics? I'm like, no. Your governance. And they're like, my employee stock option plan? They're like get trying to figure out and I'm like, no. — is this an HR thing? Yeah, like what like they honestly don't even know what I'm talking about. And these are people who have an operating company with employees, customers, investors. They've never read their corporate charter. They have no idea what it says. So I started asking people like, oh did you know that the corporate charter you have is going to lead to you losing control of the company one day? How do you feel about that? And they're like, no no no. My guy set it up for me. He would never have done that. And I'm like, okay. Well, why don't you call your guy and ask him a couple questions. I'm going to tell you right now and then you call me back. Yeah, your guy probably works for your board, not for you. Does not give a crap about what's going to happen to you at all. Anyway, they will even if you have outside counsel, outside counsel thinks they're doing you a favor by giving you so-called best practice documents, which are in our world today ludicrously investor favorable. So, they call me back and they're like they feel so betrayed. My guy did this to me and he thinks he did me a favor. I'm like, right. So, now can we have a conversation about what is this What are you really trying to do here? And do you want your stated mission to be real or just um candy coating around your malignancy? And turns out that although I have had a couple people be like, nope, thanks. Happy with the candy coating. The vast majority of founders are um very happy that like somebody's willing to talk to them about how to build an organization that can stay true to itself over the long term. That's a thing that most founders really deeply crave. Um so, yeah, it's been really fun to get to do that co-design process with a lot of companies. That's awesome. What's the next book going to be about? Oh, goodness. I nostalgia has not kicked in yet. Although Oh, it hasn't yet? Yeah, no, not at all. I only just finished this one. Yeah. — Never again. It's Well, I will tell you so, one thing that is interesting about the writing of this book is in order to get the length down to something that a normal person could conceivably read, I had to cut out a whole book length um amount of implementation advice. You're the only other person that that's happened to, by the way. The Yeah, I My 400-page book originally had an 800-page outline. Yeah. Yeah, exactly. So, I actually I unfortunately actually wrote the 800 pages and then had to cut it down. I'm very pro I'm actually very proud of the editing job that there was required to make this book readable and then obviously had a lot of test readers who were kicking my butt when it was not readable. So, I know believe me, I know the difference. Um but it's interesting the people who read it who are actually designers and founders, people who are like implementer have an implementation type job, one of the feedback I get is they want more details. So, I've been developing kind of you can go you can get them for free right now at incorruptible. co. You can get the there's all these implementation guides we're building for how to do many of these specific techniques. But, I have wondered if a workbook is in our future. I was going to say, yeah, you need to write the uh the workbook. Yeah. I guess we'll see if this sells any copies first and if it does then we'll uh So, our goal is to make sure that we sell enough copies that we get the workbook, you know, for nerds — Amen. Amen to that. Well, that sounds great. That would be great. We love a template. We love a template here. — And the next goal is to get people actually proactively asking you about governance, so you don't have to just go out and ask every single person individually. Yeah. — Cuz that'll take too long. It It's definitely a full time What's funny is that after a certain point of doing this for a while, people the word started to get out that if you have a weirdo governance problem, I'm a person you can call about it. That's actually how I met the team at Anthropic when they were first starting. They had this really difficult problem, which is they wanted to build a company that was dedicated to AI safety, not investor maxima maximalism. And they had just lived through, you know, this trauma of OpenAI, you know, they from their perspective deviating from what they thought it was all set up to do. Uh and so that that's actually how I met them and they were one of the companies early very early company who was like, "Oh, great. Someone's actually thought about this. Let's do it. " instead of like, "I don't know. Investors might not like it. " Like they actually had the courage of their convictions and they did a bunch of stuff, which ultimately culminated in them creating the long-term benefit trust for those that don't know that story is in the book. Um so, yeah, it's um it's interesting. One of the career lessons I've definitely learned is that if you stand for something specific, even if it pisses people off in the short term, in the long run, like the you never know people you never know when you're going to need someone with a certain skill set. And if you stand for something specific, people And I remember even this was true in the early days of Lean Startup, as you well remember. There were a lot of people that get really annoyed about it. Oh, so annoyed. Quite a few times I thought I was going to be fired over it. And I remember thinking to myself, you know, those same people who are firing me today one day in the future they're going to have some company that's going too slow and they're like, "You know what we really need? We want someone who's irrationally committed to the idea that you should make scientific decision make, you know, scientific decisions and do it fast. Do we know anybody like that? " And they're like, "Oh, remember that guy we fired? That guy's impossible because he always thinks that. So, like, that was annoying back then, but now it's going to be super useful. " And that has in fact been my experience in my life, like, including some of those people who really were very annoyed about lean startup have in the subsequent years

been like, "You know what I really need? I really need a lean startup person. " — That annoying guy who's now going to be Oh my god, let's get him over here. And I just feel so much more. I feel like that would never have worked for me if I had tried to shave off the rough edges and not bother, you know, not worry or bother anybody. But by standing up for what I thought was right, I think it created a me-shaped hole in people's minds. You know, they're like, "If you ever have a problem that's this shape, now I know who to call. " And I think that has been really helpful. Yeah, you're like that the sand that, you know, creates the pearl, you know, eventually. — All right, yeah, no, I love it. Okay, so our our I think that is your next book, Irritating Your Way to Success. Um, so, I just, you know, TM, I'm going to — I'm going to want to co-write and credit on that. So, listen, Eric, it has been lovely talking to you again. I'm very, very excited about the book. I'm excited that somebody is talking about this. And like I said, I think uh at least I hope that a lot of the UXers out there who have, you know, railed about some of this stuff, not in nearly the detail and don't really know the answers yet are going to want to read this book. Um, I know I found it extremely helpful. And I found it hopeful, frankly. So, I mean, and you know, I could we could use some of that. So, thank you. — dark times, so, yeah, I think we have to remember that our grandparents and great-grandparents went through far darker times and they somehow managed to keep the faith. Yeah. — And when they came out of those dark times, they used the energy of that to build new institutions that still govern our world today. So, like I think part of my goal in writing this book is for people to feel that sense of hope and to say like and to keep the faith, but not just to assume that the problem will fix itself and start working on the like well, how do I position myself for maximum advantage after the problem is already solved? Drives me crazy. We see way too much of that today. But, instead realize no, it is my obligation. This is the calling of our generation to turn and put some of these things right. So, we may not feel powerful. We may feel depressed and we feel a sense of doom, but too bad. Yeah. We We're all we got. — do it? Who else is going to do it? Yeah. This is who's This is who's available. So, we may not feel qualified, but we're what we got. So, we may as well get to work. Yeah, that horrible realization that you in fact are the adult in the room. Um yeah. All right. Well, again, thank you so much. It's been great talking to you. Um everybody, that was Eric Ries. You can and should check out his podcast at EricRiesShow. com. And you can find his new book at incorruptible. co. If you'd like to keep up with all of our new episodes here at NNG, make sure to follow us on the podcast platform of your choice and consider signing up for our weekly newsletter where we share the latest UX research and practical advice for practitioners just like you. Go to nngroup. com to learn more. This show is hosted by me, Laura Klein, with the invaluable help of our executive producer, Teresa Fessenden. That's it for today's show. Until next time, remember, keep it simple.