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How To Be Incorruptible with Eric Ries · Founder Mode

0:00
You know, it's kind of obvious when you put it that way that
0:03
I'm like, how did I not, how did nobody tell me about this?
0:06
Like, how come I missed it? I lived, you know, I was today
0:08
years old when I found out that the more successful an
0:10
organization, the more valuable it is as a target.
0:13
It's so obvious once you say it. And yet everyone always taught
0:17
me and I, I meet founders every day still who are taught that
0:21
success will make you powerful, powerful power will give you
0:23
freedom. So don't worry about it now.
0:25
Like they pat you on the head, like, oh, don't worry about your
0:27
little mission. That's nice.
0:29
Just get product market fit, get super rich and you can do
0:31
whatever you want. Hey, you're listening to Founder
0:48
Mode. Where we explore how companies
0:50
are actually built and what happens after they succeed.
0:53
Today's a special one. It's about what comes after
0:55
growth. Yeah, not how to build fast, but
0:58
how to build something that survives its own success.
1:00
We've both seen companies hit product market fit and then
1:03
slowly drift away from what made them special.
1:06
Yeah, it's rarely one big decision.
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It's a series of small ones that compound over time.
1:11
Kevin, you're not a big squishy mission vision values guy.
1:15
You're a let's win and make some money kind of guy.
1:19
How does Eric's ideas about building today in this moment
1:23
that it's really more about more about doing things kind of in a
1:26
way that's not just to make money, but making money the
1:30
right way. Like how does that stuff land
1:32
with you? Yeah, it's interesting.
1:33
Like I've always talked about like capitalism being a
1:36
scoreboard. And I think I'm super excited to
1:39
talk to Eric. I mean, I was a early reader of
1:41
his initial book, The Lean Startup, and I think a lot of
1:43
the ways we're building today still kind of view that ethos of
1:46
how to build and think about being lean.
1:48
But I think this next book that we've both had a chance to kind
1:51
of preview leads into this next sort of like, man, what happens
1:55
if it starts to work and when it starts to get big?
1:58
And then how do you sort of like make sure that the thing stays
2:01
under control? And I think for me, you know, as
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I'm older and I've thought about this and done a lot, you know,
2:06
multiple companies now, the thing that I keep thinking back
2:09
to, which is like, are we making like durable decisions?
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And so I think to me, it's less about, and again, like maybe
2:15
that is the values or the missions, like underlying
2:18
premise or that's the word that somebody would use for what
2:20
we're doing. But I think we're a lot more
2:22
deliberate when JJ and I think about like, and you know, how
2:25
are we going to play this game and how do we want to sort of
2:28
like approach the market? How do we want to approach what
2:30
we're building? How do we want to pick who we
2:32
work with, right? And so I think we've been a lot
2:34
more deliberate. About that.
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On picking customers and picking how which customers we
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prioritize, you know how we go to market.
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And quite frankly the team that we picked, Jason, I'm sure
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you've got a startup corruption story.
2:46
I know we've talked about in the past.
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So like, do you wanna tell that? Yeah, I, you know, I wanna kind
2:51
of redact the, the names to protect the guilty.
2:55
But I am going to, I am going to kind of share my, my close up
2:59
and personal. And this is from over a decade
3:01
ago, my first startup experience ever.
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I've worked in TAC, right? I worked at Google, but I've
3:05
never started a company. Anybody that wants to go look
3:07
this up, they can figure out who I'm talking about.
3:08
But I'm not going to say names because I don't want to get get
3:11
get blown up. But I worked with someone who
3:15
was on the wrong side of this stuff, like pretty very
3:19
obviously to the point where they were asking me to change
3:23
numbers and VC pitch decks and doing things that were just very
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obviously like on the, you know, black and white, right and
3:30
wrong, right. And what I learned later about
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that person that kind of connected all the dots for me.
3:35
And I, this is my own due diligence.
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My first startup and being a Co founder and just not knowing
3:39
what I was doing was that they had been indicted by the
3:41
Department of Justice and arrested by the FBI.
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And like their first startup, they it blew up.
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And the only reason I didn't find that out just Googling the
3:50
person name, because I did do that was that they actually
3:52
changed their name after that experience to a different name
3:55
so that it would be less likely that a future investor or
3:58
employee or Co founder would discover these toward facts
4:02
about them. So all that to say, like you're
4:05
coming about choosing the right team, it just lands with me a
4:07
lot and the idea that we can be incorruptible if we align, you
4:11
know, our values and our actions.
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And I think what Eric's going to talk about is like this boring
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thing that's called governance is actually way more than just
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governance. And So what that experience did
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for me was make me rethink who I choose to work with in a big
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way. And and my approach to finding
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people to Co found companies with and how I how I operate.
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And I've learned a lot of other new painful lessons since then.
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But that particular lesson I learned learned that way before,
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you know, I go any further in my own name and shame spiral.
4:39
We should we kind of get get going with Eric.
4:41
Yeah, I mean, Eric has spent years, I mean literally wrote
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the book on lean startups and kind of how they're built and
4:47
now how how they break. Yeah, and more importantly, you
4:50
know, I think, and I know this because we we got to read the
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book, right? He's talking about how to design
4:55
them so they don't. So should we bring him out,
4:57
Kevin? Let's do it.
5:09
Eric, welcome to founder mode. If you've taught a generation
5:12
how to build startups and you know, now you're asking a
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different question. How do you protect once you what
5:16
you've built, you know, once it starts working?
5:18
Yeah, well, thanks for saying that.
5:19
And yeah, you know, thanks for having me.
5:21
Yeah, we're excited to have you here, Eric in in the intro in
5:24
the book, the new book, which I'm super stoked we got a got a
5:27
chance to take a look at. Thank you for that.
5:29
You described the the moment with the professor and the kind
5:33
of that founder wake. When, When did it really hit you
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that building something great actually makes it more
5:38
vulnerable, not less? You know, it's kind of obvious
5:41
when you put it that way that I'm like, how did I not, how did
5:44
nobody tell me about this? Like, how come I missed it?
5:47
I lived, you know, I was today years old when I found out that
5:49
the more successful an organization, the more valuable
5:52
it is as a target. It's so obvious once you say it.
5:55
And yet everyone always taught me.
5:57
And I, I meet founders every day still who are taught that
6:00
success will make you powerful, powerful power will give you
6:03
freedom. So don't worry about it now.
6:05
Like they pat you on the head, like, oh, don't worry about your
6:07
little mission. That's nice.
6:08
Just get product market fit, get super rich.
6:11
Then you can do whatever you want.
6:12
And of course, if what you want is to protect the mission, it's
6:15
often too late when it's too. Early that's sort of tracks
6:20
predators, right? I mean, like this is that like
6:22
the, you know, once, once it becomes valuable, that's really
6:25
when you sort of like at some level amp up the pressure.
6:28
What are the subtle signs that like a founder would see like
6:31
somebody early in their stages, like, hey, I think I'm starting
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this thing's starting to work. Like what is that first couple
6:36
signs that you think? Yeah, Well, this is, that's
6:38
funny to say that because the professor, so the pressor's a
6:40
real founder and I have his permission to tell his story.
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But I've been, I mean, calling him just the professor to
6:44
protect his anonymity because he was very real with me, which I,
6:47
I think is so rare. You know, we were, I was talking
6:50
to him about his new startup and about, you know, how we can
6:53
protect it in the long run. But he was just beginning his
6:56
entrepreneurial journey. He had like, his first product,
6:58
first investment conversations. Like he just started.
7:00
He's like recruiting incredibly talented people out of some of
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the best laboratories in the world.
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What if the investors want something different?
7:07
He's like, well, I'll tell them no.
7:08
He's like, but couldn't they fire you?
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He's like, oh, yeah. So he's like, so he's like stuck
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at the employees trying to figure out like, how do I get
7:14
people on board with this? But then when he talks to
7:16
investors, they're so condescending.
7:18
They're like, Oh, you're if you're worried about that, maybe
7:20
you shouldn't be running a for profit company.
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Like, I guess you're not serious about business, right?
7:24
Like it's just, it was like really bizarre.
7:26
He was like living in these two different worlds.
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Anyway, I was telling him, look, I, I can help you with this, but
7:31
not right now because I'm going into this event for this founder
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and I'm watching people stream into the venue and I'm like, Oh,
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there's a lot of old friends here including like, I was like,
7:38
wait, that guy got laid off by the founder.
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We're going to celebrate tonight and he's still here.
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He like flew in on his own expense to come to this event.
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Like, wow. And I'm telling this all to the
7:47
founder, but I'm trying to explain what's going on.
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And he's like, wow, mad respect. That's the kind of company I
7:52
want to build one day. I'm just like, dude, you are not
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listening to me. He doesn't work there anymore.
7:57
This is not a party. This is awake.
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And he's like awake. Oh, sorry, did somebody die?
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I'm like, no, nobody died. He's like, oh, did the company
8:04
go bankrupt? Nope.
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Company's doing fine. He's like, then how is it awake?
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I'm like, this guy made more money for his investors and they
8:12
could spend in five lifetimes. And yet it wasn't enough.
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And when it wasn't enough, they ousted him anyway.
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And so all of us who feel this loyalty to this company, we felt
8:22
like we could really trust it. Now we don't trust it anymore.
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That's where mourning the loss of the thing that made the
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company worth investing in in the 1st place.
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And then he's like, wait, are you telling me that that's going
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to be me someday? I'm like, that's what I'm trying
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to tell you. Yes, you are 100% on the Express
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press train to this exact outcome.
8:40
According to Harvard Law School Law School, they did a study
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among venture backed companies that are built with standard
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governance early. 80% of founders will no longer be CEO
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three years after an IPO. So everyone thinks they're the
8:54
exception and some people are as long as you get lucky.
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I know some people who are the exception.
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It happens, but you're betting your life on this.
9:01
Hi. Anyway, So I'm like to the
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professor, I was like, listen, he's like really freaking out.
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And I'm like, listen, don't freak out.
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I can't have you freaking out right now because I really have
9:07
to go into this thing. But look, I promise you I will
9:10
help you. But he's like, before you go, I
9:11
just need to know, is it possible to build an
9:14
incorruptible company? I was like, well, it's kind of a
9:16
good news, bad news situation. The good news is, yes, it is
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possible. I have seen it with my own eyes.
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I know how to do it. The bad news is you've already
9:24
taken a bunch of steps in the wrong direction.
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So if you actually are serious about this, you need to reverse
9:29
course like as soon as humanly possible, because the longer you
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wait, the harder it gets. And I give that founder a lot of
9:33
credit, the professor, because he, he took it seriously and he
9:36
really did like figure this out. And I'm grateful to him that he
9:39
took what I had to say seriously so.
9:40
Eric, in the book and in this tour you're doing to promote it,
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you use the word corruption, right?
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And you just said it again, incorruptible.
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And is there a way? Why that word?
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I thought long and hard about it.
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And of course, I did not know when I set out to write this
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book many years ago now that corrupt would be such a salient
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issue in the public's discourse at the time it came out.
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I wish my timing was worse, to be honest, because it's been
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grim. Here's the problem.
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We all know in our bones that something has gone wrong in our
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economy. Like, we know it, OK?
10:11
The richest people, you know, are miserable.
10:13
They're practically having a nervous breakdown in public on
10:15
Twitter everyday. What's going on?
10:17
Like this is not that's not good.
10:19
Like, if we're all these moral compromises for if that's what
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it leads you to, like, that's scary.
10:23
We know that. Like your favorite brand,
10:26
someone said to me the other day about a certain brand, oh, I
10:29
hope they hope they make a lot of money.
10:30
And they said actually, no, no, no.
10:31
I hope they're successful, but not successful enough to be
10:34
taken over by private equity. OK, right.
10:37
Like, we know, like we're living this every day.
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We know that our favorite brand is going to be in shitified just
10:43
by like statistically speaking, that's what happens to all the
10:45
really good brands. That's what goes happens with so
10:46
many products like we're living this carnage all the time.
10:49
If you're around startups, as long as you guys have like how
10:51
many founders you know who've been ousted?
10:52
How many founders you know who lost control of their company
10:54
And it like it's even Brian Chesky even calls it not losing
10:57
control of your company to your investors.
10:58
You can lose it to your employees as the temptation to
11:01
follow best practices and OK, Rs and all this stuff like eats the
11:04
company from alive from the inside.
11:06
How many bored betrayals have there been in the book?
11:08
I give hundreds of years of these case studies.
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This is like a really significant problem that's
11:12
getting a lot worse, but we don't know how to talk about it
11:16
because it's like we've been taught that this is just a
11:18
natural law. It's just inevitable that this
11:20
happened. So like, don't make a big fuss
11:22
about it. It's just late stage capitalism.
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It's just late stage capitalism, but like I don't accept that.
11:27
And I was thinking to myself, what are we going to call this
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mission drift? What is it like a navigation
11:32
error? Like come on, it's ridiculous,
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like bureaucracy. That sounds like you're just
11:35
have too much paperwork. No, like there's something
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essential, beautiful this like spark in these companies is
11:40
being and lost and at the same time, the people who are
11:43
capturing it for themselves, they are using these companies
11:46
to make money without creating value.
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And that's when it clicked for me.
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I was like our grandparents and great grandparents would have
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had no trouble talking about this.
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They wouldn't have found this confusing at all.
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They would be like, oh, that's corruption.
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You guys don't know about corruption.
11:59
No, we have narrowed the definition of corruption so much
12:02
that it hardly applies to anybody anymore.
12:05
Like, we've legalized insider trading, we've legalized stock
12:07
buybacks, we've legalized like every kind of plunder and
12:10
exploitation you can imagine. Many of those things our
12:13
grandparents would have viewed as crimes, let alone morally
12:16
dubious ways to make money. And in fact, it is the most
12:18
ancient wisdom in the human species, going back to Aristotle
12:21
and Thomas Aquinas and lots of other people, that there are
12:24
better and worse ways to make money.
12:27
So we who build things for a living, we, I just think we can
12:30
just stop pretending that we think all the ways of making
12:33
money are equally good. Nobody really thinks that.
12:35
Like not a single builder I ever meet where I'm like, do you
12:37
think everyone making money in our economy is creating value?
12:39
That I know like, but are you comfortable saying out loud that
12:43
you think building things is the best way to make money?
12:45
They're like, well, I don't want to offend anybody.
12:47
They don't seem to mind offending you.
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What are we doing here? So I just feel like, let's cut
12:51
through the bullshit. Let's just call this thing what
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it is. This is corruption, plain and
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simple. It corrupts the moral logic of
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our economic system, which relies on voluntary uncoerced
13:01
value of creative transactions for its moral logic.
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Otherwise it's a monster. It's a horror.
13:06
The people who want to blow the whole thing up, like they've got
13:09
a point because many of the transactions we do today violate
13:12
this simple premise. But when you do it properly,
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this is what's so wild to me. For all the corruption and all
13:18
the sense of fatalism and negativity you get from people
13:21
today, I go, it's just inevitable.
13:24
It's human nature. It happened when companies get
13:26
old, when they get big, when they get this, when they get
13:28
that. Yeah, yeah, yeah, yeah, yeah.
13:29
But if it was inevitable, why are there exceptions?
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So the book is kind of a double mystery, like 2 Agatha Christie
13:35
novel stacked on top of each other.
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One, If this is value destroying, why does it happen
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at all? Because capitalism, supposed to
13:41
be about competition and value creation, so forgives.
13:44
Why is this such a common phenomenon?
13:45
And secondly, if it's inevitable, why are there
13:47
exceptions? How can there be exceptions?
13:49
And when you study the exceptions and you help build
13:51
some of the exceptions as I have, you will discover that
13:54
they basically violate every one of the best practices we've been
13:57
taught are the only and best way to build a company.
14:00
You say, like, I mean, people blame culture, leadership, but
14:03
really it's this structural thing.
14:05
And I think this like, I mean, what you're saying in best
14:07
practices is like, hey, this is the structure that was set up,
14:09
but that's actually what's creating the problem in many of
14:12
the cases, like 100% what are the forces that are actually
14:15
pulling these companies off track?
14:16
Like, is it just the fact that we're all following the same
14:19
rules that are wrong? No, no, that, that I mean that
14:21
is definitely part of it. We are definitely making it
14:23
worse when we could be making it better.
14:25
So that's that would be a good fix.
14:26
But to understand it, just thank you for asking the question the
14:29
way that you did because part of the challenge with this is to
14:32
get people to stop paying so much attention to the surface
14:35
level of organizations and start looking at the underbelly.
14:38
Like what are the forces that act on organizations?
14:41
So when you look at an organization, what can you see?
14:43
You could see the personalities, the big egos.
14:45
You know, people love to be like, you know, John Mackey
14:48
versus Wall Street, like who's going to win?
14:50
OK. Like drama, we see drama, we see
14:52
people we see if we're a little more sophisticated org chart,
14:55
business model, strategy for a little more sophisticated
14:58
culture, vision, you know, values.
15:01
OK, good, good. Those are all the things you can
15:02
easily see. But this book is about the
15:05
forces that are underneath all that.
15:07
What are the forces that act on organizations that drive their
15:10
behavior, whether you want that to be or not.
15:12
And I've, I feel like my whole life, my whole career, I've done
15:15
battle with these forces without knowing what they were.
15:18
And it's like a scene, you know, the scene in the movie where the
15:19
hero's blindfolded is getting punched from all sides and
15:22
you're like, I can't see what's happening.
15:23
I help so many companies build a superior management system only
15:27
to see it get totally unwound by a betrayal in the boardroom.
15:31
Like we could, we built, I've built systems that like we've
15:33
trained hundreds of thousands of employees.
15:35
It takes years of work. It takes one day for a board to
15:38
be like, nevermind, let's nuke this thing from orbit.
15:40
And the money that's available for this kind of corruption,
15:44
like the billions upon billions of we were spending on stock
15:46
buybacks when you could be spending it on innovation.
15:48
It's just like, it's just like these companies that are so
15:50
starved for resources are able to waste infinite money on this
15:54
nonsense. It's just like, it's just, it's
15:56
just like, why is this happening?
15:58
I can't understand it. And I call it the force that
16:00
everyone obeys but no one controls.
16:02
They are built with stronger. Stuff you describe in the book,
16:05
companies as super organisms with their own will.
16:08
I've actually felt that I've been inside of some really big
16:11
and really small companies, so I that resonated with me.
16:14
It's a pretty radical idea though.
16:15
Like how does a founder actually lose control of something they
16:20
created? OK, this, for people outside of
16:22
the trade, this idea is very confusing and hard to
16:25
understand. And for people who've been
16:27
founders, they're like, yeah, what do you think it was like,
16:29
we've all had that experience where it's like Frankenstein and
16:32
his monster. It gets away from you.
16:33
It just starts to do things that you didn't tell it to do.
16:36
And I think what is confusing for a lot of founders is we
16:39
assume that the organization's values will naturally be our
16:43
values in the same way that parents assume that their kid
16:45
will join the family business. You know, like it's a very
16:47
natural mistake to make you confuse yourself with your
16:51
child. So once you understand that
16:52
organizations are literally a lot, they are a category of what
16:56
in the scientific literature is called emergent intelligence.
16:58
If you're a founder, you have to understand that when you create
17:02
a company, you're engaged in an act of motherhood.
17:04
You are birthing it and you do not own it.
17:08
I don't care what it says on the legal docs.
17:10
You have at best the opportunity to nurture it, to try and get it
17:15
to care about the things that you care about.
17:17
You can work to bind it to your values if you know what you're
17:20
doing. So organizations are the same.
17:23
So many founders I know are like, I'm the boss.
17:26
I tell people to do stuff and they do it.
17:28
Therefore I can control what this organization becomes.
17:31
It's like, oh, really? You can command them to have
17:32
certain values. Impressive.
17:34
Most impressive. Like, no, you can't.
17:36
You can control what they do and you're not there.
17:40
And so then people say, I guess there's nothing I can do.
17:41
No, that's not right. Just like with health, these
17:43
things can be cultivated but not commanded.
17:46
And a huge part of the book is actually the operational
17:49
techniques we need to build an organization that actually is
17:52
aligned to the thing we intend for it to do.
17:56
But it's not easy. It requires a lot of work and
17:58
vigilance that most founders shy away from.
18:00
Yeah. I mean, you're proposing like a
18:01
different kind of organization, you know, something that
18:03
protects the mission more structurally like, but what does
18:06
that actually look like? You know, you're starting your
18:08
company, you've got your first seed round 6810 people.
18:12
Like how does that show up on a week to week basis?
18:15
I'm gonna. Answer.
18:15
I'm gonna answer your question, but let me give you a story
18:17
first to illustrate where we're going, OK?
18:19
Because this can feel very abstract to people.
18:22
And then they talk themselves out of having to worry about it
18:24
and and they're surrounded. If you have advisors and and
18:27
lawyers, the best. Practices, Eric, Why would we
18:29
need to do something They are so.
18:31
Good at telling you that you're the exception.
18:33
You don't need to worry about it.
18:34
I tell the story about about a founder who came to me for for
18:37
advice once, and his feces were just like, Eric's such a downer.
18:40
If he really believed in your vision, he wouldn't talk to you
18:43
this way. You're the exception.
18:44
You're special. That founder was fired from his
18:47
own company 5 months out of Drew going public.
18:49
After he told me that his investors told me he had nothing
18:51
to worry about. It's just like, like clockwork.
18:53
I'm in. Yeah.
18:54
Anyway, So let me tell you a story of this, like, give you
18:57
the whole thing in one story, and then we'll unpack how it
19:00
relates to a modern example. OK.
19:02
I want to tell you the legend of Saul Price.
19:05
OK, Saul Price was the founder of a company called Fedmark and
19:08
he is widely considered to be the father of modern retail.
19:11
If you ever wondered when Sam Walton was a was a youngster and
19:15
thinking about starting a a little store in Bentonville, AR,
19:19
why did he call it Walmart? He was paying tribute to Saul
19:22
Price. Walmart is named after Fedmark.
19:24
So he built this company in a very unusual way.
19:27
He was a lawyer before he became an entrepreneur.
19:30
And as a lawyer, he was trained to have what's called a
19:33
fiduciary duty to his client, meaning he has to put the
19:36
client's interest before his own.
19:38
When he became a retailer, he asked himself, who's my client?
19:41
And unlike a lot of people, he understood that the customer is
19:44
his client. If you're going to be a discount
19:46
retailer, the financial well-being of your customer is
19:48
job 1. So he believed this so strongly
19:51
that, for example, he would put up signs inside his own store
19:55
whenever a competitor would try to undercut him on price,
19:57
saying, don't buy this object from me.
19:59
You can get it cheaper down the street.
20:01
Can you imagine that today? Like someone like, yeah, don't
20:03
buy it for me, buy it at Amazon is cheaper.
20:05
No. Yeah, he would do that.
20:06
He was really committed to it. He practiced what are called
20:08
capped margins. It's funny.
20:10
We teach in business schools that margins are a source of
20:12
strength. So you want high margins.
20:13
But then we also teach Jeff Bezos famous dictum that your
20:16
margin is my opportunity. So which is it?
20:18
Our margins. As a source of strength or are
20:20
they a liability? Well, Saul understood they were
20:22
a liability. So no item at Fedmark could be
20:24
marked up more than 14. Even if he could get away with
20:26
it, he wouldn't do it. He did a bunch of other stuff.
20:28
He practiced the what he called the intelligent loss of sales.
20:31
And he only had limited skews, only the highest quality
20:33
products. Like it was just a very
20:34
particular shopping experience that was like really aligned to
20:38
run his business philosophy. So Fedmark was a company with an
20:41
ethos, a character, so you could trust it.
20:44
You knew what it was going to do.
20:46
And as a result, customers love shopping there.
20:48
People would drive miles out of their way to shop at Fed Mart.
20:52
He took the company public. He made a ton of money for
20:54
himself and his investors. It was going great.
20:56
But as a public company, he felt this gravitational pull that
20:59
we've been talking about, the desire for corruption.
21:02
Investors wanted him to raise prices because he could get away
21:05
with it, cut wages because he could get away with it.
21:07
They wanted faster expansion. It was never, ever enough.
21:09
This is like a voracious mall, this thing, you can never give
21:12
it enough. And so Saul was trying to find a
21:14
solution to this and he brought in a new controlling investor to
21:17
buy out the public market investors, which he thought, OK,
21:19
here's someone who's going to understand this business, We're
21:21
going to get a new board, and now we're going to be able to do
21:24
things right. But the board was subject to the
21:26
same financial gravity as everybody else.
21:28
And all this culminates one day, just like my friend at the wake,
21:32
Saul Price comes into work one day and he can't get into his
21:35
office because they have changed the locks on the door.
21:38
He doesn't work there anymore. Now, this happens to be one of
21:40
these really perfect AB split tests in business history
21:44
because we can ask what happened to Fedmart?
21:46
What happened to Saul? I'll tell you, Fedmart, the
21:48
investors got what they wanted. They got Saul out of the way.
21:50
With him gone, they could change the ethos of Fedmart as much as
21:53
they wanted. So what do they want?
21:54
They wanted higher prices, lower wages.
21:57
They wanted faster growth. They wanted conventional retail
22:00
best practices. When they got it, they got it
22:02
good and hard. And by 1982, seven years after
22:06
ousting Saul, they had driven the company into liquidation.
22:08
It had taken Saul more than 20 years to build what they
22:11
destroyed in seven. You think that's the first, 1st
22:13
or last time that's happened to business history?
22:14
Like ask. Ask a founder, you know?
22:16
Yeah. They'll tell you a story after
22:18
story. This is extremely common, this
22:19
pattern. Saul is like your classic
22:21
entrepreneur. I love this detail.
22:23
He took two weeks off, and then he was back at work.
22:26
He leased the office upstairs from Fed Mart and started his
22:30
new company, which he called the Price Club.
22:32
Now, when I was a kid already, Price Club was AI.
22:34
Get shivers when? You say I was Price Club kid
22:36
when I was the growing up. Yeah, we are my.
22:38
Family shop for everything, a price club.
22:39
It was like, I didn't even know, by the way, that the price in
22:42
Price Price Club was a guy's name I just learned.
22:45
Today I just thought. It was a discount retailer.
22:47
They was just awesome. They had all the good stuff.
22:49
So we went there all the time. But today, most people don't
22:52
remember Price Club because of what happened next.
22:54
So one of the people who quit Fed Mart in protest when Saul
22:58
was fired was a guy named Jim Senegal.
23:00
Jim Senegal had worked his way up from stock boy to executive
23:04
at Fed Mart. Like there's a very funny story
23:06
about with the first time he met Saul Price at Saul Price, like
23:08
yelling at him for stacking crates incorrectly.
23:12
He's like, you're going to hurt yourself or worse, the
23:13
merchandise. Like that's kind of his.
23:15
That was his attitude, you know, very gruff, very difficult to
23:17
please person. Jim quit as he was an executive
23:20
already, but he quit in protest. He went to go work with Saul at
23:22
Price Club. Saul and Jim both understood
23:25
something that Fedmart's investors didn't.
23:26
They understood that when people see Fedmart, they see customers,
23:30
warehouses, inventory, business model, money stuff.
23:34
They see the surface characteristics, but they're
23:36
like, no, underneath Fedmart is an engine that acted motivates a
23:40
different force, not financial gravity, but something
23:42
different. This engine is replicable.
23:45
Jim especially understood that this was not about Saul and his
23:48
charisma. This was an engine that could be
23:50
replicated if you understood how it worked.
23:53
It was an engine that generated trustworthiness, the most
23:56
underrated asset in business. So after getting Price Club on
24:00
its feet, after a few years, Jim Senegal, with Saul's blessing,
24:03
left to start a new company. And a few years after that, that
24:06
company and Price Club merged to form a company that they called
24:09
Price Costco. But today we just call it
24:12
Costco. Costco today is a $400 billion
24:16
public company. And if you ask most normal
24:18
people about who complain about late stage capitalism, if there
24:21
are any exceptions to the rule, they're always like, well,
24:24
except for Costco. Whatever we're complaining about
24:26
cowardly companies, companies that mistreat their employees,
24:29
companies that are bad for their local environment drive local
24:32
small business out of it. Everything you complain about
24:34
everyone's always like, well, except Costco.
24:36
Why? How can Costco be an exception
24:38
to all these rules? Well, Costco has the two
24:40
elements we need in order to build an incorruptible company.
24:44
It has the ethos of salt price. It still practices his 14% cap
24:48
margins fiduciary. The customer is still alive and
24:51
well at Costco. I saw this on social media the
24:53
other day. A customer wrote in to the
24:55
customer service hotline e-mail address at the like Tennessee
24:59
Costco to complain that in the food court where they sell the
25:03
Dollar 50 hot dog there wasn't any ketchup and got an e-mail
25:07
back from the CEO of Costco apologizing.
25:11
Right. So like somebody really cares
25:14
about the ketchup? Free ketchup they give away with
25:16
$1.50. Hot dogs.
25:19
Because the hot dogs are not. It's not about the hot dog.
25:22
It's not about. The hot dog, it is a symbol of
25:24
the promise that they have made to their customers that they
25:27
will never exploit from. They are true to their own
25:29
values. Yeah, that's what's so missing
25:32
in our society today. So you want to know why did
25:35
investors destroy Fed Smart but not Costco?
25:38
I hear I ask you this question all the time.
25:40
They're like, well, Costco's so big, but that's a dumb answer
25:43
because like the government. 'S choice, right?
25:44
How'd it get so? Big of course Jim Cynical was
25:47
there the day Saul Price was betrayed.
25:49
He didn't want that to happen to his company.
25:51
So Costco was built with an attribute I call integrity.
25:54
This is the second of the key things we ethos plus integrity.
25:57
If you remember nothing else about this book, the formula is
26:00
ethos plus integrity. So what is integrity?
26:02
Integrity is 2 things. It is the ability to make and
26:05
keep a promise like that Dollar 50 hot dog comparable Big Mac
26:09
Big Mac used to call it cost $1.60 when a hot dog was first
26:13
introduced. Same Big Mac cost $7.00 today.
26:16
Let's Go sells 200 million of these hot dog combos a year.
26:20
That's more than every Major League Baseball stadium
26:22
combined. So if they could raise the price
26:24
to $7.00, that's a lot of net income.
26:26
It would add straight to the bottom line.
26:28
Why don't they do it? Because they have an ethos,
26:31
they've made a promise, but they can keep it because they have an
26:34
attribute called structural integrity.
26:36
Let's Go is protected by a governance portrait, prevent
26:39
outsiders from meddling in their affairs.
26:42
Their board sees their job as a bulwark against pressure rather
26:46
than an agent of financial gravity.
26:48
This simple, this distinction in how the company is structured is
26:52
the reason why Costco is this incredible outlier.
26:55
Now people hear that and they're like, I guess you're anti
26:57
shareholders. I don't think so.
26:58
Costco has made an unbelievable amount of money for its
27:01
shareholders. Like Buffett and Munger were
27:04
like Munger's been on the board, on the board of Costco for
27:06
decades. Like they made so much money
27:08
just being buy and hold investors in a place that has
27:11
this special attribute. So what I really want you now go
27:13
back to early stage founders. OK?
27:14
Cuz like, cuz what the problem with telling stories about long
27:17
term thinking is all the stories feel very inaccessible.
27:20
You're like, well, Costco is such a big company, but every
27:22
one of these companies was a startup once, of course.
27:24
Small ones. Somebody had to.
27:25
Make the decision are we going to spend extra time and energy
27:29
on ethos and structure or not? Saul didn't to his detriment.
27:32
My friend at the party didn't what the professor did because
27:35
he understood where he's headed Now he sees this potential.
27:38
He's like, I want to create a Costco kind of company, not a
27:41
Fed mark kind of company. So if you're just starting out,
27:43
if you're an early stage company, it's so natural to feel
27:46
like I don't have time for this. I just got to get product market
27:48
fit. No, no, no, no.
27:49
It's like, well, first of all, you're assuming that doing this
27:53
work to be trustworthy will make it harder to get to product
27:55
market fit. But says who?
27:56
That's not what the data shows. The more people trust you, the
27:58
easier everything you will need to do, including raising money.
28:01
Raising money is so much easier if you're a high Trust Company.
28:04
Recruiting talent is a way is a huge advantage.
28:07
You will be able to not only get customers to be loyal to you if
28:11
they trust you, customers are far more likely to try a new
28:14
product from a brand that they perceive as trustworthy.
28:17
So there are This is the second of these fundamental forces that
28:21
act on organizations. There's never too early to worry
28:24
about this. It's never too early to try to
28:25
activate this power. If people can trust you, all
28:28
kinds of good things happen. Can you make?
28:30
Can you give the like tactical moves the like so?
28:33
Basically, if you think about this, we're going to go layer by
28:35
layer. Yeah, starting with the
28:37
innermost and zooming out to outer and outer out of the book
28:41
is organized almost like the Ames famous documentary Powers
28:43
of 10, where we start with the things we most control and move
28:47
to the things we least control. By the time we get to the end of
28:49
the book, we're talking about civic scale, civilization scale,
28:53
stuff that we have very little control over.
28:55
So we begin with, what do we control the most?
28:57
The thing we have the number one most control over is what is our
29:00
intention. Nobody can touch that.
29:02
No investor, nobody can influence you.
29:04
Only you can decide. It lives purely in the mind,
29:06
purely in the heart. So the first question we got to
29:09
ask is what is the purpose of this organization?
29:11
And it's already founders like, good God, purpose.
29:13
You got to be kidding me. I know.
29:14
But purpose is not some vague ESG thing, OK?
29:17
Every organization has a legal purpose that it is required by
29:22
law to maximize something. If you don't choose, it will be
29:26
chosen for you and you will get shareholder primacy.
29:29
So if you're listening to me and you're like, well, I don't care.
29:32
I don't think organizations are vital living things.
29:34
I think they're just financial instruments to enrich
29:35
shareholders. I get nothing for you.
29:37
You were on the fast track to being a sociopathic company one
29:40
day. And if you think that's your,
29:41
that's going to be good for you. I'm not here to convince you of
29:43
anything otherwise. Go good luck.
29:45
Call me back on your next company.
29:46
You know, Lean Startup was the same way.
29:47
We get a lot of second time founders, a lot more second time
29:50
founders than first time founders in the early days of
29:51
Lean startup. No problem.
29:53
But if you're sitting there being like, no, obviously my
29:55
company has a mission. I'm like, oh, OK, does it have a
29:57
mission or a mission statement? Most companies have a mission
30:00
statement. We are going to make our
30:02
customers lives better. We are going to build a high
30:04
quality product. We're going to help improve
30:06
health outcomes or whatever you say the mission is.
30:08
But if I read your legal documents, I see here that the
30:11
mission is actually to optimize shareholder value.
30:14
So which is it, buddy? When forced to choose, what will
30:16
you choose? Just like the professor, he's
30:18
like, well, I'll choose health. I'm sorry, what makes you think
30:21
you're going to be the one choosing?
30:22
If you don't get this one thing right, nothing else to do will
30:26
matter. That's how important it is.
30:27
So we start with that intention. Now we have to learn to defend
30:30
it. So we have to do an exercise I
30:32
call fiduciary to who? Remember, Saul said he was a
30:35
fiduciary to customers. He had a hierarchy.
30:38
Customers first, employee second, investors last.
30:41
The great Peter Drucker said, actually, no, that's not right.
30:43
It should be employees first, customer second, shareholders
30:46
last. The Johnson and Johnson, the
30:48
famous, our credo is doctors, patients and nurses first,
30:51
employee second, communities third, shareholders last.
30:53
Are you noticing a pattern? Yep.
30:55
If you are willing to say who you're a fiduciary to.
30:57
And the way you find out is you answer the simple question, who
31:00
would I rather die than betray? Who is it?
31:02
Again? You tell me it's just
31:03
shareholders. Fine, OK, I can't help you.
31:05
But it's like, well, I want to have quality.
31:07
Quality, you say? That seems pretty bold.
31:09
You're a business revolutionary, whether you want admit or not.
31:12
You just say, why just care about efficiency, safety,
31:14
security, anything that's not financial returns for investors,
31:17
you must protect it. So we choose our fiduciary
31:21
commitments and then we have to do the inner alignment stuff.
31:24
We have to figure out how do we make it our business model such
31:27
that we cannot make money except by achieving the mission, so
31:30
that no one in the organization will ever be tempted to make
31:33
money some other way again, this sounds pretty simple, but in
31:36
practice it's very difficult. Most companies have never done
31:38
this exercise, so they don't realize how vulnerable they are.
31:41
And I could tell a bunch of stories in the book about
31:42
companies. It just blew themselves up
31:44
because some employee thought their job was to make as much
31:46
money as possible instead of accomplish as much mission as
31:49
possible. And then the last of the inner
31:51
alignment topics, this one I think is the most like,
31:53
obviously tactical. We have to work on what Mary
31:57
Parker Follett called the invisible leader.
32:00
And Mary Parker Follett was an awesome and pioneering
32:02
management thinker from the 1920s.
32:05
He's a contemporary of Frederick Winslow Taylor and yet was
32:07
utterly erased from history, like really erased.
32:11
And it's so sad because her ideas are so far ahead of their
32:13
time that if I tell them to you right now, you're going to make,
32:15
Oh, did I, did you read that on TikTok yesterday?
32:17
Like they're, they are very contemporary.
32:19
I'll just give you a couple, a couple of examples.
32:20
She talked about power with, not power over.
32:24
She said the subordinate and the superior together must obey the
32:27
law of the situation, meaning we work together to figure out what
32:31
the situation requires and then we do what that is, rather than
32:34
the subordinate commands and the superior commands of the
32:37
subordinate obeys. She said the job of a leader is
32:39
to create more leaders. Anyway.
32:41
The one that's most important for our purposes is she used to
32:43
go around driving people crazy. By saying this she would say Mr.
32:47
Roundtree, the owner of the Roundtree Chocolate Factory, is
32:52
not the leader of the Roundtree Chocolate Factory.
32:55
Happy lady. What?
32:56
Like seriously? His family owns the everyone
32:59
works for. Like what are you talking about?
33:02
Just no. He is a good leader, but that's
33:04
because he instills in his people a sense of common
33:08
purpose, and the sense of common purpose rather than Mr. Rowntree
33:12
himself is their invisible leader.
33:14
The most important decisions that will be made in any
33:17
company, almost by definition, will be made with no manager
33:21
present. It'll just be a customer service
33:23
Rep on the phone making a judgement call.
33:26
It will be an engineer just deciding feature in feature out,
33:29
extra test. No test.
33:31
Rush it, even though know it's no good.
33:33
Tell somebody, see somebody, see something, say something or just
33:35
shut up and let it be someone else's.
33:37
Like there's a thousand of those that even in an early stage you
33:40
have five person company, you already have a hundred of these
33:42
decisions getting made every single day.
33:43
You can't monitor them all. You'll never know most of them.
33:47
So what really matters is what do people do when nobody's
33:51
watching anyway. In the book, I have this
33:53
technique called the alignment method to to inculcate that
33:56
sense of common purpose into people that I learned from a
33:58
bunch of the most strong culture companies that that I studied.
34:01
So that let me pause there because that's like, that's the
34:04
zooming out from intention to the things we at least have some
34:08
level of control over management layer, business model, strategy
34:11
and culture. That's the path of ethos.
34:13
Yeah. I.
34:14
Love that and I mean I think the one thing I think about it like
34:17
in a world today with AI where like the scale of companies just
34:21
goes faster, the rate of change accelerates like do you see this
34:25
kind of mission drift or this ability to sort of not sort of
34:28
have a line, this ethos upfront matter even more now where the
34:32
speed of sort of like change just happens so much faster so.
34:35
Much worse. Can we do it?
34:36
Aside, in current events, we talked about corruption.
34:39
Eric, I really want to get your take on this.
34:41
Look at open AI, look at the Anthropic, look at X AI SpaceX,
34:45
like there is some crazy stuff happening in the in the culture
34:49
right now and who knows what the world will look like in in weeks
34:51
from now. But from your perspective, with
34:53
the Sam Altman ouster and Anthropic becoming listed as a
34:56
supply chain threat and how all this stuff plays out, like when
34:59
you're talking about people not being corruptible, it sure feels
35:03
like the forces around us at all times right now are moving the
35:08
opposite direction of the pressure on.
35:10
These companies is unbelievable, and that's why you're watching
35:13
them crack. Yeah, they're not built strong
35:16
enough. Now look, I really only know the
35:17
anthropic story truly from the inside because I helped them
35:20
when they first left Open AI. Now I don't.
35:22
For the record, I played only a bit part and I take no credit
35:25
for their success. OK, the success Dario and
35:27
Danielle team everything with. Claude is because of you.
35:30
Yeah, right. Exactly.
35:30
Like, oh, come on. I don't even want the credit
35:33
because God only knows how this is going to turn out.
35:35
OK. I don't want the responsibility
35:36
either. I know the story, and I tell the
35:39
story in the book because I was there.
35:40
I saw it with my own eyes. And I think if you look, for
35:42
example, at the recent kerfuffle with, you know, with the
35:45
Pentagon and designated I'm a supply chain threat, you
35:47
mentioned that. That story is really interesting
35:49
to me because it's an example of something that I think a lot of
35:53
people struggle with in our economy today.
35:55
What does it mean for a company to do the right thing?
35:57
We're so polarized that if I say a company did the right thing,
36:00
people assume I'm saying I agree with every single detail of
36:03
their decision down to the NTH degree.
36:04
And what's interesting about the the Pentagon supply chain risk
36:08
thing is that anthropics, not the main character of that
36:11
story, and it's mostly a story of government overreach,
36:14
unprecedented and absolutely unacceptable government
36:17
overreach, just for the record. But it put anthropic in an
36:20
impossible situation where like people are like, well, you're in
36:23
a lose, lose situation. You either like break your
36:25
values and capitulate, and that's a problem in itself, or
36:29
you stand up to the largest government military of all time
36:34
and then they like go ape on you and it's bad, right?
36:37
So like you're in a really, it's a very difficult situation.
36:39
Yet we can say that there is a right thing to do because for a
36:42
company, for an organization, the right thing to do is
36:44
something that has these three elements.
36:46
It's a time when you stand up for your own values, right?
36:50
Costco defending the hot dog is right, not because I like hot
36:53
dogs, but because it's right for them.
36:55
Their values, those values are indeed aligned to human
36:58
flourishing. So I can only anybody.
36:59
If you're like a really evil organization, there's nothing
37:01
you can do. And more importantly, you have
37:04
the strength to resist outside pressure.
37:06
So it's a show of strength. And what's interesting to me
37:08
about the anthropic example is they couldn't possibly have
37:12
known the positives they would get for standing up for their
37:15
values. Like Claude went to #1 on the
37:17
App Store. Someone sent me a video from
37:19
that night. People had gone outside of
37:21
Claude's. I've had Tropics headquarters in
37:23
San Francisco and chalked up the sidewalk thanking them.
37:26
And I was like, believe me, these days in San Francisco, if
37:28
a tech company is having its headquarter chalked, it is not
37:31
usually people saying thank you, OK?
37:33
It is not usually. Chalk.
37:34
Yeah, it's. Usually something a lot worse.
37:36
OK, so this was like very, it was really unusual things
37:39
happened even to the point people say, see, they're not
37:41
even sincere. They just did it for the
37:43
virtuous signaling. But like, how could you possibly
37:45
have known that? The bottom line is I know a lot
37:47
of people who respect the anthropic team because it's just
37:50
rare to see anyone give up to $100 million period in our day
37:54
and age. Even people who say, I actually
37:55
don't agree with the specific thing that they did or said, I
37:58
don't like this or I don't like that, I nonetheless respect them
38:01
from doing it deeply. And I think that's really what
38:04
we're seeing. Like the, to me, the fact that
38:06
Anthropic has the strong safety ethos and a really, I know
38:10
because I helped them set it up, This very strong structure is
38:12
part of the reason they've been uniquely courageous amongst the
38:16
AI labs. And most founders frankly don't.
38:19
And then they're surprised that nobody trusts them.
38:21
Well, what they expect. This is awesome.
38:22
I think as we wind towards the end here, Eric, I had one
38:24
question. I think, like what's something
38:26
that you used to believe about startups that you no longer
38:30
believe? I mean, you don't cover this
38:31
game for a long time. I my, the biggest one for me is
38:34
success will protect you. I always assume that's how it
38:37
was. What's another thing I used to
38:38
believe about startups? Well, I used to say I used to
38:42
see mission as a nice to have. I was indoctrinated the same as
38:45
everybody else that basically like after you finish your
38:48
vegetables of building product market fit and having a nice
38:52
business model and making a bunch of money for investors,
38:54
then if there's any leftover for you, then you can do some
38:57
mission stuff. You know, then you can be a do
38:59
gooder if you have like a philanthropic program or
39:01
something or you know, you then and you have some, you have
39:04
extra buffer, you can OK, now I'm going to raise wages a
39:06
little bit, not be a total jerk to my employees or whatever.
39:08
That is how most people are trained when they join boards.
39:11
Like that really is what counts as a best practice.
39:14
It's just it's like board meetings today.
39:16
It's just compliance plus shareholder primacy.
39:18
Those meetings are so boring, leaving apart their atrocious
39:22
collateral damage. Like I think, I think directors
39:24
should have to take an equivalent of a Hippocratic Oath
39:27
because these boards are doing so much damage in the world.
39:29
We should like, it's absurd. There's no directors oath.
39:31
But like, apart from the damage, it's also really boring.
39:34
You've been to these meetings. They're like unbearably boring.
39:37
We can make them so much more interesting.
39:39
We can, we can have that ability to make them a lot more
39:42
interesting. And I think if we, I in the
39:47
book, I call it the new governance instead of just
39:49
compliance plus show the primacy instead 4 parts compliance,
39:53
purpose, coherence and integrity.
39:55
You do that. It's just a way more interesting
39:58
meeting because now you're talking about how do we protect
40:00
and expand the most vital thing in the organization so that I
40:03
can say that now with total confidence.
40:05
I had no, you'd ask me that question even 10 years ago, I
40:07
think I would have been very confused about it.
40:09
Do you still? Think the lean startups the way
40:11
to go with these like billion dollar rounds.
40:13
I mean, like, to me it's like Sissy, you know, you talk about
40:14
Anthropic and you know, you're unable to even buy their shares
40:17
in the secondary market. The next round is going to be
40:19
just like out of this world. Like do you still think that's
40:21
like, does that fit the lean startup thing or was that where?
40:24
How do you think? They got there.
40:25
How do you think they got there? I was, I was funny.
40:27
I was just on I just a couple weeks ago, I did Lenny's podcast
40:30
and he actually made this point. I hadn't even thought about it
40:32
because, you know, he's been interviewing the like the
40:34
product managers of all these key AI products like cloud code,
40:37
all stuff. And he was like, they don't use
40:39
the language of MVP, but they really do it like they're, they
40:43
they're like textbook sort of. I'm like, yeah, that's what I've
40:46
been trying to tell you all this time.
40:47
Like just because you can raise a lot of money doesn't give you
40:50
the license to be wasteful with it.
40:51
Like whatever resources are at your command, you want to use
40:53
them extremely well and you know, we'll see, but I feel like
40:57
this new generation of AI founders are finding it really
40:59
helpful. That's that's encouraging to me.
41:00
Well, Eric, we. We've we've taken up a bunch of
41:02
your time. We're really grateful for you
41:03
sharing your extremely learned perspective on this stuff and
41:08
and excited to share the book with the world here.
41:11
Where can folks follow your work and pick up a copy?
41:13
Best thing to do? Is to go to incorruptible.co
41:15
that is my website. You can sign up for my mailing
41:18
list there. Please do we have we tried to
41:20
make it as as rewarding as possible to be on this mailing
41:23
list? For that I have.
41:23
You have my double gratitude, Eric.
41:25
That was awesome. Awesome, very timely.
41:27
Thank you so much for joining us.
41:28
I really appreciate. It thank you guys.
41:29
That was a. Lot to absorb the line that
41:32
stuck with me, Kevin, was that success doesn't protect you it
41:35
actually actually makes you more of a target.
41:38
He said that 80% of founders are no longer CEO three years after
41:42
IPO. I don't feel like I need to Fact
41:43
Check that. That feels right.
41:44
I'm surprised it's not higher actually.
41:46
It's not a bug that's the standard government set up
41:49
working exactly as it's designed Yeah.
41:51
And what's? Crazy to me is that even adding
41:53
the IPO thing might not be enough.
41:55
Like, I know a lot the founders that didn't make it to the IPO.
41:57
And so I think, you know. Yeah.
41:59
And then the saw price story is just going to live in my head
42:02
forever. I think, you know, as a kid
42:04
going to Costco, which was then called Price Club, we bought our
42:07
first computer Packard Bell from Price Club, you know, Packard
42:10
Bell before Hewlett Packard. I mean, this is like kind of a
42:13
collision, right? I mean, it's the same guy, you
42:15
know, that got fired from Fed Mart, which I'd never didn't
42:18
know Fed Mart existed until today.
42:20
But definitely new Price Club, you know, and now turned around
42:22
and quite frankly built Costco with the same playbook, same
42:25
ethos, and but this time the structural integrity, you know,
42:28
actually kept it together. And here we are.
42:30
You know, I think you said you made a stop at Costco here
42:33
before the show. Literally.
42:34
And, and the framing, this kind of idea of ethos plus integrity,
42:39
most founders have a mission statement.
42:41
But if you read the legal docs, the operating agreement, even
42:45
the SEC filings for these public companies, right, The actual
42:48
mission is shareholder primacy, increase shareholder value.
42:52
And Eric's point is when forced to choose who's actually
42:55
choosing, it isn't you, the founder.
42:57
Yeah. And that's the.
42:58
Part I keep coming back to is this like companies as super
43:01
organisms? I mean, the Ant story was great,
43:03
but this idea that you don't own the thing, you've kind of
43:06
birthed it, you can cultivate it, you can't command it,
43:09
especially with AI in the world where everything moves faster in
43:12
this, you know, set the structure on day one messages
43:15
just really hits differently. All right, Kevin, what?
43:17
Are the Founder Mode 5 takeaways from the show?
43:20
Yeah, I mean. Success attracts predators.
43:23
Financial gravity is real #3 formulas, ethos and integrity.
43:27
And then for you don't own your company, you birthed it.
43:29
And then finally, you know, start with the intention before
43:32
someone else chooses it for you. If this episode.
43:35
Made you rethink how your company is structured.
43:38
Send it to your Co founder and to whoever drafted your
43:40
incorporation documents. Yeah, and.
43:42
Go pick up Eric's new book at your local bookstore.
43:44
Subscribe to Founder Mode for more conversations about
43:47
building things that don't just succeed, but survive their own
43:51
success. That's it for today.
43:53
Because the moment your company starts working is the moment you
43:57
have to start protecting it.