YouSaid · the spoken record

Eric Ries

lines on the record: 157
first: 2023-10-29
most recent: 2023-10-29
sittings or episodes: 1
sources: podcast

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“Get to set the terms by which this is done. And so if we want to stop selling our beings, our babies, our children for money, we don't have to do that. If we want them to have a certain ethos themselves in the world, we want them to be trustworthy counterparties and do something for the people we care about. We can insist that that is the precondition upon which we will give everything to. And so, you know, I don't want to say that I know all the answers or that my values are the ones that should win out, but I do think that we do have a certain shared set of values that we ought to be more ardent in defending. And I hope your listeners will take that to heart.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“In so many ways. And although markets discipline companies and they require them to create more value than is destroyed to stay alive, new companies, the ones that we build, are so valuable, like the core insight that makes a thing is so valuable that the being that you've built can withstand so much damage before it collapses. And yet, if you look at the average tenure of companies and public companies, just look at average CEO tenure, like any all the metrics you look at are really grim here. Like we're destroying companies faster than we create them. Such the total net number of public companies in America is down more than half from a peak that was in our lifetime. It's not that long ago. What's going on? Well, the system requires a steady supply of fresh meat to replenish that which it destroys. And if you're listening to this podcast, you probably are one of the peddlers. You're the manufacturer of the thing that the system requires for its basic survival. And so as a matter of fact, we as a group, we”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Creating a way to make positive change in the world, that's an ethos that is not universally shared and that if someone's listening to your podcast, my assumption is you're in our tribe. So like we have a collective responsibility to think about like, what do we want to stand for beyond just my company, my founder, my story, my, but like, what do we as a group, what are our shared and collective values, and how do we make those manifest in the world? Let's just leave you with one last idea. We collectively have so much power, it's crazy because the system, the way it works now, what I've learned about our current, what they call late stage capitalism, like financialized engine of capitalism is that it is value destroying”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“You just discovered it. Like, excellent. I read a couple books. You can go read them, please put those ideas. If you're someone who's jaded and like, oh, I'm so tired of hearing Alan Startup. Like, I mentioned a few new ideas in this conversation. Like, go try one of those. And like even if it doesn't work, or if it does work or, you know, like even the people I've learned a lot from are people who they tried it and in the process of it not working, they had another even better idea. And then they went and did that. Well, go do that. All I ask is you tell me what happened. I want to learn from people who are making this happen. And like, you know, I hope as we come together, not just as a lean startup movement, but as a startup movement, like as a group of people who fundamentally believe that we can make the world a better place through the building of organizations from scratch. Like we have that as our belief. Like that the future is not scary. Newness is not something to be feared or opposed. But there is a responsible, methodical value.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, that's really sweet. You know, honestly, people need to just take these ideas and do something with them. And then you learn something from it and then tell me what happens. That's all I want in exchange. Just tell me what happened. Even if you, like the people I've learned the most from are the people that tried to use my ideas, thought they were like the stupidest thing they ever heard of and doesn't work and they're mad and whatever. Like tell me, I want to know all about it because really my job, like the way I see myself is like, my job is just to try to understand these things. I just want to know the truth. If I'm wrong, like I don't like being wrong. I'm as attached to my ideas as anybody else, but like I try really hard to find out what is true. So if you discover something new, please tell me. That's all I ask. Just let me know. And if you don't try, then how are you ever going to discover anything new? So just, you know, if you like clean, you know, every day I meet people who are like who just heard about lean startup for the first time. For me, it's so old. Every day there's people who read the book for the first time and they're like, they have a question about so like if that's where you're at.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Still find me at Valenstartup.com. I'm at Eric Reese, E-R-I-C-R-I-E-S on all the usual places, although I really don't do a lot of social anymore. So like joining my mailing list at the Leanstart.com is probably the best way to keep track of the major things that I do in my life. And then, yeah, I do try to get on some social from sometimes to make some announcements. And if people want to reach out, I'm just Eric at the Leanstartup.com.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Something in your brain on its own told you to use that product. Like, why did you go start playing World of Warcraft Did someone have to get a notification to remind you like doing it? Or something happened in your life that made you're hungry. So you went to the thing to get the food. Because those are the only ways by which people come back to a product. Those all can be measured, studied, and understood to the same level of precision as we have with viral loops. And I can't, for the life of me, understand why viral loops gets all the attention and no one is remotely interested in the science of engagement. So I thought I was a time when I thought engagement loops would make me way more famous and lean startup ever would. I was very, very wrong.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Someone is living their life having a happy time, then for some reason they use your product. Why did they use your product? What made them come back to your product? And it's actually, there's not that many things it can be. Like it might be because you gave them a synthetic notification. Like, hey, please come back to my product. And they did. It could be because some kind of organic notification took place. Like that is like they got an email from a friend on your platform that was like they got a notification that was driven by like their, you know, one of the most successful customer emails of all time is PayPal's You've got money. Click here to take the money. It's like has a very high click-through rate, maybe second only to Facebook. Someone has tagged you in a photo. But we're not going to tell you which photo it was. So you better click right. So something happened. If it's not one of those two things.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's also engagement loops. And I was like, oh, just like we have viral loops, which is about how products grow, we should also have engagement loops, which is about how people stick. And like there's a science to stickiness. And like people have written about that, like, from the point of view, like, how do you make your product more addictive? But that's not really what this is about. This is about being able to model the dynamics of how customers flow through. And a version of that is in the lean startup. We have what I call the law of sustainable growth, which is a situation where new customers come as a natural side effect of the actions of past customers. And so that is obviously true of the viral loop. Everyone knows the paid engine of acquisition where you have, you know, whether you're marginal profit per customer drives your ability to invest in customer acquisition. But there's also what I call the sticky engine of growth, which is kind of like the vestige of this idea that made it into the lean startup. But I actually think that that's a whole really interesting thing where if you think about the way to think about it is like if”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, yeah, yeah. I got tons. I got tons. Oh man, the cutting room floor is full of so many things. I went through a really extended period of trying to use, but it was before lean startup. I tried to use the cell biology as the metaphor for a startup. I wanted something more biological and less mechanical. I never got one person to understand what I was talking about. It did not work. But I'll take the one that surprised me the most. This is such a small one. But I really thought that this would like take off and people would be way into it. I did a lot of writing about it and then like I couldn't get couldn't get the stick. So everyone knows viral loops”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“The most important thing you have to do in a product is make trade-off decisions. And if you just let people make their own trade-off decisions, it's totally different. It's really difficult to have any kind of coherent design like thrust. And so the idea is like this is the person who makes those. If there's a fight between two departments about how much the things should cost or if someone has a question, like, listen, I can improve the aerodynamics of the thing by this much, but it will cost this much. And it will mean we have to take this button and turn it from metal to plastic. You have someone who can actually be like, no, that button has to be metal. Like we made a promise that this is going to be like, or button doesn't matter. Like you just need someone who knows that thing. It has to be that you can keep it in somebody's head. So yeah, call the chief engineer.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, there's actually, if you study Toyota production system, they had this job that's called the chief engineer. I wish more founders knew about this because like when you become large, it's important to be able to empower the founders that work for you and not just only see yourself as the founder. So the chief engineer is the person with the moral authority over an entire line, like a car from start to finish. And I don't know if this is still true, but back in the days when people were writing a lot about Toyota, inside the company, the car is not called the Toyota Camry. It is called so-and-so son's car. And the thing about the History of Engineer is they have no reports. Nobody works for them. They just have like they have what's called the big room if you've studied that whole thing. There's like a place where they are and they have a small staff, but like they have the design and the car. And like anybody, as the number of people who work on a car, it swells up and then it comes down because you have the design phase and then you go into production and eventually like the number of people goes back down.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Somewhere, somehow there was a product management meeting where they talked about how to make this thing. I can picture it right now. Somebody was like, look, the way we make these things sucks. Like, can you please let me just put the thing that's normally on the bottom? Let me put it on the top. And let me put this in there and put that in there. And someone was like, who cares? That's going to add three cents to the cost and reduce our margins by whatever. And someone was like, no, really think we should do it right. So we want to reward people like that.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the Lavoit 300S ultrasonic humidifier, Lavoit 300S. It's like, it's just a really well-made $60 appliance, you know, it's nothing special.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was just singing the praises of a product of a friend. It's the most boring and stupid product ever. It's just a humidifier. And you be like, okay, how can you mess up a humidifier? But like, actually, it's actually very difficult to get it exactly right. It's like, you know, there's all these little attention to detail crowds. We were talking about craft. It was on my mind. It's like a very humble appliance. And it's actually like I've gone through like 10 different models trying to find something that doesn't drive me greedy. Like you want to run it at night. If that has a light that's on all night, that's really annoying. If it makes a noise, that's no good. If it overeats, there's like all these things where you're like, boy, if anyone had used the jobs to be done framework for one minute on what this physical device is supposed to be, this is the product they would have built. And I can't believe it's like such so interesting in modern capitalism. There's so many categories where they're just, there isn't a product like that or there's just one. Like, how come every product is not like that? And, you know, the forces we've been talking about are the reason why.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“My favorite interview question of all time is to ask people to describe a best practice that they learned in their career and to really get into it. Like tell me the story of how you learned the best practice, like, and just let them go on. And then you'd be like, great. Tell me a situation where that best practice would not be applicable. Most people can't do it.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“The problem, it's just like if they would just make that That creative team, they would just let them make shows that it would be okay. It would redeem all the rest of their failures. Just keep making it simple.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“I really have been trying. I don't have time anymore. I have a young kid, so my media consumption days are extremely limited. But I have been kind of forcing myself to slog through a bunch of the Disney Plus Star Wars series, which have been almost universally disappointing, with the exception of Andor. For those that have not seen Andor, it really is very good. Not good for a Disney Plus Star Wars show. It's like actually good for television, which I couldn't believe when I saw the premise of it.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I've been kind of plugging that lately. And then if you want just something that's pure fun, it's not really the season for summer read, but and also a really good audiobook is the murder bot diaries by Martha Wells. She's just such a great writer. And I know it's a very frivolous thing on the surface, but there's actually a lot in there. And I won't ruin it for nothing I would say would be a spoiler, but there's actually like a surprising amount of depth for what is really just a fun action adventure kind of read. I can't wait. I hope it is someday made into a movie it will be. If they do it justice, it will be really terrific.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a book called The Enlightened Capitalists that is just a hundred years of people trying to fix this problem and failing and like the detailed case studies. And like no founder should ever read it end to end. It's too depressing. But it's important to know some of these stories of founders that like they're willing to talk about their regrets on their deathbed that they like wish they had done differently. And it's just for those who think there's one weird trick that will help disabuse you of that notion, but it's helpful to understand the mistakes that have been made before so that we can do better going forward. On a happier note, I really want more people to read Ken Lu's the dandelion dynasty. It's a silk punk fantasy series, but it's written by, he's a wonderful writer, and it's like, if you want to see what real optimism about engineering and the ability of engineers to change the world, like, but transformed into a totally different environment, it's just such a great read. The audiobook is really good.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now you can get it later. And like many of the people, you know, look back on who was profiled in those books, like many of the early lean startup adopters are like very successful people today because they didn't feel like they had to wait. They were able to think for themselves and apply the principles in their own life. And I don't ask anyone to take this on faith. This is not like you have to do what I say. It's more just like think for yourself. Like if this makes sense to you and no one can explain to you why it's a bad idea in ways that you find compelling, give yourself permission to at least try it and see what happens.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Give that up for you, make me believe that this is the real thing. And if you're like, well, you know, we believed in some manifesto and we're good people and we got money from some investor who promised you're going to be a good guy, like that is not going to cut it. And so they're having to do the whole thing. Like the sit down there, lawyers, what do I have to do to make this promise real for these people to make them want to join? And I just, I've just seen that over and over again. If we have the courage to do it, it can solve what are really today considered insoluble business problems. So it's cool, but I think it's scary for people to feel like they're doing something different. And so I think over time we'll get more of these stories on the record. We'll get more people will have, you know, there'll be more precedent for it. But I got to say, just not to harken back to Lean Startup too much, but I'll never forget sitting with early people who are like, what's the proof? What big company is doing this? And I'll be like, just wait. If you don't want the competitive advantage.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is working to recruit academic researchers to leave their lab and come work for the startup full time. It's one of the most difficult recruiting challenges there is because it's not talking about like kids out of some school. This is like tenured professors who are leaving behind a very good life to go do this thing. They would only do it if they profoundly believed in your mission, but they're not naive. And the first question every one of those people asks is like, how do I know this technology is not going to be used for you? Because I have complete academic freedom.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“The center that is responsible for the soul of the overall ecosystem of companies that the entrepreneur is the enterprise. And you can see that obviously in the open A example, if anyone has studied the anthropic long-term benefit trust is not coincidentally structured that way. But you see lots of examples where that's what's done. And I started just pitching it to founders and said, look, let me try to show you what the benefit of this would be. And I've been amazed how many founders like break down and founders start crying with me where they're like, this is what I always really wanted to do, but I never felt like no one would talk to me about it. I didn't think it was possible. I want to put, you know, there's a critical stakeholder. I want to put at the center of everything I'm doing. Or there's some reason why we're doing this. And I want that to be the thing. I was talking about a startup who's trying to get, and again, it's not a Kumbaya thing, you know, do good or whatever, virtue signaling bullshit. It's a competitive issue. There's a company.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Because, like, those companies should be riddled with slowness and agency problems. And I know the theory so well. I can tell you all the things that ought to be true. If those things are not true, what's up? And then I was like, wait a minute, I've been to these foundation control companies. I've been to Hershey. It's just controlled by the founder donated the shares to a foundation that runs a school. I've seen it with my own eyes. And even having seen it with my own eyes, it took me a while to realize, wait a minute, this is an open secret. So I was kind of horrified to find out that this is well known and yet was never offered to me. You know, how can no one ever offered me the chance to build a company this way? And if you study even open AI or any of these companies that are now structured this way, it's always very idiosyncratic. Like they were on the standard path and then something happened that allowed them to do something unusual. And I was like, well, I don't understand why we have to wait for it to be idiosyncratic. Why don't we do it on purpose? And so I started to conceive of this idea, I call it the spiritual holding company, basically the thing at the...”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“That studied some of these, I think it was in Denmark, foundation-controlled companies versus level matched public companies that are not foundation controlled and found the foundation controlled companies outperformed from a financial performance perspective. And I was like, how is this not the most incendiary result ever? If this is true, so much of the indoctrination we've all received about what it means to be a for-profit company just wrong.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Amazon? Are you sure? So I actually think one of my realizations here is that the investor-centric view of corporations, what's called the shareholder primacy theory of corporations, is just wrong. It's wrong even if all you care about is maximizing returns for shareholders. Shareholders have this propensity to be the person who killed the goose that laid the golden egg. And it's like been going on for 150 years. These case studies go back to the 19th century. It's an old, old, old, old idea. And the solutions are actually all hidden in plain sight. So I was reading a research paper the other day.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to waste time on all that stuff. We'd waste time on it. I was like, oh, and then, like, anyone ever heard of Warren Buffett? Why do his companies have a competitor? Like, he were always like, oh, if you're giving up profit, your investors might like it. I'm like, these companies are world destroyers. What are we giving up? That's why I go start with the wrong definition of profit. We actually make a ton more money if we do it this way. And like Amazon, for all of its flaws, like the long-term thinking, the customer centricity, like that's a major source of competitive advantage. And I've worked with many of Amazon. I've worked with Amazon. I've worked with many of their competitors. And like the funny part with competitors sitting there, they're like, oh, man, Amazon's entering our market. We need to do X, Y, Z. And I'm always like, do you think Amazon's doing XYZ? And they're like, oh, no, they don't have to do that stuff. We had to do all this bullshit that our investors require and the activists and whatever. It's like, well, if you're competing against them and they don't have to do that crap, maybe you should try doing it their way and be like, oh, our investors wouldn't like that. I was like, your investors want you to get your butt kicked.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, oh, that's weird. So for a while, I was like, oh, I guess it's just turtle. We should build more turtles. But then there's all these family-run companies out there where the family has produced this outcome. And then I started to meet foundation controlled companies. You know, it's actually, it's funny, open AI is like the hottest new thing. Open AI is a nonprofit foundation with a wholly owned for-profit subsidiary. I thought that was like, wow, open AI. That's actually very common. There are a lot of companies like that in the world in certain European countries. It's actually like 20 or 25% of the companies, like public companies, are all structured that way. So it's actually like totally normal. And I did a talk for one of those companies a few years ago. And it blew my mind because when I would go there and talk to them, I was talking to their CEO and their leadership and I was like, oh, what's it like to deal with the public markets and they're like, well, we don't do that. I was like, oh, is that a major source of competitive disadvantage? You know, you guys are a nonprofit. And they're like, are you kidding me? We crush our competitors because they.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's the thing that really surprised me I thought the way that we build companies, like the standard corporate governance practices that we all do are like, must be well established in research, they must be well backed up, like they must be the only and best way. But when you start studying these things, like you find the exceptions really fast. I got into this because of Toyota, only because I called the thing lean startups. I wanted to borrow stuff from lean manufacturing. I studied Toyota. Well, Toyota has a really weird corporate governance system, which is like part of the old Japanese Koretsu system where the Toyota family is intertwined in its ownership with their supply. It's like by modern standards, it's a terrible rat's nest of disastrous corporate governance practices. But if you look at the literature, everybody who studies Toyota is like, well, the reason they're able to do this awesome stuff is because they have a philosophy of long-term thinking. I used to be like, well, how can you have a philosophy of long-term thinking if you're subject to quarterly returns? And they'd be like, oh, they don't pay attention to that stuff because they have this other structure.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't like to name specific company names in venues like this because then people always are like, well, but what about this? People like to do the whataboutism thing too much. And also I like to let companies speak for themselves. I have way too much confidential information and I just have to be really careful about it. But nothing I'm describing here is hypothetical or unreal. I have witnessed this many, many, many times myself. And every story I tell, it's like it's a real company that you can meet. They're real people that are out there. And they're not always the loudest. The loud voices in our industry tend to be the ones that have something to sell. And these companies are like just quietly doing the right thing. They don't really need to tell you about it because they're doing it. So there's like an inverse proportion to the loudness and controversy and meanness of the thing and how likely it is to be accurate, unfortunately. What I will say is this is kind of an open secret in the world.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“If that's the outcome you want, then this is going to be a perpetual process of constantly trying to find ways to create the alignment that is needed between the governance, the management structure, and the actual operations and culture of the company. Those are not separate things. They're actually only one thing because it's just one being. You have a skeletal system, a muscular system, and a circulatory system, but those things are not separate. They work together to produce you, the being. And the same thing is true for these governance structures. So I think most founders are under indexed, underinvested in that. And that's why we get to these horrible outcomes.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ask them about some of that stuff and don't ask them, should I do it? Ask them, tell me for each thing, just be like, Can you give me the pros and cons of doing it? They'll be like, the pros are, you know, it might actually allow you to save your company's soul in a dire situation like this. The cons are, investors might not like it too much. And you just be like, just sit there and be like, hmm, I'd like to do it. That sounds good. Thank you for advising me on the pros and cons. You work for me. You're my lawyer. Like I'd like to implement this thing. And just honestly, just pick a few of them to get started with. And over time, what you need to do, last piece of advice. Every founder wants the one weird trick. This is how lean startup started too. People were like, can you just tell me the one weird trick to keep my company innovative forever? It's like, there's no one weird trick. You want to do the right thing. It is a relentless and constant process. We need to build a structure of the company so that at every level, at every moment, every decision the company makes, somebody in the room making that decision feels like they have a fiduciary duty to do the right thing.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“That doesn't horrify you and make you want to jump out a window. I got it. I can't help you at all. And if you don't care, fine. I got nothing to say to you. If you don't care, you don't care. There are really sociopathic people in this world and they build sociopathic companies. I can't help you. But if you do care, sit down with your lawyer and just be like, hey, is this true? Could this happen to me? And they'll be like, yeah, obviously. And you'll be like, if I like to prevent that, what could I do? And I'm like, well, your investors might not like it. Investors like it this way because it maximizes their returns. And you're like, yeah, but I don't, that's not what I asked you. And your lawyer, your lawyer is good enough to know the answer to this question. What can you do? And if they can't go back and rewind the video that Lenny, I just had, I just named a bunch of things. You can have two founders preferred shares. You can do all this stuff.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are you properly protected against this specific thing? For example, if tomorrow Philip Morris shows up, pick your favorite evil. I use Philip Morris because my dad's a pulmonologist. So I grew up as Philip Morris as the ultimate of evil corporations. But pick your favorite evil corps. If they show up tomorrow and they offer you $1 per share more than your company is currently worth to buy it from you and your investors in order to use it to sell cigarettes to children. Do you have a fiduciary duty to say yes or a fiduciary duty to say no? Believe it or not, if you went to a fancy law firm and they filed for you the standard articles of incorporation that are used in Silicon Valley, most governance experts upon reading those documents would say you have a fiduciary duty to say yes.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Too early. Oh, yeah, I remember that. Have we done it? Oh, no, it's too late. It's too late? The thing's on rail. Sarah Alders wouldn't like it. The banker's like, oh, you don't want to put that in your IPO prospectus. It's like, wait a minute. When was the right time? You're telling me that like 18 months ago, July 3rd through 7th, there was a four-day window and it was the right time. It's never the right time. Why is it never the right time? And I've seen founder after founder after founder get steamrolled. One of the only exceptions I know is a mutual friend of ours who like actually stopped the IPO process and was like, no, I won't file the paperwork. They tried to steamroll them and file the paperwork without him. And like, he said no until I see this thing in there. We're not doing it. It was a very contentious thing, took a tremendous amount of political capital. I admire him immensely for doing it. But most founders don't. Most founders just go along. And the thing never gets done. So the most important thing is to sit down with your lawyer and just take them through a few hypothetical situations and ask them,”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“But every LP in the SPV has to sign a contract to say that they will support the mission of the company if you ever want to do something like a VCorp conversion or you ever, if there's ever a situation where it's unclear whether they're in favor of you doing the thing that's right by your stakeholders long term, they're pre-committed to that. And we assign trustees to oversee those shares rather than just the narrow interests of the shareholders. So like I can go, I can go on and on. There's like all this stuff you can do. So I get companies, I get founders excited. I'm going to get as founders excited about this for a long time. I've now been long enough at this that like the founder will go to their lawyer and the lawyer will say, listen, sounds great. But like you don't need to do that right now. You can always do it later. And they're like, okay, just do it later. And then the companies go bigger and they'll, you know, they'll do some financing around each financing round. It's like, is this the time? It's fine. We could just do it later. And then it's like 18 months from the IPO. They've hired a CFO and there's like a banker's and the whole thing's on rails. And the CEO is like, now, hey, did we ever establish that foundation thing for our non-employees stakeholders? And they're like, huh? The thing, remember we talked about, you said it was.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what happens is people hear something like what I'm saying, like, oh, yeah, we need to make sure, like, here are some things you can do. Obviously, you can become a public benefit corporate, what's it called, in California, a social purpose corporation. It's like there's legal designations you could take. Fine. You could talk to a company the day that because their startup involves building a technology out of something that comes out of indigenous cultures, they took 10% of their company and they put it in a foundation. The trustees of whom are tribal leaders from the cultures that they interact with. And those people that that has like an economic role and a role in governance. You can establish a foundation like that. You can do what's called the board mission pledge where people on your board are required as a condition of being on your board to pledge that they'll use their business judgment under Delaware law to support the mission, not just the narrow interest of shareholders. You can build, we call it an LTSPV, which is basically a financing instrument that operates like a regular SPV.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Feel like there will come a time when there's a lot of resources about how to do this and there aren't a lot right now. So it's a bit thin. I'm working on it. But we're still trying to figure out the right way. But I am hoping to start doing some events and some things like to talk about this stuff so people should feel free to reach out or follow me on the usual places. If people want to do it themselves, talk to your lawyer. This is like definitely one of these talk to your lawyer moments. I've worked with enough companies. I've actually like been around long enough that I've worked with multiple companies that have gone from zero to IPO and beyond. So I have personal friends who've like taken a company public or like now extremely wealthy and who like sometimes even call me and like, hey, I run this massive multinational company. Can we talk about this very specific situation that's come up at work? I still am involved in those companies. I still get to hear sometimes what it's like to actually do it. And one of my main takeaways of that entire process is that it's always too early until it's too late.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“But, like, when you're going to a customer, like, hi, would you rather work with a company that's owned by some private equity schmuck or a company where some of the prosperity you helped me generate is reinvested in you and your community? Like it's a competitive advantage to do the right thing. So I feel like that, like we're going to have a new wave of founders who take that seriously, who are going to just, they're going to steamroll. It's going to be really awesome to watch.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“You're working, like if you're without naming the company, I talk about a company that is an incredible ethos of love and just like it actually loves their customers. It's amazing. And that's the whole, everything cascades down from that central premise, including the CEO I meet is so frustrated all the time. I can't get people on the same page. I tell them what to do, but they don't listen. It's like maybe part of the reason you're having trouble with this is the strategy you're communicating does not actually make sense to people. Well, this one really makes sense. Like treat your customer like you would treat your own parents. People are like, oh, that's actually really easy and clear. Like I understand exactly what that means. And so their customer loyalty is unbelievable. Can you imagine what their retention is like if you actually felt you call customer service and it's like you're reaching your guardian angel rather than some board customer service rep. It's amazing. So their competitors are like, this is not fair. It's like unfair to compete with this. This is like something as a monster.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“But sometimes no one knows. You're like, who's in charge here? The board is in charge. They're like, I don't know, CEO asked me to serve on the board. It's like, who chooses? The company chose its own board. The board chooses the seat. It's all self-referential. And it's like, where did it come from? So right now, I kind of, we view it as like an accident. It just happens sometimes. But that's because we're not engineering these beings to create the outcomes that we really want. And I just think it's like a blind spot as company builders. We're so focused on the product and not nearly focused enough on the organization. And we tend to say at the surface level stuff like culture, we don't get into the deeper stuff. So yeah, I think as builders, as an industry, we need a new movement to say like we are going to build companies where human flourishing is the thing at the beating heart. And we're going to wield that as a competitive advantage to not only change the world for the better, but also make a lot more money. That's the crazy thing about it is these companies are worth a lot more than their competitors.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Satisfying experiences in my career. You ask people why was it made? They're like, how was the product made? No, how is the island of freedom that you lived on made? They're like, I don't know. Ask my boss. And I've done this exercise. I've asked the boss and the boss's boss and the boss's boss. And sometimes I'll go all the way up and I'll be like, well, actually the founder of the company was still around. I made it so.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“That needs to be right, not just because, like, I'm a supervillain got their hands on it, it would be really horrible, but also because you can easily imagine they got bought by some private equity firm who's like, this is awesome. We can now like put every town in a zero-sum competition with their neighbor for the good weather and extort them both for like that would be just as horrible. We don't need supervillain for this. Like none of us should want our technology to be used in that way. So we need to prevent that from happening. But so when we put that in that ethos, we make that part of every decision. We finally can create the environment that like people really want to work in. Just to make great products. I feel like most people I meet just want to work on something awesome. And we act like giving that that's just like just happens. But I've worked with so many companies now. Like even the ones that are really, truly great, you go meet a team who says, wow, we had, we had the island of freedom. We had the fully full, we were able to do it exactly right at one of those sad.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“People don't give a crap about quarterly reports. We have built a massive apparatus in these organizations to make sure that certain things happen. Companies are really good at the things that they care about. And therefore, we can learn something interesting about the things that they care about by what they choose to be good at, what they perennially are not good at. And so my view is that what it means to be a for-profit company, like we've gotten it wrong. We're basically incorrect. Making a profit is actually about maximizing human flourishing. That's what it means to be for profit. So like our current category says that Philip Morris is a for-profit company and the Smithsonian is a not-for-profit, but that's just backwards. Smithsonian does a lot more good in the world than the merchants of death at Philip Morris. So I think we've just gotten confused that making all forms of making money are the same. But we all know that that's not true.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was like 100%. I was like, how 100%? As certain as the sun will rise, bet your life on it. He's like, as certain as the sun will rise, 100%. I agree. Now, second question, what is the odds that Google would be complicit in something that would make them money but at the expense of murdering somebody? He's like, oh, they probably wouldn't do that. I was like, probably. 100%. As certain as the sun will rise. He's like, well. I was like, oh, really, what do you have to do? I said, well, come on. What if we're in the self-driving cars, like kill somebody? And they cover it up. What if then real media product and it's conflicted in a genocide like Facebook went through that? It's like, I don't think they would do that on purpose. It was like such the difference between the thing that is certain and the thing that we don't know. I was like, okay, why is that? We treat that like normal. Like, of course companies file their reports on that. But is it because in the human heart fidelity to finance rules is like hard coded, but care for other humans in their life is not?”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so this is nothing unique to Google, but I just happen to be talking to an ex Googler, and he was talking about the values and the company and his disappointment of what had happened and the many years that he'd been there, the good and the bad. I said, okay, answer me this question. I'm asking two different things. For each thing, I want you to tell me, what is your assessment of the probability that this thing will happen in the future? Think number one. What do you believe is the probability that Google will file its next quarterly report on time?”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's different. We don't own them. They're not slaves. We nurture them. That's different. So if you want to make promise, if you want your organization to be trustworthy, the promises it makes, if you want to win the public's trust by making promises they can believe, you have to embody those promises in the structure of the organization itself so that even if you weren't there, the promise would be kept. And people act like that's impossible, but there are lots of examples. I mean, like think about like the code of medical ethics and the Hippocratic Oath. Think about, you know, in the US, you want to do healthcare. You have to have a care delivery organization that is like staffed and run by doctors, not by private equity guys. There's all these things where we know how to build structures that are organized around some purpose. So what should that purpose be? I was talking to a former Googler. I hate to pick on Google because I've always done a lot of good things in the world. But they're like, I think the locus of a lot of tech people's disappointment in the world.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“You could be replaced. Some investor could sweep you. I tell you how many stories I tell you about startups where the investors change management involuntarily. And so the fundamental problem is that no individual person can ever make promises on behalf of an organization. It's not possible. It's a category error. You're replaceable. And the reason is because organizations are actually alive. They are super organisms with their own soul and their own life. We are their cells and organs when we make them. Founders don't create them, we birth them.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, talking about a really advanced biological AI company where like imagine having an LLM, imagine like ChatGPT, but for biological compounds. We'd be like AI, could you just synthesize for me a molecule that has these properties just described in natural language? And it's like, sure. That could be incredible. Like think about the CURES and the diseases. Just like that's going to be an amazing transformational technology. But it has such obvious risk and downside that we have to take it really seriously. Like why should anyone trust you with this power? And people always say the same thing. Well, I'm a really good guy. And I'm your bro, man. I've got good intentions. It's like, well, kids of crap about that. You could die.”
2023-10-29 · Lenny's Podcast · Reflections on a movement | Eric Ries (creator of the Lean Startup methodology) · IDENTIFIED FROM THE TRANSCRIPT · source