689: Eric Ries - The Costco Hot Dog, Why Good Companies Go Bad, Financial Gravity, Building Incorruptible Organizations, and The Lean Startup's Unfinished Business

23:15And I sat, I was like in the bathroom, like backstage, like freaking out. And I was like, okay, why am I doing this? Honestly, like time to get real with yourself. Because to me, I think one of the keys to communication that people don't talk about enough is what are you trying to communicate? People just assume that you can equally really well communicate anything. And if you're an actor, the reason why we love actors and put them on this pedestal is because they actually can do that. They can make you believe they believe anything. But in real life, that is not a positive. That's not good. If you're somebody who can make anybody believe anything, like Dan, you're not, no one's going to trust you as far as I can throw you.

23:48That's why we keep actors separated and put them up on a stage. You know, it's different in real life. The authenticity of what's being communicated, the integrity of it is the first most important thing. So to me, bottom line, I was like, why am I stepping on this stage? And I thought to myself, I was really like thinking about the pain that I had experienced as a failed founder myself. I had been there, done that. And all my books, everything I recommend, I don't recommend that people do anything I haven't been willing to do myself. I was like, this was my message was about what I had learned from these failures and how to prevent them.

24:20And I thought to myself, okay, there might be 700 people here, but I can't worry about that. Maybe there's one founder in this audience who as a result of what I say today will change their course and they'll be able to avoid the humiliation and the pain that I endured. And that will be worth it. Enough. That's enough for me to feel like this is okay. So anyway, that got me through that day and let me do it. But I tell that story because I've had a lot of reps since then. Okay, people talk about the 10 ,000 hours or whatever, like the Beatles playing those clubs in Germany for all those years when nobody knew who they were.

24:56I've put in the time, like I have given talks about lean startup more times than you could possibly imagine. Like I've put in the reps. If you try to get better at something and you put in the reps, you get better at it. So yeah, I'm very flattered that you think that I'm a good storyteller. I'm flattered that you think that there's something here from a communications perspective to learn, but mostly it comes from just trying to get better. It was not natural to me. Like when I gave that 700 % talk, I spent so much time on that talk. You can't even imagine it. I had a customer advisory board for that talk.

25:25I took it really seriously. I marketed it very heavily. I was like on social media, the early social media, not the toxic algorithm-driven garbage we have today, but the old days when like, you could just talk directly to people about it. I gave several practice talks in actual venues. You know, I remember sitting in the back of a Hobie's restaurant in Santa Clara, California, not even close to where I live, at seven o 'clock in the morning for this incredible group called the Bootstrappers Breakfast, which was like a tiny little group. I think he was still going. Sean Murphy's been doing that for many years.

25:57Shout out, Sean. He's great. He invited me. He's like, you know, I was like, I need to practice this talk. Like, who can I talk to? He's like, well, you can come have breakfast with us. I'm like hanging out with like six people and I have hobbies giving my talk. And again, I had that moment of like, what am I doing with my life? But I needed the reps. I needed the reps and I'm glad I did. So I think, yeah, if you're willing to put in the time and if you're intentional about it, you can learn to communicate in a way that's authentic to you. And I think that's what people resonate with.

26:22Ryan Hawk:I'm so glad you told that full story because that's a portable lesson for many areas of life. One, just thinking about how hard you work to get ready for that first one. And then everything you've done since then. Again, I think there's a lot to learn. From a leadership perspective, there's a lot to learn from you have to have this willingness to endure, this willingness to get the reps, this willingness to practice in front of your friends. I don't think that's normal. I don't think most people want to do that. you kind of like wing it and say, well, if it goes bad, then I can just say, well, that's because I just didn't have enough time when that's an excuse, right?

26:56Ryan Hawk:That softens the character to use that excuse. I think getting the reps, practicing, actually really caring about it is weirdly a superpower. It's a difference maker in leaders who make it happen and the ones who don't. And so that's inspiring to hear that whole story. I'm glad you feel that way. And I do think just caring and trying to do a good job is so unbelievably rare. I mean, I just, you know, I work with a lot of big companies and I work with a lot of startups. I meet people all the time who, as far as I can tell, do not do anything. They don't work. They don't do their job. I don't understand what they do, but like you give them even a simple task and they can't do it.

27:37And if you try to hold them accountable, they're extremely skilled at evading the accountability. And you're just like, what? But what, you know, it's like, like Office Space made it a joke, if you remember that movie, like what would you do here? Like, yeah, like there's a lot of that going on in the world. And so, yeah, just by being willing to be cringe and like be sincere and be like, I actually am trying to do a thing and I'm trying to make it happen. You know, I met an entrepreneur the other day and I said, what do you do? And she said, well, we're working on terraforming Mars. And a bunch of people around me at the table kind of laughed.

28:10And I was like, what are you laughing? And that's awesome. Is that even possible? And she's like, well, we didn't know, but yeah, it is. And here's a plan. And here's what we did. And like, they've made this incredible amount of progress in like two years on a civilization grade problem that everyone would just be either like, that's impossible, so let's worry about it. Or surely somebody's working on that. So it's not really my business to worry about that. And they were like, no, nobody's actually working on the plan. Like what kind of microbes are we gonna use when we eventually get to Mars?

28:40They were just like, we're gonna work on the thing that we think is important. Now, look, that might not be your thing. It wouldn't be my thing. That would scare me to death to work on a project like that. I was like, what are you even hoping to achieve in your lifetime with this? They had an answer. They had really given it a lot of thought. And I was like, that's like super cool. And you meet these entrepreneurs all the time that are just the only person in the world working on some problem. And critics often say this, who died and made you God? Why are you the king of this thing? Because I'm the only person working on it.

29:10Literally nobody's working on it. There's just a problem sitting here. And I've got, there are so many things like that. And the most thing, the thing I'm most proud of so far with the new book, you might've heard, I really believe in feedback. You might've picked up on that, on that theme in my work, right? So I had more than 600 test readers of Incorruptible. They generated more than 10 ,000 individual comments as I was working on the manuscript for months and months. Instead of scrolling social media, I was scrolling the feed of test reader comments. It was awesome. People, I'm so grateful to the test readers.

29:39The book was so much better because of them. I actually feel really bad how bad the book was when they first started test reading it. Okay, so I'm really proud of how good it is now, but it's because of their sacrifice that you can enjoy this book. Anyway, one of the things I'm most proud of with this is that several of the test readers, I think we're up to four or five now, like not zero, but like quite a few have written to me and said, thanks to this book, I'm pursuing a business idea I wouldn't have had otherwise. I've learned to see the world in a different way. And I realized there's an opportunity staring me in the face that I never noticed.

30:11And each of those businesses, if I look at what they have in common, they're all of this form. There's a certain category of business that sucks. Like every vendor sucks. Everyone hates all the players. Why is that? They're like, why can't we have a good one? Why don't we have a company in that space that everybody loves? Like, it's such an obvious thing. Like it's just this massive opportunity staring you in the face. But because we see this corruption as inevitable, we don't even think to attempt to pursue an organization that would try to create what were called the positive externalities in economics.

30:43So to me, that's one of the coolest things about writing something like this is you start to open up the aperture of what people consider to be possible, then good stuff happens.

30:51Ryan Hawk:You bring up feedback. I think this is critical. The people you surround yourself with, truth tellers in your life, because staying self-aware and aware of the world is hard at times, but there can be potentially a downside because sometimes you get feedback and they're wrong or they don't know what they're talking about, especially if there's 600 of them. I'm curious in your life, you're a very bright guy. There's a bunch of evidence to support that statement based on your body of work and the impact and the positive dent you've already made in the world. So when you seek feedback, especially from hundreds of people, how do you know like what should I listen to and what should I implement and what should I just say thank you for your feedback and then throw it in the garbage that seems like it would be hard extremely difficult extremely difficult and again a skill that takes reps I feel bad me I feel like I'm like I'm being you're like a motivational workout coach here but like yeah reps is the thing so okay first thing is how do you know you're ready for feedback first question and especially especially in an artistic project, okay?

32:01With business, I'm a little bit more like, I kick people in the pants a little bit more to be like, come on, don't be precious. Go get feedback. And that's only because in business, we tend to wait way, way too long if we're getting any kind of feedback. So like go get feedback early. But in general, like whether it's a book or a movie or a screenplay or a company doesn't make any difference. If you're personally invested in it, then you have to take feedback in the earliest moment when you won't be devastated by it, right? Because like sometimes if you get feedback too early, you can get so sucked into the feedback that then you lose your original spark or vision or inspiration.

32:35So you gotta be careful. You gotta treat your own morale, your own vision as like a perishable resource, not to get overwhelmed. But notice that there's two dimensions of that. There's like how early you get the feedback, how strong is the feedback. You know, I don't go get feedback from total raging a-holes in the early days of a project. Like I go find people who are gonna be more friendly because I want to be able to have a more safe conversation. That's okay. But the other dimension is how sensitive are you to the feedback? And that's the thing you actually have the most control over. And you can learn to interpret feedback in this very special way.

33:09And I learned this in an interpersonal context long before I learned it in a business context. It's a very simple rule. Feedback tells you something about the person giving it, not about yourself. So if someone reads my manuscript and says, this book sucks, what have I learned? I've learned that they don't like this kind of book. I have not learned anything about the book, whether it quote unquote sucks or not. If I'm building a product, I used to have this problem all the time when people would like go into my product forums and be like, your product is terrible. I would go in there and argue with them.

33:41But no, it's not. What is being accomplished by this argument? Never, never won a single one of those arguments. And all I do is piss people off. And more importantly, I blinded myself. my defensiveness blinded me to the information. Because you start to be like, huh, people 16 and younger think my product is awesome. People 16 and older think my product is terrible. Is my product actually terrible? Or is it for teenagers? Oh, interesting, right? I'm learning something about who likes my product right now. So I'm gathering information. When you make this shift to be able to take in feedback without taking it personally, you can then get feedback earlier in the process.

34:17It becomes safer and safer and safer to get product. to the point where you could actually get feedback, you know, at the very beginning, especially of a business product. Like that's what, that's really the whole idea of MVP is to get you into a situation where you're comfortable finding out if this is any good. And the last dimension of feedback is we always have to separate out qualitative from quantitative feedback. Qualitative feedback is for hypothesis generation and quantitative feedback is for hypothesis validation. I'll give you an example again from the book. There was a certain company, I won't name them, but a certain company that I used to think of as the good guys.

34:51And I did a lot of work with them and I love them a lot. And so I put them in the book. Here's a story about the good guys doing good stuff. And readers started to write me and say, those guys are not the good guys. How dare you call them the good guys? They're actually evil. And I was like, man, first time it happened, I'm like, oh, someone's got an ax to grind about my favorite company. Like, you know, F off, right? But after a while I started to be like, okay, I'm noticing a pattern. First of all, people are getting hung up on this chapter. Like I could see the data in the test reading platform.

35:19Like people are not getting past this point. They're getting distracted. They're not learning the information that I want them to learn. And so this chapter is not working. And I also had a hypothesis as to why. I think the reason is because I'm telling a story that is framed as the good guys doing something good. And people don't have that. Like they just don't believe me because they think this company is bad. So like you have to have the qualitative. If I just noticed nobody could read chapter seven or whatever chapter it was, That wouldn't have been helpful. I wouldn't have known what to do, but because I had both the qualitative and the quantitative, I could put them together.

35:52So the same thing is true, like in any kind of process, if you're not sure what the problem might be, you talk to people and get qualitative depth with them. Once you're pretty sure you know what the problem is, then you do a test to measure whether the new chapter works better than the old chapter. And that was the key. Like I finally broke down and took that company basically out of the manuscript. Not only did people stop complaining, I could see in the data that they could get through that chapter.

36:14Ryan Hawk:one of the guys you wrote about jim mackie i had him on this podcast we talked about this and it sounds like you went really deep on this i mean he called whole foods essentially his child but then he he sold it and there's a number of reasons as to why what did you learn and what can we learn from that whole process of jim mackie whole foods and eventually selling it to jeff bezos and amazon Yeah, I tell the whole, the whole sordid saga is in the book and it's a sad story. I mean, I feel bad telling it because John Mackey, he meant so well. And it's so sad to me the way people write about these dramas.

36:52Like I actually talk about at the end, we're working backwards from the end. So people don't know Whole Foods is a grocery store that was literally founded on the principle of love. Okay. It was like literally he wanted to build the greatest place in America to work. And for all the years that he ran Whole Foods, it was super profitable. And it was very frequently named one of the American, you know, it was on that, those famous best places to work lists. And yet once it went public, the gravitational pressure of the public markets, like made it impossible for them to do certain things they needed to do.

37:20As a result, they wound up in a competitively disadvantageous position and activist investors forced them to sell the company, eventually selling it to Amazon. And, you know, Amazon hasn't been a bad owner of it by any means, but the thing that made it special has clearly been lost and and just go on the Reddit forums, you'll see people still to this day mourning what could have been. So I quote this article, because when the activists showed up, Mackey fought them in the press. He was like trying to fend them off, and he called them greedy bastards. He's like, you don't care about Whole Foods and its history and its customers and its quality.

37:49You just want to make a quick buck for six months of work. And the activists who did that transaction made$500 million in six months from forcing the company to be sold. So he was not wrong about their motivation, and he estimated the amount of money they were gonna make pretty well. But the press loved that story. It was like Mackey, the idealistic, conscious capitalism guy versus the greedy bastards of Wall Street. Who will win fight? You know, it's like a personal drama. So I quote this article at the end, someone wrote the greedy bastards won. That's the title of the article and it explains that Mackey wanted to have it both ways.

38:25He wanted Whole Foods to be this mission driven avatar of conscious capitalism, but he also wanted it to be a bog standard public company using all the usual mechanisms of being a corporation. And so kind of he's seeing it as a personal hypocrisy on Mackey's part. But of course, the point of my book is why should Whole Foods have been embodied in this so-called best practice structure? What if it had been embodied in a stronger structure, one that would have allowed it, first of all, to resist the activist, of course, but years earlier to make the tough business decisions that Wall Street wouldn't have liked in the short term?

38:58That's ultimately what they weren't able to do. So yeah, I think you see these examples of a company that should have been able to succeed, but couldn't. And I call them unusual failures because it wasn't Whole Foods mistakes that doomed it. It was its success.

39:17Ryan Hawk:Let's say somebody has, not a Whole Foods, but they're doing well, growing maybe rapidly. And all of a sudden they listen to this, they get your book and they're, well, I mean, I've been focused on my culture and I think my people are great, high character, high competent. We trustworthy. We are like this, right? We're straightened up to the right. And you know, we have our, our life stuff like every company does. It's messy at times, but it's going well, it's going well. They're like, well, where do I even start? Whole Foods seem great. Uh, I want to be more like Costco though. I mean, where does that person even start?

39:52Ryan Hawk:What are some of the few things they can do to say, okay, let's do boom, boom, boom yeah yeah i'm gonna give you the check okay i'm gonna give you the checklist yep but just like if you talk to the olympic bodybuilder and he gives you a checklist you're not done the checklist is like clues do you know the ronnie coleman quote no do you know who ronnie coleman is mr olympia eight time mr olympia yeah yeah okay it's like 12 second video he goes i'll try to do his impression because his voice is amazing in this video everybody want to be a bodybuilder nobody want to lift these heavy ass weights. Yes.

40:25Ryan Hawk:Oh, you got to send me that clip. That's so. I will. It's the best because it's just so true. Everybody want to be a bodybuilder, but like, we don't want to do the actual thing to lift the weights, you know? God, that is such a great metaphor because everyone thinks they're going to be fine. Like their investors tell them, I tell the story in the book of a CEO, founder CEO came to see me, multi-billion dollar company going public planning for his IPO. He heard that I know a lot about that because I run the long-term stock exchange. He's worried about, hey, I heard Wall Street's really short-term.

40:54Is it going to be that for me? And I'm like, yeah. If you have standard governance, Harvard Law School did a study, by the way. Only 20 % of startup founders, venture-backed startup founders, who have conventional governance will still be CEO even three years after an IPO. The mortality rate here is extremely high. So I'm like, dude, you've defied the odds so far, but you need to be worried. The odds are still not in your favor. And I explained to him all the bad things that can happen. Just like told him the story of Whole Foods and all these stories. And he's like, okay, okay, I got to get on this right now.

41:23But he called me back a few months later. I said, okay, you know, how did you do any of that stuff we talked to? He's like, no, not really. I talked to my bankers. I talked to my investors. I talked to my GC. I talked to my CFO. I talked to all these people, one expert after another. And they were all like, you know, man, Eric is such a downer. If he really believed in your vision, he wouldn't talk like that. You're the exception. You're special. You're this, you're that. He's like, so we're going to be fine. He went public and five months after his IPO, investors freaked out about something one of his competitors had done, drove the stock down 90 % and he was ousted.

41:55Now, did he make mistakes? I'm sure he did. Was the business model perfect? Probably not. But had he really earned so little grace after all these years building a multi-billion dollar company, he couldn't even last, not even six months, turn it around? Like, this is the culture we're in. So for people who think they have plenty of time, the principle in the book, the most important principle is it's always too early until it's too late. People always ask me, is it too late for me? I don't know. Is it too early? I don't know. All I can say is each of these techniques, I'm gonna tell you, can you do it right now?

42:28If you can do it right now, you should do it right now. Don't wait. The best time to plant a tree is 40 years ago. The second best time is today, okay? Here's the easiest one on the whole book. If you're the founder or you're on the board or you're in the C-suite of an organization, you can go read your corporate charter. Most founders have never read their corporate charter, by the way, you should. In the corporate charter, you will find a boilerplate paragraph at the beginning that says something like, the Acme Corporation is hereby incorporated to pursue, and it's like a Mad Lib, there's like a blank line, and it says, any lawful act or activity.

43:01And you're like, oh, that doesn't sound too bad. Wrong. Under shareholder primacy, the legal doctrine that we live in today, any lawful act or activity is routinely interpreted to mean maximize shareholder value. So you think you have a mission statement that everyone's working towards, but your legal charter says something different, then you're lying. It's not your mission, okay? Give me a break. So the easiest thing in the book is simply to write your actual mission into the corporate charter. You do this, if you're a Delaware company, you can do this with a two-page legal filing. It's just true in like 44 states.

43:33Very easy thing to do. It's called a public benefit corp filing, PBC. So just remember the three letters, PBC. See, this is something literally your lawyer could do for you tomorrow. It's very easy. Why more founders don't do it, I honestly don't know. Second thing is we need to focus on what I call those fiduciary commitments. So once we say that our mission is to improve human health or something, then we say, okay, who would we rather die than betray? And then we have to figure out how to actually make those commitments real. Is it your customers? Is it your employees? I'm not going to tell you who it should be.

44:08you tell me who you would rather die than betray. If you say nobody, I got nothing to say to you. You're a sociopath, you know, get out of here. You want to run that company? I can't tell you not to do it. I'm here for the people that want to accomplish something. And it doesn't have to always be a person. You could say, well, my number one priority is product quality because I want to bring a little beauty into people's lives. Okay, whatever it is, we need to write it down, put it in the mission. Now the second step is how do we make sure that all of our employees, everybody is aligned to that goal.

44:36I give a bunch of techniques for this in the book. And the third thing is we got to deal with the board and investor pressure, like board betrayal and investor pressure are like some of the leading causes of death of companies in the modern world. So we need to have something I call the director's oath. This is like the version of the Hippocratic oath for doctors. We need that for the board of directors to make them pledge to commit to the company's mission. And the last thing, maybe the most important thing, but maybe the most controversial thing is I think the directors, even the independent directors need to be accountable to somebody.

45:10Power without accountability is corrosive to the human spirit. And the same people that are always talking about how important it is to hold founders accountable think that we should staff boards with absolutely unaccountable independent directors. So no, we need to have a secondary set of trustees. Think of it as like checks and balances, like a legislature and judiciary, executive and a legislative branch, like separate branches. We need to have some way to hold the directors accountable. There's a lot of mechanisms by which this can be done. Obviously famously like Nova Nordisk is governed by a nonprofit foundation.

45:41Patagonia is governed by what's called a perpetual purpose trust. John Lewis partnership in the UK is governed by an employee ownership trust. If you ever played a tailored guitar as I have in my music room, that is governed by an employee stock ownership plan, an ESOP. So there's many, many, many different mechanisms. If you've ever shopped at Ikea or you have a Vanguard mutual fund, or you've shopped at REI, like you have encountered companies that have these structures in your real everyday life. And the data shows that having such a structure is dramatically more stable and also higher performing than conventional structures.

46:14So that would be my kind of quick checklist would be encode the mission into the charter, make those fiduciary commitments, do something like the director's oath at the board and have the directors be accountable to somebody else via something like a foundation or a purpose trust.

46:27Ryan Hawk:Towards the end, I love this idea of you are not, But I felt like this is about personal agency. You are not stuck in traffic. You are traffic. Tell me more about this mindset, this ethos of you are not stuck in traffic. You are traffic. Okay, this is kind of spoiler alert for the book. But my belief when I write a book like this is you got to reward the people that read to the end because most people don't. Speaking of the heavyweights, people are like, I want to learn how to do this awesome thing. but book's too long, you know? I'm like, okay, well, call me back when you're ready to lift the weights.

47:05All I can do is give you the information. You gotta choose to read it. So one of the biggest issues in the whole book is I tend to see the world through organizational eyes because I'm a founder. My clients, my friends, my work is the CEOs and boards and fancy people. I can't help it, you know? Even when I deal with two kids in a garage, they're the boss of the tiny thing that we're making, right? So I'm just used to seeing things from the owner, operator, leader's perspective. I mean, it's a leadership podcast, maybe a lot of people feel this way. But one of the problems we run into when we do that is we miss that all of us have agency over this problem more than we realize.

47:47And in fact, the whole book is about this force, this force I call financial gravity that drags companies down into mediocrity. And we do a whole book talking about the structural tools we need to resist and eventually to wield and amplify this gravity. But there's like a deeper question that I leave unresolved until the end, which is where is this gravity coming from? Is it a law of nature? I can't be right. The earth has no financial nothing like financial markets or human constructions. And we always want to blame investors, blame this, but like a lot of the issue in financial gravity has to do with people's attention, your approval.

48:24Who do you give it to? Notice that the same people that are constantly telling you that you have no agency, that you don't matter, you're not important, like spend a lot of money, billions of dollars on PR to make sure you think they're great. You ever wonder why? Why do they, you know, if you're the richest man in the world, what do you care what everybody thinks of you? Why do you spend so much money on it? Maybe because people's individual choices and beliefs really, really, really matter. So every story in the book can be read esoterically, a secret way. You can read it as a story of the founder, the leader, whoever, but you can read it in reverse.

48:58So for example, in the book, I show the evidence that says that companies that are purpose-driven, mission-driven, enjoy an employment advantage. People want to work there. They don't have to pay them as much. They have higher morale. They have higher retention. That's a leadership principle, but it's also a guide to where to work. Your career will be better off if you work at a company like that. It says that customers are more loyal to brands they can trust. That is also a shopping guide. It shows that companies that are structured this way outperform for their investors. That's also the thesis of an investment company or a good guide to where to invest your retirement savings.

49:38Now, when I start talking about this stuff, people get real antsy. It's like, wait a minute. After a whole book of structural problems requiring structural solutions, now you're telling me I'm going to solve climate change with recycling? You know, F off, right? Like, we're so sick of that stuff. Everyone wants to blame individuals for systemic. I get it, man. I'm not doing that. But what I want you to understand is that we live in the age of what's called surveillance capitalism. And this is where I say, you are not in traffic. You are traffic. Where is gravity generated? You are generating it right now.

50:09The fact that you chose to listen to this podcast instead of something else is lending your gravitational power to this program. Why is everyone constantly like, please like and subscribe? We need the evidence of your attention to fuel the algorithms, to get the investment, to get the next thing. The next guest wants to see what's the data. Like you have a lot of agency. So in the age of surveillance capitalism, every decision you make, whether anyone knows about it or not, even if you keep it a secret, think about all those famous stories of people that like their parents found out they were pregnant because like Target would send them a targeted ad for like baby stuff.

50:49And they're like, why is this coming to my house all of a sudden, right? Like, even if you never tell anyone, the algorithm knows people are surveilling you. That means every decision you make is some middle manager somewhere's OKR. It's their bonus target. It's their job to make sure you do that thing. It's probably some other person's job to make sure you don't do it. So everything you do creates these gravitational waves that trickle out through our whole economy. As a result, you can complain about surveillance capitalism you want has tremendous downsides privacy is under threat all that's true but it also is a source of surprising power that you have so wield it well one more personal question it's a year from today

51:33Ryan Hawk:okay i love studying how high performers celebrate or maybe lack thereof this is called the champagne question you the people you love you're all popping bottles you're going nuts you're celebrating like crazy. It's one year from today. What are we celebrating? Yeah. Oh God. That's such a great question because I don't even know. My life was so fast. Things that were unthinkable have already happened. You know, like it's hard for me to say. So like, if you'd asked me not that long ago, I would have said, you know, last September, I say we would of course remember I don't run LTSC anymore, but I still have a habit of calling it we.

52:09LTSC filed a petition with the SEC to abolish quarterly reporting. Now for 50 years, if you ask any leader in business of any consequence, what's wrong with our public markets, what they find annoying about being a business leader, everybody says quarterly reporting makes no sense.

52:25Ryan Hawk:Gotta hit the quarter, gotta hit the quarter. Everyone hates this. There's nobody alive who thinks this is any good except for the people like that that's their thing. But like actual people who work for a living find this crazy. Anyway, for decades, people have been trying to get rid of this when it's been seen as an absolute unstoppable pillar. I went to the team at LTC. I said, listen, it's not my decision to make anymore, but I recommend we do this filing. Let's lay out the case, the evidence for why it's time for this to go. It was in the news a couple of weeks ago that the SEC is going to do it.

52:53So if you told me in September to have a champagne, I'd be like, we'd be celebrating that. That'd be like unbelievable world historical achievement. Now it's like, well, they already did it. And everyone's like, okay, I guess it's just like, what becomes a champagne problem is like instantly accepted as conventional wisdom. Oh, everyone knew they were going to do that. It's like everybody. but this was considered impossible like five minutes ago. Anyway, so I don't know, man. It's very difficult to say. I hope the book is seen. I don't know if it's gonna sell a lot of copies or be a bestseller or whatever.

53:19I hope people will like it, but the fate is really up to the people watching this. Like, this is not a book that's gonna be boosted by a lot of traditional media. It's not like gonna get like wall-to-wall coverage like a book about Elon would get, you know, like a controversy-stirring book that's full of drama and talking crap about people. Like this is not that kind of book. It's antagonistic to a lot of people in power who aren't gonna like it. So to me, if a grassroots movement emerges around this, if people take it into their own hands to not just buy the book and read it, but to like to put it into the hands of their founders that they know, their friends, and give it to their boss, and they start to just demand as consumers, as employees, as leaders, I want to work in an incorruptible company.

54:01That's my right, I deserve that. that otherwise I'm going to be betrayed who wants that that starts to have we see even the faintest inkling that that kind of thing is happening we're having a champagne toast about that one

54:11Ryan Hawk:year from now for sure love it the book's called incorruptible how good companies go bad and how great companies stay great by the way did you publish this with James Clear's publishing company it is this is published by Authors Equity absolutely nice man I I uh had a dinner with him a couple months ago when we were talking, he seems so jacked about what they're doing there. He's surrounded himself, not surprising, with like the best in the world at that. So how has your experience been? Oh, it's been great. The irony is many of the people that work at Authors' Equity are the original team that worked on the Lean Startup with me.

54:44That's cool. So I get the best of both worlds. I'm both coming home to really high-end publishing professionals who I know and love, but also I get the benefit of this radically improved economic model. It's a new business model for publishing. And I have tremendous credit to Madeline and James for inventing this thing. I think it's going to do a lot of good for a lot of authors.

55:00Ryan Hawk:Love it. Well, thanks again for being here, Eric. I've been a fan of your work for a long, long time. Lean Startup Days is really, really cool to have this conversation. I would love to continue our dialogue as we both progress, man. Oh, man, I'm super jazzed. Thanks for making the time. Thanks for such great questions. And everybody like and subscribe. Don't forget. Thank you. I appreciate it.

55:22Ryan Hawk:it is the end of the podcast club thank you for being a member of the end of the podcast club if you are send me a note ryan at learningleader.com let me know what you learned from this great conversation with eric reese a few takeaways from my notes what is your equivalent of costco's hot dog in your organization that one commitment you are willing to defend even when it's financially painful. What is something you stand for because it's part of your company ethos, especially if it doesn't make financial sense? I think it's a great question to ask yourself as well as to speak with when it comes to the leaders at your place of work.

56:05Ryan Hawk:What do you stand for, even if it doesn't make financial sense? Then find your corporate charter and read it. most say nothing about mission, customers, or employees. I liked Eric's prescription here. Encode your actual commitments into the legal document. Make them binding, not just a decorative statement that you hang up on the wall. And then pick one decision in front of you right now where the harder short-term path would build something more durable long-term. The harder path is actually easier in the long run. Think of the Ronnie Coleman lifting weights. Everybody wants to be a bodybuilder, but nobody's one who lifts these heavy weights.

56:49Ryan Hawk:What is that for you? Go lift the heavy weights. Once again, I would say thank you so much for continuing to spread the message and telling a friend or two, hey, you should listen to this episode of The Learning Leader Show with Eric Ries. I think he'll help you become a more effective leader because you continue to do that. And you also go to Spotify and Apple Podcasts, rate the show, hopefully five stars, write a thoughtful review, subscribe to it by doing all of that. You are giving me the opportunity to do what I love on a daily basis. And for that, I will forever be grateful. Thank you so, so much.

57:22Ryan Hawk:Talk to you soon. Can't wait.