Chapter 1: What is the main topic discussed in this episode?
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Hey guys, it's us, the Jonas Brothers. I'm Joe. I'm Kevin. And I'm Nick. And guess what? We created our own podcast called Hey Jonas. We invented a podcast? Well, we didn't invent it. We just contributed to it.
We're the first people to do podcasts. We get to ask other people questions because we're sick and tired of being asked questions.
Well, sick and tired is a strong way to put it, but you know. Tired and sick. Tired and sick.
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Good morning. This is Laura. Welcome to the Before Breakfast podcast. Today's episode is going to be a slightly longer one, part of the series where I interview fascinating people about how they take their days from great to awesome and any advice they have for the rest of us. So today I am delighted to welcome Eric Ries to Before Breakfast. Eric is the creator of The Lean Startup Method.
He is also the author of The Lean Startup and the brand new book, Incorruptible. So Eric, welcome to the show.
Thanks so much for having me.
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Chapter 2: What is the main topic of Eric Ries' new book, Incorruptible?
But most normal ones probably are. So what's the difference between, you know ā Any random company claiming I am mission-driven, you know, that is our central thing. And those that really... are incorruptible because they are so focused on that mission.
Yeah, I call them in the book, mission hopeful. Because I don't think you have to, you don't have to assume any ill intent on the part of people that are saying this. And in fact, in the book, I say something that a lot of test readers had a hard time with.
Because I said, look, if someone tells you that they're mission driven, tells you that you can trust them, but they haven't made the corresponding investments in an apparatus to keep those promises, then they are lying to you. And a lot of people are like, you can't say that about my boss. That's not fair. You know, he's a good guy. He's always a good guy.
Yeah, it is.
But like, I was like, well, what's unfair about it? Well, he doesn't mean to be lying. He sincerely believes he will. I'm like, that's not what I'm saying. He said you can trust him in the future, but he's lying because he doesn't even know if he's going to be there in the future. And I think that, again, it's like we've lost our ability to say this with any kind of clarity.
I tell a story in the book of, I read dozens, I mean, literally dozens of essays that people have written after leaving Google. Long time Google employees, 10 plus years, every single one of them, talking about the loss of the don't be evil ethos at Google.
One of the things we love the most, anyone who was around for the Google IPO remembers the moral clarity of a slogan that's so simple, don't be evil. Three simple words. that that's something that can be lost. And listen, Google's a great company. I mean, to say Google's like, they're not even the close to the worst of the worst, okay?
But the fact that it's so publicly documented, that despite every apparent best intention that I can find, they nonetheless felt this loss. You can see it in these essays. People write about this feeling that something mysterious was going on, that something vital was being lost, but they couldn't even say who was causing the loss.
And that feeling of helplessness, of confusion, of mystery characterizes almost everyone I know who's trying to do anything good in business today. Employees, customers, I mean, I keep telling this story about the economist John Kay, I think is the one I first heard it from, who went into a restaurant, one of his favorite restaurants, took one bite and told his friend,
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Chapter 3: Why does Eric Ries believe that management is more powerful than technology?
Yes.
But it's like, you want to make a profit.
Oh, sure.
And I'm sure a great many founders would like to have some exit or otherwise, you know, get the financial benefits. So, I mean, is there an actual governance structure that allows you to keep the original mission in the face of wanting to get good returns for everybody who put their money in at the beginning?
The simple answer is yes. And most people don't believe it. Like we're so cynical and we're so been told that the way things are is the way that things have to be for natural law reasons. that we actually often ignore the evidence that this is true, that's like staring us in the face. One of my favorite examples is Costco. Okay, everyone knows Costco.
And yet most people don't understand the magic of how Costco is made. So Costco is one of these companies, I call them the exceptions that prove the rule. So like I was watching a video the other day
Some economist, I think, was talking about how only family-run businesses can truly maintain brand integrity over generations because if you want to have a brand promise that endures for more than 10 years, you have to resist all the temptation of the ROI stuff and the spreadsheets and the quarterly targets and blah, blah, blah, blah, blah. He's listing off the companies, Ford, Toyota, Mars.
There's some family-run companies. And then at the end of the video, he's like, oh, and also Costco for some reason.
Costco's not family run.
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Chapter 4: How does Eric Ries define the concept of governance in business?
And if you study those exceptions, Not a single one of them follows what I would call today's best practices for corporate governance. So when people say that this is impossible, then you're like, okay, but if it's impossible, how come we have these exceptions? They'll be like, well, those exceptions are idiosyncratic. But then you're like, but then how come they all follow this pattern?
Like, then you say, well, it's probably a coincidence. But then I'll be like, oh, no, actually, this pattern is old enough and we have enough examples that there's extensive academic evidence that this is a better way.
And it's that they are not... Well, what are they not doing then?
Yeah, so I don't want to be simplistic about it because, of course, this whole book is my attempt to put down the blueprint of how this works. And in order for this to work, people like to focus on the structures, of course, because they're very interesting. But first, before you can adopt any alternative structure, you first have to build something worth protecting.
Right.
So the thing that makes these structures work is the internal alignment, the coherence that having a strong purpose-driven mission that is aligned with human flourishing makes possible. If you don't have that, you will not be able to achieve institutional longevity. And if you do, you will not sleep well at night based on what it comes. So just like disclaimer, please don't skip over that.
But yeah, if you look at these companies that I just named, They all have rejected the most important business idea of the 20th and 21st century, which is called shareholder privacy, which holds that the purpose of a corporation purpose of an organization really, because this is metastasized out of the public markets and into nonprofits and governments, you see it everywhere now.
Its purpose is to create financial prosperity, to create financial returns for its investors or donors or for whoever. Sometimes even not, we can't even say who it's for. We're just like, well, we have to grow. We have to get bigger. We have to have more money. A lot of nonprofits, schools fall into this trap all the time.
And the desperation to make money, first of all, makes you very weak because it makes you vulnerable to anyone who can threaten, credibly threaten to take your money away or offer you more money. So these companies are easy to tempt. They're basically addicts, do anything for a hit, which is really quite sad.
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Chapter 5: What are the human costs associated with startup culture?
Customers are more likely to try your new products. I mean, just the benefits of trust, it's a compounding asset. And yet most leaders today are horribly naive about this. It's as if we've taught them how to create this vault full of this incredibly valuable asset, the most valuable asset in the world. And we're like, just leave it unlocked. If someone tries to steal it from you, act shocked.
It's like, why are we shocked? It's valuable. Of course, people are going to try to steal it from you. So you need to learn to build organizations that are strong enough to resist. And we see some of these structures like employee ownership, like having an industrial foundation, a perpetual purpose trust, being a public benefit corp, are structural mechanisms.
They're just locks on the door to prevent outsiders from taking what you've made.
Well, we're going to take a quick ad break and I'll be back with more from Eric Ries.
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Hey, it's us, the Jonas Brothers, and guess what? We have some big news. What's the news, Nick? Huge news. We created our own podcast called Hey Jonas. We invented a podcast? Well, we didn't invent it. We just contributed to it. We're the first people to do podcasts. Yeah, a pretty wide range of podcasts. We're starting a trend. But this one's extra special.
So how did we actually come up with the name Hey Jonas, guys? I honestly don't remember. I think it was on a call about what we should call it, and... Well, we were thinking of originally calling it one of the early names of our band before Jonas Brothers.
This is how you guys remember it going down? Yes. I have a very different memory of this. We were talking about a thing, a bit for the podcast where people could call in and say, Hey, Jonas. And then I wrote down on my little notepad, Hey, Jonas, and offered it up as a potential title for the podcast.
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Chapter 6: What is the difference between mission-driven companies and those that are not?
All right. We're going to take one more quick ad break. Then I'll be back with more from Eric Ries.
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Hey, it's us, the Jonas Brothers, and guess what? We have some big news. What's the news, Nick? Huge news. We created our own podcast called Hey Jonas.
We invented a podcast?
Well, we didn't invent it. We just contributed to it.
We're the first people to do podcasts.
Yeah, a pretty wide range of podcasts. We're starting a trend. But this one's extra special.
So how did we actually come up with the name Hey Jonas, guys? I honestly don't remember. I think it was on a call about what we should call it, and... Well, we were thinking of originally calling it one of the early names of our band before Jonas Brothers.
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Chapter 7: How can companies maintain their mission while pursuing profitability?
I'm most active on Blue Sky, but yeah, I have a lot of following on LinkedIn. And people can buy the book in any format you want. Okay. You can get it in hardcover. You can get it in ebook. You can, I just finished recording the audio book, which has a bunch of cool bonus content. And also audio book is super cool. Very excited about it.
But the other thing you can do, this book is going to be carried in lots and lots and lots of local independent bookstores. We actually have a huge list of books of bookstores that are carrying the book on the website. So if you go to incredible.co, you really want to do me a favor and do your community a favor. Buy the book at your local bookstore.
Support these important local community institutions. Or, of course, you can buy it wherever it's most convenient for you. I'm so grateful to those who want to do that.
Well, thank you so much. Eric, thank you for joining us. Thank you to everyone for listening. If you have feedback about this or any other episode, you can always reach me at laura at lauravandercam.com. And in the meantime, this is Laura. Thanks for listening. And here's to making the most of our time. Thanks for listening to Before Breakfast.
If you've got questions, ideas, or feedback, you can reach me at laura at lauravandercam.com. Before Breakfast is a production of iHeart Media. For more podcasts from iHeart Media, please visit the iHeart Radio app, Apple Podcasts, or wherever you listen to your favorite shows.
Hey guys, it's us, the Jonas Brothers. I'm Joe.
I'm Kevin. And I'm Nick. And guess what? We created our own podcast called Hey Jonas. We invented a podcast? Well, we didn't invent it. We just contributed to it.
We're the first people to do podcasts. We get to ask other people questions because we're sick and tired of being asked questions.
Well, sick and tired is a strong way to put it, but you know.
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