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HOUSEKEEPING 📨

It’s pretty crazy that Australia has three of the top ten cities in the world, according to The Economist. Nevertheless, in Australia, all you hear in certain circles is how poorly the country is doing today. Granted, in the 2013 version of The Economist’s poll, there were four cities on the list, but I still feel so incredibly lucky to be an Australian, and in particular, a Melburnian.

I feel like there is a general sense of dissatisfaction across the globe today, stemming from the cost of living driven by COVID-era money printing, but even so, I think we are in a pretty good place in 2026. I’m bullish on closing out the decade in a blaze of innovation, growth, and, hopefully, better vibes.

INTERVIEW 🎙️

Eric Ries, Author of Incorruptible

Eric Ries is the creator of the Lean Startup method and the author of The Lean Startup, the 2011 book that sold more than a million copies, was translated into 30-plus languages, and gave a generation of founders its core vocabulary—the MVP, the build-measure-learn loop, the pivot. He later built the Long-Term Stock Exchange (LTSE), an idea he first floated in that book's epilogue and then spent close to a decade turning into a fully SEC-approved national securities exchange, the first new one cleared to list companies in over 50 years (Twilio and Asana were the first to sign on). His latest book, Incorruptible: Why Good Companies Go Bad... and How Great Companies Stay Great, arrived as an instant New York Times bestseller.

What makes Eric worth reading right now is where his thinking has gone. The man who spent two decades teaching founders how to build is now fixated on why so many of them lose what they built, ejected, bought out, or slowly drained of everything that made the company worth starting. He calls the culprit ‘financial gravity’, the pull that bends even great companies toward short-term thinking and quiet mission abandonment, and he argues the fix is structural rather than ethical. Governance you design early and on purpose to defend the things that score as ROI-negative but matter most. He's not theorizing from the sidelines, either. He advised Anthropic's founders when they left OpenAI, pointing to their Long-Term Benefit Trust as the idea working in the wild, and keeps a file of founders whose own names are stuck on products they no longer control. His through-line lands at exactly the wrong moment for anyone mid-build. It's always too early to protect your company, right up until it's suddenly too late.

What is the core of the book? And why do good companies go bad in the name of profit?

The core idea is really simple. Most founders lose control of their company involuntarily. Either they get kicked out, or the company's culture and structure drift from what they had in mind, and eventually it becomes an out-of-control monster. The book is about how to stop that from happening.

The book is structured like a double mystery. The first mystery is why companies are so often destroyed in the name of profit. Think about your favorite brand that got taken over by private equity, a company that went public and is now a shadow of itself, or a place where the founder was ejected.

The second mystery is that if such a decline is inevitable, why are there exceptions? Because there are. The same person who'd tell you the process is inevitable in one conversation will be raving about how much they love Patagonia, Costco, or some other remarkable company in another. Start noticing which names come up again and again, like Vanguard, Costco, Patagonia, Novo Nordisk, the John Lewis Partnership, Hershey, Tony's Chocolonely, and lately Anthropic. As a set, these companies violate almost every one of our modern best practices for building, structuring, and governing businesses.

That's a fascinating clue that something's gone rotten. Why are we preaching best practices that the very best companies—the ones with real longevity, the ones that stay true to their mission and still make an awful lot of money for investors—don't actually follow? That magic combination is what we all claim to be chasing. So I started tugging on the thread, and in researching the book, I found plenty of evidence that many of our modern best practices are, in fact, value-destroying. We've materialized a set of practices that leaves companies weak and vulnerable to the financial gravity that drags them down into mediocrity or worse.

What does Patagonia understand that most companies don't?

Patagonia's such a great story because it shows a lot of the concepts in miniature, and it's so many people's favorite company. They're worth billions now, so it must be a result of incredible management and flawless execution, but not really. For many years, the company was extremely poorly run. Yvon Chouinard used to disappear on long mountaineering and climbing expeditions and return after months of total neglect. There's one story where he returns to the office and sees, in the bin next to his Head of Sales, a giant invoice for a huge order they'd sold. He fishes it out, all crumpled up, and asks if they really got an order for this and just threw it in the trash. And the guy says, “Yeah, you weren't here. It seemed like a lot of hassle to fulfill such a big order, so we threw it away.” There are loads of stories like that. The company famously overexpanded, outsourced too much production, had to lay off people, and nearly died. Plenty of reasons it shouldn't exist.

The reason it does is a testament to the power of mission. The mission is so strong it's become a magnet for talent and for customers. They once ran a catalog whose front page said, 'Everything we make pollutes.' Rather than dodge the environmental cost of what they do, they put it right up front. Before they were into environmental activism, they were obsessed with product quality. They told people not to buy extras, but to buy one thing and have it last. They'll still repair any of their gear for free, because they believe things should last forever.

Chouinard used to teach his employees classes on things like the nature of quality itself. He'd put an object on the table, like a bag of coffee beans, and ask whether it was a quality product or not. The poor students would say it depends on whether you like coffee, but he would correct them, saying quality is an objective function. Something either is or isn't the highest quality it could be. This is a man who hand-forged his own pitons and carabiners because he couldn't find ones good enough. I know this all sounds very la-di-da. Great, they have values, but what about the business? The thing is that this is the secret superpower of the best companies in the world. When you magnetize people, everything costs less. The best people want to work for you, customers are supremely loyal and far more forgiving of your mistakes, they'll try your new products, and your brand is worth more. I call the principle 'harder is easier'. You do the harder work up front to commit to your values, and you reap the benefits that make business easier down the road.

They do what they do, and they’ll never compromise. If that means they go out of business, fine. That's a level of internal consistency most companies can only dream of.

How do you make something like mission and culture actually stick?

This is one of the book's biggest preoccupations, because I didn't want to write another manifesto about how great trust and mission are. We have enough of those. What we need is a blueprint. A step-by-step guide for building organizations that can be trusted, that can make and keep promises. It took me a whole book to answer this properly, so forgive the compression. Take OKRs, for example. Almost every company runs on them now. You take a grand goal, break it into sub-goals, break those into sub-metrics, and everyone ends up with a metric they have to move. Sounds logical. But ask people how they'll pursue their goal, and they'll say, “I'll take every possible thing I could do, stack-rank by ROI, and do the highest-ROI things that hit my number.”

He’d refuse, but they wore him down with the idea of experimenting, so he relents. They run two a day, and metrics and OKRs go up. Before long, it's three emails a day, and on it goes. You see that slow compromise everywhere.

Trustworthiness is the most underrated and valuable asset in all of business. It's a genuine financial asset, in some cases worth more than money, because money is something you spend and is gone, but trustworthiness, if you protect it, endures. People stay loyal to brands for decades, even across generations, even in a cynical age. So once you see trustworthiness as an asset, you realize that when you hand an individual an OKR, they can quietly spend that asset to boost their personal number, at the expense of the company's balance sheet. Imagine a business with no financial controls, where anyone could spend money without anyone knowing. You'd be bankrupt in no time. Most companies end up morally bankrupt for exactly that reason. They have no mechanism to preserve this asset. The book is about how you build the vaults to measure, protect, and defend them against the people who'd squander them.

Why did you want to write this book?

Honestly, I'm sick and tired of this phenomenon. I've helped too many people make too much money only to end up miserable. If the company becomes a disaster, I don't see who it's for. I know so many people whose kids and grandkids will be ashamed of how the family money was made. They've become the villains of their own story, and in so many cases, they have to watch from the sidelines as the thing they created turns into a malignant monster.

I've started keeping a file on founders whose own names are also the name of their product or company, who then get ousted and have to watch someone else degrade the quality of the thing that bears their name. I even know of a case where the founder is legally barred from starting a competing company to fix the problems, because his name is trademarked by the original company and is too similar to theirs. It's absurd. I've watched this up close. I've seen so many founders lose control and get absolutely massacred by the buzzsaw of the financial system, because they come in naive. They don't take enough steps to protect themselves or their vision, and they reach out for help when it's far too late. One of the key ideas in the book is that it's always too early until it's too late. So I'm trying to get people to take this seriously from as early as possible.

What's the good news story about Anthropic?

The situation with AI is complicated, and I think we're simultaneously too optimistic and too pessimistic about the technology. Meanwhile, there are people actively trying to burn the world to the ground, and I think we can save some of the criticism for them. People always ask me what the problem is with this or that. Even during the GameStop mania, journalists kept calling to ask why people were so upset. People get upset whenever someone finds a way to make money without creating value. Turn the economy into a casino, and yes, you can make money, but people get angry. We have an intense, intuitive aversion to it, and yet we lack the modern language to talk about it. One of the breakthroughs for me was realizing our grandparents had no trouble talking about it. They'd have called these corrupt ways of making money. That's what the word corruption used to mean. We've forgotten it.

Why the lowest inference costs? Best technical architecture. Why? Best talent. Why? The best talent wants to work there. Why? Because people want to feel like they're the good guys. Why do they believe that? Because the culture is genuinely aligned with that ethos. Keep going, and you’ll land where many of the companies we've discussed land. A magic combination of two things: they have the ethos, the culture, the mission that the best people find intensely attractive, and they also have the integrity and structure to resist being pushed off their values.

There's been very high-profile bullying of Anthropic by enormously powerful people. Part of why they've kept their nerve under that pressure is that they saw it coming and built a structure to protect themselves. The Long-Term Benefit Trust is an external set of trustees with the power to appoint directors to the PBC's for-profit board. They've used some of the techniques I recommend in the book, and I think that's part of why they seem a bit more courageous than their competitors.

I'll never forget the night Anthropic said no to the $200M contract and OpenAI said yes. Someone sent me a video of the sidewalk around Anthropic's headquarters, which had been chalked up. Normally, if I told you activists chalked a San Francisco tech company's offices, you'd brace for something grim, but people were thanking them for doing the right thing. Claude went to number one on the App Store the next day. They reaped so many counterintuitive benefits for doing the 'right thing' that some people started criticizing them for it, saying they're only virtue-signaling to get the benefits.

That's the funny thing about mission-driven companies. The magnetism is so powerful that people can't quite believe it. When I started the book, Anthropic wasn't well known; I had to revise that chapter a hundred times as they kept having stratospheric success. But the pattern is common. Show people a young company, and they’ll say, “Never heard of them, how successful can they really be?” Show them a wildly successful one, and they’ll say, “That's not realistic.” Is there any company whose success you'd accept?

With these magnetic powers, you're either nobody or you're insanely successful. That's the point. So the skepticism is the tribute vice pays to virtue. In trying to stay skeptical, people are quietly admitting something powerful is going on. We keep pretending mission is some soft-hearted thing you trade off against profit, when it's one of the most powerful sources of competitive advantage in the world.

Has your thinking changed since The Lean Startup?

I know a lot more than I did then. Some of the original book was a bit simplistic, and tactics are aged. The tools we have now for building an MVP and measuring what's happening are so much better than before, but the principles hold. The whole point of that book was that if we reason from principles about what can and can't work—if we think about entrepreneurship more rigorously—we can work out what to do in each era of technological disruption.

I made a claim at the time about the semiconductor revolution that its long-run effect would be two things. First, more and more democratization of the means of production and faster cycle times, letting you enter more markets more quickly. So acceleration is one major effect. Second, increased uncertainty and unpredictability about what will work, and a decreased ability to forecast the future in any detail. Those two pillars are really what The Lean Startup is for. When you find yourself in a fast-moving, highly uncertain situation, The Lean Startup is what you want. I think that prediction has held up pretty well.

What is the Long-Term Stock Exchange, and why does it exist?

My first attempt to dent this problem wasn't the book; it was the many years I spent building the Long-Term Stock Exchange, the LTSE. I actually floated the idea in the epilogue of The Lean Startup. I try to end all my books with a final chapter that's a bit different from what came before. What struck me as a management theorist is that we now have a real body of evidence on which management techniques work, and one of the strongest findings is that a philosophy of long-term thinking leads companies to outperform over a generational timescale.

People used to ask me why I was telling them to build venture-backed companies and take them public, when the public markets are the most short-term environment in the world. I didn't know anything about public markets at the time—this was 15, 20 years ago—but it just seemed off. Why would investors want companies to be less valuable? You'd think they'd want them more valuable. So I had this idea of building an institution that brings together managers and investors who share a long-term philosophy, so everyone makes more money. That was just a stock exchange, and someone should build a long-term one. When nobody would, I decided to do it myself.

I don't run it day-to-day anymore, so I have to break myself of saying 'we.' But the company got SEC approval and has listed and traded multiple stocks (the first to do that since the NASDAQ was created more than 50 years ago). You may have seen recent headlines suggesting the SEC looks set to move companies from quarterly to semi-annual reporting. That's the result of a petition LTSE filed last September. We don't get much credit for it, the way the press is covering it, because it's become a political food fight. Still, the company's mission is to make public markets more conducive to long-term thinking. A sanctuary for companies that want access to public markets without all the associated drama and nonsense. It's been a very difficult project, but if you have the patience, you can carve the Grand Canyon out of water and gravity.

How do you get the best out of yourself?

Honestly, I struggle with this because I'm always doing so much, and I tend to say yes to things. The upside is you get to do a lot of interesting stuff; the downside is you run yourself ragged. I have a robust family life, and I'm incredibly blessed. I draw so much energy and inspiration from my wife and kids, from that family support. People these days like to mock the idea of work-life balance, but to me, it's the foundation for achieving anything worthwhile. I'd call it work-life integration, and I've strived for it for a long time.

On techniques, it’s meditation for me. If you can't achieve equanimity, you're probably not going to succeed at much else, and entrepreneurship is inherently anxiety-provoking. You're constantly confronting failure and the fear of it, getting publicly pilloried, and you don't get the dopamine hit of success the way you do in other kinds of work. So a spiritual practice, the ability to seek equanimity and curate your inner life, is critical.

A lot of people get into entrepreneurship with demons chasing them, thinking worldly success will solve an inner problem. Most of the time, it really doesn't. I raise it because entrepreneurship is one of the great truth-seeking disciplines, right up there with being an artist or a scientist. At the end of the day, reality either will or won't accommodate your vision. To do truly great work, to create real impact, to build something with generational returns, to see your vision realized, you need the freedom to choose. Imagine trying to do a startup in a country where someone else tells you what you're allowed to build. We're drifting in that direction right now, which is genuinely a little scary, but we're not there yet. Externally, we still have the freedom to do what we think is right.

My real question is whether we have inner freedom. I think a lot of people don't. They don't have the self-mastery or the equanimity to take in the truth of their situation and do what it requires. Often, the reason they can't find success is an inner belief that stops them from doing the right thing. That's part of the power of this book. Readers have already written to tell me it changed how they see business, and what it means to be a for-profit company, and that as a result, they're pursuing an idea they'd never have had the courage to chase before. It was staring them in the face, and only the inner shift let them see it. I'm pretty excited about that.

Extra reading

• Why Companies Go Bad - June, 2026

• Why Corporate Corruption Is so Common - May, 2026

• Incorruptible: Why Good Companies Go Bad... and How Great Companies Stay Great

And that's it! You can follow Eric on LinkedIn and X, and check out his The Lean Startup to keep up with what he’s doing.

BRAIN FOOD 🧠 

TWEETS OF THE WEEK 🐣 

TOOLS WE RECOMMEND 🛠️

Every week, we highlight tools we like and those we actually use inside our business and give them an honest review. Today, we are highlighting Mochary Method—an executive coaching firm that specializes in helping growing startups.

See the full set of tools we use inside Athyna & Open Source CEO here.

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