In his new book, world-renowned bestselling author Eric Ries probes the root causes of corporate corruption. He introduces a method for designing corporate structures that maintain good intentions by redefining a company's core profit as 'Human Flourishing.'
Imagine a very convenient smartphone app you enjoy using every day. The young founders who first created this app started the company with a pure and passionate goal: “to make people’s lives freer and more comfortable through technology.” You deeply resonated with their wonderful vision and recommended the app to your friends. However, five years later, the situation is completely different. This app no longer considers your convenience. Instead, it has turned into a so-called ‘monster’ that cleverly inserts ads everywhere on the screen, constantly pings notifications to steal your attention, and even secretly collects your personal data while you sleep to sell it elsewhere.
We have witnessed such bittersweet stories countless times in the news and in our daily lives. Why do ‘good companies’ that started with the intention of making the world a better place lose their original intent and become corrupt over time? Is it an inevitable fate that good intentions must disappear once an organization grows and massive amounts of money begin to accumulate?
| To provide a clear answer to this fundamental and heavy question, a legendary figure who completely changed the paradigm of the global tech industry and startup ecosystem has returned. It is Eric Ries, the entrepreneur and author who wrote the global bestseller The Lean Startup 15 years ago. [I’m Eric Ries, author of “The Lean Startup” and new book “Incorruptible” – AMA | Hacker News](https://news.ycombinator.com/item?id=48477135) |
He has broken his long silence and stood before the public with his new book, Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great. A Q&A with Eric Ries, Author of Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great Just two weeks after its release, the book has proudly made its way onto the ‘USA Today’ bestseller list, drawing passionate resonance from readers worldwide. Two weeks after launch, Incorruptible made the USA Today… What important message is he trying to convey to us through this book?
Why It Matters
You might think, “What does a book read by Silicon Valley entrepreneurs have to do with my ordinary daily life?” However, our lives today are completely surrounded by products, services, and technologies created by corporations.
To use an analogy, giant tech companies are like ‘invisible, massive water treatment plants’ that supply the water we drink every day. From the moment we wake up and check our smartphones, to shopping online and entrusting important tasks to Artificial Intelligence (AI), we live by drinking the water sent out by these plants. What if these massive plants were designed to blindly pursue only their short-term monetary ‘profits’ and removed essential water filters? The damage from drinking that contaminated water would inevitably fall upon ordinary consumers and society as a whole.
| Eric Ries is not a scholar who only researches complex theories at a desk. He reflects that it has been 15 years since he released The Lean Startup, and during that long time, he has been a field expert who has looked deep inside numerous organizations—from tiny new startups to massive global corporations, non-governmental organizations (NGOs), and even government agencies—providing practical advice. [I’m Eric Ries, author of “The Lean Startup” and new book “Incorruptible” – AMA | Hacker News](https://news.ycombinator.com/item?id=48477135) |
He confesses that while acting as a founder, advisor, and investor over decades, he has witnessed countless times the heartbreaking process of many companies that once had amazing and wonderful missions slowly deviating from their paths, losing the soul of the organization, and reaching ‘Annihilation.’ A Q&A with Eric Ries, Author of Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great
The reason this book is important to all of us is that it is not just a romantic story appealing to companies to “manage morally and nicely.” Rather, from the sharp perspective of a Tech Ethicist, Eric Ries intensely questions whether it is structurally possible within the current capitalist system to build an ‘Incorruptible company’ and presents realistic solutions. Eric Ries: Lean Startup to Tech Ethicist If the companies making the AI and smart services we rely on every day apply his solutions, our data privacy, the quality of the information we consume, and the future of our society will be much safer.
The Explainer
To deeply understand Eric Ries’s new and innovative arguments, we first need to look back at the philosophy of The Lean Startup, which surprised the world 15 years ago. The spirit of the ‘Lean Startup’ (a startup methodology of testing ideas quickly, receiving customer feedback, and continuously innovating) completely changed the way companies worldwide conceive and execute their businesses. The Lean Startup: How Constant Innovation Creates Radically…
| To put it simply, let’s use the analogy of starting a restaurant. In the past, when first opening a restaurant, a founder would take out a massive bank loan to build a large, fancy building and release a complex menu of over 100 items all at once. Without knowing whether customers would like the food or not, they would recklessly place ‘Huge bets upfront’ with enormous amounts of money and time. [Eric Ries, Lean Startup | Practical Founders Podcast](https://practicalfounders.com/podcast/protecting-soul-of-your-company-eric-ries/) |
| However, Eric Ries advised, “Never start a business so recklessly.” His core argument was to first make and sell just one key menu item at a small street stall before putting up a fancy sign, and to continuously modify and develop the recipe (continuous innovation) by collecting the raw reactions of actual customers (customer feedback). The Lean Startup: How Constant Innovation Creates Radically… This intuitive and efficient methodology has greatly contributed to countless entrepreneurs worldwide validating their ideas faster and settling into the market without unnecessary waste. [Eric Ries, Lean Startup | Practical Founders Podcast](https://practicalfounders.com/podcast/protecting-soul-of-your-company-eric-ries/) |
| However, as time passed and he observed the rise and fall of many companies, Eric Ries painfully realized that there was a critically important ‘next chapter’ that his previous masterpiece, The Lean Startup, had failed to address. Incorruptible: The Chapter The Lean Startup Missed with Eric Ries While it taught how to build products smartly, quickly, and without waste, it did not provide an adequate blueprint for ‘Protecting the soul of your company’ when that company achieves great success in the market, becomes massive, and begins to face greedy pressure from numerous investors. [Eric Ries, Lean Startup | Practical Founders Podcast](https://practicalfounders.com/podcast/protecting-soul-of-your-company-eric-ries/) |
Eric Ries analyzes the phenomenon of good companies slowly becoming corrupt as a problem of fatal flaws in ‘Corporate Governance’ (the system of corporate control and internal decision-making) rather than a lack of individual morality. Become Incorruptible - The Truth Behind Successful Businesses Most founders of great companies start their voyage into the rough seas of business with a beautiful ‘Mission’ in their hearts to make the world a better place, using it as their compass.
Let’s use a very important second analogy. A brave and good ship captain set sail with a compass pointing exactly north, toward ‘benefiting the world.’ The crew also believed in that direction and rowed hard. But as the company grew, one day, someone secretly placed a very powerful magnet (short-term financial performance and shareholder profit pressure) right next to that compass. What would happen? No matter how good the captain is as a person with excellent steering skills and a clear original destination, the compass needle itself turns in the wrong direction due to the force of the massive magnet. Ultimately, this ship loses its original great destination and speeds toward the reefs, facing irreversible ‘Annihilation.’ A Q&A with Eric Ries, Author of Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great
To stop this tragic voyage, Eric Ries emphasizes that the powerful magnet next to the steering seat must be permanently removed and the fundamental principles of the compass must be redesigned. To this end, he challenges entrepreneurs worldwide to completely redefine the meaning of the word ‘Profit.’ In the past, a company’s top priority for profit was simply the numbers on the accounting books and the cash returned to shareholders. Now, to become a great company, corporate profit must be redefined as the ‘Maximization of human flourishing.’ How ‘Lean Startup’ author Eric Ries redefines profit in his …
In simple terms, it means creating a structure where a company is only evaluated as having ‘made a real profit’ when the technology and services it provides truly enrich people’s lives and enhance their dignity. Eric Ries asserts that for a company to resist the temptation of corruption and remain a great organization, it must fundamentally redesign its decision-making system and governance based on this ‘Mission Primacy’ (the management principle of making the company’s purpose and good mission a top priority over any financial goals). How ‘Lean Startup’ author Eric Ries redefines profit in his …
Where We Stand
Is this beautiful idea of prioritizing human flourishing merely an unrealistic utopia of dreamers existing only in books? Not at all. As an entrepreneur who values practice, Eric Ries is engaging in extensive activities to directly prove his newly established philosophy in the harsh business ecosystem of the real world.
He personally established the ‘Long-Term Stock Exchange (LTSE),’ a completely new type of stock market for companies pursuing long-term growth by breaking away from short-term performance focus. This helps companies focus solely on their original long-term mission and vision without being chased by the short-term pressure of quarterly earnings announcements. Furthermore, he is actively working as a co-founder of an organization called Answer.AI to correctly distribute the benefits of advanced technology to the many, rather than the few. Incorruptible: The Chapter The Lean Startup Missed with Eric Ries
| The market’s reaction is also significant. Silicon Valley, global investors, and the public, who once shouted that making money was everything, are increasingly awakening and agreeing on the importance of corporate ethics and essence. As Eric Ries declared in a strong tone during a podcast interview, “People have finally woken up to this reality.” [Eric Ries, Lean Startup | Practical Founders Podcast](https://practicalfounders.com/podcast/protecting-soul-of-your-company-eric-ries/) |
Indeed, proving this public awakening, his new book Incorruptible, which questions the fundamental reason for a company’s existence, achieved the feat of going straight to the prestigious ‘USA Today’ bestseller list just two weeks after publication, chosen by discerning readers. Two weeks after launch, Incorruptible made the USA Today…
His journey does not stop there. He has appeared as a speaker at large-scale startup events in Seattle, USA, and elsewhere, constantly throwing a powerful challenge to numerous founders who will lead the future, asking them to rethink, “What is the profit you define, and how will you structure your company?” ‘Lean Startup’ author reveals one regret about his … - MSN He also operates active podcasts and newsletters that communicate with subscribers worldwide, widely spreading concrete ideas for establishing companies focused on true ‘Human flourishing’ rather than just money-making machines, along with the moving stories of hidden heroes who are silently practicing this in the field. Eric Ries Newsletter and Podcast
What’s Next
We are now rapidly entering a great era of transition where Artificial Intelligence (AI) and cutting-edge algorithm technologies replace human intellectual labor and consume all areas of our lives. In this situation where technologies with immense power are monopolized by a few corporations, ensuring that corporate organizations do not become morally corrupt and do not deviate from the correct course of ‘human flourishing’ has become a top priority task more important than ever for the survival of humanity.
Imagine if a ‘Medical Diagnosis AI’ programmed solely to maximize short-term revenue cleverly induced expensive, unnecessary tests for patients, or if a ‘Legal AI’ constantly encouraged unnecessary lawsuits to increase contingency fees. What would happen to our lives? As the power of technology grows, the ethical compass of the companies that control it becomes the final line of defense protecting our daily lives.
In a recent social media post, Eric Ries shared a very sharp and chilling insight into corporate ethics that everyone living in the AI era must keep in mind:
“You can never inspect and examine the complex internal structure of an AI in detail. But we can very clearly watch how the people and companies that create that powerful AI treat others (You Can’t Inspect an AI. You Can Watch How Its Makers Treat People).” Two weeks after launch, Incorruptible made the USA Today…
This short and powerful message strongly implies that the criteria by which consumers and investors evaluate the value of a company will fundamentally change in the future. The ‘great companies’ that will dominate and survive the AI era will not simply be those with fast computing speeds or flashy technical prowess. The key competitiveness that determines a company’s fate will be how a philosophy of respecting others and a solid, incorruptible governance are planted at the very core of the organization.
As consumers, we will also no longer easily applaud the flashy blueprints companies show at new product launches. We will evolve into wise ‘watchdogs’ who sharply monitor how they overcome and control the sweet temptation of profit maximization to keep the initial mission they promised. The powerful structural blueprint ambitiously presented by Eric Ries’s new book Incorruptible clearly provides a new benchmark for us to monitor and cheer for the technology companies of the future. Incorruptible: The Chapter The Lean Startup Missed with Eric Ries
💡 MindTickleBytes AI Reporter’s Perspective
The true essence that makes a company run is not the tens of thousands of lines of code displayed on a computer screen. The ultimate algorithm that moves the entire organization is the ‘definition of profit’ agreed upon by founders and investors. As Eric Ries insights, if a company’s internal compass is not structurally fixed to point toward ‘human flourishing’ rather than ‘money,’ then any technology from innovative geniuses will eventually turn into a monster that ruins the world. We must deeply engrave the fact that what changes the world is not a few lines of genius code, but a healthy governance that holds that code firmly so it doesn’t lose its correct destination.
References
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[I’m Eric Ries, author of “The Lean Startup” and new book “Incorruptible” – AMA Hacker News](https://news.ycombinator.com/item?id=48477135) - A Q&A with Eric Ries, Author of Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great
- Incorruptible: The Chapter The Lean Startup Missed with Eric Ries
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[Episode 834 Eric Ries Revisits The Lean Startup and Discusses How to Become Incorruptible](https://www.startupsfortherestofus.com/episodes/episode-834-eric-ries-revisits-the-lean-startup-and-discusses-how-to-become-incorruptible) - Episode 609: Eric Ries - Incorruptible: How Great Companies Stay Great
- The Lean Startup: How Today’s Entrepreneurs Use…
- Eric Ries: Lean Startup to Tech Ethicist
- Become Incorruptible - The Truth Behind Successful Businesses
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[Eric Ries, Lean Startup Practical Founders Podcast](https://practicalfounders.com/podcast/protecting-soul-of-your-company-eric-ries/) - The Lean Startup: How Constant Innovation Creates Radically…
- Two weeks after launch, Incorruptible made the USA Today…
- How ‘Lean Startup’ author Eric Ries redefines profit in his …
- ‘Lean Startup’ author reveals one regret about his … - MSN
- ‘Lean Startup’ author Eric Ries calls for a shift to ‘mission …TechURLs – A neat technology news aggregatorEric Ries Newsletter and Podcast’Lean Startup’ author Eric Ries calls for a shift to ‘mission …
- TechURLs – A neat technology news aggregator
- Eric Ries Newsletter and Podcast
- Maximizing shareholder dividends
- Maximization of Human Flourishing
- Complete monopoly and acquisition of competitors
- Global Innovation Foundation
- Long-Term Stock Exchange (LTSE)
- Lean Startup Institute
- Blue Ocean Strategy
- Zero to One
- The Lean Startup