Ignite: The Book — Eric Ries on Why Good Companies Go Bad in his new book: Incorruptible | Ep274

**Eric Ries** (0:00)
If you ask people to tell you the story of entrepreneurship, like why is entrepreneurship, why does it work, what does it do? There's actually two competing stories you will hear most often. For people like me and you, entrepreneurial type people, we tell the story like this. The bold, swashbuckling entrepreneur has a vision. Through the vision, he realizes, she realizes, we need to make a product. To make a product, we must have resources. To have resources, we must have a business model. Now, business model, you must have a strategy. We must have strategy, we must have people.
From people, we must build a culture. To then, we build this thing and we offer it to customers. The market validates our intuition. We have product-market fit, and that's the role that customers, entrepreneurs play in our society. Aren't you glad that they exist?
But there's actually an opposite story you hear sometimes. It goes like this. The market has a need for a dry cleaner, or a florist, or a social network, whatever. The market has a need. The need summons customers to want to buy. That requires a product to be built. For a product to be built, we need employees. When we have employees, we must have coordination. We need managers. To have managers, we must have a strategy and a business model. So somebody, in the end, has to be the person who got to take credit for this whole phenomenon. Somebody has to be the person who's the final decision maker.

**Brian Bell** (1:31)
Hey, everyone. Welcome back to the Ignite Podcast. Today, we're thrilled to have Eric Ries back on the mic. He is the creator of The Lean Startup Movement, and now the author of his upcoming book, Incorruptible, Why Good Companies Go Bad and How Great Companies Stay Great. Thanks for coming back on, Eric.

**Eric Ries** (1:44)
Oh, it's my pleasure. Congrats on the show. I love it. It's growing and thriving.

**Brian Bell** (1:49)
Yeah, thanks. It's always great to have guests back on, especially when they publish books. It's kind of like my favorite type of podcast. So tell me what this book is about. It's not really about how to build companies. My understanding is, it's why companies we admire inevitably betray their mission and what it actually takes to prevent that. Maybe you talk to me about what the book is about and why you wrote it.

**Eric Ries** (2:09)
Yeah, I've noticed because I'm a big believer in feedback, as you might have heard. So I had 600 people test read the book. They generated more than 10,000 comments. So I have a really good sense of how people respond to the book, and I was able to really track. I could tell the book was getting better as I was writing it. I apologize to all the test readers of the first version.
It was really grim. Sorry, I did my best. Anyway, that's how you make it better. I noticed there are basically two kinds of readers for this book, what I call the why readers and the how readers. They're right there in the subtitle. First of all, there's people who are like, why does this keep happening? Why are every company I admire eventually turns to crap? How come when private equity takes over my favorite restaurant, I can taste it? What's up with that? Why is this happening? Then the how readers are company builders, are leaders and board members and founders and even investors who want to know.
We don't need another manifesto about how our economy is messed up. We got plenty of those. The real question of this book is how? How do you build an organization that is incorruptible, that people try this shenanigans on it and it doesn't work because it's strong enough to resist? So yes, it is in some level a company building book, but now challenging not just the product building or strategy level topics like in Lean Startup, instead now we're getting at what I think of as the underlying structural forces that affect how companies behave and the governance and structural solutions that determine how strong or weak a company is, which I feel like is a way of thinking about companies that many, many people have not yet encountered. But once you see it, you're not going to be able to unsee it. Because we talk about companies as great, but I want to ask, they might be great right now, but are they weak or are they strong? It reminds me of the strong companies that will endure.

**Brian Bell** (3:44)
Yeah, it reminds me of the first book I read in business school 25 years ago, in Business 300 at University of Washington, Seattle. It was good to great. It was like the first book we read. So I mean, you've probably read that book and studied it. And what is this book contributing to the business literature that either disagrees with good to great or builds on some of the philosophy of that book? Yeah.