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- A core principal from Toyota Lean Production and Demings TQM, is that a critical way to increase quality is to address waste coming upstream, including the waste of fixing defects.
The argument that “AI runs so quickly” reminds me of the American manufacturing technique of making a machine lunch out widgets whether they were needed or of not to maximise throughput. As any lean practitioner knows this leads to multiple additional wastes including excess work in progress and wasted movement.
How do you see this principal lines up with current AI arguments?
by evolve2k - Oh my God, we're seeing this kind of waste of overproduction everywhere with AI. In fact, I've noticed that even when I vibe code a product, I often wind up adding tons of additional features that I didn't plan to, simply because the AI makes it convenient to do so. I even feel the vision for the project starts to drift in line with what the AI wants rather than what I want.by eries
- Any thoughts on bootstrapping a SaaS in the AI era? Is it more manageable because a single person can leverage more? Or more difficult because of increased resource needs and customer demands? And also how that factors into starting an "incorruptible" company today.by keiferski
- Any time you have a technological change, it's kind of confusing to figure out how it can apply to entrepreneurs. On the one hand, it makes it so much easier to create a new MVP, makes it easier to create distribution and to get connected to customers, to do many of the techniques that lean startup demands. On the other hand, that same capability is now in the hands of thousands or even millions of other people, including other people creating startups to compete with you and the incumbents you're trying to disrupt. It's always an open question whether the so-called attacker's advantage will overcome the so-called defender's advantage with any given technology.
In terms of the thesis of Incorruptible, though, I do think that LLMs in particular should be really, really advantageous for managers and leaders who want to create alignment and coherence within their own company. If there's anything that LLMs are extremely good at, it's summarization. So much of the modern leadership challenge is simply figuring out the answer to the question: what is my organization actually doing right now? That's a summarizing problem.
by eries - I worked at Anthropic, and I wouldn't attribute much to the structure itself – so I'm wary of using it as a positive example here.
I do attribute a lot to specific people. Concretely, to much of the intitial team, who they recruited on the research/infra side, and some very close personal relationships within research/infra. That dynamic, paired with their unwillingness to accede to something against their values, is what I credit for some atypical decisions and outcomes [1].
Things regulary go "corrupt" in parts of the company; it's hard to scale without importing culture from big tech. Sometimes, the defense was ICs escalating issues, Dario talking to ICs, and then shaking things up.
But this process takes time, and it doesn't lead to a full reversal; a bad/misaligned hire has reverberating impacts. Many folks are still driven by values (even if their values are not your values!), but scaling dynamics seem to be evolving like any other org – just at a higher employee count and revenue numbers.
I do place trust in specific people who work at Anthropic, but I wouldn't place trust in Anthropic the organization. It's an organization that's wont to change, regardless of its structure.
by lebovic - What does ICs stand for?by chrisgd
- > scaling dynamics seem to be evolving like any other org – just at a higher employee count and revenue numbers.
I really wonder if it's possible to avoid these dynamics, even if you try really hard.
If not, it seems to me that goal alignment is the main benefit of a hypothetical lean AI company where the middle management is 1% people and 99% tokens. When most of your decision-making is not being siphoned by politics, your output scales far better with respect to input resources.
by 2001zhaozhao - Your comment is very astute. A structure is like a shell. It can only protect what is within. It does not cause what's within to be vital, healthy, or unhealthy. But if you think that the courage that Dario has regularly shown would be possible with a conventional "best practices" structure, I think you're kidding yourself.by eries
- Were those upright people abducted by aliens when you started working with Palantir and the "DoW"?by propagandist
- The policy decision to silently nerf AI/ML code produced by Fable surely wasn't just something "accidentally imported via a bad hire"? It seems to me like Anthropic wants to control who can develop frontier AI models. Maybe from inside Anthropic that seems like a noble mission, but from the outside it seems like downright shady anti-competitive behavior.
I saw in latest news the decision has been partially reversed -- because of external pressure...
by davedx - Totally agree about the people. I've seen a bad hire blow up a 20 person startup. I've seen 5 person company excel since they worked more like 5x5 persons than 5 individuals.
- Hi Eric, I enjoyed The Lean Startup.
You used the phrase "our industry". Personally, I'm not a huge fan of the 'tech industry' concept, simply because a lot of startups are not in software/computing, and a lot of new technology isn't either. But I get what people mean.
I notice that the companies you mention like Costco and Patagonia are not in the tech industry. Does your new book have any examples which show how to stay incorruptible in the face of the network effects that drive monopolization in the tech industry? Alternatively, have you seen workable ways to split network effects amongst networked affiliates, to spread out the market power?
I know that most founders aren't exactly looking to make a startup with a lot of competition (I'm sure not), but it would be nice to know if someone is fixing problems specific to the 'tech industry'.
by FiatLuxDave - Yeah, I did my best in the book to find that balance between tech and non-tech stories. You'll find a few tech stories in there, for example Anthropic, GitLab and Cloudflare. And if you want all the horror stories, you can read Cory Doctorow.
I wanted to have a wide variety of stories in the book from many different industries to show just how pervasive these forces are that we're doing battle against. While there are some things that are unique to the tech industry, I think we have more in common than what sets us apart.
FWIW, I wish people would talk about the "startup movement" rather than the "tech industry" for what we do. But maybe that ship has sailed.
by eries - My biggest struggle with this question is that "going bad" sometimes coincides with not just financial incentives, but also more people getting value out of it. For example Spotify gradually shifting from "we make it easy to curate and share playlists" to "we make them for you to use as background music constantly." Sometimes what's bad for the early power user is great for the late adopter, and it's difficult to make any kind of broad judgment about whether the change is better or worse.
What do you say to this interpretation? In particular do you think most cases could be framed as "the key audience/customer/market has shifted"? Is it possible to find greater financial success while doing things the primary audience doesn't like?
by ngriffiths - I don't have the link in front of me, but someone who used to work at Spotify wrote a really nice reflection about this change through the lens of incorruptible over on LinkedIn. If someone can find it and post it here, that'd be great. If not, I'll try to remember to come back and post it later.
I think these changes very rarely have to do with what customers want shifting, but when people say "the market," they are often confused about whether they're talking about customers or our financial markets. Frankly, it's far more often for this kind of correction to originate in the pressure from financial markets than any other single source.
by eries - They study aspects of this phenomenon in UI design. There is a constant struggle between power users and novices, and a good UI absolutely cannot cater to both. Which means that over the life of a product, its UIs will tend to get more complicated and inscrutable as your user base levels up. Adobe products are often cited as prime examples.
This, of course, makes on boarding and new user acquisition harder, and can severely limit product growth. And this also leaves space for simpler products to come along and cater to the novice market. Or, companies can fight this tendency, and remove features, or make them harder to use, in order to cater to less demanding demographics.
What I'd be curious about is what spotify looks like as their market share levels off. Do they keep catering to the automatic playlist crowd, or does their average user get more sophisticated over time?
by milesvp - I haven't read the new book yet, but I'd be interested in your take on Disney's trajectory over the last, say, 2 decades. It seems to have strayed pretty far from Walt's original vision, largely due to the actions of Bob Iger. He took what used to be a company that was fueled by creativity and turned it into a machine that strip mines IP and extracts value. Iger purchased IP (Pixar, Lucasfilm, Marvel, Fox) as a risk mitigation strategy since you get an established brand you can exploit on day 1. But in doing so he killed the soul of Disney, which was built on big creative bets (literally sell the car to make a movie, mortgage the house to build a park).by byoung2
- @eries I have a question at the bottom for you
I happen to think a lot about this exact case. Walt Disney was an innovater who hated to repeat himself. He took enormous leaps of faith multiple times during his career in doing something completely new/different. Snow White: first full length feature film, Disneyland, and then EPCOT. He also hated making sequels on animated movies, he thought of it as a cash grab. That's why sequels like Bambi 2 and Cinderella 2 came decades after his death.
The reason I believe for all this is that founders like this are visionaries that are hard to corrupt. Walt had a strange relationship with money, he didn't long to have a lot of it, yet he knew he needed it to build his extraordinary projects. Ofcourse a founder with no care for money is a recipe for disaster, thus his brother Roy, an accountant often critizing Walt's ideas made the perfect match for the powerful duo that they were.
When Walt died, his vision died with him. The company slowly got handed over to other CEOs like Eisner and Iger. They just see the world very different, they just needed to secure the future of the company and make as much money as possible, sequels started to come out, park prices drastically went up while reinnovation stayed far behind.
We all know that the innovative soul of Disney died with him and that's very sad. But on the bright side, his story can still inspire others to make their magic.
My question to @eries; I studied business in the university of Rotterdam before coming a developer. Our bachelor was a 4 year course with your 'Lean startup method' at it's core. One thing that bothers me a lot in this day and age is the culture of reiterating and 'ship fast'. I look up a lot to Walt and his vision was quite the opposite. He built stuff and had a special eye for quality before releasing anything. He had the nerve to remove parts of a movie where artists had worked 8 months for the sake of the quality of a piece. I feel we live in an age with no sense for quality anymore. We just are to re-iterate as fast as possible and build shitty MVPs to see if there is demand. I get the idea, really.
But honestly, as an industry, at the same the bar for quality is extremely low. And it's in the entire industry from startups to SME to Enterprises. With AI, this trend only seems to become worse, we generate more, but not necessarily better. We are going to be in a time where signal to noise ratio will be incredibly low, and the demand for quality products is going to be up.
I hope it doesn't sound too bitter, but I just long for that old philosophy of quality first. Curious what you think about that!!
by joshuaS98 - I recently had the chance to meet Abigail Disney, who has been a very vocal critic of what's happened to her grandfather's ethos. It sounds quite sad.by eries
- Eric, thank you for taking time to answer questions! I read The Lean Startup early in my career and it shaped a lot of it. I’m keen to read your new book
As I read through your comments, one question popped into my head: what’s your thoughts about the Friedman doctrine? Do you address it in your book?
Specifically, the Friedman doctrine makes the argument that the social responsibility of the firm is to increase its profits. That policy making should be left to governments.
Milton Friedman states in his essay:
Insofar as [a business executive's] actions in accord with his "social responsibility" reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money.
His theory was introduced in 1970 and it seems has since become the standard for the corporate world
How does this square with what you present in your book? Do you disagree with his theory?
by jameslk - > the Friedman doctrine makes the argument that the social responsibility of the firm is to increase its profits. That policy making should be left to governments.
> His theory was introduced in 1970 and it seems has since become the standard for the corporate world
questions: WHY has it become the standard? Should it still be the standard-- the world has changed a lot since 1970, is the context that supported Friedman's arguments still true? Does this also mean corporations shouldn't try to shape government/public policy?
Additional questions: "increase profits" over what timescale? PE has a reputation for increasing profits in the short term while killing the company over the medium term.
Re social responsibility. Wasn't it Ford who helped realize that paying workers enough to let them buy your product increased your market size, thus increasing profits? Did Ford perhaps go too far in 'social policy' by requiring his employees to pass invasive inspections by his company's Sociological Department. Where to draw the line?
- Yes, indeed, this is discussed extensively in Chapter Fourby eries
- I'm not Eric, and I'm not an economist, but I'd suggest this quote is mostly used to drive up profits for shareholders, and not for the benefit of the other two constituencies.
For example, we bought a company, and over the next year or so doubled wages in that company. Our "social responsibility" in that case was to spend shareholder money so that workers had a living wage. That doesn't seem to be the story I hear about say Amazon.
Yes, we've also spent money outside of those 3 groups. We contribute to charity. We spend money encouraging staff (and customers) to get cancer screenings etc. We spend (I guess shareholder money) on lots of things that are adjacent to our actual business.
Frankly, in the long run, I think it ultimately helps the business. It makes us "human" and reminds us that we control money, the money does not control us. This permeates through employee relationships, it permeates customer relationships. Ultimately that makes for a stronger company, built to last.
We've had acquisition offers. The shareholders have resisted them so far (despite easy riches) because we've seen what happens to other companies our size when they get acquired. Shareholder interest flows up. Staff (and by extension society) interest goes down. Ultimately most everyone leaves.
by bruce511 - For those that want to go deeper with _Incorruptible_, I've spent the past few months doing hundreds of interviews and events discussing its various themes and topics. I'm having Claude Code summarize this progress along the way at https://howisincorruptiblegoing.com/
You can also see the various accolades, reviews, and awards that it's accumulated so far.
by eries - As an author, I'm navigating SO many angry people who are enraged at the idea of using AI tools in writing. How are you managing that?by Jaauthor
- I agree with your premise that the unethical behavior in the markets is structural. I also commend your work on this book. The creation of the LTSE is also a huge and laudable accomplishment. Kudos!
However, I have to express some skepticism that through regulations and reforms, we can reverse the entire incentive structure for public investment to be aligned with stewardship rather than extraction. How do you plan to defy the "financial gravity" between you and this dream?
Finally, I think that Claude Code has misinterpreted your request to summarize your interviews and events. Instead, it created a marketing and promotional website with not a summary to be found!
by sdellis - Just dropping in to thank you for writing this book and raising awareness around it. A lot of builders are really disillusioned by how "corruptible" the tech industry has been.
I wrote a blog post called "Revenue Model is More Important than Culture" (it made the #1 spot on HackerNews a few years ago) arguing that the way to avoid that corruption is by making sure the business model is immune to it, but having read your thoughts, I'd say your argument (structure being the dominant term) is even stronger.
by Ozzie_osman - Link for anyone looking for it
https://somehowmanage.com/2020/09/20/revenue-model-not-cultu...
by aturek - I wish I had read that blog post because that is one of the chapters in the new book. I actually think that the phrase "mission-driven" for most companies is a total lie. They are at best "mission-hopeful". In fact, I tried to create a new term for the work that is required: the management system, leadership techniques, and structural elements that are required to 100% align the business model with the mission. I call it "mission drive," as if it was an engine you could install and maintain.by eries
- Eric - I've worked for NASA, ATT, IBM, HP, Amazon, and Google, not to mention a couple of startups that I started in between. None of them (except the startups, but they were brief) stayed true to their original mission. I haven't read your new book, but IMO, it's because the founders leave and the next leadership don't share the vision or values of the founders in the same way. After all, a company is a collaboration among people who want to make a contribution. When the people change, the company changes. It's inevitable.
That said, you seem to have archetypes above Costco, Patagonia, and Novo Nordisk that avoided it.
Can you comment on not what it takes to build such a company, but rather how to transform companies like those that I worked for into ones that resist gravity? Or is it too late?
by mehulashah