Why Good Companies Go Bad (And How to Stop It)
In a Nutshell
The core problem is that standard corporate structures—especially Delaware C-Corps with shareholder primacy—turn successful companies into targets for takeover, forcing founders out and prioritizing short-term investor returns over long-term mission. Founders can build "incorruptible" companies by adopting mission-controlled structures like Public Benefit Corporations (PBCs) and two-entity models (e.g., Novo Nordisk's nonprofit foundation overseeing a for-profit subsidiary), which legally embed a purpose beyond profit and create governance checks that outlast any individual. Evidence from Costco, Novo Nordisk, and Anthropic shows these structures attract aligned talent and investors, resist pressure to compromise, and dramatically improve survival odds over 50+ years compared to conventional setups.
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The best way to make money is to create more value than you capture by building something people want. Many ways of making money today allow people to get rich without creating any value at all.
Eric Ries, author of the New York Times bestseller The Lean Startup, is releasing a new book called Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great. The Lean Startup taught generations how to build companies, but the new book addresses how to protect what founders create.
All of Ries' books come from personal pain. He has observed many companies lose what made them special, with founders losing control and companies not becoming what they were intended to be. The Lean Startup helped create many companies worth protecting, but failed to provide tools for founders to stay in control and protect the trustworthiness of what they built.
Founders spend significant time on zero-to-one thinking, with The Lean Startup serving as a key resource. Until now, there has been no playbook for making companies last for a hundred years. Current leadership and entrepreneurship teaching emphasizes that success will protect you once product-market fit is achieved, but this view is incomplete.
The more successful an organization becomes, the more valuable it becomes as a target for takeover or theft. This represents a missing ingredient and major blind spot. Ries has witnessed this pattern across many companies and shares the story of coaching a founder referred to as "the professor" in the book.
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