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Yup. The hot dog story is in the book, and although it is a leadership story, that leadership is protected by a unique structure. Without which, I think it's very clear that it would be insufficient. You'll have to read the book to get al the details :)

do tell

And they say people on HN are all negative without having read the source material. What an exaggeration!

I hope you decide to read the book, and then come back and share whether it meets your expectations or defies them. The fact that you know about the "hack" of the two-entities solution indicates to me that you might well be surprised. There is a whole chapter on that "hack" and how (and why) to implement it.

I'd also ask you to re-examine whether the "objective incentives of the capitalistic market" are a law of nature (and thus, immutable) or something that is subject to human agency. If the latter, maybe we should exert ourselves towards changing it, rather than simply denigrating those who attempt to change it as naive or hopeless. In fact, I address this question directly in the later chapters of the book, including why (I think) people make comments like this to me.

So, in a way, you're in the book! I hope you'll check it out. But either way, thanks for stopping by and dropping a comment.

Right now, in most developed countries and especially in the United States, the defaults for corporate governance are set to a very extractive batch of so-called best practices. Organizations that want to have longevity, be mission-driven, and protect themselves have to proactively and at their own expense change away from the defaults. We could certainly imagine resetting those defaults to something more aligned to human flourishing.

All the mistakes, pretty much, are in the category of not fighting hard enough to protect the company or the founder. I tell a couple stories like this that still haunt me to this day, where I just feel like maybe, maybe, maybe if I had laid down across the tracks and made a big histrionic stink about it, maybe I could have gotten them to take it a little bit more seriously. On the other hand, maybe I just wasn't strong enough and didn't have the power, and there was nothing I could do. I'll never know.

I just did. I can't really imagine what I would want to write about next. I guess if I'm lucky enough to live long enough, we'll see.

So far, no, it's been a complete blackout from the major podcasts and major TV programs.

Of course that's true, but then don't forget that business model is a choice.

Thank you. That's very nice of you to say.

Strongly endorse this way of thinking. If your local library doesn't have enough copies, I'd be glad to donate one.

I cover this topic extensively in the book. I think the fact that founders are increasingly turning to the political solution of "despotic emperor for life" tells you more about how bad standard governance is than anything else. I think vesting this power in a singular person or small group of people has all the downsides you'd expect from studying history. In the psychology literature, they literally have a name for "hubris syndrome." That is a mental illness that sets in when people have too much power.

In the book, I make the case for what I call constitutional governance, which I see as a third way in between standard governance and founder-controlled governance. I think it is both more effective and more long-term. After all, a company that is tied to the human lifespan has a built-in expiration date.

That's it exactly. Trust is part of a virtuous performance cycle that causes them to both be more true to the mission and also to make more money and therefore be able to invest more in the mission, etc.

I guess I should also say that the one tool that I've used that doesn't do this is the one made by my friends at Answer.ai called solveit. You can check it out here at solve.it.com

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.

incorruptible does not mean immortal, fwiw

I appreciate you engaging with the argument in good faith and I look forward to hearing what you think of the book if you do decide to read it.

amen

He's every bit as brilliant and generous as you remember. You can still learn from him, btw, once we re-open the solveit course: https://solve.it.com/

stay tuned

I assure you that I hand-wrote every word of this all-too-human reply. I'm sure an LLM could have done it better.

Sure, happy to. This is a very common source of confusion, so definitely worth clarifying. We agree that Costco's difference is due to its superior leadership. The question is why has the company been able to maintain this leadership advantage over multiple generations of managers, when other companies have not.

In the book, I give dozens of examples of companies that were well-lead and then suddenly destroyed, often by outside actors who found a way to profit from their destruction. This often happened at the governance layer, while leadership watched helplessly from the sidelines.

So why hasn't this happened to Costco? I don't think it's a coincidence that Costco has a variety of "bad governance" provisions, such as a super-majority (of all shares, not just votes) provision threshold for shareholder votes, as just one example. When activists, analysts and other Wall Street actors have tried over the years to force Costco to change, its leadership has been insulated from this pressure. I think that is a structural factor that is important.

Again, structure does not _cause_ ethos. It protects it. My argument in the book is you need both.

I genuinely do not understand what you are asking, but I'd be happy to try and answer it. If you prefer a website not created by humans, you might prefer: https://howisincorruptiblegoing.com/ instead

I would love to learn more about it, too

By far the easiest thing is to file a "public benefit corp" form in Delaware. Two pages, extremely easy, your lawyer can have it done for you by next week without breaking a sweat. By itself, it is not enough, but it solves a genuine problem and has almost no cost/drawback.

No way! I would absolutely love to hear what you thought of that book. In fact, you may be the first person I've ever interacted with who actually read it!

By this logic, there are no such thing as psychological forces or institutional structures that affect human behavior unconsciously. I don't think that can quite be right. If you read the book, you can see the much more detailed and (I hope) rigorous argument, and then judge for yourself.

FWIW, Friedman himself I think would be quite scandalized by what passes for normal business practice today.

Yes, indeed, this is discussed extensively in Chapter Four

Thanks for the suggestion

There's actually a whole chapter on this in the later parts of the book. I talk about the phenomenon of non-profit-run companies (think credit unions or Signal or Wikipedia) and how many of us simply treat them as one-offs or singletons. As I write in the book, we admire them but we do not emulate them. I think this is a major blind spot, and I try to explain why it happens and what we can do about it.

I guess then the jury is still out, then

as nate bargatze says, if only it were that simple!