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nicksbg | on: I'm Eric Ries, author of "The Lean Startup" and new book "Incorruptible" – AMA
I think that for example Zuckerberg has built a structure where he is basically irreplaceable. It had to do with A/B shares where, while having a lot less shares, he made sure to have the controlling ones.

While this is good while the founder is alive, it sort of begs the question how long will the company that has structure like that run after the founder is gone. I believe it could go to some family foundation that controls the company, but I guess that is still prone to corruption.

I think that there are a lot of interesting examples in gaming industry - founders start something and they are pushed from the company due to acquisition or by the shareholders. Let us not forget hostile takeovers too.

As for startups - I think that it depends a lot from where you come from. For example, being in Europe, Serbia, it is a lot harder to bootstrap startup or to find investors. The best bet is organizing startup as a C corp in Delaware via something like Stripe Atlas in order to get (hopefully) some foreign investors interested. Investors here want to extract value before there is one there, which is a short term thinking. This in turn lead to risk aversion, opening the country for outsourcing model which is now collapsing and where there is small percentage of product based companies.

eries | parent | next
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.

dominicrose | parent
> this is good while the founder is alive

Are we still talking about Facebook?

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