Lenny's Podcast: Product | Career | Growth
01:24:22 · Eric Ries, Lenny Rachitsky
[01:24:22] S0: Be Our grandkids will think this is the most obvious thing they've ever heard about. So yeah. You can get ahead of it now. When I first started talking about Lean Startup, people thought it was so weird. As weird as you think this is, people thought Lean Startup was a lot weirder. So I've been through this before. And when I write, I don't write very many books. Okay> I'm not like an influencer. I don't tweet every 30 minutes. I'm not that kind of person. It takes me years to put these things together. And I only do it when I have figured something out that I have personally lived myself and found useful in my own work and I've helped lots of other people do it. So it takes me a long time because it takes a lot of experimentation, a lot of testing. This is the work of hundreds and hundreds of companies who I have worked, had the chance to work with and seen what works and what doesn't work. So the pain that I'm describing to you is like, this is not some hypothetical thing. I'm not trying to trick you into something. I have nothing to sell you. This is just what the data shows can prevent this epidemic of value destruction that we're seeing all over our economy. [01:25:25] S1: So maybe it's just a final tactic. Say an early stage founders listening to this, they're like, "Oh, shit I got to really do something here." What are say three things they should do in the next week or two?
01:25:35 · Eric Ries
[01:25:35] S0: Okay, here, let's just do the really easiest things. First of all, if you haven't raised money yet or you've only raised money on safes. Okay? You can do absolutely whatever you want. So do not waste this moment. Everyone's in such a rush to get big, such a rush for the next thing, but you have a precious, precious moment here. The founders who have already raised their series A or they're in pre-IPU, the founders that you envy that are ahead of you, it's more of a pain for them. They got to go get investors on board. They got to go... They need to do it. Okay. I told you the next best time to plant a tree is today. So they still have to do it, but you have an incredible privilege. Just please, please, please do it. Because here are the basic things I think are really easy to do that are super low cost. Be a public benefit corps, do the file. But that's so easy. And write a mission there that is something you really will feel good about. And the way the test for if you wrote the right thing is try to brainstorm with your co-founder. You don't need to spend like 10 weeks on this, spend an hour and just adversarial prompting. Okay? Can you think of any way you could make money while violating this statement? And if you can, would you be happy or sad in that scenario? If you'd be sad, write it into the thing. Don't ever be a situation where you're rich and miserable. Write it down. Okay. Easy. Second thing that's super easy, we didn't get a chance to talk about, I call it the director's oath. This came up obviously because there's this big fight going on between Anthropic and Figma and a reporter I text just got reported, reported on the idea. Because it was like, "What are our responsibilities in these weird situations?" It's actually really tricky. Every company's calling me being like, "Are you saying I can't have an AI person on my board? Because having an AI person on my board seems really dangerous." But I'm just like, "You know what's really dangerous? Not having an AI person on your board." So yeah, everyone's kind of stuck. What do we do? It's impossible situation. We need to have, just like we have doctors that have a Hippocratic oath, first do no harm. Why don't we have that for directors? It's insane to me. Directors control, make far more consequential decisions than nurses.
01:27:29 · Eric Ries
So why do we hold nurses to a higher standard than directors? No. So we can wait for us to standardize on an oath for everybody, but you could implement one right now. You could just write it into your corporate charter, "Everyone has to do this. It's a precondition of being on the board." And then the third thing is I'm going to presume, again, for founders, we'll talk about non-founders in a second, but for founder, I'm going to presume you've already got what are called founders preferred shares. If you don't know what that is, you need to ask an LLM to explain it to you. And just say, " Eric said founders preferred shares could potentially make me personally an extra billion dollars someday. So can you explain to me why?" Type that prompt and read what it says. You need to understand the economics of what are called founders preferred shares. So I'm going to assume that you understand that and you've already done it. If you haven't, that doesn't count on my bill of extra things you needed to do because you need to do that anyway for personal reasons. But if you have that, then that's the logical place to do things like founder control, extra votes, board votes for board control, stuff like that. So talk to your lawyer about what are called mission protected provisions. If your lawyer's kind of being a drag or you don't like having to pay them by the hour, I actually helped start a law firm just because this drives me crazy. So there's a law firm called Virgil. They'll be happy to help you and they don't charge you by the hour. This is not the main thing that they do. They mostly do AI assisted back office acceleration, which is also very cool. But anyway, make sure you have somebody you can talk to about it. Okay? And then after you've figured out which of those things you want to do, then imagine yourself in the seat of an investor saying, "It sounds like you're a greedy SOB. You have all this power for yourself. You're like a power hungry emperor. Why do you want to be emperor for life?" So you don't want to be emperor for life. Right now we kind of have this dichotomy between what I call investor controlled companies and founder controlled companies. And everyone's like, "You got to pick one or the other." But neither alternative is very good. What we want to create are what I call mission controlled companies.
01:29:26 · Eric Ries, Lenny Rachitsky
So a mission controlled company is one where the mission itself has sovereignty. And so if you're feeling a little greedy about grabbing all this power for yourself, that's the time to do something like the Anthropic LTBT. It's very easy to implement at the early stages because you don't need a nonprofit. Let's say you're a want to be Novo Nordisk, you don't actually have to boot up the nonprofit right now. All you have to do is write it into the charter the way Anthropic did. Just say, "10% of the equity is hereby pledged to a nonprofit foundation and 1% of future revenue. The foundation gets a board seat," or whatever you want to say. Those things are really easy. Just write them into your charter, fire and forget and then boot it up later, but make sure you have the right to do it. Now, those are the bare minimum easiest things in the book to do. A total piece of cake. [01:30:10] S1: It's interesting how so much of this is similar to, not similar, but to AGI alignment, finding a way to align AI, finding a way to align your business. [01:30:19] S0: It is not a coincidence. Okay? There's a deep philosophical reason why this comes up. I'll give you the simple version and then we'll do the complicated version. [01:30:27] S1: Okay.
01:30:27 · Eric Ries
[01:30:27] S0: The simple version is who aligns the aligners? This is the number one unsolved problem in AI. It's not the technical. We're making great progress on the technical alignment problem, but we haven't made jack progress on the human alignment problem, which is that we've known since the development of Conway's law decades ago, that software products, the organizational imprint of the humans who make the software shows up in the technical architecture of the software. It's really weird actually. We don't think about it that much, but the org chart is visible in the architecture diagram. Why? Because human values flow from the parent to the child. So that's one reason. We have to make sure that if you're trying to solve the alignment problem, but you can't agree on what the human values are to align to, you're already cooked. But the deeper and more interesting problem, I don't know if your listeners will be familiar with this or not. There's this concept in the scientific literature called emergent intelligence. And I write about it in the book because corporations, organizations are the oldest form of artificial intelligence on the planet. They are an example of this emergent intelligence. The same scientific principle that makes the transformer architecture work and appear intelligent, that same principle is at work in organizations. Organizations are literally super organisms. They're alive in the same way that these models are emergent intelligences. And if you don't know what this is, it can sound very metaphysical and weird and spooky. So if you want a physical demonstration, I promise no metaphysics required. One of my favorite demonstrations of emergent intelligence, I don't know, maybe Lenny, maybe you can link the video. I have it in the book too. There's a video where researchers created this thing they called the Piano Movers puzzle. You remember that famous clip? I don't know if you have the meme of Friends where they're trying to get the couch down the stairwell and he's like, "Pivot, pivot, pivot." People send it to me all the time for obvious reasons. They created a version of that puzzle that they had ants solve. So visualizes like two slits, two walls with a gap in each wall and a big eye beam shaped irregular object. And if you watch a human solve the puzzle, it goes like this.
01:32:37 · Eric Ries, Lenny Rachitsky
They try one thing, they think about it, they rearrange, you go back, you back. You've ever got to do a puzzle like that? You can just tell watching the video that an intelligent person is trying to solve this puzzle because they try logical things that don't work and then they learn. If you give one ant this puzzle, he cannot solve it, obviously, but put a thousand ants in there and they can solve the puzzle. And if you watch the video of the ant colony solving this puzzle, you will swear you can see an intelligence at work because it does just like a human. It tries something, it pauses to consider, it reorients, tries something different, it's spooky. And the researchers found this is what we have to understand for humans. The more ants you put in the puzzle, the faster the solution. But the more humans you add, the worse, unless the humans are very carefully aligned. This is the key lesson for organizational design. We are birthing these things left and right. And if we don't tend to them properly, they develop emergent characteristics that we don't like. We don't want that to be like that. And no amount of founder mode is going to clean that up because you're talking about something that is deep in the DNA of the thing you made. Beware. [01:33:48] S1: What I'm hearing here is we should be hiring more ants for our organizations. [01:33:52] S0: Well...