Why Eric Ries believes shareholder supremacy is over

Eric Ries’s The Lean Startup changed how a generation of entrepreneurs build companies. In his new book, Incorruptible, Ries takes aim at some of the most sacred business assumptions and explores why he believes the current system is failing the very people it’s supposed to serve. Plus, Ries shares what he witnessed firsthand in the clash between Anthropic and the U.S. government. This is an abridged transcript of an interview from Rapid Response, hosted by former Fast Company editor-in-chief Robert Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today’s top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. There’s this declaration in Incorruptible where you say shareholder supremacy is over. It doesn’t feel that way to me, so what makes you feel like shareholder supremacy is over? My personal view is that this fight has already been lost. First of all, shareholder primacy was supposed to be for investors, but like I said, it’s actually turned out to be really bad for investors. And I think we’re actually in a world of extraction primacy now. I always think of rich investors, the investors today. Yeah, we’re running for the benefit of the shortest-term, most extractive investors. Yes. Secondly, there’s a generational thing. The new generations coming into the workforce now have lived only under this idea. This idea is very recent. I always tell people if you can see a park with a tree in it, you’re probably looking at something older than shareholder primacy. The key date for the adoption of shareholder primacy in Delaware is 1986. That’s not that long ago. We’re talking about Depeche Mode, not monks in some monastery. A very recent occurrence. But we now have people entering the workforce who have lived under this idea their whole lives. So when I teac