Bootstrapped SaaS founders have kept financially-focused investors out of their precious businesses.
Most have done the deep work to create real purpose, values, mission, and business models to support the special non-financial goals they have for their companies.
But those aren’t enough to protect the magical soul of a great growing business—the golden goose—that matters more than growth at all costs.
Eric Ries is an entrepreneur and author of “The Lean Startup,” whose work has helped software founders validate ideas faster and build companies without making huge upfront bets. You’ve read it, right?
After years of helping startups, large companies, and governments apply Lean Startup principles, Eric built the Long-Term Stock Exchange and turned his attention to a bigger question: Why do so many successful companies lose their way?
Eric’s new book, “Incorruptible: Why Good Companies Go Bad…and How Great Companies Stay Great,” offers practical ways founders can protect the soul of their companies before it’s too late–even when they don’t have big outside investors.
In our conversation on this week’s podcast, Eric explains the idea of “financial gravity”—the hidden force that pushes companies toward short-term financial thinking as they grow.
Eric shares cautionary stories of companies like Whole Foods, Johnson & Johnson, Silicon Valley Bank, and Costco to show how scaling, investors, boards, and even employees can gradually erode trust, mission, and long-term value.
He explains why founders should explicitly codify their mission into governance structures, why trust is the most underrated asset in business, and how practical founders can retain optionality while building valuable companies that endure.
“People have woken up to this reality. Given where we’re at, even if you can create a bootstrap company and maintain control, it doesn’t make you completely safe. The problem is actually not investors, but financial thinking.
“So I tell a bunch of stories in my book (Incorruptible) of companies where the issue wasn’t investors, but their own employees. You start to bring in professional managers. You start to bring in a CFO, and the CFO has that extractive mindset, or even worse.
“Financial gravity is one of the most underrated concepts in business. Your business model, strategy, vision, culture: these things are very important, but they are the things that we have control over. Financial gravity is a force that we don’t control—and usually don’t see until it’s too late.”
He offers solutions that safeguard against them in the long term. Incorruptible is the blueprint for companies that will prosper and endure without losing their soul.
Check out this practical episode with Eric Ries on the Practical Founders Podcast.
