Lenny Rachitsky: evaluation

Transcript context

…is a 100% true story. The trustees of the nonprofit foundation once had to intervene to protect the for profit from this exact temptation to want to sell it out. And I won't get into the whole story. They did the right thing in this case- ... want to sell it out. And I won't get into the whole story. They did the right thing in this case because they had the legal power to do so. Their intervention ultimately created more than $500 billion of shareholder value. I didn't add an extra zero for emphasis, $500 billion. So when people hear about these things for the first time, it's natural to feel like we're talking just about business ethics or mission. It's like some extra nice to have thing that after you do the real serious business, now you worry about this stuff. No. This is one of the most powerful engines of value creation in the world. And for a lot of people listening, this will be the first time you're hearing about it. But just because it's new to you, does make it new? The German optics company, ZEISS, who makes the lenses in my glasses and yours too, they had this structure in 1885. So I think it's really interesting that we have enough of these examples to know that there's nothing inevitable about this financial gravity. We actually have a dataset that can be studied. There's a whole branch of academic research that has shown, for example, companies with that structure like Novo and ZEISS. They are six times more likely to live to year 50 compared to their conventional counterparts. They have superior return on invested capital. They make more money for investors. They're better in so many ways. So it's a bit of an open secret that these techniques exist. I want us to have these stories in our mind because, as we get into the techniques, some of them are going to sound radical. We want to say, "Wait a second. Is this really doable for me? Yeah, I'm just a little startup. I'm just trying to get into product market fit. Why are we talking about this long off stuff?" Hundred-year-old companies know. August and Marie, they were a tiny startup too once. Now that company's worth hundreds of billions of dollars. So before we get into that, let's remind people again why this is worth doing. Because it's going to sound like, "Oh, my God, this is so annoying. I have to do all these weird things that no one else is doing. I have to convince all these people this is not going to limit us and not hurt us down the road." But just let's remind people again just why this is important, why this is so painful if they don't do it right. Gosh, there's so many things to choose from.…

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