The Startup Way: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth

by Eric Ries

As I discussed in The Lean Startup, these kinds of bad incentives trickle down from the public markets and infect everything that public companies touch, including the environment, politics, public safety, and, of particular concern to me, the whole entrepreneurial ecosystem. If the goal of a startup “exit” is either to be acquired by one of these public companies subject to short-term pressure or to IPO and then be subject to them directly, then founders will inevitably face pressure to maximize their company’s attractiveness to those systems. Even worse, the corporate development departments of public companies then wind up anointing the next generation of leaders in startup hubs simply by being the ones who decide which companies to acquire for outsize valuations. It’s corrosive.