My theory is that it&#x27;s about the speed and strength of feedback loops.<p>If you run your own restaurant and you&#x27;re there every day serving food to customers, you have a very rich stream of immediate feedback on how your company is doing. The purpose is pretty clear. If you have a bad idea, people will tell you that your porkchop milkshake is terrible and you&#x27;ll stop serving it.<p>As companies grow, the feedback loops get longer and the signals get attenuated. That allows larger companies to get more and more crazy. Especially so for companies selling to the &quot;enterprise&quot; market. There deals happen very rarely, allowing the crazy to metastasize.<p>Many non-profits have it worse, because they have broad missions. Their goal is to do good, but &quot;good&quot; often ends up being a broad category, so it&#x27;s easy for them to end up doing a weird variety of things with varying degrees of effectiveness. Worse, even if you can get people to agree on a clear definition of &quot;good&quot;, the feedback loops are weird. Since they rarely get money from direct service, they have to engage in a bunch of semi-related activities to fund the mission stuff. Often that&#x27;s grant money, which means enterprise-like sales cycles and feedback loops that are way too long.<p>The non-profits I&#x27;ve seen do best have clear missions, specific revenue sources, frequent feedback, and a lot of discipline around picking projects. E.g., I&#x27;ve volunteered for the Long Now Foundation for years; they&#x27;re smart, small, and scrappy. Or the California Academy of Sciences runs a damned good science museum, and I think it really helps that each and every day things have to work for their thousands of visitors. But the further non-profits get away from that, I think the easier it is for madness to creep in.