Breaking Rules : How Power Really Works
Why the most successful leaders ignore ownership
Published
Jul 19, 2025
Topic
Thoughts
The Moment Everything Changed
Sam Altman owned 0% of OpenAI when its board fired him on November 17, 2023.
Four days later, he walked back in as CEO with more power than before. The board that fired him was gone. The investors who backed the coup had capitulated. And 700 employees who'd threatened to quit unless he returned were back at their desks, more loyal than ever.
Here's what no one talks about: Altman didn't win because he was right, or because he had better lawyers, or because justice prevailed. He won because he understood something most people never figure out—the rules everyone thinks matter don't actually matter at all.
Equity doesn't matter. Board seats don't matter. Voting rights don't matter. What matters is whether people will follow you when all the formal structures say they shouldn't. And if you can master that, you can control anything.
This isn't just about Sam Altman. It's about a fundamental shift in how power works. The old model said: get equity, get board seats, get voting control, then you have power. The new model says: get people to need you more than you need the company, and ownership becomes irrelevant.
The most successful leaders of our time have figured this out. They've learned to break every rule we thought governed business while making it look effortless. More importantly, they've learned to make rule-breaking itself a source of power.
Rule #1: You Need Equity to Have Control
The Zuckerberg Paradox
In 2004, a 19-year-old Mark Zuckerberg controlled Facebook with 65% ownership. By 2012, he controlled it with 28%. Today, he controls it with less than 15%.
According to every business school textbook, Zuckerberg should have lost control years ago. Dilution should have weakened his position. New investors should have demanded board seats and voting rights. Professional managers should have replaced the college dropout.
Instead, his control has only grown stronger.
The secret isn't complex corporate structures or dual-class shares (though those help). It's that Zuckerberg made himself structurally irreplaceable while everyone else became structurally dependent.
Here's how: Every major decision at Facebook flows through frameworks Zuckerberg created. The company's strategy, culture, hiring practices, and even daily vocabulary reflect his thinking. Employees don't just work for Facebook—they work within Zuckerberg's mental operating system.
When Peter Thiel invested $500,000 for 10.2% of Facebook, he wasn't just buying equity. He was buying access to a founder who understood that control isn't about what you own—it's about what others can't do without you.
"Mark figured out early that if you become the person who makes the decisions others can't make, ownership percentages become academic," observes one early Facebook executive. "You don't need to own the company if the company can't function without you."
The Altman Protocol
Sam Altman took this insight further than anyone before him. He deliberately structured his compensation at OpenAI to minimize equity while maximizing irreplaceability.
While other CEOs accumulated stock options, Altman accumulated decision dependencies. Every major partnership, every key hire, every strategic direction became personally associated with his judgment and relationships. He didn't just run OpenAI—he became OpenAI's interface with the outside world.
When Microsoft invested $10 billion, they invested in Altman's relationship management as much as OpenAI's technology. When employees joined for below-market salaries, they joined Altman's mission more than OpenAI's prospects. When researchers chose OpenAI over Google or Anthropic, they chose to work with Altman more than to work for OpenAI.
The board fired "the CEO of OpenAI." But what they actually tried to fire was the person Microsoft trusted, employees followed, and partners dealt with. Which turned out to be impossible.
"Sam proved something really important," says one Silicon Valley investor. "If you make yourself the nexus of enough relationships, you become more powerful than any equity structure. The company needs you more than you need the company."
Rule #2: Boards Control Companies
The Institutional Theater
Corporate governance is largely theater performed for an audience that doesn't understand they're watching a play.
Board meetings have agendas, voting procedures, and formal resolutions. Directors review financial statements, approve budgets, and monitor compliance. Everything looks orderly and democratic. But most of the time, real decisions happen elsewhere.
The secret is that information asymmetry trumps voting rights. The person who controls what the board knows controls what the board decides. And in fast-moving companies, the CEO almost always controls information flow.
Consider what a board actually does: They meet quarterly for a few hours, review slides prepared by management, ask questions based on limited knowledge, then vote on proposals they don't fully understand. Meanwhile, the CEO lives inside the business 24/7, understands every detail, and frames every issue.
"Board governance works when you're running a railroad or a bank," explains one veteran director. "When you're building something new, the CEO always knows more than the board. And knowledge is power."
The Musk Methodology
Elon Musk has turned board management into an art form. His approach: make board oversight practically impossible by moving too fast for traditional governance to keep up.
At Tesla, Musk announces product launches on Twitter, changes manufacturing processes on factory floors, and makes acquisition decisions in real-time. By the time board meetings happen, major decisions have already been implemented and proven successful (or failed and been abandoned).
The board faces a simple choice: ratify decisions that have already worked, or try to undo changes that would damage the company. Since most directors want to minimize risk rather than optimize outcomes, they almost always choose ratification.
"Elon creates facts on the ground faster than governance structures can respond," observes one former Tesla director. "You're not really governing the company—you're just documenting decisions that already happened."
This isn't accidental. Musk deliberately operates at speeds that make traditional oversight impossible. When directors complain about process, he points to results. When regulators demand compliance, he changes the facts faster than they can write rules.
The strategy works because momentum beats oversight. A CEO who's constantly moving forward forces everyone else to react rather than control. And reactive players rarely win power struggles.
Rule #3: You Need Official Authority to Give Orders
The Influence Inversion
The most powerful people rarely give direct orders. Instead, they create conditions where others naturally do what they want.
Steve Jobs never told engineers exactly how to build products. He told them the products weren't good enough and watched them figure out how to make them better. Peter Thiel never told portfolio companies how to operate. He asked questions that made founders realize what they should be doing differently.
This approach works because voluntary compliance is stronger than forced compliance. When people choose to follow your direction, they internalize your goals as their own. When they're forced to follow orders, they follow minimally and resentfully.
The psychology is counterintuitive but consistent: humans resist external control but embrace internal motivation. The leaders who understand this never try to control people directly. They control the frameworks people use to control themselves.
The Question Technique
Marc Benioff built Salesforce's culture around a specific form of indirect authority: the transformative question.
Instead of saying "We need to move faster," Benioff asks "What would we do if we had to ship this in half the time?" Instead of ordering cost cuts, he asks "How could we deliver more value with fewer resources?" Instead of demanding innovation, he asks "What would we build if we knew it couldn't fail?"
The questions sound innocent, but they're precisely engineered to produce specific outcomes. They shift conversations from whether to act to how to act. They frame constraints as creative challenges rather than limitations. Most importantly, they make solutions feel like discoveries rather than orders.
"Marc never tells you what to do," explains one former Salesforce executive. "But somehow you always end up doing exactly what he wanted. It's like he reprograms how you think about problems."
This technique works because it exploits a fundamental cognitive bias: people believe more strongly in ideas they think they discovered themselves. By guiding others to "discover" the right answers, indirect leaders create deeper commitment than direct orders ever could.
Rule #4: Legal Structures Determine Business Outcomes
The Regulatory Arbitrage
The most successful rule-breakers don't fight regulations—they make regulations irrelevant by changing the game faster than rules can be written.
Uber didn't lobby for taxi deregulation. They built a service so useful that millions of people started using it before regulators understood what was happening. By the time governments tried to ban Uber, they faced riots from drivers and passengers who'd become economically dependent on the platform.
Facebook didn't wait for privacy regulations. They collected so much data and created such strong network effects that regulating them became like regulating electricity or water—technically possible but practically devastating to users.
Amazon didn't argue with antitrust authorities. They made themselves so central to e-commerce infrastructure that breaking them up would damage millions of small businesses who depend on their platform.
"The key insight is that if you become essential faster than you become regulatable, the rules have to bend around you," observes one policy expert. "Markets move faster than laws. If you time it right, you can create facts that make old laws obsolete."
The Thiel Gambit
Peter Thiel discovered the ultimate regulatory arbitrage: jurisdiction shopping combined with regulatory capture through intellectual influence.
Palantir operates in a legal gray area between private software and government surveillance. Rather than seeking explicit authorization, Thiel positioned the company as solving problems regulators didn't know how to solve themselves. By the time oversight mechanisms caught up, Palantir had become essential to national security operations.
The strategy works in three phases:
Phase 1: Build capabilities that don't fit existing regulatory categories Phase 2: Demonstrate value for problems regulators can't solve otherwise
Phase 3: Shape new regulations by providing expertise regulators lack
"Peter doesn't break rules—he makes them obsolete," explains one former government official. "By the time anyone figures out how to regulate what he's doing, he's already three moves ahead."
The approach requires tremendous patience and capital, but it creates competitive moats that formal patents and licenses can't match. When you help write the rules, compliance becomes a competitive advantage rather than a burden.
Rule #5: Money Comes from Ownership
The Influence Economy
The biggest financial returns increasingly come not from owning companies but from being essential to them.
Sam Altman's net worth increased by billions during his time at OpenAI despite owning virtually no equity. His value came from being the irreplaceable nexus of relationships that made OpenAI possible. When that position was threatened, the entire ecosystem mobilized to protect it.
Reid Hoffman made more money from LinkedIn's network effects than from his equity stake. His real asset wasn't shares in the company—it was being the person everyone in professional networking turned to for advice, connections, and strategic guidance.
Marc Benioff's wealth comes partly from Salesforce stock, but increasingly from being the definitive authority on enterprise software strategy. Companies pay millions for his consulting. Conferences pay millions for his speaking. Investors pay billions for access to his deal flow.
"We're moving toward an economy where the most valuable asset is being unsubstitutable," argues one economist. "Equity ownership assumes companies generate value independently. Influence ownership recognizes that key individuals often are the value."
The Attention Arbitrage
The most sophisticated practitioners have learned to monetize attention directly rather than converting it through traditional business models.
Elon Musk's Twitter acquisition wasn't primarily about advertising revenue or subscription fees. It was about controlling the platform where global attention flows, then using that control to benefit his other enterprises. Tesla gets free marketing. SpaceX gets regulatory favorable. His political candidates get amplification.
The purchase price was $44 billion. The attention arbitrage value—using platform control to benefit other investments—could be worth multiples of that over time.
"When you control attention, you control everything else," observes one media analyst. "Elon didn't buy a social media company. He bought the ability to direct global conversation toward his priorities."
This represents a fundamental shift from ownership-based wealth to access-based wealth. The question isn't what you own, but what you can influence. And influence, unlike ownership, can compound without dilution.
The New Playbook
Step 1: Make Yourself Unsubstitutable
The foundation of rule-free power is creating irreplaceable value that transcends formal relationships.
This isn't about being indispensable in the traditional sense—working longer hours or knowing more details than anyone else. It's about becoming the person others turn to for the decisions that matter most.
Elon Musk became unsubstitutable by being the only person willing to bet his entire fortune on electric cars and space travel when both seemed impossible.
Peter Thiel became unsubstitutable by developing investment frameworks that others found useful for thinking about technology and markets.
Sam Altman became unsubstitutable by being the person Silicon Valley trusted to navigate the transition to artificial intelligence responsibly.
The pattern is consistent: identify problems others are avoiding, develop superior approaches for solving them, then become the person others rely on for guidance in that domain.
"Unsubstitutability comes from taking on the hardest problems and actually solving them," explains one entrepreneur. "Once you prove you can do what others can't, formal authority becomes optional."
Step 2: Control Information Flow
The second step is managing what information reaches decision-makers and how it's framed.
This isn't about deception or withholding important facts. It's about recognizing that context is control. The same information can support completely different decisions depending on how it's presented, when it's delivered, and what framework is used to interpret it.
Master practitioners become the primary source of context for important decisions. They don't just report what happened—they explain what it means, why it matters, and what should be done about it.
Board meetings become conversations about problems and solutions the CEO defines. Investor updates become narratives about progress toward goals the CEO establishes. Media interviews become opportunities to shape how external audiences understand the company's strategy and priorities.
"Information without interpretation is just noise," notes one communications expert. "The person who provides interpretation controls how information becomes action."
Step 3: Build Dependency Networks
The third step is creating mutual dependency relationships that make your position stronger over time.
Traditional employment relationships are transactional: the company pays, the employee works, either party can terminate at will. Dependency networks are architectural: removing any key node damages the entire system.
This requires thinking systematically about stakeholder interdependence:
Employees should develop skills and relationships that are primarily valuable within your ecosystem Partners should integrate their operations with yours in ways that increase switching costs Investors should depend on your judgment for sector expertise and deal flow Customers should build their businesses around your platform or service
"The goal isn't to trap people," clarifies one network theorist. "It's to create so much mutual value that leaving would hurt everyone involved."
When dependency networks reach sufficient density, they become self-reinforcing. Each relationship makes others more valuable. Each success attracts more participants. Each participant has incentives to strengthen the overall network.
Step 4: Operate at Network Speed
The fourth step is moving faster than traditional governance structures can respond.
This isn't about recklessness or ignoring consequences. It's about recognizing that speed creates its own authority. When you're solving problems faster than others can create oversight processes, you force reactive rather than proactive responses.
The technique requires careful risk management: move fast on decisions that can be easily reversed, move deliberately on decisions that can't be undone. But within those constraints, prioritize momentum over permission.
"The fastest way to lose power is to ask for it," observes one experienced CEO. "The fastest way to gain power is to start exercising it responsibly and let formal recognition catch up."
Organizations naturally adapt their structures around successful patterns. If you consistently make good decisions quickly, formal processes will evolve to support your approach rather than constrain it.
When Rule-Breaking Backfires
This approach isn't risk-free. The same techniques that create power can destroy it when misapplied.
Elizabeth Holmes tried to build unsubstitutability around claims she couldn't deliver. When the technology failed, the entire structure collapsed.
Adam Neumann built dependency networks around unsustainable economics. When investors demanded profitability, the relationships became liabilities rather than assets.
Travis Kalanick operated at network speed but ignored ethical and legal constraints. When scandals accumulated, speed became a disadvantage rather than an advantage.
The common failure pattern: using rule-breaking techniques without delivering genuine value. When your position depends on perception rather than performance, any serious challenge can trigger complete collapse.
"The difference between powerful rule-breakers and destructive ones is usually competence," explains one organizational psychologist. "If you can actually solve problems others can't, people forgive a lot of process violations. If you can't, they forgive nothing."
The Institutional Response
Established institutions are beginning to adapt to network-based power challenges.
Boards are developing new oversight mechanisms for fast-moving companies, including real-time monitoring and specialized committees for emerging technologies.
Regulators are experimenting with adaptive regulatory frameworks that can evolve alongside technological change rather than always lagging behind it.
Investors are creating new due diligence processes that assess founder influence and dependency risks alongside traditional financial metrics.
"The arms race is just getting started," predicts one policy researcher. "Rule-breakers will develop new techniques, institutions will develop new constraints, and we'll see how the equilibrium settles."
The most sophisticated practitioners are already evolving their approaches to stay ahead of institutional responses. The next generation of rule-breakers will need even more sophisticated techniques to achieve similar results.
"We're in a transition period where old power structures still exist but new ones are more effective," observes one economist. "Understanding both systems becomes essential for anyone who wants to actually accomplish anything important."
The Ultimate Insight
The most successful leaders of our time share a common understanding: formal authority is a consolation prize for people who can't build real influence.
Equity matters when you can't make yourself irreplaceable. Board seats matter when you can't control information flow. Official titles matter when you can't create voluntary compliance. Legal protections matter when you can't operate faster than enforcement mechanisms.
But when you master the techniques of rule-optional power—unsubstitutability, information control, dependency creation, and network speed—formal structures become optional rather than essential.
This isn't about breaking rules maliciously or ignoring ethical constraints. It's about recognizing that the most important forms of power emerge from creating value others can't replicate, building relationships others can't replace, and solving problems others can't handle.
The rules everyone thinks matter are often just habits left over from earlier eras when power worked differently. The leaders who understand this aren't just more successful—they're reshaping how power itself operates.
The future belongs to those who can master both formal structures and network dynamics, using each when appropriate but never being limited by either. In a world where change happens faster than institutions can adapt, the ability to create and exercise power beyond traditional rules isn't just an advantage—it's becoming essential for anyone who wants to build something important.
The rules are optional. The question is whether you're ready to master what actually matters.