Proof of Character

Ries said this to Vikas Shah in a Thought Economics interview published in May 2026, about his book Incorruptible. Shah had asked how an established company could start to think differently about profit and mission. Ries’s answer was about trust, and his example was Costco’s food court, where a hot dog and a soda cost $1.50, the same price, Ries says, as in 1985. His point is that a promise kept in public, at a cost everyone can see, is how customers learn that a company can be trusted. He calls trustworthiness “the most underrated asset in business today”: a trusted company pays less to win customers and keep them, and customers stick with it after a mistake.

Costco’s own telling matches. Craig Jelinek, then Costco’s CEO, told the story at an April 2018 chamber of commerce luncheon in Issaquah, Washington, Costco’s home town. He had gone to co-founder Jim Sinegal and said they could not keep selling the hot dog for a dollar fifty: “We are losing our rear ends.” Sinegal’s answer: “If you raise the effing hot dog, I will kill you. Figure it out.” So Costco built its own plant, began making the hot dog under its Kirkland Signature house brand, and now keeps the price while earning “a fair return.” Jelinek added that $1.75 “would not be that big of a deal” to shoppers. What mattered was the mindset: when people think of Costco, they think of the $1.50 hot dog. Six years later, Gary Millerchip opened his first earnings call as Costco’s finance chief by telling analysts, in the Motley Fool’s transcript of the May 2024 call, that the $1.50 price was “safe.”

Ries thinks few companies do this because of how they rank spending. Sort projects by return on investment and anything that builds trust lands at the bottom, because the benefit is intangible and the cost shows up on the books. He calls the way out “harder is easier”: companies that take the costlier path, capping their margins, paying above market, giving away premium features, end up with less friction, not more, while squeezing every transaction creates the friction: turnover, distrust, customer churn.

His second example is Cloudflare, which on September 29, 2014 gave website encryption away free to every customer, including the two million sites on its free plan. Encryption had been the feature that most often got free users to pay, Ries says, and fewer of them upgraded afterward, but sign-ups rose by an “order of magnitude” and more than made up for it.

Five Guys does something similar with its fries. Every order comes with an extra scoop, a practice the company says dates to its first store in 1986. Chad Murrell, one of the founder’s five sons, told Food Republic in 2016: “We always give an extra scoop. I say load ‘em up and make sure they get their money’s worth.” Some people complain they get too many, and he tells his managers that “if people aren’t complaining, then you’re not giving them enough.” The extra scoop costs Five Guys money on every order and shows up nowhere in a return calculation, which is Ries’s description of the hot dog. What it buys is a customer who leaves sure they got their money’s worth, every time.