Claims

The product-company model aligns incentives toward speed and quality: the company makes more money when it moves faster rather than slower, and makes more money when things work the first time rather than taking multiple attempts, which is the opposite incentive structure of cost-plus contracting.

If you have skin in the game, you will worry about blowup because it is your money; if you don't have skin in the game (as a CEO or fund manager), your incentive is to print good numbers, collect compensation on profits, and avoid paying for downside, creating a perverse incentive structure that leads to tail risk-taking.