Lenny's Podcast: Product | Career | Growth - What most people miss about marketing | Rory Sutherland (Vice Chairman of Ogilvy UK, author)

Starting point is 00:00:00 Steve Johns was not a technologist. He was a pitch man. He was a brilliant salesman. He was a fantastic marketer. When products succeed, we forget the extent to which marketing was actually instrumental or decisive in their success. You once said, if you can imagine a stand-up comedian doing a routine about your product, then you're onto something. You need to preserve slightly odd things. Rolls-Royces were the only cars which still had a pedal on the floor. Famously, Verve Kliko, it's the one with a yellow lame. Idiosyncrasies kind of count double. Give any advice for early stage founders to help build their brand.

Starting point is 00:00:32 Be consistent, be distinctive, and be faced. When you are not famous, you have to find all your customers. Suddenly you reach this magical sort of escape velocity of fame where people start coming to you. Today my guest is Rory Sutherland. Rory is vice chairman of Ogilvy, UK, author of the book Alchemy, the Dark Art and Curious Science of Creating Magic and Brands, Business and Life, and the founder of Nudge Stock, the world's biggest festival of behavioral science and creativity. Rory is both an example and a huge proponent of thinking from first principles.

Starting point is 00:01:07 Through his speaking and his books, he encourages people to not think logically when solving problems, but to think psychologically, using human psychology to inform how you design and build and market your products. Rory is full of amazing stories and ideas and examples and inspiration, which you'll get a sense of as soon as we start talking. I don't even ask him a question and he's already off to the races. This episode is for anyone who wants to think more creatively, help their team be more innovative, and learn how to create more magic in your world.

Starting point is 00:01:37 Rory has been one of the most requested guests on this podcast, and I can now see why. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes and helps the podcast tremendously. With that, I bring you Rory Sutherland. Rory, thank you so much for being here,

Starting point is 00:01:58 and welcome to the podcast. That's pleasure. It's an audience I don't normally speak to, and it's an audience which I think is particularly valuable, particularly important, but also actually probably could benefit quite a bit from just a little bit of extra psychology. Not least, by the way, a very simple observation, which is that do not think that good products automatically succeed or that bad ones necessarily fail. The other thing I'd say is that timing is so important that don't necessarily reject things simply because they failed in the past. One of the best products I've ever worked on in a professional capacity was Facebook meta TV, the TV portal, sorry, Facebook, the meta portal TV. Oh, I love the portal. I bought it for about $120.

Starting point is 00:02:52 It plugs into your TV. It allows you to do obviously WhatsApp or Facebook or indeed Zoom. on your television with a fantastic, you know, face tracking camera. I mean, it really is sort of $500 worth of equipment, which they were selling for about 120. One of the best things I've ever owned, I owned about four of them. When I heard it was being discontinued, I bought another one because I think they're so good.

Starting point is 00:03:16 And yet for reasons I fully don't, you know, I don't really understand, apart from the fact that every single review said, this is brilliant, effectively, as a product, But the first seven paragraphs of the article weren't saying this is brilliant. They were saying who would allow Facebook to put a camera in their home. And so there were basically, you know,

Starting point is 00:03:38 it was nine paragraphs of privacy paranoia because you can turn the thing off. After all, you don't have to leave it switched on, okay? You know, but there were nine paragraphs of privacy paranoia, basically followed by one paragraph saying, as these kind of products go, it's brilliant. Yet we still don't have video calling on TV unless you're willing to plug your laptop in

Starting point is 00:04:03 or do something pretty fancy and complex. That seems really weird to me. Let me actually read a quote from you around what good marketing often looks like. So you once said, if you can imagine a stand-up comedian doing a routine about your product, then you're onto something. The urge to appear serious is in many ways a disaster in marketing. I'd love to hear your thoughts on that. This episode is brought to you by Pendo.

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Starting point is 00:05:02 the actions that matter most. Then Pendo integrates user feedback so that you can capture and analyze what people actually want. And the new thing in Pendo, Session Replace, a very cool way to visualize user sessions. I am not surprised at all that over 10,000 companies use it today. Visit pendo.io slash Lenny to create your free Pendo account today and start building better experiences across every corner of your product. P-S, you want to take your product-led know-how a step further? Check out Pendo's lineup of free certification courses led by top product experts and designed to help you grow in advance in your career. Learn more and experience the power of the Pendo platform today at pendo.io slash Lenny.

Starting point is 00:05:48 Today's episode is brought to you by Cycle, the AI-powered feedback platform for product teams. Is your customer feedback a tangled mess of slack threads, survey responses, and overflowing inboxes. Wish that you could know what your customers really need. Cycle unifies all of your customer interactions from support chats to user research, gong calls, and app store reviews into one neat collaborative space. Cycles AI then extract actionable insights on autopilot. Cycle will learn what you're building so that it can label incoming feedback automatically. That means you'll get a full voice of customer report without manually triaging feedback. Then simply you cycle ask to dig deeper into any topic and generate custom AI generated summaries across your entire feedback repository.

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Starting point is 00:07:07 he's looking to reinvent the hotel, arguing, I think with some reason, that it's one of those areas which is actually ripe for a good degree of disruption. So it's a complicated thing. Don't be too weird. Okay? Don't, you know, don't be too strange because if the consumer,

Starting point is 00:07:28 there's a wonderful concept from Raymond Lerbe, of course, the French designer called Maximally Advanced Yet Acceptable. In other words, you know, there is a pace of change which consumers will accept. And generally they're more comfortable with evolution than they are with complete reinvention. There are exceptions to that. Well, actually even the iPhone. let's face it, okay, was preceded by the iPod. It wasn't a complete WTF moment, okay?

Starting point is 00:07:57 And consumers effectively like to migrate their behavior rather than reinventing their behavior. But nonetheless, one of the things I always point out is that idiosyncrasies kind of count double. The wonderful thing actually years ago, back in the 1990s, Ogilvy won the Jaguar account. And one of the things the creative director in New York said is that, you know, one of the things you need to preserve is slightly odd things. So in a Jaguar of the 1990s, you turned on the light above your head, the reading light or the central light, with a switch that was actually on the central console.

Starting point is 00:08:40 Every other car you reached up and you flipped the switch. In the Jaguar, you pressed the button at the bottom and the light came on at the top. And the creative director said, you know, keep those things. You know, actually, you know, distinctiveness really matters. And they were actually really interesting because they said, and that's interesting you say that, because we're actually planning to get rid of it because we thought it was inconsistent. For years, I don't know if this is still true, because I don't drive many Rolls-Royces.

Starting point is 00:09:08 But for years, Rolls-Royce was the last car. Now, obviously now cars dip their headlamps automatically, or you have an automatic setting. but for years Rolls-Royces were the only cars which still had a pedal on the floor, perfect for an automatic, not so good for a manual, but they had a pedal on the floor where you dipped and undipped your headlubs, rather than having a stalk. And those things which I always cite things like the double-treat cookie when you check in, for example.

Starting point is 00:09:38 I mean, a brilliant example of this, which when you think about it was extraordinary in terms of the attention it garnered, you probably remember MCI the American phone. No, you're too young. Yeah, I do. Of course, I remember them. You do. Okay, they have the concept of friends and family

Starting point is 00:09:53 where you nominated a certain number of calls, a certain number of numbers that you called particularly frequently, and you got sort of 20% off calls to those numbers. I think it started off with 10, and I think they eventually rumped it up to kind of 25, but actually most people, 90%, it's a Pareto principle. Most people make 80%.

Starting point is 00:10:14 of their calls to probably five or six numbers. Now, what was interesting about that was it garnered via. It was in a sense irration, okay, but it garnered much more interest than if you'd simply reduce the cost of calls by 15, 20% across the board, because you had to stimulate, you know, stipulate your numbers and because you have to, you know, actually, things that are slightly weird, things that have a little bit of extra friction, things that are slightly, you know, counterintuitive. Sometimes the right thing to do is to get rid of them.

Starting point is 00:10:46 Sometimes you kind of celebrate them. And that's what I mean about the comedian. The comedian notices things that are slightly weird, notices things. And actually, there was a great comedy routine when friends and family came to the UK. It was introduced from MSCI by a marketer called Ed Carter to BT in the UK. There were whole comedy routines about it. You know, people going, you know, I suddenly realized, you know, I couldn't think, of the ninth number, you know, or it's basically my mum and nine adult lines.

Starting point is 00:11:16 This was the kind of thing. But those kind of things which actually slightly, there are a slight little splinter on the attention. In other words, it's something that slightly raises up from the normal shape or it's the step that isn't quite the riser. If you go down a flight of steps and one step is slightly, you know, the sender is slightly out of whack. Those things have a place, actually.

Starting point is 00:11:43 I mean, famously, Verve Clico, the French Champagne house. Their labels ended up yellow by mistake. I think there was some printing error, and they thought, okay, we have these stupid yellow limos. We will send them to lay roast beef in England. We do not want to sell their own potential by selling them in France. And then the Brit said, okay, by the way, that champagne, can you send us more of the champagne with the yellow label.

Starting point is 00:12:10 It's going down really well. And they said, okay, we're going to make it really yellow now, just to, you know, almost as a kind of wind up, I think. Okay. But of course, if you think about it, the entire identity of that champagne, you know, you can't remember the number. It's the name. It's the one with the yellow label.

Starting point is 00:12:27 Okay. You know, and so visual distinctiveness and other forms of what you might call UX distinctiveness. As I said, don't go crazy weird. But there's this concept of Maya, which is maximally advanced yet acceptable. There's a wonderful phrase which I'll share with you, which was, there's an English guy who went over from the BBC for BBC 4, which is like, it's like the PBS of PBS.

Starting point is 00:12:55 It's the really niche kind of, you know, educational kind of, you know, hardcore factual British TV channel. And he went to buy, to see if there are any programs to buy from the Danish state broadcaster and he ended up buying a series called The Killing. He bought the first season of The Killing,

Starting point is 00:13:17 went for it for $24,000, so about $30,000. He paid to run the Killing which had aired on Danish television about a year and a half earlier and been quite successful in Denmark, but nowhere else. And he paid $24,000, $30,000 and aired it on BBC 4.

Starting point is 00:13:33 And then it became hugely popular. And then it migrated to BBC 2. and then Netflix came along and bought the rights to the series. You'll probably remember this. So actually, the Danish state broadcaster ended up. He said, there should be a statue of me outside this Danish broadcaster, because I ended up making them tens of millions of pounds by both selling the rights to the original series and also by Netflix buying the rights to the basic storyline.

Starting point is 00:13:59 I said, well, why did you do that? I said, what made you buy it? And he said, great phrase. He said, well, he said, if you're British, true also if you're American, by the way. If you're British, the great thing about Scandinavians is there just the right amount of weird. Okay, right. So if you think about it, you know, if you have to watch something set in Denmark and you live in San Francisco, it's not like watching something set in Korea or Somalia. Okay, right.

Starting point is 00:14:23 You're not sitting there going, what the hell is going on here? Why is this man doing this? Basically, they're a bit like us. They're enough like us that we basically figure out what's going on. but they're weird enough to make it just that little bit more interesting. And I think, you know, I think that's part of the reason for the popularity of Scandy Noir and Scandy crime is there the right amount of weird. And I think that's true of product design.

Starting point is 00:14:49 I think with Raymond Lerby, I think the thing was he made a fan, if I've got the story right, he made a fad that was insanely quiet. And people didn't believe it worked because it was just too quiet. And years later, I remember that story because there was a guy who had this extraordinary kind of machine learning and AI device that was being used by engineers. And he was producing a, I think it was an electric toothbrush. It might have been a razor. It was either a men's razor with an electric motor, which was they could somehow make it insanely quiet by using some weird machine learning algorithm about what caused the noise.

Starting point is 00:15:26 I said to him, be a bit careful because it's probably a good idea to make a razor a bit quieter. but if you make it too quiet, we genuinely won't believe it's working. Actually, it's the crackly noise that when you rub it over your face, and it's the buzz of the thing and the vibration of the thing that actually convinces us it's doing a job. And you can actually, you can overdo this. You can over-optimized for things. I love all these examples you're sharing of ways products stand out,

Starting point is 00:15:56 sometimes by accident, sometimes intentionally. If I were to zoom out and try to describe what you encourage people to do, you basically are intent on convincing people to think less logically, to think less rationally, which I think is pretty counterintuitive to a lot of people, especially in business, where they're told be more rational, be more logical. I think what it is is psychology is a branch of complexity theory. Okay. And there are lots of things in it which are non-linear butterfly effects, small things that have a huge effect.

Starting point is 00:16:25 And there are also lots of things which are, if you like, Yinn and Yang. In other words, what I say is the opposite of a good idea can be another good idea. You know, I always say there are two great ways to check into a hotel. One of them is insanely high touch and the other way is no touch. It would be pretty cool to check into a hotel where basically you just walked in with your mobile phone and unlocked your room. That would be pretty cool. It's also pretty cool if you go to the Mandarin Oriental in Hong Kong that they take you up to your room, show you how to use the television.

Starting point is 00:16:57 The shower, I hope, because that's always a baffling thing. and that actually make you a cup of tea in the room while you're filling out the paperwork at your vast desk. They're both pretty great ways to check into a hotel. They're complete opposites, but they are distinctive. I think understanding the fact that what we're trying to do is we're trying to run the world of business entirely to a reductionist kind of maths and physics and finance model,

Starting point is 00:17:26 you know, where everything is kind of linear and everything works in straight lines and everything's proportionate and the opposite of a good idea is wrong and the past is a fantastic guide to the future. We're basing our decision-making on kind of high school maths questions. It always bothers me, by the way,

Starting point is 00:17:46 that intelligence tests are multiple choice. The SATs are multiple choice in the US, I think, aren't they? Very weirdly, great aunt of mine actually spent some time in the US, I think at Princeton, actually involved with the guy who designed those kind of early intelligence tests. By the way, she had her doubts. One of the things she commented on was that basically if they did an intelligence test in which kind of white academics didn't come top, they rejected it as a measure of

Starting point is 00:18:18 intelligence. So they found, for example, I think that Native Americans and African Americans were, for instance, better at memorising poetry than white people were. Okay. And, you know, all credit to my great aunt, you know, they rejected this then as a measure of intelligence because it didn't fit their narrative. But the other thing that bothers me, well, you know, I'm slightly proud of my great aunt for spotting this, calling this out as a bit of bullshit, to be absolutely honest. But the other thing that always bothers me is that by definition, multiple choice questions

Starting point is 00:18:50 have a single right answer. Okay. Theoretically, you could have multiple right answers and you simply have to choose one that is acceptable, I guess. But basically, they've got a right answer and three wrong answers. That's how you do multiple choice questions. But real life decisions aren't like that. You can have multiple right answers.

Starting point is 00:19:09 And also, you don't have all the information you need to answer the question contained within the question. And some of the information you have, which you think is important is actually irrelevant to answering the question. So we have this kind of, you know, how many you look at those intelligence tests, SAT measures, IQ tests. They're all, you know, two buses leave a bus station, one travels due north. They all have, you know, an assumption of complete proportionality and linearity. The buses are all traveling in a straight line. You know, you have to calculate what time it is when the buses are 100 kilometers apart. Okay.

Starting point is 00:19:45 And there's a single right answer. And all the information. and the question is germane to the answer, that, you know, generally there isn't any extraneous information which you have to ignore. And there was a famous experiment, actually, which I think originated in France, where they said, you know, this ship stops, you know, 27 goats get on, three sheep get off, then they add 25 cows, how old is the captain of the ship? And what they found is actually pretty intelligent kids would not give the unsyped. it is impossible to tell. They'd assume that the information in the question, because it's in the question, had to be of use in formulating the answer.

Starting point is 00:20:30 And you can Google it because it then appeared in a Chinese, I think a Chinese school exam. And it was a very interesting experiment done, I think, by a French philosopher or psychologist, which is what happens if you actually just give people a load of data and then you give them a question. Are they so habituated by kind of high school question? to assume that what's in the question must therefore give you, you know, a single right answer. And this is exactly what happened. And, you know, if you look at real life, i.e. business decisions, which anything that involves human behavior, it's simply, you know, all those conditions that we are expected to look for in something when we call it scientific, none of those conditions are met, you know,

Starting point is 00:21:13 single right answer, proportionality, you know, the scale of the input being proportionate to the scale of the effect. None of those things are, none of those things are met in real world decisions. And yet we select and promote people on their ability to perform those artificial activities. I'm curious if you've seen a company figure out how to do this better. So you clearly are incredibly good at out-of-the-box thinking, thinking incredibly, creatively. All these examples are examples of where something was not what you would expect. Have you seen anyone actually implement a way to operate where they allow their employees and companies to think this way. It's a few really interesting stories of companies which have a much less top down.

Starting point is 00:21:58 In other words, it's a much more, you know how an evolutional has this theory of multi-level selection, which is we don't just select for individuals or genes. We select for groups, for example. Two examples I've heard of anecdotally, which are interesting. There's a British company called Optopus Energy, which also has a software to vision called Craken, which is a kind of, it's effectively a way of managing utilities in a much more sophisticated pricing environment. And they have extraordinary tariffs where, you know, if you charge your car after midnight, you know, you pay a tiny fraction of what you pay the rest of the time.

Starting point is 00:22:34 It's very much about marrying supply and demand. The way they operate is almost multicellular in that you have lots of small autonomous teams. Their ultimate brief, what the objective of the company is is very, very clear. But actually, they allow people considerable autonomy within teams of sort of 10, 15, 20 people in terms of how they actually achieve their ends. The second example is Shopify, where their customer service teams are in groups of 10. And Toby Shannon, who is the chief operating officer of Shopify, modeled this on sports teams. He said, if you look at teams of people in sport, your typical sport will have somewhere between sort of, you know, okay, rugby might be 15 and soccer is 11 and

Starting point is 00:23:22 cricket's 11. But generally teams have those double-digit kind of team sizes. And he thought there was something meaningful about that. And so there, although it meant, you know, in some ways, a much less lean structure, because normally in a call center environment, you'd have one person managing 100 people. And you had effectively a team leader with a team of 10. And what was interesting that emerged from this is, you know, although, you know, he had to fight for this to an extent, these people were extraordinarily happy in their jobs and extraordinarily motivated, but also kept each other motivated because the teams were small enough where people felt kind of debts of obligation to their other teammates. In other words, if you work for an

Starting point is 00:24:08 organization of 100 people and you pull at sick day, you don't really feel terrible about it, Okay, but if you're pulling a sick day means the other nine or eight people have to work quite a lot harder because you're not there. Natural kind of human instincts of reciprocation and obligation don't really scale up, you know, into, you know, there's the Dunbar number famously of 150 people, which is the size of sort of military units and Oxfordwich colleges and so on. And there's that famous Dunbar number coined by Robin Dunbar. once described as the number of people you know where you could join a conversation in which they were engaged with someone else without it feeling weird.

Starting point is 00:24:55 It's brilliant different. Most people know about 150 people where effectively, you know, you're at a party, you see friend X, who's one of your dumb bar number, one of your 150 people, talking to a complete stranger, and you can go over and join that conversation without feeling you're a bit of a kind of wallflower

Starting point is 00:25:13 or being a bit of an idiot by butting in. And that's the Dunbar number 150. There does seem to be some number around sports teams or around 10. So that's a way of designing for humanity rather than designing for the organogram. And a third case would be, a very successful British online retailer called A.O. Appliances Online is what it stands for.

Starting point is 00:25:38 And he said something fairly similar in terms of, you know, the brief to the staff is, you know, very simple briefs like treat the customer like you'd treat your grandmother. And if you look at yourself in the mirror, the shave test, and you come home at the end of the day, would your mum be proud of what you've done? You know, they actually set not those kind of metrics of, you know, speed and efficiency and how many deliveries did you make. but the way in which they kind of define customer service and this would apply to call centre staff as well is, you know, imagine, treat the customer like you're talking to your grand.

Starting point is 00:26:18 I said there are lots of different ways you might talk to your grandmother. You've all got different grandmothers, etc. But basically everybody knows what that means. And similarly, you know, make your mum proud as effectively the brief. And I think, you know, I think undoubtedly, you know, there are two great virtues to this one of which is that the metrics often actually get gained

Starting point is 00:26:41 or they lead to a complete distortion of behaviour. The second thing with metrics is that either people gain them to their own advantage or they obey them but find them stupid but the loss of autonomy that results when you're simply chasing a few metrics. Imagine what is like to work in a call centre where you're basically incentivised

Starting point is 00:27:05 to get the customer off the phone as quickly as you possibly can. The loss of autonomy and judgment that betokens, I think, that is deeply depressing. It's deeply demotivating. So a final case of that is Zappos. We're talking to the fantastic guy who is, I think, Chief Marketing or Operating Officer for Zappos. You won't believe this.

Starting point is 00:27:30 I think that he refused to make speed. a measure in the call centre. He said the call is as long as it needs to be to solve the problem. And they had one extraordinary outlier, which was something like a customer service call, which was seven hours long. Now, I think it involved a couple of bathroom visits on both sides. I have no idea what the problem was that actually changed that. But that was almost a point of principle that if it takes seven hours to solve the problem, that's how long we spend on the line. And so this business where in the urge for quantification and the urge for what you might call de-psychologization of problems,

Starting point is 00:28:13 in other words, you define them by entirely objective, non-psychological, non-emotional measures. We've actually created what I call Soviet-style capitalism. It's deeply demotivating. It's all about kind of quarterly targets. Quarterly targets, I mean, at least the Soviet, Union had a five-year plan. Okay.

Starting point is 00:28:35 We've got these stupid quarterly obsessions with, you know, revenue for, you know, meeting our forecast for quarter two, okay? And effectively people feel, you know, it's like metropolis. And people feel fundamentally dehumanized by this. And, you know, and the persistent cost cutting has effectively destroyed much of the pleasure of the workplace, I think. because there's no discretion. There's no sort of discretionary judgment allowed anymore

Starting point is 00:29:06 because someone saw any deviation from this imaginary optimum as being at cost. And we go into work to some extent to exercise our humanity. And that would include not only economics or reason or logic, it would also include things like ethics, for example. was fair. And, you know, this attempt, the great-bound Canadian philosopher,

Starting point is 00:29:35 I didn't really know much about until I came across him in a festival in Wales where he was speaking called John Ralston Saul, who writes, he writes actually, I wish I'd known about this

Starting point is 00:29:44 when I wrote my book because it is kind of, this book famously called Pascal's bastards Alistair, sorry, Voltaire's bastards. And it's all about how effectively the French in, you know,

Starting point is 00:29:57 the French as distinct from the Scottish Enlightenment basically became fixated with reason, which is one of what he calls seven, six human skillsets, I think ethics, memory, instinct, creativity. He lists about six human qualities. And what happened with the,

Starting point is 00:30:17 effectively with the French Enlightenment, was that they became utterly fixated with reason as a problem-solving mechanism to the exclusion of anything else. And he said, it's not designed to be used in isolation. you've used this term psychological

Starting point is 00:30:33 psychology psychology a few times psychologic yeah and psychological yeah in other words there's a different there's a different kind of mechanism for logic and decision making within the evolved human brain

Starting point is 00:30:48 which is actually quite a lot more nuanced and more sophisticated than the kind of mechanisms for decision making that economists theorize you know because it has to account for imperfect information, it has to account for variance in outcome, it has to account for asymmetrical information, and it has to account for imperfect trust.

Starting point is 00:31:12 So, you know, we've evolved to effectively operate in decision-making under uncertainty, as Herbert Simon called it, and yet most of the actual design of procedures that we encounter are designed for effectively information, you know, decision-making under-sacemptive. certainty. And that's a very special case, which actually never applies completely, I've argued, but certainly very rarely actually occurs in the real world. It mainly actually is found in kind of economic models. You have a really good insight into why we think in this irrational, illogical way, which I love. I think you talk about how if we were, you know, evolving in the savannah, if an animal is very predictable and very logical, they're a lot easier to catch.

Starting point is 00:31:57 Yeah. Yeah. Can you just talk a bit about that? Because I think... No, no, no, no. I mean, things like, you know, the ability to behave irrationally, you know, okay, there's a claim. By the way, of all the negative reviews I get, they weren't where I expected at all. There's about three pages in the book where I basically say being a bit doubled Trump has its virtues, okay, which is that no one's going to dick with you because they're not entirely sure what you're going to do. Now, bear in mind, okay, this does not mean I'm absolutely an uncritical admirer of the Donald, okay, far from. But the guy has operated in like the New York real estate scene for quite a long time. And one of the things you've got to learn in that business is, you know, no one's going to survive in New York real estate if they can actually predict what you're going to do.

Starting point is 00:32:51 Okay, right. Okay, I imagine, okay, that is not a world where being, completely consistently logical, never losing your temper, never walking away from a deal, etc. You know, you have to be able to play those game theoretic kind of moves. Okay. There were people who basically encountered this thing. Maybe I should have put it right at the end of the book, can I put it somewhere early on, who were then driven practically insane by this assertion. But the fact remains that, you know, there are certain circumstances in which the ability to behave irrationally is actually, at the meta level, highly rational.

Starting point is 00:33:31 You know, the fact that, you know, okay, okay, if I'm never going to fight back against anybody who's slightly taller than me, very rational, but I'm going to spend my whole life being dicked around by people who are a quarter of an inch, you know, taller than liar, all right? You know, very rational. Okay, they're bigger, stronger than me, never do anything to retaliate. Okay. But no, okay, we have to have some degree of, and Darwin spotted this,

Starting point is 00:34:01 some degree of kind of random number generator in our makeup. And the most classic example of this, which is I learned from Robert Trivers, the evolutionary biologist, is that when a hair is being chased by dog, it goes into this incredibly random pattern of movement, where it will kind of zoop straight up in the air, it will suddenly do a 90 degree turn to the right, it will then suddenly double back on itself at huge speed. And it appears, I don't know how they find this out,

Starting point is 00:34:29 that it doesn't actually know what it's doing, that there's a kind of random number generator in the hairs. I think it's called, in submarine warfare, it's called doing a crazy Ivan, where you just execute kind of crazy maneuvers. It was that Russian submarines when being pursued by American submarines would do something called a crazy Ivan. And the hair has the equivalent thing,

Starting point is 00:34:50 which is basically it just enters this random movement, speed mode. And the point is it can't consciously know what it's going to do next because the dog would then learn to anticipate what it was doing. It has to be random and it almost has to be unconscious because

Starting point is 00:35:07 the hair cannot give away any telltale signs of what its next move might be. And so if the hair knew what the next move might be it would actually start to reveal preparatory, you know, muscular movements which the dog could learn

Starting point is 00:35:23 to read. So, you know, but there are other reasons, I mean, there are other reasons why we need to be irrational for far less controversial, you know, or far less survival dependent reasons than this. For instance, the exercise of social intelligence. We have two very strong inbuilt, we don't utility maximise. We have two very strong inbuilt default modes in the human brain, one of which is habit, do what I've done before, and the other one is social copying, do what everybody else seems to be doing. And they make extraordinarily good sense in evolutionary terms because an organism that had to learn everything from first principles would eat a hell of a lot of poisonous berries rather than going, look, I've always eaten the yellow berries. I seem to be fine.

Starting point is 00:36:09 I don't have the shits. Let's just stick to the yellow berries. Well, unless there's a massive shortage of yellow berries, that's probably a pretty good idea. Or equally, if you find yourself in a new environment or new habitat and all the other primates are eating the purple berries and nobody's touching the yellow ones, in that environment it's probably a good idea to copy them. Because there's extra intelligence

Starting point is 00:36:33 there. In other words, I can learn effectively from copying my past behaviour or copying the behaviour of others. I can actually, you know, it's a fairly low cost way of discovering low variance, low downside behaviours.

Starting point is 00:36:49 By the way, very interestingly, it actually was an AI which actually went into investigating what would be necessary for more people to have solar panels and more people to have heat pumps. And it is not telling the environmental benefits. It is not tell them how much money they'd saved by having a heat pump. No, the single thing that would persuade people to have more heat pumps is if three people on their street have a heat pump. Okay. Now, to an economist, that drives them practically. insane because they go, no, no, no, the behaviour of your neighbours should be entirely relevant

Starting point is 00:37:24 to, you know, you should simply do the maths and calculate how much you'd save, compare that against the return you get in a high interest savings client, and then decide whether the heat pump is worthy of the investment. But that's not how we work. We're not prepared to be the first person, you know, with the worst solution. I mean, with electric cars, there's probably a very strong heuristic, which is every consumer's learned, whether it was computers or DVDs or cassette decks, or, you know, fax machines or actually washing machines, okay,

Starting point is 00:37:57 but going back, okay, with anything electrical, it kind of pays to wait because they get better very quickly and they get cheaper very quickly. So are people wrong, therefore not to make that decision? Well, no, what they're doing is they're learning, but, you know, heuristic from past experience. which, by the way, when it applies to anything with a plug, it's been pretty much proven. You know, I have friends who bought the early flat screen televisions, and they paid thousands and thousands of dollars for these things.

Starting point is 00:38:30 And you go into their house. God, that's shit. You know, so, I mean, an awful lot of these things are, you know, instinctive intuition that we've just learned through experience. And we don't know what the future is going to bring. Actually, it's what you might call decision-making based on a reasonable expectation of something. This episode is brought to you by Coda, and I mean that literally. I use Coda every day to help me plan each episode of this very podcast. It's where I keep my content calendar, my guest research, and also the questions that I plan to ask each guest.

Starting point is 00:39:07 Also, during the recording itself, I have a Coda page up to remind myself what I want to talk about. Kota is an all-in-one platform that combines the best of documents, spreadsheets, and apps to help you and your team get more done. Now is the perfect time to get started with Kota, especially its extensive planning capabilities. With Kota, you can stay aligned and ship faster by managing your planning cycles in one location. You can set and measure OKRs with full visibility across teams and stakeholders. You can map dependencies, create progress visualizations, and identify risk areas. Plus, you can access hundreds of pressure-tested templates for everything from roadmap strategy to final decision-making to PRDs.

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Starting point is 00:40:32 Your basic premises, too many of these are just very rational, logical approaches to a solution. Why is it so important to think outside the box like this? There's a joke in the UK. It's less true than it used to be because there was a famous actor called Jean-Claude Van Down, who is known as the Mussels from Brussels. But the old British joke 20 years ago was that there are no famous Belgians. And it's a bit weird. Why are there no famous Belgians?

Starting point is 00:41:00 And it turns out it's a bit like why there aren't very many famous Canadians. And the reason is if you're a famous Canadian, and everybody assumes you're American. And if you're a famous Belgian, everybody assumes you're French, unless you're a painter from the Middle Ages, in which case you're not called Belgian at all, you're called Flemish.

Starting point is 00:41:16 There are actually a lot of famous Belgians, but everybody assumes they're either French or they're called Flemish because they painted in the 16th century or something. And interestingly, for the same reason, there aren't very many famous marketing campaigns to launch new innovative products. Because when a product succeeds, everybody forgets the fact that it was the marketing that was instrumental to its success.

Starting point is 00:41:45 When I say marketing, I mean in its wider sense. I don't just mean the advertising, the communication, I mean the positioning. We tend to look at great products. We go, you know, iPhone, okay, the Ford Model T, okay? And we tend to go, everything was a bit crap. And then Henry Ford came along, where Steve Jobs came along, and they had this invention. And everybody immediately saw that this was brilliant and they went and bought it. I've got advertisements from 1916 advertising the benefits of electricity in the home.

Starting point is 00:42:12 In fact, that was an advertising campaign that went on for about 30 years. I spent an early part of my working career in advertising persuading people to get the internet in the late 1990s, dial up internet. Now, we forget all that because when we look back, we kind of constantine a history and we go, there was no internet. And then Tim Bernersley came up with the web and everybody wanted the internet. No, 20 years. I mean, you know, there are, I mean, okay, the mobile phone was freakish because that was actually driven by social pressure in part. You know, you had no, even people who didn't really want a mobile phone,

Starting point is 00:42:48 ended up having to get one because you looked like a bit of an asshole when people said, what's your mobile number? And you couldn't give one. And also it became impossible to meet your friends, right? Because they said, okay, I'm not sure which pub we're going to, but we'll ring you on the mobile. If you said, I haven't got a mobile, people will get it. I will sod you there.

Starting point is 00:43:05 Okay, but again, most of these things, including smallpox vaccination, okay? Edward Jenner, who basically came up with the cowpox as a vaccination against smallpox, which was the, you know, absolute plague of the 18th and possibly came to the new world. I'm not quite sure, but it was an absolute plague of like the 17th, 18th century. And he comes up with his basic vaccination thing, huge opposition, unbelievable skepticism, massive suspicion. If you thought that anti-COVID vaccination or something, this was on a par with that. His marketing coup was getting the British royal family to vaccinate their children, I think. Okay. Now, so what we're saying is that first of all, when products succeed, we forget the extent

Starting point is 00:43:53 to which marketing was actually instrumental or decisive in their success. I mean, Steve Jobs was not a technologist. He was a pitchman. He was a huckster. I mean, this as compliments, okay? He was a brilliant salesman. He was a fantastic marketer. The tech people at Apple didn't respect him. They said, I don't get what Steve even does like he can't even code, okay? But he was absolutely brilliant in everything from product design to, you know, to focusing on a limited number, to extraordinary taste, to giving those presentations and, you know, selling things as a magician, eventually. Making, making everybody believe that Apple was capable of magic,

Starting point is 00:44:35 and therefore you didn't need the skeptic. Now, so first of all, marketing plays, and timing and luck, by the way, let's also include those. These other factors play a much greater role in both the speed of adoption and the success of adoption of anything remotely new or anything. But in hindsight, we forget the marketing,

Starting point is 00:44:58 and we never say, because of the great marketing, I bought that product. We go, I bought it, because it was a great product. But we thought it was a great product because of the marketing. We had to persuade people to get electricity. We had to persuade people to vaccinate against smallpox. Penicillin came up against a lot of hostility in very early stages.

Starting point is 00:45:17 Right. Okay. Also, let's not forget, we're only looking at the successes. I think there have been great products, which are genuinely intrinsically a good idea. I mentioned MetaPortle TV. I'd also include Google Glass. I'd also include the wine box. I'd include the Japanese toilet.

Starting point is 00:45:38 Okay, right? I'd include the air fryer until recently. These are all utterly brilliant things, but it took, in the case of the Japanese toilet and the wine box and Google Glass, something about the timing or the marketing, not the product, something was wrong, and the consumer basically never bit.

Starting point is 00:45:58 It never reached critical mass. Somehow they couldn't, the chasm of the earlier doctor. I still think it's barbaric. I've got a Japanese toilet here. I don't have one in my other little flat. I think it's barbaric that the Western Hemisphere dry wipes, right? The whole of the Middle East has a bun gun.

Starting point is 00:46:15 You know, in Japan, your lavatory quite rightly cleans your rectum with water, as God intended. Okay. And for some reason, we and the sophisticated West are there with a dry bit of paper, scraping it up over our anus. This is medieval, okay? I mean, think about other things, right?

Starting point is 00:46:34 Nobody, house keys. You compare how easy it is to get into your car. You've got some keys somewhere in your person, in your handbag, in your briefcase. You're not really sure where the keys are. You walk up to your bloody car and you open the door. Your house, it's fucking 1720. You've got to rattle some metal things to get into the house. Why?

Starting point is 00:46:55 House building, okay, I mean, house building, the way we build houses, will be recognisable to a Roma. the Romans never invented the stirrup. Would you believe that? They didn't actually have a stirrup for horses. So you basically had to cling on with your knees. Oh, my gosh. How? Okay. So what's so fascinating?

Starting point is 00:47:17 The wine box, by the way, really fascinates me. Because in a logical, the Kindle has only really, you know, it's kind of taken up to a... I thought when the Kindle and Tablet came wrong, I admit this. I thought, okay, well, that's the end of the fling line for physical. books. And fairness, I travel a lot, so I have quite a lot of e-books because I can then pack one tablet in my bag. I'm carrying a library around with me, which is, you know, quite on a long plane flight. It's a lot better than having to pack eight books and decide which one you're going to read when you get there. But if you don't travel around, people seem to prefer physical books,

Starting point is 00:47:51 for example. People like these things actually, like the, what's that funny Scandinavian thing you write on? You know, that pad thing. Remarkable? Remarkable tablet. Remarkable. Okay. People like that, actually, because it allows you to do less. Okay? It allows you to concentrate because you don't get emails. You don't get distractions, et cetera.

Starting point is 00:48:11 But the wine box, I mean, you know, it should have, basically, you know, we should. It keeps for weeks, okay? It's got its own tap. You can have a glass of wine in the evening without opening a bottle and letting the other five, you know, five glasses go off. You're not forced to become a raging alcoholic if you live alone. which you kind of are with wine bottles. All of these things vastly better. You know, keep it in the fridge, dadi dunditda.

Starting point is 00:48:39 Didn't succeed. Entirely psychological. You know, in terms of logical, you know, products. And I'm most fascinating, I mean, the Japanese toilet. Why the hell is that, you know. I looked actually recently at the most expensive flat in London, which is someplace in Knightsbridge, which is going for like $110 million or something.

Starting point is 00:49:00 And you've got to wipe your own ass. I mean, it's 110 million for this place. And the toilets. Now, I imagine if there's a Middle East owner, they'll go and retrofits and bung guns in there. How flaming weird is that? You know, I mean, seriously strange. And you realize that actually, you know, I mean, Google Glass,

Starting point is 00:49:25 I mean, it was kind of marketing cock up. They launched a bit too soon. Then they only gave the bloody glasses to deviant. developers. Now, with the best will of the world, developers probably aren't the worlds like coolest people. Okay? They're not the people you want to have walking around your bar wearing Google Glass. The user imagery wasn't that great. And so you have these really interesting phenomena. I would have bought Google Glass, actually, even at the insane launch price of about $1,000. Because I would really, really like being able to walk around now. I don't know what, I'm telling you now.

Starting point is 00:49:57 I don't know what the time is. I don't know when my next meeting starts. I don't know what the weather's like outside. If I just had regular in-eye updates, a kind of heads-up display for shit that's going on in my life that just reminds me of stuff, I easily peck, without having to look at a digital watch. I've bought these, both Android and Apple watches. And nah, I might as well get my phone out, basically.

Starting point is 00:50:22 I've got an ordinary analog watch here. But actually having something which you can wear, which just goes to your next meeting starts in five minutes. The guy you're talking to is called Lemmy, you know, all that stuff. Be really, really good. I have no idea whether Meta Portal to you, apart from this business of the privacy thing with Facebook. But if any product deserved to succeed in the pandemic for crying out loud, right?

Starting point is 00:50:47 It was video conferencing on your TV, and yet it just didn't. And so, you know, don't think, the other thing I'd say is don't think because a product's failed in the past that you shouldn't try again. because you know that famous thing, you know, that the definition of insanity is trying the same thing again and again and expecting a different result. That's not the definition of insanity. That's the definition of a complex system, right? You know, that actually, I mean, quite a lot of internet ideas failed, I think, quite a lot of online ideas failed because they were just mistimed. Typically, you know, some good ideas were too early. Great little thing actually called the Chumbie, which I had about three of them.

Starting point is 00:51:28 They were little internet connected devices. And they just cycled through little screens, which would say like little applets, like little kind of, you're probably an iPhone user, but what we call widgets, okay, on the screen. And they go, these are the trains from your local station. They're on time. They're not on time.

Starting point is 00:51:47 They're running. This is the weather. This is the latest news flash for the New York Times. And they'd just cycle through that stuff. And they'd sit in a little, kind of little thing. How about three of these? I thought they're fantastic. But again, okay, I'll give him two examples of this about timing.

Starting point is 00:52:04 It's 1989, no, hold on, it's 1989, okay? I sign out a mobile phone. It's like a brick. It's made by Motorola. Sign out a mobile phone from the office in 1989. Because I'm going to a meeting somewhere off site, and I need to be contactable. So you didn't have your own mobile phone. No, the office had about eight of them, and you signed one out.

Starting point is 00:52:26 They were kept charging in the office. You signed one out, you told your team what your number was for the day, and you set out to your trip. So I'm walking down Oxford Street with this mobile phone, and someone rings me, so I haven't one of the choice. I have to answer it. So I'm speaking on a mobile phone in Oxford Street, with the business streets in London, in 1988. Two people shout abuse at me from passing cars for using a mobile phone. Second case, in, let me see if I can date this. it would be about 2000 and, oh, crikey.

Starting point is 00:53:01 I guess about 2003, 2004. There was a company started by some American expats called Food Ferry in London, and I think it was a hybrid CD-ROM. You actually had a CD-ROM of most of the stuff, and you went online, you ordered your groceries, and they delivered them to you. And I mentioned to someone in 2000,

Starting point is 00:53:22 it would have been the early 2000s, that I actually ordered my home groceries on the internet. and they laughed in my face. Okay, I mean, just literally, they went over, they said, hey, you'll never get this guy. You know, he fucking called his groceries on the internet. And that was, this is my point I'm saying, is that there's this huge, huge psychological hurdle

Starting point is 00:53:44 to changing behavior or to getting people to adopt behavior, which is slightly unusual. There was massive, I mean, okay, one story, I then bought my own mobile phone. this would have been about 90. It was 89 I was borrowing the phone. It would have been about 95, 96 when I actually had my own mobile phone, maybe 94.

Starting point is 00:54:08 I'm trying to work it out. And I'm on the top of a bus in London. And somebody rings me. And they ring me from the States. It's my friend Ted, who was a biochemist, a pen, I think, at the time. And I said something on the phone. I'm sitting on the top of a bus.

Starting point is 00:54:23 And I said something on a phone, which made it obvious I was speaking to someone in America. It was like, what time is it with you or what's the weather like over there? Basically, it was obvious. I was making an international call on a mobile phone, the top of the bus. I actually thought there was a mild risk of physical attack because that was such an extraordinarily twatty thing to do. And I suddenly realized it's because I'm old, I'm 58.

Starting point is 00:54:47 You know, I suddenly realized a lot of younger people don't have the chronological context. They just assumed that, you know, there was no internet. And then the internet came along. so everybody got it. Now, you know, okay, the smartphone was pretty, the mobile phone itself was not rapid. They've existed for about 50 years, right? You had to be pretty rich,

Starting point is 00:55:08 and they mostly were in people's cars. I saw someone with a portable telephone, I think in 1984, and that was a really weird thing for some of them. They weren't fast. The smartphone was pretty fast. I grant that. That was a freak exception.

Starting point is 00:55:26 Most of these things are really, God, I'm slow, and also, if you get your marketing wrong, or if you miss time your launch, or if you just misjudge some aspect of your launch psychologically, you can take something which is intrinsically a brilliant product, and it will fail to bite. That's why I think this is really important, because we have survivorship bias.

Starting point is 00:55:49 We only look at the successes. No one's there going, you know, I mean, certain things like, I mean, the fact that we still open up, our houses with keys for crying out that, all that stuff. I agree. I'm excited. I'm excited for the Tesla version of keys. Yeah, I'm completely.

Starting point is 00:56:08 I'm completely. You've shared all these amazing examples of products that are great, but didn't work out. Many of the reasons that that happens is within a company, it's very hard to share and suggest silly ideas, as you describe. And you have this actually really cool suggestion that I wanted to highlight, which is first share. like the logical, rational, typical answer, and then I think it has great time to think about the silly, crazy idea. Can you talk a bit about that, just how to operationalize this a little bit?

Starting point is 00:56:37 According to Herodotus, writing in about, what is it, I suppose the 6th century BC, it was not there about all 5th, I should know, sick, probably. The ancient Persians, when they had to deliberate, they debated everything twice, once while sober and once while drunk, and only if they agreed in both states would they go ahead with the course of action. Now, I don't know whether being drunk is just an opportunity to come up with a better idea, okay, or whether it's a question of, does this appeal to us rationally? Does this also appeal to us emotionally?

Starting point is 00:57:10 Okay, I don't know. There's something really, really interesting about having what you might call a two-stage, a double lock on decision-making, which is, okay, there's this fundamental asymmetry, which is creative people have to present their ideas to rational people for approval. Okay, fine. don't mind that, never happens to the other way around. You never get engineers or accountant saying, well, I think the answer is 3.75,

Starting point is 00:57:34 but before I go and present this, I'm going to share it with some wacky people to see if they can come up with a neater, more cunning idea. So that's one issue. I mean, the other issue would be, I mean, talking about, you know, products that fail, by the way, Ford and Edison, okay, collaborated on an early,

Starting point is 00:57:53 in the I think the first decade of the 20th century, an early electric car. Watch this on Jay Leno's garage, by the way. I think that Jay Leno is a greater philanthropist than Bill Gates. Bill Gates is quite useful if you're in Africa, if you've got malaria or something, but he's not much used to me. Jay Leno, on the other hand, takes a vast fortune,

Starting point is 00:58:16 buys and restores amazing cars, and then shares videos about them on YouTube. Now, that's great if you're in Africa, and it's great if you're me, okay? fantastic. I mean, I absolutely adore this guy. Interestingly, the electric car, according to Leno and according to other articles I've read, was actually quite good. It was quiet. It was, you know, unbelievably good acceleration. And the range wasn't terrible. And for the time, the speed wasn't bad. What killed it, interestingly, user imagery. The user imagery was because

Starting point is 00:58:48 it was quiet, you didn't have to hand crank it. It didn't give off fumes. It didn't make it loud noise, they were really popular with women. And they became stereotyped as like woman's car. Meanwhile, all the people doing the jloppy racing and the kind of customization, all the farm boys were using gasoline cars. Now, fast forward, what's so fascinating? Fast forward to 2025. I'm quite pro-electric cars. I've got two, and my wife has one of them, you know what I mean and I like them both I wouldn't go back to gasoline because I think they're great okay they're lovely to drive they're like a limousine and a go-cart they have very few moving parts they're incredibly quiet they're just lovely okay I mean just drive one and you'll see what I mean

Starting point is 00:59:39 and that when I write in favor of electric cars I get all these comments in the spectator comments below of people who really hate them and when they write to me what it bothers down to is they think to user imagery, like Google Lars, right? And actually there's a problem with all tech products because the first people to adopt innovative products tend to be slightly

Starting point is 01:00:01 weird. Okay, and weird people do not confer the reassurance of kind of social norms in the way that adoption by conventional people does. If you've got your weird, millionaire, rich, Nutter, and he's

Starting point is 01:00:17 got, you know, he's got a wind farm, and he's a heat pump. It doesn't make ordinary people think, oh, I must do the same. Now, what's happening here is that I didn't realize this, but all the people who don't have electric cars see the people with electric cars and go smug environmental tosser who's looking down on me because I've got a diesel and thinks he's saving the planet even though you've had to mine all this cobalt and lithium and whatever to produce the battery. What a trap. Now, the interesting thing about this, okay, is that in very few cases I can encounter, I can remember, okay, is are the electric car owners actually very interested in the environment? They're not. Similarly, when you meet

Starting point is 01:01:02 environmental people, okay, they don't have electric cars. They've always got some crappy excuse, like, yeah, but my wife needs to do the school run and said we decided we get a diesel, right? Right. I don't know why, okay, but you meet these people. You go to environmental conferences, And you say, so, you're really keen on the environment. You've got an electric car. Well, we thought about getting one. Meanwhile, all the people in like Essex, right? You know, Jersey, right?

Starting point is 01:01:28 Who just really like cars or really like tech, other people buying electric cars. It's got almost nothing to do with environmental credentials. And yet, by actually imbueing these electric cars with kind of Priya-style, you know, sort of values of smugness, it's actually a huge obstacle to adoption because people just, I don't want to be that kind of person. Now actually, okay, when I had an electric car three years ago, there are fewer charging points than there are now.

Starting point is 01:02:02 But what I noticed was really odd, okay, was that if you wanted to charge in like Billerickey, okay, in Essex, okay, imagine New Jersey, okay, imagine, you know, Trenton, okay? Loads of charging places there, all right? you went somewhere really woke. You know, you imagine, you know, I don't know, Cambridge, Massachusetts or whatever, right? Nowhere to charge. Cambridge, England, absolute desert for car charges.

Starting point is 01:02:28 Brighton, which is like the most right on city on the south coast of England, nowhere to charge at all. But you went somewhere, you know, you went to somewhere a bit bling, a bit, yeah, okay, right? Bang, loads of charges. How what the hell's going on here? And to be honest, okay, what's happened is we've, we've, we've, we've, we've, we've, we've, We've imbued electric car owners with its holier-than-thou kind of aura, which causes other people to resent them, despite the fact that incredibly few of them are really doing this for environmental reasons. They may be happy to have zero-emission cars. I would like to get solar panels to charge my

Starting point is 01:03:07 car, not really to reduce carbon emissions, but just because it'd be really cool to have a car that runs on the sun. Okay. I quite like solar pals on my house. Not really because I'm going to say the planet, but I like at dinner parties to, you know, or rather be lunchtime, wouldn't it?

Starting point is 01:03:23 Yeah, to go to a picnic and go, look, I'm getting two kilowatts on my app. Okay, to me honest, that's the kind of, and actually, the reason most people adopt new technology is peacock's tail, it's showing off. The first cars

Starting point is 01:03:38 weren't as good as horses and cars. They were done to show off. They were done for novelty-seeking reasons or for reasons of status display. And that's what rich people are for. They provide the early-stage funding for promising ideas before they really reach maturity. It's famously, the argument is that birds evolved wings as sexual display plumage before they became large enough to function as a mode of propulsion. So birds which seem to have evolved from dinosaurs for the most part, the lodging. is that they they first of all got wings as a form of sexual display.

Starting point is 01:04:16 The peacock got the tail, okay? But most other birds did the display with the wings to look cool. So I think dinosaurs had feathers, didn't they think? I don't know right. Okay, so there was a sexual display thing going on. And eventually they thought, oh, actually, you know, I've did this to show off. But I can actually get to that branch. And so there's that early stage funding argument.

Starting point is 01:04:38 And what actually provides the early stage funding for new promising ideas is quite often slightly 20 people like me. But we've got to be conscious of the fact that... And also, if you really evangelise new things, you know, I was an Airfriar evangelist, literally going about over 10 years, 15 years ago, I was like the John the Baptist of Airfriars. You know, and I occasionally say to an audience of 500 people,

Starting point is 01:05:03 if you've got anybody here going on an airfrile, and there'd always be six people that go, yeah, best thing I've ever born. Okay. And it suddenly occurred to me that actually in a way, that that actually annoys everybody else. It's not people going, cool, these people with air friars,

Starting point is 01:05:17 they really like these airfriars. Maybe I would look at getting an air fryer. Instead, it's like, these people are in a cult. What you have to realize working in marketing is that people in marketing are very high in openness, very high in openness to experience, very, very keen to stand out, very keen to be distinctive.

Starting point is 01:05:35 The majority of the population are much lower on openness to experience. They're much more driven by habit and social norms, and largely they want to fit in. They feel comfortable when they fit in with the people around them. It's a slightly unusual kind of corporate environment where people actually want to kind of effectively play constant games of one-upmanship with their kind of workmates,

Starting point is 01:06:01 which tends to happen in marketing and other functions and tends to happen actually at the higher levels of corporations. But it's actually very unlawful, it's actually slightly an unnatural state, So you're going to be very careful working in a marketing department or being a person who works in marketing to continually remind yourself that you're an outlier. One of my favorite stories from your book Alchemy was the story of the Walkman and how the engineers, basically they had the technology to add recording to the Walkman. And they're just like, hey, of course, we need to add this feature. We can do it. It would have cost 50 cents.

Starting point is 01:06:36 Because apparently they built the first Walkman on the, I think there was a thing. called the Sonny Talkman, which was a dictating machine, which had both a speaker and it had a microphone. And it would have cost like 50 cents a dollar per unit of the Walkman to add recording function. And of course, later on, they did add that much later on, when people were familiar with the concept. But I think it was Marita, I think it was Akio Marita at Sonny,

Starting point is 01:07:04 who was the kind of instigator of the Walkman project. And he was the single driver who said, no. And they all got very upset about this because they said, look, it costs nothing and it doubles the functionality of the device. And Marita said, you don't want to double the functionality of the device. You want the device to have one function which it performs very well, what Don Norman will call an affordance.

Starting point is 01:07:25 Okay. You don't want any ambiguity about what this thing's for. What this thing's for is for listening to high quality music while you're on a flight or on a train journey. And it's for that. It's a personal entertainment device. and nothing else. Once people start going, is it a dictaphone? Does it have a corporate function? You know, should I use it to record concerts, etc. Once it's got more than one function, people don't know where to start.

Starting point is 01:07:50 And so I thought that was an absolutely inspired thing, which is actually, you know, in many cases, less is more. You know, in other words, focus attention on one thing. The one thing that it does, it's really good at that thing. You don't have to worry about anything else. If you want to do that thing, then this is the thing for you. And if you don't want to do that thing, then don't buy it. Very simple binary decision. The second you introduce kind of complexity into the thing, logically, greater functionality should mean greater utility, which should mean greater value.

Starting point is 01:08:20 But sometimes, you know, as with the McDonald's menu, okay? That was an absolutely beautiful case where they realized that, okay, it's partly about speed, it's partly about simplicity, it's partly about supply chain, but it's also about choice reduction. You know, do you want a Big Mac? Don't you want a Big Mac? Whereas the American Dino, which was the kind of preceding thing before the McDonald's brothers came and sort of shook it all up

Starting point is 01:08:44 with I suppose this kind of Detroit model of kind of production. The American Dino was, you know, how do you want your eggs? You know, substitutions, you know, over easy, sunny side up, poach, scramble, etc. The whole thing was about customization. And so this is what I mean. Sometimes customization is a great idea. Sometimes it's the opposite. I think Tesla's quite clever in that the choice architecture of Tesla's is just the right amount of choice.

Starting point is 01:09:14 You don't want one color, okay, and you don't want one battery size, but equally they haven't gone silly. Okay, you know, they're kind of two interiors you can choose from two size of wheels, five colors, I think five basic colors and two premium ones. It's about right. You know, that's kind of about manageable, you know, whereas, you know, I had a look at the customised. the new electric ranger over today. And it's just, well, it drives you insane because, you know, you suddenly realize you're going to be spending basically the price of a house.

Starting point is 01:09:47 By the time you've added all the stuff you really, really want, you can't actually justify buying the vehicle. Okay, so maybe a last question. We've covered a lot of stuff at this point, which makes me very happy. I ask people on Twitter what I should ask you when you were coming on the podcast. And the most common question came around branding for stuff.

Starting point is 01:10:06 So say you're a startup, you're trying to figure out how do we build a brand for what we're doing? Do you have any advice for early stage founders to help build their brands, drinking their brand over time? Something they could do early on. Very, very simple. Be consistent, be distinctive and be famous. Now, the author, we forget this, okay. Advertising often talks about brand in this incredibly nuanced way about differentiation and this and the other. You've got to be distinctive, okay, undoubtedly.

Starting point is 01:10:36 You've got to be consistent for obvious reasons. And you've got to stick at it visually without dicking around too much. But actually, the reason advertising agencies never say, we're going to make you famous is because it sounds too obvious. Okay. Well, yeah, obviously, yeah. But let's not talk about fame. It is. It's about fame.

Starting point is 01:10:57 Okay. In that fame fundamentally changes the rules in completely nonlinear ways. So, first of all, when you are not famous, you have to find all your customers. Suddenly, you reach this magical sort of escape velocity of fame where people start coming to you. And they start saying, have you thought of using this for this? Actually, you didn't think of this as an application for your product, but I've actually got this. You know, I actually use it for this. Okay.

Starting point is 01:11:28 And then you reach sort of, there are kind of levels of fame. And they compound over time. It's not linear. It's not attributable. You can't really say, you know, I joke about this, okay, there are people who can attribute their fame to one single event, Monica Lewinsky, perhaps, being an example, okay, or serial killers, all right? Okay, yeah, if I hadn't killed all those people, no one would have heard of me. Okay, okay, there are people for whom fame is like attributable. But for most, most people, it's a whole, what you might call, amalgam of different activities, you know, going back years. And actually, in many cases, we ask consumers, how did you hear about this? They don't actually know. They'll always put TV or something online, but actually they don't know how they heard about it.

Starting point is 01:12:18 They just kind of heard about it. And we know that people's brains react completely differently in terms of their level of comfort with things they've heard of before versus things that are completely new. It's always similar to the kind of puristic of, you know, is everybody else eating this, have I eaten it before? and have I heard of people eating this? Right? It's part of that same package of, you know,

Starting point is 01:12:43 right in the motherboard of human psychology. So fame is completely, it basically changes the rules for everything. You know, when your chief executive rings somebody up, they probably call back. If you're a famous company, if he's heard of you or she's heard of you, she'll call back.

Starting point is 01:13:01 Right? If they haven't heard of you, they probably won't call back. What's that worth? What's it possible? It's impossible to quantify the value of fame. People come and work for you for less money. People actually apply to you without you having to find them. People stay longer.

Starting point is 01:13:15 Customers come to you and give you the benefit of the doubt. You're allowed to cock up once, okay, if you're famous, right? People, you know, people will give you, if you've got a great brand. The best definition of a brand is from the guy who's called Eric Johnson, I think, who wrote the book, Blindsight. and he's also written a book called Brands that Mean Business. It's a great book. It deserves to be much more famous, actually. And there's a sentence in that book which says,

Starting point is 01:13:47 having a great brand means you get to play the game of capitalism on easy mode. And I genuinely can't think of a better definition than that. Now, the point about playing on easy mode is, can you quantify the value of that? Well, no, because you don't know what your score would have been if you were playing on hard mode or psycho mode. I'm not a gamer, but you know what I mean? Okay.

Starting point is 01:14:12 And can you also say which of your various activities contributed to that the building of that great brand? Well, no, you can't because it's actually not even an amalgam of things. It's actually a kind of concatenation. It's a, you know, their whole sort of. elements here which are catalytic. They're not linear. And that's the other thing, which is that because it's not linear, attempts to evaluate advertising on short-term transactional metrics will always grotesquely undervalue the contribution of that activity to your ultimate

Starting point is 01:14:51 business success. It's a bit like, when I first got a pension, for the first few years, brand building is a bit like a pension. The first few years, I had a pension. I go, oh God, I'm paying this guy a few hundred quid a month. And look, I mean, you know, half it's gone in commission and, you know, there's a lot of work. And I'd rather have the money to have an Indian meal. You know, I don't know why I'm doing this. A waste of, oh, look, it's hardly gone up at all. And what a bore. What a waste of time. I thought that for about three years. I'm 58 now. And I got a pension. I go, where did all this money come from? I don't remember paying this. It really is like that. It's a compounding effect.

Starting point is 01:15:28 and everybody effectively, because we have finance and ROI and all those things, everybody's using addition, multiplication, subtraction and division to try and quantify the value of an activity, which actually is about power laws. It's not about that kind of linear bullshit, okay? It's really about kind of power laws and non-linearities and all this kind of stuff. And so, you know, we're being judged by the wrong kind of maths. We're being evaluated by the wrong kind of maths and also we're being evaluated over the wrong time frame.

Starting point is 01:16:06 And consequently, my argument would be that at a very rough estimate, an awful lot of marketing activity is in reality four times as valuable. Okay, I'm plucking that number out of the air, but four seems about, you know, ish, right? is probably four times as valuable as people think it is when they measure its short-term contribution. Could be more, of course. I love that, because over time, it will build and it compounds, it's like a drip. I love the three points you made about how to build a great brand. Consistency, distinctiveness.

Starting point is 01:16:41 What was the third? It was, be famous? Yeah, I mean, consistency, distinctiveness, probably clarity. Clarity. Yeah, just be famous. Great. Yeah.

Starting point is 01:16:53 Yeah, some sort of clarity of promise, I think. Amazing consistency. I think a good brand is a sort of promised. But also the extent to which it contributes to trust, okay, which is that if you met a celebrity on the street, right? Okay. I don't mean a serial killer celebrity. I mean a famous actor, okay. One thing you wouldn't think about is, are they going to steal my wallet?

Starting point is 01:17:20 Are they going to mug me? Are they going to do anything with it? They may have lots, lots of vices, but generally people who have a lot of reputational skin in the game, who've invested a lot in building up a reputation over time, are going to be much more cautious about disappointing their customers or risking negative feedback than someone nobody's ever heard of. Right? I mean, and let's be honest, okay, I think it's even more extreme in the United States than is in the UK.

Starting point is 01:17:49 The relationship people have with celebrities is kind of, purvey and weird. You know, they, you know, they imbue these people with superpowers. They're actors, right? They actually smart through the air. But somehow people treat them with this kind of reverence because they're just famous. And the point is, it's kind of easy mode. You know, if you are actually pretty famous, you are playing that game on easy mode.

Starting point is 01:18:16 Because so many things which require massive reassurance, due diligence, checking, you take it to the board, three people on the board have never heard of the companies that they want you to go back and check with so and so, so, so, and then you walk in and, you know, and it's kind of you're famous, the rules are different. And when I say there are also these inflection points like escape velocity, I always say about Coke, that Coke has reached a magical level of fame where it is your expectation that any shop or bar or cafe or Beechland-starred restaurant will stock it. I can ask for this anywhere, okay, and if they haven't got it, it's their fault, not mine. Now, that's really kind of mega fame.

Starting point is 01:19:03 But equally, in B2B, there's an inflection point in B2B marketing, okay, which is that if no one ever got fired for buying IBM, right, we know the famous phrase, if you appoint Pricewaterhouse or EY or whatever to your audit, okay, and something goes wrong, everybody blames them if you appoint someone nobody's ever heard of to be your auditor and something goes wrong everybody blames you for not appointing Christ's Waterhouse

Starting point is 01:19:30 or EY you know it's rather like one of the reasons I fly with you know I wouldn't go on a business trip with Ryanair even though they're actually pretty good and they're very punctual right is if the flight gets cancelled or delay and I ring the client and say

Starting point is 01:19:45 I'm terribly sorry the BA flight's been delayed okay they go, oh, well, never mind you did your best. And if I ring up and say, the Ryan Air flight's been delayed, okay, it's not quite the same, is it? Right? I haven't necessarily tried.

Starting point is 01:20:02 I've kind of skimped on that. You see what I mean? Yeah. And so, you know, various things, it's not just what things are, it's what they mean. And we use brands as kind of extended phenotypes to express ourselves in all kinds of ways.

Starting point is 01:20:19 So this is the other thing with brands. It's not just a simple consumer. It's not just a simple business consumer relationship. There are all kinds of things. What does the brand I use say about me? It's do the people who know me know what this brand means? It's no good being a luxury car that nobody, that only rich people have heard of.

Starting point is 01:20:42 Because in order to convey prestige, it's necessary for you to know that other people know that BMW is a prestigious car brand and so on and so forth. So there are lots of things here which are second order, third order, non-linear compounding factors. You know, we just have to acknowledge this is a different kind of maths. And yet we're being judged on a kind of, you know, X minus Y equals Z maths.

Starting point is 01:21:09 It doesn't make any sense. Maybe as a final question, is there anything you want to leave listeners with folks that are building product, any lasting piece of negative advice? Try and do the psychological and the technological and the economic for that matter. You know, in other words, the sweet spot is it works psychologically, it works technologically,

Starting point is 01:21:34 and it works economically. In other words, you can make money out of it, people want it and it's, you know, it's got an interest, it allows them to do something significantly new by using some clever application of tech. Try and use those three things in parallel, because I think what most businesses do is they try and do things in series. And businesses borrow an awful lot from the kind of Fordist Taylorist production line mentality of the process.

Starting point is 01:22:01 Okay. And the process, we have to pretend that the process is linear. But the process of any kind of innovation or development is not linear. There are loads of products, which, by the way, have completely failed at first iteration. and then someone sold them in a different way and they then turn out to be completely successful. I mean, you know, I mean, the pivot, okay, is an example of that. Famously, Riggily started off selling soap powder in Chicago.

Starting point is 01:22:29 Then he started giving away baking powder free to sell the soap powder and then realized he'd start making baking powder and selling that and he gave away chewing gum that went on the baking powder as a gift and then people liked the chewing powder, a chewing gum a lot more than they like the baking powder. baking powder. So as a result, Riggley became a chewing gum company. So, but we're always trying to make this thing linear because when we tell stories backwards, we post-rationalise and we reverse engineer. And we reverse engineer our actions

Starting point is 01:22:58 to make it all seem perfectly linear and logical as a kind of sense check. The real process is never like that. And I think you should have marketing, I think marketing and technology are two sides of the same. Marketing and innovation are two sides of the same coin. You either, as I often say, you can either work out what people want and find out a clever way to make it or you can work out what you can make and find a clever way to make people want it and actually the greatest thing

Starting point is 01:23:24 has managed to do both simple as that so I don't do it one or than the other don't leave marketing to the last minute but equally work in parallel as far as you can work in people find your book and Natchstock point them real quick Nudstock.com

Starting point is 01:23:39 the book's called alchemy and it's got a variety of depending on which country you're in. But if you look for Alchemy by Rory Sutherland, the audiobook is probably the best thing to buy because I actually read it myself and I kind of riffed a bit from that. But also available on Kindle

Starting point is 01:23:56 and from all good bookshops and quite a few rotten ones. And there's also a book I've co-written called Transport for Humans, co-written with Pete Dyson. If you're in the transportation industry, I'd recommend that one. Amazing.

Starting point is 01:24:08 Rory, thank you so much for being here. Thank you for that. Always a joy. Thank you so much. much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenny's Podcast.com. See you in the next episode.

Lenny's Podcast: Product | Career | Growth - What most people miss about marketing | Rory Sutherland (Vice Chairman of Ogilvy UK, author)

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