The Compound and Friends - How Things Go Viral (with Barry, Michael, and Derek Thompson)

Episode Date: January 3, 2020

Derek Thompson stops by The Compound to discuss how and why things go viral with Barry and Michael. Derek is a staff writer at The Atlantic and author of “Hit Makers.” 1-click play or subscribe on your favorite podcast app   Subscribe to the mini podcast on iTunes or Spotify    Enable our Alexa skill here - "Alexa, play the Compound show!"   Talk to us about your portfolio or financial plan here:  http://ritholtzwealth.com/   Obviously nothing on this channel should be considered as personalized financial advice just for you or a solicitation to buy or sell any securities. Please see this 3,000 word terms & conditions disclaimer: https://thereformedbroker.com/terms-and-conditions/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

I'm Barry Ritholtz. I'm here with Michael Batnick, and our guest today is Derek Thompson. He is a writer for The Atlantic and the author of Hitmakers, and today we're going to discuss why things go viral. Stick around. So Derek, before we talk about the why of virality, maybe let's just back up and talk about the myth, the viral myth, as you described it. What's that about? So in this book, there are really two myths that I'm trying to break. The first is the myth of novelty, and the second is the myth of virality. The myth of novelty says that there's this idea, especially in advertising and marketing, that we're obsessed with things that are new. In fact,

the word new is the most commonly used word in all of advertising. But the oldest idea in psychology is this thing called the mere exposure effect. And what the mere exposure effect says is that essentially we have a familiarity bias. We like old songs. We like old movies. But we like them with a little bit of a twist. So we like old features and old franchises,

but we watch them again in sequels. Or we like old songs, but we like them sort of redone. You see this with some of the most famous sort of stories in history. Batman. Batman. Certainly the entire Marvel comic universe. But also Star Wars, right?

When Star Wars was first being written, George Lucas had no idea what a story would be. He had a brilliant world-building exercise, but he had no story. And then he discovers Joseph Campbell. He comes up with this theory called the hero's journey in a book, The Hero of a Thousand Faces, where he says that for centuries we've been telling the same story over and over and over again. You have the hero who often has lost a parent or both parents, who's offered to go on a quest that's supernatural. And first he says, no, I'm too ordinary to possibly do this. And then he finally goes on that quest and he defeats someone who's intimately involved with his own origin story and returns as the hero or the one or the

son. This is the Matrix, this is Harry Potter, and it is, of course, Star Wars. So what makes Star Wars so extraordinary, I think, is not that it's so new or that it's so familiar, it's both. It's a familiar surprise. It's an extraordinarily novel act of world building shot through with the most familiar story ever told. So that's the first thesis of this book, is the idea of the familiar surprise being really

key to hits. The second big idea of the book is this idea of the viral myth. The viral myth is this concept that I think is sort of swirling in the ether around us, that some things are just good enough to go viral. That some content, some songs or movies or ideas or tweets are like the measles. They can't help but spread throughout an ecosystem. And what I'm saying in this book is that actually, if you read the data science, you learn that nothing naturally goes viral. Nothing is the measles. Distribution and marketing helps determine why what becomes popular

does become popular. So let's spend some time on that, because there's a ton of really high-quality things that for whatever reason never seem to catch on, and lots and lots of things that perhaps aren't as great, but suddenly they get traction, they start going viral, and there's no stopping it. You're saying this is a very, very specific, deliberate act that greatness alone doesn't make it happen. act that greatness alone doesn't make it happen.

Yeah, greatness alone doesn't make it happen. Essentially, there's a lot of things that are good enough to go viral, but for maybe every 10,000 songs that are good enough to be number one in the Hot 100, only five of them will be. So what makes up the difference? It's distribution and it's marketing. And timing and luck. And timing and luck. And you can see this when you go back through history and really look at why what became canon in music and film actually did become the most popular in class. So let's look at a really old example. Let's look at something like Impressionism.

Which, by the way, is a really fascinating section. It's the first story in this book. Why is it that in the 1870s, 1880s, no one understood whether any of these paintings were any good, and somehow all of us know who Monet is, who Manet is. How did this happen? How was this canon built? Well, it turns out that there's an artist who none of us really remember these days named Gustave Caillebotte, and Gustave Caillebotte was a French collector of art, also a sometime painter, and he collected a bunch of reject paintings from his painter friends.

So he's collecting all of these paintings and he dies in his 30s of a stroke and he bequeaths his entire collection to the French Museum. He says, here, take it all. The French Museum says, I don't want this crap. This is impressionist, you know, zilch. Like, we don't want this. But his executor is Renoir and he essentially forces them to take all the paintings. So they hang there at the Musée de Luxembourg.

The first time that the French government has ever allowed Impressionist paintings to be hung in a French state museum. And who just happened to be Caillebotte's seven closest friends? Their names were Manet, Monet, Degas, Renoir, Cezanne, Pissarro, and Sisley. Still today, these seven most famous Impressionist painters.

And so the theory from this that a lot of art historians and actually sort of psychologists and data science have looked at is we have an Impressionist canon today, not because these seven painters were the best, but because a lot of their artworks just happened to be hung at the same time because of Gustave Caillebotte. They're all a part of the canon, and they benefited from the distribution that that first museum exhibit offered.

And Caillebotte mandated in his will that they either have to all be hung or none at all or something like that? It was an all-or-nothing thing. He said they all have to be hung. All seven of these painters have to be hung, and also importantly said that none of his paintings had to be hung in the same exhibit. So you have, at the same time, the establishment of the Impressionist canon, the Kaibat 7, as I call them, but not Gustav Kaibat. It's a really interesting sort of historical proof of the idea

that distribution and the construction of state canons is often responsible for why we remember what's famous and what's not. So that is before today and the internet, and we live in a viral world of 24-7. Do you think that social media has changed everything where it's not as random as it used to be and cream does rise to the top? And maybe we don't know what's going to absolutely take off, but it maybe loses a little bit of the randomness. Yeah. So data scientists have looked at this. They've created what they call information cascades, where they can watch a single piece of content spreading

through an ecosystem, whether it's a YouTube video or a tweet. And they've asked themselves, okay, does this information cascade, this map of an idea catching on, does it look like virality? Does it look like a disease spreading? Or does it look like the opposite, which is a broadcast, right? Virality is a million one-to-one events. I get you sick. You get Barry sick. He gets someone else sick.

That's an actual virus. Broadcast is the opposite. Not a thousand or a million one-to-one events, but one one-to-one million event, right? So, for example? So, for example, you tweeting something and a million people seeing it. Or, you know, Oprah Winfrey putting something on Instagram and a million people buy that book and it immediately becomes the number one book in the country. Oprah can't go viral. She is viral.

It doesn't make any sense, given sort of what we understand of epidemiology, to say that Oprah's tweet or Oprah's Instagram post is going viral. There's no such disease that spreads from one to a million people simultaneously. That's not a disease. It's a broadcast, right? Otherwise, you would maybe have, like, if there was a measles factory and it exploded and the factory was located in downtown Manhattan and everyone suddenly got the measles, that would be the broadcast of a disease. But that's not virality. It's not viral spread.

Hashtag antivirals. Yeah, right. So what sometimes happens in social media is you get a little bit of both. One person tweets another person, tweets another person, and it slowly goes until it gets to a person of a little broader influence to a person of an even more broad influence. And then it hits Oprah. And then it goes Oprah, and then it goes from viral to public. How about sapiens? I think Bill Gates or Mark Zuckerberg recommended

it, and it was well-known maybe a little bit beforehand, but after that... Right. And so this is, I think, how a lot of seemingly viral events happen. And so essentially, right, if you look at this map, the idea of catching on, almost everything that seems to be viral has some node in the information cascade, in the story of this idea spreading, where it goes from one to a million, right? Maybe it's Justin Bieber putting on Instagram he and his girlfriend dancing to Call Me Maybe by Carly Rae Jepsen. And then it suddenly became the sensation of the decade. But it took that moment.

It's the same thing you often see with books. Is it different in Canada? Canadian to Canadian? Is it different in Canada? Yeah, yeah. It's a different viral spread, maybe. It's spread slower in Canada, potentially, because of the cold. So what about the ability to predict what's going to go viral?

So in other words, do you have any ability to look at something that you're about to hit the blue button on a tweet and say, this is going to do well? So again, I think it's important to think about popularity and the potential for popularity as being two things. On the one hand, it's the content, right? It's the familiar surprise element of it. And on the other hand, it's the distribution. So I had a piece that went up today, actually, that looked at generational politics, how

young versus old is the most important dividing line in the Democratic Party today. Not race, not class, it's age. Since the great financial crisis, if I saw that right piece. That's exactly right. And so I knew that I wanted to make sure that the piece was presented in a way that was a bit of a familiar surprise. People are used to generational politics, millennial versus boomer, you know, OK boomer, that whole thing. So I knew I needed millennial versus boomer in the headlines that people would see, yes, I can graft onto something I'm familiar with and then allow it to teach me something else, familiar and surprising.

But I also knew that it would only really get to number one on theatlantic.com if it was in the homepage lead, which it was. And then it got to number one on the site. So if you're trying to explain why the article that I wrote got to number one in The Atlantic, I don't think you could just say, oh, it's because Derek wrote a good article. No, it's not just that. It's also distribution. Because when an article is placed at the top of The Atlantic homepage, that's where the most people see it. That's our way of signaling to people this is the most important story of the day. So even in explaining something that isn't anything close to a best-selling book or a number one song, something just an article that I wrote in December, why did it get to number one in the Atlantic? Not just content, but also distribution marketing.

Stunned silence from both of us. F***, that was beautiful. But I can't believe you stunned us to silence. Okay, that doesn't happen very often. Let's talk about the Mona Lisa, which is really a relatively small, not especially impressive painting. Why did the Mona Lisa become the most famous painting in the world? I think the story of the Mona Lisa is a great example of how a piece of content that is good enough, and of course people are going to hate the fact that I'm calling a da Vinci a piece of content, but of course it is, how something that is merely good enough can go viral and become the most popular thing

of its kind in the world. For the vast majority of the Mona Lisa's history, it has not been the most famous painting in the world. When it was hanging at the Louvre decades ago, or sorry, when it was hanging in the Louvre in the late 19th century, early 20th century, it was much less valuable than a lot of paintings that were hanging alongside it. But in 1911, an Italian thief stole it from the museum and sort of traveled around the world with it. And there was this sort of international manhunt for the Mona Lisa. Where's the Mona Lisa? It was all over American newspapers, European newspapers, news around the world. Where's the

Mona Lisa? So by the time it was finally found, it had benefited from this explosion of exposure. Suddenly everyone knew what the Mona Lisa was because it had been stolen. And so that's one reason why it was mocked so many times in the 20th century. Like Duchamp put a little mustache on it and said, ooh, and now it's a funny little piece of Dadaism. And people kept sort of playing with it. So again, it created more and more exposure. More and more people are seeing the Mona Lisa. So if da Vinci saw that today, he would say, what? That was a throwaway. I don't think that was a second draft. I mean, I think da Vinci thought that he had done

something really special when he made the Mona Lisa, but he didn't necessarily think he'd made the most famous piece of art in the history of the world. But if there's one piece of art that literally every single person in this office, on this street, has heard of, it's the Mona Lisa. And why? Not because in 1910 it was the most famous piece of art even in its own museum, but rather because it was stolen in 1911 and created a new story that was even bigger than the piece of art itself. So again, in explaining the Mona Lisa's popularity and ubiquity, you can't explain it just by looking at content or painterly quality. You have to look at the distribution mechanism that exists around it.

Derek, that's a great place to leave it. Where can people find more of your stuff if they want to either read more of your writings or find your books? Yep, they can go to The Atlantic, they can buy my book Hitmakers, or they can follow me on Twitter at DKThomp. Derek, thank you so much for coming in. Help us broadcast and distribute this message. Hit subscribe, share with your friends. Derek, thanks again for coming in.