Killer marketing secrets that always work (ft. Ogilvy Adman, Rory Sutherland)

0:00 There are two ways of making money. You can either make desirable things or you can make things desirable. And there's not much you can do about the laws of physics. Whereas the laws of psychology are magnificently malleable. I feel like I can rule the world, I know I could be what I want to We know about you, but do you know uh what you're getting into at all?

0:26 Up to a point. I know of the podcast quite well. I know that you're like recently a uh uh kind of a social media star. You even though you've been killing it for decades. Uh I heard a story about how someone just started like uploading some of your talks and it went viral and then you said, Maybe I should do this. It happened I think accidentally. And I've kind of reverse engineered what happened.

0:47 Which is that most marketing people Talk about what they do. And my argument is of necessity I started talking about how we think. And consequently Um

0:58 You know. The willingness to accept the fact that surprisingly arbitrary seeming trivial decisions may have a monumental effect on is actually necessary to have a proper understanding of living in a complex Into you know, interconnected system.

1:15 Yeah, if you believe there are important strategic things and then there are trivial things which you delegate down to junior people and in which you have no interest whatsoever Fundamentally, I think you're missing the point. Because Uh the real world isn't like that. It's you know, it's full of butterfly effects, silver bullets. You know, str you know, small things, alchemy I call my book, because you can turn lead into gold.

1:39 You can literally take something which is seen as a product disadvantage. And turn it into a strength. I think you had a good example of that with uh Have you ever heard, Sean, the story of how horsepower

1:52 Kind of came to be. No. Tell that story. So one of my one of my great contentions is that when we look at great entrepreneurs or great inventors Jobs, you know, if you say

2:04 Uh Edison Ford. What? Bolton. They tend to be written. Up as historians as inventors.

2:12 And my argument is that an Invention Change his behavior. I think it's Stuart Butterfield of Slack who said something very similar.

2:23 No. The only real measure of the effect of you're having on innovation is the extent to which you change behavior. And you can invent anything you like, but if you can't get anybody to adopt it, it's an invention, but it's not an innovation. And what was selling steam engines to Mine owners. And the purpose of the steam engine was to replace the horses they used to walk round and round in circles draining the mine so that miners could go in and effectively mine.

2:50 Cole slate. Cold, whatever, without drowning. What he realised is that you could you as an engineer, you could talk around, you know, the calorific capacity of the boiler or the Length of the And these people didn't want to know.

3:04 So Walton Bolton amongst themselves said well What do these people really want to know before they're prepared to buy a steam engine? Is that they want to know how many horses they no longer need to feed. If they buy a steam engine, how many horses can I get rid of if I buy the steam engine?

3:20 So Watt went out and invented a unit we still use today, which is called the horsepower. And the reason it's not named after a famous scientist like the Ohm or the Newton or the Coulomb or the What for that matter, or Celsius, or anything of that kind. Is because it's a marketing unit. It was invented for marketing purposes because you can then go and say, If you buy a twenty five horsepower steam engine You can actually get rid of seventy five horses'cause

3:44 I think the horses worked in shift, so it does the work of twenty five horses, but it does it twenty four hours a day. So you can now get rid of tw of seventy five horses. And these people would go scribble, scribble, scribble, scribble, scribble, cost of horses, cost of feeding horses, cost of looking after horses. And you know, on the back of an envelope they could then go, We'll have two of those. By the way, it went even further than that. I mean, the industrial revolution was a marketing revolution every bit as much as it was an industrial revolution, because there was no point in being able to produce things in abundance if you couldn't create corresponding demand. So, you know, one of the things about the eighteenth and nineteenth century in England was it was an absolutely pioneering period in terms of how people marketed things. And that included the steam engine where Watt and Bolton

4:31 Would go to a mine owner. Now let me get this right. Some people were already using Newcomen engines, which were less efficient steam engines than the Watt engine. And Watt and Bolton would go along to the people who are already using these inefficient steam engines, and this is how they priced their their own steam engine. He said We'll supply it for free.

4:51 You pay us A third of the money you save on coal. So it was literally hardware as a service. Bear in mind this was seventeen seventy five. I mean, years later Rolls Royce started charging airlines for jet engines in the same way, effectively. You pay us for every hour the engine is in service.

5:08 Now what was ingenious about that was of course It aligned the interests. of the people selling the steam engines and the people owning the mines, because the people in the country where coal was most expensive most needed to make mu m to save money on coal, that was Cornwall. W tin well there's there were tin mines quite a long way away from any available coal field. So coal was more expensive there. And so the first Watt engines were

5:32 In places where coal was most expensive, which meant the mine owners save more money and Walton Bolton made more money. So they were actually capturing the upside. Whereas if all you've done is said, Yup, it's a hundred guineas for a steam engine, you wouldn't mean capturing any of the upside. I mean

5:50 This was I have to say this This was pretty smart stuff. I mean W one of the worst mistakes you can make is thinking that people five hundred years ago, three hundred years ago, two hundred years ago were thick. They were very, very clever.

6:04 And probably they had less time staring at smartphones and more time to be clever, to be absolutely honest. But th th something I discovered the other day is the Orson Strait in Denmark. The Danish crown. wanted to charge effectively customers duty on any cargoes passing through the Straits of Denmark, and they had a kind of stranglehold over it. And the original thing was they'd send people on board and say Uh, we'll estimate the value of your cargo and we'll charge you ten percent.

6:33 And they thought this is a lot of bother. So they said They said to the people passing through the Orson Strait, this isn't like thirteen fifty, okay? Uh you tell us what your cargo's worth. Okay.

6:43 Uh We'll charge you ten percent on that. Oh, and by the way Every now and then Will randomly buy your cargo at the price you quoted. Dude, that's like how we pay taxes.

6:54 It's a genius, isn't it? You you can do property evaluation that way, you see. It simply says, You tell us what your house is worth and the only deal is we have the right to buy your house for that amount of money. What's funny is um I think that in America I think it's like I think point four percent. I could be getting the numbers off. It could but it's like between point four and like two percent of Americans get audited every year. And like if you do the math, it's like I don't know, man. It might be worth pushing it and just get audited once every uh

7:23 Thirty years. You're absolutely right. Yeah. I mean h having said that, an IRS audit, from what I've heard, is a living nightmare, isn't it? Yeah. Yeah. Yeah. I'm not actually being serious. You know who needs the modern day horsepower? is all of the AI products. Yeah. If you if you if you have Claude and you have ChatGPT, essentially they're all making the same looking product.

7:43 Right. It looks like a chat interface and then it you type something and then it gives you something back. And so they're not differentiated in the experience or the pr the the look and feel of the product. Uh that much. And then they come out with these models, and each one has a different, you know, Opus 3.0 light, heavy, expert, pro plus. And you're you have no idea. Which should use?

8:05 And then they use benchmarks that are It's like on the crud lightweight benchmark of coding expertise, we're at three point seven seven nine. Th why don't they just have the equivalent of horsepower? Why don't they just write IQ? Yeah, or when like Apple was like uh the iPhone, instead of saying like it's X amount of megabytes of gigs, they said. A thousand songs in your pocket.

8:25 It's not just in your pocket. Now this is the classic thing, which is that engineers I've talked to hundreds of entrepreneurs on this podcast and I've got a bunch of takeaways, but one of the big ones, one of them that shocks a lot of the people out there who are product nerds, which Frankly, I am myself. Is that oftentimes in order to turn something that's going kinda good into something that's absolutely amazing, is to fix the marketing.

8:48 Not the product. And in particular, fix how many people know about the product. That's like the big thing. It's called attention. Say it with me. Attention. And so this team at Starter Story, they put together a free guide. They call it the one million dollar attention guide. It's this pretty amazing thirty-nine page document that's filled with 15 tactics to get eyeballs on what you are building. And so there's a even a 30 minute recording from Pat, who's the founder of Starter Store. He has interviewed hundreds and hundreds of entrepreneurs. So he's able to put this together through a bunch of research and experience. And so if you're interested in getting more attention, which frankly you should be, everyone should be, then you should click the link below in the description or scan the QR code right here.

9:28 Engineers. Whether they know it or not. Deep down just want to impress other engineers. Okay. And so a psychological solution in their engineering community will be seen as cheating.

9:41 So I make the same point about electric cars, which is you have this thing called range anxiety, and we're spending billions and billions of dollars a year trying to produce batteries with a higher energy density. It's a really good thing. I'm not c I'm not saying, Hey, engineers, you're wasting your time. But Isn't it cheaper just to reduce anxiety? Rather than to increase range. Because if the way to reduce range anxiety is always to increase range, we'll end up with electric cars being heavier than they need to be, more expensive than they need to be

10:10 And you know, with fifty kilowatt hours sitting outside your house ninety five percent of the time effectively doing nothing. So reducing anxiety and I realise, by the way, how irrational this is. Explain the story, which is It it fascinates me because One of the things I think that helps If you want to do this, is to have some degree of metacognition.

10:31 Which is you don't just think, you think about your own thinking. Yeah. The really good fighter pilots have good cognitive skills, but they also have good metacognitive skills. They don't just go, I'm gonna do that instinctively, but they also ask, Is there a reason why I shouldn't be doing that? In this instance.

10:49 Okay, or this time it's different, as it were. And so my wife's car is a mini Cooper electric and it's got about uh I I guess it's about Uh twenty eight thirty. kilowatt hour battery in a range of about a hundred miles. And I've got the Lotus Electrae, which is a hundred and twelve kilowatt hour battery, a range of about three hundred miles.

11:10 And I got back from quite a lot of driving. I've been down to Wales back. And the car's down to sixteen percent. Okay. I'm getting And all the lights have gone amber'cause it's at sixteen percent. So I'm g I'm I'm going white knuckle on this and going, God, I'm down to I'm sixteen percent uh Oh my goodness, I'm down to sixteen percent. Then I look at the actual range.

11:30 And it's About fifty eight miles. Now my wife's car, that's fifty six percent. Okay. In my wife's car, we drive around at fifty six percent, i.e. with a range of fifty six miles, all the time, without the slightest mention of anxiety.

11:45 But when that's expressed as sixteen percent not fifty six miles. Okay. I'm suddenly having connections with And really panicking. Now what that suggests is that

11:55 Range anxiety is much more a factor of psychology than it is of physics. And the problem with trying to increase battery range is the laws of physics are actually kind of set in stone to a large part. Okay. There's not much you can do about the laws of physics.

12:13 Whereas the laws of psychology are magnificently malleable. And so that's the thing that really interests me, because we spend a lot of time effectively trying to uh work within the laws of physics which are immutable. Well, it would be a lot easier just to say Actually.

12:29 You know. Why don't we why don't we take this undesirable thing and make it cool? Right. You know. This is the uh elevators need to go faster. No no no. Just put a mirror in the elevator. Just put a mirror in the early. People will be happy looking at themselves. And it's actually, by the way, it gets quite philosophical this because you suddenly realize That

12:50 Literally trillions of dollars of effort. are invested by businesses every year. In pursuit of metrics. Which the customer May not notice or care about.

13:03 Whereas at the same time no money is spent On things which would actually make a huge difference. There are relatively easy wins here for both government and the private sector in saying I'll give you an example of this. So

13:17 I call this reverse benchmarking. In other words, you look at all the metrics that everybody cares about in the category. You find a metric that's been completely and ridiculously neglected. And you double down on that thing. Now I first came across this in

13:31 Will Gadara's fantastic book, Unreasonable Hospitality. He goes to the number one restaurant in the world All of his team say we ought to copy this, we ought to do that thing with the napkins, I really like what they do in the bathrooms with the scented jos sticks. Let's copy that. And Gadaro's not going to copy any of that. Because two one we can't afford to and two they're already doing it. What I want to know from you is what out of this evening at the world's best restaurant, Michelang three star restaurant somewhere.

13:57 What was a bit disappointing, what was a bit meh. And They said the coffee was a bit average. Yeah, it was nothing special. And the beer drinkers

14:06 Probably the chefs who'd gone along. Got treated really crappily, shabbily compared to the wine drinkers. So he goes back to his own restaurant. And he appoints a coffee sommelier and a beer somelier. And he says your job is not just to

14:21 Benchmark against these people. It's to hit it out of the park. Now if you think about it. Taking something that's bad about the category. No

14:30 Not saying we need to raise our level to the category average. But instead doing it spectacularly well. Something that nobody's expecting. That was what Apple did. I would argue.

14:41 Okay. That's what Buckys did. I don't know if your Buckys Wh where are you in the US? Yeah, I lived in Texas. We we we're big bucky guys. Yeah. Okay. It basically started with an insight around women's restrooms. Now you could have just had averagely clean's restrooms and you would have benchmarked.

14:58 They're like the bloody hall of mirrors at Versailles, right? I mean I haven't been in them, but I the men's restrooms are pretty good, but the women's ones are apparently sensational. And My argument is that, you know, if you let's say you're a hotel. Okay. Everybody will focus on the rack rate and the this and the size of the room and the you know, and so on and so forth.

15:17 Have you ever had A h e even in a really expensive hotel. A laundry experience that isn't a bit of a pain in the ass. You know, you're gonna fill in a form, you're gonna put it in a bag. By the way, if you get your laundry back, they never replace the bag the second day, so if you want a second lot of laundry, you've got to ring up and ask for another bag in another form.

15:37 Okay. Now, what would happen if a hotel if I stayed in the hotel, which was I'm not saying you could be totally shit. Okay, as a hotel, as long as you have a brilliant laundry service. You know, Apple is, you know on a par technologically with other

15:52 Entities. But it's sensationally good at the emotional component. Yeah, Bucky's is what But it's it's it's a thing apart. You know, U Uber doesn't have cabs that smell of urine. I'm not suggesting you can neglect the other stuff.

16:05 But I think what you can do is that when you cause the c customer to pay attention to something It consequently becomes more important. Because it's surprising. And because It it's attention grabbing.

16:19 It therefore suddenly came. Uh uh causes the consumer to completely reweight Their utility function. Now one of my examples would be car rental. I don't I don't know, if you rent cars at airports, presumably occasionally.

16:32 Hate doing it. Yeah. Yeah, exactly. Hate it. Once you've driven out of the car park, it's the same shit. It doesn't really matter. Maybe maybe you can make rental return a bit better, but let's not worry about that, okay? I just asked the question, why is it that when I book a taxi for a hundred dollars to pick me up from the airport here in London? They meet me at arrivals and even push my troley with luggage to the car park. Yeah.

16:56 But if I rent a car for six hundred dollars, I've got a find and cue at the car rental desk. Mm. Then I've got to go and find often in like hundred and ten degree heat. I've got to go and find the car. And then, by the way, there is there isn't even a laminated sheet of A four paper in the car saying, This is how you open the fuel filler cap. This is how you release the handbrake.

17:17 You know, there's nothing. Yeah. Once you're in the car, about Ten, twenty minutes in, you start to enjoy it. But that initial bit, which nobody seems to be measuring

17:28 It's the bit that's terrible. No. In some cases I would literally happily pay a hundred quid. If the deal is we meet you at arrivals. Okay, we take the luggage to the car, we hand you the keys, we answer your questions about how the car works. If by the way they also turn the air now, you could do this with electric cars, if they also turn the air conditioning on ten minutes in advance.

17:49 Okay. Now you've done something which is Now there's that thing w what's that funny thing, Turo, isn't there, I think. Which because it's humans might might be able to create something a bit like that. Yeah, they I I use Toro all the time. They have a thing where it will the the loner will drive to your home.

18:08 And because of that, by the way. When I rent cars at large American airports, Phoenix or someone like that. I actually arrive at Phoenix, take a taxi to the hotel, and then book the car the next day. Because the downtown experience of car rental with no luggage is so much better than the airport experience with luggage.

18:28 You know, we asked you a question earlier of like, so how do you do it? And it sounds like one thing that I'm picking up is Yeah, you pay attention to what irritates you. And instead of just complaining about it. That's a great source material. I think Jerry Seinfeld says irrit irritation is innovation. He I think when he was creating his uh His talk show.

18:45 It's because he had been for years he had been famous. He got invited on late night talk shows and he would go. And it's just every if you look at every late night talk show, it's the exact same. There's the guy at the desk, there's the cheesy music, there's the band guy that they have, you know, sort of forced laughter with. And When he created comedians and cars getting coffee. It was the equivalent of a talk show, but he's like, What's the opposite of everything I hate about those things?

19:05 And then he created something and I think licensed it for like a hundred million dollars to Netflix. Starting with irritation at the way that this thing always works. I don't know it. Room one hundred one is I think it's from Orwell. It's the room to which you'd badish things that you really want to get rid of.

19:24 And people will come in and just have a rant, and it will be everything from You know, uh potholes. Slightly boring choice. to cumber buns or something similar like that, you know.

19:37 Unnecessary and needs to be eradicated. And you're absolutely right, irritation is innovation. And so One of the things is that I would argue that um There are in a sense there are two really valuable things.

19:50 One of which is what you might call the meta stuff, which is What are you really in the business of? Now You know, Nasim Talib and I had this conversation about why you actually buy the things you buy. And my joke is, you know, my jokes were the reason you have a swimming pool isn't to swim in it.

20:09 It's so that you can walk around your garden in a bathing costume without feeling like an idiot. Okay. So on a hot day you can walk outside And lie outside. Without wearing many clothes, without feeling stupid.

20:21 Okay. And a dishwasher. Crocary and Plates.

20:27 It's valuable'cause it keeps them out of sight. But when you when you look at these things and go, Maybe it's not about this, maybe it's all about that, what you have to acknowledge is two things, I think. One You've got to let go of two handholds at once, which is what makes it difficult. One is economic logic. You know, if we reduce the price, more people will buy it.

20:48 Economic logic is a has very bad predictive value, I think, in the in you know, in consumer behaviour. And the other thing you've got to you've got to partly abandon is conventional approaches to market research. Where you you think that we've asked the customer what it is they want. And they will tell us.

21:05 Because most of what we feel Isn't even thought. Let alone spoken. And and also there are very, very large areas of consumer behavior. Which are

21:17 They may be meta rational at some level. But Nobody will ever tell you. I would buy that product if it were more expensive. But there are

21:26 Plenty of documented. Of exactly that happening. I think you you're buddies with the uh Daniel K uh. And he in his book Thinking Fast and Slow, I don't know if you've read that Sean, but one of his like one of the famous examples was The Economists, I think it was, or something like that. Yeah. They like do uh this thing where they say you can get the economist for twenty dollars a month and you get all of these things and if you get the other version of the economist, you get all of these things plus

21:58 Digital access. Paper paper only, paper plus digital, and digital only. And paper only and paper plus digital were the same price. So you looked at that and your mental frame was if I get the if I get the paper version, I'm getting the digital one for free. Vanishingly few people ordered paper only.

22:15 Now if you remove the paper only one So you you know, effectively you had digital or digital plus paper. Vanishingly few people chose the one in the middle. But the presence of the middle option. Increased by about two or three hundred percent.

22:31 the number of people who subscribe to Paper Plus Digital instead of digital. It could I th I think it shifted the ratio from one direction to the other. And by the way, that's pretty valuable to the economist, because my hunch is that their uh paper circulation is much more valuable in terms of advertising revenue than their digital circulation is. One of the best Ogilvy ads, my favorite ad is uh David Ogilvy writes this letter and it's I think it's called How we write ads at Ogilvie.

22:58 And he like has this like long maybe thousand or two thousand word essay on like the eighteen points on how they create ads that are effective. And some people might be like, Well, why would you give your secret away? And he was like, Well I'm gonna teach them how we think. Th there's also a really interesting aspect in um business, which is If you give your secrets away, you assume that people will copy you.

23:21 And the odd thing is they don't. And quite often the reason is they're just culturally incapable of doing it. So for example, if you point out that physical direct mail is very successful. For a business. You'd think that your competitors would go, Well that's a useful learning, I must do some more of that.

23:40 What you then discover is no, actually they're culturally they just find using, for example, an old fashioned m um advertising medium simply too difficult to justify or too unfashionable or whatever it may be. To be comfortable with it. So even if you just give away the evidence of how you do what you do, What you find is that you're copied much less than you'd expect.

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24:27 Check out hubspot.com, the agentic customer platform for growing businesses. You said you study How we think, or you like to talk about how we think versus what you do. Let's break that down. Okay. So

24:40 If I just asked you a very simple question that's probably very broad, you could take it any direction you want. How do we think? I think what happens is that small businesses, family owned businesses to some extent, founder led businesses are An exception here. What's interesting is simply being able to understand that

25:01 Value is Not really produced in the factory, it's produced in the mind. And that There are two ways of making money. You can either make desirable things or you can make things desirable. And each of them is as profitable as the other. For some reason, once the business fit hits a certain size,

25:22 It gets focused on what it does. Not what it means. And I think there's a kind of invisible loss there. Now Similarly. At the same time

25:33 I think those businesses lose the capacity to innovate as well. Something something rather depressing happens, which is Uh you effectively get caught in a mindset Where you Probably have a mental metaphor for your business.

25:48 You you're looking at it as if you're an engineer looking at a piece of machinery. And it's reductionist. It's about optimizing the parts rather than optimising the whole. And at some level, I think Uh that model becomes unhelpful.

26:05 But also what happens, I think Is that you become More and more. Uncomfortable with uncertainty. And this is where it gets quite interesting.

26:14 There's a wonderful story I always tell, which is Richard Thaler, the Nobel Prize winning economist and behavioral economist. The author of Nudge. He once spoke to a Board of about ten people.

26:27 Very large company. And he goes to the eight heads of the largest divisions of this company. And he asked them all simultaneously a question. Would you take a decision if it had a fifty percent chance of increasing your profits next year by fifty percent? And a twenty percent chance of reducing your profits by thirty percent.

26:45 And six out of the eight of them said no. And Thala goes back and says, Well, you know You're all good enough mathematicians, I assume, to realise these are highly favorable odds. To a gambling man, you know, this is a very, very good bet. And yet you decline to take part. Why is that? And they reply, six out of the eight of them.

27:06 Uh because Uh twenty percent of the time, or thirty percent of the time, I'd lose my job. And then the interesting thing happens, which is the chief executive is sitting at the end of the table and looks aghast at the eight people and goes But I want all of you to take those odds.

27:21 Because Net net in aggregate. we'd almost certainly end up massively better off. Yes, two divisions, one division might have a slightly disappointing year, but four of them would perform spectacularly.

27:36 And you realize that the way that businesses are structured As you push responsibility and accountability further and further down the organization, they become more and more risk averse and they become more and more uncertainty averse. So they would prefer a definite five to ten percent to a probabilistic a fifty percent chance of fifty percent. And what happens then is that you fundamentally you become highly conservative. You're more worried about downside avoidance than you are upside opportunity.

28:10 And as a result. Obviously both innovation and marketing, I would argue, are fat tailed activities where ten percent of what you do is probably more valuable than everything else. Yeah. You can't tell in advance which ten percent it's going to be. They are processes of exploration and discovery.

28:28 And what you do is you get rid of the discovery layer In the pursuit of efficiency. And in the short term. It looks like a great idea. But in the longer term

28:39 It's it it proves fatal. I think. Because you've lost the capacity to adapt, to reinvent. to reposition In pursuit of the occasional

28:49 Um the occasional breakthrough. We we have um a very startup oriented uh audience of which a lot of people are founder led businesses or or they wanna be So we could talk about like how big companies turned around, but what's an example of a startup or small company that you look at and you're like, Oh, they nailed it. And here's why they nailed it, even though if if this was pitched at a big company, this would never have worked, but here it is, kicking ass.

29:14 I mean th the example that I always feature in my book is Red Bull, which is an example of A business that makes no sense. In other words, you could only really justify Red Bull on the basis of intuition. There was some pre existing popularity in Thailand where I th I think it was bought by lorry drivers to keep awake it might Yeah. But someone there was capable of making the leap of imagination.

29:39 Into into an uncertain future. Where a drink which cost a lot of money came in a tiny can and research told them Consumers Basically found Mildly repellent.

29:51 Yeah. In defiance of all the rational odds. This had potential. And it's worth noting that Generally there's always a lot of data.

30:00 from the past,'cause all big data comes from the past. There generally isn't much data about the future. There are two problems there. One of which is If you insist that every single decision is based on data. All your decision making has a status quo bias.

30:15 Because all your data comes from the past. There isn't any data about the future. The second problem that happens is that the the things you tend to focus on tend to be the same things that all your competitors are focused on. Which means that you unwittingly, perhaps, become more and more similar to every other business in your category, which means you become more and more in i indistinguishable and less and less distinctive.

30:39 Which effectively means you get involved in a kind of race to the bottom. You create kind of red water competition. And one of the things I would say is an almost unfailing trick. To innovate. Both to innovation and to brand building.

30:54 Actually. is to find the metric which your competitors have neglected, which they don't even bother to measure. Or which is difficult to measure. Got often it's an emotional metric rather than the You know, a time, space, cost, price, distance matrix.

31:10 What's an example of that? Well, Apple. Uh in that everybody was asking the question, what can a computer do? in Silicon Valley. Uh nineteen seventies. And Steve asked the question, Yeah, but what does it feel like while you're doing it? He asked aesthetic and emotional questions.

31:27 In an industry where everybody was focused on technological questions. But in another example, the Uber map. is an example of that, where riding in an Uber is more or less the same as riding in any other taxi. What Uber completely transformed was the experience of booking and waiting for a taxi. And by the way, at the other end of the journey, the experience of pay for it.

31:50 So the Uber map, whether this was intentional or whether it was just some software guys thinking it'd be a cute thing to do, when you booked a taxi by telephone, you rang up having no idea of what the likely availability or wait time would be. In many in many cases they say, Yeah, we'll have a car for you in ten minutes You kinda go, It's too early, you know. You had no idea. You had no expectation of car availability. And then when you'd book the car, you had no idea when the car was going to show up and you'd have to hover around on the sidewalk, you know, waving at any likely looking passing car that appeared to be looking for your address. Suddenly.

32:25 Uber changed all that because it gave you an estimate of availability, it gave you an estimate of price. Uh it approved your payment in advance and then it showed you on a cute map what the license plate number was of the car and where it was and how long it was going to take to get there. The funny part is I think uh well, I remember w Sean and I lived in San Francisco when U Uber first came out and uh he would pull up your app and be like all right, you'd see the cars driving around you. And you'd be like Oh, there's one nearby, maybe I could snag it.

32:53 And I don't think that was even real. I think those are fake. I've also heard the same thing about pizza delivery. Uh, which is when they say it's in the oven, you know, it's be you know, it's being prepared, it's in the oven. You just have to add probably. It's probably in the oven. Uh i to be honest, I don't think they're actually scanning a barcode on every piece that goes in. There is a component to it, however, that

33:17 Which is that if you feel that Progress is being made, but McDonald's probably m and KFC probably make a mistake here. in that if you order on screen a McDonald's, it basically says Uh in preparation.

33:31 Ready for collection. And they could probably play a game there where they say Uh you know, being prepared. Uh you know. on the you know, on the tray, they could give you an impression of forward movement.

33:43 Because it's all to do with dopamine and and sort of Uh effort and reward. And consequently, it's a little like if you imagine a chimney. hacking away at a termite mound. If it comes across one or two little termites.

33:57 No, just small pieces of reward. It'll keep going. It'll feel content to keep on going. Whereas if you have a long period of effort without any Any seeming Reward. Fundamentally the experience is very, very different. I mean, I remember a brilliant case of this.

34:13 And it's simply you know, it's it's it's mind hacking. I I make no apology for it. I probably would defend in court. the practice of dominoes creating uh somewhat fictitious delivery cycles. On the grounds that it simply makes people feel better.

34:31 Now the the the having the cars circling around, I've heard both stories that they are to some extent accurate. All that kind of what you might call their figurative. So they they they show you car density without actually showing you the actu accurate l location of a car. I've heard various stories about this. There are also, by the way, elevator buttons Uh the door closed. Which are placebo buttons.

34:55 So they don't actually speed up the closing of the doors of the elevators at all, but they give impatient people in the elevators something to do. Is that true? Or is that a rumor? And I'm I'm I'm kinda mixed on this because My argument uh th this gets very complicated. I mentioned this in my book. Which is that Neurophen, which is um kind of like Advil. And there were various variants more expensive than the standard variant, which were, you know

35:25 Neurofin for period pain, neurophine for cold and flu. And These were formulaically in some cases identical to the base product. And My problem there is that

35:38 The psychology of pain relief Is so full of placebo effects. that taking something that says for period pain and cost a little bit more will actually reduce your period pain more Even though the chemical constituents of the drug are more or less the same.

35:55 Well there are debates about the placebo effect and you know, y all the way from people who claim that you can do placebo surgery. I mean there are people who claim that if you actually attempt to fit a gastric band Then you don't fit the gastric band for whatever reason. Okay. The person will still lose weight.

36:14 I mean Uh so there are people who are absolute placebo effect um fundamentalists. all the way to people who are fairly sceptical, but where it's universally agreed is in the area of kind of analgesics and pain relief. psychological factors, perception plays a massive Uh role.

36:31 And of course There are forms of Pain which are enjoyable. This is where I get a stranger still. So if you have If you have a cut on your

36:41 Um you shouldn't say And you put some sort of um uh antiseptic on it, you want it to sting. In a way, because the sting is evidence of efficacy. The fact that it's hurting proves it's working. And so your reaction to this stinging pain

36:57 Is not entirely discomfort. Because you've reframed it as this is proof that it's doing its job. Yeah, it's like burning off the the dirt. Burning off the bad things, et cetera. And so you know. Th this is where it gets really strange. But

37:12 My argument is that nearly all organizations, and this is where innovators and and and family owned businesses have an advantage, because Family owned businesses are, for example, privately owned businesses, founder led businesses Are free. To use intuition. in a way that publicly held companies aren't, because most people in a publicly held organization feel that everything they do has to be rationally justifiable from the get go.

37:39 Now what you do has to be justifiable eventually. There's no point in doing something which fails decade after decade. I get that. But The freedom to actually act on hunches, to act on intuition

37:53 to place bets for which there isn't much pre existing evidence. is an advantage to the entrepreneurial business over the established business. 'Cause they can explore a much larger solution space. Hey, can I ask you a question on how you got good at this stuff? Because I know that you're a thought when it comes to this stuff, but you were a practitioner for years. And I think you're a d direct response copywriter.

38:16 Well well, the story's even better. I think you were not in copywriting, got fired, and came back into the copywriting department and went to the top, which It's probably a lesson in fit. And uh knowing your strength and your nature rather than uh Uh just thinking I'm good or bad. No, I have to admit it wasn't an accident in that from about the week three working as a graduate trainee in Ogilvin May the Direct, which was the direct response wing of Ugle V.

38:42 David Ogilvy was a massive advocate of direct response advertising because he believed that you learnt what works. And he was absolutely right. Define direct response to people who don't understand it. So Historically and back in nineteen eighty eight when I started work when there was there was an internet technically, but there was no web.

39:04 It typically meant direct mail. And couponed press advertisements. Uh More late uh or later. Advertisements with a coupon or a phone number.

39:14 But it was an advertisement which invited the consumer, buyer, customer, interested party to respond directly. To an identifiable advertisement. So for example, like here's one. It's like an ad for something and and there'll be a letter and at the end there's like a coupon and it says Fill this out and tell us do you want to buy you this vacuum. And the coupon would have a dotted line around it with a pair of scissors to encourage people to cut it out or

39:41 Indeed to rip it out and put in their pocket. What would happen is on that coupon there would also be a code. Uh you'd be asked to quote the code if you telephoned. Which related both to the Creative

39:54 um execution. And the media. placement of the ad. Now bear in mind, in I think, certainly in the nineteen twenties, possibly in the nineteenth century, Long before medicine. And science.

40:08 Had grasped that there was such a thing as a randomized control trial. The advertising industry Had Started testing.

40:17 This kind of thing ages ago. Direct response copywriters would, for example Test headlines. By running small classified advertisements at very low cost. Each with a different little headline and a

40:30 You know, in an ad the size of a couple of postage stamps. And they would they would learn which one got more responses. And uh they would therefore When it came to doing more expensive large full page advertisements, they'd use the headline that had worked in Minute Chat.

40:47 But what had happened? But I s assume this was at the behest of advertisers. But I don't know for sure. Is that newspapers in the United States and the United Kingdom When they produced

40:59 newspapers they were printed on two or sometimes four parallel presses. Just to produce the number of newspapers you needed. Now when these newspapers came off the presses They were interleaved. So it wasn't.

41:13 All the newspapers from pr from printing press A went to North Boston and all the uh all the newspapers from printing press B went to South Boston The output from the two presses was interleaved, a bit like shuffling a deck of cards. What that meant was you could run one advertisement in on press A and a different advertisement on press B. And you'd created a randomized control trial where effectively which of the two advertisements you saw

41:41 Uh was effectively random. In other words, you and your neighbour might well get a different advertisement. But it solved that problem where had you not done that into leaving, you might have had a case where all the rich people got one advertisement and all the poor people got another. And of course, statistically then the result wouldn't be very v very valid. And because of this Direct response advertisers.

42:03 Endlessly tested. Both creative changes and indeed media selection. they'd find that one medium would work, you know, four times better than another. And one creative execution would work twice as well as another.

42:16 And sometimes very, very small changes. would make enormous differences. So for years, this would have run from something like the nineteen thirties to the nineteen fifties, there was an advertisement for a correspondence course, which basically taught people to write More dramatically. And the headline was originally Do you make mistakes in English? Then someone added the word these

42:40 Do you make These mistakes in English Which then piques the curiosity of the readers, so they want to know whether the whether they're the mistakes. that they're making. And then somebody else I did the word

42:52 Do you make these common mistakes in English which destigmatise the idea that if you are making these mistakes you're an ignoramus? And so you would actually have in direct response businesses levels of testing at that level of kind of d uh of detail. And The reason that's so important is that what you realize

43:14 Is that In psychology There are butterfly effects all over the place. You can do surprisingly small trivial things. And they make an inordinate difference to how people respond, how they emotionally respond and consequently how they behave. And in many cases that means whether they buy or whether they don't buy.

43:35 And so consequently, long before there was behavioral economics, there was direct response advertising. And in fact anybody who works in direct response advertising would have gone to one of those early practitioners i in behavioral economics and said. Yeah, we've done that for years. Mm-hmm.

43:50 Oh. And I'll g I'll give you an example. This is It's something like nineteen ninety one, nineteen ninety two, and I'm working on direct response to advertising for the phone company. And We

44:02 Simply Um, we're offering people the chance to pay a couple of pounds a month. Extra to receive What what we're called star services, I think in the United States. Network services, which is you could have call diversion, you could have call waiting on your phone, and you could have something else. wake up call or something like that. And if you've paid a certain amount monthly, these facilities were added to your home phone line.

44:26 And we read people letters and it said either send back the pre laser coupon below in the in the postage paid envelope. Or call this number and quote this code. Post or phone. And we had a Slightly

44:40 Bunkers client who didn't want to offer the postal response. I don't know why. I've no idea why to this day. Okay. And so we said, Well, let's test it. Um Let let's not just get rid of a coupon response because that's dangerous because You know.

44:55 If you know, if if you don't test this rigorously, you could end up effectively damaging your business quite significantly on a whim. And so we tested three kinds of letters, fifty thousand people each, randomized, completely randomized selection, as with the newspapers. And One lot got postal only, one lot got phone only. And one not, as before, got the choice of

45:17 Phone or post. Post only five percent response, right? Phone only two percent response rate. When you offer people a choice It was just it was seven percent.

45:28 Not quite, but almost nearly, I think, the sum total of the of the two independent response rates. That may not surprise strike you as all that weird. But to an economist, this would be completely baffling, because it would suggest that the more important factor a affecting whether you bought the product was not what the product was or how much it cost.

45:50 But how you were able to actually order it. And from that moment on I remember thinking, okay. This is extraordinary because Every now and then

46:02 There are almost certainly brilliant businesses which are failing Because they've failed to unblock Some sort of psychological bottleneck. In this case the psychological bottleneck m might have been that You know, all you know, people just hated using the phone to order something.

46:18 Yeah. And you could have rationally spent Millions and millions and millions of pounds trying to improve the product, or to spend ages demonstrating what a great product it was. And yet if you fail at one psychological hurdle, you can doom yourself. And so

46:34 It's very painful. I when people say, How do you get good at this stuff? I'll tell you I'll tell you my one trick, which is I think I have ADHD. Broadly speaking. I'm not very interested in the middle of things. So I'm interested in looking at a question from a deep philosophical level, and I'm interested in trivia. I'm not really interested in there.

46:56 In the in the middle. Because I think In complex systems. There are two things you can do. You can tinker with the details and achieve surprisingly valuable responses. Or you can effectively Come up with a new paradigm for what you're doing.

47:10 Very similar to direct response advertising, where the rule is you either test one thing or you test everything. So in direct response to advertising, this would go back to the nineteen twenties, the nineteen thirties, people like, you know, uh Claude Hopkins and the early kind of practitioners of scientific advertising as they like to call it, which is You know, you either test the single word or you come up with a completely different advertisement with a different visual. If you test five things, you can't be sure which one of the five is making a difference. Okay. So you've probably have heard this on the podcast, but if you're running a company, I think that the number one attribute that will determine if you are gonna succeed in business is how fast you can learn from others. Specifically how fast you can learn from other entrepreneurs.

47:53 But there's a problem with that. I have this problem and in fact you probably have it too. That's one of the reasons why you listened to my first million in the first place. The problem is that finding other successful entrepreneurs to learn from it's a pain in the butt. And so that's why a few years ago I started a company called Hampton. You can check it out at joinham dot com. We have thousands of members and they exist for this exact reason. So here's how it works. If you're a founder that does at least three million in revenue and you make it through our incredibly thorough vetting process, we then match you and put you in a group with nine other entrepreneurs.

48:25 You meet in real life in your city once a month, and it becomes your peer group. That will frankly change your entire life. It's changed mine. I'm in a group as well. And so if you're a founder that does at least three million a year in revenue, check out joinhampton.com. Again, the URL is joinhampton.com. You know, you've said a couple of things that I I think are pretty fascinating. The first one that I wrote down was

48:47 competing on a different dimension. So you mentioned the taxi versus Uber example. And I love this because If you just sat down with a piece of paper, you gave somebody a creative assignment, you said, Abe Make a better taxi. They would almost always focus on the ride. The cost of the ride would be the first. If I could make it way cheaper, that would be great. If I could make it way faster, that would be great. If I could make it way more premium in some way, the ride. And what you pointed out was that there was a psychological bottleneck that was preventing people from doing it.

49:15 When Uber first came out, I remember People thought it was overvalued and I was living in San Francisco, they were raising money. And They were doing these analysis of what percentage of the taxi market, if Uber made up twenty five percent, if it if it took fifty percent market share of the taxi market. And what ended up happening was in San Francisco alone, Uber tripled the taxi market.

49:36 Uh, within the couple of years. I have a very brilliant friend who had the idea for effectively a dynamic market in transportation before Uber. Actually he patented something before Uber did. And he has a letter Responding to his idea from Guy Kawasaki.

49:55 which said, I can't really see this working in the United States, he said Americans don't take taxis very much. Maybe in New York. And actually when you think about it, pre Uber You know, LA was a motorist market if you were if you had a car and it was a

50:12 public transport market if you didn't. It it the taxi market was was relatively small. New York was an outlier. New York obviously the New York cabs were a major thing. But you're absolutely right. Everybody was looking at it as if it was purely cannibalizing

50:27 an existing market. Now what the economists and what the Harvard Business Review would say is that they achieve this through lower prices. I don't think they did. I don't think Uber's actually reliably cheaper necessarily. Okay. I think they achieved it through better psychology. And the example I had Of what I call

50:44 Uh the w the these are the sort of fat tailed Jeff Bezos puts it very well. He says, You know, in baseball the most you can score is four, but in business you can hit a thousand. And I think that the Fear of uncertainty and the f and the Unwillingness to experiment in business.

51:01 is causing people to endlessly try and sort of hit Singles. And At the expense. Of occasionally trying to hit a thousand.

51:11 But how do I like Sean and I are both business owners. Like How do we go from being academic and also looking at past results? to in analysing past results because what's interesting is like

51:22 You guys were talking about Uber. If you read their C deck. Even they said they're like we think that You know, if we knock it out the park, this might make a hundred million dollars a year, you know. Now they make hundreds of millions every week. What can you tell me where for the next week or two weeks I can shift my thinking and create a framework or something like that where I can go and deploy this stuff on

51:44 my team maybe a habit or a question I can start asking myself an action I can take. Two. get this sort of different type of thinking. I'll give you a real world example. I worked on American, which is probably David Ogilvy always said, if you want to be a copywriter, spend the first five or six years of your life working in direct response Because you learn what works, you also learn what matters. You also learn what not to leave out.

52:10 I'll give you an example of that, you know, if you were selling a product by mail order and the coupon did not say somewhere, expect your product within twenty eight days. Or it will be sent to you by post within twenty eight days. You'd probably halve the number of people ordering'cause you've now created uncertainty. You've now created a degree of ambiguity. So it also it also taught your attention to detail. Actually.

52:34 In advertising. Which I think a lot of mainstream advertising misses. Which is that's all very well and good. You've made a wonderful claim, you've changed people's minds about something. But actually if you want them to act they require a far greater degree of certainty than can often be achieved in just a poster or T V ad. So it i it it was a br it was a brilliant training.

52:55 Working on American Express was probably the best account you could possibly work on. Um In the sense that they do a bit of everything. It's a brilliant brand, but it also is a very, very professional Direct marketing. operation. And they do everything. They do member get member. They do

53:10 car member communications, they do acquisition communications, you know, et cetera, you know. Uh yeah, all manner of stuff. Um, David Ogilvy, by the way, always wanted American Express to do a very simple thing which they never had the courage to do. Which was uh to write a letter which basically said, Take out the American Express card

53:28 And if you aren't happy, if you don't want to keep it after your first year, we'll refund you double the fee. And nobody ever had the courage to do it. I still think it would actu it would work. But Here was the interesting thing working on American Express.

53:44 There are little things that America Express did, like putting MemberSynth on the card. Which But have been worth and American Express people have told me this, have been worth billions of dollars to American Express since the card was started. People are more reluctant to cancel.

54:00 Uh because They don't want to you know rejoin and go back to year zero, if you like. You know, you know, I'm sixty years old, if I had a card with member since twenty four on it, it doesn't quite say the same thing as member since ninety three or whatever. Ninety five, I think. Okay.

54:16 So that was a tiny little bit of psychology which cost absolutely nothing. But it also is a testament to the kind of relationship they have, which is you we're you know, you're a card member. We don't just issue you a card from one year to the next. You know, we can s we know it's a it's an intimation that they're in a relationship with you. But here's something that was it was client idea. No, I'm uh um although the agency helped, but it was a client idea. This is the late eighties, early nineties, and we're encouraging people to get the American Express gold card, which was pretty expensive. I mean, you know, it was something like eighty pounds back in the eighties.

54:51 And We wrote long, long letters explaining all the rational reasons why you want the gold card. Yeah. This client, I think, had the Leap of intuition which was

55:02 People wanted a bloody gold card anyway. Okay, it's the late eighties, right? You know, it's a you know an area uh a a period of fairly conspicuous consumption. And He said they want this card anyway. You know, to be honest, we could just say it's a great looking card. Yeah. Uh and people would apply. The reason they're not applying is fear of rejection.

55:21 And so he managed to find a way in which you could actually say all you need do to receive your card Not apply for your card, but receive your card is sign your name on this form. What we know about you suggest you're virtually pre approved for membership. And the reason we made this so simple is we want you as a card member. Now think about the difference there psychologically.

55:41 Between Applying to Yale. And getting a letter from Yale saying we want you to apply. But Okay.

55:50 Or think of it in dating terms. You're interested in a girl? Or a bloke? Okay. And the difference

55:59 In terms of your thought patterns. If you thought that person was interested in you. But by the way, there is I don't know if you've read The Rules by um I th th I think it's called The Game by Neil Strauss, actually, about the pickup artist community. It's quite an interesting book. Brother. Look at us. We've been we studied I you should see us when we are fourteen, okay? We not only did we read that, there's more highlighted parts than there aren't. But the interesting thing is it's actually

56:26 For most guys Effectively propositioning everybody you fancy Is a workable strategy. Most people can't bring themselves to do it. Because of fear of rejection.

56:39 Yeah, fundamentally. Yeah, most people haven't got the you know They're not going to be able to to just chat up and proposition everybody they fancy Because

56:48 Uh you know. You'll get a ten percent hit maybe a five percent, ten percent hit rate, which is of course all you need. But nonetheless it comes at the cost of you know, significant uh dents to the uh Uh the ego.

57:00 I'm a very much uh an amateur historian and like two major takeaways I've had from reading hundreds of history books is Human nature. has been the same and will always be the same. And so you can just copy other people who have done something or be in be heavily inspired by them. And the second thing is that um when humans talk to each other, we use these phrases like well, just be rational.

57:21 Just be the like don't be an animal. Like just be rational. And it's like well We are animals. We are not rational people. And therefore you can't use Logic. in order to build something or you can't use too much logic in order to like build something great. Humans are like very irrational. Beans.

57:41 This is not to say that rationality isn't valuable. It's a question of when you deploy it. And um David Hume, the philosopher, said reason is and should only be the slave of the passions. Now there's a great book by a m French mathematician called David Bessie called Mathematica. where he argues that very little progress in mathematics is actually made logically.

58:02 What mathematicians do is they use maths to Sense check their dreaming. Effectively. It's brought in. To correct your emotional behavior.

58:15 When it goes wrong. But actually the idea that in business that the Explanation of a decision is more important than the outcome of a decision to your career. Okay. is what you're really focused on, not the ac the quality of the outcome of the decision.

58:34 What that means is that you're effectively saying you cannot use intuition, which is a bit like going to a detective and saying You can only use information which has evidential value. You can't use gossip, you can't use Anecdote, you can't use intuition, you can't use a hunch. You can't use um, you know, your sense of smell, as it were.

58:55 You can only use evidential value to arrive at to to actually Um solve a crime. And it massively limits your ability to solve complex problems. Because What what your intuition is telling you to do is where to focus your attention.

59:11 And in the case of you know, in the case of crime, you might ask a very open ended question, did anybody notice anything unusual last night between the hours of eight and ten PM? Now. Very open question. All someone will say is a weird man drove past in a white van or something. Okay.

59:27 Doesn't you know, no evidential value, but it tells you what to investigate next. And if you demand that every single business decision is based on stepping stones of of pure pre existing data and logic. You can only get to about five of the possible

59:43 twenty five places. Where a solution might be found. And the places you'll get to will all already be occupied by your closest competitors. Because they're using the same stepping stones you are. Why why didn't you ever want to start a your own company?

1:00:02 Well there is one which I did inspire, which is a coffee brand called Flat White Or Go off. Wait, wait, wait, hold on. Did you say you created a coffee called? It exists. It it might currently be in some sort of legal dispute about the trademark. Not with me. I'm happy for them to take it. Somebody trademarked uh f off? Somebody else had this idea? Let me explain the idea. Okay. It's it struck me that there were places where you wanted a high quality cover coffee.

1:00:30 But you didn't want a queue behind people who are all customizing their own bloody drinks. And the technology with contactless payment now allows you to basically tap Pick up a coffee which has been made in advance and walk off. And my argument is that the flat white, which is a New Zealand slash Australian invention with which is I think the right ratio of coffee to milk and with micro foam as well. I think I think it's basically

1:00:53 The you know, it it's the happy medium of sensible coffee drinking. And this is quite interesting because my assumption was Th the place to put this is they only have two versions. For the vegans there's an oat flat white And there's a regular milk flat, right? You walk up, you tap your card, you pay four pounds, you pick up

1:01:12 a pre made coffee and you walk off. And my logic was at the time Train stations. And um airports. were the natural home for this thing.

1:01:22 Uh they're expensive real estate, so the fact that you can sell more coffees in a given time, it's Henry Ford applied to coffee, basically. Okay. The argument is that Starbucks and the customization and the time is absolutely wonderful if you're in downtown Santa Fe and you're meeting a friend for two hours. But it's not suited to airports and railway stations. So anyway, this thing launches. It's only it's only at the trial stage at the moment. But something really interesting happened.

1:01:48 Which is Shortly after we launched and got some publicity, someone came to us and said, Actually the natural market for this isn't even train stations and railway stations. It's conferences. Quite often.

1:02:00 The coffee at a business conference is rubbish because it's it's badly made filter coffee because you have to serve a lot of people simultaneously. Or you have a customizable coffee thing. Right? Where there's a massive cue,'cause everybody comes out of the plenary session, they all want a coffee, so they've got something to hold in their hand and not look like an idiot, which is one of the reasons we buy coffee, by the way. Nothing to do with drinking it. It's effectively accessorising ourselves.

1:02:27 Okay. And The point about flat wide or Off is it's high quality coffee, not crappy filter coffee, that you can produce at scale by simply reducing the customization. level.

1:02:38 Now here's where it gets interesting. Henry Ford was a brilliant marketer. Why did he say you could have ever any colour so long as it's black? Because at the time Paint dried at differing speeds depending on the colour.

1:02:52 And therefore, if you had a variety of paint colours on the Ford production line, it completely messed up the flow of the production line because some cars would take longer to dry than others, and it turned out that black was the fastest drying colour, so they basically imposed black on the whole Ford flint. So It's absolutely fine. Not to give people something.

1:03:15 To ask people to make a trade off So long as you make them aware of the trade off in advance. Okay. Off.

1:03:24 It doesn't you y if you turned up at a branch of Starbucks and they said we we only serve flat whites, right, you go what the Yeah, what are you talking about? No, no, I want to Frappuccino with, you know, almond milk and blah blah blah. No no. Okay. No, you can't have that. It's you know. Now the reason it's called flat white or f off is it makes explicit the trade off.

1:03:43 Before someone turns up. So you said if anybody uh the joke is, if anybody turns up and asks for a cappuccino, you point at the logo and you say, The answer's in the name. Right. No. There's an example of this which always fascinates me. Are you a fan of the Moxie hotel chain?

1:04:00 Oh, I stated once at New York. The th they're like a kind of upscale uh like kind of more modern contemporary type of change. So it's quite interesting. Because the rooms are tiny. There's no room service, there's no laundry. Okay. But the grand floor's kind of a bit like a

1:04:16 Well, a a solvent we work. Right. And there's a twenty four hour barista, there's a you know the you know uh there's a um uh usually there's someone making really quite good cocktails. You check in at the bar, you don't check in at the con uh the check in desk. There isn't a concierge, none of that bollocks, okay? Don't go and stay on your honeymoon, don't go and stay there for a week. But if you've got one or two nights to stay in a place.

1:04:40 It's exactly what you want. Okay. It's small room, very good T V, very good Wi Fi. The other great advantage is after you've checked out in the morning and had breakfast. To be honest, you can hang out there for another five hours if you want to. You know, whereas if you tried doing that in a conventional hotel, you'd you'd feel a bit unwanted.

1:04:58 It's a it's it's basically a brilliant, brilliant, explicit trade off. And they always said when I spoke to them, they said basically Ninety percent of our customers love this. And the reason they love us is either because they've stayed before, they understand the trade off and they buy into it. Or else they know about how the moxie works and they get the deal Ah, they've decided in advance that's the trade off I want.

1:05:21 Ten percent of their customers are expecting the Marriott. And they're pissed off as hell. And it's a classic example of actually You know, expectation minus reality. You know.

1:05:33 Is the formula that matters. You can provide less of something so long as you don't actually disappoint. Right. Have you seen the slate truck? Yes.

1:05:44 What is that? So it's an absolutely minimalist electric vehicle. It's about twenty five thousand dollars. And you can effectively customize it with all manner of sort of automotive bling. But but but the the core trade off is up front. They're like

1:06:01 There's no heat seeders, there's no screens, there's just knobs. You gotta crank the window yourself. Um is basic. We're not filling it up with stuff, but it's if you want simplicity and you want the price to be it's a twenty five thousand dollar Electric pickup. And you're just not gonna get all this random junk that every car company puts in. We're not doing that. So it was absolutely explicit and in a sense that's what, you know, Avis did with we're number two, so we try harder. This is you know, don't okay, we don't have the scale of the other guys, but we make up for it somewhere else.

1:06:31 And the consumer's very happy making trade offs so long as they're explicit. The problem with a lot of kind of cost reduction and um you know and uh efficiency pursuit. In business. Is it isn't chosen by the consumer, it's imposed on them.

1:06:46 Hm. Which is a very, very different thing. But no, the slate truck is a brilliant example of what you might call Explicit minimalism. But it but it's brilliant. They they underdid the competition where everybody else tries to overdo the competition. And they were just very explicit about it and it resonated like crazy. I mean, I put I don't I've never I would have never bought a pickup truck.

1:07:06 And I put a deposit in the deposit. I couldn't help it. I I love what they I love what they're all about. And I if I'm right, I think they'll discover something really valuable. Interestingly. Which is everybody's talking about the idea that cars become shareable. Now

1:07:23 I would share my slate truck with anybody else. Right. You know, what's the worst that happened is they vomited it and I have to hose it down, right. I'm not gonna share my m my existing car with anybody. Right? I don't even don't even let my wife drive it.

1:07:37 Exactly. And so You know, what are the uh what they'll do when you do these eccentric things. As with discovering that F W or F O Is a

1:07:49 Is a is an absolute godsend for conference organizers. What you often do when you do something eccentric is that you plan and you do your you know cost benefited analysis near feasibility study. But generally when you do something unusual, you discover That your target audience is actually bigger than you expected. And also it's bigger than you expected because you don't have the same competitors that everybody else does. You know, if you think about the Marriott versus the Hampton Inn versus the Double Tree versus the Hilton, it's all kind of like okay, right. Whereas the distinctive do you know what Moxie why the Moxie's call the Moxie?

1:08:25 It's because the project was called Marriott on Generation X and Y. And so it was called Project Moxie and they never got around to coming up with a new name for it, by the way. But the interesting thing is I'm old, right? I'm sixty. But my wife and I my wife's sixty one. Right?

1:08:42 Cradle Snatcher. And um Uh sh you know, we both We both choose As I said, you know, five days, you know.

1:08:51 Uh, you know, m maybe five days is a bit too long to stay in democracy. If you've got any one or two or three nights, Dave, it's what we go for. Because I actually I'm Not quite a boomer. I think I what am I? I'm probably J between Gen X and Boom or something. Anyway. But I mean, I'm way outside their intended target audience.

1:09:08 And so you know, it's very interesting. If you focus on one target audience, you'll gener generally find that as a byproduct of your focus You'll find incremental target audiences who by the way I This is very interesting in terms of tech. Because

1:09:24 There's a lot of tech out there which is really valuable to the old. Okay. But the problem is you can't market explicitly to old people because then young people won't buy it. So Mm. Cars from you, if you take someone out of the Volkswagen Golf, the average age of a Volkswagen Golf buyer who's buying a new golf.

1:09:43 is probably about fifty nine. But when they advertise it, they don't show a fifty nine year old, they show you know twenty eight year old or a thirty three year old or whatever. And so quite often you have this very interesting thing that old people are quite badly served by marketing because marketing is always really eager to show the product in the hands of Young people.

1:10:03 And there are a couple several examples of this. One of which is um bone conducting headphones. I don't know, they're marketed at joggers and swimmers, and the idea is that if you have bone conducting headphones, when you go jogging you don't lose all spatialness and run in front of a bus. 'Cause your ear lug your ear holes are still open and all the sound is transmitted through effectively the bones. That transmitted to the bones in your inner ear.

1:10:30 Absolutely brilliant for people with hearing loss. Because it bypasses the stirrup and the anvil and whatever it is inside the air, which are the bits that deteriorate when you get older. And the sun goes straight basically to your Oral nerves. Absolute Godsend to old people. No old people know about this. And the other one is um actually I've got one here.

1:10:50 Uh the Samsung folding phone. Okay. Sorry, buddy camera's wandered off. There we are. Okay. But this folding phone. Okay. There's a secondary market there in anybody over sixty because the standard mobile phones handset.

1:11:05 You know, once your eyesight is you know, goes a bit, I've had a cataract operation. Okay, the standard phone handset is pretty much unusable. So there's a whole lot of tech out there which really intrigues me because it's actually brilliant for older people, but they just aren't told about it. Hey, can I ask you one last question? You you're you seem very well read.

1:11:27 Uh very eclectic. Um I have this Ocul V On advertising book. But if I wanted to get better at writing copy, but also coming up with ideas and frameworks

1:11:39 Can you suggest a few books that I could read? Some of Okay, some of them are very old. Obvious Adams. Robert Updograf published in nineteen sixteen. Well, it you can read it basically on a single toilet visit. It's about fifty, sixty pages.

1:11:55 Um I'm delighted to say I think Amazon keep reprinting it or somebody keeps reprinting it. Obvious Adams, the story of a successful businessman. Now when you first start reading it, you'll think, Jesus, this is a bit corny. Okay. But it was one of David Oglevy's favorite books. And it's actually about an advertising man and his approach to problem solving. And everybody it really delights me because every now and then I mention it on a podcast

1:12:21 And it goes to like number one in advertising books on Amazon in the UK. I always take a bit of a thrill for this'cause this guy died in about nineteen forty eight, you know. And his book's still influencing people. And um there's another great one called The Specialist, but I think Charles Sale. These are some of these old American business books which are

1:12:42 Absolutely priceless. Scientific advertising by Claude Hopkins. for example. There's a book called How to Become an Advertising Man by James Webb Young. Who was at Jay Walter Thompson in Chicago for many years. Now there are other great books. Obviously in behavioral science, Richard Shotten has written some superb books called, for example, The Choice Factory or The Illusion of Choice. And they're really, really worth reading in terms of understanding the

1:13:08 uh counterintuitive aspects of human psychology. If I Okay, they I really, really recommend them. Um, I also recommend you just read widely. I'm Nasim Taleb is one of my biggest influences because

1:13:20 I think differently about statistical things now. I realise that the real world is actually fat tailed, it's not a normal distribution and that You know, a small number of things have a disproportionate amount of power. In terms of writing, David Ogleby's v uh obviously anything by him is very, very good, not least'cause he's a very, very good writer of books as well as a very good writer of advertisements. There's also a thing which is desperately difficult to get hold of called the copy handbook, published by D and A D

1:13:49 in the UK, but unfortunately I think you have to buy it on eBay and they never did a reprint and it's about three hundred quid. But see if you can find that. 'Cause it's great copywriters describing how they write. Drayton Bird. Um a a British uh he's kind of the British version of Lester Wonderman in direct marketing. various books, for example, Common Sense Direct Marketing.

1:14:10 There's a great book published by Ogilvie called I think it's called How to Write. This is how to write in business from one business person to another. Not so much about copywriting. But the guy there was Joel Rathelson and Ken Roman wrote it. They were two Ogilvie very senior people. I knew Joel.

1:14:32 An awful lot of things in advertising. Stop being used. This is why I've Suggest to anybody here listening to this who's an entrepreneur. Go and look at some advertising archaeology.

1:14:44 And the reason is That Advertising people Just as engineers want to impress other engineers. Advertising creatives want to impress other advertising creatives, which means they want to do something that's brand new, never been done before, da da da.

1:15:00 Actually Loads of things get discarded by the advertising industry which never stop working. Long copy press advertising never stop working. Direct mail never stopped working. Jingles never stopped working, although you have to call it sonic branding now. And one thing that's fascinating me, which

1:15:17 Never stopped working, it just became unfashionable. If you go back to the nineteen fifties, there are a lot of advertisements which are cartoon strips. But You know, they're like half page, quarter page. Cartoon stories with people speaking in speech bubbles.

1:15:33 David Ogilvy always said, look, that is the single most readable form of print. If you put anybody down in it with a newspaper, they'll read the comic strips first. And yet, for some reason, it was massive until the nineteen fifties and even the nineteen sixties. Lots of advertising took that form where you told a story. In print. And for whatever reason nobody's doing it. Now

1:15:57 Here's what's interesting, okay? What are kids into now? Manga. Right? If you actually wanted to reach young people, uh ironically, reverting to this nineteen fifties form of advertising Where it's effectively.

1:16:13 Okay. It'll have to be you know differently illustrated, maybe, but it's effectively manga. Would be about the coolest thing you could do. This is the fascinating thing, you know, as David Ogle said, you're not advertising to a standing army, you're advertising to a moving parade. And new new customers, you know, new members of new target audiences

1:16:33 are a are appearing all the time who aren't aware of the things that the people born ten years earlier already know. And so the opportunity I think to uh literally be innovative by simply learning from the past. Cause the advertising industry is very bad at it. No. As David Ogley would say, you had to y you sometimes you had to break the rules, but you had to know the rules in order to break them, if you see what I mean.

1:16:56 You had to be aware of the fact you're breaking a rule and you had to have a good reason to do it. That was fine. You uh You're a fun ass hang. Well I hope it's been useful. Well, I feel like we did maybe twenty percent

1:17:11 Of what? What I think we could have talked about. And so uh I think that I think we'll do we'll do a repeat. I'm very happy to do a repeat. Did I have like all these notes I'm about to like run to my marketing team and being like Do all this.

1:17:24 Five. That was awesome. Total pleasure and any time. Really delighted. I feel like I can root Well I know

1:17:35 be what I want to I put my law in it like my days off on the road, less travel, never looking back. All right, let's take a quick break to talk about a podcast. Cause if you're listening to this, you like podcasts. And what's better than one podcast? Another podcast. And let me tell you, another podcast you should check out. It's called Success Story. If you like hearing about different success stories and hearing QA sessions with successful business leaders or hearing keynote presentations or just checking out conversations about sales and business and marketing tactics, is a great podcast for you. So check it out wherever you get your podcasts.

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