Rory Sutherland: Billion Dollar Marketing Secrets Revealed

55:19He would have shared it undoubtedly with Amos Tversky but you can't he was dead he was dead you can't get a Nobel Prize posthumously and effectively they're all rebranded they're subsets of psychology right okay yeah uh and they're also in a way possibly necessary but slightly dishonest attempts to rebrand psychology and the reason is um i think it's richard thaler who said the president of the united states can reasonably have a council of economic advisors but you couldn't have a council of psychological advisors. I don't know why, but for some reason, economics is considered a kind of, erroneously, a hard science, and therefore it's acceptable to take the advice of an economist before you introduce some piece of government policy.

56:08Far less acceptable to take the advice of a psychologist. Go figure. Why? Well, I have theories about that, which is that people are looking for what you might call numerical proof of their course of action and they would rather have an entirely spurious economic economic justification which allows them to present that as a an optimization problem than introduce softer sciences which would introduce a degree of ambiguity which would require them then to make a decision okay so that's my personal theory yeah but um in some ways it's a fair point if i went into the finance function i'm very friendly with quite a few finance people at ogilvy if i go to them and say hey let's talk about psychology they're probably going to feel a bit awkward and shuffle off whereas if i go and say i've read an interesting paper on behavioral economics people in the what you might call those more left brain departments because it's got the word economics in it will immediately feel that they have to pay it serious attention.

57:11It's a bit like the air fryer isn't it? It's like you need to sort of have a little... No, no, no, what you call thing? Okay, okay, here's my most mischievous suggestion. I do know him and really, really like and revere him. So I hope he'll forgive me for saying this. But I think marketing is much, much more important in reality than we tend to acknowledge. And I always say I'm a huge fan of octopus energy. Okay. And I always think there's a parallel universe in which they decided to call themselves green tech, dot com okay and they didn't have a pink octopus as a logo and in that parallel universe they've got 30 000 customers okay i mean i i think how how things are framed how they're perceived um how you what what the frame of comparison is whether you feel something's expensive or cheap partly depends on the price but far more it actually depends price as i always say to economists price is a number the consumer's prices are feeling okay the same thing can feel expensive or feel cheap entirely dependent on uh on your what you might call on context mental context environmental context if you go into sunglass hut or a premium sunglass retailer a 70 pound pair of sunglasses will seem extraordinarily cheap if you go into boots it will seem insanely expensive yeah that's anchoring isn't it right um the anchoring's kind of a sort of sub subdivision one thing i've um read you say is like we need we need ideas it's this it's not the idea it's actually the selling of the idea which is important and i i've got into this ice bath thing right and i think it's a load of it's kind of my my morning routine jimmy i was talking to jimmy car last night and he's into this thing where you go into a sauna and then jump into a yeah so mine's a bit of an oxymoron because i'll jump into the ice bath for three minutes and then have a cigarette afterwards so it's like kind of like doing the breath work in and then just do you have an ice bath at home what do you do well this is what i'm saying it's just what these guys have done it's so clever they've basically sold me a fucking paddling pool right which is you basically pump it up yourself they've they've packaged it as this is an ice bath which does all this stuff your mental health your well-being is this a place up in london in mayfair or somewhere so what's happened is these high high status gyms and these high status uh people like andrew they've sold you an unheated paddling pool unheated paddling pool right yeah which you fill up yourself it's kind of mucky it's got like a little thing you honk onto the side of it you can set the temperature but i'm like this is a this and actually is it getting it must be the selling of this idea is so good that people are willing to put themselves in that much let's be really brutal here yeah right okay um sushi if sushi weren't japanese yeah okay and you were told you were shown a documentary where these um effectively these brazilian or somalian hunter gatherers you know uh were forced to eat uh raw fish wrapped up in rice inside a leaf your natural reaction would be poor fuckers i hope that never happens to me right okay but you make it japanese yeah and the entire way in which we perceive it there's a brilliant thing which i'm gonna i'm gonna start this tradition okay where podcast guests get to plug things because i don't think the podcast hosts should have exclusive rights over um over influencer marketing there's a place in santa fe new mexico just outside called i think it's called 10 000 waves and it's a japanese spa and you go in typically in a group and you have this kind of interesting kind of bath thing and you wear a kind of weird robe and there are lots of tatami mats dotted around the place and it's one of the most enjoyable days I've ever spent in my life I went with my whole family and we took a room okay and it was fantastic and then it occurred to me that if it weren't Japanese I wouldn't I would have thought this is a really ridiculous thing I'm basically paying to use a gigantic bath with some wood stuff around okay but because it's Japanese a huge amount of the mental groundwork in getting me to accept it has already been done and consequently um uh okay um I think there are a lot of things, okay, which are unbelievably marketing dependent and we never realised they are.

1:01:42Such as? Well, I mentioned sushi, which is if it weren't Japanese, if you were told that, you know, impoverished African peasants were wrapping up raw fish in bits of rice and leaf, okay, that would probably have had vastly less appeal. Miso soup is the most extreme. Yeah. Which, I mean, Heinz would never have launched miso soup, would they? Because they would have done a bit of research and people would have said it's disgusting and there's a weird leaf in it. What the hell are you talking about? Why do you think? Well, because it's Japanese we think it has sort of age old venerable qualities and it has cleansing properties and all that kind of thing.

1:02:20So the extent to which we're capable of actually objectively evaluating anything seems to me pretty limited. And then when people get angry about marketing and say it's manipulating people and it's taking things that people don't need and making them more attractive yeah yeah it's probably true quite a lot of things on the other hand i said let's look at the best idea that anybody's ever had in world history which in terms of its outcome is probably uh smallpox vaccination edward jenner i mean we can all have an argument about this okay you know you can mention the steam engine okay um but i would probably say that if you exclude religion which probably had hugely beneficial effects and maybe tea as well but had huge effects in allowing people to cohabit in more densely populated areas okay but smallpox vaccination undoubtedly you know up there in the top 10.

1:03:21Now we always assume naively don't we when we look at history with the benefit of hindsight that Edward Jenner has this insight that dairy maids don't get smallpox and the theory is that because they've been infected with cowpox first which gives them immunity to smallpox while being a much much milder strain therefore it's a good idea to infect yourself deliberately with cowpox and therefore you know completely not not completely but very very reliably then remove the risk of smallpox now that means that you know one of your children doesn't die and two of them aren't unpleasantly disfigured it's an unbelievably important idea okay you'd think wouldn't it people go well ted you've really cracked this one god we've been looking for a cure for that for ages thanks for that we're all going to vaccinate our kids did people do that did they bollocks jenner had to spend his whole life basically arguing his case and the marketing breakthrough i think that i need someone to check this okay the marketing breakthrough was probably getting the king to vaccinate his own children because the king was the supreme social media influencer yeah he's the high status the high status person who other people in imitate and a lot of people not unreasonably took the heuristic which is that if the king who is extremely well advised is making this decision yeah guess i'm just wondering which king it would have been if the king's doing this it's probably okay for me yeah david beckham does david beckham well funnily enough there's a brilliant instance which um a friend of mine called Michael Liebreich who's a very brilliant environmental investor and skeptic and he's not skeptic about climate change he's just skeptical about a lot of the proposed solutions to it he sent me a wonderful thing which showed that the polio vaccine which was incredibly important we forget that because none of us can remember anybody actually I had a great aunt who'd had polio as a child so I'm as a 58 year old I'm in the last sort of generation or two of people who actually have experience of someone who had polio the big breakthrough was they got Elvis to have a polio vaccine live on the Ed Sullivan show fairly early in his career there's footage of it there's brilliant article in I think New York magazine or the New Yorker and it was an incredible breakthrough where effectively Elvis on stage is basically being injected with a polio vaccine on tv yeah and so those things really really sodding brilliant ideas require marketing air fryers okay once you bought one you never went back i don't know anybody who bought an f well no that's not quite true there are always five percent of people who go oh i don't get the point or i don't understand it okay they'll always be that but basically everybody who bought an air fryer goes okay changed my life brilliant okay doesn't mean you didn't have to spend 15 years persuading people of this it's not like people have this instantaneous perfect conception of what will be valuable to them in the future because most people live their lives through defaults and the default settings are habit okay and social copying do what i did before do what everybody else does yeah what are some because we've talked a lot about sort of um anchoring uh context price i think you said price is feeling what are some of these variables you can people can press and press or press down or you know um lean into that can get get potentially not great ideas to spread and i think let's maybe use like say we were trying to create like a polish polish food right for example yeah polish food isn't big in the uk polish food is probably like Korean food 20 years ago whereas Korean food now is getting bigger and bigger although they're very good at running British cafes of course because it's a sort of similar if you're doing a kind of you know bacon and eggs say you were trying to create like a Polish Nando's right so it's like people start what sort of foods they do, they do like lots of sausage you probably have to have a hero item don't you?

1:07:35it's a really really good question sorry no Now, one thing you can do, which I think is one of the central insights, although there are many from Will Godara's book, is effectively, it's called unreasonable hospitality. And he argues that in the hospitality industry in general, one very good strategy. Now, it would be very easy to misunderstand this strategy by saying you can be shit at everything so long as you're brilliant at one thing. no not saying that what i'm saying is that there is a certain component of your offering which has to be unreasonably good and so i mean i always thought it was fascinating um there's a fascinating hotel chain which i often talk about because i think it's just interesting psychologically which is the moxie hotel chain i don't know if you've ever stayed in one where are they like okay they're all over the place they're in pretty good locations the rooms are tiny uh the rooms are extremely basic there's no laundry there's no room service i think there's a kind of ironing room there might be a laundry room but there's an ironing room there's no actual laundry they're not intended for you to stay there for a week they're intended for one two maybe three night stays yeah and the rooms are actually smaller than you get in a travel lodge then they've got a very good tv they've got very good wi-fi the bed's very comfortable it's all quite modern and minimalist but they're small okay the location is good generally and it can be because the rooms are small and the entire differentiation is the ground floor which is kind of like a 24-hour barista run coffee bar serving also alcoholic drinks sometimes serving food there's a little shop there are a load of desks chairs it's a bit like an ad agency basically the ground floor and you can hang out there so you don't mind that your room is so small because you can basically hang out on the ground floor invite friends around to join you if you want to um when you check in you don't check in at a check-in desk you check in at the bar and they typically i don't want to over promise here but most of the time they offer you a welcome cocktail which is their signature cocktail of the day which is generally delicious and so you drink that and you check in and you go up and dump your stuff in the room and then you don't sit in your room with your laptop like a sado as you would do in most hotels okay the ground floor is basically it even has lockers okay so you could lock your laptop in the ground floor if you wanted to um uh and um you basically sit down you know get your laptop out on the ground floor order a really good coffee charge it your room yet maybe you have a cocktail maybe you have a pizza but for anybody i'm to be honest i mean i um i'm probably way too old for their target demographic but it still appeals to me what they're doing which is make everything basic acceptable and decent and have one thing that's remarkable so say that was polish food what would that be um would you start with a crossover product which is like the polish bacon sandwich the polish version of i know i'm obsessed with this idea of bacon sandwich as a restaurant because the bacon roll or bacon sandwich the other restaurant bangers so that's a sausage restaurant is it yeah yeah it's kind of it is what you were saying but they don't have the champagne and they don't have the brown sauce which is what we talk about that would be interesting and then you probably have one killer maybe you start with something crossover which is kind of this is where Raymond Lurvie the designer called it Maya which is maximally advanced yet acceptable so you take people if you like you allow them to keep one foot in the familiarity camp while putting another foot into the experimental side so you may look you may raid polish cuisine which is not something i know a huge amount of yeah neither do i there's a very good actually a very good restaurant like a schnitzel burger would be an example of was it mayor uh yeah mayor would be exactly that yeah a schnitzel burger would be exactly that kind of thing which is both may a stand maximally advanced yet acceptable and it comes from the idea of product design which is you want something to be as good as it possibly can be without making it so different to what preceded it that people can't get their heads around the idea.

1:11:59Yes, with you. Now, that doesn't always seem to be the case because there are weird things like bubble tea, which seem to come from absolutely nowhere. I guess it's Korean. Kombucha. Kombucha came from virtually nowhere, right? I met someone, I have to confess this, which is I met someone about 12 or 14 years ago who was, I think, Russian and had this idea of making kombucha a thing in the UK. I remember listening and half of me thinking she was completely mad because I thought, I'm not sure people are ready for fermented cold tea. Now, interestingly, John Evans, who you ought to interview, who is the marketing director of Britvik, he made Lipton's cold iced tea a big success against all the odds because all research and all his colleagues told him there was no way that a hot tea-drinking country like the UK would actually have an appetite for cold tea.

1:13:01How did he do it? So it's worth noting. So I did say to him that a little bit of the appeal of cold tea is possibly rather like Starbucks in a can or Red Bull, is that sometimes we're just too lazy to make a cup of coffee. We want a bit of a perk, but we're either too time-starved or we're in a car, OK? and we just haven't got time or the energy to make a cup of coffee so an instant caffeinated drink is going to have some appeal anyway simply on the grounds of laziness but you can promote these things and um what becomes popular i think market research conventional market research is probably not a very reliable guide to what becomes popular because if you'd ask people um you know would you like bubble tea most people will go that's the stupid idea the stupidest idea i've ever heard of and of course what the research doesn't capture is that when there are lots of places serving bubble tea people's own curiosity and social proof goes this seems to be a thing i better find out what it is okay it's not the same as researching something in the abstract which i think can be dangerously misleading because you know none of the you know dyson i always say dyson red bull nespresso none of those things would actually have succeeded in research in advance of their own existence but so some things do spring out of nowhere i you know but i mean that one way of trying it is you try as you said the schnitzel burger you you what else would you do what other levers would you push on when we could maybe talk about context we could talk about you know i think one of the ways you'd get high status chefs like your gordon ramsey to say oh this new polish schnitzel place is amazing what other what other levers would you press to get that idea to spread so we end up with like 100 polish nando sites you might want to cheat a bit okay and go a bit eastern european and include hungarian things like um you know cherry soup um cherry soup in a bowl hungarian fantastic soup made of cherries really what is it savoring or sweet?

1:15:09It's kind of you generally put a bit of cream on sour cream I think in it. God it's a long time since I've had it because I last had it in Hungary which was bloody years ago. Yeah. I'm sure you could get it if you went to the is the Gay Hussar still there? I wonder if that's closed down. That used to be the sort of left wing restaurant par excellence in London, the Gay Hussar and so back in the 70s and 80s. That's where Labour politicians typically went to eat. I mean you might want to cheat a bit because no one actually knows okay what's authentically Polish and what isn't so there's no reason you couldn't borrow from neighboring cuisines and get away with it well you could almost apply apply the pan-Asian to the pan-Eastern Europe you know that you know as you go to those pan-Asian places it's actually a hodgepodge of Korean then you have bao and you have sushi and it's just a cornucopia of different Asian cuisines I think that's clever because that brings, as you say, you're borrowing from slightly different areas, but it brings people into the Eastern European category versus just the Polish category.

1:16:12And then there's a question of, you know, to what extent does fish play in the whole thing? You've got a whole load of questions going on there. Okay. But it would be...

1:16:26It would... I mean, it's a very interesting point, which is maybe... i'm gonna that's a bit of an uphill challenge because polish food doesn't have eastern european food with the exception of hungarian generally doesn't have a fantastic reputation which may be nothing to do with the quality of their cuisine but simply because they you know while they were part of the warsaw pact okay there was probably a general deterioration in food in the standards of kind of culinary innovation uh um let's let's yeah we'll go go back to that So as I want to continue on that thread, I want to ask you about Defining Kahneman's system one and system two as person their metaphors.

1:17:08Just to be clear Yeah, he said that I listened to the talk you did with him. I think it was at the IOD Yeah, a long time ago. It was just practitioners and advertising was the idea. Yeah, and I would love to talk about cyst Well firstly define system one system two in their personalities Then also I would love to understand how those two things are working when I go to fucking Chipotle, right? So I go to Chipotle and they get me in with this£8.50. And then I've got my, I either go chicken or pork and I'm going along. And I think that's almost like the system two working. It's like, which one do I go for?

1:17:42And then suddenly they're like extra chorizo. And I'm like, yeah, extra guacamole, yeah. And before I know it, I've spent 15 quid. So I'd love to know, yeah, first to find system one, then system two. And then how does that work when I'm in Chipotle? The metaphor is, I mean, it's very simple. And I would argue - It's not a system, is it? It's what he says. Well, his argument is that there are processes like what's two plus two? He always gave this example. And that's basically, you don't have to think about it. You just go four. And that's an example of something that's very system one would be nearly everything you do while you're driving.

1:18:17The vast majority of what you do while you're driving a car is basically instinctively driven. You're not consciously thinking there is a right to turn ahead, therefore I will need to turn the steering wheel shortly. You fundamentally trained your brain to make driving, for the most part, autonomic. Now, you might argue driving in a city like London, why people hate all those 20 mile an hour limits, OK, is that a process that was once basically autonomic. And you could basically go, I'm in a city now, I better not go too fast. And 30 miles an hour seemed about right. okay suddenly now you're having to pay attention consciously to a load of things which once you could actually take as take for granted okay so and the most extreme sort of system one form of driving is that weird feeling where you suddenly realize you have no memory of driving for the last 10 minutes you've been lost in a kind of dream world and meanwhile your body and eyes have been driving the car and you assume you haven't actually hit anyone or anything okay because that would have actually snapped you back into attention i hope okay but there are we've all had those moments okay if you're if you're if you're a frequent driver if you're an infrequent driver probably when you first get into a car driving a system one you know it's mirror signal maneuver sorry sorry it's just you're actually right it's system two yeah when you first get into a car when you're first learning to drive when you're first learning to ride a bicycle it's system two and through repetition and a kind of automation it gets effectively you know transferred to metaphorically system one uh and an awful lot of the activities of system one occur effectively they're opaque to inspection they occur below the level of consciousness yeah okay so my drive to the station this morning to go to watford i wasn't really um uh there were one you know there were several moments at which i made conscious interventions you know like oh look there's a car ahead um so i'll slow down so the car has passed the cyclist before i get there that might have been kind of semi-consciously thought out it might not be you might just you know i mean i imagine if you're a taxi driver or a professional driver it becomes even more kind of automated but the point being that a large part of our activity and people always quote weird figures like 95 of our decisions are unconscious i'm not sure you can realistically put a percentage on that but i don't think it's unreasonable to assert that a very large proportion of decisions we make are either unconscious or under the influence of unconscious processes so an example would be in choosing from chipotle yeah interesting quickly what system two for listeners and then we'll go into the system system two okay so two plus two for most people who are vaguely mathematically um uh literate uh is four and nobody has to think about it whereas um 13 times 12 which i think is 156 but okay um you actually have to give that a little bit of thought yeah okay in other words and you might even take out a pen and paper and so the argument that kahneman made is that of course the system one is faster than system two and we're not even aware of it in operation and as a consequence of which although it's unbelievably valuable and probably essential to our evolutionary survival kahneman would argue that sometimes system one gets a jump on system two and causes us to make a suboptimal decision before we've had time to think about it okay so now by the way there are lots and lots of cases where making a decision before you've had time to think about it probably saved your life okay you know jumping out of the way of a bus because you're standing on the road you hear a noise and without actually pausing to think about the consequences of your action you simply jump to safety those kind of behaviors are actually very very necessary in evolutionary terms to our survival carneman might have argued that in a modern environment where more and more decisions maybe require system two thinking in other words we actually need to discipline our thought and decision making processes that the what you might call the the path dependency of decision making where system one gets to make a decision first may lead to things which are biases or even very bad decisions okay simply because effectively our instinctive heuristically driven okay assumptions override what might be the consequence of a more thoughtful interpretation or evaluation of all the evidence so I'm one very system one thing by the way I think is the idea that you get what you pay for okay so the idea when you're in a shop and you're going to shipotle and if one thing's more expensive than the other you'll probably assume it's better now there's no actual evidence for that okay I always give this example which is that if you went to a shop to buy bluetooth speaker and one bluetooth speaker was bigger than the other more powerful than the other and it had more features but it was also cheaper now to a standard economist that's the easiest decision in the world higher utility lower price slam dunk nothing to see here no brainer buy the cheaper better speaker inverted commas move on but humans that would conflict with a human instinct which is something that's more expensive is probably better in some way and actually we find that decision deeply confusing in reality we go that's strange because if i'd actually made a better speaker this is sort of social intelligence i'd probably charge more for it so the fact that this speaker is better and cheaper is now confusing me and i'm probably not going to buy either of them so there are a lot of cases where um our brain whether we like it or not is operating under certain mental assumptions uh which kind of almost in hardware if you like yeah so what's what's happening when i go into chipotle then like because because what in terms of that decision with the Bluetooth speaker, right?

1:24:49Yeah. If I go into Chipotle and I order, say, the chicken with extra chorizo and cheese and guacamole up front and they say it's 14 quid, suddenly I'm a bit like, oh, I don't want to do that, right? But then if they get me in with the chicken, right? And then they start fucking loading it up, loading it up. And then as they move the bastards along and they say, right, I want you to extra chorizo, one quid. Why am I saying yes to that? Why am I saying yes? It's a sort of sunk cost thing, which is quite often for these inverted commas biases. Yeah. There's actually a phrase that sums it up, which is kind of in for a penny, in for a pound.

1:25:27OK. OK. Yeah. And the point would be, you know, why spoil the ship for a hapeneath of tar? I'm in here anyway now. I might as well go the whole hog and get the absolute sandwich I want. Yes. So in other words, I mean, if you think about it, the whole concept of sides, OK, OK, is very similar to that, which is OK. You could argue that sides just give people more choice. Yes, that's true. But there is the argument that I've got this main thing now having having committed and mentally written off the cost of X. I might as well spend a bit extra to make X even better. so the classic example would be buying a car okay you can't after market market fit something like a glass roof a glass sunroof or a heated steering wheel or whatever so when you're buying a car you think well i'm spending a five-figure sum already i might as well spend another three or four thousand pounds on extras to make this as good as it possibly can be and because after all i'll never have another chance again for four years and car makers will make inordinately more margin on optional extras than they they will on the base model car yeah so what you're uh and other other examples once you're in that in that sunk once you're sort of that sunk cost thing or in for a pound do you think that's basically your your sort of the system one's activated there you're just sort of thinking fuck it like i'm already i may as well get the roof i may as well would be if you turn up at a hotel yeah and they say um you can actually for 50 pounds a night you can upgrade to a suite obviously it depends how long you're staying there to a degree but you are more likely to go yeah fuck it okay than you are to buy the suite when at the same time as you're paying for the basic room and the argument for that is that you've already mentally written off the cost of the room because you've paid that in advance okay so i'm in for 200 quid for my three night stay or whatever it might be or two nights day i'm in for that amount of money and now i can make this experience amazing for just a bit more and undoubtedly that is a recurring pattern with marketing pretty much everywhere okay i mean uh once someone's it's it's sometimes called in salesmanship the foot in the door thing if you can get someone to agree to buy something then either immediately or subsequently getting them to upgrade to a better version of that thing is often easier than selling the better version of that thing from the off so okay a brand that mastered that fantastically and which has given them a you know a large shareholding by warren buffett and an extraordinary level of success is american express where there were a lot of people who probably wouldn't get an American Express gold card off the bat.

1:28:27But if you sold them the green card and then three years later said, for only another X pounds a year, okay, their attention is focused on the increment, not on the overall cost. Okay, so your attention when it's do I want to add the chicken, do I want to add the so-and-so, is focused on the incremental cost, not the headline amount. Okay, with you. What are other ways to sell ideas, do you think?

1:28:58okay one way is slowly uh which is we have to accept the fact and i think business has this fundamental mistake of tending to think that the returns from innovation are kind of linear and actually if you look at significant innovations what you will see is a kind of sigmoid curve of adoption where things are i mean sushi i'm old enough to remember when sushi was a pretty niche-y food. The idea of selling sushi in supermarkets, as now happens, okay, would have seemed completely outlandish in 1989 or 1990. You went, some people liked it, they went to specialist sushi restaurants, they were taken by someone who liked sushi, but the journey that that particular food has had is that sigmoid curve where it's very, very slow and grows kind of seemingly linearly and then it hits a tipping point where adoption accelerates and then it hits a kind of ceiling which depending on what the product may be with a mobile phone it was nearly 100 the ceiling of adoption well you might argue in some countries it's actually 105 because people have more than one phone but there's also a ceiling beyond which there's no possible future penetration um or at least the penetration beyond that point is going to be kind of incremental again it's not going to be exponential and so it's a very dangerous mistake to start with an idea and assume that because it's not instantly popular that it has no future by the way i mean even the adoption of the iphone was quite slow to begin with okay if you actually look at volume sales you know even products which we tend to look back on and assume were these kind of epiphany products where no that iphones didn't exist then they invented the iphone and everybody bought an iphone trust me it was not like that i spent a large part of my working life in the 19 late 90s early 2000s persuading people this is uh under the aegis of bt persuading people to have internet access at home now okay to you me everybody in the room that's that now seems absurd it seems absurd that you would have to persuade people to buy a mobile phone.

1:31:16I mean you may have to persuade people to buy one kind of mobile phone rather than another kind of mobile phone but 97 % of people you know in that category in some shape or form. There was a period from, well I mean if you go all the way back there were mobile phones in the 1970s but they were kind of incredibly niche and insanely expensive. There was a period from the late 1980s, maybe the middle 1980s, late 1980s to probably the early 2000s, where you actually saw mobile phone penetration, maybe a bit later than that, mobile phone penetration effectively went through the population in that sigmoid curve.

1:31:57And you'll probably see that with the adoption of things like solar panels, for example. And electric cars uh i suspect will also follow that pattern um i think the projections for electric car sales were wrong probably because they they used an extrapolation rather than the understanding that this is not a straight line and by the way the reason for that is as i said um if if you accept that the two forces acting on human behavior the two default modes are um uh habit i'll do what i did last time and i think most people who've moved to an electric car will continue to buy electric cars in fact the percentage of people who actually revert is way below 10 once you've gone electric you know you never go back okay now the second thing that drives people is social proof which is they're highly influenced and reassured if you like by the behavior of other people around them there is i would argue a third very strong human default behavior which not among a certain innovative and experimental part of the population who are always trying to something new like me i'm a sucker i read stuff magazine i'm 58 years old i've just bought one of those samsung freestyle projectors and i'm pissing around with like projecting stuff on the ceiling i i know i'm basically a bit of a dickhead in that i'll try I'll try anything that has novelty value.

1:33:29You may be the same. I don't know. But other than those people for whom what you might call having the latest thing forms a significant part of their identity, most people also have a very strong mental thing, which is to construct or reverse engineer a justification for why the old way they did things and which they're currently using is still right. and why the new way is stupid and so you have massive hostility to mobile phones in the early days massive hostility weirdly to air fryers slight less in that case massive hostility to electric cars which you see now among petrol car drivers and that's the kind of thing which is it's right because i do it not i do it because it's right so people have an immense mental capacity for self-serving post-rationalization now in the case of electric cars there's this weird hostility to the whole thing okay now by the way i think that people are right to some degree to be hostile to over eager government legislation mandating electrification because i think this is a process that should take place at an organic natural pace i also think there are people who should probably never buy an electric car okay there are use cases people who drive a very small distance you know you know let's say a 78 year old pensioner who drives to the shops twice a week okay it's a waste of a good battery to electrify those people okay even if they're buying a car from you you should let them buy a petrol car because the contribution they're making to global warming is nugatory and the you know so the benefits of having a battery sitting outside their house may become slightly different as they can attach the battery to the grid and use it as a storage form but the part it's a waste of a battery giving it to someone who drives very very small mileage okay um and so i think the i think of opposition to the government but there's this kind of weird hostility to electric cars which manifests itself in people being convinced that everybody with an electric car ends up stranded um and you know i mean literally i can remember people going mobile phones are ridiculous why would i not want to make a telephone call while i'm on the street okay i mean you know uh there are people who didn't want the internet at home quite often we had to use an argument when we were selling it for bt that um uh it will help your kids with their schoolwork so we kind of slightly one very potent argument for people who were identified as being families was you could kind of guilt them into it slightly because their children would be at a disadvantage conceivably if they didn't have access to the same resources as other kids.

1:36:16That's a really clever sort of nuanced... So I sort of get the social proof, the anchoring, those are kind of obvious ones. What are some of these sort of... Yeah, kind of almost like magic tricks. It's like leaning into... OK, well, you don't want your kids to fall behind because that will make you a bad parent. That's a great... I mean, now it's ridiculous that you need to use that argument because people would just assume that a house without internet access is basically uninhabitable. Alex Hormozzi has two great things, which is the pain is the pitch, which I love. He's brilliant. Yeah, the pain is the pitch.

1:36:45And then just reduce all the risks. So I was speaking to, actually, I don't know if you've met Luke, who's Chris Williamson's business partner in Newtonic. Lovely guy. I'm trying to do a festival next year called the Hungry Hooteruni. I was like, how the fuck am I going to sell Hooteruni? It's basically like loads of different food and drink speakers, founders and stuff. I was like, how the fuck do I sell the tickets? So he was like, well, go into the, he told me about Hormozzi. He was like go into the pain. What problem do you solve and then just reduce the risk? So if you don't like this festival or this day, I will just give you your money back from my personal account And I've already gone around to a few people who said that David Ogilvie Just like David Ogilvie died That's this slightly annoyed that he always wanted American Express to make the offer Which is because it was a card with a fee and still is which is slightly unusual he always wanted to make the offer try the american express card for a year and if you're not happy after a year we'll give you double your money back now double your money is a real skin in the game proof of confidence yeah okay what was interesting about that is people said well people could rip us off and david said my let's test this because two things my guess is that only a very small percentage of people will actually deliberately get a card so that they can make what would mean sort of 45 pounds in profit in a year's time okay because you've got to try it for a year first and they've got to have 45 pounds to begin with secondly yes some people will do that you don't want those people as customers in the first place so it's actually serving a very good purpose of getting rid of arseholes okay from your customer base so I'm because what I find interesting about David is he sold and I asked this maybe we can explore this with you there is extraordinary wisdom this is partly what my next book is about there was a whole generation of admin of the kind of Don Draper era Leo Burnett David Ogilvy Bill Burnback yeah it's okay there was extraordinary wisdom and knowledge embedded in that period of advertising the problem i've got with the advertising industry is it currently has a business model that sells insights one brand at a time one client at a time and so it sells insights like bloody faberge eggs here is an insight which you can have and it's just for you and it's really expensive and you can just have one and my argument is with say the food industry there are tons of insights and i want to sell them like coca-cola i don't want to sell them like fabergé eggs i want to go look if you if if you run a cafe or a bar or a restaurant exactly your insight about bring the goddamn card machine when you bring the bill right all right for restaurants one of them would be put tables and chairs outside the outside even if it's raining because it says from 300 yards away there's a cafe over there okay and it's open because if it wasn't open they would have put their tables and chairs inside and locked them away okay so it's a brilliant it's like a massive neon open sign another thing would be um which always interests me um if you look like a cafe this is just an interesting thought okay um what's the difference between a cafe and a restaurant and my theory is this that in a restaurant you're obliged to have at least a one course possibly two course meal in other words you cannot just have a coffee and a slice of cake now in a cafe you can upgrade to a you know fairly large calorific meal but you're not under an obligation so if you can do a dishoom and make your restaurant look a bit like a cafe people will come they'll come in and they'll buy one thing and then they'll decide to buy more that's why this is by the way it's very when you're in a foreign country and you can't read the vibes let's say you're in somewhere like milan you can't tell what's a cafe and what's a restaurant we we had this when we're in madrid where my wife and i kept fucking up because there There were a load of tables and chairs outside a place.

1:41:03And we sit down and go, can we have a coffee? And they go, are you not having a meal? You know, you're filth. You know, fuck off. OK. Now, one of the reasons why eating out in a foreign country is actually weirdly anxious is you're not entirely clear what the rules are. And now, I'll give you another example. It is amazing how many establishments, while open, are so badly lit, particularly in the British winter that they look as if they're closed the dying words of William Sainsbury the founder of Sainsbury's I mean literally the dying words before he died were make sure the stores remain well lit it's so so there's a lighting question going into a murky space okay then there are really interesting questions like the meaning of things like tablecloths which were a mandatory for dining out in my childhood okay and now may well be off-putting you know we've been so wagamammified that if we see tablecloths we go it's too fancy i don't want to go through all that palaver i'll go to a restaurant which doesn't have tablecloths you know so things take on completely different meanings um but but what i'm saying is that i think there are universally applicable insights you know which you can learn far better than from me from alex homozy or from will gadara you know i'm very happy because they're very very interesting wasn't the pain is the pitch pain is the pitch and reduce the risks were those the two things because he featured you in his book actually which is which is a brilliant book but on the lighting and the all day thing have you been to the restaurant caravan no man coffee so they've been on my podcast so where are they uh they've got so that yeah they're so then there's one of If you actually kept my diary clear, I could actually find these bloody places.

1:42:51I could actually have time to go out and explore. Sorry. Yeah, go on.

1:42:58But the... Yes, what... OK, in my diary next week, go to Caravan. Right, OK, fine. Sorry, we'll carry on. So what Laura did was she... She's the founder, the Antipypidion New Zealanders, a wanky way of saying New Zealanders, is they they do kiwis of course i might be related i'm not sure he's called townsend and he's a new zealand coffee entrepreneur who's the guy who arguably invented the flat white yes so you're related to the guy well most a lot of townsends in new zealand are related to me because i had a great uncle or great great uncle who left a large amount of money to something like eight nephews about seven of whom basically as farmers took the money and hoofed it to new zealand so if you if you're a kiwi called tanzan there's a fairly high um likelihood that you're actually a relative of mine so i've always wanted to establish a relationship with this guy because kiwi coffee of course is absolutely fascinating amazing but what she what she did is so that they really pioneered the all-day dining so you go there for breakfast in the morning okay that's a real okay a really really interesting thing which assume discovered is they how do you crack the lunch at an indian you get them in for breakfast you open for breakfast but what she does is which is wild which again it's kind of a special effects and goes back to my street food is comedy restaurants and movies i think one of the things i think you can make a mistake you can make a massive mistake doing this so let me share this with the world's coffee shops and cafes i am sure that if you open uh that for the last half hour a costa is open they don't do all that much business and it'd be very easy for them to assume okay um the reason we're not doing much business is there isn't much demand for coffee between 6 and 6 30 therefore there is absolutely no point in us opening later now that's dependent on the assumption that falling demand is due to time of day not nearest to closing.

1:45:04And my hunch is... Okay, right. Okay, this is my theory. This is my theory, okay? And I think it's important for the world's cafes and coffee chains to realise this. People don't like having a coffee in a place that's closing, right? Because you feel under time pressure. This is why all-day dining is so interesting, okay? The time pressure is off-putting. the staff I'm gonna really god they're gonna hate me they're gonna piss in my coffee for revealing this okay I'm oh shit every time I now stop at an arrow someone's gonna gob in it oh god okay but I'm gonna reveal it anyway okay the staff don't want customers to come in in the last 20 minutes of the day and this is known in the trade as getting the mop out all you have to do is provide a very small clue that your closure is imminent and you don't attract any new customers.

1:46:01Now, partly, that may be unintentional or it may be intentional on the part of the staff because they want to clean the muck off the, you know, the cappuccino machine, the frother, and they want to mop down the toilets, they want to wipe down the tables so they can piss off as soon as the coffee shop closes. And that may be the fault of coffee shops for not paying overtime. I don't know the economics well enough, right? So what people do, either unintentionally or intentionally, is they do this thing called getting the mop out. All you have to do is take one chair and put it upside down on top of a table, and no one else will come into your coffee shop, because they don't want to be the last customer of the day, and they don't want to consume anything under time pressure, and they don't want to look unwelcome, and they don't want to come in and be told, no, I'm sorry, we're closed.

1:46:46Okay, now Woolworths used to be very clever. They used to actually open for five minutes after their official opening time. So they never have this problem of people turning up and being told, sorry, we're closed. So they used to open or used to close. Woolworths would say, we close at 5.30 and they actually close at 5.35. Every single business should do this because if you allow someone into a shop and then give them second rate service because you're basically thinking about how you get home rather than how you sell someone a coffee, you've created a pissed off customer. now what is happening okay is in the half hour before a coffee shop closes they are basically deliberately or accidentally or inadvertently manifesting signs that new customers not welcome and it could be a mop getting the mop out it could be putting a single chair on upside down on top of a table or taking two chairs and putting one upside down on top of the other effectively that is a massive turnoff to any prospective customers so the fall off in sales between 5 30 and 6 may be nothing to do with the fact that nobody wants coffee between 5 30 and 6 you may actually have a really fantastic market for your coffee all the way until 7 30 what you won't have is a market for your coffee in the half hour before you close if you're radiating signs of closing my wife gets very angry with me because weirdly although i'm a very placid guy very occasionally i completely lose it okay what makes you lose um and so i was outside i won't i won't name i don't want the staff to get into trouble but um half an hour before a starbucks closed at a major um uk railway station i had luggage because we'd just come back on the euro star i obviously didn't want to take huge suitcases into starbucks so i sat down at a table outside the starbucks where my luggage wouldn't get in the way of anybody else and sent my wife and daughter in to get coffee and while i was sitting there 25 minutes before the restaurant closed someone made me move because they were clearing the tables away right i'm not going to say which station i don't want anybody to get a bollocking okay but i absolutely lost it because i think you know if it you know that is an abominable thing to do i was trying to do the good thing by not clogging up your coffee shop with my enormous wheelie louis vuitton steamer trunk

1:49:17okay i don't want to clog up your cafe i'm sitting outside you've put the tables and chairs outside clearing them away early and making a customer move is just bullshit those tables remain there until you close then you then you clear them away okay you don't close them away 25 minutes early now i don't know and i'd like to know is this because um coffee shops pace inadequate overtime okay and therefore everybody feels that effectively they're on the clock for the last half hour and they've got to get as much cleaning done in the last half hour of the day as they possibly can what i'm saying is that someone looking at the sales data from a coffee shop might get completely the wrong impression because they think it's the time of day that's diminishing demand for coffee whereas it's actually the behavior of the restaurant itself as it nears closing time and equally opening early right means that if you open at 10 rather than 11 and only five people come in between 10 and 11 but the fact that there are five people sitting there 11 means that 15 people come in at 11 rather than seven it may pay you to open early even though looked at in isolation the economics of that first hour may not make sense and i would call that deshumanomics which is their astonishingly ingenious idea of solving the problem of indian food at lunchtime by opening for breakfast it's genius this is a really fucking random question but what would be your death row meal do you think i've said that before um and it was i've been on another podcast where they actually cook your death row meal for you that's hilarious, what was it?

1:50:58there's a Pakistani restaurant in and it is Pakistani, in Mayfair, in Kinnison Street called Saloo and they do something, it's not always in the menu, so ring and check which is called Halim Akbari now I have a bit of a bit of a caveat to Schumann about this because he says they've tried halim in dashum and nobody likes it and i keep arguing you have to persevere it's a very strange thing where lamb is soaked overnight with grain to form a kind of meat porridge fucking hell okay you then place it on top of rice and then brilliantly there are a lot of little side dishes so you can pimp your halim where there are bits of ginger bits of chili i'm sorry my wife's ringing hi can i call back a bit later is everything okay righty-ho okay bye-bye bye-bye um sorry hi i just got this new samsung freestyle projector and i thought okay to compliment this i'll go and order one of those folding projector screens so i can put it up and it's a bit like you know spinal tap where they get the dimensions all wrong buying anything rectangular online is absolutely fatal right because you know if you buy a tv you have no idea really how big something is because you're just comparing identical black rectangles so i've ended up with this thing this bloody projector stream it looks like something david brent would kind of use it's absolutely fucking enormous and so my wife is basically desperately how big is it well i thought i thought it was just this modest little thing that you could put on the bottom of the bed it turns out the thing's fucking why do you want a projector so much was that the sort of the earlier okay it's like an air fryer okay you don't know until you got one okay there are a lot of things yeah i've talked to the samsung marketing director saying why on earth don't you market this so what no no i'm not saying you shouldn't have a tv right i'll come back to halim akbari in a moment but rather than having a fourth tv buying a projector now the problem with projectors was they were very cheap ones which were kind of rubbish and then there were kind of professional laser projectors which are three grand and require you to connect them to a sound bar a massive sound system god knows what this samsung projector is an all-in-one thing which basically gives you the full the full app interface uh with netflix with amazon prime uh with youtube okay you log in on the projector it's got its own speaker okay so you can even you could even run it in the garden at night you could actually have films out out in the garden in the evening you could yeah but if you've got a white wall or or like me you could buy a ludicrously oversized projection screen of course it's like spinal tap in reverse you know the thing in spinal tap where they have the model of stonehenge which is sort of spinal tap oh it's brilliant film it's a parody of the kind of rock music scene um it's what the hell's name christopher fantastic comedy film.

1:54:08It's where the phrase it goes up to 11 comes from. You may have heard that. All your listeners to your podcast should watch it because it's brilliant. What happens is they want for their kind of massive rock stage, they want a huge model of Stonehenge and they muddle up the sign for feet with a sign for inches. So they end up getting sent this model that's about 18 inches high. Okay. Okay. Anyway, sorry. So you've got that going on at home right now. The versatility is, okay. Now, okay, what's the great thing with a projector, with this glorious... I'm not paid to do this, but Benjamin's a friend of mine, and he's the marketing director of Samsung Europe.

1:54:51So the glorious Samsung Freestyle second-generation projector is, if you think about it, okay, assuming you have some white walls in your house, which you probably do, wallpaper is not really a thing i imagine in your home i'm maybe wrong it may be you know may look like carrie johnson's house for all i know but okay the great thing about a projector is you've now got a port completely portable tv it's about twice the diameter of this thing about as high which can be as big as small as you like right and you can plug it in anywhere there's a wi-fi connection and a plug or indeed you can you can actually buy an optional additional charger which benjamin can send me now for free because no no okay that's your podcast plug that's my podcast plug now what if you think about it there's always that slight tension in the home between partners in that one of you wants a bigger tv than the other the great thing with this with this projector tv is it takes up the space of a shoe box when you store it okay however if you want it to be a hundred inch tv you pocket a long way from the wall and if you're in the kitchen and you just want to make recipes you've literally got a 30 inch tv or 20 inch tv just projecting against the wall and then if you if you want to put it away you've got no tv at all because it just goes into a cupboard so you don't have a massive black rectangle on the wall all the time also you can weirdly project it benjamin by email said it's a great thing you can project it onto a table from the ceiling, if you buy the ceiling mount.

1:56:27Or, when you're in bed, you can project it on the ceiling and just lie back in bed and watch films above your head. Now, in the 1970s... It's probably lazy if you haven't been doing it. In the 1970s, people who wanted to improve their sex life used to put a mirror on the ceiling above their double bed. Now, they did that because they didn't have the technology to do something far more erotic, which is to have sex while watching a two-hour YouTube documentary about steam traction engines, you know, Which I imagine is about it. I haven't tried this I hasten to add but I imagine that's about as good as it gets You're reading your fantasies here This is this is the site This is the slight problem with There is that weird thing isn't that slightly aspergic men like me and YouTube Oh YouTube so good.

1:57:14It's it is the to be honest I think it's the great library of Alexandria of the 21st century. I think it's the great pyramid of the 21st century It's the greatest human achievement apart from of course the Samsung Galaxy second-generation projector Which is the perfect way in which to consume it? There's a channel for you actually Benjamin They go into how how films are made send you it. Oh, it's a sensational But is that was a shit show is it the making of there's a wonderful one called the making of X was a shit show yeah goes into so they do francis ford cope copelo did godfather and apocalypse now because you know apocalypse now was a shit show like charlie sheen did so much coke and fags that he'd end up having a heart attack um they had all the everything that was going wrong with the and actually the helicopters yeah kept being withdrawn because the government needed to fight some border skirmish yeah yeah so they couldn't rely on the supply of various it was filmed in the philippines and they want it to be filmed in australia but anyway it's really it's a great um but it really going to francis for coppola's like sort of creativity and how he uses the catastrophe to because the film started here and then it ended up being all this weird sort of dystopian film where they brought in you know marlon brando was those those things where you zoom in yeah typically with a specialist commentator yeah and you zoom in incredibly tight so okay the most over documented um sort of 24 hours of the 20th century probably the kennedy assassination and there's a youtube documentary called ask a mortician which is hosted by someone who works in the funeral business and the title of this particular episode is why did jfk not have an open casket and that sounds like a very very niche question but she goes in absolutely tight and then explodes it you know effectively you know and it turns into well because it's entirely the take on the kennedy assassination from a mortician a funeral director's perspective and the details are a large part of it is that which coffin they bought the fact that the uh the secret service commandeered the hearse and were then incapable capable of operating the latch mechanism to actually slide the coffin out of the hearse to load it onto Air Force One, with the consequence that you had the dead body of JFK in a coffin in the back of a hearse with a load of guys with crowbars basically trying to lever it out of this car.

1:59:47The fact that it took the funeral home, God knows, ages to be paid for the casket. The fact that the casket they chose, they felt had to be the most expensive one, which meant it was ludicrously heavy. The fact that the whole of America was kind of in the wake of a Nancy Mitford book, I think, or Jessica Mitford, Jessica Mitford book called The American Way of Death, which was kind of expose of the US funeral industry, which therefore meant that everybody was highly suspicious of the whole funeral industry. dutty dutty dutty but okay it's impossible to encapsulate without her expertise and her brilliance okay but that business of of actually doing the opposite of what television does which is kind of to start broad okay of starting on something incredibly narrow and niche and then effectively kind of zooming out uh is utterly utterly fascinating i mean it's kind of i mean life's kind of fractal okay you know in other words there's complexity at scale but there's also the same kind of level of complexity when you it's a mandelbrot set when you burrow into the details and so youtube i mean the thing about youtube is i think two things happened which we didn't notice jimmy carr always said that the weird thing that happened is youtube became the biggest tv station in the world and nobody noticed i will also plug youtube premium which is a very good use of 1995 a month i shouldn't be doing that because it's ad free and i work in advertising so I'm taking the bread out of my colleagues' mouths.

2:01:16But nonetheless, if you're a heavy YouTube user, and you will be if you get YouTube premium, it's worth it. Now, a few things. One, most of it's broadcast quality. I grew up in the era when we went on YouTube and it was wobbly, handheld, grainy pictures for the most part. So first of all, the quality of filmmaking and just general cinematic grammar has improved immensely. Secondly, it has now become so extensive as a repository of film. I can't remember what the figure is but you need to live for something like 7000 years to watch all of it and you'd still never catch up because more is being added all the time that it's now become wikipedia with video okay now it was browsable but now it's searchable so literally if you have an obscure boiler and the flu freezes over there's some weird guy who's made a film about how to unfreeze the flu on a backseat boiler b7409 i mean that probably is slightly over claiming it but in other words the level of granularity you can go into is absolutely extraordinary and if like me you're tiny bit on the spectrum of course uh the ability to be honest my dad was exactly the same you know he stopped reading fiction and just read biographies and i'm guilty of the same failing actually but you know i love factual television of any kind yes extraordinary and so that i think is that I think is really really interesting because what's some of the most interesting biographies you've read well I've I must get back to Halim Akbari by the way yeah so you can pimp your halim yeah because they're little bowls typically I think is it ground ginger it's probably chili anyway they're lots of little powders and you can mix them you can either mix them into the team or sprinkle them unevenly on the top to get a kind of I think one of the reasons why bubble tea the behavioral economics of bubble tea is its variable reinforcement theory in a cup which is we quite like things okay where it's a bit like the chocolate at the bottom of the cornetto which actually i think is there to prevent leakage but it's like the final little unexpected treat at the it's the easter egg at the end and we seem to like certain foods that are kind of slightly uneven okay so i'll go back to the uneven texture so there was an experiment with pigeons where they basically trained pigeons so if they pecked a switch they got a a couple of pellets of food yeah and the pigeons would basically peck the switch have a couple of pellets of food peck it again have another couple of pellets of food and after about three pecks they get a bit sated and a bit bored and they wander off to do some other pigeon stuff whatever they do other pigeon stuff shitting on people or whatever it is okay and then there was a weird glitch in the experiment where they kind of ran out of food pellets and so they made the thing a bit random where when the pigeons pecked the thing they couldn't afford to give them two pellets every time sometimes the pigeons will get no pellets sometimes they get one sometimes they get two and at that point the pellets was like a bloody pigeon fruit machine they became completely addicted to this because the return was no longer constant and predictable it was uncertain the The pigeons basically were just pecked and pecked and pecked and pecked.

2:04:41And you basically created pigeon Vegas for these bloody things. And they were just going and pecking and pecking away. And there seems to be some component in variable reinforcement theory, which may explain the appeal of bubble tea, which is that it's different. It keeps changing all the way down. Sometimes you get one of these big lumps of tapioca shooting up. The texture of it. Well, it's just that no two sips are completely alike. I interviewed Margot Henderson, who's Fergus Henderson's wife, who obviously did St John. And we were talking about... That, would you believe it, was my local. We were actually in St John Street as an agency.

2:05:15Oh, really? Back in the mid-90s. And, my God, I was grateful to that place. So, a couple of things. So, she talks about the art of drinking a Negroni and why Negroni's so good. So, it's like you're quite stressed. The first sip of Negroni's actually super strong and punches you. And you get the thing of the lemon. Or, sorry, the orange or the lemon. So, that really hits you. and then you have two of those and actually as you get slightly more drunk from the big hits by the time you get the end of the Negroni the ice cubes begin to melt so it's actually a much softer drink so what we were saying is it sort of dances with your mood when I drink a gin and tonic I like to have the tonic bottle so I can vary the strength as I go through I like to start with something basically you start with something which is a bit of a depth charge and then you end up with something that's a soft drink and interestingly that may explain why actually if you make a really good Bloody Mary, you shouldn't mix it perfectly.

2:06:08Conceivably. In other words, the Tabasco should be slightly unevenly distributed. I don't know. What do you think? Okay. Now, this is a bit weird, because you know one of the things I say, which is that the opposite of a good idea can be another good idea. Yeah. Right? The interesting thing with food is there's McDonald's food where the success is that it's completely predictable. There are no surprises. In other words, there's nothing there to make you uneasy. OK. And then there's another kind of food, which is, you know, it's never the same twice. And weirdly, depending on whatever mental frame of perception it may be, sometimes we seem to want one and sometimes we seem to want the other.

2:06:51And you might argue there's a theory about the brain that most of what we perceive is actually a prediction. And we only really turn our senses up into gear when something surprises us. So this is a really interesting philosophical question. Don't ask me, ask a guy called, say, Charles Spence at Oxford, who does a huge amount of research into this. So he will do wonderful, wonderful experiments. Anybody in the food industry, get this guy in and pay him a lot of money, because he's fantastic. What does he do? He will make a strawberry-flavoured sorbet, make it yellow, and put it inside a frozen lemon.

2:07:28so your brain is entirely expecting the thing to be citric and bitter and instead it's sweet and the interplay between expectation and delivery basically creates a new taste that that doesn't really exist in the natural world it creates essentially a brain a brain stimulus around taste the contrast between what you're expecting and what you get generates something on what you might call a third dimension of taste. Have you heard about Stephen Pinker's strawberry cheesecake principle? Hit me. I know Stephen. I got fucking obsessed with why illustration works so well with food. Sometimes, well, obviously all these products around us, there's illustration.

2:08:15Yeah. And in lots of these sort of hipster pizza restaurants now, on their box, they'll use illustration. And everywhere I looked, noble rot the wine bar uses illustration a bit of that may simply be uh it's that you're effectively tapping into heuristic assumptions that have been established by other artisan brands which use illustration so illustration and hand drawing kind of says handmade a little bit i mean charlie biggum's genius i think uh was putting the thing in a bamboo thing rather than a plastic pot okay fundamentally that completely changed our perception of what that food might be and what it might deliver okay and it made us feel that it was kind of handmade because the container didn't say factory yeah and indeed the packaging didn't say it's designed an apple mac it suggests it was designed by hand but what often happens then is that this then creates a consumer assumption that food that's packaged like that is that kind of food and people who therefore an example would be you're having guests around okay you'd probably rather serve them hand illustrated crisps okay or crisps that have a kind of artisanal quality rather than crisps that look like they're produced by a multinational yeah and so it kind of says Now, obviously, multinationals are now tapping into this because they're not completely blind.

2:09:51And, you know, you have Tesco producing brands. And sensations are an anomaly to that. Because sensations with... They were posh crisps from Walkers. Yeah, and then I suppose crisps got posher and posher and posher. Very funny. I had a friend who was involved in the naming of sensations. And two things happened. there was a huge debate about what the behavioural insights team called itself within government. And somebody, it might have been David Halpin, said, actually, this debate is completely irrelevant because whatever we call ourselves, people are going to call us the nudge unit. And indeed they did.

2:10:28The nudge unit. Nudge unit, because it was inspired by Thaler's book Nudge, effectively. And so everybody's going to call it the nudge unit for short. Yeah. the same thing happened with Walker's Sensations where apparently a friend of mine was involved in the discussions around the naming and someone said actually what we call this is kind of irrelevant because everybody's going to call them posh crisps which is kind of what they did yes yeah and I suppose the crisps just get posher and posher and posher then it went tyrols obviously which Perry did tyrols I mean this is an extraordinary testament to the brand value and thus economic value created by packaging design.

2:11:12Oh, it's crazy. This room. The way, so the way Perry's... Okay, you've got Sipsmith over there. You've got Yeo Valley. I don't think he designed Sam Pellegrino. I'm not going to give him credit for that. I think that's been around since before he was born. I think that's just sitting there as a bottle, isn't it? But in terms of the... If you go around it, it's really, really interesting. Dorset cereals, you go around to, is it pronounced Beaver or Belvoir? Belor, I think it is. I always call it Belvoir. Okay. Now, are Callow actually Scandinavian? I don't know. That's a very mischievous question, because they may not be.

2:11:49The best story is goo, right, in terms of the selling of ideas. So you know goo. It's British. It's East End Company, right? Yeah, British. But you bang an umlaut on it, or diarosis. But what Perry did to sell the idea to James, who's the founder, He goes, right, leave it with me. I'm going to go and find, just do a load of research. They had the goo pudding. And he put the slide up on probably that TV there and was like, oh my God, James, I found a company in Norway or wherever it is, or Sweden, that's got this thing called goo. And it's, look how great that looks. So if only we could do this.

2:12:25So then James is like, fuck, I wish we'd had done that. I wish we'd done that. And then Perry goes - We have. We have, that's your brand. That's your brand. And that's the genius of selling ideas. was if he'd said, you know, it's such a good way to sell an idea, do you know what I mean? Technically, technically that's not as lying. But nonetheless, as long as you reveal the lie afterwards. Oh, exactly. Yeah, yeah, yeah. Yeah, exactly. As long as you reveal afterwards, you see, the second you thought this was a company, you wanted to buy it. And yet, which is an emotional response, and yet if you'd come along and said, I've got this idea about goo, the first reaction would be can you show me four more alternatives please exactly well it so perry now we're creating a business environment where it's impossible except for entrepreneurs and arguably slightly deranged ceos to use an incredibly valuable um human skill which we've evolved over millions of years which is called intuition and our fear of intuition in other words the requirement that all intuition be replaced by data is basically killing business and it's why you know broadly speaking which is tragic okay everybody who wants to do something interesting and new leaves a large company in order to do it yeah i want to talk about the data and intuition is like sort of a barbell a la sort of nasa and there's a question i've had this written down since we did our first podcast i've just never got around to asking it because we end up talking about fucking chicken korma for two hours um i will i'll give another plug for Salud's Halim Akbari yeah yeah by the way while I'm doing this I'm starting this tradition right where the podcast guest gets to advertise not in return for payment but just to recommend things they really like because I think we should we deserve our place in the sun right so what else would you recommend if you're hungry and in Seven Oaks yeah and you want a good arepa arepa go to Seven Oaks's best Venezuelan cafe which is called Budare which is also Seven Oaks's only Venezuelan cafe I'm sorry but it's hard to find it's in the shambles you won't regret it also available on Deliveroo so this is a fact for those of you who are gluten free arepa is made from cornbread budari is the name of the hot griddle plate on which it's made yeah okay so gluten intolerant or gluten free people can enjoy an arepa sandwich with complete freedom and it's just a glorious tiny little cafe tucked around the back of nowhere the kind of place which absolutely deserves to flourish.

2:14:58And if you're in Westrum, nearby Westrum, why not go to Bussey's Bites, which is possibly Britain's only Jamaican-Italian cafe. Ooh. Now, the way the... What's their equivalent of the... He's Italian, she's Jamaican. What's their sort of middle ground for you? What's their version of the schnitzel burger? It's absolutely brilliant, because if you're going out with people who are a bit wussy about spice, They can have something entirely Italian, whereas the Jamaican stuff, you know, ramps up the stimulus a bit. Yeah, rips your head off sort of thing. They also make very, very good coffee. And they also sell vegetables.

2:15:34So it's a wonderful little place, and it's just adorable. And my argument is, I work in advertising, so I'm normally paid to advertise things. And it's quite nice in my spare time to advertise things that deserve to be advertised, that deserve to be better known. They could almost be like a little mug. what i want to ask you is 10 times 1 is not the same as 1 times 10 no so that so because that's again it's been a question on my mind but maybe let's use that as mathematically it is yeah mathematically it's not but like but then one person coming to you 10 times is not the same as 10 people coming to you once yeah okay the only real measure i would argue now there are obviously kind of weird exceptions to this in the case of like you know those kind of michelin three-star restaurants which everybody only goes to once and i always ask that as an interesting reflection of signaling value versus intrinsic value in food which is if you often ask people what's the best meal they've ever had in their life okay they'll usually cite a really fancy restaurant and then you ask them the second question and how often have you eaten there and almost inevitably the answer is once and i always ask the question well if it was that good why didn't you go back and i always suspect that the signaling value of having been there is a large part of the experience okay so there's no point in going back because the value you get from saying you've been there is actually greater than the value you got from eating there consequently there are also restaurants which people like indeed budari in seven oaks seven oaks is best venezuelan cafe um which people go back to repeatedly okay and the i always think that the real measure of a fantastic place has to be repeat purchase in other words the true measure of what you might call revealed preference is not the thing that people do once which may be for bragging rights it's the thing that people do a hell of a lot but in so in terms of the one times ten is not the same as ten times one what are the implications for that not necessarily with one reason to have a loyalty program is you can tell the difference between the two because there There are businesses which look successful in the early phases because everybody gives them a try and leaves disappointed and never comes back.

2:17:49Now, it's possible to operate as a business just on naive customers for a certain length of time, or in the case of New York, just on the case of novelty. But that's not really a sustainable business. What do you think is better, New York or London for food, and what's the differences you've noticed? Because I swear it's more status-seeking in New York. London is obviously better for food because we have better Indian restaurants. Everything else is secondary. But I swear in New York, it's like the state is... All Indian restaurants in my book have a Michelin star, okay? Because I love Indian food so much.

2:18:21Why St. John a Clever? I read it, I listened to a podcast. That podcast, I'll send you a link about the mechanics of a Michelin star restaurant and how much money they actually make. And he goes... There's someone actually making a documentary about this right now. Oh, that would be amazing. Yeah, but what he says is if you lose a star, that the loss of a star is so fucking detrimental to your business, than actually gaining one it is. There are people who actually want to opt out of the whole system and actually decline. Well, St. John kind of basically hide the fact that they've got a Michelin star, the one in Smithfield Market.

2:18:54And I think that's fucking clever because they're building a business. They've got a Michelin star. So you could go to the Michelin guide and find St. John, but they never... Don't say... Let's shut up about this because I don't want to ruin it for them because I'm very fond of that place. Yeah, yeah, yeah. But that is ingenious. So clever to almost hide that. So you're a hostage to fortune, you see. Yeah, and also there's a restaurant in... Where was Shakespeare born? Wherever that was. Stratford-on-Avon. Yes, yeah. Where they lost the star and it just completely decimated their business. Because you basically lose the star, lose the status.

2:19:27It also forces you... Because what makes a Michelin-starred restaurant may be at odds with what consumers want. Particularly as eating out becomes less of a special occasion. thing right and it forces you to serve the kind of food in the kind of environment which actually okay I mean I had a friend who actually I can't remember what it was but he was he was in Los Angeles and basically doing a whole load of business and forced to eat at fancy restaurants for sort of five nights in a row and he said he was craving beans on toast by the end of it you know those kind of meals aren't the kind of meals you want to have all that often I have met really rich people who basically seem to eat in Michelin-starred restaurants all the time.

2:20:13And I find that deeply weird because it's not a kind of food that you want routinely, nor is it the kind of environment that you want to eat in routinely either. It may be that they do that because when you do that, you bump into other very rich people and it's quite valuable. And that was to some extent the value of the Concorde, which is it was an economy class flight. Bloody hell. It was an economy class flight. you're basically seated like easy jet but on a plane full of really rich influential people so in business class or in first class it would be absolute social anathema to break into conversation with your next door neighbor but on the concord it was actually discourteous not to do so because you were rubbing shoulders with them and so part of the value of the concord was as a kind of a networking device at 55 000 feet um so there may you know there may be an element that people go to those restaurants because they bump into their other super rich friends and then end up doing deals but it doesn't strike me as a way that a normal person would want to eat because you need to you need to give specialness a degree of rarity and scarcity and that raises questions like my daughter is always convinced that five guys has over expanded she thinks that it's okay to have a few five guys in london it's probably okay to have one in birmingham glasgow newcastle but once you've got a five guys in tunbridge wells it's lost a bit of its oh shit there's a five guys i better go while i've got the chance and therefore become now i i i don't know if she's right or not but it's an interesting observation well in and out and of course private equity often forces these brands to over expand consequently they lose some of what made them special to begin with that's why i love in and out the fact they just constrict they They won't expand.

2:21:57I've been in Arizona. California. I think it's because they've got their own beef herd, if I'm right, and they won't open anywhere where the beef can't be served fresh. And consequently, I think they've made their way into, I think you can get one in San Antonio, Western Texas, New Mexico, I think. But they won't go to the East Coast. Yeah. Something similar, actually, with White Tower, which is a very, very... White Tower? Okay. Okay. It's basically before there was... White, as in... White's Tower, before there was McDonald's. Sorry, I'm talking bollocks. White Castle. Oh, is that Harry and Kumar?

2:22:30Get the money to you. Yeah, yeah, yeah. I don't know why I call it White Tower. I'm talking, I'm getting senile. White Castle, before there was McDonald's, before there was Burger King, there was White Castle. And it's an extraordinarily interesting story. The reason it hasn't expanded that much is because it's family owned and they don't want a franchise. They have franchised, but they don't want to do it. and they also confined themselves to a pretty strict geographical area, although apparently the sliders are actually buyable in shops. What they did, we assume that the burger is kind of like this innate American food item.

2:23:10However, if you read the history of White Castle, at the time they started, one of the reasons Americans are probably fixated with steak is that minced beef or minced meat of any kind had been majorly discredited by a book in about 1916-17, I think, by Sinclair Lewis, if I've got that right, which was inside basically an expose of the Chicago meat and meatpacking industry, where he revealed that basically whenever you had minced beef, loads of other things, it was a bit like the horse meat scandal, loads of other things were always being mixed in. and so minced beef was kind of discredited which may explain partly the american obsession with steak because they had a much more centralized meat industry than the british did you know your butcher would probably mince the beef locally right whereas in america the whole thing was based around this kind of massive like cheese and beer you know it's wisconsin or whatever you know very very centralized and white castle basically did something very clever they made the restaurants incredibly clean uh the staff were dressed in these kind of paper disposable clothes and i'm pretty sure that the beef was ground on the premises within the presence of the customer and so they effectively resurrected the burger it was their marketing prowess which took a despised meat form and made it acceptable that's crazy so so in a sense they're the kind of how would you describe it they're the kind of john the baptist to mcdonald's jesus my wife's gonna kill me okay but but but um that you know that this was an extraordinary piece of psychological innovation which realizes that there's something that everybody likes to eat but they don't trust it so the first problem we've got to solve is not actually a logistical problem or a supply problem the first problem we've got to solve is a psychological problem which is mistrust of ground beef there's a restaurant in called what time does the online gig start 12 okay so no I've got another 7 minutes 6 minutes yeah I do want to go to the loo yeah yeah that's true I don't need to poo or anything sorry we'll try we'll just try if you've only got a couple of minutes, let's do some quick questions then.

2:25:39So I had Seth Godin on again the other day, which was fascinating. I asked him a question, which is what was the rule of marketing that was around 400 years ago that will still be around in 400 years? I'd love to know what those are for you. Be famous. And it's so banal that we forget to say it. Advertising agencies feel stupid saying, we're going to make you famous because it sounds like it's sort of banal. Instead we say, you know, we're going to reposition your brand as a da-di-da-di-da, okay? Right? but fame compounds and fame also takes you through various interesting thresholds of growth where you don't have to find your customers your customers find you when you call someone they return your calls people come to you offering to work for you rather than you having to find employees that fundamentally people work for you for longer because your you know your name on their CV may have some value to them etc that fame is completely wrong to look at advertising investment and fame on the basis of a crude ROI because fame is not an in fame and therefore marketing expenditure is not an input with a with a single result it's a lubricant it's a catalyst okay the best definition I ever remember this a guy called um Johnson I'm just trying to remember what his first name is who wrote a book called brands that mean business and he said having a great brand is like playing the game of capitalism on easy mode everything you do it isn't just selling everything you do is just a bit easier a bit more forgiving requires a bit less work than if you're playing the game on hard mode which is when you don't have a brand that's almost links back to that so going we spent some money on advertising and the effect on immediate sales was x is a complete underestimation of the value of fame building activity that links back to that sort of ecosystem of the restaurants we talked about earlier of having your halo effect of your Michelin star restaurant and your pub you know the fame from the halo restaurant what you're doing is you're recirculating fame okay and absolutely right and actually some things you may make a small amount of money from but they may be producing a lot of fame yes okay so yes if you go and do talks it's very well paid okay but writing a book and talking about it on a podcast is actually enabling you to make that money from giving the talks by making you more famous.

2:28:05Right. Final question. And businesses are so obsessed with divide and rule. What do you mean by that? Well, taking every component of a business and demanding that it maximises its own internal profit without consideration to the contribution that might be making to the rest of the system, that often, you know, I mean, I've managed to solve, you know, I've managed to win this argument. But Ogilvy, you know, it would be very easy for Ogilvy to say, why are you going on a podcast? They're not paying you. OK. And so consequently, you know, I don't think any business has a proper calculus of the value of this stuff.

2:28:46I think that every single way in which they calculate it, designed by kind of reductionists in the finance department, serves to underestimate the value of marketing. One final thing. um yeah so book book the ape that understood the universe great book um you know that opening chapter is the alien coming down yep and he's like what the fuck is humanity right um ask this to seth like how would you explain the role of marketing uh to um on human nature to an alien it goes way back beyond beyond when they were humans okay this is the necessity in any in any environment or ecosystem where in where just where individual where choices can be made particularly that means one with movement okay it is the necessity to communicate that in advance of what in other words a bee can travel to a large flower with big petals in the confident expectation that the journey will not be wasted because a flower that didn't have much nectar or pollen.

2:29:55Now, there are orchids which fake this. There's fake advertising in nature. Which is? Scam advertising. The orchid looks like something that's attractive to the bee, but it doesn't deliver any nectar or pollen or anything of any value. So that's basically scam advertising. Orchids are scam advertising in the plant world. okay however the confident expectation is that unless it was it had enough nectar pollen or whatever it is sufficient to attract repeat business repeat visits from insects it would not be worth the while of this plant investing in petals to advertise its presence and in the same way if you're doing car advertising it would be uh if this company spends five million dollars advertising this car they would not do that if on test driving the car i discovered it was shit so at the very least i can confidently believe it may be worth test driving this car given that the investment in upfront communication costly signaling okay is a reliable indicator of a seller's confidence in the popularity of their product in some way now if you want another example of costly signaling by the way that every single sodding podcast we have the technology to have lapel mics invisible microphones right okay um every single podcast has people sitting in front of expensive microphones which is a way of saying i'm so serious about this shit i've actually spewed you know a few grand on recording equipment this is this is totally pointless there's No, there's no...

2:31:36Absolutely no. Sorry, I might be causing offence, but an awful lot of this stuff, okay, is just, ooh, these must be serious podcasters because they've got a big microphone. Well, I remember when I interviewed James Smith, who's Chris Williamson's business partner the other day, and it was the first time we'd used all this kit in BrewDog and eat straight away, because you're better to have it than to not, but as last time we recorded an iPhone, right? And I think it works fine. Yeah, yeah, fine. But when he came in the room, the first thing he said was like, yeah, you're proper podcasters because the SD card's in there.

2:32:12And that's like a little status signalling thing. A sure mic is status signalling. Yes. You know, it's so interesting. Right, you've got to run. I've got to go. I've got to go. But this has been absolutely fantastic. What a pleasure. Thank you so much. I've got to go upstairs. Thank you so, so much for listening to the podcast. I really, really do appreciate it. If you liked that episode, only if you liked it, please do give it five stars. Subscribe. tell all your friends families foes next door but one cat dog whatever please tell everyone about this podcast it means the world to me and i really want to understand what your pain points are as the new wave of challenger food and drink brands please do hit me up on linkedin search damn pope and hopefully we can together create a more meaningful and powerful podcast for the next wave of challenger food and drink brands thank you so much