What most people miss about marketing | Rory Sutherland (Vice Chairman of Ogilvy UK, author)

25:59You know, they actually said not not those kind of metrics of, you know, speed and you know, efficiency and how many deliveries did you make? But the way in which they kind of define customer service and, you know, this would apply to call center staff as well is, you know, you know, imagine treat the customer like you're talking to your grandmother. I said, there are lots of different ways you might talk to your grandmother, you've all got different grandmother's, etc. But basically everybody knows what that means. And similarly, you know, make your mum proud because effectively the brief. And I think, you know, I think undoubtedly, you know, one of the, there are two great virtues to this, one of which is that the metrics often actually get gained or they lead to a complete distortion of behaviour.

26:45The second thing with metrics is that either people gain them to their advantage or they obey them, but find them stupid. But the loss of autonomy that results when you're simply chasing a few metrics. Imagine what it's like to work in a call center where you're basically incentivized to get the customer off the phone as quickly as you possibly can, okay? The loss of autonomy and judgment that that betokens, I think. And that, that, you know, is deeply depressing, it's deeply demotivating. So a final case of that is Zappos, we're talking to the fantastic guy who is, I think cheap marketing or operating officer for Zappos.

27:29You won't believe this. I think that he refused to make speed a measure in the call center. He said the call is as long as it needs to be to solve the problem. And they had one extraordinary outlier, which was something like a customer service call, which was seven hours long. Okay. Now, I think it involved a couple of bathroom visits on both sides. I have no idea what the problem was. Actually, that was almost a point of principle that if it takes seven hours to solve the problem, that's how long he's fend on the line. And so this, this, this business where in the urge for quantification and the urge for what you might call desiccologization of problems.

28:13In other words, you define them by entirely objective non -psychological, non -emotional measures. We've actually made, we've actually created what I call Soviet style capitalism. You know, it's deeply demotivating. It's all about kind of, you know, quarterly targets, quarterly targets. I mean, at least the Soviet Union had a five -year plan. Okay. We've got these stupid quarterly obsessions with, you know, revenue for, you know, are meeting our forecast that quarter two. Okay. And effectively, people feel it's like metropolis and people feel fundamentally dehumanized by this. And, you know, and the persistent cost -cutting has effectively destroyed much of the pleasure of the workplace, I think.

29:01You know, because there's no discretion. There's no sort of discretionary judgment allowed anymore, because someone saw any deviation from this imaginary optimum as being a cost. And, you know, we, we go into work to some extent to exercise our humanity, you know, and that would include not only economics or reason or logic, it would also include things like ethics, for example, what's fair? And, you know, this attempt, the great fellow Canadian philosopher, I didn't really know much about that I came across him in a festival in Wales where he was speaking called John Roston Saul, who writes, he writes actually, I wish I'd known about this when I wrote my book, because it is kind of, there's a book famously called Pascal's Bastards, I think, Voltaire's Bastards.

29:54And it's all about how effectively the French, you know, the French as distinct from the Scottish Enlightenment basically became fixating with reason, which is one of kind of what he calls seven six six human skillsets, I think ethics, memory, instinct, creativity, you know, he lists about six human qualities. And what happened with the, you know, effectively with the French Enlightenment was that they became utterly fixated with reason as a problem solving mechanism to the exclusion of anything else. And he said, it's not designed to be used in isolation. You've used this term psychological psychology, psychology, a few times.

30:37Psychologic, yeah. And psychological, yeah. In other words, there's a different, there's a different kind of mechanism for logic and decision making within the evolved human brain, which is actually quite a lot more nuanced and more sophisticated than the kind of mechanisms for decision making that economists theorize. You know, because it has to account for imperfect information, it has to account for variance in outcome, it has to account for asymmetrical information, and it has to account for imperfect trust. So, you know, we've evolved to effectively operate in decision making under uncertainty, the Herbert Simon call it, and yet most of the actual design of procedures that we encounter are designed for effectively informational decision making under certainty.

31:31And that's a very special case, which actually never applies completely, I've argued, but certainly very rarely actually occurs in the real world. It mainly actually is found in kind of economic models. You have a really good insight into why we think in this irrational illogical way, which I love, I think you talk about how if we were, you know, evolving in the savannah, if it animals very predictable and very logical, they're a lot easier to cat. Yeah, yeah, can you just talk a bit about that? No, no, no, no, no, no, no, no, I mean, things like, you know, the ability to behave irrationally, you know, okay, there's a claim, and I, by the way, of all the negative reviews I get, they weren't where I expected at all.

32:13There's about three pages in the book where I basically say being a bit doubled Trump has its virtues, okay, which is that no one's going to dick with you because they're not entirely sure what you're going to do. Now, bear in mind, okay, this is not mean I'm absolutely an uncritical admirer of the, of the doubled, okay, far from. But the guy has operated in like the New York Rethaste scene for quite a long time, and one of the things you've got to learn in that business is, you know, no one's going to survive in New York real estate if they can actually predict what you're going to do. Okay, right, okay, I imagine, okay, that is not a world where being completely consistent, the logical, never losing your temper, never walking away from a deal, etc.

33:04You know, none of you, you have to be able to play those game theoretic kind of moves, okay. And there were people who basically encountered this thing, maybe I should have put it right at the end of the book, and I put it somewhere early on, who were then driven practically insane by this assumption. But the fact remains that, you know, there are certain circumstances in which the ability to behave irrationally is actually at the meta level highly rational, you know, the fact that, you know, okay, okay, if I'm never going to fight back against anybody who slightly taller than me, very rational, but I'm going to spend my whole life being dipped around by people who are quarter -wimmed, you know, higher taller than all right, very rational, okay, they're bigger stronger than me, never do anything to retaliate, okay.

33:55Yeah, yeah, but no, okay, we have to have some degree of Darwin spotted this, some degree of kind of random number generator in our maker. And the classic example of this, which is I learned from Robert Trivitt's The Evolution of Aurologist, is that when a hair is being chased by a dog, it goes into this incredibly random pattern of movement where it will kind of zoop straight up in the air, it will suddenly do a 90 to return to the right, it will then suddenly double back on itself at huge speed. And it appears, I don't know how they find this out, that it doesn't actually know what it's doing, that there's a kind of random number generator in the hairs, I think it's called in submarine warfare, it's called doing a crazy Ivan, where you just execute kind of crazy manoeuvres, they've was at the Russian submarines when being pursued by American submarines, would do something called a crazy Ivan.

34:48And the hair has the equivalent thing, which is basically it just enters this random movement high speed mode. And the point is it can't consciously know what it's going to do next, because the dog would then learn to anticipate what it was doing. It has to be random, and it almost has to be unconscious, because the hair cannot give away any telltale signs of what its next move might be. And so if the hair knew what the next move might be, it would actually start to reveal preparatory muscular movements, which the dog could learn to read. So there are other reasons, I mean there are other reasons why we need to be irrational, far less controversial, you know, or far less survival dependent reasons than this.

35:35For instance, the exercise of social intelligence, we have two very strong inbuilt, we don't utility maximize, we have two very strong inbuilt default modes in the human brain, one of which is habit, do what I've done before, and the other one is social copying, do what everybody else seems to be doing. And they make extraordinarily good sense in evolutionary terms, because an organism that had to learn everything from first principles would eat a hell of a lot of poisonous berries, rather than going, look, I'm always eating the yellow berries, I seem to be fine, I don't have the shits, let's just stick to the yellow berries.

36:13Well, unless there's a massive shortage of yellow berries, that's probably a pretty good idea, or equally if you find yourself in a new environment on new habitat, and all the other primates, reaching the purple berries and nobody's touching the yellow ones, in that environment is probably a good idea to copy them, because there's extra intelligence there, in other words, I can learn effectively from copying my past behavior or copying the behavior of others. I can actually, it's a fairly low cost way of discovering low downside behaviors. And by the way, very interestingly, actually was an AI, which actually went into investigating what would be necessary for more people to have solar panels and more people to have heat pumps.

37:01And it is not telling the environmental benefits, it is not telling them how much money they'd save by having a heat pump. No, the single thing that would persuade people to have more heat pumps is if three people on their street had a heat pump. Now, to an economist, that drives them practically insane, because they go, no, no, no, no, the behavior of your neighbours should be entirely relevant. You know, you should simply do the maths and calculate how much you'd save, compare that against the return you get in a high interest savings fund, and then decide whether the heat pump is worthy of the investment.

37:36But that's not how we work. We're not prepared to be the first person, you know, with the worst solution, with electric cars. There's probably a very strong heuristic, which is every consumer's learnt whether it was computers or DVDs or cassette decks, or you know, fax machines or actually washing machines, okay, but going back, okay, with anything electrical, it kind of pays to wait, because they get better very quickly and they get cheaper very quickly. So are people wrong, therefore not to make that decision? Well, no, what they're doing is they're learning, but you know, heuristic from past experience, which by the way, when it applies to anything with a plug, it's been pretty much proven, you know, I have friends who bought the early flats for intelligence, and they've had thousands and thousands of dollars for these things, and you go into their house, you've got that shit, okay.

38:35You know, so I mean, an awful lot of these things are in, you know, instinctive intuition that we've just learnt through experience, and we don't know what the future's going to bring, but actually, it is what you might call decision -making based on a reasonable expectation of something. This episode is brought to you by Koda, and I mean that literally. I use Koda every day to help me plan each episode of this very podcast. It's where I keep my content calendar, my guest research, and also the questions that I plan to ask each guest. Also, during the recording itself, I have a Koda page up to remind myself what I want to talk about.

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40:32You're basic premises. Too many of these are just very rational, logical approaches to a solution. Why is it so important to think outside the box like this? There's a joke in the UK. It's less true than it used to be because there was a famous actor called Jean -Claude Van Dam, who was known as the Muscles from Brussels. But the old British joke 20 years ago was that there are no famous Belgians. And it's a bit weird. Why are there no famous Belgians? And it turns out it's a bit like why there aren't very many famous Canadians. And the reason is, if you're a famous Canadian, everybody assumes you're American, and if you're a famous Belgian, everybody assumes you're French, unless you're a painter from the Middle Ages, in which case you're not called Belgian at all, you're called Flemish.

41:16Okay? There are actually a lot of famous Belgians, but everybody assumes they're either French or they're called Flemish because they painted in the 16th century or something. And interestingly, for the same reason, there aren't very many famous marketing campaigns to launch new innovative products. Because when a product succeeds, everybody forgets the fact that it was the marketing that was instrumental to its success. When I say marketing, I mean, it's why the sense. I don't just mean the advertising, the communication, I mean the positioning. We tend to look at great products. We go, you know, iPhone, okay, the Ford Model T, okay?

41:56And we tend to go, everything was a bit crap. And then Henry Ford came along, Steve Jobs came along, and they had this invention, and everybody immediately saw that this was brilliant and they went and bought it. I've got a verse from 1916 advertising the benefits of electricity in the home. In fact, that was an advertising campaign that went on for about 30 years. I spent an early part of my working career in advertising persuading people to get the internet in the late 1990s, dial up internet. Now, we forget all that because when we look back, we kind of constatine a history and we go, there was no internet and then Tim Berners -Lee came up with a web and everybody wanted the internet.

42:34No, 20 years, okay? I mean, you know, there are, I mean, okay, the mobile phone was freakish because that was actually driven by social pressure in part. You know, you had no, even people who didn't really want a mobile phone ended up having to get one because you look like a minimum art cell when people said, what's your mobile number? You couldn't give one. And also it became impossible to meet your friends, right? Because they said, okay, I'm not sure which pub we're going to, but we'll ring you on the mobile. If you said, I haven't got a mobile, people will go, we'll solve you there. Okay, but I give most of these things including smallpox vaccination, okay?

43:11Edward Jenner, who basically came up with the cowpox as a vaccination against smallpox, which was the, you know, absolute plague of the 18th and possibly came to a new world. I'm not quite sure, but it was absolute plague about the 17th, 18th and he came up with his basic vaccination thing, huge opposition, unbelievable skepticism, massive suspicion. If you don't, that anti -covid vaccination or something, this was on a par with that. His marketing crew was getting the British royal family to vaccinate their children, I think. Okay, now, so what we're saying is that first of all, when products succeed, we forget the extent to which marketing was actually instrumental or decisive in their success.

43:58I mean, let's Steve Jobs was not a technologist. He was a pitchman. He was a hutchster. I mean, this is compliments, okay? He was a brilliant salesman. He was a fantastic marketer. The tech people at Apple didn't respect him. They said, I don't get what Steve even does like he can't even go. But he was absolutely brilliant and everything from product design to focusing on a limited number to extraordinary taste to giving those presentations and selling things as a magician, eventually. Making everybody believe that Apple was capable of magic and therefore you didn't need this Gibson. Now, so first of all, marketing players and timing and luck, by the way, let's also include those.

44:45These other factors play a much greater role in both the speed of adoption and the success of adoption and anything remotely newer. But in hindsight, we forget the marketing and we don't say, we never say, because of the great marketing, I bought that product. We go, I bought it because it was a great product. We thought it was a great product because of the marketing. We had to persuade people to get an interest. We had to persuade people to vaccinate against smallpox. Penicillin came up against a lot of hostility and very early stages. Now, also, let's not forget we're only looking at the successes.

45:25I think they've been great products, which are genuinely intrinsically a good idea. I mentioned Metaportal TV. I'd also include Google Glass. I'd also include the Wine Box. I'd include the Japanese toilet. Okay, right? I'd include the air fryer until recently. Right? These are all utterly brilliant things, but it took, in the case of the Japanese toilet and the Wine Box and Google Glass, something about the timing or the marketing, not the product, something was wrong, and the consumer basically never bit. It never reached critical mass. They didn't somehow they couldn't cross the chasm of the earlier doctor.

46:03I still think it's barbaric. I've got a Japanese toilet here. I don't have one in my other little flat. It's barbaric that the Western atmosphere dry wipes. Right? The whole of the Middle East has a bun gun. In Japan, your lavatory quite rightly cleans your rectum with water as God intended. Okay? And for some reason, we in the sophisticated West, they were the dry bit of paper, scraping it up over our anus. This is medieval. Okay? I mean, think about other things, right? Nobody, house keys. You compare how easy it is to get into your car. You've got some keys somewhere in your person, in your handbag, in your briefcase.

46:42You're not really sure where the keys are. You walk up to your bloody car and you open the door. Your house, it's back in the 1720. You've got a rack on some metal things to get into the house. Why? House building. Okay? I mean, house building, the way we build houses, will be recognizable to a Roma. Although the Romans never invented the stirrup. Do you believe that? They did. They did actually have a stirrup for horses. So you basically had to click on with your knees. Oh, okay. So what's so fascinating, the wine box, by the way, really fascinating to me because in a larger world of the Kindle, it's only really, you know, it's kind of taken up to a, I thought where the Kindle and Tablet came along.

47:28I admit this, other, okay, well, that's the end of the fling line for physical books. And Fedas, I travel a lot. So I have quite a lot of ebooks because I can then pack one tablet in my bag. I'm carrying a library around with me, which is, you know, quite a long plane flight. It's not better than having to pack eight books and decide which one you're going to read when you get there. But if you don't travel around, people seem to refer physical books, for example, people like these things actually, like the, what's that funny, Scandinavian thing you write on? You know, that pad. The remarkable.

48:00Remarkable. The remarkable. Okay. People like that actually because it allows you to do less. Okay. It allows you to concentrate because you don't get emails, you don't get a place in the, you know, we should, it keeps for weeks. Okay. It's got its own tap. You can have a glass of wine in the evening without opening a bottle and letting the other five, you know, five glasses go off. You're not forced to become a raging alcoholic if you live alone, which you kind of are with wine bottles. Okay. But all of these things, vastly better, you know, keeping the fringe down, you done it out, all they did.

48:40Didn't see it entirely psychological. You know, in terms of logical, you know, products, and I'm also stressed, you know, I mean, the Japanese toilet, one of the hells that, you know, I looked at you recently at the most expensive flat in London, which is someplace in Night's Bridge, which is going for like a 110 million dollars or something. I had, you got to wipe your own ass. Okay. I mean, it's 110 million for this place and the toilets. Now, I imagine if there's a Middle East now, they'll go and retrofit some bungalows in there. There's a lot of flaming weirdes that happen. You know, I mean, seriously strange.

49:21And you realise that actually, you know, I mean, Google Glass, I mean, it was kind of marketing cock up. They launched a bit too soon. Then they only gave the bloody glasses to developers. Now, with the best way of the world, developers probably aren't the worlds like coolest people. Okay. They're not the people you want to have walking around your bar, wearing Google Glass. The user imagery wasn't that great. And so you have these really interesting phenomena. I would have bought Google Glass actually, even at the insane launch price of about a thousand dollars, because I would really, really like being able to walk around now.

49:56I don't know what, I'm talking to you now. I don't know what the time is. I don't know when my next meeting starts. I don't know what the weather's like outside. If I just had regular in -eye updates, it's a kind of heads up display for shit that's going on in my life that just reminds me of stuff. I easily pet without having to look at a digital watch, which I bought these bloody, both Android and Apple watches. And yeah, it's, I might as well get my phone out, basically. I've got an ordinary analog watch here. But actually, having something which you don't wear, which just goes you mentioned meeting starts in five minutes.

50:30The guy you're talking to is called Lemmy, you know, all that stuff. We really, really good. I have no idea whether metaphorical to you apart from this business of the privacy thing with Facebook. But if any product deserved to succeed in the pandemic for crying out loud, right? It was video conferencing on your TV and yet it just didn't. And so, you know, don't think, and the only thing I'd say is don't think because the products failed in the past that you shouldn't try again. Because you know that famous thing, you know, that the definition of insanity is trying the same thing again and again and expecting a different result.

51:07That's not the definition of insanity. That's the definition of a complex system. Right? You know, that actually, I mean, quite a lot of internet ideas failed. I think quite a lot of online ideas failed because they were just mistimed. Typically, you know, some good ideas were too early. Great little thing actually called the Chumby, which I had about three of them. And they were little internet connected devices and they just cycled through little screens, which would say like little applates, like little kind of, you're probably an iPhone user, but what we call widgets, okay, on the screen. And they go, these are the trains through your local station.

51:45They're on time. They're not on time. They're running late. This is the weather. This is the latest news, fractional, and New York times. And they just cycle through that stuff. They'd sit in a little cuddly, little thing. How about through these? I thought they're fantastic. But again, I mean, I'll give you two examples of this about timing. Right? It's 1989. No, it's 1989. Okay. I sign out a mobile phone. It's like a brick. It's made by a motor road sign out a mobile phone from the office in 1989. And because I'm going to a meeting somewhere off site, and I need to be contactable. So you don't have your own mobile phone.

52:23No, the office had about eight of them, and you sign one out. And they were kept charging in the office. You sign one out. You told your team what your number was for the day, and you said, I'm tripped. So I'm walking down Oxford Street with this mobile phone, and someone rings me. So I haven't been on the show. So I have to answer it. Okay. So I'm speaking on a mobile phone in Oxford Street, business, business streets in London, in 1989. Two people showed abuse at me from passing cars, but using a mobile phone. Second case. In, let me see if I can date this, it would be about 2000 and, I don't know, cranky.

53:01I guess about 2003, 2004, there was a company started by some American expats called Food Fairy in London. And I think it was a hybrid CD ROM. You actually had a CD ROM at most of the stuff, and you went online, you ordered your groceries, and they delivered them to you. And I mentioned to someone in two, I mean, it would have been the early 2000s that I actually ordered my home groceries on the internet, and they laughed in my face. I carried them. Literally, they went over and they said, hey, you'll never get this guy. You know, you fuck it up. This is groceries on the internet. And that was, this is my point I'm saying, is that there's this huge, huge psychological hurdle to changing behaviour or to getting people to adopt behaviour, which is slightly unusual.

53:52There was massive, I mean, okay, one story, I then bought my own mobile phone. This would have been about, this was, it was 89, I was borrowing the phone. It would have been about 95, 96 when I actually had my own mobile phone, maybe 94. I'm trying to work it out. And I'm on the top of a bus in London, and somebody rings me, and they ring me from the States. It's my friend Ted, who was a biochemist at Penn, I think at the time. And I said something on the phone, I'm sitting on the top of a bus, and I said something on a phone, which made it obvious, I was speaking to someone in America. It was like, what time is it with you or what's the weather like over there?

54:31Basically, it was obvious I was making an international call on a mobile phone, the top of the bus. I actually thought there was a mild risk of physical attack, because that was such an extraordinarily, trotty thing to do. And I suddenly realized it's because I'm old, I'm 58. I suddenly realized a lot of younger people don't have the chronological context. They just assume that there was no internet, and then the internet came along so everybody got it. The smartphone itself was not rapid. They've existed for about 50 years. You had to be pretty rich, most people were in people's cars. I saw someone with a portable telephone, I think in 1984, and that was a really weird thing, some of them out.

55:19They went fast. The smartphone was pretty fast, I grabbed that. That was a freak exception. Most of these things are really gone and slow, and also if you get your marketing wrong, or if you miss time your launch, or if you just misjudge some aspect of your launch psychologically, you can take something which is intrinsically a brilliant product, and it will fail to bite. That's why I think this is really important, because we have survivorship bias. We only look at the successes. No one's there going, I mean, certain things like, the fact that we still open our houses with keys for crying out that, you know, that stuff.

56:00I agree. I'm excited. I'm excited for the test leverage. Yeah, I'm completely, I'm completely. You've shared all these amazing examples of products that are great, but didn't work out. Many of the reasons that that happens is within a company, it's very hard to share and suggest silly ideas as you describe. And you have this actually really cool suggestion that I wanted to highlight, which is first share like the logical, rational, typical answer. And then think it's great time to think about the silly, crazy idea. Can you talk a bit about that? I just had an operation on this a little bit. Well, I got it to Herodotus writing about what is it that I suppose is the sixth century BC.

56:41It was about their fifth or fifth, I should know, certainly. The ancient Persians, when they had to deliberate, they debated everything twice, once while sober, and once while drunk. And only if they agreed in both states, would they go ahead with the course of action. Now, I don't know whether being drunk is just an opportunity to come up with a better idea. Okay, or whether it's a question of does this appeal to us rationally? Does this also appeal to us emotionally? Okay, I don't know. There's something really, really interesting about having what you might call a two stage, a double lock on decision making, which is okay.

57:19This is fundamental asymmetry, which is creative people have to present their ideas to rational people for approval. Okay, fine, don't mind that. Never happens the other way around. You never get engineers or accountants saying, well, I think the answer is 3 .75. But before I go and present this, I'm going to share it with some wacky people to see if they can come up with a neat and more cunning idea. So that's one issue. I mean, the other issue would be talking about, you know, products that fail, by the way, Ford and Edison, okay, collaborated on an early, I think the first decade of the 20th century, an early electric car.

58:00Watch this on J Leno's garage, by the way, I think that J Leno is a greater philanthropist than Bill Gates. Bill Gates is quite useful if you're an Africa, if you've got malaria or something. It is not much used to me. J Leno, on the dozens of stores, amazing cars, and then shares videos about them on YouTube. Now that's great if you're in Africa and it's great if you're me, okay? It's fantastic. I mean, I've got to see door this guy. Interestingly, the electric car, according to Leno and according to other articles I've read was actually quite good, it was quiet, it was, you know, unbelievably good acceleration.

58:37And the range wasn't terrible. And for the time the speed wasn't bad, what killed it? Interestingly, use the imagery. The use of imagery was because it was quiet you didn't have to hand crank it, it didn't give off fumes, it didn't make it loud noise, they were really popular with women and they became stereotyped as like woman's car. Meanwhile all the people doing the jloppy racing and the kind of customisation, all the farm boys were using gasoline cars. Now fast forward, what's so fascinating fast forward to 2020, I'm quite pro electric cars, I've got two and my wife has one of them in Sydney and I like them both, I wouldn't go back to gasoline because I think they're great, okay, they're lovely to drive, they're like a limousine and a low carb, they have very few moving parts, they're incredibly quiet, they're just lovely, okay, I mean just drive one and you'll see what I mean.

59:39And when I write in favour of electric cars I get all these comments in the spectator comments below of people who really hate them and when they write to me, what it boils down to is they think, it's user imagery, like Google Glass, right, and actually there's a problem with all tech products because the first people to adopt innovative products tend to be slightly weird, okay, and weird people do not confer the reassurance of kind of social norms in a way that adoption by conventional people does. If you've got your weird millionaire rich nutter and he's got, you know, he's got a wind farm and he's got a heat pump, it doesn't make ordinary people think, oh, I must do the same.

1:00:24Now what's happening here is that I didn't realise this, but all the people who don't have electric cars see the people with electric cars and go smug environmental tosser who's looking down on me because I've got a diesel and thinks he's saving the planet even though you've had to mind all this cobalt and lithium and whatever to produce the battery, what a trap. Now, the interesting thing about this, okay, is that in very few cases I can encounter, I can remember, okay, is the electric car owners actually very interested in the environment, they're not. Similarly, when you meet environmental people, okay, they don't have electric cars, they've always got some crappy excuse, like yeah, but my wife needs to do the school run and said we decided we'd get a diesel, right, I don't know why, okay, but you meet these people, you go to environmental conferences and you say, so yeah, you're really keen on the environment, you've got electric cars, well, we thought about getting them, but meanwhile all the people in like Essex, you know, Jersey, right, who just really like cars or really like tech are the people buying electric cars, it's got almost nothing to do with environmental credentials.

1:01:37And yet, by actually imbuing these electric cars with kind of preer style, you know, sort of values of smugness, it's actually a huge obstacle to adoption because people just I don't want to be that kind of person. Now actually, okay, I, when I had an electric car three years ago, there are a few charging points that there are now, but one in 80s was really odd, okay, was that if you wanted to charge in like Bill O 'Rickie, okay, in Essex, okay, imagine New Jersey, okay, imagine, you know, Trenton, okay, loads of charging places there, all right, you went somewhere really woke, you know, you imagine, you know, I don't know Cambridge, Massachusetts, whatever, right, nowhere to charge, Cambridge, Cambridge, England, absolute desert for car chargers, Brighton, which is like the most right on city on the south coast of England, nowhere to charge at but you went somewhere, you know, you went somewhere a bit playing a bit, okay, right, back, loads of charges, how the hell's going on here?

1:02:42And to be honest, okay, what's happened is we've we've imbued electric car owners with its holier than thou kind of aura, which causes other people to resent them despite the fact that incredibly few of them, all right, are really doing this for environmental reasons, they may be happy to have zero emission cars, I would like to get solar panels to charge my car, not really to reduce carbon emissions, but just because we really cool to have a car that runs on the sun, okay, I'd quite like to set up panels on my house, not really something to plan it, but I like it dinner parties to, you know, or rather, maybe lunchtime wouldn't it, yeah, to go to a picnic and go, oh no, I'm getting, I'm getting two kilowatts, okay, to be honest, that's the kind of, and actually the reason most people adopt new technology is Peacock's tale, it's showing off, the first cars weren't as good as horses and carts, they were done to show off, they were done for novelty -seeking reasons or for reasons of status display, and that's what rich people are for, they provide the early stage funding for promising ideas before they really reach maturity, it's famously the argument is that birds evolved wings as sexual display plumage before they became large enough to function as a mode of propulsion, so birds which seem to have evolved from dinosaurs for the most part, the logic is that they first of all got wings as a form of sexual display, the Peacock got the tale, okay, but most other birds did the display with the wing, the still look cool, because I think dinosaurs had feathers, they think, they're right, okay, so there was kind of sex to explain going on, and eventually they thought, oh actually, you know, I did this to show off, but I can actually get to that branch, and so there's that early stage funding argument, and what actually provides the early stage funding for new promising ideas is quite often slightly cramped people like me, but we've got to be conscious of the fact that, and also if you really evangelise new things, you know, I was an air fryer evangelist, literally going back over 10 years, 15 years ago, I was like the John the Baptist of air frives, you know, and occasionally say to an audience of 500 people, if you go, anybody here got an air fryer, and there'll always be six people going, yeah, best thing I haven't bought, okay, and it's not an air care to me, but actually in a way that that actually annoys everybody else, it's not people going, cool, these people with air fries, they really like these air fries, I may be able to look at getting an air fryer instead, it's like these people are in a cult, what you have to realise working in marketing is that people in marketing are very high in openness, very high in openness to experience, very, very keen to stand out, very keen to be distinctive, the majority of the population are much lower on openness to experience, they're much more driven by habit and social norms, and largely they want to fit in, they feel comfortable when they fit in with the people around them, it's a slightly unusual kind of corporate environment where people actually want to kind of effectively play constant gamers of one artmanship with their kind of workmates, which tends to happen in marketing and other functions, it tends to happen actually at the higher levels of corporations, but it's actually very unloved, it's actually slightly an unnatural state, so you're going to be very careful working in a marketing department or being a person who works in marketing to continually remind yourself that you're an outlier.

1:06:19One of my favourite stories from your book Alchemy was the story of the Walkman and how the engineers, basically they had the technology to add recording to the Walkman and they're just like, hey, of course we need to add a speech or we can do it about what? It would cost 50 cents because apparently they built the first Walkman on the, I think they were thinking of the Sony Talkman, which was a digtating machine, which had both a speaker and it had a microphone, and it would cost like 50 cents a dollar per unit of the Walkman to add recording function, and of course later on they did add that much later on when people were familiar with the concept, but I think it was Marita, I think it was Akiyama, Marita, that's Sony, who is the kind of instigator of the Walkman project, and he was the single driver, who said no, and they all got very upset about this because they said it could look at cost nothing and it doubles the function out in the device, and Marita said you don't want to double the function out in the device, you want the device to have one function which it performs very well, what Don Norman will call enough affordance, okay?

1:07:26You don't want any ambiguity about what this thing is for, what this thing is for is for listening to high quality music while you're on a flight or on a train journey, and it's for that, it's a personal entertainment device and nothing else. One of people started going easy to dig to phone, does it have a corporate function, you know, should I use it to record concerts, etc. Once it's got more than one function, people don't know where to start, and so I thought that was an absolutely inspired thing, which is actually, you know, in many cases, less is more, you know, in other words, focus attention on one thing, the one thing that it does, it's really good at that thing, you don't have to worry about anything else, if you want to do that thing, then this is the thing for you, and if you don't want to do that thing, then don't buy, very simple binary decision.

1:08:11The second you introduce kind of complexity into the thing, logically greater functionality should mean greater utility, which should mean greater value, but sometimes you know, as with the MacDobbles menu, okay, that was an absolutely beautiful case where they realized that, okay, it's partly about speed, it's partly about simplicity, it's partly about supply chain, but it's also about choice reduction. Do you want a big Mac, don't you want a big Mac? Whereas the American Dino, which was the kind of proceeding thing before the MacDobbles brothers came and sort of shook it all up, with those supposed to kind of Detroit model of kind of production.

1:08:48The American Dino was, you know, how do you want your eggs? You know, substitutions, you know, you know, over easy, sunny side art, poach, scramble, etc. The whole thing was about customization, and so this is what I mean, sometimes customizations are a great idea, sometimes it's the opposite. I think Tesla's quite clever in the choice architecture of Tesla's is just the right amount of choice. You don't want one color, okay, and you don't want one battery size, but equally they haven't gone silly, okay? You know, they're kind of two interiors you can choose from two size and wheels, five colors, I think five basic colors and two premium ones.

1:09:29It's about right, you know, that's kind of about manageable, you know, whereas I had a look at customizing the new electric range rover today, and it's just, well, it drives you insane, because you know, you suddenly realize you're going to be spending basically the price of a house, but the time you've added all the stuff you really, really want, you can't actually justify buying the vehicle. Okay, so maybe a last question, we've covered a lot of stuff at this point, which makes me very happy. I asked people on Twitter what I should ask you when you were coming on the podcast. And the most common question came around branding for startups.

1:10:07So say you're startup, you're trying to figure out how do we build a brand for what we're doing. Do you have any advice for early stage founders to help build their brands, drink their brand over time, something they could do early on? Very, very simple, be consistent, be distinctive, and be famous. Now, the author, we forget this, okay, advertising often talks about brand in this incredibly nuanced way about differentiation and this and then the other. You've got to be distinctive, okay, undoubtedly. You've got to be consistent for obvious reasons, okay, and you've got to stick at it visually without dicking around too much.

1:10:44But actually, the reason advertising agency is never say we're going to make you famous is because it sounds too obvious, okay, well, yeah, obviously, yeah, but then let's talk about it. It is, it's about fame, okay, in that fame fundamentally changes the rules in completely non -linear ways. So first of all, when you are not famous, you have to find all your customers. Suddenly you reach this magical sort of escape velocity of fame where people start coming to you. And they start saying, have you thought of using this for this? Or actually, you didn't think of this as an application for your product, but I've actually got this, you know, I actually use it for this, okay.

1:11:28And then you reach sort of, there are kind of levels of fame and they compound over time. It's not linear, it's not attributable. You can't really say, you know, I joke about this, okay, there are people who can attribute their fame to one single event, with monochilous ski perhaps, but it's up, okay, or serial killers, all right? Okay, yeah, if I hadn't killed all those people, no one would have heard of me. Okay, okay, there are people for whom fame is like attributable. But for most, most people, it's a whole what you might call a malgum of different activities, you know, going back years and actually, in many cases, we ask consumers, how did you hear about this?

1:12:11They don't actually know. They'll always put TV or something online, but actually they don't know how they heard about, they just kind of heard about it. And we know that people's brains react completely differently in terms of their level of comfort with things they've heard of before versus things that are completely new. It's always similar to the kind of heuristic of, you know, is everybody else eating this, have I eaten it before? And have I heard of people eating this? Okay, that's, you know, it's part of that same package of, you know, writing the motherboard at human psychology. So, fame is is completely, it basically changes the rules for everything, you know, when your chief exactly rings some of the app, they probably call back.

1:12:55If you're a famous company, if he's heard of you, or she's heard of you, she'll call back, right? If they haven't heard of you, they probably won't call back. What's that worth? It's impossible. It's impossible to quantify the value of fame. People come and work for you for less money. People actually apply to you without you having to find them. People stay longer. Customers come to you and give you the benefit of the doubt. You're allowed to cock up once. Okay, if you're famous, right? People, you know, people will give you, if you've got a great brand, the best definition of a brand is from the guy who's called Eric Johnson, I think, who wrote the book Blind Sight.

1:13:33And he's also written a book called Brands that Mean Business. It's a great book. It deserves to be much more famous, essentially. And there's a sentence in that book which says having a great brand means you get to play the game of capitalism on easy mode. I genuinely can't think of a better definition than that. Now, the point about playing on easy mode is, can you quantify the value of that? Well, no, because you don't know what your score would have been if you were playing on hard mode or psycho mode. I'm not a gamer, but you know, you don't know me. Okay. And can you also say which of your various activities contributed to that, the building of that great brand?

1:14:19Well, no, you can't, because it's actually not even, it's not even an amount of more things. It's actually a kind of concatenation. It's a, you know, you know, they're, they're, their whole thing elements here, which are catalytic. They're not linear. And that's the other thing, which is that because it's not linear, attempts to evaluate advertising on short term transactional metrics will always grotesquely undervalue the contribution of that activity to your ultimate business success. It's a bit like, okay, when I first got a pension, for the first few years brand buildings of it like a pension, right?

1:14:58The first few years I had a pension, I got a, I'm paying this guy a few under a quid a month and look, I mean, you know, half it's going commission and goes a lot of work. And I'd rather have the money to have an Indian meal, you know, I don't know what I'm doing. It's a way to, oh, look, it's hardly gone up at all. I don't, what a bore. What a waste of time. I thought that for a pension three years. I'm 58 now. And I got a pension. And I go, where did all this money come from? I don't remember paying this. It really is like that. It's a compounding effect. And everybody effectively, because we have finance and ROI and all those things, everybody's using addition multiplication, subtraction and division.

1:15:39To try and quantify the value of an activity, which doesn't, which, which actually is about power laws, it's not about that kind of linear bullshit. Okay. It's really about power laws and non -linearities and all this kind of stuff. And so, you know, we're being judged by the wrong kind of maths. We're being evaluated by the wrong kind of maths and cons, and we're, and also we're being evaluated over the wrong time frame. And consequently, my argument would be that at a very rough estimate, an awful lot of marketing activity is in reality four times as valuable for it's given, okay, I'm plucking that number out of the air, but four seems about the issue.

1:16:24It's probably four times as valuable as people think it is when they measure its short term contribution. Could be more of course. I love that because over time, it will build in the compounds. It's like a drip. The, I love the three points you made about how to build a great brand consistency, distinctiveness. What was the third? It was, be famous. Oh, yeah. I mean, consistency, distinctiveness, probably, you know, clarity, clarity, just be famous. Great. Yeah. Yeah. I mean, some sort of, some sort of clarity of promise, I think. Amazing. Consistency. I think a good brand is a sort of promise.

1:17:00But also, the extent to which it contributes to trust, okay, which is that if you met a celebrity on the street, right? Okay. Now, I don't mean a serial killer celebrity. I mean, a famous actor, okay. One thing you wouldn't think about is are they going to steal my wallet or they're going to mug me or they're going to do anything with. They met, I've lots, lots of vices, but generally people who have a lot of reputational skin in the game who've invested a lot in building up a reputation over time are going to be much more cautious about disappointing their customers or risking negative feedback than someone nobody's ever heard of.

1:17:42Right? I mean, and let's be honest, okay, it's even, I think it's even more extreme in the United States than there's in the UK. Yeah. The relationship people have with celebrities is kind of purveying weird. You know, they, you know, they imbue these people with superpowers. They're actors, right? They actually smart through the air. But somehow people treat them with this kind of reverence because they're just famous. And the point is it's kind of easy mode, you know, if you are actually pretty famous, you are playing that game on easy mode because so many things which require massive reassurance due diligence checking you take it to the board and free people on the board who've never heard of the companies that they want you to go back and check with Sonsa.

1:18:28So say, and then you walk in and you know, and it's kind of your famous, the rules are different. And when I say there are also these inflection points like escape velocity, I always say about Coke that Coke has reached a magical level of fame where it is your expectation that any shop or bar or cafe or beach land start restaurant will stock it. Okay? Another, I can ask for this anywhere, okay? And if they haven't got it, it's their fault not mine. Now that's that's really kind of negative. But equally and in B2B there's an inflection point in B2B marketing, okay? Which is that if no one ever got fired for buying IBM, right?

1:19:12We know the famous phrase. If you appoint price for auto, sorry, why or whatever, you're all it, okay? And something goes wrong. Everybody blames you for not appointing Christwaterhouse or you know, it's wrong like one of the reasons I fly with, you know, I wouldn't go on a business trip with Ryanair even though they're actually pretty good, they're very punctual, right? Is if the flight gets cancelled or delayed, I ring the client and say, I'm totally sorry, the BA flight's been delayed, okay? They go, oh, we'll never mind you, did you the best? And if I really haven't say the Ryanair flight's been delayed, okay?

1:19:58It's not quite the same, is it? Right? I haven't necessarily tried. I've kind of skimmed on that. Is it what I mean? And so you know, various things, it's not just what things are, it's what they mean and we use brands as kind of extended phenotypes to express ourselves in all kinds of ways. So this is the other thing with brands. It's not just a simple consumer, it's not just a simple business consumer relationship. They're all kinds of things as what does the brand are you say about me? It's do the people who I, who know me know what this brand means. It's no good being a luxury car that nobody that only rich people have heard of because in order to convey prestige, it's necessary for you to know that other people know that BMW as a prestigious car brand and so on and so forth.

1:20:52So there are lots of things here which are second order, third order non -linear compounding factors, okay? You know, we just have to admit, this is a different kind of maths. And yet we're being judged on a kind of, you know, X minus Y equals Z maths. Does it make any sense? Maybe as a final question, is there anything you want to leave listeners with folks that are building product any lasting piece of negative advice? Try and do the psychological and the technological and the economic for that matter. You know, in other words, the sweet spot is it works psychologically, it works technologically and it works economically.

1:21:35In other words, you can make money out of it, people want it, you know, it allows them to do something significantly by using some clever application of tech. Try and use those three things in parallel because I think what most businesses do is they try and do things in series and businesses borrow north lot from the kind of fordist, Taylorist production line mentality of the process, okay? And the process, we have to pretend that the process is linear. But the process of any kind of innovation or development is not linear. They're loads of products which, by the way, have completely failed at first iteration and then someone sold them in a different way and they then turn out to be completely successful.

1:22:18I mean, you know, I mean, the pivot, okay, is an example of that. Famously, wriggly started off selling soap powder in Chicago. Then he started giving away baking powder free to sell the soap powder and then realized he'd start making baking powder and selling that and he gave away chewing gum that went on the baking powder as a gift and then people like the chewing powder, a chewing gum, a lot more than they like the baking powder. So as a result, wriggly became a chewing gum, come for the new ad, okay? So, but we're always trying to make this thing linear because when we tell stories backwards, we post rationalize and we reverse engineer and we reverse engineer our actions to make it all seem perfectly linear and logical as a kind of sense check.

1:23:02The real process is never like that and I think you should have marketing, I think marketing and technology are two sides of the marketing and innovation are two sides of the same coin. You either, as I often say, you can either work out what people want to find out a clever way to make it or you can work out what you can make and finally clever way to make people want it. And they're actually the greatest thing managed to do both simple as that. So I don't do it one or the other, don't leave marketing to the last minute but equally, you know, work in parallel as far as you can. Working people find your book and let's start to point them real quick.

1:23:38That's stomp .com. The book's called Alchemy and it's got a variety of subtitles depending on which country you're in but if you look for Alchemy by Rory Sutherland, the audiobook's probably the best thing to buy because I actually read it myself and I kind of read it a bit from that but also available on Kindle and from all good book shops and quite a few rotten ones and there's also a book I've written called Transport for Humans, Co -written with Peak Dyson. If you're in the transportation industry, I'd recommend that one. Amazing, Rory, thank you so much for being here. Thank you for that.

1:24:10Always a joy. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify or your favorite podcast app. Also, please consider giving us a rating or a leaving review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenyspodcast .com. See you in the next episode.