Featured Youngling & Feynman Essays:
This is where most entrepreneurs find themselves, fighting for the middle, the average.
Average prices. Averages products. Average clients. Average everything.
In physics, it’s often possible to describe a process accurately with comparatively little data. In the world of business and human behavior however, that’s rarely the case. Pretending that’s not true leads to inaccurate models with little predictive power.
There’s a tremendeous misconception in the world of marketing today, that marketing is engineering. It’s not. It’s much more similar to comedy than it is to engineering. Forumulas fail due to anti-network effects among other reasons and there’s a huge part of creative value creation which is increasingly overlooked in our ‘overly reliant on logic’ society.
Today’s TLDR expressed in a single sentence is: ‘’Try seemingly stupid things as long as the business risk is non-lethal.’’
We’re cargo culting startups. We copy all the things successful ones do, but we don’t do the things which actually matter.
The advice we receive, while well-intentioned, is often more harmful than helpful.
‘‘The biggest problem with market research is that it all comes from the same place: the past.’’
- Rory Sutherland (Vice Chairman, Ogilvy)
In many situations, such as the development of a contemporary marketing campaign or the birth of a new business model, there’s a decrease in effectiveness as a function of the number of people who copy that approach. I’m calling this phenomenon ‘anti-network effects’.
Are your processes serving your customers, or are you trying to force your customers force to serve your processes?
Why we can’t always trust the past to inform our decision-making process for the future.
Fewer people, better.
Not more people, worse.
Science relies in large part on replicability.
Business does not.
Copying is a zero-sum game and all participating players will compete profits away until they reach a Nash-equilibrium.
There’s a good chance working longer hours decreases your productivity and increases the mistakes you make.
For people in intellectual and emotion labor based fields, there’s a good argument to be made for working 4 hours a day.
Focussed and deeply concentrated.
Boiling down this entire series gives us two questions we must ponder:
If I put a dollar in the revenue engine how much do I get out and when?
If we disappeared tomorrow, would our users be deeply sad?
According to utility pricing, the simple act of having Sally grab the expensive 20k tv and placing it next to the 2k one should not have any impact on consumer behavior and yet we see it clearly does.
The minute we start messing with the choice architecture and the context in which we present things, we start influencing the very way it’s perceived.
The world’s happiest countries have high GDP per capita, and most of the least happy are very poor. But the correlation is far from perfect.
When we design physical products, we have no problem designing it for the way we’ve evolved.
We didn’t get legs so we could pedal bikes. We didn’t get arms to steer.
Yet we make our products work for humans the way they are.
Then why do we refuse to do the same thing in psychology?
there’s tremendous value in doing the opposite, minimalism. Figuring out how you can improve the product by removing things (simplify) vs. adding things (feature creep).
When we realize that the science we need to understand human behavior is more like meteorology rather than Newtonian physics, it’ll become more acceptable to test counterintuitive things.
I believe there are 2 main ways to create economic value:
You can figure out what people want and supply it.
Or you can determine what you can supply and figure out clever ways to make them want it.
Mathematically speaking, they’re indistinguishable.
We deal with humans. Humans with emotions. Humans that behave irrationally.
Humans that make illogical decisions which they post-facto justify by rationalization.
So you end up never testing things that seem illogical but might actually translate into massive user happiness.
We're rebels, misfits and outliers.
We're the ones who're trying to find that very process others will later implement.
We are the explorers.
This means you measure once and cut twice. You GO! You ship!
Because most are trained by traditional education or by copying what others are doing with the main focus being sales.
But as we discussed many times, revenue is always a lagging indicator of a job well done.
In order to actually sell, one must first have a prospect’s attention and interest.
Maybe, just maybe, the goal shouldn’t be to maximize the number of people going into the funnel while pummeling them with high-pressure sales tactics and scarcity until they buy.
Chasing revenue results in losing revenue.
That's because revenue is a lagging indicator that reflects how much people love what you're making / doing and how good you are in capturing a subset of the value you've created.
Give people what they want not what they need (or what you think they need). If you can find a way to mix the 2 go for that. Always be ethical and don’t optimize profit by selling horseshit even if they want it, if you can’t get informed consent. You have a responsibility to make stuff people love but also to make their lives better and that starts by being honest.
‘‘But Ford's tone-deafness hurt the company when GM listened to customers and gave them “A Car for Every Purse and Purpose” in 1920.’’
‘‘The only good reason not to listen to your tribe is because you suspect you can create something they''ll love even more.’’
‘‘Vision, can cast a blanket of false certainty over assumptions that are flawed.
The longer we focus on our vision, the heavier that blanket becomes and the harder it becomes to see the truth underneath. Which is why innovation almost always progresses by the death and not the evolution of the incumbents.’’
‘‘This essay can be boiled down to a single yet extremely crucial insight:
Force your business model to fit your customers, don’t force your customers to fit your business model.’’