Sizzle and Steak

Supported by Greenhaven Road Capital, finding value off the beaten path.

Rory Sutherland makes a good point. He notes that if you get into a great restaurant but it smells awful you’ll have a bad experience.David Ogilvy understood this too. Terry O’Reilly’s Under the Influence podcast is built around this idea and he says; “the reason people choose certain brands has little to do with how something functions or how something tastes, because with so many categories we drink the label and smoke the advertising.”

These men are marketers. They sell the sizzle, and it’s just as important as the steak.

The Mona Lisa is a great technical painting but she has sizzle too. For a long time, she was merely a Renaissance painting. Then Napoleon hung her in his bedroom. A century later someone stole her. Picasso was suspected, then exonerated. The painting returned. NPR explains:

“Before its theft, the ‘Mona Lisa’ was not widely known outside the art world. Leonardo da Vinci painted it in 1507, but it wasn’t until the 1860s that critics began to hail it as a masterwork of Renaissance painting. And that judgment didn’t filter outside a thin slice of French intelligentsia.”

Joel Greenblatt has sizzle with his steak too:

Josh Wolfe told Patrick O’Shaughnessy that the best entrepreneurs have sizzle and steak.

“There are amazing credible people. And there are amazing salesmen. And sometimes those two people are one. When they are you have an amazing entrepreneur. But often times they’re not…You need a marriage of both. You need a storyteller and you need an operator.”

Sometimes it’s hard to match the sizzle with the steak. On Wharton Moneyball (April, 2018) the foursome talked about uncertainty in sports. Uncertainty is hard to sell. Yet life is uncertain.

One reason sizzle and steak are both necessary could be related to Clayton Christensen’s Disruption Theory. Disruption occurs when one feature of a product becomes good enough and consumers switch their preference but producers don’t. The mp3 dominated because it sounded good enough. The key music metric shifted from quality to portability.

But the relevant feature isn’t always quantifiable. When Warren Buffett considered his investment in See’s Candy, he wrote to Charlie Huggins in 1972, “Maybe grapes from a  little eight-acre vineyard in France are the best in the whole world, but I have always had a suspicion that about 99% of it is in the telling and about 1% is in the drinking.” Once something tastes good enough it’s about the label (“with so many categories we drink the label and smoke the advertising”) that influences how we spend/Spent.

All sizzle no steak is derogatory but all steak and no sizzle isn’t better. Jocko Willink is fond of talking about the dichotomies of life; leadership, courage, and curiosity. The best answer is often; it depends. Situations dictate actions and that’s true here too. Some businesses need more sizzle, others need more steak, all need some of both.

The good thing is that more sizzle isn’t difficult. At Basecamp, they do this by coding good software and writing about work. David Heinemeier Hansson calls the sizzle “teaching”, and says, “every business is interesting in some way.”

The good news is that there are different forms of sizzle for different kinds of steak. The better news is that sizzle is achievable for anyone.

Rory Sutherland has another good point. Improving sizzle is a lot easier than improving steak. For example, what if trains were nicer instead of faster. “It doesn’t matter if your journey is three hours or two and a half if it’s useful time.” Better stories are easier than better tracks.


Thanks for reading.


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