Author: MIKE

Buying gas for a vehicle is both easy (finding, doing, paying) and salient (gauges as well as low fuel warnings). People need no help to fill up. However, non-consumption occurs when something is perceived as too hard or unimportant. 

Consider the barnacles on your to-do list. The ones that get transferred to the new piece of paper or system or from physical to digital and back again. I’ve had items last longer than green bananas but the end is the same for both: buckle down and get it done (in the case of bananas, bake bread). 

Eventually you do roll up your sleeves, mentally brace yourself, and collect the necessary tools only to frequently find that dreaded task takes much less time than expected. If we’d known it was that simple we’d have done it much earlier. 

My wife and I bought a mattress from an online store. It’s fine. We ordered online because the perceived ease was greater, though we found out that Amazon (not where we ordered from) raises the bar for ecommerce and other companies often fall short. Amazon shifted the line of perceived ease for online orders well south of its actual location.

Business owners, volunteers, and persons on the internet can all shift the line by raising the salience and (perceived) ease. telling stories, structuring information, or bringing attention to a situation. The history of tuna demonstrates both these points. One year the California harvest of non-tuna was less than expected and fishers faced filling the tins another way. They caught larger fish, called it ‘chicken of the sea’ and packaged it with recipes pre-printed on the paper labels. ‘Hey’ the thinking went, ‘this is white meat too’. 

This model works as a way of thinking about the world but it only works as a model. There’s no Lego-style instructions. Rather, consider the JTBD for your customer, reader, team and find ways to be more salient and easier. 

In the pay-what-you-want short reading on Tyler Cowen, we highlighted how moon affiliation (wrong reasons, right or wrong outcome) shifts the action curve down. 

Finance and fitness are nice corollaries because regular actions compound to large effects. People can also FIRE up their efforts to shorten the time. Dog walking is the ’employer match’ of the finance world.

To be heathy in waist and wallet has a cost. There’s the time it takes to educate yourself on what to do, find the best ways to do it, and work to pay the fees that allow you to do the thing you educated yourself on and optimized for. But there’s a secret to this price, sometimes it’s fun to pay!

“Buying good things can’t be the secret to success in investing. It has to be the price you pay. It’s not what you buy, it’s what you pay. There’s no asset so good it can’t become overpriced.”  – Howard Marks

This idea from Howard Marks doesn’t just apply to investing. It applies to everything.

A friend owns an RV and I asked why he chose that instead of a Hampton Inn. Well, he said, the free breakfast would be nice but he likes the campground vibe and tinkering on the RV. His price for that RV is low because he likes rewiring and upgrading the lighting.

Using this model of ‘what you pay’ the answer to vegetarianism is ‘Yes’. I like to cook, have a general idea about what to eat, and enjoy new things. It’s a low cost switch.

Another angle to answer this question is to think about the opportunity cost. Due to a medley of tendencies (née biases), we think about thing in terms of losses. Expressions like, if it ain’t broke don’t fix it, address this.

Yet, we aren’t creative when it comes to thinking about further upside. Netflix does not compete with sleep but we think it does because we think sleepily. If it’s at night and someone is in bed, we think there’s only a handful of things people might do. But the list is often much much larger.

Using the model of opportunity costs, the answer is ‘Yes’, there’s probably a vegetable based upside. Just because I don’t know about it doesn’t mean it’s not there.

Another angle is to consider the incentives. Do the people who promote doing X also benefit from me doing it? It could be that vegetarians prosthelytize because they love animals and not because eating plants is healthier. I do love my dogs but my motives are more selfish.

Using the model of incentives, the answer is ‘Maybe’. Incentives are conditional and a good default is that if I don’t recognize it, it’s working against me.

One final model is the idea from Nassim Taleb of Extremistan and Mediocristan. Most of social life is one of power laws. Fat Bottom Tails Make the Complex World Go Round. “For if the world is organized into a critical state,” wrote Mark Buchanan “then even the smallest forces can have tremendous effects.” 

For both health and wealth, the goal is to stick the landing within a certain range. According to Taleb, to avoid ruin look to the ancient examples of actions. For example, the best beverages are the old ones: water, tea, milk, wine. Vegetarianism fails this test, though it does raise the question how far into the past should someone go?

Using the model of complexity the answer is ‘Maybe’.

Luckily I’m a designer, luckily we all are, and we can prototype things. My plan going forward is to eat less meat; substitute peanut butter for turkey, nuts for beef jerky, and black-beans for taco meat (which I prefer anyway). All signs point toward moving away from meat, but not necessarily all the way.

Photo is of my daughter’s sixth-grade science experiment: what keeps mashed avocado green longest? Better than lemon juice was a thin layer of water which easily pours off. 

These are just a few models to filter the world through. More are in the short pay-what-you-want piece about how Tyler Cowen thinks. Cowen says that vegetables are better with some heat.

It was delightfully ironic. Turner Novak spoke with Patrick O’Shaughnessy and said:

“There’s ideas of TikTok for X, but TikTok can already do that. If you want to watch sports in a TikTok like setting, just go on TikTok because it will know you want to watch sports.”

…on an episode where Patrick led off talking about Bottomless, a smart scale subscription service.

I want to say one word to you, just one word. Are you listening?

Prediction.

Thanks to technology (like podcasts!) there’s been a shift in getting to consumption. In the past, we’d consume if we were told. Locality mattered a lot. In 1995 a friend said I should get Dookie. I went to K-Mart. It was out of stock. I heard Green Day on the radio, went back to the store, bought the album, didn’t like it that much.

In 1995 there was a lot of what David Ogilvy called reason why advertising. “Imagine that you’re at a dinner party and the woman next to you says, ‘I have to buy a new car, have you any advice to offer to me?’ And I tell her that I think she should buy a Mercedes Benz. She says, ‘Why a Mercedes Benz?’ Well I don’t try to put a mirage up, I give her rational reasons.”

In general, said Ogilvy, the more you tell the more you sell.

There was nothing special about 1995 other than I was thirteen and that Green Day album is my first consumer memory. If anything, the era of being told about something (at least at the macro level) was tapering off.

Being told worked for a long time because we were mostly told things by groups who we trusted. There’s always been word-of-mouth, but brands are trustworthy. If a company could advertise it showed fitness. That was information.

Then we got the information superhighway.

The internet allowed people to shift from being told to searching out. Rather than using advertising’s availability, we shifted to other forms. The internet allowed reviews, questions-and-answers, stars, ratings, lists, rankings, and more. We asked Google ‘What is the best…’.

If you do get an air fryer, opt for the bigger basket.

In 2020, we can search and be given ‘reasons why’. In 2020, we use Amazon, Google, and Instagram.

In 2020 time, we’re also seeing the rise of prediction. Bottomless predicts when you need a refill. TikTok predicts what you’ll watch. YouTube suggests next videos. Netflix has always done this.

In 1999 Reed Hastings spoke to Sarandos about Netflix. The company, Sarandos recalled to Katie Couric:

“Was about a marketing move. Back in those days, studios argued about digital distribution; who is going to pay to retrofit theaters for digital? But the cheapest thing a studio does is mail prints around, what really costs a lot of money, and is inefficient, is marketing. If we can get tasted-based merchandising of ‘You’re going to love this movie!’ And you dont’ have to spend tens or hundreds of millions of dollars on marketing, you can change the P/L of every studio in the world. Taste based picking has been at the core of the business from the beginning.”

In 1975, film critic Roger Ebert won a Pulitzer Prize for Criticism. Consumers were informed.

In 1983 Sarando enrolled in his MBA and Film School program at “Arizona Video Cassettes West”. People came in the store and they were informed, they searched, and they were suggested by Sarandos and his staff.

In 1999 Hastings noticed Pixar’s problem of profitability and wanted to change the equation.

…

Broadly it seems like there are three paths to consumption: being told, being sought, and being delivered.

Being told. Advertising. Billboards, Facebook Ads, and so on. In Retirementville Florida one friend says that the weekly newspaper ad brings in more business than she can handle.

Being sought. Can the right people find your product? Search Engine Optimization and Content Marketing.

Being delivered. Can a business act with ethics?