Wanting, is this mimetic?

This is not a book review of Wanting: The Power of Mimetic Desire in Everyday Life. It is only a slice. Wanting should be subtitled ‘networks effects’. The book is based on network structure and connections but I can’t recall ‘network’ being used at all.

In mimesis, a centralized network is ‘Celebristan’. Our relationships with one-namers like Lebron or Cher is a centralized model. In mimesis, a dense, not centralized network is ‘Freshmanistan’, these are our relationships with roommates, neighbors, and colleagues.

2 networks

A network’s structure dictates information flow. Information is anything: ideas, vaccines, and so on. Lebron’s favorite salad dressing transfers widely, but only to us. He does not care about our top topping.

But, one-namers have dense networks with each other. Unacceptable: Privilege, Deceit & the Making of the College Admissions Scandal is an example of Burgis’s point. One-namers took the same trips, owned the same properties, bought the same toys. Though they were celebrity to us, their network was ‘Freshmanistan’.

The information in mimesis is status, rivalry, and desire.

Well, our best versions say, I don’t care about all that. This, mimesis OG Rene Girard said, is the romantic lie. Rivalry exists because we don’t really know what we want. “In the universe of desire,” Burgis writes, “there is no clear hierarchy.” It’s not that you want Ray-Ban sunglasses, it’s that someone else does.

This is my sticking point. I’m on board with the network structure and information flows. I’m okay with wants being fungible. But the conclusion feels wrong. Maybe.

There’s this dumb thing that happens to my wife and me. One of us suggests dinner, vacation, or weekend spot. The other mehs it. Time passes. A friend suggests that place to one of us. They go to the other and suggest it. ‘What the heck, I said that last month!’

Something is happening. Is it mimesis? I don’t know.

Status is an evolutionary advantage. Group membership helps us survive, and status games help the group because they are non-violent competitions. Draymond Green probably attacked teammate Jordan Poole because their status games were off. But the episode proves the point. Had Green’s punch landed, both individuals and the group would be hurt. Signs of status like cars, homes, jewelry, people, experiences prevent this conflict.

Is this mimesis? I don’t know.

Rather than rule on the mimetic ideas, we can triangulate them. In the spirit of looks like a duck, walks like a duck, talks like a duck. How does mimetic theory fit with…

Network theory? Great! Network theory is the underlying structure. All networks have information like covid viruses, neighborhood gossip, bumping electrons. Mimesis fits with our social networks.

JTBD? Surprisingly okay. In jobs theory people begin to ‘hire’ for solutions with “passive looking”. Maybe that stage is our social influences. If we are imitative then seeing one person with something might influence us.

Status games? Not bad. Mimetic rivalry creates the status hierarchy within a group.

Incentives? Less good. In the aggregate a bunch of people work to make as much money as possible. But does any one of them do that because they have a mimetic rivalry with any other? “The romantic lie” is great branding but incentives feel more right than mimesis.

The book confused me. It seems kinda right but not really right. But here we are, thinking about it, which may be mimetic itself.

A few network examples that didn’t make the post: The Zappos Holacracy was CEO Tony Hsieh’s attempt to recreate college, increase random interactions, and optimize “a return on collisions”.

The Theodore Roosevelt Covid outbreak as another example of network structure and information flows.

Intentional living – winning or otherwise

Good advice is tricky. The This Time is Different series is built around asking: Are these the correct lessons?

Part of the uncertainty is the truth and fit between the big idea and the story. In Start with No, the big idea is our ego, the story is sales, and the fit is: good salespeople have the right ego. Do people have egos? Are people in sales? Does the right ego for sales still matter? Yes – so the book is good advice. 

In Wanting: The Power of Mimetic Desire in Everyday Life, the big idea is network structure, the story is about mimetics the fit is: we are mimetic due to our network structure. That checks out too (though doubt the effect size). 

Winning by Tim Grover follows this pattern. The big idea is intentionality told through the story of winning a competition. Winning like Jordan or Kobe requires intentional actions. That checks out too. In Early Retirement Extreme, the big idea is intentionality but the story is financial philosophy. The same big idea but a different story. 

Grover focuses on intentionality in two ways: wants leading to actions and outsider status.

For Grover, wanting to win has to lead to acting to win. “If you don’t get on the same level,” Michael Jordan told one teammate, “It’s going to be hell for you.” Jordan was one of the first players to switch from carb-heavy meals to eating steak before games. Before Jordan, few players trained during and before the season. For Kobe, the actions were learning Slovenian to trash talk Luca Donic. In 2008, preparing for the Olympic Games, Kobe was going to the gym when the rest of the team came back from a party at five in the morning. 

Intentional living requires wants which require actions.

Grover’s second point is how it feels to be an outsider. Howard Marks popularized the idea that outperformance means being different and being right. Easy to say, hard to do. 

Investors, like Marks, can be different and right with good stakeholders. If limited partners don’t ‘get it’ the business plan can’t work. So investors look for LPs who will ‘stick with it’. It’s easier to be an outsider when surrounded by a collection of insiders. 

Grover’s clients are in the entertainment business and the ‘get it’ is social. Why succeed unconventionally when you can fail conventionally? 

To succeed as an outsider someone must have a plan and stick with it rather than stick your finger in the wind. “No,” Grover writes, “is a complete sentence.” Build up the don’t give a fuck muscle too. Some think it’s weird? Who cares! Successful outsiders will design easier paths. Kobe Bryant had the most ingenious form and LARPed as the Black Mamba. Winning wasn’t a great book. I hoped for more insider stories. But the big idea was a good reminder. 

Survivor Games

December 13 is the Survivor finale and a chance to highlight the different ideas of the blog.

Sampling. These people are not “representative samples“. Survivor hosts a casting call for people with good stories. Like Bob Iger’s big lesson, entertainment isn’t about reporting so much as stories.

Incentives. Like the many games of Jeopardy, Survivor has layers of games. When there are layers of games it’s difficult to judge actions. Is someone trying to win the game or claim later fame?

Business models. Thanks to MTV in 1981 and then Real World in 1992, one entertainment business model is to create value by editing rather than crafting (unlike Seinfeld). Put regular people with backstories (hence sampling) in interesting situations and things will happen. Edit a month of island living to a few dozen hours and viola.

Customer acquisition costs. Sequels – it’s season 43 for Survivor! – have lower CACs. Consumers don’t need to be educated.

Easy money

Q: How do you get people to pay more?

A: Don’t make them pay.

People and rivers both follow the path of least resistance. What is easy? That’s what people do.

But not junk food, binge-watching, and immediate gratification easy. It’s easy subject to our last choice. Switching jobs isn’t easy, but it is easy to show up at one. Ease has two challenges: the initial change and each small choice.

Jobs To Be Done addresses the first challenge. People change when the discomfort of the present and appeal of the new is greater than the anxieties of switching and habits of the present. JTBD interviews is the focus on the moment things flip. Free hotel breakfasts and donation alchemy are examples.

But I think it’s very interesting when you just think about what can be expensed on a corporate card and how that differs in terms of the pricing power that a business might have. And to me, if you can find a customer that’s going to be able to use their corporate card and you can give them a reason to use their corporate card, they are going to be much less likely to churn, willing to pay for more expenses because it’s always easier to use other people’s money than it is to use your money.

I think much of Manhattan between restaurants and sports teams is propped up on the corporate card dynamic there and a little different demand curve in terms of how that looks from a pricing perspective. So that is certainly the case here and what you have going on, and they’ve used it to their advantage historically.

Matt Reustle, Business Breakdowns

An HBR article’s contents aren’t clear, Matt remarked, there are no stars or reviews. It’s just the title and date. That’s the fear of the new – is this going to be good? But it’s Harvard, and the person buying isn’t the person paying. That’s great! That’s easy!

The challenge of ongoing action, is solved by design, crafting the path of least resistance. Want more vaccines? Schedule their application at each checkup. Want to eat less? Make it hard, or easy!, to count calories Want people to buy your Peloton? Don’t make them pay – let their future selves.

Organizations have many levers to pull to create behavioral change. Which ones are best depends on the context. For Harvard Business Review it’s branding and differentiating between the consumer and the customer.

Your product is the feta on the salad

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Operators live in their business. It’s nights, weekends, holidays, birthday parties, and vacations. 

Customers don’t care. 

To a customer, a business is just mustard on a sandwich. Nice, but not their life. To a customer, life is nights, weekends, holidays, birthday parties, and vacations. 

Hamdi Ulukaya immigrated to the United States when he was twenty-two years old. He signed up for an English class – Hamdi spoke Kurdish and Turkish – and was assigned a ‘how to’ paper. Hamdi grew up shepherding sheep in the Turkish hills, so he wrote his paper about making cheese. 

His teacher loved it. Not for Hamdi’s encouraging English, but for the content. She owned a farm upstate and needed help making cheese. Hamdi agreed to help. 

It paid enough to get by and continue his studies. Hamdi’s cheese was good, it was “old world”. Americanized cheeses, like feta, didn’t taste like the cheeses of his youth. After working on the farm, Hamdi opened a cheese factory with his brother. 

People liked their cheese, it was good, but the restauranters didn’t care. Pricey but good feta from a regional supplier wasn’t what operators wanted. It was just a salad component. Restaurant operators ordered from the major manufacturers because the price was low and the quality was consistent. That’s all they needed. 

Hamdi worked nights, weekends, holidays, and birthday parties, and didn’t take vacations. Hamdi lived cheese. He was a shepherd, a farmer, and a manufacturer. There was no one in the world better equipped to run a feta cheese business. 

But it was just ‘mustard’ to his customers. To Hamdi, it was his life. With a lot of hard work, he grew the business to be a regional success. 

In 2005 Hamdi got a letter about an adjacent business for sale. It was in Ithaca New York and the last owner couldn’t make it work. Let me take a look, Hamdi thought and he called a friend to tag along. Are you crazy, his friend marveled when they arrived, this factory was owned by Kraft and they couldn’t make it work! What makes you think you can? 

Hamdi thought he could, this time with yogurt. Like with feta, he made a great product. Unlike feta, people cared. His first distribution deal was with ShopRite. After two weeks, his contact said, “I don’t know what you put in this yogurt and I don’t want to know – but I cannot keep it on the shelf.” This new, thicker yogurt was a hit. Within five years Hamdi’s yogurt company, Chobani, passed one billion dollars in sales and was the leading American yogurt company. 

Businesses service customers and fit in their lives. No one cares as much about your business as you do. Customers want to live their lives with their mustard, cheese, or their Chobani yogurt. Entrepreneurs live the mustard, cheese, and Chobani yogurt.

Russian Markets

Competition’s effect is the “market mechanism”. This example is from 1996 Russia.

Bill Browder is looking at stock in a Russian oil and gas company. The country’s companies have just become public, and though MNPZ has slightly smaller reserves than British Petroleum, it’s trading for 100x less. Why?

I was convinced that there must be some other explanation for the deep discount and spent the next several days searching for it.

Did the preferred shares have different par values? No. Was the ownership restricted to workers? No. Could the higher dividends be arbitrarily changed or canceled by the company? No. Did they represent only some minuscule part of the share capital? No. There was no explanation. The only reason I could fathom for why they were so cheap was that no one had showed up to ask about them-until I had.

Amazingly, I found that this anomaly wasn’t restricted to MNPZ.

Nearly every company in Russia had preferred shares and most of them traded at a huge discount to the ordinary shares. These things were a potential gold mine.

If there’s a name, there’s a market mechanism. If the invisible is now visible, there’s a market mechanism. If something is weird, new, unknown, secret, there may not be.

Pricing power evaporates with the heat of the market mechanism. Sometimes though, in the far reaches, someone can, find a gold mine.

Can someone be, like MKBHD?

Can someone become like you now Guy Raz asked Marques Brownlee?

It’s different today. “I’ve noticed that in polls of younger people their dream jobs used to be firefighter or movie star, but they all say YouTuber now”, said Marques, “this is fascinating to me because when I started that did not exist.”

If something is legible it’s something to compete on. But illegible things – becoming a YouTuber before it was a thing – make the competition harder.

Legible means playing according to the rules of the game. Illegible means making up the rules as you go. “I just wanted to make the kind of videos I liked to watch,” Marques notes. Illegible also means there’s time to find your rules. Brownlee spent years making videos. He admits that the early ones are hard to watch because they’re so bad. That’s fine!

With value comes competition, and the market mechanism whirls to life. “Your margin,” Bezos believed, “is my opportunity”. Alpha erodes.

Except in some places like the new, the foreign, the unaccounted, the unfavorable, the silly, and so on. Not every new thing ‘works out’ but every new thing has less competition.

Cons & Contexts

Context matters. A person at a college football game is unlikely to rip off their clothes and go streaking across the field. It happens, sure, but not whimsically. Streaking is premeditated. How else do they write such witty comments on their bum? But that person might rage. They might tear down the goalposts. They might set a couch on fire. Mobs are infectious.

Music is too. Turn on some good music. The context has changed the person.  

In a Betwixt the Sheets episode, Maria Konnikova talks about her 2016 book, The Confidence Game (Konnikova is one of my favorite non-fiction authors). She notes that con observers typically don’t understand. Too often we say that would never happen to me

But a con artist changes the context. “What we don’t understand” (looking at cons from the outside), Maria says, “is that objectivity goes away when we are emotionally involved. The first thing a good con artist does is get you emotionally involved in the story so that your ‘red flag spotter’ turns off.”

My wife’s grandmother lived to ninety one. She was a collector – of junk. Marketed in small-ish magazines sent directly to her house, she bought statues with American flags and coins and bobbles. She bought “limited edition” coins. She musta had fifty porcelain elephants. Her purchases were emotional: sentimentality, patriotism, greed.

She was a shrewd woman. Sharp too. Her eighty-fifth birthday was an open house and we spent much of the day eating and laughing with her. I was amazed at her observations. She lived through the depression. She worked on a farm. She had nine kids. She outlived some. She was tough, not an easy mark. She was conned. 

Her chotskies were just the artifacts. Family used her too.  

In business there’s an expression: you set the price and I’ll set the terms. You can charge any price if I can pay it whenever, however, and with whatever. Cons are similar: you set the mindset and I’ll set the context

Eliud Kipchoge is the greatest marathoner ever – so far. In a New York Times piece, he is quoted “Only the disciplined ones in life are free. If you are undisciplined, you are a slave to your moods and your passions.”

Con artists change the context which changes the mood. Their victims are emotionally involved. My grandmother-in-law was emotionally involved. Discipline is a buffer. Contexts change, emotions rise, but  discipline remains. 

Black Friday JTBD

JTBD (vacuums, meals, multitools) exists to find the implicit motivator. Humans stink at admitting, acknowledging, and understanding the scope of our motivations. JTBD finds gaps between those shortcomings and the lived results.

“I’m going to go Black Friday shopping,” Krista told me, “as an excuse to get lunch with my girlfriend.”

It seems like shopping is shopping – but one distinction is experience or convenience. Are we doing something to get it done or doing something to have done it? Shopping as an excuse to get lunch is a different job than shopping for deals.

Happy Black Friday.

The best uncorrelated asset

One framework for investing is the bathtub model. Individuals (but also managers of OPM like pension funds, endowments, etc.) aim to fill the tub as much as possible. An individual’s main stream is their salary. Maybe some salary first goes to an investment, and then pours in the tub. A rental property, a second job, a military retirement are inputs too. 

But the tub doesn’t just fill up, it drains too. Losses in the market are like leaks in the tub, hopefully we can mop these up and dump them back in. The big four unexpected costs: health, house, job, spouse are major leaks. Retirement is the intentional draining of the reserves.

More water and more pressure is good. Fewer and less severe leaks are good. One way to add on net are uncorrelated assets. What flows faster as something leaks more? Real estate and gold are classic examples. Bitcoin too – kidding! ‘All weather’ and ‘cockroach’ are portfolios which blend assets for uncorrelated returns. The goal is to prevent major mop ups or total losses. 

But the best and only uncorrelated asset is mindset. 

A common mindset during drawdowns for investors who dollar cost average is that stocks are on sale. This attitude goes beyond investing. When something bad happens it’s a chance to get stronger. Another is, you’ll have a great trip or some really good stories

The world is complex. There’s a lot going on, sure. But also ‘a butterfly flaps its wings in Kansas and causes a Tsunami in Guam’ complex. How does someone plan for just what’s happened since 2016?! How do investors (but also managers of OPM like pension funds, endowments, etc.) find that someone? Not only is our mindset the best and only uncorrelated assets, it’s ours to control. We can want less or more. We can view the obstacle as the way. We can match expectations to reality.