Tag: 2010s

Unreasonable Hospitality (book review)

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“How to Treat Other Human Beings” could be the subtitle to Will Guidara’s Unreasonable Hospitality. I loved this mix of stories, lessons, reflections, and mistakes. It felt honest. It read fast. I had a library copy but this is one of those put this on the shelf to page through later books.

Unreasonable Hospitality is going above and beyond to treat other human beings well. Take care of each other. Get out of your own head. Avoid your ego in favor of service.

It felt great to read, I’m still glowing.

And unreasonable hospitality is easy. It’s just three things.

First, a desire to do it. Your motivations may vary.

Second, a 95/5 mindset. Things cost money. It’s impossible to provide service without charging and even harder to be over-the-top. So the business model matters.

Guidara’s 95/5 approach is to watch ninety-five percent of the expenses like a hawk. At Eleven Madison Park this meant things like dishwasher racks to reduce breakage. While he managed the MoMA cafe it meant no fresh food an hour before closing time to reduce waste.

In his experiences at many restaurants, Guidara learned to manage costs. What could get cut? What couldn’t? What were the easy (and wrong) metrics? I pictured him like a wise carpenter. Rather than head to Lowe’s, he ripped a spare sheet of 3/4” plywood that was in the corner.

Now, what about that other five percent?

Third, the job to be done.

It’s about delight. Sometimes Guidara gave away the Tiffany champagne flutes to a newly engaged couple. Sometimes he fed the parking meters.

Sometimes it was complementary theater, sports, or concert tickets. Sometimes he served a classic New York City hot dog for a guest who hadn’t had one yet.

Sometimes it meant complementary cognac after dessert and with the arrival of the check. Sometimes it meant ten 100 Grand bars when a guest, preying on their hospitable reputation, asked for a million bucks. That guest loved it.

Why is this person here? What do they want? How can I serve them? What delights them?

–

Nothing about Unreasonable Hospitality is new.

But none of it is common.

The book is a chance to change that. With Guidara as a guide, anyone can put a little more hospitality into the world.

–

Note: Part of this book’s impact is its identification. We have plenty of posts about words: words mean competition, the new dictionary series, and words hiding value. Words are important because they identify something. They’re landmarks on our map of life.

In 2008, the story goes. A bunch of NBA players returned to their hotel after a night (and morning) of revelry, only to see Kobe going to the gym while they were headed to bed. Those players saw that and took their careers more seriously. Kobe’s actions were a landmark.

Will’s book is a landmark.

Top Gun Twitter targets

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That makes no sense!!! is a signal for misunderstanding. We may not need to understand. The logic may not be local to us. But people don’t do dumb things.

Tyler Cowen questions Twitter’s ad targeting, “can’t they send me a targeted ad for Indian classical music at least once? An economics book? That would be easy given who I follow. But they can’t even do that. It’s Top Gun. I know Top Gun is out and my eyes roll.” 

This is a known problem. Thomas Tull founded Legendary Entertainment in 2000 based (partially) on this idea. The fans of Batman will know when Batman comes out (2005, 2008, 2012). People reading the newspaper will not know, but people who read the newspaper also may not care. Tull said he could give his mother two tickets and money for popcorn, drinks, and a snack and she still wouldn’t go see Batman. 

Tull thought: How to persuade the middle group? Don’t waste money advertising to the huge fans or the never-buyers. 

The Top Gun:Maverick trailer came out July 2019! Everyone between thirty-five and fifty knew about the movie. Yet Top Gun is on Twitter. That makes no sense?

Option 1: Momentum. Paramount Pictures has an annual budget for social media and each gets their share. TG was on Twitter because it’s just something they do. 

Option 2: Social proof. PP has the annual budget to advertise on social media to build social proof. According to Robert Cialdini, social proof and authority are both tools to reduce uncertainty. Maybe lots of people heard about TG but were unsure if they should go. Seeing it on the timeline makes the film appear popular, more people go, the film appears popular, more people go, and so on. 

Option 3: Twitter ads are just bad. Cowen is right. 

Option 4: Twitter ads are secretly great. Cowen did go see Top Gun. The mechanism is something other than social proof (#2)

Option 5: Twitter ads aren’t targeted, they’re brand building. Maybe a better analogy for Twitter is the NFL, a place for national brands to reinforce their messages. My last three promoted tweets were for Google, Extra gum, and the AP news. 

Option 6: Something else. 

…

A viral YouTube ad from 2013 was It’s Not About The Nail. Put another way this thing isn’t really about the thing at all. A lot of life has deeper parts to it. 

Last week one of our regular players brought Gatorade to the pickleball courts. She had too much and was getting rid of it. The superficial reading is that she wants to get rid of it. Why? It doesn’t spoil. Just drink it over the next few years. But really it was about sharing. 

Status Games (review) make no sense superficially. But peel back the layers of evolution and we see that status is a proxy for power. Rather than physical conflict to create a hierarchy, certain species use status. Physical conflict reduces the individual and collective. Groups which adopted a non-physical mechanism performed better than ones who did not. 

Sometimes superficial is just superficial. Twitter might just have bad targeting and Yeah that makes no sense is a fine answer. But sometimes it’s not! And that’s where the fun stuff hides. 

‘Typical’ monthly mortgages (1971-2022)

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This is the ‘typical’ house payment for the last fifty years. ‘Typical’ being the median sale price and average thirty year rate.

If my parents had bought when I was born they paid $982. But if they bought when my brother was born, it would be almost two-hundred dollars less each month. A huge difference for a young family.

The sweet spot for modern buyers was October 2011 when payments flirted with $1,000. 

The Covid-19 drop and surge can be seen toward the right. It wasn’t until August of 2021 that payments crossed the trend line into wild heights. 

What difference does it make for someone now? Since the end of 2020, the ‘typical’ payment increased seven-hundred dollars a month. 

Interest rates are a headline metric, but are not the most important thing for buyers. The fall 2022 ‘typical’ monthly payment is: $2,580. A $50,000 decline on the purchase price is equivalent to 1% lower interest payments. Not only that, home prices have a .9 correlation with monthly payments whereas interest rates have a -.55 score.

Housing is easy news to consume. The bad is about rising prices and rates. The good is about remodels, flips, and luxury. The truth is somewhere in the middle, here it’s in color.

How “off track” are housing prices? The red line is the 2016- March 2020 trend line relative to the graph of median listing prices. Currently prices are a 33% premium to what the historical growth suggests.

…

United States figures only.

Start with No (book review)

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In his 2016 book, Never Split the Difference Chris Voss suggests Jim Camp’s, 2011 book, Start with No. 

To Voss, ‘no’ is progress. Too often ‘yes’ is said for appeasing purposes and ‘maybe’ means we haven’t clarified what’s important. But ‘no’ is firm, it’s progress. 

Camp explores this idea deeper. He, like Voss, dislikes win-win negotiations. First, they lead to unnecessary compromises. In an effort to let both sides ‘get something’ negotiators compromise too much and on the wrong things. A 10% discount in exchange for a longer contract is good only if it’s important. Too often, Camp writes, people compromise on things which don’t matter. 

Second, win-win is considered fair. Who judges what’s fair? There’s no master evaluator. There are ethics though. Camp’s model is analogous to sports. Prepare, train, and play as hard as you can within the rules for the full period of time. Once the event is over, shake hands and respect your opponent. 

Third is the idea Voss runs with, a ‘no’ is progress, it’s “a decision that gives everyone something to talk about.” 

If ‘no’ is so important, why write a book? This coulda been a tweet. 

Well, no. There’re better ways to get to ’no’. And this book is really about something else entirely.

Our second house was a for sale by owner. A nice family with a nice home. We sniffed around each other like dogs with our initial questions and when asked about his timeline for building their next house the owner said, ‘I’m in no rush, I’ve got a house now’. 

That was good. He conveyed un-neediness. Being needy is Camp’s first warning. Do. Not. Need. A. Deal. Both Camp and Voss frame themselves against the classic negotiation book, 1981’s, Getting to Yes. Their books, they say, highlight what GtY gets wrong. Fair. But Getting to Yes presents the BATNA: best alternative to a negotiated agreement. That’s essential to un-neediness. 

The heart of un-needines, and of good negotiations is the secret message of the book. Start with No is really about our ego. 

Being needy is ego. Camp’s second rule is to act like Columbo. Disarm the adversary. In other words, put ego aside. Don’t try to be impressive, smart, or IN CHARGE. Don’t elucidate and don’t use words like elucidate. Camp warns about trying to be liked (chapters 2, 3), to be smart (6), or only talking about your side (4, 7, 8, 9). 

It’s hard to Start with No when you start with yourself.

The role of ego varies in size and scope. A successful negotiator finds the right balance of their own and their adversary’s point of view. This is the root of Camp’s system. It’s also the heart of copywriting and JTBD. 

Good negotiations are difficult and rare, Camp writes. That makes sense! To be a successful negotiator (according to Camp) we have to check our ego – a problem humans have been dealing with for hundreds of years. 

Camp tells a lot of ‘me’ stories. They’re about his big deal big deals, his awesome son, his business. It’s a little much (Voss’ stories are better). But hidden in those is a wonderful exploration of our ego and what we can do about it. 

Ego is tricky because like picking our nose, we don’t notice. It’s part of us. But when someone contrasts another way it makes us pause and consider that. For instance, “the most important behavioral goal and habit you can develop is your ability to ask questions” or “The self-image of the individual in the selling role traps him or her in a neediness mode and often leads to bad deals.” That frames our behavior and leads to questions like do I ask enough questions or am I needy because I want to feel smart, impressive, helpful, or whatever?

Camp’s book introduces his perspective, and that’s a good start to good negotiations.

Enhanced Savings Rates

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This is from our HSA. It’s good copywriting. ‘5X’ is easy to understand. ‘You may be missing out’ is great too. 

The chart excels as well. It’s easy to understand and those Enhanced Rates do look bigger. They look bigger because of level one numeracy. 

We level one think all the time. It’s knee jerk and first blush. We see something and some combination of evolution and experience fit what we see with what we know. Big red ‘Sale’ signs are examples. We first compare the sale price with the previous price rather than the item’s intrinsic value. This makes sense as our first reaction is immediate, requires no additional effort, and is something we are used to doing because it mostly works just fine. 

The posts here, about average, focus on this idea too. Average is easy to compute and conveys certainty about an uncertain (often heterogeneous) world. Average is level one numeracy but we can do better. 

One way to get past this reactionary thinking is to change the what we know part of our lives. Books like The Data Detective (2021), How to Lie with Statistics (2010), Fooled by Randomness (2008), and Factfullness (2018) are wonderful. 

A fast fix comes from Sir David Spiegelhalter. Don’t look at relative comparisons, look at absolutes. Rather than the relative rate, look at the dollar difference.

That’s what I did. 

If someone saves the $2,000 in an ‘enhanced’ HSA account they have sixteen more dollars after twenty years. A lot of years for not a lot of money. For accounts of ten-thousand dollars, the difference is almost eight hundred dollars ($11,543 vs $10,745). Fine, a Series I Savings Bond accrued that same dollar value in six months. 

The don’t look at relative comparisons, look at absolutes is a good starting place – but there are further levels. 

First is to think about the costs. The enhanced HSA rates are an annuity, likely with some new terms. There’s the switching costs too. That’s a potential headache and unwanted contract in exchange for not much money. We will pass. 

Actual health rather than health savings is different. 

For people 25-34, their chance of dying from Covid-19 is about the same as pulling the ace of spades from a shuffled deck – twice in a row. 

For people 55-64, their chance of dying from Covid-19 is about the same as flipping heads eight times in a row. 

For people 75-84, their chance of dying from Covid-19 is about the same as pulling any heart from a random deck of cards – three times in a row. 

Those are low absolute risks but seriously consequential. 

The world is complicated and messy. Not only that, but it changes too. Numbers are helpful, but we have to ask the right questions to start. 

–

The Covid-19 odds are rough estimates. There are about forty million people in any ten year age group. The number of deaths in the 25-34 group is 11,451. I divided the deaths by size of the group to get the percent chance of death. Odds are multiplicative, three heads in a row are 12.5%, 0.5*0.5*05. Two ace of spaces are one in fifty-two times one in fifty two, or about 0.04%. 

Demand-Side Sales 101 (book review)

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Demand-Side Sales 101 opens with a foreword from Jason Fried, from his time selling shoes: 

“I noticed that when people browsed shoes on a wall, they’d pick a few up and bounce them around in their hand to get a sense of the heft and feel. Shoes go on your feet, but people picked the shoe with their hands. If it didn’t feel good in the hand, it never made it to their foot.” 

Authors Bob Moesta and Greg Engle of the Rewired Group wrote this book to explain how sales fits under the JTBD umbrella. Rather than selling, Moesta (whose voice I read this in) wants sales staff to be more like a concierge. 

Sales isn’t about bringing the product to the person. 

Sales is about helping the person make progress. 

Investors get this. An investor is only able to maneuver to the extent their limited partners allow. An educational endowment may not invest in companies whose business is distasteful to their staff, students, alumni, etc. Other investors can take advantage of this restricted action section. In the words of Seth Klarman: I want partners who cash checks when I write them and write checks when I ask for them. 

Consumer good businesses get this too. It makes no sense to ‘sell to’ people who don’t want the product. Moesta wants to take this spirit and distill it: move past selling to helping. 

Products that help have to start with what the customer actually needs. This is demand side (rather than supply side) innovation. Supply side tends to be features a business can create. Demand side tends to be the progress a user needs. 

This orientation may lead to novel solutions. Channeling Theodore Levitt, Moesta writes: 

““I need a drill, because I want a hole.” “I need a hole, because I want a plug.” “I need a plug, because I want a lamp.” “Why do you want a lamp?” “Because it’s hard to see, and I want to read better.” Now, we are beginning to understand the customer. They don’t need a drill at all; they need a Kindle.”

Think of your product, Moesta and Engle explain in their Circuit Breaker podcast, as the mustard on a sandwich. That’s how important whatever it is you do. The iPhone is the greatest product created, but it too is just the mustard. The elemental arrangement (a book about that) of sand and plastic is great – but only because it allows progress like emailing, photo taking, and reading Bob’s book. 

There are four forces that affect change: Push of current situation, Pull of the new solution, Anxiety of the new solution, Habit of the current situation. 

Moesta is dyslexic and sees these four aspects as an equation. Customers act when [Push of old + Pull of new] > [Habit + Anxiety]. A lot of copywriting works this way. ‘New’ and ‘Best’ are aspects of pull while money-back-guarantee is an aspect of anxiety.  

Diet can be seen this way. The way we look at the scale is the push of the current and the pull of the new is the vogue diet of the moment. Anxiety is fear of failure and the ambiguity aversion of the unknown. Habit is what mindlessly eat. 

Oh, and a wedding is coming up. 

Understanding the four forces isn’t quite enough to make sales. Customers travel through time, and six stages: 

  1. First thought. In a competitive market it helps when there is no name for a thing because names mean competition. Meanwhile a business has to create the question that leads to progress. “Questions are places in your mind where answers fit. If you haven’t asked the question, the answer has nowhere to go. It hits your mind and bounces right off.”
  2. Passive looking. Buyers consider actions. Push and Pull don’t yet outweigh Habit and Anxiety. 
  3. Active looking. Something happens. I’ve had it. 
  4. Deciding. What do people really value? Everything has trade-offs. Successful organizations sync their strengths with the customers’ wants. 
  5. Onboarding. A sale occurs.
  6. Using. How well something performs (relative to their(!!!!) expectations). This is 100% subjective. It’s not what you can build, it’s what they want to do. 

The 2011 Betty White Snickers commercial is how Mars used demand side sales to sell more Snickers. 

“When Snickers reframed their product from competing with Milky Way—supply-side selling—to solving the customer’s struggling moment—demand-side selling—they created pull for their product by helping people make progress.”

Milky Way is a treat and competes with glasses of wine and Oreo. Snickers is a snack and competes with Red Bull or Clif Bar. 

“But great salespeople don’t sell; they help. They listen, understand what you want to achieve, and help you achieve it. A better title would be “concierge.””