Too fast? Slow down. Too hot? Cool down. Too little? Add more. Too long to wait? Make it shorter. Maybe.
Waits are complainable for a couple of reasons. Fairness, if someone enters a line later but finishes sooner. Ambiguity, if the wait duration is unknown. Comfort, if there’s somewhere to sit, charge a phone, or entertain us, waits can be wonderful.
Not all problems have “symmetrical solutions”. Changing something else might change the main thing. Even better, sometimes something else is easier.
For instance, we bought a Roomba. It is loud. Rather, it is Loud AF.
Too loud? Make it quieter. Maybe. But loudness has layers like, how much noise I can hear. One change is quieter. Though that tradeoff makes it more expensive.
Another approach is to hear it less. The Roomba does just that! The vacuum has a scheduling feature and integrates with smart homes. Want a quieter Roomba? Run it when no one is home.
Asymmetry is at the heart of Alchemy. Rory Sutherland wants people to see that problems are asymmetrical and then use psychology (in this case, technology) to solve the problem in a new way.
Reframing our perspective is a powerful thinking tool. ‘Sleeping on it’ is reframing. Reading books is reframing. Comparing novel things is reframing.
For a business owner, thinking of time of day, place in life, and what happened prior is reframing.
Bob Moesta notes “context creates value”. Time and place create more or less value. Birthday gifts have one value on birthdays and another value when it’s not.
But we miss this because of average lies. Average computes easily, is sometimes helpful, but is a crude tool. Sometimes we NEED this one thing RIGHT NOW!
Contrast Snickers and Milky Way. Graphically:
Snickers is a chewy pick-me-up energy bar. Milky Way is a treat-yo-self deep breath of sweetness. The context creates value.
According to Bob Moesta, the context for eating Snickers is that I’m hungry and I want something filling, tasty, cheap, and fast. Applying average thinking, there’s not a constant demand. Find when customers consume a product reveals that product’s JTBD.
“Context creates value” fits well with Alchemy too. Channeling Rory Sutherland, it wasn’t that Snickers needed to be tastier, rather reframed. Alchemy is about solving problems with psychology rather than physics. Instead of making travel faster, make it more enjoyable with wifi, charge ports, booking flexibility, a table for tea, someplace for the kids to burn off energy, and so on. Faster is only better when the process sucks.
Consumers and customers have untapped wants. They’re hiding behind time, place, averages. They’re served by JTBD & Alchemy.
The EV problem is not range. The problem is charging time. “Most electric vehicles today,” said James Frith, “can do an 80% charge in twenty minutes or so. That’s probably slightly longer than people want to stop at a gas station on a long journey, but it’s not unreasonable.”
While technically correct it is psychologically wrong. Theproblem isn’t “twenty minutes”. The problem is “gas station”.
When I started driving, gas stations were dirty. In high school, I worked manual labor and we rated the gas stations on how horrible they were. They were bad even to a crew of teenage and twenty-year-old boys working for an asphalt company.
But gas stations have gotten better as they have become less like gas stations. Buc-ee’s – a Texan invention – is a gas station that became a tourist destination. People want to stop. That seems like the kind of place someone could spend twenty minutes.
So it’s not the wait, it’s the quality.
There are different forms of twenty minutes. A twenty-minute wait in the McDonald’s drive-thru is different from a twenty-minute nap while your wife and daughters go to a craft store. You’re frustrated by the first and delighted by the second.
The classic gas station is the wrong model and the industry changes reflect that. An ideal charging station then is a nice place to spend twenty minutes. It’s a place to buy coffee and food and use a nice bathroom. Maybe there’s a playground or park? It should have solar so customers get a psychic reward for their time.
Another avenue is to ask where do people already wait twenty minutes? Fast-casual meals are at least twenty minutes. Twenty minutes is the length of an episode of The Good Place. Headspace could use charging stations as a customer acquisition channel – we all could use a little less stress on the not-so-open roads.
In Alchemy Rory Sutherland suggests that we invest too much in physics rather than psychological solutions. Physics, like battery technology, is hard because the rules don’t change. Psychology is easier because sometimes the rules change. What’s a long wait in one case is a short one in another. That’s how to solve the EV equation.
I wrote about Headspace here and “personal recharging” is a great opportunity.
“The tricky part of incentive design is that there are noisy signals about what could work and what may not work. For example, when given a hypothetical choice between cash and non-cash incentives, people overwhelming choose the cash incentives but studies consistently show that giving additional compensation in the form of non-cash rewards can be more motivating than cash.”
The basis of Alchemy is to create a lot of of value for a small cost. Alchemy happens for donations, for interest payments, and even for paying for a Peloton. Non-cash incentives are another form of Alchemy: the value of the item is greater than the cost to produce it.
On March 9, 2022 gas in Florida cost $4.19 per gallon. A friend noticed this and stumbled into a bit of Alchemy. His company is creating a mileage reimbursement program for the employees.
A “mileage reimbursement program” moves past a basic cash benefit and into the realm of alchemy because it uses our availability tendency: what’s top of mind is most important. Gas prices are often top of mind thanks to their frequency (and SIZE), but with Russia’s invasion of Ukraine the availability is even greater. And that’s not all! Thanks to our mental accounting we perceive pain at the pump.
A “mileage reimbursement program” is a great idea. It delivers more value than it costs. Here’s a few more:
Mother’s Day. There’s no holiday that deserves status elevation more. What if an organization had flowers for moms (or husbands to take home to moms) or bulk ordered a delivery. Hey everyone, at lunch today there’s a signup form if you want to order flowers for your mom. This is kinda tricky because if gifts are too easy they lose some impact.
Annual bonus. There’s alchemy calling it a “Christmas” rather than “end of year” bonus.
Four day workweeks. Businesses have some quantity of work that’s divided into some number of days. Divide those two for a rate. Reducing the number of days means the rate must rise, but many employees find this a fair trade as evidenced by the work-from-home success.
The original advertising alchemist, Rory Sutherland, noted that organizations often optimize the wrong metrics. Don’t make the trains run faster, which is very costly, Sutherland said, if you can make them more enjoyable for much less. A place to sit, a plug to use, and a coffee to drink go a long way for a small cost. That’s alchemy. Find something to provide that has an outsized impact.
The best analogy to understand Loretta Breuning’s book Status Games is calories.
For many years survival was difficult. One problem was calories. So ‘evolution selected’ creatures with a mutation where certain foods (fat, sweet, salt, etc.) released good brain chemicals. Those creatures did better than others and became dominant. In a world with plentiful food those same adaptations aren’t as helpful.
For many years survival was difficult. One problem was predators. So ‘evolution selected’ creatures with a mutation where certain social group circumstances released good brain chemicals. Those creatures did better than others and became dominant. In a world with fewer predators those same adaptations aren’t as helpful.
Evolutionary life was hard so species adapted. Tigers and orangutans have no predator and tigers and orangutans are the only mammals to live alone. Like five fingers on a hand, something about social was splendid for survival. These groups included a pecking order and status games – which have at least two advantages.
Status games as alchemy. In a nod to Rory Sutherland, status games are a form of marketing where there’s a large reward for a not very large cost. Actual fights among mammals are rare. This makes sense. Fights reduce survival chances. Having a way to find out who is right/strong/better/whatever without the fight is quite nice.
Status games protect the group. Status games trim the tails of an individual’s outcome but make reproduction more likely. Any individual mammal is more likely to survive somewhere in the middle of the pack rather than in a non-stop quest to be ‘top dog’. And, Loretta writes, “It enables weaker individuals to enjoy the protection of stronger individuals in the face of common enemies.”
Groups are good for survival and status games are good for groups. So status became part of our human operating system.
One analogy for the human brain is the elephant and the rider. The rider is our conscious brain and it is giving directions, narrating the story, and feeling in charge but really the elephant is going to go where it wants to go – and per Breuning the elephant wants to travel on well trodded paths. “Your animal brain just strives to repeat behaviors that trigger happy chemicals and avoid behaviors that trigger unhappy chemicals.” Thanks to the evolutionary advantage of being in groups, our brains have a simple set of chemical instructions.
Good: being in a group, ideally higher up.
Bad: being separate from a group, demoted in a group.
Groups are important so we seek groups. Everywhere are groups and everything is a status game. Fancy cars are status games. But so is ethics, morals, politics, house size, neighborhood, intelligence, partner, ability to drink, family heritage, even hardships. Find the chemical rewards and you will find the game. “Each brain sees the world through the lens of the neural pathways it has,” Breuning writes.
So, status games are normal but maybe not as helpful as they were. If we have to play, then we can play wisely. Remember, explains Loretta, it’s the dopamine that makes something feel good, not the thing. “The simple way to do this,” Breuning concludes, “is to put yourself up without putting others down.”
I have no idea how much of this book is true but I liked it for a two reasons. First, it acknowledges the world as it is. Animals compete and form cliques, just like us, because we are animals. Two, the book’s perspective is action oriented. This is how things are and this is what you can do, I imagine Breuning advising. Most of all this book reminded me of Spent, we are all signaling and we are all playing status games.
Comments: it is ironic that ‘pecking order’ is from domesticated chickens. Also, ‘evolution selected’ is just how we assign action and our brains like effects from actions. Examples include Headspace, poker, and international espionage and it is the source of the expression ‘don’t shoot the messenger’.
May 2022 Update. Scott Alexander’s review of The Gervais Principle offers an example of status games, and why they are helpful, in the context of Seinfeld.
Alchemy is about taking existing or marginal resources and deploying them for non-linear effect. Sometimes small changes go boom.
One way to see this is in the expression 20,000×1 != 1×20,000. Rory Sutherland introduced this idea through travel. A new rail line, Sutherland said, that saves many people a few minutes is worth less than a change that saves a few people many minutes.
Another example Rory gave was airline lounges. A sole traveler visiting a lounge many times a year gets a small benefit whereas that traveler with their family twice a year gets a huge benefit. In each case the same number of scones are consumed, but the effect to the consumer is different.
A real life example is the Credit Karma Save program.
“One of the things we noticed was that there’s strong deposit behavior around paydays and we wondered if there was a way to do nudging around paydays. So we created a savings boost program where just by depositing a dollar that month you’re eligible to win twenty thousand dollars that month.” – Kyle Thibaut, The Science of Change, October 2021
That’s not all. Credit Karma also offers Instant Karma, a cash reimbursement program for their debit card users. Every transaction is a chance to win that amount back.
I’d wager that the Credit Karma accounting for “customer reward” or “interest paid” or such, is similar in scope to the competition – but having a few large chunks rather than many small ones is a golden idea.
It’s always nice to validate an idea with an “out of sample test”. Does this work elsewhere? Marc Andreessen riffed on the idea that there are only bonds and call options.
March 28, 2022 update. Previously this idea was in the Landslide post which covered: sun and skin damage, landslide prevention, and Marc Andreessen on the culture of work.
To humans, conditions matter. This, is a creativity canvas.
For instance, payment medium matters. People tend to spend differently because the feedback, the salience of paying with a twenty dollar bill is much higher than with a credit card.
“Certain payment systems leave a weaker trace in your memory. When I’m facing a purchase I ask, ‘How much have I spent in the recent past on things like this?’ If the answer is a lot then I’m less likely to make a new purchase, and if I’m paying by credit card I don’t remember those past purchases.” – Dilip Soman, The Decision Corner, October 2021
So, Soman created an app where people could spend and see feedback on their recent purchases. They spent less! Success!! But in 2010 South Korea created a text-message-for-purchases-alert-system and they found the opposite. “On an average,” Soman said, “people who opted in to receive the notifications spent more instead of less.”
The mechanism seems to be that text message information registers in a different way. “When we interviewed people they would say things like, ‘Oh if I ever needed a record I know my phone has it.’ Instead of being more vigilant they outsources that to the phone.”
The replication crisis in behavioral sciences makes me more hopeful about the tool’s potential. Human beings are goofy. Being one place and not another doesn’t matter how hungry I am, but you wouldn’t know by our actions.
Bottom line: the easiest behavioral tool is dialing friction up or down. Thanks for reading and supporting.
One way to think about Alchemy, said Rory Sutherland, is to think of a Sudoku puzzle. In Sudoku each column, row, and 3×3 box must have one through nine once and only once.
Sutherland’s suggestion is to shift back and forth between the rows, columns, and boxes. We’ve highlighted donation alchemy, wine alchemy, and magazine alchemy. Alchemy is like moneyball find secondary things that deliver value. An easy addition, from Sutherland, is good wifi and good seating.
Another way to consider Sudoku situations is as a triangle.
“This is why I like being in the field of addiction. It isn’t just about ‘the drug’ and it’s not just about ‘the person’ and it’s not just about ‘the society’. It’s about all three, it’s this triangle between social factors, personal factors, and drug factors. It’s a very complex equation but it’s fun because you can see different parts of the world and different weightings and different outcomes.” – David Nutt, London Real February 2020
Nutt’s podcast covers a lot of ‘the society’ solutions, where certain locales changed consumption patterns. Mostly the outcome change is about ease. When alcohol is less easy to consume – via where and when it can be purchases or how much it costs – then people drink less.
The triangle feels like a better analogy than Sudoku. The triangle can be rotated like a dial. We can move points A, B, or C or A, B, and C. The triangle also fits with a complex adaptive system view: if we move A down three and over two it will be in the circle but then B will be out. And it could affect C too.
One way to think of a decision is to think of the ‘right’ answer. This has limits. ‘Right’ answers exist within conditional assumptions, and mostly in the mathematics and moral fields. Should I be honest with my partner? has a ‘right’ answer. What’s the optimal distance my 2017 Subaru Outback should follow this other vehicle given these LIDAR, radar, sonar, sonic readings? has a ‘right’ answer. Note, I have no idea how adaptive cruise control works but it is the best automotive technology of the last decade.
‘Right’ answers are limited because of all the conditionals. Self-driving cars are one example. It’s a math heavy domain, the cost and availability of technology (read: number collecting and computing) has fallen, and we’ve never had as many smart-focused-people or as many save-our-collective-butt-companies, and yet it feels slow. Why is self-driving so slow? The conditions! Snow, rain, city, country, semis, motorcycles, bright lights, night lights, desserts, animals, forests, and not least of all: other drivers.
To get the ‘right’ answer to a question like: should the car warn the driver and begin automatic braking? the system needs a pretty tight window of conditions. So if the ‘right’ answer is difficult to come by is there a better option? There might be.
Rory Sutherland’s work comes up a lot here because Rory Sutherland’s work brings up an important idea. Sutherland loves marketing because marketing deals with psychology which is a lot easier to change than the objective thing. Package delivery is an example. Tracking numbers, emails that note your package is on its way, and estimated delivery dates all deliver psychological value. Contrast this with getting a package faster: logistical value, which has a very real cost. It’s not that better package tracking is better than faster package delivery but that it delivers more value than it costs. It’s the same idea of Michael Lewis’ Moneyball: what’s highly (or somewhat) valuable yet costs very little? Sutherland’s tool is psychology. Lewis highlights math. Let’s add another: subtraction.
“It’s an easy problem for a dad to fix, I grabbed a block to add to the shorter column but Ezra had removed a block from the shorter problem. Ezra is normally a horrible subtractor but he plays a lot of Legos and this was an instance where he stumbled upon subtraction.” – Leidy Klotz
Leidy knew how to fix his son’s Lego bridge. Add a block here —>. But Ezra had an idea too. Take a block away here —>.
Whether a situation’s ‘right’ answer is to add or remove is irrelevant – for now. What’s a better car: a Toyota or a Lexus? The question is which costs more? It’s easy to add. We have a tendency to add. But adding probably costs more and when it’s a costlier implementation but only a marginally better outcome then the better choice might be to subtract.
One fertile area for creativity (and anything new is creativity says John Cleese) is in the area between zero and some. It’s in these places where something moves from free to costing that behaviors change. Oh, and it doesn’t have to be an actual cost. Mental accounting works too.
“We know that donations tend to decrease when overheads increase. That makes sense. People want to feel confident they are having a tangible impact. Interestingly, this only applies when donors have to pay for the overhead themselves. In one study when donors are informed that an initial major donor has covered the overhead, donors are more likely to take an overhead free donation option than opt for a 1:1 matching scheme — even though the matching scheme will yield more for the charity.” – Maddie Croucher
This felt right. My reaction was, well if they muck up the overhead at least I know my money was well spent. This isn’t logical, but I’m not sure it is wrong. At my daughter’s school they collect canned food for a local food pantry. There’s a celebration for the class with the largest mound outside its classroom door.
Now, it would ‘do more’ to donate cash, rather than send food of unknown cost, calories, and willingness to eat, and again I’m not sure it’s wrong. It feels good to know my money was well spent and that the food we bought won’t go to waste.
“I always thought that asking small, an ask you can’t refuse from the godfather, works best. If you’re giving three dollars a month it’s much easier to up that to eight or ten than it is to go from naught to fifteen.” – Rory Sutherland
It’s not like I have to find cash or write a check and put it in an envelope. The kidney beans and mac ‘n cheese are within arms reach. Not only that, my kids collect it.
Charitable donation best practices are new to me but I’d wager that what works is ease. Make things financially, intellectually, or socially easy and people will do more. If the overhead is covered that removes the question: will my money go to to those who need it? A small ask might mean that people find doing easier than considering whether or not to. Charities, schools, or businesses can all remove the hurdles for their customers.
– One other idea with-regards-to the classroom donations is the social lesson. The food is tangible and the kids collect it. There’s also probably some social signaling pressure among parents to ‘show up’. So net-net is a canned food drive ‘better’?