## The Spinal Tap Workout (made up start up)

This is part of the made up start up series.

Spinal Tap, the 1984 mocumentary follows a band of bumbling Brits. In one iconic scene, Christopher Guest (lead guitarist) describes his ‘special’ guitars to Rob Reiner (filmmaker). And their amps which “go to 11”.

Befuddled, Reiner asks why not make eleven ten. Guest replies, because eleven is more than ten.

It’s an iconic scene.

Ten is special thanks to our fingers. Ten is easy thanks to repetition.

Other number bases aren’t intuitive. We are used to ten. Binary counting looks like this: 0, 1, 10, 11, 100, 101, 110, 111, 1000 and so on. We aren’t used to binary but it’s great for computers. Zero and one are simply open and closed circuits electricity races through. This is why computers are amazing, lots of microscopic gates and speedy electrons charging through.

Numbers are only tools and we should use the right tool for the job. This gets us to “three sets of ten”.

Three sets of ten was (is?) the default workout. Three sets of ten curls, presses, pushes, pulls. Three sets of ten sit ups, pull ups, or get ups.  Why ten? Our fingers!

Here’s the pitch: three sets of eleven

That’s silly. But hold on. There are many examples of what we call ‘Large N small p‘. It’s the Google search effect. Google holds a Large Number of auctions and earns a small percent of each ad buy. Making a few cents each transaction isn’t a great business unless it’s repeated a lot. Sales calls are “a numbers game”. Large N small p also accounts for unlikely events. If someone is ‘one in a million’ there’s eighty people like them just on planet earth.

Three sets of eleven uses the Large N small p effect to make workouts better. Participants only do one more repetition for 10% greater results.

Of the made up start up series this idea is not the best. How could you even sell this? But it’s in the non-obvious explorations that we find the better ones.

## Made up start up: Sandbags

A business succeeds by doing three things: creating something people want, getting it to them, and communicating the value. We call this: product, placement, promotion.

Hey Siri, search ‘sandbag workout’

Workout sandbags are an interesting product because no one wants sandbags. The product is the sandbag but the JTBD is looking like this guy. Or at least more like this guy

Sandbags are also interesting because of their distribution opportunity. DTC opens opportunities blocked by traditional retail and neutralizes the TiVo problem. Channels like Amazon are okay, but shift the comparison metrics to price and stars. Companies that offer good-enough inexpensive options do well on Amazon – not a good tactic here.

Lastly, the ‘people also ask’ sandbag section seeds great copywriting. These customer queries reveal wants. And customers want clarity. Searches are full of ‘program’ or ‘workout’ or ‘plan’. People are searching for what Bob Moesta writes are the ‘little hires’. Someone has bought a product, the ‘big hire’, but don’t quite know how to use it. That’s interesting too.

People take action when their current situation stinks enough, a new solution looks good enough, there’s not too much ambiguity aversion, and their habits aren’t too strong. In his book Moesta puts it this way:

[Push of the malaise + Pull of the solution] > [Anxiety of ambiguity + Habit of the moment]

If LEFT > RIGHT then action occurs.

Push: everyone wants to be in better shape. Like that guy? Who knows.

Pull: sandbags are kinda weird, kinda bro. This may be an opportunity.

Anxiety: people don’t know the ‘little hires’. Big opportunity.

Habit: the workout (or not) of the moment.

In Unacceptable, the book about the college admission scandal, parents hired help. The aiding advisor advertised high-school-test-prep ads at coffee shops and gyms near the schools. The customer wasn’t the student going to college, it was the parent paying for it. The consumer and ‘little hire’ were different from the customer and ‘big hire’.

Successful products serve both groups. This makes the Unacceptable story tragically funny, some students didn’t know, what, or care what their parents did!

This is spitballing. We’d also need to find:

• Where are the ready people? Maybe: in Google searches, Instagram fans, on Reddit forums, listening to personal development podcasts, and so on. What’s our version of the coffee shop?
• What does ‘zombie revenue’ tell us about why people who buy it but don’t use it?
• What workout email helps customers make progress?
• Why are sandbags so bro? Is this an opportunity?

Every business is a trade off. Doing one thing makes other things easier/harder. A team that plays offense fast has less time for their defense to recover. There’s a good way to sell sandbags. Is this it? Only the market knows. But it’s a good mental lift.

## Solving the EV problem

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. The problem 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.

## QR IQ

This is part of the made up start up series.

My mother-in-law has a problem when she goes out to eat. The problem is a combination of information, imagination, and conceptualization. The problem is: my mother-in-law doesn’t know what to order.

But she’s 70 years old. She has solutions. Is it familiar? Is there a picture? Is it recommended? Everything she orders falls into those three buckets. And thanks to Covid19 all that can change.

Part of the (uneven) Covid19 strategy are QR menus. These codes mostly link to a pdf version of the old menu. Consequently, these menus mostly suck. PDF or HTML menus take all of the worst parts of ordering food and make them more difficult to see. But things don’t have to be this way. QR codes for menus are the perfect opportunity for this peripheral technology to become a main course.

Here’s the pitch: a startup that builds interactive menus.

This is a hard problem. Restaurants are hectic, restaurant retention is tough, and there’s not a lot of excess capital for investment, but QR code menus may be a wise pairing thanks to framing.

Restaurant menus are terrible at framing. A paper menu is static and the only form of framing is the relative price framing. I’m not buying the most expensive or cheapest so this middle item seems fine. A digital menu can be dynamic. The options for choice architecture are abundant.

• Guests who liked this also liked this.
• The chef recommends this with that.
• Add in this appetizer for only \$3 more.
• This item has been ordered 1,000 times this month.

All this startup needs is a few salespeople, a copy of Cialdini’s Influence, and an AWS account!

Restaurants are hired for multiple jobs: food, atmosphere, social status, signaling, and so on. Restaurants are also hired to make things easier: I don’t have to cook, clean, plan, or shoulder the burden of honey-what-is-for-dinner-tonight? A well built menu can reduce the diner’s decision demand.

This startup isn’t obvious because customers won’t articulate why they had a nice time at Dariano’s Diner but they will have a nice time because it’s a better experience which begins with the menu.

Yes, there are many restaurants to sell to – but this startup is competing with non-consumption. This isn’t a better reservation system (though it could be) or a better procurement provider (it could be that too), it only has to be better than a PDF or webpage.

So join me in raising funds for some QR IQ, a business that will build on human psychology to create a better dining experience.

March 3, 2022 update: This works! At least for automotive. The full video is here but according to one ex-industry person the digital signing of documents can increase (via framing I’d wager!!) back-end profits by 25%.

## The Birthday Cake Diet

This post is part of the made up startup series.

Health is a good proxy, like with finance and fitness, for understanding systems because it involves personal choice, design, social factors, marketing, culture, and so on.

Part of the reasons diets, like the diet formerly known as Weight Watchers, work is design. One design is zero point foods, like bananas. Zero points isn’t zero calories but it is zero thought. The primal diets do the same thing. Carbs bad, meat good. Fasting also succeeds due to good design. Vegetarian too. The best diets combine easy rules and identity.

Here’s the pitch: the birthday cake diet or BCD.

The first product would be a book. Or, better, a self-help book! It would outline all the advantages of better eating, all the research of behavioral scientists, and all the philosophy around intentionality and purpose. Tolle meets Tversky to defeat Tollhouse. The pitch is: the only junk food you would ever eat would be birthday cakes.

People could just decide to only eat birthday cakes. But then again there’s a fasting app that’s essentially just a timer — and it’s a great idea! The BCD frames inaction (not eating) as action (waiting for a birthday cake). Annie Duke I know would approve.

‘Okay’ you’re thinking, ‘it’s not just birthday cake that’s bad for you.’ True. So after the first book about the why, comes the second book with the how. Taking a page from WW, the second book used slices of cake as the metric. One cookie? One slice of cake. Chips? One slice. A granola bar? Half a slice. Pizza? Half a slice. Bananas? Free! It’s not as clean as the points system, but framing things as a slice of cake definitely will change some consumption patterns.

The books will kickstart the funding needed for recurring revenue. Birthday cake as a service anyone? BCAAS! The BCD wouldn’t even need to create products. This business white labels ones from the big bakers or leverages the identity and design ease to create Keto ones or whatever. Plus birthdays are regular events. The Total Addressable Market is everyone every year.

The BCD is super social media friendly. Like cheat day posts on Instagram, the BCD sells the experience of blowing out the birthday. You haven’t had cake all year, how about one that’s five feet across? The BCD is shareable. Imagine the local, regional, and national news. This is so influencer friendly. Is a low CAC tastier than birthday cake? We will find out.

So email me to sign up and join the next great eating revolution: the birthday cake diet.

This posts are too much fun. Somehow this is the second Birthday themed post, here is the birthday bet. In college a friend framed regular beer as having a ham sandwich and light beer as not. I still think of that when I see a can of Budweiser.

## Swedish-style as a service

People love IKEA, to the effect of nearly one billion annual visits. The flat pack furniture and furnishings yields twenty-four billion euros in revenue each year. But could there be more in store for this store of galore?

One way to find business opportunities is to observe users and follow their lead. Instagram for example, developed both polls and shops (in-part) because users hacked those features before they were available. IKEA faces a similar opportunity.

If you’ve never been, IKEA is organized as an upstairs showroom and a downstairs warehouse. When a customer likes a lamp upstairs they note the aisle and bin code and when downstairs find the item. An upstairs room might look like this:

For larger item like couches and shelves, customers do the above and haul, unbox, and assemble their purchase. Flat packs, material selection, design choices, and scale all contribute to IKEA’s success.

Here’s the pitch: IKEA as a service.

The upstairs showrooms have appealing arrangements. It’s modern. It’s clean! For this made up start up an IKEA specialist comes to customer’s home to clean and arrange it in the flat packer’s fashion. The program includes a points program, where customers earn points toward future delivery and installation of IKEA products.

An IKEA saas offers a few advantages: recurring revenue, reduced churn, and a chance to grow their customer base. Wow Mike the house looks great, someone might say and of course I would tell them about the service, and offer my IKEA referral code.

Consider cleaning a car. My car isn’t new but it looks new after a good cleaning. The same thing occurred to college-me while shopping at The Gap. It wasn’t the clothes that looked good, it was the manikins! If I wanted to look good it wasn’t the clothes I needed, it was the body. Some number of people must do this at IKEA. Their goal is appearance and one way for that job-to-be-done is buying IKEA products.

The IKEA effect may be taken but this saas business might have great legs, like the beautiful bamboo ones available at IKEA.

Made up start ups is an ongoing series. They’re intended to be half-tongue-in-cheek and half-serious. The point is thinking in different ways, like Tyrone.

## Made up start up: The Financial Game

Edit: this was drafted in late 2019.

I loved the movie The Game. The premise was that for his birthday, Michael Douglas’s character was ‘attacked’ in a real life adventure. It was part thrill, part horror. I can’t even remember how much of it was real.

‘What is real’ is a common premise in my favorite movies.

Part-of-the-reason I like it is because it holds a truth. Without skin-in-the-game we really don’t know what we would do. There are our stated and revealed preferences. There are our human biases. There are the ways something is presented.

It’s a real quagmire and something Sallie Krawcheck noted when she spoke on The Long View podcast:

“Ya’ll probably know this as well or better than I do, but when you ask someone what their risk tolerance is, nobody knows it until they go through an ’07 or ’08. They just don’t. Let’s call a spade a spade. But we answer it. Men will answer it and women will go, I need to figure out what it is.”

Sallie Krawcheck

According to Daniel Kahneman, we’re answering an easier question. Instead of what is my risk tolerance we probably answer something like how do I feel today or which column of returns looks good? We do the same thing when choosing college.

Here’s the pitch: Taking a cue from David Fincher and Krawcheck, we’ll create a company that coaches financial advisors on how to stage Doomsday Days with their clients. Like for Douglas, the clients won’t know when it will happen (and we’ll hide this feature in a bunch of legalese).

The plan would be to make up financial statements that mimicked actual downturns; 1953, 1981, 2008, etc. Clients would come in for their regular meetings, be presented with a fictionalized loss for twenty minutes, and then have a debrief session. It’s the financial equivalent of a false positve lung cancer diagnosis.

During the debrief the advisor could talk about real feelings of loss, of risk, and pain. Then, together, work out a new plan.

As advisors are already busy, the business would sell them a script. They could choose a level of pain, and we would provide the portfolio forms (printed on very formal looking paper) as well as suggestions on handling the psychology of it. As an upset we could offer “Confederate Coordination” as we called the wife and explained the plan to her. Yes, it would have to be, the wife.

## Book Review: The Naked Jape

When Rory Sutherland recommends a book I do my best to find it. Even if it’s from 2006 and uses British English. Henceforth, I’ll be interchanging behavior and behaviour.

The Naked Jape was good for exactly the reason Sutherland said it would be: comedy reframes things.

Alchemy recasts one thing as another. Diets, wrote Penn Jillette are hard, but challenges are exciting. When he reframed his diet as something difficult but not-fun as something difficult and challenging it changed his attitude. Jillette had already learned challenging things – like juggling – so this was just another one of those.

Comedians are great at this.

“My father hugged me only once, on my twenty-first birthday. It was very awkward. I know now what it was that made me feel so uncomfortable: the nudity.”

That joke works well in a comedy set, less-well on a first-date, and terribly while talking to a psychiatrist. Change the context, change the meaning. Or, change the words and you change the meaning in the context.

Carr’s book offers lots of little jokes that prove this point. The ideas, these jokes are “anarchic, a little scrap of chaos from beyond the boundaries of the rational, a toe dipped in the shallow end of anti-social behaviour.”

Take the idea of jokes along with the JTBD theory and we get the start of the solution to a puzzle.

When Instagram was building out features an engineer told co-founder Kevin Systrom that he was building a polling tool. ‘That doesn’t sound like something I would use’ Systrom recalled. ‘Oh no, it’s going to be great,’ the engineer explained, ‘teens will love this!’

They did.

What was happening at the time was that teens were uploading solid-color backgrounds with a prompt on it. Their followers voted as comments. The users created a work-around, customizing the platform for their needs. Workarounds are also common in comedy. I saw a sign at an audiologist’s office that (loosely) demonstrates both JTBD and jokes; We don’t sell hearing aids, we fix hearing.

In the JTBD work, Bob Moesta changes his perspective. He enters customer interviews as an empty vesicle and lets them tell him about the product. He avoids jargon. He doesn’t lead them. Moesta is similar to Jerry Seinfeld who described comedians as people with a third eye. Here’s Seinfeld with the check after the meal.

“Went out to dinner the other night. Check came at the end of the meal, as it always does. Never liked the check at the end of the meal system, because money’s a very different thing before and after you eat. Before you eat money has no value. And you don’t care about money when you’re hungry, you sit down at a restaurant. You’re like the ruler of an empire. “More drinks, appetizers, quickly, quickly! It will be the greatest meal of our lives.” Then after the meal, you know, you’ve got the pants open, you’ve got the napkins destroyed, cigarette butt in the mashed potatoes – then the check comes at that moment. People are always upset, you know. They’re mystified by the check. “What is this? How could this be?” They start passing it around the table, “Does this look right to you? We’re not hungry now. Why are we buying all this food?!””

Let’s try this comedy idea with this reframing.

Instead of paying last, people pay first. A restaurant places a \$50/100/200 charge just for stepping in. Customers get a menu without prices and order without influence. At the end of the meal, a waiter brings back their balance, if there is any.

There’s all kinds of consumer psychology at play here from menu design to mental accounting to the idea Seinfeld jokes about it. This may not even be a good idea but it’s a new idea and that’s what matters.

If something could be the premise to a joke, it’s on the right path.

Another Rory’s read is Schtick to Business by Peter McGraw. If you like this blog’s stories, you’ll probably like that book (a few overlap). McGraw’s big idea is that business people should think more like comedians and find the interesting weirdness around life. There’s areas where we’ve always done it this way has wallpapered over interestingness.

Rory Sutherland (@rorysutherland) Tweeted:

Highly recommend. https://t.co/A4Wi0WmJIQ

## Made up start up: Showzam

When the iPhone 3g came out, one of the most impressive apps was Shazam. Through some techno-magic, the app could identify a nearby song. This, was a big deal for me because I’ve always been terrible at knowing names and understanding lyrics. My most egregious sin, according to my wife’s family was mistaking Elvira for ‘hell-fire-up’.

Besides this mistake, my wife has only one other problem with me, interrupting television shows to ask questions. With different chronotypes, she will watch one more episode which after two weeks means she’s a season ahead.

Here the pitch: Shazam but for television shows. A person opens the app and the service detects which show is on in the room. Then it pulls up a synopsis of the plot, who the characters are, and where they’ve been. Like the recap shows run. After a skim, the second person can join in and know what the hell is going on.

The potential monetization is large. Like Roku or Amazon, the app can earn affiliate fees as people pay to sign up for other services. Showzam can also earn advertising dollars with dynamic advertising and with data collection on searches, see what is popular and monetize that information in a variety of ways.

Whether Showzam would work like Shazam I have no idea and it seems like a much more difficult technology problem. However, there’s a need and JTBD .

## Made Up Start Up: Upcoming Streaming

Movies are awesome. The next time you hear someone regret remakes, remixes, and redundancy please remind them to respect your review. No one complains about meatloaf, sequels are comfort food.

However, I don’t always remember who is who, who is alive, or who is in love. Here’s the pitch: a streaming service that offers a limited run of a limited number of movies based on the time of year.

Wharton professor Jonah Berger researched how ideas spread and part-of-the-reason ideas spread is timing. People are contextual operators. We need cues for action. How many times have you seen a trailer, heard about a restaurant, or found out about some music only to never followup. You need a nudge.

The Upcoming Streaming businesses would be just that. The week before Harry Potter X comes out, the last two movies from that universe are available to stream. The Rock has another Jumanji-like movie coming out, and so another Rock movie is available to stream. Actually, the Rock always has movies coming out. He’s a mainstay.

For movie studios this is a no-brainer. Some studios spend more marketing a movie than making one. This streaming service would be inverted marketing. People pay to get excited for the next movie. Free money.

There’s hope for this idea as smart contracts become more popular. Tyler Cowen notes that Hollywood and whaling were the VC OG. If Silcon Valley is into crypto and blockchains then maybe the theater business isn’t far behind.

Another advantage is that this business doesn’t interfere with the competitive advantage of existing streaming services. If a movie is offered in more than one location, few customers would cancel Netflix just because a movie or two each year were available somewhere else.

But wait, there’s more! This business has scarcity. If movies are only available for the week before a release people will feel the need to act now. It can’t hurt having psychological influences pushing this idea along.

Upcoming releases wouldn’t be the only available source of inspiration. How many studios would love to pump their old rom-com libraries for one more run as they return to our lives as a special Valentines week lineup? How great would it be to stream only the Thanksgiving episodes of Friends over the Thanksgiving holiday?

If someone knows Michael Ovitz, have him get in touch.