“Going for the no”

Mike Maples Jr. worked for a software company that enabled telecom companies to offer broadband service. Mike’s job was sales.For many telcos it wasn’t even a buy or build? question because they were in the hardware business: driving tucks, laying cable, and climbing telephone poles.

But not every company was a potential client. “I started” each pitch, Maples said, “by saying, ‘This many not be a good use of your time.'”

“I would start to make body language like I was going to leave because my goal was to have them reach out, pull me back, and go, ‘No, I’m screwed I’ve got to have three million subscribers in the next eighteen months, my CEO just committed to that on their last Wall Street call.” – Mike Maples Jr., Founder’s Field Guide August 2021

It wasn’t just customers Maples wanted, but the right customers. In high-cadence systems, the wrong customers slow a business’s innovation cycle. “They’re going to ask me for requirements that don’t matter for building a different future” Maples said, “because they’re conventional thinkers who live in the present.”

Traditionally we think of CAC as customers per dollar spent, but customers are heterogeneous, that’s a two-dollar word we learned during Covid. Maples is a venture capitalist so he wants to invest in things that are small now but will be huge later. In the current circumstances that means technology. So Maples restricted his customers because the product he sold (or, wanted to sell in the future) was very specific.

The opposite case can work too: expanding a customer base by offering a more generic product. This is the American Picker case. People browsed the antiques but bought the t-shirts.

A business model is not static. It’s more like a philosophy combined with a Bayesian formula. It has to change with the conditions, but that starts with an awareness of one’s system.


Systems and CAC are two of my favorite ideas. Read them all in a daily email drip on Gumroad. Find it on Amazon too.

Ship Platinum, Receive Gold

Within a system like an office, neighborhood, or team there are two main levers which drive behavior: culture and incentives. Culture, says Ben Horowitz, is what people do when they aren’t told what to do. Incentives are the rewards from actions. Incentives are easy to create but don’t always get the intended action.

One incentive might be fines for thin plastic bags. One potential action is customers switch to re-useable bags. Hey look! That’s was the plan.
Hannibal Loves It
Another potential action is using thicker bags. In this case the incentives led to the opposite anticipated actions: more plastic trash.

A family friend pays his kids for good grades. It works, but it’s likely a combination of culture and incentives. This is an incentive system that could easily go awry.

Another incentive that goes awry is rewarding for gross figures rather than net. This was the case in the record industry said Will Page:

“They would ship a platinum record because shipments were what qualified a platinum record. It wasn’t actually sales, if half-a-million albums came back to the factory gate it was up to the CFO to deal with the cost of returns. Once you create rules to play by people will bend those rules. If bonuses are related to platinum status and platinum status is related to shipments, then what do people do? They ship a million records.” – Will Page

1978’s Sgt. Pepper’s Lonely Hearts Club Band soundtrack was reported Platinum but was a sales bust. The following year the rules were changed and Platinum meant shipments minus returns within 120 days. That number has crept back down to thirty. It’s incentives all the way down!

A Platinum album is one million units. Gold half that. Album certification – ship Platinum, receive Gold back – feels like a thing of the past. But incentives are not.

Being better than Superman

Maxim four from Richard Zeckhauser is: “When trying to understand a complex real-world situation, think of an everyday analogue”.

Alex Tabarrok has been using this strategy to communicate about vaccines.

“To me the vaccines are like a superpower. Superman is immune to bullets and I tell people: ‘Wouldn’t you like to be immune to bullets? The virus has killed many more people this year than bullets have, and the vaccine makes you immune to the virus, it’s better than being immune to bullets!'” – Alex Tabarrok, July 2021

In Dan Levy’s book about Richard Zeckhauser he includes a section from Gary Orren who used the everyday analogy strategy to describe the AmeriCorps service program. AmeriCorps, Orren told legislators, is like a Swiss Army knife, it does many things well though it’s never the perfect tool. A few weeks after addressing the governmental staff Orren returned to their offices. “Oh yeah, I remember you. Swiss Army knife.”

This strategy helped, Orren explained, because it focused his thinking and the audience’s understanding. A lot of times our thinking is FAST and analogies shift complex concepts into simpler situations.

Simplification isn’t the end though. Extremes, like questioning the Ohio vaccine lotto, are not the final answers but a first foothold. If we can understand an issue’s basic components first, it can be easier to build up to the rubber-meets-the-road challenges of IRL.


My year of AmeriCorps was health based, and I remember many vision screenings .

Travel budgets

Actions are the children of mindset and environment.

When running his document storage company, AJ Wasserstein created a travel budget. Budgets are good. Budgets are a design tool, and we are all designers.

Wasserstein’s budget wasn’t denominated in dollars, it was in days away from home

“One thing I did while working at Archives One was give myself a travel budget. I gave myself permission to travel a certain number of days a month. It wasn’t a financial budget, rather a nights-away-from-home budget. If I started to exceed that consistently, my role at the company needed to be cleaved and I had to hire someone to do part of what I was doing.” – AJ Wasserstein, Circle of Competence, June 2021

Wasserstein asked a different question. Rather than ask what was financially costly he asked what was socially costly and optimized for that. A lot of times we assume that the important is easily measured. Dollars? Yes. But other things too.

From field to city to car to circuit

This is a podcast episode covering the consumer journey from field to city to car to circuit.

The consumer journey has been one where a business shares information to a consumer depending where they are. That started at the farm with the creation of the Sears catalog, a moved to the city with the creation of stores, then moved to the car with the creation of malls and large big box centers like Walmart, and finally our story is at the point where it is on the Internet with online brand Zappos, Amazon, Warby Parker.

The selling, at least to the American consumer, is remarkably consistent. There has to be a way to talk directly to consumers whether in a store on the pages of a catalog or via an Instagram account. There has to be a way to get the product to the consumer, whether that is the new railway system, the rural mail delivery, or two day shipping.

This episode was a little less organized than normal and recorded outside. Thank you for your patience.

The podcast is available as Mike’s Notes: Apple, ListenNotes, or Overcast.

Curated Creativity

Broadly there are 3 ways to spend a day online.
– trends, the algorithm or human generated headlines
– feeds, the self selected sources
– search, the internet queries of Wikipedia articles, travel plans, and what-is-my-kid’s-teacher’s-email

Articulating the ways helps distinguish when we are, or aren’t in a helpful place. On days when it’s time to work it isn’t helpful to spend too long in the trends. Naming also helps us establish healthy habits. Jason Zweig uses the fire hoses and tea cups system.

The 3 ways aren’t good or bad. They are more helpful or less helpful depending on the work to be done. Here’s some help for the feed type of work, two curated podcast feeds.

Economics. Tyler Cowen is a wonderful thinker we have looked at many times: how to eat well, how to argue well (with yourself!), and how to consider incentives. Cowen is a podcast host and frequent guest but more importantly, he shares many potential podcast people on his blog Marginal Revolution.

Periodically I cull through the blog for the MR Mentions podcast feed. These are guests or ideas mentioned by Cowen. It’s not a comprehensive list and it runs through my own filter, but it is a way to think a bit more like an economist.

Behavioral Science. Rory Sutherland is a wonderful thinker too. We’ve probably looked at his ideas even more: the room or Zoom, marathon lottos, and ambiguity aversion are just some places his ideas percolate. Sutherland has hosted Nudgestock, a B.S. conference since 2014 (the presentations are on YouTube!), a great index of thinkers.

Periodically I cull through a Twitter list of Nudgestock guests to find podcast episodes for the Behavioral Listenings podcast feed.

The pitch. These feeds are free and both contain potentially valuable ideas. The main cost is the time to listen, however with the advantages of 1.5x speed, wireless headphones, asynchronous listening, and portability those costs are reduced. Plus there’s no psychological baggage (sunk costs) to make you stick around. This is my list, not yours, so passing on an episodes is a reflection of my (poor) choices.

Happy listening and cheers to the long-tail of content. Before the fire hose it felt good to “stay abreast”. In 2021 it’s about timing: what do I need to know and when. A good feed is one internet tool.

Free Meals

At the start of Dan Levy’s book Maxims for Thinking Analytically, a book about Richard Zeckhauser’s tools for thought, is this riddle: “Mary and Jim want to paint a room together. If Mary painted alone it would take her 2 hours, and if Jim painted alone it would take him 3 hours. How long would it take to paint the room if they paint together?”

It’s not 2.5 hours.

Zeckhauser’s first maxim is: “When you are having trouble getting your thinking straight, go to an extreme case”. We used this maxim to ask: was the Ohio vaccine lotto a good idea? And it probably was.

Danny Meyer uses a version of this maxim too. One of the most important factors for a restaurant’s success is the location. (Overall it’s a hard business). Meyer wants to avoid errors of commission. Even if a restaurant proves successful it is “stuck with” the location. So Danny explores many locations to find something that works and ask an extreme question:

“Sometimes a space says, don’t plant anything here, this place should not be a restaurant. The first question I ask myself when I look at a restaurant space is: would I want this even if it were free?” Danny Meyer, July 2021, The Knowledge Project

Another way to consider this kind of framing is the expression you couldn’t pay me to. One advantage to living in the south, where football rules the roost, is the access to football. If you like it that is. One friend uses you couldn’t pay me to to express her feeling about SEC football games, the same games where tickets can be hundreds of dollars.

Levy’s riddle is easy once we slow our thinking. Thinking fast we average the work, and get 2.5 hours. Thinking slow(er), like Zeckhauser, and we notice that Mary alone would take two hours. That’s the extreme.

F1 CAC

Customer Acquisition Costs might be the most fun business topic because it offers a lot of room for creativity and a CAC near zero makes the unit economics much easier.

One way to think of CAC is like a Nigerian Prince: how do I find my ‘customers’ cheaply so that the resource intensive activities are focused on the ones most likely to ‘buy’.

Via Business Breakdowns:

“This is probably the area where Liberty has done the most in the shortest amount of time, where what’s going on behind the scenes has changed quite a bit. They’re fine with paid TV but also want to make sure there is access to live TV to keep the F1 fan base engaged.” – Arman Gokgol-Kline

There is an opportunity cost to giving away content, but that must be balanced with the customer acquisition costs down the line.

We’ve highlighted some fun CAC ideas like viral marketing (Zillow), email signatures (Hotmail), coupons (Netflix, AOL) and bundling and reframing (McDonald Happy Meal). One addition here is beauty.

This isn’t brand new. One insight that led to AOL CD proliferation was that people will open (direct) mail that feels substantial. Rory Sutherland harks on this too: no one has ever thrown away a substantial 9 x 12 package addressed to them.

This is Todd Synder’s angle. His catalogs are purposefully beautiful and meant to be left out. The aim, said Snyder, is to have the recipient’s partner see it and say something like ‘You would look great in these clothes’. This catalog angle is decades old. Sears supposedly make their catalog’s footprints slightly smaller than the competitors so that when the housewife tidied up, the Sears one came out on top.

It’s easy (but not cheap) to buy customers. It’s not simple (or easy) to have customers find you. But a low CAC has a high value.

Thanks to Tren Griffin for repeating the ideas of CAC and LTV so many times they’re a well-worn mental model.

‘Good’ numbers

This summer my kids were not going to watch too much YouTube. But, things changed. My eleven-year-old got into Moriah Elizabeth, a YouTuber into decorating and painting. Her channel is good. It’s interesting and entertaining. It, for me, avoids the overreactions and clickbait present on YouTube. She’s super positive and if not teaching kids how to be creative at least she shows them that it’s okay to mess up, laugh it off, and try again.

She wrote a book, Create this Book where each page is a prompt to draw only with polka dots, or draw a structure, or draw something without lifting your pencil from the page. We bought it. It’s fun. We do a page a day and laugh at or admire our drawings after.

This is to say that not all screen time is equal. But it’s easy to count and present equally. Apple offers a Sunday notification that your screen time was higher/lower than last week. That’s not really helpful. It would be like if a refrigerator displayed the calories consumed but not what exactly someone ate.

It also happens, says Betsey Stevenson, at the macro level during each jobs report. There’s the unemployment number and the initial response is that more workers are better. However it kinda depends on the timescale.

“When we see the ‘quits’ numbers really high that seems bad. In the short run we’re going to see fewer jobs. But it’s actually an optimistic time.” – @BetseyStevenson The Ezra Klein Show

People tend to quit their jobs when times are good and the next job is immediate. As people move about in the economy it follows that wherever they land will probably be a better fit, a win-win for everyone. But that’s hard to quantify.

One way to flip this problem is to restructure the counts. Basketball coach Todd Golden will redraw the lines on a basketball court. If a player shoots from inside the arc it’s worth one point. Shots outside the arch are worth four. That’s clever counting. Restructuring the way a player perceives the points is a way to find the ‘good’ numbers.

Fire hoses and tea cups

There are three ways to spend your days online. The broadest consumption of information is the Trend. A curated collection of information is the Feed. A laser focus is the Search. The best way depends on the situation. An ‘end of’ moment has more Search. A start has more Trend.

It’s not simple to know which way to spend a day but Jason Zweig beautifully addresses the balance of the three ways, the feeling of FOMO, and offering tactical advice on how to spend your day.

“If you’re drinking from a fire hose, which we all are, then the only sensible thing you can do is let it run. There’s no point in trying to put your face in front of the fire hose and open your mouth as wide as you can and take it all in. What I do is let the fire hose run and then once or twice a day take a little tea cup and dip it into the fire hose and pull it out and see if I like what I found.” – @JasonZweigWSJ, The Long View

This style of checking in feels slow. But then again, what does the work need? “Any recommendation to take action,” Zweig told Shane Parrish, “has to be compelling enough to overcome the inherent intrinsic advantage of just sitting there.” We design our own performance architecture and metaphors like fire hoses and tea cups helps us think — at least like Jason Zweig.