Tag: podcast

It’s not the fall…

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It’s not the fall that gets you, it’s the impact at the end. 

The best metrics describe a state of the world. Hotness has three audiences. “Fahrenheit is basically asking humans how hot it feels. Celsius is basically asking water how hot it feels. Kelvin is basically asking atoms how hot it feels.” (Reddit) 

Another is the contrast between American and Canadian avalanches. In the states, a medium avalanche is “relative to the path”. In Canada a medium avalanche “could bury a car, destroy a small building, or break a small tree.” The southern system expects the audience to be familiar with the area. 

A third is calorie counts. Sure, bananas have calories but they can also be zero-point foods. Counting calories isn’t the point. Weight loss is the point, so what’s the best way to communicate information that leads to those actions? 

About hurricanes: “The Saffir-Simpson Hurricane Wind Scale we use to rate hurricanes is based on only wind and doesn’t take into account the chief hazards which can be storm surge and flooding rains. It’s wholly inadequate. We need to go away from rating one through five based on winds. Hurricane Harvey stalled for days over Texas and caused a hundred billion dollar plus disaster (Harvey made landfall as a category four storm, but most of the rainfall and damages was as a tropical storm).” – Dr. Jeff Master 

Hurricanes need to be rated more like Canadian avalanches. If measuring wind speed rather than rainfall wasn’t enough, there’s another problem: the hundred-year storm. 

Everywhere I’ve lived has a hundred-year storm. In Ohio (Southeast and Northwest) it was floods. In Florida it is hurricanes. Imagine a category five hurricane that hits Beach City once every hundred years. What chance is there for a storm of that level in the next thirty years? 

Master walks through this math. A one-percent chance each year is a ninety-nine percent non-chance. Multiply a ninety-nine percent non-chance thirty times and the hundred-year storm has a 26% chance of occurring in a thirty-year window. 

It’s not the hurricane winds that get you, it’s the flooding afterward. Yet we measure the winds. 

White water white wash

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We like things we are good at and we are good at things we intentionally practice.

We practice better numeracy through examples like A+ BS HSA rates. The point there was that organizations choose favorable framing in absolute or relative numbers.

Numbers are just characters in a story.

LoTR has Frodo. Stranger Things has Eleven. Batman has Batman. Tim Harford’s advice for better numeracy is to ask who is telling me this story and why are these the characters?

A clever example comes from the August 2022 episode of Acquisitions Anonymous where the hosts discuss a Vancouver white water rafting company. Business pitches use numbers to tell a story about why a business is worth a lot of money. Like a job interview or a date, it’s a polished version. 

This particular pitch used a blended SDE (seller’s discretionary earnings) multiple. Rather than value the business on elevated 2021 numbers, the seller’s broker included 2019 & 2018. That is a wolf in sheep’s clothing and co-host Bill D’Alessandro pulled away the mask. 

Yeah, Bill begins, blended earnings are often good but the 2021 Covid-19 bump is so large it pushes the weighted average higher than any other year. Pre-Covid-19 the SDE was around three-hundred-thousand-dollars but the weighted average is over five-hundred. 

Averages, weighted or otherwise, work best with distributions like number of autos owned, Wordle guesses, or years of school. 

Averages, weighted or otherwise, work terribly with distributions like financial wealth, number of testicles (an average of one), and movie revenue. 

Stories work best with coherent characters. Number stories work best with coherent calculations. We are experienced with stories about people. We stop books, leave theaters, or stream something else if we don’t like the way things fit together.

We’ve so much less experience with numbers. 

But now we have a little more. Thanks Bill.

How to write great copy

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Neville Medhora writes great copy because Neville Medhora made copywriting easy. Let me give you his steps.

But first, a warning. Copywriting can work too well. There are many scammy producers who use copywriting to sell scammy products. Copywriting joins JTBD and negotiations and Alchemy as selling tools to be used ethically.

Copywriting has two huge benefits. First it filters your listeners. I never have hecklers at my comedy shows said John Cleese because the people who come are all people who know what I’m going to say! Copywriting influences the stakeholders, who allow a certain freedom of movement – or not.

The second power of good copywriting is the magic of customer-acquisition-cost. With the right CAC, all business models work. Pirate Booty has good copywriting, informing parents that it’s “great for lunches”.

Copywriting can seem difficult because we start at the BLANK PAGE. But Neville Medhora created a system that makes copywriting easy. Anyone can write like Neville if they just follow his steps.

  1. No blank pages. Medhora maintains SwipeFile.com for inspiration. He also keeps a list of posts he’d like to write. Medhora is curious and one of his inspirations, Joseph Sugarman, wrote that the best copywriters “hunger for experience and knowledge and find other people interesting.” Like a chef with a well stocked kitchen, Neville never starts with nothing.
  2. Start writing – with a framework. Medhora likes the AIDA framework: Attention, Interest, Desire, Action. He starts each piece with this outline and fills in each section. Remember, this is supposed to be easy.
  3. Find their thinking words. Amazon reviews are a “cheat sheet” for language. My research led to a book review which said this helped me have a healthy conversation with my spouse of 20+ years. Another review said it helped me maximize the time with my kids before they “flew the roost”. The book was about personal finance, but the language of the customer was “relationships”.
  4. Write the zero draft. It’ll be bad. It will look bad. Whatever.
  5. Let the draft marinate. Let your subconscious work. While you wait write 25 headlines – this is advice from Neville’s buddy Sam Parr.
  6. Edit your draft
    1. Does every line “earn it’s pixels”?
    2. Words or pictures? If your product/feature must be described, use words. If your product should be seen (like software), use gifs.
    3. Can you describe aspects the customer doesn’t appreciate but exist nonetheless? Our furniture is kiln dried for 72 hours…. a furniture website might say. Maybe everyone does this, or it’s not special within the industry but it’s not well known outside it.
    4. Do you need to punch it up? Add a cheat sheet, a rating system, embed a picture gallery, or make a cost breakdown.
    5. The more your reader knows the less you need to communicate. And vice versa.

That’s it!

If you want more from Neville check out his podcast episode with Sam Parr or use ListenNotes.com to search for other interviews.

“It’s impossible”

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Kris surfaced this work and had some excellent notes.

“Impossible things happen fairly often. That doesn’t mean things are actually impossible just that we thought they were impossible. There’s a corollary to this: enough people relying on something being impossible makes that thing more likely in a perverse feedback kind of way.”

Agustin Lebron

We’ve covered this idea: something is always happening. But Agustin furthers the thought. If many people think something is impossible then it is underpriced. Agustin gives the example of the housing crash of 2008. Home values don’t go down, was one impossible pillar. Another was that home values don’t crash across the country. These two impossibles fed certain incentives.

Sports offer a good view on ‘impossible’. There’s always an inevitable team. It’s impossible they lose. Yet the better bettor ‘shorts the narrative‘. The Wharton Moneyball hosts regularly pillory “once in a generation talent” that arrives every other year.

Agustin is a trader but like with Bayesianism, we can adopt the philosophy. Impossible/Inevitable comments are signals of confidence not accuracy, and should be priced accordingly.

“Aviation porn”

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Jobs-to-be-done is one of our favorite topics because the examples are just so much fun. Here is another.

“What we are trying to do is what I call ‘aviation porn’. The reason people subscribe to Flying (magazine) is because of the beautiful photography, the long form evergreen articles, and the fact that when their friends and family come over they see the aviation publication. It takes a lot of work and effort to become a pilot and the people that are pilots are super dedicated to it and want to show their friends.”

Craig Fuller, Think Like an Owner podcast

Fuller explained that when he took over the magazine there was a push to go more digital, and he did that, but not without forgetting the JTBD of the print magazine.

TTID: Canadian software

MIKE

Our this time is different examples have noted that when the overall system (airline regulation) or when the technology within the system (high jump pads) changes then this time is different. While confirming evidence isn’t a perfect indicator, it’s nice to note:

“If you have a mining business then base rates can tell you something. But over the past ten years there’s a new crop of businesses that have no historical analogs. This sounds like ‘this time is different’ but sometimes it kind of is. These businesses (software SAAS) grow fast, they grow organically. In a couple years they have global reach and no capital requirements. They can click a few buttons on AWS and suddenly they have more servers. They have expensive stocks so they can hire the best engineers, all around the world because everything is remote.” – LibertyRPF, Infinite Loops, October 2021

Often, TTID is used to support a narrative claim, and in general it pays to ‘short the narrative’. But sometimes TTID is right, the world changes. It’s a bit like finding a needle in a haystack (if there even is one).

The base rate for TTID is low. But when systemic rules or new technology allow the job to be done we can look closer.

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Liberty has a nice Substack.

Parenting advice about lacrosse

MIKE

The best parenting advice for me has been small bits that, like train switches, change the outcome direction. This too shall pass as well as a few deep breaths does wonders. Resetting expecations closer to reality helps too. We’ll add another today.

Todd Simkin wanted to quit lacrosse. He wasn’t quite as good as the other kids, or as fast. It was hard. He was in high school. There were other things to do, not that Simkin knew what they were when asked. So, he told his dad over dinner we was quitting lacrosse. Then, Simkin went to bed. This is what his dad said the next morning.

“Come into the living room, I want to talk to you. I’ve been thinking about it all night and it’s really bothering me. I haven’t heard why you wanted to quit other than you’ve been frustrated with your coach. There’s not enough here. It doesn’t make sense. You have to explain it in a way that makes sense for me to be supportive of this.”

Another bit of parenting advice is to avoid unnecessary ultimatums. Pick that up or else you’re going to bed right now!! Though it’s the mad emoji feeling in the moment it’s the zen emoji we should strive for. That’s kinda what Todd’s father did.

“This was such great parenting. It wasn’t saying: this is what you have to do or, here’s what you can’t do. Instead it was: if this is a reasonable or consistent or rationale choice I’ll back you up on this. If it’s rash and has long-term consequences then there are implications here that require appropriate weight and thought.” – Todd Simkin, The Knowledge Project, September 2021

Todd didn’t have a great answer so he didn’t quit the team, but he also didn’t play the next year.

There’s a lot of empathy in this podcast episode. It’s about understanding where people are physically, mentally, emotionally and meeting them there and it’s fully of helpful advice for our personal and professional relationships.

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Give someone a hug today. Digital or physical, doesn’t matter. 🤗

Excellent endocrinologists

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In Average is Over Tyler Cowen predicts that future jobs will reward people who work well with machines and humans. There will be good careers for people who understand people and data.

For instance, a doctor spends years of her life in medical school and residency and attends continuing medical education courses to ‘know a thing’. But she also must convince her patients. The way we do each of these will change with time but these are the two parts any job. Put another way, it doesn’t matter how good the model is if people don’t follow it.

“The (diabetes treatment) model we created beats 95% of primary care physicians, not because they aren’t smart, but they don’t go through the six million (treatment) combinations in their head. For endocrinologists there’s a top quintile who get results as good as the best output of our algorithm. They don’t do it by choosing the best algorithm, they use their humanity to talk to their patients about adhering to the drug regime. They are getting results a different way.” – Len Testa, Causal Inference, October 2021

Good convincing outperforms better medicine! This is why financial education does not work. Action does not follow information like a tail follows a dog.

Testa doesn’t elaborate how the doctors describe the diabetes deterrents, but it’s probably in the listener’s language. “Excise the statistical jargon,” said David Spiegelhalter and communicate better.

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Sounds like a JTBD post no?

Sports bras and pickup trucks

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One of the hallmarks of a Job-To-Be-Done approach (our series) is not to ask the people what they want. A better approach is to understand what job people want to do. That means looking at how people hack your product or when there is zombie revenue. It means what people do, not what people say. Here are two additions to our collection.

Of the thousands of first Title Nine catalogs only a handful of orders came in. But…

“Many of the people put a sports bra on their order. So while I may not have been the quickest study, you don’t have to tell me twice, wow, sports bras are the most essential piece of sports equipment for the average American woman.” – Missy Park, How I Built This, October 2021

Park built her first catalog by choosing the clothes she wanted. Park grew her business by solving the JTBD.

Our second comes from another CEO:

“Being with F-150 customers is like having a barbecue with the next door neighbors, we know them that well. The Homer had a doughnut maker and beer dispenser. If you ask people what they want, you get a Homer, but if you know the customers really well you can surprise them with twelve kilowatts of power to power their home. They won’t tell you that. They won’t tell a focus group that. But if you know them well enough you know they’ll like it.” – Jim Farley, Decoder with Nilay Patel, April 2021

Whether the Ford Lightning succeeds remains to be seen, but the fact that they promote the frunk’s ability to hold two carry-ons and one full-size suitcase shows a JTBD focus.

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My first collection is 26 Jobs to be done, it’s $3 on Amazon.

“Going for the no”

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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.

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