Tag: rory sutherland

The Headspace JTBD

MIKE7 Comments

Headspace, the mindfulness and meditation app had a problem. People came to the app under duress and wanted to feel better. Now. So, Rory Sutherland summarized, people didn’t persist for the long term benefits without a short term win. “That’s fair,” says Dr Clare Purvis. The company had to address the immediate need but also address the long term benefits.

A common idea around here is the Barry Ritholtz refrain: don’t just do something, sit there. The idea is that we equate action with progress but fail to assign inaction to progress too. Usually action=progress is negative, like with poker or architecture. But the action=progress mental model can be used for good. This, I think, is what Headspace did.

“One of the things that we tested,” Purvis pontificated, “was that rather than an eyes closed mindfulness practice was some eyes open embodied practices of stretching and breathing. We saw overwhelming positive responses to these.”

Traditional meditation (🧘‍♂️) doesn’t fit action=progress. But standing or standing and breathing is something. This isn’t sarcasm. I truly believe that part-of-the-reason this worked was because it made people feel like they were addressing the immediate issue.

What’s the job-to-be-done of Headspace? Make me feel better. ‘Embodied’ is action, action is progress. That’s what I want, especially right away.

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Maybe this applies to marketing trading/investing too. Though less profitable, is it easier to sell action?

Meaning and marginal effects

MIKE1 Comment

‘Is diet a form of counter signaling among wealth people?’ wonders Rory Sutherland. “If so it won’t really scale. It will be profitable. It will be large enough, there are enough wealthy people. But if it doesn’t scale beyond the highly educated and well paid then obviously the environmental benefits won’t be so great.”

Though I agree with Rory (a lot) here he’s surprisingly wrong.

Blockbuster Video and Southwest Airlines had the same business model, though they aren’t the only ones to operate this way. For Blockbuster the problem wasn’t everyone having Netflix but some people having it. If they lost 5% of their customers, sometimes their most profitable ones, in any given area that changed the unit economics. The same fixed costs spread over fewer customers meant the non-fixed costs had to change too. The same with Southwest. In the early days of the airline, founder Herb Kelleher told employees they only made money on the last two passengers.

These marginal customers are the reason Rory is wrong here. Much like the first pounds lost on a diet being the most impactful, the first ‘meat consumers’ lost will also have an outsized gain (or is it loss?). But that’s not all! Because the environment is a complex adaptive system, the effects are almost certainly non-linear.

Most of the podcast between Sutherland and Live Kindly’s Jodi Monelle is about delivering value through meaning. Value through meaning is kosher, it’s vegan, it’s carbon free too! Value, Rory says, is ‘Beyond Meat’. It’s like meat, but better. It’s beyond meat. That’s good value.

Local maxima

MIKE3 Comments

When stuck-at-home in 2020 my kids (12, 10 then) and I enrolled in the Marc Rober Creative Engineering course on Monthly. It was mostly above my engineering (and their in-depth interest) level but it was still great. We got to see Rober’s structure for brainstorming, more of the build process, and his thinking along the way. The hours of course video were like a documentary, a ‘Making of’ video.

One thing we saw was how Rober prototypes his builds. In the case of a making a candy launching device Rober made one using springs, one using compressed air, and one using hydraulics. The reason to prototype, Rober said, it to not get stuck at a local maxima.

Rober's sketches

We all have an idea for solving a problem and a lot of times we just do that. However in the situation we get more information. Rober suggests imagining a series of wooded hills. From the ground we don’t know which is highest (the best solution). So we need to hike up our best guess and look around from there. The hike up to, and the view from the top give us information on how best to act.

Rober’s process has come, in-part, from his years at Apple and NASA and making things like squirrel obstacle courses and glitter bombs. He’s a YouTuber with a very small staff, (no groupthink) so how might an organization avoid local maxima?

Rory Sutherland suggests following the bees. What’s great about Rory’s recounting is the structure. Organization direction is based on culture and incentives. Sutherland’s structure is one way to change the incentives.

“I think having two budgets, two sets of metrics, and two sets of incentives for exploit and explore. It would be utterly insane to learn something in a test and fail to exploit it by doing more of it. Make the most of what you know, but always invest twenty percent in what you don’t know yet. Bees do this where roughly twenty percent of bees ignore the waggle dance that tells you where to find nectar. The bees understand that if you don’t have these rogue bees the hive gets trapped at a local maxima and eventually starves to death.”

Part-of-the-question with a local maxima is the cadence of change: is a business more like Netflix or a pool construction company? Rober prototypes. Sutherland et al. ‘test counterintuitive things’. Some bees explore, some exploit. Each found a balance and designed a loose solution so not get stuck at the local maxima.