Rory Sutherland - Alchemy: The Surprising Power Of Ideas That Don't Make Sense

Full transcript: Rory Sutherland on London Real

3:13 This is London Real. I am Brian Rose. My guest today is Rory Sutherland, the British advertising icon and vice chairman of Ogilvy, one of the largest marketing and communication companies in the world. You are known as an expert on consumer behavior, market trends and the influence of the internet, earning awards for your work on Microsoft, Unilever and IBM. You write for The Spectator, you’ve given multiple TED talks, and your new book Alchemy explores why placebos are so effective, why logic doesn’t always pay, and the surprising power of ideas that don’t make sense.

3:43 Rory, welcome back to London Real. It’s a joy to be back. Thank you very much. Great having you here. It’s been four years since we sat down and I wanted to ask you to start off, what has changed in four years in your worlds of understanding human behavior, technology, advertising, influence?

4:01 What’s the first thing that comes to mind? Oh, one of the strangest things that comes to mind is that in truth not that much is happening, and this sounds a very strange thing and it’s worth discussing because my generation, leaving aside the internet and maybe low-cost air travel, okay, nothing really significant has happened. Now that sounds a ridiculous thing. That’s why you’re here, to transformative technologies. One utterly absurd thing, say if you compare my grandmother who was born in 1900, where they probably didn’t actually, the other grandmother was born in about 1895, they wouldn’t have had electric light for the first 15 years of their existence.

4:44 Laundry would have occupied a day of your life. What she saw between 1895 and roughly 1980 was inordinately more pronounced, I think, in terms of the level of innovation and life-changing technology than what we’ve seen. Hmm, interesting. So it’s slow. There’s something very strange going on and I was asked this question.

5:11 Americans are in a state of extraordinarily kind of dissatisfaction in a way because they can’t recapture the American dream. Hmm. I tell me right now, I ask the question sometimes, what’s the American dream? Partly a dream because no other country at the time could share it. So 1915 I need 45 to 50, the United States had 50% of world GDP.

5:35 Yeah, okay. It was the only country that wasn’t destroyed. It was the only country which wasn’t either poor to begin with or totally destroyed by war or just generally irredeemably crappy in some way. In this period an extremely number of new innovations became accessible to someone median income, certainly even, even actually someone on low income, right? I think when cars, houses, refrigerators, for example.

6:07 Now those things were available in 1910, 1920 if you’re a Rockefeller, you know, but essentially a whole bunch of things became available to Americans which wouldn’t be really commonly available anywhere else for another 20-30 years. I mean supermarkets, I mean, you know, extraordinary cars. My father used to get American car magazines in his youth in the sort of 1940s and he said really an American car magazine in say 1942 as a twelve-year-old English boy was like reading science fiction, you know.

6:45 So there were things, you know, things like for example a convertible with an electric hood, okay, which wouldn’t really be seen, they’re all commonplace in the UK for another sort of 30 or 40 years. The cars were just astounding. The world depicted, I watch and repeatedly watch because it’s a sensational film, North by Northwest. Yeah, and you have to remind yourself as a Brit that this was, what was it, 1950 probably, around there. Four Kings, right?

7:11 Now if you look at the train or the architecture of some of the buildings for example, it’s of a kind which to a Brit watching it would have seemed absolutely astounding. There’s a famous comment made about a later film, 1960s Psycho, which is that the shower scene, the shower burger had slightly less in fact in Britain in the United States because in the UK in 1960 people are astonished by the idea of a hotel room with an ensuite chocolate, right? And so there they were still getting around the fact that you had a shower, which was by no means a shower in a hotel room would have been a complete oddity in 1960.

7:52 In Raymond having an adjacent shower and toilet in a basic motel wouldn’t be unthinkable. My uncle went to Texas in the late 60s and they apologized to him that there was a black-and-white television in his hotel room, right? And he was a bit baffled because A, he hadn’t expected color TV, he hadn’t expected a TV in his room at all. He’s a British hotel at that period. Older listeners will know this, you had a television room which had, which was set to one channel and the residents of the hotel came down and sat in chintz chairs and watched the television, right?

8:28 Okay, so the Americans had the Americans, they have this American dream. It was partly a dream because no one else had it, but I always wondered it must slightly piss you off now as an American because to be up still honest, okay, you’ve got this kind of narrative that France or Spain or Italy are like really poor and shitty compared to the United States and yet in terms of those basic possessions, those life enhancing possessions, there’s not much difference. It’s not obviously honest, okay.

8:56 It’s not as if there’s you weird form of technology coming in which really rich people can afford that no one else can, and I’m in the weird position and that, you know, I talked to a few other tech people on Twitter about this and we don’t like to talk about it much because it makes you look like a kind of first world problem, bit of a spoiler. But we actually say, look, the weird thing about tech is one of course electronic tech, internet tech is extraordinarily egalitarian in many ways in that it’s a bit like Hockney’s great, sorry, that will hold straight comments on Coke, which is, you know, all the Cokes are the same and all the Cokes are good. The President of the United States can’t get a better Coke than the bum on the corner of the street, and that, okay, I’m suddenly a bit of an to say that tech like that, but actually if you’re a Premiership footballer you have a PS4, you might be able to buy it three months earlier than someone on median income, but ordinary people can buy that same thing, which when you think about it is extraordinary, the extent to which most people in the UK, some are on median income, who really really wanted to could effectively have the best mobile phone handset in the world.

10:12 There are the categories like that. Sherry is a weird one for some reason where I don’t know why, this is the most expensive bottle of wine in the world costs hundreds of thousands of pounds, the best sherry in the world you can pretty much, and for some reason sherry is never premium. Eyes door has lost its premium quality to a degree, but that’s extraordinary, but there’s also an extraordinary thing which is if you gave me a hundred thousand quid and said okay take this to your branch of Currys PC World or whatever and use it to improve your life, I could get a few marginal improvements in on my bad massive projector, I guess, I don’t know, I might buy bigger television, my wife would probably stop me, and I actually, to be honest, after I’d spent about two thousand quid I’d be at a loss to know what to do.

11:01 Okay, so what does that mean? Is there a strange which is we always talk about economics, know everybody measures how much money people gotta spend, but equally important to me in economics is consumption, on what people have to spend their money on, right? And I’m always becoming a bit of a socialist, which is weird for someone like me, in the sense that if almost if all the very rich end up doing with their excess money, isn’t that okay, my grandparents they had the fourth dishwasher in Wales, okay, that was a massive status symbol then if they wanted to be, I mean yeah, and they weren’t particularly blingy, they just loved practical gadgetry and this thing was the price of a car, Bradley.

11:39 Okay, but a dishwasher is a real thing, it’s a transformational brilliant brilliant idea which you know I mean proof but in this way it’s a technology which if yours broke you would immediately set about getting it fixed, right? You would go, I’m perfectly happy for four weeks without a dishwasher, what are you, real now? So your point is that that means there isn’t anything, right? So it was so weird what rich people today, even if you make an extra million, it’s what you go consume, your life isn’t gonna be marginally interesting.

12:08 So there was a phrase that the drive, American dream of making our lives a lot better probably because the American dream was a dream was that you were enjoying it while everybody else was having a nightmare, right? But part of reason the American Dream was a dream was that your extraordinary non shittiness of your economy for that glorious period also coincided with an extraordinary number of things which was suddenly affordable which were really worth buying. Okay, so you know no one’s gonna dispute the fact that a car is a is a big thing, okay, and now it’s disputing the fact that a dishwasher, washing machine, fridge is a huge thing and now we don’t have that in, you don’t really happen, so we’re a little upset that we don’t have that.

12:49 I mean, how can you lord it, how do you lord it over the Spanish when, okay, you know, okay, we can’t anymore? Can you? Because in terms of basic quality of life, I wonder if there’s a kind of weird, it was remembering that to some degree we, economics has always assumed that actually independent that human wants a kind of finite, if you like, and therefore you know socialism that provides people with the basis of their needs, the writers always argued never know.

13:21 Actually what made consumerism extraordinary is that, and what made communism not work is that the ingenuity of capitalism was continually providing people with what you might call instrumental advantages. There’s a great phrase which is, as well as economic inequality there’s instrumental inequality, which is the difference between what rich people can do and what poorer people can do, and until someone invents something really weird, okay, you know, I mean maybe there is some strange, like one person self flying drone that I can climb in and I can get to work and land on the roof in you know 20 minutes from Sevenoaks and that cost 90,000 quid or 150,000 quid. Now actually what Silicon Valley will do is it will over-size that technology, it won’t actually sell it to me, right, it’ll just, it’ll essentially just a bigger much Biloxi’s.

14:15 An extraordinary thing, by the way, did you ever use it? I have used it, yeah, yeah, okay, but don’t tell too many people that, you know, I don’t reduce availability, but a little bit more than the black cab, you get an S-Class Mercedes turning up. Now Uber Lux is essentially now, obviously it’s not something you use every day, but it’s essentially a chauffeur when you want one for 20 or 30 quid a pop, right? It’s a really good value there. I mean, let’s extraordinary let me a thing which is until we can actually argue, okay, the people who are wealthier are buying significant instrumental practical advantages with their money and by doing so are funding the affordability of those same things to everybody else.

15:03 You know, there’s a great role that I think income inequality did play is in many cases the rich funded the early development of things like washing machines, televisions, radios, and then eventually those things through mass manufacture became more and more affordable over time, okay. So there’s an argument that what the rich, what rich person’s status seeking did was, it was in a way the status seeking of rich people was a kind of R&D funding exercise for the wider population. Now if people only spend their money on property, for example, or I’m sitting in the to the plane rather than back that same useful function doesn’t seem to be being before.

15:42 Okay, understood. Let me ask you about something to happen yesterday and I want to get Rory’s marketing perspective of this. We have a new prime minister, Boris Johnson, who was there on probably the back of the Brexit vote, which is a marketing phenomenon itself which I’d like to ask you about, but Boris, he is, and you talk about this in your book, illogical. You look at him as a candidate, you remember the Tony Blairs and the Bill Clinton days, I mean they all had personal stylists and people that would cut their hair and do their makeup, and it was considered that was always going to be the leader, that was this obvious, I don’t know what it is, perfect person.

16:18 But now you have someone like a Boris Johnson, how is that play from a logic, a logic that that is our leader now? Is that intentional? If you were his marketing guru, could you? Okay, I think he’s his own marketing guru for good and ill, and I think that’s true of Trump as well, and me and a bunch of other people have also made the point that Trump is instinctively much much cleverer than intellectual people think he is. He’s instinctively clever, not intellectually clever, but no, well, by the way, I don’t think the man was a total idiot, no way, which is a common, you know, some question, yeah, by any means, and he has a certain negotiator’s instinct and a certain communicator’s instinct which you might expect a real estate salesman to have, definitely.

17:04 Um, always bluffing, always coming on strong. And actually one of the things he does also which is, I mean, I wrote a piece about this, there’s a strange, if you take the sort of social justice movement and there’s a wonderful paper in a website called, I think, Aeon, which makes this point, it’s become a kind of religion and weirdly a large part of the behavior of the social justice movement is actually deeply counterproductive, because if you get really really obsessed about, for example, certain speech codes and you react to the violation of those codes in the way that a religious person would react to blasphemy, okay, and therefore what you do is you evidence discussed generally your opponents hate you. So the two things I think that the social justice movement has which make it look like in a sense deeply flawed Protestantism, okay, is one, weirdly they turn on themselves to an extraordinary degree.

18:10 It has no concept of kind of solidarity because they actually hate an apostate or a heretic more than they hate an atheist, okay. So that’s the first thing, so they will turn on people who are actually at will, they’ll turn on Germaine Greer and they’ll turn on Peter Tatchell for sake, explain those two cases of people, that’s extraordinary bad for creating a cohesive movement where you’re competing to show moral purity to a point where actually you’ll start condemning people who are, who you know who shoe you should be actually admiring a part of your movement, dancing looking down the city. The second thing is your reaction of disgust and horror, people really really hate being treated with contempt, and what Trump did is, as I said, he found the thermal exhaust port on the liberal Death Star, because he had to just cross one of these lines a little bit, okay, by saying bad hombres, okay.

19:14 He knew all those people including journalists, but I’m not only just talking about, you know, the head of gender studies of the, you know, whatever it is, college, okay, some liberal arts college, he knew that those people and the press would go batshit crazy about it and start calling him a racist, and he knew that that reaction was actually net to his electoral advantage, particularly in the places which he needed to win, because the extent to which the left has abandoned what you might call its old economic aims and become insanely preoccupied with gender and race to the exclusion of almost anything else is, you know, it is an extraordinary kind of Achilles heel, and Trump exploited the, because he knew, okay, I could, if I simply behave in this way the press will actually give me an insanely disproportionately high amount of publicity, and to some extent, I hate to say this, but fame is basically good, okay, that, you know, by being five times more famous than all the other contenders for the Republican nomination.

20:26 Mm-hmm. Simply generating noise basically works in that context. Now Johnson’s interesting because Corbyn’s also interesting, because Corbyn and Johnson are, although very different politically, if you think about Corbyn, someone should have realized very quickly that he was going to win that election for the Labour Party leadership anyway, even without a lot of kind of extreme left-wing people mobilizing, simply because you had three very identical candidates and one distinctive one, and it’s not like Dave Trott calls it Gestalt theory, but you know, if you have zero, if you have a whole screen of zeros with an X in the middle, the human brain spots the X in about a millisecond, right?

21:12 This for politics, and I mean so the three identical candidates split the vote, Corbyn as the fourth candidate. This is why, by the way, the Tory leadership election at least narrows it down to two before it goes out to a public vote, because otherwise you have that fundamental problem which is that you have the X X X Y problem, which is essentially, you know, the three X’s are indistinguishable and therefore divided support, whereas the one distinctive person attracts everybody on a particular part of the spectrum. Okay, understood.

21:46 The fact that he had a beard was pretty much a winner, you could have put anybody for with a beard and I think they would have watched to have that. Just if you want a lot, you know, if, if, if Andy Burnham had been persuaded to wear a large beanie hat throughout the campaign, he probably would have won. They would Boris said, well, what, Boris does the same thing, which is he’s distinctive, and it’s worth remembering that is that by design, well, that his personality, it’s both, I suspect, say the Trump, well I suspect to be honest I think he knows that he can’t play the other game, okay, so why bother?

22:17 Such a citizen, why, why bother and magnify it a bit. Seconds worth remembering, of course, that I was slightly defending his role to my wife who doesn’t like this tall by saying that actually leadership qualities and show business qualities are much much scarcer in politics than administrative ability. Everybody goes, he’s been a good politician, he’s the Prime Minister, he should be, you know, have, you know, high quality. Now actually you can outsource that stuff, you can delegate that, the administrator.

22:47 The ability to be a figurehead might be, I would argue, you know, I have no idea, okay, to be honest I suspect that Richard Branson is, I think you might be dyslexic, an extraordinary thing which is a remarkable number of entrepreneurs are actually dyslexic. Generally don’t know how Richard Branson, how good Richard Branson is at running a spreadsheet, okay, reading a spreadsheet, or how good he’d be if you asked him to perform some complicated feat of logistics. Now I think you outsource there’s a lot of that, but exactly being the figurehead for an airline and saying this is what this airline is about, it’s not like other airlines, okay, he does something which very few heads of a PLC could do and I think we are, we are suffering this problem where organizations are increasingly Apple kind of run by the finance director, right?

23:35 And I’m sure that Tim Cook is a much better finance rate than Steve Jobs would have been, right, but in terms of creating that extraordinary distinctiveness and in terms of unifying an extraordinarily fast and cranky group of people like Apple employees, stroke Brits, the value of what Johnson does, even though I’m by no means an unqualified you know fan, I have huge doubts on all sorts of levels, he is a leader in a figure, yes. It’s a scarcer human quality than administrative ability, okay. And do you think corporates need it as well?

24:12 Do you think he needs more of a Jobs figure as opposed to less of a Tim Cook figure? I think it’s hugely valuable to have within a bit, I would say this would not, but in within a business to have someone at the top who essentially is happy to go against the grain, okay. Thank you. In your case, company, I’m only the vice chairman, I’m not, I did have, but I think having a percentage of people as you would do in an ad agency having a creative director who’s a highly distinctive character, those things are really really useful.

24:49 If you think about it, the great ad agencies were all founded by creative people, you go back Bernbach, Ogilvy, et cetera, and what has happened is they’ve become overly administrative in that managerial qualities are probably over awarded and creative and you know, so in other words the people who measure and count the money are becoming in all organizations more valued than the people who generate the value, right, the creators. Yeah, you mentioned America and the American dream, and is that really where modern marketing was born, when you had all of a sudden this lower and middle class, you had all this stuff to sell them, people had a choice because it wasn’t communist Russia? So now is that when marketing evolved?

25:31 You also an interesting thing because what we often forget, a few episodes of Mad Men make this clear, is probably like Mad Men. Do you like watching? Yeah, no, yeah, I mean it’s both very, it’s both actually very accurate, very inaccurate, okay. Actually you are new, the later versions of those Mad Men when you started, I still know one or two people who, Joe Rafelson in Chicago, he and his wife were both copywriters at Ogilvy in the 50s and 60s, okay. I had a very distinct observation, I went out to dinner with them both and I said to what extent is in that chapter fiction of Joel himself said, oh nothing like that, I mean the depiction of the philandering and the drunkenness and so forth, I mean really, I mean it really is monstrously overblown.

26:16 His wife telling he was a joke, it was exactly like that. So depending on the male or female perspective, it’s worth remembering by the way it was complicated in that there would have been a large number of agencies in the 50s, I’m not sure didn’t include Gerald Thompson, major agencies which wouldn’t even handle alcohol accounts. So we’ve got to remember that cuz America was only, if you know, 20 years after prohibition, there was still, you know, quite America was very very puritanical then, okay.

26:50 But presumably agencies did start to spring up which were much much more maverick in all sorts of ways, okay. But I mean Jeremy Bullmore remembers that a bunch of American board directors came over and attended the JWT Christmas party in London and were reported back, the directors’ wives reported back with some horror that there was quite a lot of dancing. So I mean that is that is the strangest thing about the United States, which is you’re actually bizarre and actually in some ways I think irreconcilable mixture of weird sexual and other license combined with Puritanism.

27:32 It always works that way, but I mean you’re Brit, Britain I think has reached a kind of accommodation. Yeah, well you’re closer to the continent where, yeah, but it’s somewhere in between, but I see Britain is, yeah, it has kind of a mid-Atlantic identity, alright. I think, yeah, we’ve never had a big hang-up about booze really, I mean you know, yeah, America definitely has that. Well you know, admin, that was kind of what Wall Street was later, what the oil business was like later, what tech was like later, I mean that’s where the action was, right?

28:02 That’s where, yeah, because A, you had 50% media commission, you had the sudden coming of television which was extraordinarily potent, you also have this thing which we all forget, which is a surprising number of American brands were at the time regional and so there was essentially with the coming of national distribution and national media to support national distribution, because remember you think about it, your newspapers, you’ve never really had a national newspaper, okay, back then. So the extent to which television, by dint of being national, forced these ones slightly regional brands to compete for national dominance in a kind of winner-takes-all competition, that must have driven extraordinarily high ad spend. Yeah, and so probably by dint of receiving commission there were agencies which were for a short time, at these 1050 years, literally insanely rich.

28:57 I mean it would have been an extraordinary way because they certainly sit up copied, they simply copied the commission and payment system from press, okay, and of course so you know when you multiply the numbers by ten or fifteen, these numbers became spectacular. So lavish expense accounts, of other states pay packages, that’s what we see kind of in Mad Men and everything. And there’s, is there still a hangover from that, work is like advantageous thing which is because you have, yeah, you were effectively paid by your clients but because the money, the commission, came from the media owner and you would technically, I think it was in Britain it was illegal to rebate commission to anybody else for a long time, so in a weird way you weren’t entirely paid by your clients, they could withdraw their business, but they weren’t actually writing cheques to you, they wrote checks to the, you know, to the media and you got your fifteen percent, and that probably gave you an independence of mind as well because you weren’t always there haggling about what the blended hourly rate was, okay.

30:02 Gotcha. So and how did that carry over to where we are today when it comes to marketing? You said the American Dream is still some twisted version of that’s old is still in the consciousness, but know about the American Dream, which is that it was partly a dream because everybody else was having a bit of a nightmare. Yeah, and it’s also interesting because I don’t think, you know, barring some strange nuclear catastrophe, I don’t think you’re ever going to see one country being that much relatively richer than everyone else, or at least relatively better in terms of quality of life.

30:36 Now the reason I raise all these questions are an instrumental inequality is I would argue that we ought to now start looking for improvements in quality of life, remember I’m this is going to sound like weirdly left-wing, it’s simply pragmatic, okay. We should start to look to improve people’s life with greater amounts of leisure rather than necessarily with greater amounts of money. Hmm, okay, because at some point if the money is being spent in a way that is either completely rival or us, the market essentially just inflated but these people are competing for scarce commodities, zero-sum game, okay.

31:14 The washing machine was not a zero-sum game, okay, but was there, that’s the, you know, an enormous benefit. Now here’s a great thought experiment, okay. If you ask people, it’s Robert H. Frank who wrote a book called The Darwin Economy, fantastic economist and evolutionary psychologist. If you ask people would you rather live in a world where you earned fifty thousand pounds a year and everybody else earned thirty, or would you rather live in a world where you earn eighty thousand pounds a year and everybody else earned a hundred, okay, quite a lot of people choose the first, and the reason they choose the first is not irrational, because relative wealth in some respects, if you’re trying to attract the opposite sex for instance, if you want to buy beachfront housing, okay, maybe much more important than absolute wealth.

32:09 In fact when you go to Ogilvy, what slightly paid for that Ogilvy is the chief executive of Ogilvy in London and the chief executive of Ogilvy in New York probably have the worst quality of life I would argue objectively of any major senior person in Ogilvy. If you’re if you’re the head of Ogilvy in a Latin-American country, okay, you know known as much as the person in New York does, that your house is bloody spectacular, okay, you know, right, you know it’s on some cliff overlooking a tropical beach, you know, whereas the person in New York’s, you know, you know they’ve got a nice apartment but it’s nothing to write home about. Now if you ask just a different question which is would you rather live in a world where you had four weeks vacation and everybody else got five, or would you rather live in a world where you got six weeks vacation and everybody else got eight?

33:00 Sorry, yeah, right, yeah, yeah, most people say I’d rather live in the six week vacation world because vacation is not a, not a relative status good, it’s an absolute good and more of it is better than less regardless of what everybody else has. So leisure time is a good, it’s not a competitive rivalry as good like money is for prop chasing property or, or, I mean I would argue personally I think the whole travel industry has gone batshit crazy, okay, in that for young people who everyone’s paying close, don’t really the status thing anymore and I didn’t own a car, you know, right, okay, you’re young voice, a young person voice, I don’t even know the car, I probably belong to a car club, okay, and I think it was really that, but they use travel, they use travel as a status indicator.

33:43 I think if you went to university now and you’d never been anywhere long-haul you’d be at a significant mating disadvantage to some, get you’d been to match you pitch you and so they just have difference to the status competition was the same, the currency changes, okay. Now I asked a room of Millennials and young folk once, all London resident, okay, how many of you have been to Machu Picchu? And then I asked how many of you have seen Lincoln Cathedral?

34:11 And the ratio was about two or three to one Machu Picchu. And you can get to Lincoln Cathedral in a day from London, okay. Now okay, whatever you want to say, okay, one, you don’t get altitude sickness, okay, two, architecturally it’s, that’s Machu Picchu, right? Thirdly I’m not even sure watching a Four Corners documentary on that’s Machu Picchu wouldn’t be more valuable than actually going there, to be honest. Now so the real interesting thing there is that leisure is something people enjoy for its own sake, whereas money I think is increasingly something people enjoy for the business of pursuing personal status and rivalry, which is a zero-sum game, okay.

34:55 And that affects the way we market to people today. Well, I, yeah, I think we’ve got to ask questions, asking questions about I mean there are economists, are weirdly there’s a strange economic movement called something like post-scarcity luxury communism, okay, which essentially says that we become sufficient at manufacturing and distributing goods that nearly everybody in the world who wants to will eventually be able to live a life of considerable opulence, okay. Now at that point you actually need to introduce communism essentially in order to, simply because money motivated, or what you might end up with is absurd inequalities of wealth, okay.

35:43 We’ll see if we get there. We’ll see. If we get in the book you talk about this concept of perception versus reality and you make a great example in the first part about Coca-Cola versus Red Bull, and I think this is interesting because everyone watching has probably consumed both of those beverages, but tell me what you see when you see the way Red Bull introduced their product into a market that before had never seen anything like that and how they did things that were uh, nay, illogical, because much of marketing is illogical and that’s why it’s fascinating.

36:09 I think there’s a really vital thing which has actually importance not only for marketers and market researchers but also for people doing artificial intelligence and working with Big Data, which is that human behavior doesn’t run on objective reality, it’s not driven by objective reality, it’s driven by meaning and context. So the same thing in a different context can appear totally different to the human mind and therefore leads to totally different behavior, even though the thing itself may be the same. Simply changing the context changes everything, right?

36:50 I always think of the Mark Twain but replayed, he would entertain in the fence. Yeah, he gets his friends to pay him to paint the fence because if you portray fence painting, and of course if you, if you, if you think about that, we see examples of that. There’s a wonderful Onion parody about upper-middle class women in sort of Marin County engaging in candle making. Now in the 18th century candle baking was a necessary piece of domestic drudgery, and the second you could actually buy ready-made candles you huge d create for the opportunity, but suddenly what was once, I kind of said, you know, an 18th century, you know, necessary totally tedious piece of Drudge work suddenly becomes a kind of, you know, an extraordinary pleasure, right?

37:39 Bread baking another example, you know, yeah, and I mean arches and basically means manufactured through an inner fish process, doesn’t it? Yeah, okay. And which is all the rage, it was just that’s interesting in itself because what it’s evidence, so I think the hipster movement which I which I thoroughly endorse, by the way, is saying long eventually there isn’t an equivalent to the washing machine anymore, really, there isn’t this thing that can really change my life.

38:05 Not by the way, the washing machine, if you think about it, really enabled women to enter the labor force, so its knock-on effects were much more significant than merely avoiding a day of drudgery, okay. And so what we’re gonna do is we’re gonna do the things we always enjoyed, we’re just gonna do them better. So we’re gonna make really really good toast and actually I find that business of doing basic, you know, immutably good pleasures like breakfast and just saying let’s just do it incredibly well, I find that actually it’s, to be honest, the psychological value is probably more than the intrinsic value, but it’s a pretty harmless way of enjoying ourselves, I think.

38:44 Yeah, and perception areas, I’m very pro hip, so I think hipsters should be subsidized, actually. Ha, and I, it’d be very interesting, very scenic anomic argument, the universe a basic, and if you pay hipsters to move into, I think they could solve the housing crisis, because once you’ve got two or three hipster cafes, okay, any area becomes an acceptable place to live. If you’ve got high-speed fiber-optic broadband and some hipsters, you’ve essentially gentrified, okay, right there, okay.

39:11 So comes, so actually paying hipsters to, say there’s a town in South Wales which really really needs, you know, an artisanal sourdough bakery, you might be on earth, ality some generation, and you make an AI as well. So how does that, I had a gangrene, okay, so it’s the fact that what AI has access to is information about reality, price, okay, information about behavior, sales, well it doesn’t have information on is the weird black box of human perception together in between. So let me give me an example of this.

39:45 There were some bird perception scientists, I’m sure there’s a better name for it than that, we’re doing experiments showing parrots photographs, right, and they were slightly baffled by the behavior, the reaction of parrots to these photographs. Like there’s a mixture of things shown on screen and things shown in print and for example, I’m making this up but this could be the kind of thing, you might show the picture of a ripe banana and they’re completely uninterested. Do you remember a parrot’s vision, okay, is first of all they can detect ultraviolet, secondly they have completely different sensitivity in their cones in their eyes to a totally different part of the wavelength.

40:28 So remember a photograph of a yellow banana and a TV picture of a yellow banana is not actually producing any yellow photons at all, it’s producing equal amounts of red and green photons, and the red and green are calibrated to the areas of sensitivity in the human eye, and so your TV is species-specific, all color printed magazines is species-specific, okay. So what you’re saying is unless you actually printed real colors, anybody print in full, I don’t know, so what’s the point that the parrots are seeing, he’s not reacting, how we go, oh, parrots aren’t interested in ripe bananas? But the parrot wasn’t seeing a ripe banana, the parrot was seeing a banana was green or black or I don’t know what it was, but okay, but it wasn’t seeing a ripe banana because actually what looks like a bright banana to a human in print or on TV, not in reality, doesn’t look like a ripe banana to a parrot, okay.

41:23 And in the same way what we might do when we look at big data is we might draw conclusions about the relationship between reality and behavior which are entirely erroneous. One, we may fail, we may assume a good, I won’t go into this in a huge amount of detail, we may assume a huge amount of ergodicity, so we may assume that what people, what the average does at once is what everybody does over time on average, right, and that may be completely wrong, okay. So we may get by having these snapshots and averaging them, we may assume that the average of a group, that the collective simultaneous average of a group behavior is representative of the overtime average behavior of that group, which isn’t a true assumption, okay.

42:12 So that’s the ergodicity problem. The context problem is the Red Bull one-in-four parrot one, which is if you asked a load of people, okay, what would make a great drink as an alternative to Coke, everybody would tell you accurately, in a way, I want to drink the taste nicer than, cost less than Coke, it comes in a really big can so I get great refreshment for my money, okay. The most successful attempt to compete with Coke, Red Bull, does the opposite: tastes like it can’t, costs a fortune, comes in a tiny can and tastes disgusting, right?

42:48 And when they researched the taste people said this is disgusting. Now my contention is if you flip the context from drink to drug, those three qualities which make Red Bull an appalling drink make it a brilliant placebo. Um, all medicinal products have to taste weird, otherwise we don’t believe they’re medicinal, right? If you think about it, you know, everything has to taste a bit weird, right? Yeah, I think, to be honest, if you sell vitamin C you can make it taste really tasty, don’t, I think the placebo effect is much stronger if you make it taste slightly foul, okay.

43:23 Red Bull, by the way, they researched it with a company that only researches the taste of carbonated drinks and people basically said things like that, the company said this is the worst drink we’ve ever researched in the whole history of our company. Normally people say things like it’s too sweet for me, I know it’s a drink for kids, really, here they were saying it’s like, I wouldn’t drink this piss if you paid me to, but as it’s our ugh as a drug the small town says this drug’s really potent, okay, because we can’t give you a full 375 milliliters around that, you’re calling up, and so it was marketed not as a drink but as a drug, it gives you wings. Therefore the small quantity, the high price and the weird taste, which in the context of perceiving a drink make it a very bad drink indeed, make it a brilliant drug.

44:10 Is that from The Immutable Laws of Marketing, where it says don’t be second in a category, invent a new category where you’re first? Exactly. Yeah, it’s a, in a sensitive great country. So the example I also give is if you look at people’s pizza behavior, nearly everybody orders their pizza for as soon as possible, and it was assumed in pizza delivery that what everybody wanted was basically instantaneous pizza delivery. Um, we argued that maybe that’s true, maybe it’s context, well sorry, praising may believe a deadlines I’m consciously there, the point being that the default on the web, on the web if you ordered pizza, is ASAP, the default on your mobile phone is ASAP, if you ring up they never say when would you like your pizzas to arrive, they assume unless you state otherwise, do you want it as soon as possible.

45:02 Then we said what if you just changed the context of ordering, and particularly so you don’t assume that it’s going to be immediate, you make the default further out than ASAP, but also what happens if you actually ask the question as a time of day, not as a duration, because if you ask for the duration people tend, the guy wants as soon as possible, if you ask would you like it to arrive at 8:15, 8:20, 8:25, 8:30, a lot of people go, where I wanted to arrive in half time or, and sure wouldn’t mind having a shower, so when they get to arrive an hour’s time. And if you change the question you change the answer to the question, and so the huge danger is that people will derive from big data assumptions about what humans want which are actually not a product of their deep desire, they’re simply a product of the context in which something is perceived, okay.

45:55 And that’s why I still have a job and the realistic in a very simple level, okay, I could very easily, this is obviously daft but if you think about it, I could put two thousand pound bags in Tesco handbags and I don’t think I’d sell very many, okay. The same bag in Bond Street might walk off the shelves. Now yeah, you’d say okay target audience, do that, that actually it doesn’t really matter, to be honest, even if really really rich people are going to your local Tesco, they don’t want to buy a two thousand pound bag in Tesco.

46:27 Secondly we’re in comparison with milk and microwave, the Sunya 2,000 pounds seemed like a lot of money in comparison with the other, on Bond Street it might well be a bargain, okay. And so once you don’t understand the contextual frame in which people decide, you only decide you couldn’t make the totally erroneous assumption that there’s no market for two thousand pound bags, right? And so there’s this huge problem essentially which is that what we’ll try and do when we have big data and when we have artificial intelligence, we’ll try and look for connections between the things we know, I, what the price is, how many people buy it, and what will remain blind to is the really decisive factor, which is how is the thing presented.

47:15 Before Starbucks, okay, if you’d gone around the United States and essentially said would you willingly pay 350 for a coffee, no would be the answer, especially not and by three a day for espresso. If someone had said would you actually pay 50 p for a cup of coffee, all the data on how much people will pay for ground coffee or Maxwell House would tell you that people paying effectively forty pounds for the equivalent of a large jar of coffee is never gonna happen, and espresso proves that wrong. If you frame the price differently people are totally happy to do it.

47:47 In the case of Starbucks, I mean I think most of these huge companies, by the way, Google, Starbucks, Uber, they’re really the product of a psychological discovery, not a technological one, okay. I’m, if you think about Uber’s technology, as GPS it’s um, you know, it’s a map, I mean it’s rudimentary, putting those two things together so that the uncertainty of waiting for a car is hugely diminished because you can see there’s a car on the way. Yeah, and actually while you’re waiting for the car you can have another cup of tea and make yourself a point rather than staring anxiously out of the window, okay.

48:23 That’s what changes the game, that’s the psychological in it, I don’t know, because you, because Uber doesn’t necessarily reduce your wait time for a cab, what it does is it reduces the psychological pain of waiting, and the pain of waiting is created more by uncertainty than it is by duration. Yeah, I remember last time you were here you said something that really stuck with me, Rory, when you’re in the tube these days, I’m on the Northern Line, you can see the next few trains and it gives you the exact time, like two minutes or four minutes, and you’re sitting there and all of that uncertainty and angst is like, oh what’s coming, even though it’s six minutes, and sometimes those things change in real time, but it feels certain, it feels accurate, especially cuz it’s in one minute increments.

49:03 The amusing thing is that the people on the Tube have to go through extraordinary hoops to justify spending on live information systems, and the reason is that their objective measure of transportation is based on objective not subjective measures, so the improvement, the reduction in anxiety doesn’t count. The only thing that would actually matter is a reduction in wait time, and my argument is look, if you can reduce anxiety without reducing wait time, it’s gonna be an ordinary cheaper to do so. By the way, oh, by the way, I’m not saying you have a wait time of 45 minutes, I’m not suggesting this is a panacea, I’m merely suggesting that, I mean I quite often catch trains from Blackfriars station, which is essentially a bridge over the Thames, and sometimes I just wander there and just don’t even bother to have a train in mind and sit on the platform, and the reason I do that is that I know it’s 12 minutes now before the train comes in, I could rebrand that 10 minutes as doing a crossword or more likely looking out onto the river because it’s a gorgeous view, tourists would kill for that view of London, and so I actually sit backwards or sideways on one of the benches and look out towards the river, and my view is that’s not a waste of time at all, right, because it’s been reframed, been reframed and repackaged.

50:20 And so that’s the innovations that the Ubers do and some of these other big companies. I mean I changed, I’m in an interesting position because I live equidistant between two stations and interestingly my use of one station, which was very very low for the first few years I lived where I do, my use of that station went up by a factor of about 3 or 4 when a coffee shop opened out there in the morning, because the 15 minutes that had previously been, you allow a margin of error to catch the train, and the 15 minutes waiting had previously been irritating, and once there was a coffee shop with a nice guy to chat to and a bench in which to sit and drink a coffee and stare into space, essentially I no longer minded that wait anymore, and so my use of the station went from sort of, I don’t know, once a fortnight to twice a week.

51:14 Okay, you have a concept in your book where you say that we have two reasons for doing anything, there’s the good reason and the real reason, and this comes down, Morgan I think said that, yeah, every man has two reasons for doing what he does, a good reason and the real reason. There’s huge monetary this, we have an official reason for choosing things, this to do with the reptile brain and the brain. I was burbling on to you, wasn’t I, about that name piece of hi-fi I bought, the Naim Mu-so, and uh, to be honest, okay, I was saying the reason I justified, as I said, in all the explosion of Spotify, of Tidal, the fact that my music collection effectively online is now all music, I can listen to all of the world’s radio stations pretty much, I can listen to all of the world’s classical music, all of the world’s country and other inferior forms of music as well, essentially.

52:08 Airing that a big fan of country. A lot of behavioral science music fans in England, I’m finding that in the advertising industry as well, but we never admitted it. Says we rang, but no, it’s a copywriter’s, it’s a copywriter’s medium, okay. I think if you’re a copywriter you actually secretly love country because the words are so damn good, but it’s very weird because it’s always seen as this very very white, okay, as a medium, but you go to the Caribbean and actually when you think about it reggae is Caribbean country, really, okay, and weirdly people in the Caribbean absolutely love country music, so that stereotyping of it is being very, you know, it’s being kind of a kind of cracker, part form, it’s very on, but I suddenly realized, and I came up with this rational justification, okay, which was that I had, you know what’s crazy is when I had a limited record collection I, you know, I spent five hundred quid on having a really good hi-fi.

53:02 Now I have unlimited content, I, other than buying expensive headphones, I haven’t spent any money on home Wi-Fi other than a few Bluetooth speakers costing a hundred quid, it’s time for me to spend 600 quid on some of this stuff, you know, podcasts, audiobooks, we’ve kept those, okay. Yeah, so I suddenly unwrapped toys, in the fact that that Naim thing is literally 15 times more valuable than it would have been in 1980 because of the extraordinary content I can use it for. In truth, I bought it cuz it looks really cool, okay.

53:38 Now that’s a lizard brain making my decision. My example is, okay, that toothpaste is the beautiful case where you actually have two reasons for doing it. Officially it’s all about dental health, right, okay, it’s all about preventing cavities, gum health, all those things. If you look at when people clean their teeth, one, okay, first thing in the morning, yes, right before you go to work, yes. Do you sometimes, to be honest, if you have one of those weekends where you bum around in your pajamas or underpants watching TV and not getting out of the flat, do you clean your teeth those weekends?

54:12 You don’t, right, because you’re not getting out of the house. Before a date everybody would clean their teeth, so actually it’s more about breath freshness and social anxiety, not dental health. In that item – or exhibit – in this 95% of all toothpaste is mint flavored. Now that does not make sense if it’s about dental health, it’s principally about the anxiety of bad breath and or scuzzy teeth. The secondary benefit which we use as our post-rationalization is all about dental health.

54:46 Now I think good advertisers understood this all along. Just think about, okay, this is probably the most successful brand in Britain in terms of household penetration, Colgate. Saying if you don’t have anything by Colgate in your home you’re probably something sort of weird, deviant, you know, it’s been like 10 years ago if you didn’t buy your underpants from Marks and Spencer as a bloke you have, you know, you’re probably a bit iffy, you know, there’s something, you know, not, you should be left alone with a silverware, you know, if you have, but the interesting thing about Colgate is that they understand this because what’s the headline, the ring of confidence, okay, very very cleverly ambiguous because yes, if it’s a mum taking the kid to the dentist you could make an ad all about the fact that no fillings today, mum, but equally the ring of confidence is really, you know, if you’re a teenage kid going out on Saturday night you’re not anxious about, you know, knocking someone out with your halitosis, right?

55:42 So you need to understand that most people make those decisions from these deep down inside insecurities, reptile brain, what these, yeah, I’m actually, yeah, I mean the part of the brain that does the deciding isn’t the part that does the explaining. I mean it’s a metaphor, but I mean it’s that why Trump’s been so successful? You see a guy on stage that you know, I used to watch Trump in the election, he put all the pretty girls behind him, Ivanka and all the wives, and then he’s up there, you know, lying, the billions of dollars and the real estate, you know, okay.

56:15 He did, okay, and the monkey part of the brain says he’s the monkey leader, and then later you say oh his policies are this, is there something, yeah, yeah, the silverback gorilla, the kind of, okay, the thing he did which I thought was actually brilliant, okay, as a piece of advertising and nobody company should have won a Grand Prix at Cannes for effectiveness chess, do you remember there was a picture of him in his plane in fantastic opulence of the plane, eating with done eating KFC, KFC, well you know even better and gravy, you know, yeah, he didn’t have a knife and fork which he was slightly really cool to over there but equally if you’re a private plane you’re gonna have cutlery or in, you know, why use plastic cutlery if you’ve got the metal stuff?

56:57 And what was utterly brilliant about this was, if you think about it, was incredibly since it said I’ve got a plane, right, but I eat the same food you guys do. Now the two things: one, Hillary didn’t have her own plane, okay, she didn’t have the money, if she had a plane it probably was lent to her by Goldman Sachs, right, okay. Secondly you can’t imagine Hillary and KFC, can you? You know, it would be some avocados or you know, you know, something weird, you can’t imagine Hillary eating that stuff.

57:25 Yeah, at you can imagine Boris, Boris is a bit of a bit porky, yeah. You can’t imagine Boris actually secretly sneaking off to the Colonel’s finest establishment, you know, for a, you know, for a couple of spicy hot wings. I can, that right, we can also you can see it. And of course one of the things that’s vital about these people as well is that to us in London we think politicians are people just like us, if you live in a normal part of the country, by which I mean not even outside the M25, you live towards the M25, ok, they’re all drawn from the same bloody administrative caste of people who in the course of everyday life you don’t encounter very much and when they do they’re a pain in the arse, like someone at the local council or, you know, a librarian or something, right, right.

58:11 And this administrative caste is actually, I so let me get this right, I think the first Attlee cabinet, 45, okay, there were seven people in the cabinet who had started their working life at the coalface in a mine in 1945, 1945, okay, as recently as the 1980s and was recently the 1980s, certainly the Labour Party to an extent, the Conservative Party, you know, the Conservative Party probably would have had a garage east wing, which is people who started by, you know, buying garage, in the Labour Party to be much more like did they come through the Union education system, but I think it was something like 18, 19, 20 percent of MPs only 20 years ago or 25 years ago had started their working life in a manual position, okay. So we forget that most politicians, the whole, the whole higher education system is created a racket, I mean the higher education system exists to preserve middle-class privilege and to seek to solidify middle-class advantage, okay.

59:21 I creating by writing the rules for success, the rules of the game are written in a way that middle-class people are a uniquely well placed to play it, to play the game, middle class and upper middle class, yeah. And so we’re in a democracy so you have to relate to the common man or you won’t get elected. Thing about America is that what we forgot about Hillary, right, is that, I mean I was watching occasionally for reasons of slightly perhaps unhealthy, I’m a total Reagan-phile, in that as a guy who, I mean, somehow knew how to present himself, speak itself actually or shucks humility, fetter had a leader than an administrator, and the extraordinary Matt Reagan, I watched him appear for Roy Acuff’s, I think it is 90th birthday at the Grand Ole Opry in Nashville, and he comes in a white suit, the way he does is different, and then of course YouTube being YouTube it starts playing me Reagan porn essentially, you know, and you see Reagan, okay, George W., right, when he had a bit of spare time he went to Texas, to be honest he was the president who knighted States, he had some sort of wrongish in Texas, but to be honest if you gave it to me I’m not even sure I’d even go there, I mean he was some clearing brush, yes, Grubb, Reagan of course and Nancy were riding around in horses, they had a kind of pickup truck in California.

1:00:50 Virtually every, Clinton, Clinton had, for all his kind of cunning he had that common touch, you can imagine Clinton sneaking off to a KFC, right? Yeah, he used to go to McDonald’s with his running crew, CIA runners, so they don’t, they don’t go that, no no, the interesting thing is that nearly every, every American president of the last, George H.W. Bush was the one exception in that he did didn’t really know how to fake or genuinely reflect that part of the American, which is if you’re gonna be an American president, that’s fine, but you’ve got to be 25% regular guy in some way, okay.

1:01:29 And Boris at times, that poor, where he takes that box, weirdly all those an old Etonian classicist and hound, you know, grotesque philanderer etc etc, the philandering is by the way interesting and I’ll come to that in two seconds, that also make you like the common man? Well it also is a bit silverback, isn’t it, in a way? Yeah, I mean Trump’s doing the Stormy Daniels porn star thing and no one cares, might help him. It is fair to remember that if you think about it, okay, to most people in the United States, in the UK certainly, the most males, okay, the reaction to sudden wealth of Hugh Hefner makes much more sense than the reaction to sudden wealth of Mark Zuckerberg, doesn’t it, okay?

1:02:13 Now okay, well a lot of people if you said to them what would you do if you had loads and loads of money suddenly, okay, the answer basically I live in a massive mansion in California, thread by supermodels in bikinis, is to some extent a more normal reaction, and if we look at the history and we read Petronius, we go back to the Roman emperors and so on, you know, powerful people do, then they go to a software company and spend the time staring at a bloody screen and then take all the money exhibit away. So having your own plane, I have to admit this, okay, there is one thing, having you having a plane with your own name on it, that’s that’s the last thing in my bucket list which I had to say sneakily I shouldn’t really admit this year, I have that with all good but I’ve been having a plate, having a plane with Sutherland down the south, you’ve got to agree, okay, that would be, you know, I get slight envy of big haulage firm, mister, you, because there is a firm called Sutherland which is a Caithness-based, that’s where we’re from, okay, that’s best calling all its firm which I think takes things down to Smithfield market, it’s a meat haulage firm.

1:03:17 Every now and then you see one of the, you know, you see one of these massive kind of 18-wheelers with Sutherland in 18-foot-high letters down the side. You even if you weren’t making it, there’s something about Trump that does appeal to that common man. It’s kind of an Oxbridge that you, you have a, Boris will know this very well, you hand porters are Oxbridge and the general thing of the porters and to some extent the bedmakers, okay, was they actually loved the boozers and the philanderers and despised the academics to a great extent as they were more like that because because it’s seen in one side it was a more natural reaction to privilege in many ways, it’s used to take advantage of it, didn’t try it, than to spend your whole time in a library and mugging up on the Delian Confederacy or something, you know.

1:04:16 And so people don’t apologize for it these days, the war stories, doesn’t, I didn’t think I’d, she liked him very much. I mean I’ve been really candid here, we go, but the little trick in marketing is if you can’t put yourself in other people’s shoes you might as well pack up and go home, you know, particularly as the real problem in marketing isn’t just that it’s very very urban and London-centric, it’s also the problem in London is you’re very homogeneous in terms of the age group and social group with which you hang out. Soon as you move to suburbia your next-door neighbors are sixty-five, you know, you have kids, you know, you have parents at the school who are all drawn from a different middle year to some extent, okay, but in London it’s possible to have a kind of social circle which in terms of age group and socio-economic group are barely a cigarette paper apart from each other, and so it’s not difficult to put yourself in the shoes of anybody else, going essentially, I can imagine myself having a pint with Boris, right, whereas I can’t really imagine myself hanging out at a KFC with Hillary Clinton, for example, okay.

1:05:29 And so those kind of those kind of qualities are at least interesting. The other thing is of course that you you have the fact that all politicians are in complete thrall to neoliberal economics, and I’m not including Corbyn and they’re far left on this, and I’m not including more eccentric people on the right, that’s very interesting thinkers on the right who also question this, but the neoliberal economics which is essentially the function of government is to make the country economically more efficient, okay, is first of all of course we don’t actually appreciate efficiency that much because we’re not conscious of what we wouldn’t have if it were less efficient. That’s great simple thing, okay.

1:06:16 I, you know, I’m sure that something said neoliberal economics has given me the, you know, the Kindle or the whatever it might be, maybe it’s given me that hi-fi thing at a price which is, you know, an even ten percent lower than I would have otherwise paid, but hey, I might have paid the higher price anyway, be I’m not really conscious of things that if that thing didn’t exist I wouldn’t really miss not having it, okay. I understood, but the second thing is that neoliberal economics is a bit like being married to an accountant, which is you have quite a nice car but you never use it to go anywhere interesting, and I think neoliberal economics fell into that trap, which is that it’s so deficient in terms of meaning and motivation that only the nerdiest people, broadly speaking only males I think, well the reason I think economics becomes, conventional economics becomes a very very male study as well is you’ve almost got to be somewhere on the spectrum to actually regard that as a motivating force in your life, and so what it did is it created in politics a kind of vacuum for leadership, meaning, no I’ve said, and I’m basically small c, possibly large C conservative at times, and one of the things I have said is we have to have some sort of aim, like okay let’s get to a four-day week.

1:07:37 Um, fantastic MP for Faversham who’s put a Conservative MP who’s put in a proposal, it was at ten minutes that important for a week because we have totally failed to use technology to rethink patterns of working behavior. The one of the big problems is, okay, here’s a classic case of path dependency. Now if this seems a bit anti-feminist bear with me because I got the whole point from Fay Weldon, okay, which is when the two income household first became possible it was an extraordinary act of liberation because women were free to work if they chose to do so, okay.

1:08:22 Households that would rather have money than leisure could effectively have two people in the work force and therefore they could acquire goods at a rapid pace before they perhaps had children, okay. Then what happened is it became the norm and that the two income family went from being an option to being compulsory because you couldn’t afford a house unless you had that, and so that brought with it what you might call an increase in wealth but a decrease in freedom. And so the typical married household with children has essentially gained not much economically because house prices have simply gone up pro rata, okay.

1:09:04 Um, they’ve lost 35 hours of 40 hours of discretionary time a week, which now I don’t think we need all 40 of those hours, I think we have labor-saving appliances which mean we might need 15 or 20. The extent to which childbearing disproportionately hurts female careers could also be solved if, as this fantastic MP proposes, that flexible working should be a default in all advertised jobs and you’d have to give a reason why the job wasn’t flexible. So instead of making flexible working an option, jobs are flexible by default unless they’re not, okay, and she’s very astute behavioural scientist, I’ve met her and she’s brilliant, I’m kicking myself I can’t remember.

1:09:46 And this is again trading that income for the leisure that you said earlier that actually has more value. America doesn’t have a mechanism by which you could choose to earn a bit less money and have a lot more leisure, and it’s even example you could double your holiday, your vacation allowance from two weeks to four at the cost of four percent of salary. My hunch would be if given the freedom more than 50% of Americans would do it. Why don’t they do it? Because if you’re the first person to go into your boss and say I want four weeks vacation it looks like you’re not committed.

1:10:17 Yeah, okay, so that’s something that has to be mandated because if you don’t mandate it essentially no one will ever put the bell on the cat, okay. That’s interesting and as I also think by the way America would probably be richer if they did this. Now this seems strange but if you think about it, money spent in leisure time is much more labor-intensive and is spent locally. So I would argue that Americans probably have too many goods and too few hours in which to enjoy them, right, and then if they spent those that it would be, but actually you’d probably be well not anymore, I go, oh yeah, go on holiday, the United States and one reason is, one of the reasons is that you get so little bloody vacation that even in peak times of the year tourist attractions like the Grand Canyon, so we first went to the Grand Canyon completely out of season, okay, and we basically just parked next to the canyon and we looked at it, okay.

1:11:15 The next time we went with my children, said had to be in the school holidays, so I think it was July or August, and we actually ended up in overcoat flow car park, see, and I had to walk a small way to the canyon. Now if the Grand Canyon were in Spain, okay, in July and August you wouldn’t be able to get within 20 miles of it for people, go up the assets, but you get so little vacation time that the only people who are going to see it, typically what it would be, it would be an American whose company has one of those conferences that ends on a Friday in Scottsdale, and because the American industry is basically the American holiday industry, and so America needs to try to prioritize the spending, and wealth, wealth is to some extent the choices you can make with it, okay.

1:12:00 Well, phony increases if it increases the meaningful choices you can make. One of the reasons the very rich are often quite poor is if they’re trapped in the status framework of other very rich people they end up doing totally mindless and stupid things simply to compete, which this is why actually one thing about Boris, Boris he’s really a genuine heiress to crap though he acts like one. One interesting thing I always think is people who know how to spend their money are the very poor and and very posh, not the very rich really, the very posh know how to spend their money, they don’t give a what anyone else thinks, okay, and the very poor can’t afford to engage in sense the signaling activities, they spend they tend to spend their money on things that are actually fun.

1:12:46 Hmm, right, in here, okay. Now the middle class, 90% of middle class activity is effectively signaling how middle-class you are to other middle class people, which both prevents you from doing things which are meaningfully enjoyable. Having an enormous television, you know, Britain this weird social thing which is it’s considered Plan C either not television or to have a small modest television that have a huge W, it’s great, right, okay. Secondly, you know, my less posh neighbors are able to have a hot tub in the garden and now my guess is if you’re a kind of upper middle-class American you can’t really have a hot tub, does that fair?

1:13:29 I mean because it’s too lowbrow, yeah, you didn’t call it something else, it does exactly. You’d have to make it Japanese, well you have to make it out of teak or something about that, and then you can just about get away with it. Most of our behavior in our life is based on how we compete with other people and the person actually that that is an extraordinary waste of wealth because you’re essentially allowing your preferences to be defined by other people, right, which lowers your happiness and, yeah, engagement.

1:13:56 I’ll give you an example, by the way, of indoctrination in this area, which is my wife occasionally gets those strange magazines like House and Garden, you know, and I would look through the houses and get, but hold on, there isn’t a single electronic device in any of these photographs, there’s the radio, there isn’t a hi-fi, there’s the Bluetooth speaker, there wasn’t a television, who the hell won’t spend like four hundred thousand quid on bloody Farrow and Ball, they got no telly, okay. And so I met someone who worked for some gardening where the telly is, oh we take all that out before we photograph the house. So there are whole lot of females who are basically being fed a lie that the good life consists of having artfully arranged pot plants and no large screen TV, and it’s entirely a kind of aesthetic myth that essentially being fed to people.

1:14:45 That’s why would you not lend huge TVs, and say it’s spoken like a true man. Let me ask you about Brexit because it’s on everyone’s mind and there was a Channel 4 doc with Cumberbatch about talking about the marketing manipulation that happened with that. I’m curious on your thoughts, the way that you see that the vote actually happened, the way that was done marketing-wise to people all around the country and what it means to people now and the perception of it versus a reality.

1:15:14 I’m in a very strange position here because I’m genuinely not that bothered, right, we’re this wid pervy minority in that I voted Remain fairly narrowly. I think it is, I think the EU is probably net beneficial or I think it’s a good idea which is very badly executed. I, I mean I became a bit more Leaver-ish when these three new Commission presidents emerged about three weeks ago through no kind of democratic process at all, okay. They’re a bunch of failed politicians from other countries who are given this kind of extraordinary position of power and essentially it’s decided behind closed doors and there’s a significant democratic deficit, there’s also a significant accountability deficit in that broadly speaking you want decisions that affect people to be taken in close proximity to the people who are affected, and I think that the, I also think that the modernization which is something economists, for example, and businesspeople have an absolute obsession with, the efficiency gains from scale, which I think are actually questionable, and the reason is that when you gain in scale you tend to lose in diversity.

1:16:33 Now I can’t buy really a Citroen 2CV anymore because as the car industry has gained in scale it’s also lost what you might call the localized eccentricity and a variety that you used to possess, and you know increasingly cars look like other cars to a great extent, and okay, I mean maybe, maybe the electric car will lead to an extraordinary proliferation of boutique car makers, I mean we can look, we can only hope, you know, arguably it might bring back the coachbuilder because essentially if you think about early Rolls-Royces would just be engine, chassis and you’ve parked it on to Mulliner Park Ward and they did their bodywork, and an electric car when you think about it is so good, am essentially all the moving parts, it’s a roller skate with a battery and a bit of software, so the ability to actually build interesting vehicles on that platform strikes me as quite exciting.

1:17:32 But anyway, so let me get back to Brexit, I’m, I thought Project Fear was a lie, I thought the extent to which they exaggerated the problems was also dishonest. Writing a flower was the campaign, the Remain, is the Remain has made a terrible mistake which is they turn Project Fear into Project Threat. Instead of saying there are significant disadvantages to leaving they talked essentially about the fact that, you know, we can’t, we can’t possibly leave, it’s impossible, which made then Leavers think, well hold on, you shouldn’t have got us into this inescapable position in the first place, because the EU is patently a shapeshifter, it’s a political project when it suits it, it’s an economic project when it suits it, and you can’t endlessly make people make political concessions in return for putative economic gains because what, you know, ultimately you end up completely trapped, okay.

1:18:25 I don’t think the EU should have acquired a flag, I don’t think it sort of required an anthem, by the way, I think those were terrible mistakes because you could do loads of things, you have a logo, you can have loads and loads of things, NATO, you know, NATO’s got a flag admittedly, but I think it’s a mistake to essentially try and take on the trappings of a state because it shouldn’t be that yet, okay, fifty years’ time, there is a natural pace, there’s a natural pace of change. The EU unfortunately, by dint of its dysfunctional decision-making, if you think about it, it made some uniquely bad decisions. I mean the, that the extraordinary diesel cheating crisis, the Euro itself is a terrible mistake, freedom of movement shouldn’t have been introduced across the board simultaneously, okay, simply because if you’re, if you’re, if you’ve got any kind of interest in complex systems you realize that what is good, okay, a generally freedom of movement would bring ultimately economic goods, but you can’t get from state A to state B without the gains, if the, if you try and move from the first state to the second too quickly, okay, the gains become incredibly uneven, and the gains from freedom of movement were extraordinarily uneven, if you think about it.

1:19:41 Britain’s at a disadvantage in a weird way because we speak English, so there are more British-born people working in Australia than are British-born people working outside the UK in the EU, okay. That surprises everybody when they hear it, okay. So the very language thing makes, okay, so most people who have been brought up on American, British films etc and can speak English you know 90 percent as well as I can can come over to Britain, there’s a whole range of jobs they can do.

1:20:12 If I move to Warsaw I’d be sweeping the streets, right, because all my skills are entirely linguistically dependent, I don’t speak Polish, right, so that transfer doesn’t go together, that transfer is highly uneven, if you think about it, okay. Let’s imagine you had washing machines, we’re all French-made washing machines would work with a British plug but to make a British-made washing machine work in France you had to install a 100 pound inverter, okay, that would not be an even competitive situation for washing machine manufacturers, British washing machine manufacturers would be at a disadvantage. If you replace the 100 pound voltage inverter with learning the language of the local country, that asymmetry exists in terms of freedom of movement if you’re an English-speaking country to begin with, okay.

1:21:00 That makes sense. So what do we go from here? We’re practicing, so my point is uncoated, even-handed, I would probably have preferred that we stayed, having taken the vote we have to leave because democracy is more important than, you know, 1% GDP growth and the, to a dear to the principle of you voted, this is what you want. It’s extremely good for the middle class to have to occasionally do something that they don’t like because it hasn’t happened to them for 25 years, you know, basically 20 middle class urban people pretty much get to design the world they want, it’s hardly unhealthy for them occasionally to have to do something to make some uncomfortable, which is what’s happening right now, which is what’s happening, they kind of have to get used, I have, I do fully, I mean the other thing that makes me uncomfortable is that the reaction of the EU to the Leave vote just cemented the Leavers out because there’s very simple thing, okay, if you everybody talks about the huge economic problems of trade, nobody talks really very much about the defense or political disadvantages of leaving, not much, because probably they suspect there aren’t many to be, am stillness there would be if you were an island or you were Belgium, okay, but if you’re the fifth largest economy or sixth largest economy in the world you can kind of do that yourself, okay.

1:22:28 Um, the problem at this economic thing is that everybody in business knows if you quiz them that if you put 50 businessmen in a room they could solve the Brexit thing in an afternoon, okay. You’d say okay fair enough that, you know, that Britain pays some duties on certain products, we need special treatment for the free movement of agricultural goods, foodstuffs, aerospace and automotive parts, there are a few select industries which were disproportionately hit if we’re not careful, we need to basically preserve those, we need a solution which is to some extent a cosmetic solution in Ireland, which is provided the border checks don’t happen at the border, okay. It’s worth remembering there are customs and border checks within the United States, okay, if you drive from Vegas to California there’s an agricultural thing, the checks you’re not, I don’t know, carrying weird animals or something.

1:23:23 Yeah, Bob’s with you, right, and maybe checks that you don’t look like you’re from Mexico. Do you think that’s what a secret immigration? I think there is, I’ve been through that check a few times. So um, okay, I think I understand what you’re saying. You know you talk about this thing called the placebo effect.

1:23:36 In Europe the thing is it’s dishonest really, what is dishonest is it’s not really an economic problem, the reason Brexit’s been made difficult is the politics of the EU, which is it cannot allow us to be seen to leave without suffering, right, okay, and that’s that’s a political problem. If you’re a business person you could say, and I talk to fellow business people, you know, there’s quite a lot of Leave business people, by the way, out there, we shouldn’t forget that. It’s worth remembering that Dyson is probably a Leaver, asking why, because the lobbying business which bit Britain is recent and in the United States I think is catastrophic, the influence that business has over democracy.

1:24:21 If you want to know why Dyson’s a huge Euro skeptic it’s probably because the German vacuum cleaner industry tried to stitch him up because in setting the standards for vacuum cleaners they tried to make the test, does this sound familiar, okay, only be performed on empty vacuum cleaners, okay. So the efficiency gains of a Dyson, which doesn’t lose suction because of its vortices, okay, would not then be essentially detectable in the test, okay. Thank you, because you basically Hoover up air and then went on for Brexit, and let me talk about a couple, that is a huge stick shop.

1:25:00 Yeah, it is, we should be hugely uncomfortable about an organization where that kind of thing can happen, okay. You talk about the book, thing called the placebo effect, what does that mean and what should we understand that from a marketing perspective, where you know what were, it’s a real psychological effect. of what we’re being sold and what’s happening, what does that mean? So I mean essentially you can take the idea of the placebo and you can define that more broadly or more narrowly as you choose.

1:25:28 During the way I’m not sure I ought to be very clear about this, I’m not sure about evidence for placebos that they actually cure things. What I am confident is is evidence of placebos where the problem itself is something that’s perceptual, for example pain or discomfort. I’m absolutely clear the placebo and the placebo effect can be magnified to remove what you might call the psychological side effects of certain conditions, okay, and there are people who go further who say that actually, I mean it seems weirdly that you can cure obesity by giving people a fake gastric band operation, which when you think about it, so in other words they’ve had cases where the people, the operation hasn’t gone ahead because of some problem and yet the person loses weight anyway.

1:26:21 Now so patently there’s, and there is a part of the human endocrine system which is psychologically driven, and the theory around the placebo effect is this, that essentially, okay, we have to conserve, in the evolutionary environment we had to conserve our resources very carefully, and one of the things is a massive response to illness or disease, A, is extraordinarily costly in terms of resources, and B, um, may actually immobilize you, which means you can’t escape from predators, okay. So most of the unpleasant side effects of a cold or flu are actually the body’s attempt to actually rid the body of flu by increasing your temperature and so forth. So interestingly the immune response is what creates the discomfort.

1:27:16 Now obviously the body has to limit that immune response because something that completely immobilized you might have a huge risk attached, and evolution read them, there’s an argument that we are, we’re ill more often in the winter than we are in the summer because the body has a more conservative use of resources to fight infection in the winter, where you might starve to death or where you might freeze to death overnight, whereas in the summer it’s calibrated to an environment where food is more abundant and where the requirement of energy to actually just fight cold is reduced, okay. So the argument is there isn’t an experiment which is if you convince hamsters or guinea pigs or something by changing the lighting, if you convince them that it’s summer they seem to get ill less and mount more effective immune response against any illnesses you give them, simply because their brain, stroke, internal, the immune mechanism effectively is thinking that it’s summer.

1:28:20 Now a placebo is equivalent to making you think it’s summer. It creates the conditions in which your body goes, okay, I can actually turn this dial up to nine now because I’m in bed, people are looking after me, they’re bringing me soup, I have a wise shaman with a white coat, also known as a doctor, who is ministering to me, reassuring, kind of pills. Given these conditions now’s a really good moment to turn the dial up on my immune response. Gotcha, gotcha, and that’s how that works.

1:28:52 Now that’s the narrow medical definition of a placebo, but people including Nicholas Humphrey, the Cambridge psychologist, say there are what he calls placebos in the wild or collective placebos. So if you think about it, you want a group of soldiers to be brave and to make sacrifices on behalf of each other, what you do is you use that, they’re low, if you think about it they’re parts of your body you can control or at least over which you have the illusion of conscious control, like moving my hand up and down, then they’re parts of my body, my heart rate for example or my pupils, which I can’t control obliquely but can’t control directly. I can meditate and bring my heart rate down, I can go jogging and bring my heart rate up, I can dilate my pupils by moving into a dark room or weirdly looking at pornography, I don’t know why that works but go figure, okay, that for some reason causes your pupils to dilate, okay.

1:29:48 Now interestingly the Germans and everything called bedroom eyes, which means a bedroom eyes, which which must be somehow linked to that, the state of arousal, people’s eyes grow bigger, but the interesting thing there is that you can control those things obliquely but you can’t control them directly. I can’t say I’m going to be brave today, okay, I can’t say pupils dilate to by, you know, 50%, but what I can do is if I create an environment in which it’s easy and natural to be brave, I, you all march together, you call yourselves brothers in arms, you all live together, if you think about soldiery they tend to be billeted together, they’re very much in close proximity, they’re, you know, they’re taught to almost see each other as brothers and as a family, they have enormous symbols, you use trumpets and music and drums which seem to make people braver, you have symbols, banners, regimental flags, all the panoply of things tend to create unity and human beings and make them, to borrow the words of Jonathan Haidt, a bit more ant and a bit less chimp.

1:30:59 So we become then much more of a collective force and less of an individualist force. I think Special Forces soldiers are probably different, I think in that case with Special Forces soldiers you have people who are not quite to taste psychopaths or sociopaths is unfair because people aren’t completely psychopathic, but Special Forces soldiers seem to have the very weird quality which is they jump out of a helicopter while being shot at and they’re not frightened, okay. The back of this book says to be brilliant you have to be irrational, and what are you trying to say by that?

1:31:33 What everything is the statements here, since 90% of remaining human problems aren’t really problems of physics, they’re problems of psychology, okay. Everything gets defined as an economic problem, as a physical problem, how do we make trains faster, you know, how do we reduce income inequality, okay? Now in given inequality is a weird one because to some extent it’s a bit, is it actually a problem? In other words if everybody is reasonably well-fed, dressed, rested, the problem is actually a psychological one, which is it makes us feel uncomfortable in some way, right?

1:32:10 Now so we’re trying to solve a psychological problem using the mathematical tools and the simple straightforward models of Newtonian physics, as it were, paetynn, it doesn’t apply because the way we perceive things isn’t objective, okay. So the way in which you, for example, the way which you get people to behave in a particular way or feel in a particular way may be extremely oblique, just as how do you make trains faster, you put a sign on the platform that doesn’t actually make the train faster, it makes the wait less painful, but that’s equivalent to making trains more frequent, making the wait less painful, right. And so, and you say this, like the problem with logic is that it kills off magic, that’s the way of you sees anything is the psychological problems can sometimes be solved magically whereas physical problems can’t, right, okay.

1:33:05 So there’s no such thing as a free lunch is the economists’ attempt to recreate the second law of thermodynamics for the social sciences, yes, that was repeated to me a lot in business call, no free lunch, no free dance, but I, of course, psychologically there is a free lunch, if someone buys me lunch I feel differently about them and about the lunch than if they made me go Dutch or made me pay, okay. And you have other unexpected things like dare to be trivial, if there are a lot of ups, you escape the Newtonian trap, butterfly effects become possible, you can add a word and change a human reaction, okay. So I’ve got a great friend Paul Craven who’s a very very good magician and also also spent many years in finance, and he said that he said the single best trick I ever learned in business is that when you want to ask someone a favor most people say I need you to do me a favor, or sorry to dump this on you but, or I’m sorry but I’m absolutely snowed under, I need you to do this for me.

1:34:07 He said if you phrase that same thing as I wonder if you can help me, in other words you’re not certain they can help you but you’re asking a question where they will gain considerably in status and in estimation if they can answer yes, there you haven’t actually, you’ve actually created a volunteer rather than press-ganged a recruit, okay. And so that the entire approach they will have towards performing that task will have been rendered completely different simply because of the tone of voice and the wording in which they’ve been asked to do it, right, okay. But that’s really important because as I said, okay, if you don’t believe me, if you had reframed the student loan as a graduate tax, the entire reaction to it would have been totally different.

1:34:54 I personally believe, in my politics are weird as you’re probably starting to gather, okay, I personally believe we should have inheritance tax. I think the person who should be taxed should be the recipient, okay. It shouldn’t be taxed at the point of death, it should be taxed at the point of receipt, encouraging people to spread their money more widely, okay. But if you won, people started calling the inheritance tax a death tax, okay, it was kind of doomed.

1:35:19 Hmm, whereas if you just said, you know, it seems to me ridiculous that someone should say well if you go out to work as a teacher every year and you happen to have made it to headmaster and you get it, you know, you get promoted or pay rose, that pay rises as a headmaster of a school is taxed at 40%, okay, but if your dad died and he happens to own a large house in the country you get 300 thousand pounds tax-free, then seems to be utterly ridiculous, he’s just that actually inheriting money is somehow something to be incentivized more than actually earning it. Now Adam Smith, Bowen was in favor of large inheritance taxes, as he’s Warren Buffett. Let me ask you a couple of these other questions.

1:36:00 A flower is simply a weed with an advertising budget, what does that mean, Rory? Signaling is often necessary in a, economics doesn’t understand well, it only came up with in part from sort of signaling, although partly borrowed it from biology, but in many cases it is necessary, important is that advertising is twenty billion years old, you know, and pollinated flowers have been kicking around for at least 20 million years, and in order to convince the bee that it is worth investigating you have to actually advertise yourself, and the extent to which you spend money on petals is proof of your confidence in the long-term value of what you have to offer. So people use advertising as a heuristic for knowing whom to trust, okay.

1:36:45 That’s really good. Don’t design for average. The innovation tends to happen rather at the edges, so if you design for the very middle of a market you end up in an overcrowded field. The people who successfully innovate are the people who actually, who actually, I’ll give you a lovely example of this. BT developed a phone with huge buttons intended for people who are basically blind.

1:37:08 Yeah, I remember. Now the thing to remember is designing for the disabled is a really good philosophy because most of us are kind of disabled a lot of the time. So if you’re standing on a train you lose the use of one arm because you’ve got to hold on to something, and it’s now mandated that you have door handles rather than doorknobs in buildings so that people with no hands can open the door, burn elbow, actually someone carrying two mugs of tea thankfully has no hands.

1:37:35 So looking at people and designing for people under particular constraints, or for example frequent users are often very very different. So 10 people who buy your product 100 times a year are very different from a hundred people who buy your product ten times a year. That’s why you need Amazon Prime, okay. So Amazon Prime is a classic example of not designing for average because Amazon Prime is the realization that, I think interesting, Jeff Bezos was already a billionaire when he introduced Amazon Prime, and he came across huge, huge opposition within his new organization, but I think his point was very simple, he probably felt even if you’re a billionaire, okay, ten people don’t mind paying three pounds for delivery once a month, no one however rich is really going to be happy paying 3 pounds to deliver 10 times a month, and therefore if you want to have frequent customers you have to have some mechanism where they can pay for all the delivery in one shot, okay, and that was the outer edge.

1:38:37 Um, this one I don’t understand: the opposite of a good idea can also be a good one. Huge, important, because by modeling social science on physics we think that being scientific means being like your high school science class where there was a right answer and a wrong answer and you could get three point seven, tick, anything that wasn’t three point seven was wrong, right? In marketing, one, the rules of the game aren’t constant, two, you can rewrite them, three, by changing the context you can change what good means.

1:39:11 So to give you an example, not far from here there used to be a restaurant in Chinatown called Wong Kei, you remember it? Now it was a Chinese restaurant in Chinatown famous for being the rudest restaurant in London. Now normally being rude in a restaurant is a bad idea, okay, just as for example saying that gravity acts upwards in physics means you’ll make some really dumb decisions, but if you actually make your rudeness part of your proposition and people expecting in advance, then weirdly being rude in a restaurant can be a benefit, not a cost.

1:39:43 So that means it’s another good idea, reading up Red Bull’s classic example, it’s the opposite of Coke, tastes disgusting, comes in a tiny can, in all those respects you can take the opposite of something and people like it. I would argue for example if you take hotel check-in, a really really smooth automated hotel check-in is great, you know, where I just take my mobile phone up to room 307 and open the door, I think that was really cool, um. I also think that the Mandarin Hotel in Hong Kong, where someone walks you up to your room and makes you a cup of tea and a pot of tea in your room while you fill in the check-in forms, that’s also a great form of hotel check-in.

1:40:26 Um, what isn’t good is the middle. Yeah, as I often say there’s a bargain and there’s an extravagant treat, okay, we don’t get an endorphin rush from mid-market retail. The Henry is a great vacuum cleaner, the Dyson is a great vacuum cleaner, okay. Yeah, no, I’m just so, the idea that where we’re trying to optimize something is fundamentally mistaken and therefore we’re using the wrong maths and the wrong mindset in making marketing decisions if we assume only that our job is to be the best at something, and if we define ourselves by our competitors it’ll be even worse because we’ll be, we’re trying to be better at something that a lot of people are already good at.

1:41:06 What’s the point of doing that, okay? Now the person who understands this best in the business world, if you want to read a business book, a mine is any partly a business book, Peter Thiel, or Thiel, I know Americans pronounce German words in a weird way but I don’t want, it’s Zero to One, is a great great book, he understands this stuff absolutely brilliantly, you know, your purpose is not to be a great competitor, your purpose is to create a kind of mental monopoly in some space, its rid of monopoly essentially so that you have monopoly pricing power and actually can, you know, operate like a great business can and innovate and take long-term decisions. The second you’re trying to be competitive, to be honest, the future health of your business is already in doubt because you’re driven by short-termism and the winners of the market.

1:41:51 Yeah, that’s really powerful. Don’t be jarred, dare to be trivial rule, yeah, that the way to solve the problem may be surprisingly trivial and silly, and our attempts in business to make ourselves look serious and important by always talking about higher order things we’ve read in The Economist may actually make us stupid. What you need to do is change, sometimes all you need to do is do a very small butterfly effect change and actually you can, but by the way the opposite is also true, that big in big inputs can have small effects, small inputs can have big effects, that’s why human behavior, i.e. complex behavior, isn’t like high school science, okay.

1:42:33 If there were a logical answer we would have found it. What does that mean? That means that by and large the remaining problems tend to be problems that a logic proof this isn’t, okay, this isn’t the Middle Ages, there are a lot of problems in the Middle Ages which hadn’t been solved because no one had brought a logical approach to her, in many respects there are certain inventions which are weirdly late to emerge, okay, but I would argue the modern age, replete as it is with management consultants and, you know, economists and hyper-rational politicians for that matter, the problems that actually persist are likely to be those problems which can’t be solved by what you might call direct, non-oblique, non-creative, proportionate intervention, right.

1:43:20 And on that same note you have one rule, at rule number eight, test-test counterintuitive things only because no one else will. Yeah, because information that you know and everybody else doesn’t know is much more valuable in creating a kind of monopoly than information that everybody knows, okay. Alright, so this is a really about going against the grain. Number six, the problem with logic is it kills off magic. Definition of trying to make something scientific is the first assumption of a science is that magic is impossible.

1:43:46 Absolutely true in physics, not true in psychology, you can solve, there is magic possible in psychology, you can make something worth ten times as much money essentially simply by tweaking with the brain, not the thing itself, right. And we see this all the time with products and videos going viral and all these weird things that happened not scientifically. Yup, and because of the brain in the, in psychology. What’s your, what’s your business like these days, because you mentioned AI a few times and we know digital economy it’s become very numbers driven, Facebook ads and YouTube ads and metrics, and yet you sit on top of a lot of that and think, wait a second guys, we’ve gotten too much into the numbers, we’ve gotten too logical, that what I’m hearing from, never hostile to numbers, I’m slightly hostile to the bad use of numbers and I’m very hostile to numbers that make decisions without any human intervention or oversight.

1:44:41 The Boeing 737 MAX, you know, that might be a case in point, okay, which is that I, I don’t, I don’t believe you should have speed cameras, or rather I think at the very least the speed cameras should send back a video to a human operator, okay, of the 20 seconds before the speeding offense and the 20 seconds after the speeding offence to see in which context you are actually breaking the speed limit, because there are cases where, secondly I think that speed cameras or bus lane cameras which disproportionately profitable, okay, should be a sign first of all, if you have a speed camera that’s disproportionately captured a lot of people speeding, both at Lib Dem politician, you remember the M11, he was done for driving back from Forest and stood and breaking the speed limit, okay.

1:45:37 That speed camera raises about ten times as much money as any other speed camera in Essex. What that suggests to me as a complexity scientist is that, sorry mate, what you got there is a problem with signage and road design, not a problem of speeding, right, because if one speed camera captures people disproportionately to that extent, what it actually is just, I can tell you exactly what happens, right, okay, you’re tooling down the M11, that let’s be realistic, okay, 78 miles an hour cuz it’s one o’clock in the morning, okay, or what he was coming back from Stansted pretty late, okay, but that’s a specific road, in specific, specifically don’t know it, but then suddenly you come across a sign that says 50. Now in order to not be caught by the speed camera you’d have to brake with the violence which would actually be dangerous to road users behind you and dangerous to yourself, so bad design, so that’s bad design, right.

1:46:27 Similarly if you have a bus lane, as in a camera in South London which I think makes something like 3 million pounds a year for people, the reason for that is that in order to turn left you have to turn into the bus lane at some point because otherwise turning left is downright dangerous. That, that is not evidence where you should be punishing the individual, you should be punishing the road designer. But what about with what you do at Ogilvy and all this information, I mean you know 10 years from now will it be much more AI, will there be computers figuring these totally happy?

1:46:55 I’m totally happy with having AI, I think you’re bound in some cases AI will be very creative because I think AI will dare to be trivial because it doesn’t have an idea of what trivia is, so weirdly AI will quite often I think pick up the importance of butterflies, so I am, what was AI also doesn’t practice, one hopes, defensive decision-making. Mmm. Where it becomes dangerous, however, is what becomes defensive decision-making, okay, is always doing what the AI says because you’re much less likely to get sued for obeying the algorithm than you are for getting it wrong if you use your own judgment.

1:47:32 So you may create an environment in which overriding AI becomes a very dangerous career move, and we’ve got to be careful of that. We’ve also got to be careful because AI and algorithms contain within them the inherent biases and prejudices of the designer. Yeah, so for example all trained AI assumes you want to get to your destination as soon as possible, until recently, I think they may have corrected this as a response, I hope, to my article, you could be at Waterloo station, want you to get to Bath, there could be a direct train to Bath leaving in 10 minutes and your National Rail app would tell you to go to Paddington and catch the train there because it’s seven minutes faster, okay, even though the train is twice the price and involves taking a tube, carrying your luggage up an escalator and doing all that rather than merely boarding a direct Waterloo train to Bath, okay, that’s because someone has designed the algorithm to over-prioritize the importance of speed versus hassle and price.

1:48:32 Yeah, in the case of airline algorithms being so driven to choose by price that it will soon become completely impossible to introduce optional improvements to passenger experience in an air, in an aircraft, because you’ll fall below the fold in the search results, okay, and therefore essentially air travel, if we’re not careful, will become a race to the bottom where the natural human trade-off between quality and price will become distorted. In the case of Google Maps the algorithm is designed by Californians and Californians don’t understand the idea of a journey where you drive to a station and catch a train, so if I ask Google Maps, where I’m in Sevenoaks, get me into work, it goes, okay, do you want to go by car or do you want to go by public transport, okay?

1:49:19 Now that’s a very Californian, it doesn’t switch to Spanish when I click public transport, that’ll be the most Californian thing in the world would here, yes, oh love you guys, here’s your pass, but it basically, it basically assumes that the only reason you want to use public transport is because you don’t own a car. Now anybody who lives outside the M25 knows the way to get to central London, unless it’s like a quiet Sunday, is basically you drive to a station, you catch a train, right, ok, ok, ok, but, but but this thing goes, ok well you can go by car and it takes you an hour and 25 minutes because you’ll get stuck in traffic, or you can take a bus to the railway station which means you’ll have to walk for half a mile and then wait for 30 minutes for a bus, right.

1:49:59 Now both of those are based on a bollocks assumption that you can’t mix car with train. Ok, what’s the biggest challenge facing Ogilvy in the next 10 years? Oh, I think that the whole advertising industry has totally lost the plot and that it has become obsessed with that part of advertising which is a media and targeting optimization process, and the creative industry, the creative agencies essentially, are guilty of a kind of Stockholm Syndrome to the media agencies, where they think it’s all about essentially optimization of something.

1:50:38 I would argue something completely contrary, which is the efficiency and effectiveness in much marketing activity maybe inversely correlated. Hmm, inversely? Absolutely inversely, that actually it’s the part of advertising that’s wasting is the part that works, to quote a paper written by London Business School. Now let me explain one possible reason for this, okay. It’s fame, okay.

1:51:08 If you asked a teenager on Saturday night why do you always go out on Saturday night, and they would answer something along these lines, they’d say well I might get lucky. How you gonna get lucky? Well, don’t know, but you know, I might meet a girl, I might get a boy, I might meet some mates and we might have a great time, I might end up, you know, I don’t know, it of five and whatever looking one from Saturday, what it is, they don’t know how they’re gonna get lucky, but they do know is that if they stay home on Saturday they’re not gonna get lucky, best thinking happened as they watch quite a good film.

1:51:41 Now I would argue that a very very strong justification for advertising is simply that if I’m famous the likelihood that positive luck events happen to me goes up enormously, okay. I can’t say in advance what they’re gonna be, I can’t say remotely in advance how I’m gonna get lucky, it may be that because that my chief executive gets his call returned because people have heard of our company, it might be that someone really clever comes to us with a good idea because they’ve heard of our company. Everything that was good that ever happens to you happens because someone’s heard of you, that’s okay, right, and that fame is a great way of exploiting luck asymmetry, that far more good things happen to you if you’re famous with no increase in bad things, with one exception which is if you get involved in a scandal it’s worse, okay.

1:52:32 So if you’re a dishonest company you don’t want to be famous because it makes it much much worse when you’re caught out, but if you’re basically a reputable company making a good product and you’re, you know, you’re not a dodgy drugs company killing people, it pays you to be famous because the positive asymmetries of interactions, the positive interactions that result, vastly outweigh what is a really trivial downside, okay. And that’s marketing getting nothing, that’s not the needs to say in advance how to be successful reduces the number of ways in which you can be successful, okay, because you’ve already defined in advance what success looks like. Well why don’t you just say I want to be successful, I really care.

1:53:12 Wow, okay, fantastic, you love this, right? That’s the problem with metrics though, you’re following one metric and you say that one by trying to make everything quantifiable you’re truck, you’re narrowing in advance the number of possibilities your company has to get lucky, okay. Now if you don’t sound a thug for a second, right, okay, that book is sort of a psychology book, I wrote it, I didn’t write it just for advertising people, I’ll be clear about that, because Jeremy Bullmore said the best books about advertising.

1:53:35 How do you get Nassim Taleb to put a quote like that on your book? Um, well he’s not exactly the easiest guy to nail down, he doesn’t actually say nice things about anybody. Um, actually I love the guy, the book would never be written without Nassim Taleb because his his work in the insert, oh, is the classic work. I also admire people like Robert H. Frank I mentioned earlier, okay.

1:53:59 Um, those are people who are enormous value because if you read their books you you get thousands of things over the books but really you get one thing, which is, oh so as well as looking at it like this I could also look at it like that, and actually there is no context-free truth really, okay, so the more ways in which you can look at something the richer you are, okay. Now the crucial thing here, what happened with this book was A, I was really lucky and missing it seemed to lab, to be honest without whom I wouldn’t have had the confidence to write the book. The C, by the way this is a, I’m delighted to say that the seem has bought eight copies of the book or something for friends, so he paid me likes it more than just, he said quite a lot, so he says the breakthrough book, mother reality makes sense in her own way, so in a Taleb says this is a breakthrough book, mother reality makes sense in her own way, she yields her secrets to practitioners, almost never to academics.

1:55:02 I love this: psychologists, economists and non skin in the game people, no matter what they say, are functionally unable to grasp good. So just as 20% of bees, another very good book, Eric Beinhocker, The Origin of Wealth, by the way it’s a really really good book, the interesting thing there is that a certain number of bees disobey the waggle dance and go around at random, and the reason is they don’t know what they’re doing in advance, they’re just trying to get lucky. I would argue that advertising serves that purpose, and with this book, well, extraordinary thing happened, hey, I met Nassim and the seemed like the book, okay, which kind of helps.

1:55:43 So the other thing as well, which is someone I’m not quite sure who, but someone sent out a copy to Chris Evans. Now, okay, I didn’t write it for the advertising industry, but I wrote it as a business book with also relevance to real interesting psychology. I never thought for a second, okay, if I’d sat down and said okay how do we promote this book, let’s get on the Chris Evans breakfast show, okay, is that not only you know thought like a book now. So having Chris interview me, he happens to be in Cannes, happens to call me up, I happen to appear on the show broadcast from Cannes the following day, having read the book, Chris continues to go on about how much he liked the book, right?

1:56:22 For about a week the book was outselling The Very Hungry Caterpillar, it was outselling the Highway Code, okay, it was outselling Dan Brown, it was number 7 on Amazon, and hey, hey, the Highway Code’s bloody compulsory, okay. No, and that’s the hardback though, okay, it didn’t last forever. I’ll need some more good luck if I’m to get the thing into the Sunday Times bestseller list or whatever. Nonetheless that was something which was a huge positive upside which came in a sense as a result of indiscriminate promotion.

1:57:01 If I had only targeted the book to people working in, for example, behavioral science, okay, it’s a very efficient way of promoting the book because a very large proportion of those people would go on to actually buy the book, but it’s actually an ineffective way of selling the book because I’ll never get lucky. The most that could happen to me is I get 100% penetration of the world’s behavioral science community. Yeah, and soon that’s in an hour, the very idea of strategizing.

1:57:31 Is the huge advantage of being a rich organization is presumably that you can afford to talk to lots of people, and then you hope you’ll get better employees cuz you’re famous, you’ll get better ideas brought to you because you’re famous, you don’t need to pay your employees quite as much if you’re a famous company because they derive more status working for you, okay. So getting about Mars possible to quantify, they’re also impossible to promise and impossible to predict, but they are very very valuable, okay. That’s a very good point.

1:57:58 Um, tell me about you, what’s uh, what’s something that you do every day that is a non-negotiable for you? Maybe a way you create or a way you wake up in the morning, or certain things that you do every week. I have to spend a day working from home otherwise I go crazy. I have to spend, very strangely, I have to spend about an hour of the day staring into space. Yeah, you might call it meditation if it isn’t really, and staring into space.

1:58:21 When do you do that, how do you do that? I like commuting, this is the honest thing, okay, which is that something enough, I’d always surmise this and a friend of mine called Douglas McWilliams who’s a transport and specialist economist, so there’s economic, economic metrics data that supports this, that actually people preferred not to live too close in time to their workplace, that’s why you moved to Belsize Park from Shoreditch, you see. We like a bit of a mental buffer between work and home and it’s kind of like diver decompression.

1:58:55 I guess so. One thing is terrible thing, um, that business of the train journey staring into space is actually really important to me. I always go first class because I, because I buy an off-peak first class Southeastern and ooh it makes you feel good much more than value, and so, so yeah, absolutely right, and also it, you know, but the second thing is it’s very hot strobe, the staring time is really really valuable, just having that buffer in between home and work and the people describe it, so actually my argument is that that commute in a weird kind of way it’s, say okay, but you probably know this as well, if you, when you’re looking forward to that 45 minutes staring time on a train journey, let’s say if I’m on a platform and I see Clovis throughout the platform, the person I like the most in the whole of the world with a prospect, my wife, okay, if generally somebody’s fantastic company, entertaining, charming, everything, my heart’s like sinks because I’m gonna have to talk to them, right?

2:00:08 Yeah, that’s a terrible thing to say because it makes you feel a bit of a bastard, but I think everybody who commutes feels the same way, they want that quiet time to themselves. Yeah, yeah, it was like meditation before the East got here. English meditation, exactly. I wonder, I think that’s a bit of a gender divide there. If you think about coarse fishing, which is just staring with equipment basically, isn’t it?

2:00:30 I mean fit, you know, coarse fishing is basically just staring, right, and you just have to buy some expensive equipment in order to have a reason to be staring but basically and stare, and that’s a male, it’s a very male thing, and there is some evidence in transportation which shows the same thing, which is that basically guys, okay, and this is what my wife who’s gets really disquieted, because what are you thinking about, do you not think about anything, you know, and you know, and I think that our staring time is really really vital. I think it’s very powerful. Um, Rory, open-plan offices bother me for that reason because I think they make it difficult to stare, okay.

2:01:06 Yeah, you might have a point, someone’s always in your eyeline, you can always hear what’s coming, maybe what it is, maybe what it is is a, as a slightly verbal, verbalizing, non-visual person, there may be an actual thing which is that if you think about it, a huge percentage of your brain is, I, you know, is processing speech, vision and sensory etc, and the ability to turn that off has some value, you know, and there’s often an argument, isn’t there, the real value of alcohol is it switches off your prefrontal cortex a bit and you get to feel what it’s like to be an animal. Yeah, there’s, you know, being pissed you actually know what it’s like to be an animal again. Now that is, I’m sure it’s really really bad neuroscience, but it’s quite a useful metaphor.

2:01:50 Yeah, that’s powerful. Right, what if I asked about five of your friends and said what is Rory’s superpower, how does this man get the things that you get done, what would they say it is, what’s the one quality? It’s also weakness which is distract, distract ability, but actually the ability to get distracted, I don’t really have a sense of proportion and I think that’s weirdly useful because most people with a sense of proportion tend to look for solutions which are proportionate.

2:02:19 Sure, okay, and you’ll get distracted and go out a bit, but if it’s just all about this and you know under this, it may sound apps, it’s a huge advantage being 53 because generally if you say something counterintuitive or silly when you’re 23 you get ignored, at least when you’re 53, I’m saying this to young people, is something to look forward to, one of the few things to look forward to, at least people have to give it 15 seconds’ consideration. Well also helps with your CV, you know. Yeah, no, I guess, yeah, you’re right, even though I think it is an age thing, thank you, because I think for some reason, you know, there is that huge advantage that if you are 53 and you say something a bit weird, people will at least go, I wonder.

2:03:04 Yeah, yeah. What was the best day of your life and the worst day in your life? A day in a Qatari prison was pretty bad, I didn’t like that. When was that? That was about two years ago, yes, to tournament years ago, I was vaping on a plane and they didn’t have a box for vaping on a plane, so they ticked the box and reported around that I’d been smoking on a plane because there wasn’t, vaping was so new there wasn’t a tick box.

2:03:31 Oh yeah, for it. So I ended up essentially being banged up in a Doha prison for 24 hours and it, that was interesting actually because the worst part of it was the uncertainty. So if they just said you’re gonna be in jail for anywhere, I was, then we’re gonna let you go, okay, but what happened, slightly this Middle Eastern thing, we know when he wants to give you bad news, you know that thing, okay, and so they said oh don’t worry, what we’ll do is we’ll just take you off the plane and this, you know, if they just said okay it’s 24 hours in jail, then you go this is ridiculous, you can’t be, okay, when I can put up with 24 hours in jail, but what instead happens is they go oh no, don’t worry, you’ll just come to the airport, you’ll pay a small fine and we’ll put you on your plane to London.

2:04:15 Fine, it’s fine, yeah, okay, I don’t worry, all you need to do is sign some forms and we’ll take you to the plane, yeah, yeah, great, that’s fine, okay. It really did get a bit of a move on cuz my plane is actually leaving in only an hour and a half and I need to pay this fine and move on, other thing, oh well don’t worry, if we don’t get you on this plane I’ll get you in the plane in two hours’ time, and do okay, and then something on the back of a bloody sort of SUV with two soldiers with rifles and a copy, the two cops in the front, me in the middle between two guys with rifles. Yeah, if it went, oh they was letting me drive out, they go, Holland, where we going?

2:04:52 We’re going to the airport, but the airport’s behind us, and then eventually they say, it’s a very weird cultural thing, this thing of not giving it to you straight, finishing to say no, not going to the airport, you’re going to prison. Now that point I don’t know what, what the hell’s going on here, is this gonna be a week, is gonna be a month? Well there’s someone else at the Sevenoaks, you basically ended up dined up there for three weeks, I mean don’t, don’t do anything if he in any of those Gulf states today they asked you to stop vaping on that on the plane, they, they could’ve just, I don’t know, this is the IRA, they could’ve just asked me to stop, they didn’t ask, no.

2:05:23 So what it was is you have this terrible thing, which is that the all those airlines which people love because the service is so good, okay, you’ve got the one thing you’re gonna watch is that the staff are so terrified of losing their jobs, which they can lose in a heartbeat, that they basically follow everything to the letter. Now I’m right back on British Airways or easyJet after that, where you can kind of have, I mean as my colleague said, like colleague whose blood work railing it isn’t, it’s imprisoned if they imprisoned everybody on the Dublin to Boston flight for that behavior, ship half the Irish population. I mean, I mean that business of what you might call low-ambiguity cultures, and Burma, there are people in prison for having a girlfriend, okay, there were people in the prison for bouncing a check.

2:06:15 Now when you go out you rent a house, that you write 12 predated checks, ok, post-dated checks rather, for each month of your rent, okay, if you forget that your rent check’s coming up in two days’ time and you go a little bit below that balance, okay, it’s not a hard call, no question of your bank ringing up and going you need to put some more money in, and you might have a hundred thousand quid in another bank account, right, again, right, straight, straight to prison, right. You know what I suddenly realized is the thing that’s most valuable, that genuinely the real underpinnings of freedom, are living in a culture with some sort of sense of ambiguity around it, which is where you can say yes, I get this, but under the circumstance of provision, okay.

2:07:00 What was the best day of your life? That’s a really interesting question, I’ve had a very good, actually, actually yesterday was pretty good, my daughter’s 18th birthday. I’ve got twin daughters, okay, and there is unbelievable joy when they’re 18, which is one, you’re not held responsible anymore, so so there’s a slight feeling that I can actually now relax, you know, for the first time in, in, in 20 years, you know, in other words if something slightly bad happens then, I don’t mean something terrible, I’m still worried about that, there’s something slightly bad happens to them, I’m no longer held up as being an appalling parent because they’re 18.

2:07:46 The second thing is the joy of being able to go on holiday whenever I like. The biggest bloody nuisance of children isn’t the expense of school fees, clothes etc, all of which you might actually just to some extent welcome or feel worthwhile, the extraordinary restriction it has on your ability to go on a holiday at times when it’s actually less crowded and less expensive drives me nuts, because I hate leaving Britain in July or August, would you, right, okay, I mean the weather’s never that bad, you, we have had one or two dud summers, okay, I get it, but of all the times to leave the UK, okay, June, July, August and early September are the stupidest times to travel abroad you can possibly conceive because it’s about as nice as it gets, and the stupid bastard school holidays which was designed for harvesting, they’re not, they’re designed for holidays, they’re designed for the bloody harvest, by making it impossible to get, oh we’re in the winter and easy to go away in the summer, is the most ludicrous stupid entrenched pattern of behavior.

2:08:53 Your point has been made, yeah. Where, what scares you, Rory? Health, obviously, always worried about skip hood, yeah. One of the interesting things is I realized how much fear is down to uncertainty and powerlessness rather than what we think it is, which fascinates me psychologically. So one of my children and, when actually my wife and I all use a thing called Life360, I don’t even know it’s a mobile tracking, so yeah, so you can see where everybody, everyone is.

2:09:40 Yeah, yeah, the other daughter won’t use it, I respect your privacy decision not to use it. The only thing is is that if you can’t get hold of the one daughter and you can see where they are you’re not remotely bothered because you go okay, if I can’t get ahold of her in another hour’s time, another time, I know what I can do next, which is either go there, phone someone, phone someone else or whatever, okay. With the daughter where you can’t get hold of her and you don’t know where she is, you’re absolutely breaking it because not only do you not know what’s happening, okay, but you don’t know what to do, and that fascinates me, that actually there’s a kind of mental state which is, you know, the feeling of powerlessness seemed to be what terrifies us in a weird way, rather more than once, I suspect that’s why a lot of people are frightened of flying, actually the fear, I’m not, but it’s the fear of something you can’t do anything about.

2:10:35 Yeah, yeah, that’s, um, and that interests me. So what the other thing I think that we get frightened, we probably sometimes get frightened of the wrong things, we also get angry about the wrong things, I think. I mean I think one of the worrying things about politics is that, yeah, and I, the behavior of some of the social justice movement really gets to be on this because, you know, if Trump says bad hombres, right, you get like four days of general crap about learn and blow, blowing is this racist?

2:11:09 Well first of all maybe it is, but it doesn’t matter because by making a massive fuss about that what you’re doing is totally counterproductive because you’re actually effectively giving Trump support, because people who’ve used the phrase bad hombres or who would use it now go, well if you’re calling me a racist, I mean screw you, I’m gonna vote for this guy. Scott Adams was very very good on all this stuff, he said if you were, if you don’t want Trump to win, stop calling me a racist, he said, you know, he says it’s a totally counterintuitive, sorry, can’t productive reaction. Yeah, it’s happening, but the other thing is there are things that are really worthwhile to get angry about, okay.

2:11:44 So I’m a right-of-center Brit, okay, I’m a huge Americana-phile, massive Americana-phile, but I think your rate of incarceration as a country is batshit crazy. Yes, so it’s higher than China as a proportion of the population, right? I think it’s the highest rate of proportion of your population is in prison at any one time of any country in the world. I think like wonder sanity at one point, and now some of that has to be, you know, that can’t be optimal, you know, and the extent to which, by the way, it falls disproportionately on certain ethnic groups, a hugely high number of it is probably for fairly trivial drug-related offenses, for instance.

2:12:25 The mileage, what is, look, if you’re getting really worried about gender pronouns and you’re not really getting worried about the U.S. rate of incarceration, okay, this is not a really great use of focus of time because there’s something where, you know, you could get perfectly sane people to have a debate about this, we could all have a perfectly sane debate, okay, and people outside academia, people outside your weird bubble could be persuaded here, okay. Vegetarianism, by the way, I think is an interesting thing, I think animal rights is a really interesting area where you could, you know, I can see areas where, sue, the tragedy theme on the left is that they have really good ideas and then for some reason they seem to get most excited by the bad ones, right?

2:13:12 Yeah, and I see what you mean, in the less effective, you know, wait, but you know, I, I mean there are loads and loads of really interesting issues here but I mean you know the gender bathrooms thing is not really, I mean that’s a really strange area in which to, you know, use that amount of mental energy. Agreed, and my gut, my contention is that you’re doing it to signal your religiosity to your peer group, okay, so the second politics is more interested in signaling purity to its in-group than winning supporters from an out-group, then essentially get out of that, get out of that politics and go find somewhere else. You know, making jobs by making it mandatory, which is bizarrely from the Conservative MP for Faversham, right, female MP, I crazily forgotten her name, she’s fantastic, okay, but now that is a really interesting idea, so jobs advertised, jobs by default are advertised on flexible terms unless you have a reason for them not to be, that’s a really big an idea, no one’s talking about that, right?

2:14:24 So focus on those big ones. Yeah, focus on the big ones. What keeps you awake at night, if anything? Nothing much, I sleep like a child, but what would keep me awake at night, but we great things, I don’t know if you notice, but one of the great things about being in late middle age is you do kind of have less things, it’s not the things worry you less but that probably it’s because actually once you’re 50 the future course of your life has less variance than when you’re 20, you know, when you’re 20 everything’s to play for, you know, you don’t, you know, you don’t have anything in either the real or the metaphorical bank, and you know everything in the future is potentially possible, both for good and ill.

2:15:23 Now as your, what you might call your life expectation variance seems to reduce for the age, those kind of things which would have kept me awake in an agonized state 15 years ago don’t really, now I think I’m apparently reaching this weird happiness thing where most people’s happiness dips in middle to late middle age and then as you get towards the middle of your 50s people tend to cheer up. I think that’s right, isn’t it? I don’t know, there isn’t, there is a bit of a kind of what’s called the smile, which is that people start off happy and happiness does seem to dip at a particular age and then weirdly returns again.

2:16:04 Yeah, now we ought to investigate what that is because it doesn’t, it’s not to do with wealth, it might just be biological, but it might be something else as well. I wonder what that would be, it could be your next book. Although that was another great moment, by the way, which is the curse of writing a book, of course, is for the period you’re writing it you never have any free time, because even when you’re not doing anything you could be writing a book, and that is a, you know, having those sort of two-year projects is really really painful, it takes years.

2:16:32 It was very weird, I made a very valuable discovery writing it, by the way, which is that ten times ten minutes isn’t the same as a hundred minutes, and similarly four half days is not remotely as productive as two days in a row, and what I realized is in order to write things, for whatever reason, and there’s a wonderful paper by Paul Graham, the founder of Y Combinator, which is only a basically a single page essay, it’s called Maker’s Schedule, Manager’s Schedule. Yeah, no. And the point is about maker time is long periods of uninterrupted time are what’s necessary for maker time, and the reason a coder will get really pissed off if you put a ten-minute meeting in the middle of his afternoon is not cuz he’s lost ten minutes, is because he’s lost his afternoon.

2:17:22 Yeah, and Graham claims they always tend to run Y Combinator on maker time and they have large swathes, and what I discovered with the book is I probably wrote literally 80% of the book in 20% of the time I spent writing it, and that was because where I managed to actually get chunks of time free, I’ve got a flat in Deal on the Kent coast, when I went down for just ten days and said I’m not going to any birthday parties, I’m not reading my email, I’m not doing anything else, the first day was largely ineffectual, the second day was quite productive, the third day was very productive, and then I had a, then I think after about three very productive days I probably took a day off, but what you realize is there’s nothing remotely linear about time and productivity.

2:18:07 That’s good to know. Yeah, that paper, Maker’s Schedule, Manager’s Schedule. Yeah, there’s one thing in business which everybody ought to read, I think. It’s nice, those, yeah, we’re a big fan of that here, that coffee I gave you is called Maker Mode coffee. Perfect.

2:18:23 Rory, if you could pick up a phone and call up the 20-year-old Rory Sutherland and give that young man some advice, I guess you hadn’t started all over yet, you’re probably still at uni, what would you tell him? I would say things that would change the course and my general view is I’ve been lucky, and one of the things I’m also very keen on, as you’ll notice, is I generally say you can influence your exposure to positive or negative luck but you can’t necessarily plan in advance how you want to get lucky, and I’ve been very very lucky, genuinely, in that I really, I suppose the fantastic luck real that was the first job in path dependency terms because I was working with people, Drayton Bird, who was probably the most brilliant copywriter and direct response practitioner certainly in Britain, possibly the world.

2:19:17 I was at Ogilvy & Mather Direct, was then called, which was the direct marketing wing of Ogilvy. I had a brother who was an academic so knew about the internet and the web six months before anybody in business had heard of them, being in direct marketing was the perfect place to be when advertising started to make itself more digital. Yeah, I learnt from incredibly good people, Ogilvy had Randy Howell, founder, my old art director Mike Sim, people had chasing King, Antony Abdul, going back there, would have been Steve Harrison, obviously, okay.

2:19:50 So I was in this place where I kind of ended up there cuz it was the, it was actually at the end I got quite a few second interviews because I think the only job offer I got, interestingly, when I went for the interview I liked it so much that had I had other job offers I still would have taken Ogilvy & Mather Direct, I think, and the, an interesting question, boy, had Ogilvy never written Ogilvy on Advertising, which I had read before, would I have been so keen to apply for Ogilvy? I see, this is one of those things about fame being very symmetric. But that was an extraordinary lucky start, and then the other lucky start was being able to, the other lucky break, I think helped by quite a few of those people I’ve aforementioned, was being able to make a move from advertising account management to being a copywriter, okay.

2:20:44 The Spectator’s been hugely lucky, that was again the product of a lucky invitation to a dinner with Matt d’Ancona, and, you know, who would have thought it, now that’s been, bloody hell, 26, I must have written, be at a time, that must be 10 years now I’ve been writing for that, maybe longer, come to think of it, crikey. Okay, so if you have no advice for that young man, maybe you could tell me the best advice you’ve ever received on marketing or on copywriting at Ogilvy. Yeah, really interesting one: start with the coupon, which again sounds really banal and when we first heard it we thought it was just a little old, old-school people.

2:21:36 The point about to start with the coupon, which is when you were writing a direct response ad, before you write the headline you should make sure the coupon was perfect, and that shows the understanding that if you, in any process of selling, if you haven’t got the last mile right there’s no point in improving the first mile. Hmm, so writing, okay, so what it’s that, what that says is quite interesting, it says optimize backwards, and what that says to me actually is that if you start a government program the first thing you should discuss is not who I had to advertise the program, how to promote the program, but you should start by saying how do you apply for this program, should you have to apply for it at all, should it be automatically opt-in? Sure, so actually getting the last mile right first and then working backwards is a better way to improve a an honor gothic system.

2:22:28 Does that mean getting the product right before that, in fact? Yeah, so or in marketing terms the experience certainly, yeah, because if the experience is no good there’s no point in selling the products, people only buy at once. It doesn’t pay for any marketing for something that people anybody once, unless it’s a pension or one of those strange once-in-a-lifetime, That’s good advice. Last one, advice to the 20-year-old that’s watching us out there in the world, are listening to exploring: be good at more than one thing.

2:23:21 In other words if you try this is a sort of it was wrenching when I read the Peter Thiel book Zero to One because he kind of says something similar, which is there’s also a new book out which is in support of the generalist, but if you, if you’re trying to be the best tennis player in the world, okay, there will be a best tennis player in the world but it’s probably not going to be you, you’re gonna fail, okay. If you are strong in two related fields then in the medium to long term, if there’s some overlap between those two fields, you can become the most knowledgeable person in the world in A plus B. Trying to be the most knowledgeable person in the world in A, I mean if you think about it, the whole of behavioral economics and a Nobel Prize for economics kind of emerged from the fact that the psychologists at Stanford sat next to the economists and used the same coffee room.

2:24:11 Mm-hmm. And in the same way I’d argue that the most interesting things emerge from the overlap of two things, and therefore I think you should always have a side hustle and you should always have a kind of intellectual hinterland, because if you become too narrowly focused, to be actually honest, you’re competing against too many people for the same very narrow limited thing. It’s really good advice. So ideally take two fields, you land somewhere in between, it also lets you pivot, a thing because if one thing becomes, you know, we can’t predict the future, and so having two or three legs on which you can stand allows you to pivot much more easily than if you’re, if you’ve bet the farm on one thing.

2:24:59 Hmm, powerful advice. The book is Alchemy: The Surprising Power of Ideas That Don’t Make Sense. For me, you know, I never studied marketing, I studied engineering at MIT and I studied finance, and marketing always is this weird dark art, and I think it always will be, and I think the people hate it because most of what people want from a business school is unambiguous advice, and the advice actually to marketers is become comfortable with ambiguity, because this is not a field with single right answers, it’s not a field where there’s equilibrium, the right answer today can be the wrong answer tomorrow.

2:25:34 Look at London City Airport, you know, okay. Um, the fascinating thing is that for years everybody went on Changi, would you buy Airport who have been the skipper, I bought a Walkman for 80 quid, or it’s amazing, I couldn’t believe it. Yeah, and then every airport has a bloody shopping centre attached, people start getting London City Airport, it’s brilliant, isn’t it? You just check in and 15 minutes later you’re boarding the plane. And so because humans tend to notice what’s new and distinctive, not what’s important, and they make important what’s distinctive, what’s important to consumers isn’t gonna be static anyway.

2:26:08 Yeah, yeah. Rory, it’s always fascinating talking to you. I’m sure you could tell me more hours, but thanks so much, this gives me a lot to think about, especially when it comes to marketing, what we do here as well. Oh brilliant. The book is Alchemy.

2:26:20 I guess some people get it at Amazon and all the places they buy books. I encourage everyone to watch your TED Talks on YouTube, and Rory, until next time, it’s been a pleasure. Thank you very much indeed. Thank you.