Alchemy: The Surprising Power of Ideas That Don't Make Sense

by Rory Sutherland

RORY’S RULES OF ALCHEMY: The opposite of a good idea can also be a good idea. Don’t design for average. It doesn’t pay to be logical if everyone else is being logical. The nature of our attention affects the nature of our experience. A flower is simply a weed with an advertising budget. The problem with logic is that it kills off magic. A good guess which stands up to observation is still science. So is a lucky accident. Test counterintuitive things only because no one else will. Solving problems using rationality is like playing golf with only one club. Dare to be trivial. If there were a logical answer, we would have found it.

FOREWORD: CHALLENGING COCA-COLA Imagine that you are sitting in the boardroom of a major global drinks company, charged with producing a new product that will rival the position of Coca-Cola as the world’s second most popular cold non-alcoholic drink.fn1 What do you say? How would you respond? Well, the first thing I would say, unless I were in a particularly mischievous mood, is something like this: ‘We need to produce a drink that tastes nicer than Coke, that costs less than Coke, and that comes in a really big bottle so people get great value for money.’ What I’m fairly sure nobody would say is this: ‘Hey, let’s try marketing a really expensive drink, that comes in a tiny can … and that tastes kind of disgusting.’ Yet that is exactly what one company did. And by doing so they launched a soft drinks brand that would indeed go on to be a worthy rival to Coca-Cola: that drink was Red Bull. When I say that Red Bull ‘tastes kind of disgusting’, this is not a subjective opinion.fn2 No, that was the opinion of a wide cross-section of the public. Before Red Bull launched outside of Thailand, where it had originated, it’s widely rumoured that the licensee approached a research agency to see what the international consumer reaction would be to the drink’s taste; the agency, a specialist in researching the flavouring of carbonated drinks, had never seen a worse reaction to any proposed new product. Normally in consumer trials of new drinks, unenthusiastic respondents might phrase ...

For instance, as the anthropologist Pierre Bourdieu observes, gift giving is viewed as a good thing in most human societies, but it only takes a very small change in context to make a gift an insult rather than a blessing; returning a present to the person who has given it to you, for example, is one of the rudest things you can do. Similarly, offering people money when they do something you like makes perfect sense according to economic theory and is called an incentive, but this does not mean you should try to pay your spouse for sex.fn1

Perhaps most startlingly of all, every single one of the Remain campaign’s arguments resorted to economic logic, yet the EU is patently a political project, which served to make them seem greedy rather than principled, especially as the most vocal Remain supporters came from a class of people who had done very nicely out of globalisation. Notice that Winston Churchill did not urge us to fight the Second World War ‘in order to regain access to key export markets

Behavioural economics is an odd term. As Warren Buffett’s business partner Charlie Munger once said, ‘If economics isn’t behavioural, I don’t know what the hell is.

Imagine that you get into financial trouble and ask a rich friend for a loan of £5,000, who patiently explains that you are a much less needy and deserving case for support than a village in Africa to which he plans to donate the same amount. Your friend is behaving perfectly rationally. Unfortunately he is no longer your friend.

The two categories of retailer who have weathered the global economic instability best in recent years are those at the top end of the price spectrum and those at the bottom. Some of this is a result of widening wealth inequality, but a glance at the demography of shoppers shows that it is not quite that simple; for instance, the bargain department store TK Maxx has a customer base that perfectly matches the UK population.fn4 In fact, we derive pleasure from ‘expensive treats’ and also enjoy finding ‘bargains’. By contrast, the mid-range retailer offers far less of an emotional hit; you don’t get a dopamine rush from mid-market purchases.

Why is this? In his book Skin in the Game (2018), Taleb includes what might be the most interesting quotation on an individual’s politics I have ever read. Someonefn3 explains how, depending on context, he has entirely different political preferences: ‘At the federal level I am a Libertarian. At the state level, I am a Republican. At the town level, I am a Democrat. In my family I am a socialist. And with my dog I am a Marxist – from each according to his abilities, to each according to his needs.

The irony is that the ‘man of system’ in the early twenty-first century is all too likely to be an economist, but what we need more of today is men and women who are not wedded to an overbearing system of thought. This book is an attempt not only to create them, but also to give them permission to act and speak more freely. I hope it will free you slightly from the modern rationalist straitjacket, and help you understand that many problems might be solved if we abandoned the rationalist obsession with universal, context-free laws. Once free of this constraint, you might have the freedom to generate magical ideas, some of which may be silly but of which others will be invaluable.

just imagine proposing the following ideas to a group of sceptical investors: ‘What people want is a really cool vacuum cleaner.’ (Dyson) ‘… and the best part of all this is that people will write the entire thing for free!’ (Wikipedia) ‘… and so I confidently predict that the great enduring fashion of the next century will be a coarse, uncomfortable fabric which fades unpleasantly and which takes ages to dry. To date, it has been largely popular with indigent labourers.’ (Jeans) ‘… and people will be forced to choose between three or four items.’ (McDonald’s) ‘And, best of all, the drink has a taste which consumers say they hate.’ (Red Bull) ‘… and just watch as perfectly sane people pay $5 for a drink they can make at home for a few pence.’ (Starbucks)fn7

There is a simple reason for this: you can never be fired for being logical.

The GPS knows only what it knows, and is blind to solutions outside its frame of reference. It is completely unaware of the existence of public transport, and so will suggest that I drive into central London at eight o’clock in the morning, a journey only a lunatic would undertake. By contrast, my Transport for London app is completely unaware of the invention of the automobile. And on Google Maps, once I click the ‘public transport’ button, it assumes I own no car (a very Californian assumption) and will confidently recommend that I travel to my nearby train station – an easy drive of no more than 15 minutes – by an elaborate combination of bus routes that will take an hour and a quarter.

Is this the reason why driverless cars will not popular? What about public transport (pandemic)

I did not decide to travel to the airport by back roads because I had calculated the level of variance in journey time – I did it instinctively, and was only aware of my unconscious reasoning in retrospect. ‘The heart has reasons of which reason knows nothing,’ as Pascal put

I think Robert Trivers is right in his theory of self-deception; if he were not, our job as advertisers would be much easier than it is. We could just ask people why they did things or whether they would buy them, and they would reply honestly: ‘No I wouldn’t normally pay $4.65 for a coffee, but if you put a fancy green logo on a paper cup so I could display it to everybody as I walk into the office then I might just be interested …’ In reality, no one will ever tell you that.

For a business to be truly customer-focused, it needs to ignore what people say. Instead it needs to concentrate on what people feel.

‘Why do people go to restaurants?’, say. ‘Because they are hungry,’ comes the answer. But if you think about it a little, someone merely hungry could satisfy their urge to eat far more economically elsewhere. Restaurants are only peripherally about food: their real value lies in social connection, and status.fn11

So let’s ask again – why might people hate standing on trains? Is it about feeling cheated? After all, you’ve paid for a seat on the train, and the rail company has taken your money and not given you a seat. Is that it? In which case, might you try offering standing-only carriages for shorter rail and tube journeys? People using them could be refunded part of their fare, or rewarded with points towards free journeys. Would they feel happy then? We could find out.

‘The trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say.

The second lens is standard economic theory, which doesn’t ask people what they do and doesn’t even observe what they do. Instead it assumes a narrow and overly ‘rationalistic’ view of human motivation, by focusing on a theoretical, one-dimensional conception of what it believes humans are trying to do. Again, behavioural economics has shown that it provides an incomplete and sometimes misleading view of human behaviour – neither the business nor the policy worlds have paid sufficient attention to the failings of economics and research.

The broken binoculars assume that the way to improve travel is to make it faster, that the way to improve food is to make it cheaper and that the way to encourage environmentally friendly behaviour is to convert people into passionate environmentalists. All these ideas are sometimes true – but not always.

I am not so sure that Maskelyne was a villain and instead see him as a ‘typical intellectual’. I say this because we see the same pattern in a series of significant innovations – science seems to fall short of its ideals whenever the theoretical elegance of the solution or the intellectual credentials of the solver are valued above the practicality of an idea. If a problem is solved using a discipline other than that practised by those who believe themselves the rightful guardians of the solution, you’ll face an uphill struggle no matter how much evidence you can amass.

My friend and mentor Jeremy Bullmore recalls a heated debate in the 1960s at the ad agency J. Walter Thompson about the reasons why people bought electric drills. ‘Well obviously you need to make a hole in something, to put up some shelves or something, and so you go out and buy a drill to perform the job,’ someone said, sensibly. Llewelyn Thomas, the copywriter son of the poet Dylan, was having none of this. ‘I don’t think it works like that at all. You see an electric drill in a shop and decide you want it. Then you take it home and wander around your house looking for excuses to drill holes in things.’ This discussion perfectly captures the divide between those who believe in rational explanation and those who believe in unconscious motivation; between logic and psycho-logic.

Similarly, ‘Why do people go to the doctor?’ seems like an idiotic question, until you realise that it isn’t. Is it because they are ill and want to get better? Sometimes, but there are many more motivations that lie beneath this apparently rational behaviour. Perhaps they are worried and crave reassurance? Some people just need a bit of paper to prove to their employer they were ill. A lot of people may go in search of someone to make a fuss of them. Perhaps, what people are mostly seeking is not treatment, but reassurance.

The distinction matters – after all, not many people make unnecessary visits to the dentist.

Instincts are heritable, whereas reasons have to be taught; what is important is how you behave, not knowing why you do. As Nassim Nicholas Taleb remarks, ‘There is no such thing as a rational or irrational belief – there is only rational or irrational behaviour.’ And the best way for evolution to encourage or prevent a behaviour is to attach an emotion to it. Sometimes the emotion is not appropriate – for instance, there is no reason for Brits to be afraid of spiders, since there are no poisonous spiders in the UK – but it’s still there, just in case. And why take the risk? Other than in a few specialist jobs in zoos, there’s not much to be gained from not being afraid of spiders. So, as with tooth brushing, behaviours which have a rationally beneficial outcome do not have to be driven by a rational motivation. Cleaning our teeth is good for dental health even if we do it for reasons of vanity. As far as evolution is concerned, if a behaviour is beneficial, we can attach any reason to it that we like.

You don’t need reasons to be rational. History books are full of examples of public health or social benefits that have been driven by spiritual rather than material reasons.fn1 Strict dietary law, in both Islam and Judaism, is a good example – and has a further benefit in the shape of social cohesion, as it forces people to eat together. Additionally, while the rule against eating pigs may seem superstitious, as the anthropologist Richard Redding explains, keeping chickens rather than pigs has several key advantages. ‘First, they are a more efficient source of protein than pigs; chickens require 3,500 litres of water to produce one kilo of meat, pigs require 6,000. Secondly, chickens produce eggs, an important secondary product which pigs do not offer. Third, chickens are much smaller and can thus be consumed within 24 hours; this eliminates the problem of preserving large quantities of meat in a hot climate. Finally, chickens could be farmed by nomads. While neither chickens nor pigs can be herded in the same way as cattle, chickens are small enough to be transported.’ You can also add the risk of infection to this list; although in Judaism the prohibition against eating pork is described as chok, meaning a rule for which there is no rationale, pigs can spread diseases, and pig farming may pass them on to humans. Similarly, Islam requires that the dead are buried as soon as possible after death, in order to ‘reduce the suffering of the deceased in the afterlife and to re...

Had Darwin waited a hundred and fifty years or so, he could have saved himself a great deal of trouble and seasickness in uncovering our primate ancestry by travelling from Down House to his (and my) local Sainsbury’s supermarket in Otford in Kent. There he could have learned from point-of-sale data that, over 30,000 items on the shelves, the single item most frequently purchased, as by all grocery shoppers in Britain, is … a banana.

Whenever I speak to a very good mathematician, one of the first things I notice is they are often sceptical about the tools which other mathematicians are most enthused about. A typical phrase might be: ‘Yeah you could do a regression analysis, but the result is usually bollocks.’ An attendant problem is that people who are not skilled at mathematics tend to view the output of second-rate mathematicians with an high level of credulity, and attach almost mystical significance to their findings. Bad maths is the palmistry of the twenty-first century.

To put it crudely, when you multiply bullshit with bullshit, you don’t get a bit more bullshit – you get bullshit squared.

One of our clients at Ogilvy is an airline. I constantly remind them that asking four businessmen to pay £26 each to check in one piece of luggage is not the same as asking a married father of twofn6 to pay £104 to check in his family’s luggage. While £26 is a reasonable fee for a service, £104 is a rip-off. The way luggage pricing should work is something like this: £26 for one case, £35 for up to three. There is, after all, a reason why commuters are offered season tickets – commuting is not commutative, so 100 people will pay more to make a journey once than one person will pay to make it 100 times. In the same way, the time-saving model used to justify the UK’s current investment in the High Speed 2 rail network assumes that 40 people saving an hour ten times a year is the same as one commuter saving an hour 400 times a year. This is obviously non-sense; the first is a convenience, while the second is a life-changer.

But let me come back to my previous point. In maths, 10 x 1 is always the same as 1 x 10, but in real life, it rarely is. You can trick ten people once, but it’s much harder to trick one person ten times.

Amazon can be a very big business selling one thing to 47 people, but if it can’t sell 47 things to one person, there’s a ceiling to how large it can be.

Remember, anyone can easily build a career on a single eccentric talent, if it is cunningly deployed. As I always advise young people, ‘Find one or two things your boss is rubbish at and be quite good at them.’ Complementary talent is far more valuable than conformist talent.

Don’t design for average.

Weird consumers drive more innovation than normal ones. By contrast, it is perfectly possible that conventional market research has, over the past fifty years, killed more good ideas than it has spawned, by obsessing with a false idea of representativeness.

Real excellence can come in odd packaging. Nassim Nicholas Taleb applies this rule to choosing a doctor: you don’t want the smooth, silver-haired patrician who looks straight out of central casting – you want his slightly overweight, less patrician but equally senior colleague in the ill-fitting suit. The former has become successful partly as a result of his appearance, the latter despite it.

As I said, our apartment is on the second floor, and there is no lift.fn6 But again, I decided to look at it differently. Not having a lift is good for you, because several times a day you get guaranteed exercise. In my mind, the flat no longer suffered from the absence of a lift – it was blessed with a free gym.

We should test counterintuitive things – because no one else will

But in coming up with anything genuinely new, unconscious instinct, luck and simple random experimentation play a far greater part in the problem-solving process than we ever admit. I used to feel bad about presenting ideas as though they were the product of pure inductive logic, until I realised that, in reality, everything in life works this way. Business. Evolution by natural selection. Even science.

Today, the principal activity of any publicly held company is rarely the creation of products to satisfy a market need. Management attention is instead largely directed towards the invention of plausible-sounding efficiency narratives to satisfy financial analysts, many of whom know nothing about the businesses they claim to analyse, beyond what they can read on a spreadsheet. There is no need to prove that your cost-saving works empirically, as long as it is consistent with standard economic theory. It is a simple principle of business that, however badly your decision turns out, you will never be fired for following economics, even though its predictive value lies somewhere between water divining and palmistry.

In the real world, however, quad-play is about as popular as a shit sandwich. The human brain has been calibrated by evolution not to pursue economic optimisation and risk systemic disaster. Quad-play places four eggs in one basket, which makes us feel vulnerable: refuse to pay that £250 data-roaming charge from your jaunt to Tenerife and one company can cut off your mobile, television, broadband and landline.

According to economic theory, this makes no sense at all, but in the real world it is perfectly plausible. After all, any theatre selling tickets at a discount clearly has plenty to spare, and from this it might be reasonable to infer that the entertainment on offer isn’t all that good. No one wants to spend £100–£200 on tickets, a meal, car-parking and babysitting, only to find that you would have had more fun watching television at home; in avoiding discounted theatre tickets, people are not being silly – they are showing a high degree of second-order social intelligence.

We don’t value things; we value their meaning. What they are is determined by the laws of physics, but what they mean is determined by the laws of psychology.

Companies which look for opportunities to make magic, like Apple or Disney, routinely feature in lists of the most valuable and profitable brands in the world; you might think economists would have noticed this by now.

Wine tastes better when poured from a heavier bottle. Painkillers are more effective when people believe they are expensive. Almost everything becomes more desirable when people believe it is in scarce supply, and possessions beco...

If you declare something highly exclusive and out of reach, it makes us all want it much more – call it ‘the elixir of scarcity

Never forget this: the nature of our attention affects the nature of our experience.

The Walkman also exploits a clear psychological heuristic, or rule of thumb – ‘the jack-of-all-trades-heuristic’, whereby we naturally assume that something that only does one thing is better than something that claims to do many things. Similarly, when we hear ‘sofa-bed’, we instinctively think of an item of furniture that is not great as a sofa and not much good as a bed, either. And some of you may have encountered a spork, an unsatisfactory spoon, which is rather less use as a fork.

The strongest marketing approach in a business-to-business context comes not from explaining that your product is good, but from sowing fear, uncertainty and doubt (now commonly abbreviated as FUD) around the available alternatives. The desire to make good decisions and the urge not to get fired or blamed may at first seem to be similar motivations, but they are, in fact, never quite the same thing, and may sometimes be diametrically different.