More on this book
Community
Kindle Notes & Highlights
The Earl of Sandwich was an obsessive gambler, and demanded food in a form that would not require him to leave the card table while he ate.
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.
true that ‘what gets measured gets managed’, but the concomitant truth is ‘what gets mismeasured gets mismanaged’.
As any game theorist knows, there is a virtue to making slightly random decisions that do not conform to established rules.
a distinguishing feature of entrepreneurs that, since they don’t have to defend their reasoning every time they make a decision, they are free to experiment with solutions that are off-limits to others within a corporate or institutional setting.
most valuable discoveries don’t make sense at first; if they did, somebody would have discovered them already.
Alfred Hitchcock once said, ‘drama is just real life with the boring bits edited out’.
We constantly rewrite the past to form a narrative which cuts out the non-critical points – and which replaces luck and random experimentation with conscious intent. For instance, a friend of mine once mentioned that he had been attracted to buy his current home partly because it was close to an excellent restaurant, forgetting that the establishment opened after he had moved in.
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.
In this model, reason is not as Descartes thought, the brain’s science and research and development function – it is the brain’s legal and PR department.
The more data you have, the easier it is to find support for some spurious, self-serving narrative. The profusion of data in future will not settle arguments: it will make them worse.
The doorman may actually increase what you can charge for a night’s stay in your hotel.
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,
slightly embarrassing but nevertheless essential facet of free market capitalism that it does not care about reasons – in fact it will often reward lucky idiots.
The theory is that free markets are principally about maximising efficiency, but in truth, free markets are not efficient at all.
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.
Almost everything becomes more desirable when people believe it is in scarce supply,
the alchemists failed to experiment with the rebranding of lead.
sea urchins were once whore’s eggs.
Never forget this: the nature of our attention affects the nature of our experience.
it is surprisingly common for significant innovations to emerge from the removal of features rather than the addition. Google is, to put it bluntly, Yahoo without all the extraneous crap cluttering
McDonald’s deleted 99 per cent of items from the traditional American diner repertoire; Starbucks placed little emphasis on food for the first decade of its existence and concentrated on coffee; low-cost airlines competed on the basis of what in-flight comforts you didn’t get.
Although you may think that people instinctively want to make the best possible decision, there is a stronger force that animates business decision-making: the desire not to get blamed or fired.
‘No one ever got fired for buying IBM’ was never the company’s official slogan – but when it gained currency among corporate buyers of IT systems, it became what several commentators have called ‘the most valuable marketing mantra in existence’.
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.
Cooperation is impossible unless a mechanism is in place to prevent deception and cheating; some degree of efficiency often needs to be sacrificed in order to convey trustworthiness or to build a reputation.
Medieval guilds existed for this reason. Trust is always more difficult to gain in cities because of the anonymity they afford, and guilds help to offset this problem. If it is costly and time-consuming to join one, the only people who enter are those with a serious commitment to a craft.
Reciprocation, reputation and pre-commitment signalling are the three big mechanisms that underpin trust.
Many things which do not make sense in a logical context suddenly make perfect sense if you consider what they mean rather than what they are. For instance, an engagement ring serves no practical purpose as an object. However, the object – and its expense – make it highly redolent with meaning; an expensive ring is a costly bet by a man in his belief that he believes – and intends – his marriage to last.
Upfront investment is proof of long-term commitment, which is a guarantor of honest behaviour. Reputation is a form of skin in the game: it takes far longer to acquire a reputation than to lose one.
Unlike short-term expediency, long-term self-interest, as the evolutionary biologist Robert Trivers has shown, often leads to behaviours that are indistinguishable from mutually beneficial cooperation.
In game theory, this prospect of repetition is known as ‘continuation probability’, and the American political scientist Robert Axelrod has poetically referred to it as ‘The Shadow of the Future’.
procurement, by setting shorter and shorter contract periods, may be unwittingly working to reduce cooperation.
the ‘tourist restaurant’ approach, where you try to make as much money from people in a single visit.
counterintuitive findings in customer behaviour: it has long surprised observers that, if a customer has a problem and a brand resolves it in a satisfactory manner, the customer becomes a more loyal customer than if the fault had not occurred in the first place.
SIGNALLING HAS TO BE COSTLY
effectively describing what biologists call ‘costly signalling theory’, the fact that the meaning and significance attached to a something is in direct proportion to the expense with which it is communicated.
Bits deliver information, but costliness carries meaning.
EFFICIENCY, LOGIC AND MEANING: PICK ANY TWO
We notice and attach significance and meaning to those things that deviate from narrow, economic common sense, precisely because they deviate from it.
A handmade birthday card can be cheaper and yet still more moving than an expensive bought one – but it has to involve a level of effort.
The meaning in these things derives from the consumption of some costly resource – which, if not money, may be talent, or effort, or time or skill or humour or, in the case of risqué humour, bravery.
This explains why working with an advertising agency can be frustrating: it is difficult to produce good advertising, but good advertising is only good because it is difficult to produce. The potency and meaningfulness of communication is in direct proportion to the costliness of its creation –
Quite simply, all powerful messages must contain an element of absurdity, illogicality, costliness, disproportion, inefficiency, scarcity, difficulty or extravagance – because rational behaviour and talk, for all their strengths, convey no meaning.
meaning is conveyed by the things we do that are not in our own short-term self-interest – by the costs that we incur and the risks we take.
only by deviating from a narrow, short-term self-interest that we can generate anything more than cheap talk. It is therefore impossible to generate trust, affection, respect, reputation, status, loyalty, generosity or sexual opportunity by simply pursuing the dictates of rational economic theory.
bravery is sexy, but rationality isn’t.
ADVERTISING DOES NOT ALWAYS LOOK LIKE ADVERTISING:
we have developed the ability to arrive at pretty good, non-catastrophic decisions based on limited, non-numerical information,
think we subliminally deduce that any place that goes to the trouble of erecting chairs on the street will serve coffee that, at the very least, is unlikely to be terrible.
