Rory Sutherland: Advertising Giant Unveils How Brands Fool You | The Development by David Podcast

1. 0:00 – 2:09

   Reimagining time: nightclubs, casinos, and why schedules get stuck

   1. DJDavid McIntosh Jr0:00

      So Rory, my mandatory behavioral reset that I would've changed during lockdown would be to push the timeline of nightclubs earlier in the day. I just think having nightclubs so late on is such a waste of productivity, a waste of sleep, and I guess nightclubs don't have windows anyway, so you could recreate the sense of night during the day. I just think it's a very inefficient way to socialize.

   2. RSRory Sutherland0:23

      Well, it's a very interesting point you make, which is that the time of certain things... I mean, you, you make the point that actually Las Vegas has already done this, hasn't it? It effectively, it removes clocks, and casinos have no windows, and so you're not conscious of the fact that you're inside gambling on a sunny day. You don't really know what time it is, and sometimes you'll leave a casino in Va- Las Vegas and be surprised that it's light or surprised that it's dark.

   3. DJDavid McIntosh Jr0:51

      [laughs]

   4. RSRory Sutherland0:51

      Cinemas have that effect a little bit, don't they?

   5. DJDavid McIntosh Jr0:53

      Yes.

   6. RSRory Sutherland0:53

      In that you go into a windowless space, and you lose track of time, and sometimes in the summer you come out of the cinema expecting it to be dark and it's still light. Sometimes, of course, if you go to a matinee, you're often surprised that it's light because you have this expectation that you go into a cinema in daylight and come out in the nighttime.

   7. DJDavid McIntosh Jr1:12

      [laughs]

   8. RSRory Sutherland1:12

      But of course, matinees, and sometimes it's the other way around, of course, in, you know, in long summer evenings or in the north of Scotland, you could come out of a cinema at midnight and it'll still be daylight.

   9. DJDavid McIntosh Jr1:22

      [laughs]

   10. RSRory Sutherland1:22

       So you're right. And the other point I've always made is that an awful lot of things like time, uh, the time things happen, which are if you like sort of, um, uh, they've arisen out of network coordination. And, um, they often get enshrined even when they should be, to be honest, rejigged, simply because it's very difficult to change the behavior of everybody simultaneously. I've, I've heard that actually the Berlin nightclub scene basically gets started at about 4:00 in the morning. So my friend Paul Dolan is a big devotee of the Berlin nightclub scene, and he says, "I'm too old to stay up all night, so what I actually do is I go to bed, I turn up at a nightclub at about 6:00 in the morning when it's all kicking off-

   11. DJDavid McIntosh Jr2:09

       [laughs]

2. 2:09 – 5:34

   Daylight saving, time zones, and theatre start times as a Nash equilibrium

   1. RSRory Sutherland2:09

      ... and then spend the daylight hours doing this stuff rather than, you know, sacrificing my beauty sleep." And the other interesting one, there are a couple of interesting ones. There's the whole question of daylight saving time, which I think is a bit stupid in the UK. A large part of it is really there as a sop to sort of farmers in the n- far north of Scotland or schoolchildren in the far north of Scotland. Now, to be absolutely honest, there's no particular reason why... I mean, I, bear in mind, I'm, I'm called Sutherland. We're from Caithness, okay? Um, but the population of Caithness is something like 20,000 people. There's no reason why the schools in Caithness can't just kick off at 10:00 in the morning. You know, it wouldn't exactly confuse anybody else. Okay? Um, and I don't quite understand that, that argument. Uh, you have some crazy things in terms of daylight saving and time zones. Spain, unlike Portugal, Spain should be in the same time zone as the UK. It's extraordinarily inefficient use of time, uh, and heat and all sorts of things, the fact that Spain is on the same time zone as, um, Central Europe. But apparently Franco did it to impress Hitler-

   2. DJDavid McIntosh Jr3:18

      [laughs]

   3. RSRory Sutherland3:18

      ... in the 1930s, and they're now stuck with it. Um, it's just too difficult to change back. And the Portuguese have never, I think, been on the same time... Oh, no, the Portuguese had a brief period where they tried being on the same time zone as Spain for convenience of rail timetables, and they just decided it was ridiculous. But my rant, funnily enough, on that basis, the simultaneous chronological reset would actually be the time that theatrical performances are on. Cinemas are okay. You can go to the cinema at 5:00 if you want to. You can go to the cinema at 10:00 in the evening if you want to. It caters for a wide range of choice. London theater land, you know, operas, plays, um, musicals, et cetera, basically it all kicks off around 7:30, which is too early for you to eat beforehand, and it all finishes about 10:30, 10:45, which is too late for you to eat afterwards. And also, the interval's too short, so if you agree to meet friends at the theater, you end up exchanging about seven words-

   4. DJDavid McIntosh Jr4:17

      [laughs]

   5. RSRory Sutherland4:17

      ... and they're, "Here are your tickets," and, "Where are our fucking drinks?" Okay? I mean, that's, that's about the extent. Unlike Glyndebourne, which has a decent one hour 10 minute interval, the rest of theater and opera is utterly useless for the purposes of being sociable. Because generally one, you know, one half of the party or the other half will end up turning up five minutes before curtain up. Then you have this pathetically short interval where all you can do is basically stand shoulder to shoulder and worry about where your drinks are.

   6. DJDavid McIntosh Jr4:47

      [laughs]

   7. RSRory Sutherland4:48

      And then you, you, you basically get kicked out onto the... Now, I always thought this was done for the convenience of actors and people who work in the theater. And then I asked around and they said, "No, no, no, we hate it too."

   8. DJDavid McIntosh Jr4:59

      [laughs]

   9. RSRory Sutherland5:00

      They said people in the theater hate the times they have to work. They'd much rather either basically kick off at about 6:15 or alternatively kick off later. But the whole business where all the theaters start at 7:30 creates traffic chaos. It cr- creates general crowding. But, um, uh, it's, it's basically very, very difficult to change that. It's one of those things where everybody gets... Uh, it's a bit like a Nash equilibrium. Once you fall to this Nash equilibrium, everybody gets stuck.

3. 5:34 – 8:03

   Presenteeism, commuting, and why office productivity is measured unfairly

   1. DJDavid McIntosh Jr5:34

      Are there any other behaviors that have been cemented into history that we just can't shift, much like the Spanish time zone and, uh, the times theaters kick off?

   2. RSRory Sutherland5:43

      Well, the Spanish, I mean, to be honest, the Spanish, the Spanish could change it. I mean, I, I, I, I'm not entirely sure what the obstacle is, because at least, at least that's something which is actually a matter for the legislature. Whereas a lot of other behaviors, um, certainly, I mean, one thing that's, um, I mean, I mean, presenteeism and the idea that... I mean, one thing I've always slightly resented, okay, is that you're deemed to have started work when you get into the office.

   3. DJDavid McIntosh Jr6:12

      [laughs]

   4. RSRory Sutherland6:12

      Because in truth, okay, the people with a one-and-a-half-hour commute actually start work the moment they get on the train. And I think we should give those people a little bit of a pass and say, "Okay, if you've got a one-and-a-half-hour commute, and you get into the office at 10:00, we appreciate the fact that you've done one and a half hours work on the train. Also, you've done all the antisocial stuff before you have to get into the office, which leaves you free to go around the office talking to people, which is what the office is for."

   5. DJDavid McIntosh Jr6:40

      Mm.

   6. RSRory Sutherland6:40

      Whereas the people who get into the office at the crack of 9:00, you know, who've only had a 20-minute commute, I mean, they were asleep 40 minutes ago. So I mean, undoubtedly there are some pretty unfair ways in which we measure productivity, in which we measure commitment, and things like that. And presenteeism, I think, has become problematic, uh, in an age where demanding effectively, implicitly, that people reply to emails at 10 o'clock at night and at the weekend, while at the same time still demanding people pitch up at 9 o'clock in the morning, is really a bit of an unreasonable ask. I think, I think that the, the workday, yes, it's true, okay, that some leisure activities like online shopping have probably permeated the workday a little bit. You know, you can, unless you, unless you work for a very, very strict organization, you know, you can kind of plan your holidays, and book hotels, and do a few things like that while you're in the office. But for many people, the extent to which the office has effectively spilled over into their private life, including their holiday time. Now, in Germany, you have a law, I think, um, certainly it was instigated by Daimler-Benz, that when you go on holiday, you turn your email off. It's not just a question of the email doesn't get read, the email gets rejected with a message saying, "This person's on holiday. Find another solution."

   7. DJDavid McIntosh Jr8:01

      It- it's strange, uh, 'cause I mean, I-

4. 8:03 – 9:49

   Email as “shoddy design”: removing friction increases noise

   1. RSRory Sutherland8:03

      'Cause I mean, I mean, e- e- email is a product, a product of very shoddy design, 'cause it was such an unfamiliar thing. It was designed by analogy with the letter. And even things like CC and BCC, if you think about it, they're terminology from the age, not the age before the photocopier, okay? So it stands for carbon copy and blind carbon copy.

   2. DJDavid McIntosh Jr8:26

      Wow, okay. I didn't know that.

   3. RSRory Sutherland8:27

      Okay? So CC stands for carbon copy. Okay, now no one really, basically people took the, uh, the formula for the office memo, and they applied it to email with the assumption that immediate is perf- is better than delayed, uh, and the assumption that costless and effortless is better than effortful. And for the sender, a lot of that stuff is true, okay? But for the recipient, not so much. 'Cause before someone had to send you a memo in 1985, they had to get it typed up, they had to burn some favors with the typing pool, they had to hand write it, proofread it, get it distributed, take it down to the photocopier room, or whatever. Because there was effort in communicating, it tended to be the more valuable communications that got produced. Whereas once you make communication free, you know, it's a bit like social media, okay? You know, uh, r- most people didn't write a letter to The Times saying, "That's bollocks," right? Because you had to put a bit of effort in, so you thought, "Well, I've got to put the effort into sending the letter to The Times, so I'd better put a bit of effort into writing it." Whereas if all you've got to do is click send, okay? Once you take away the friction, and you take away the effort, a certain element of filtration gets lost, I think.

5. 9:49 – 12:51

   Subtle cues that change behavior: donation envelopes and “intelligent autopilot”

   1. DJDavid McIntosh Jr9:49

      Uh, and when I read Alchemy, I think you use a case study, um, bringing this to life about, I think it's, is it donations where the quality of en- uh, envelope, the perceived-

   2. RSRory Sutherland10:01

      Envelop, yeah

   3. DJDavid McIntosh Jr10:01

      ... effort into, yeah, the, yeah. It, it drove, uh, donation level, right?

   4. RSRory Sutherland10:07

      Yeah. Now, I don't think anybody would've consciously said, "I wasn't going to give £100, but because the paper quality was 175 GSM rather than, you know, 110, I felt unusually generous." It's one of those unconscious things where effectively our brains are effect- absorbing clues and connotations from everywhere we go. You know, there are certain things that connote things to our unconscious. And what, what I think we noticed with the higher quality paper is that it didn't particularly get more donations, but it got far more donations of a high amount. And maybe it's just that putting a £110 check, let's say, into a really cheap, flimsy en- envelope just seems somehow, you know, not very zen, or safe, or secure, or natural. Um, one of the other experiments was putting the flap of the envelope on the end, the narrow end, rather than the lo- log end, to make people feel safer putting money inside it.

   5. DJDavid McIntosh Jr11:12

      [laughs]

   6. RSRory Sutherland11:12

      Um, and, and that, that had a 14% uplift in donations as well. So these things are really interesting because the, the human brain is running on what you might call intelligent autopilot, you know, far more than we actually realize. It's making these inferences and assumptions from, uh, you know, cues and clues in the environment all the time that we're not really aware of because they, they seem to bypass conscious thought. And it's a bit like I've just, I've just got a car that's not quite driverless, but it's got adaptive cruise control. Uh, it's also got intelligent cruise control, so it reads speed limits. And it's very interesting when you drive on adaptive cruise control, it just automatically basically follows the car in front, uh, up to a maximum speed, that you realize that actually, you know, most of the time you're driving kind of without thinking. You know, when something significant happens that actually wakes up your conscious brain, you know, someone tailgates you, or someone cuts in front of you or, you know, there's a tractor up ahead and you need to m- take evasive action, obviously then it, it reenters, you know, conscious control. But most of the time, uh, the, the analogy I've always heard is with the automatic camera. Yes, we have settings, we can twiddle with the shutter, in the camera on a mobile phone for that matter, okay? Yes, you can alter the white balance and the shutter speed and the aperture level and the focus, but most of the time we don't. And I, again, yes, we can intervene in our decisions to some extent and sometimes improve them, but most of the time we don't.

6. 12:51 – 19:54

   Design affordances—and the human version: fixing confusing service interfaces

   1. DJDavid McIntosh Jr12:51

      One of the articles that I enjoyed reading of yours was a reflection on Don Norman's work about, is it single affordability? About the Sony Walkman, how-

   2. RSRory Sutherland13:01

      Uh, it's afford- fa- the fo-

   3. DJDavid McIntosh Jr13:02

      Affordability

   4. RSRory Sutherland13:03

      ... uh, the phrase is the affordance. Yeah, the affordance is a-

   5. DJDavid McIntosh Jr13:05

      The f- single affordance

   6. RSRory Sutherland13:06

      ... um, yeah, the idea that there are a lot of... When he writes in his book The Design of Everyday Things, a lot of very simple devices are designed in a way that even though we don't realize it, we can only really use them in the way they're intended. I mean, an example of a single affordance would be, um, uh, you know, uh, for example, you can only plug, um, a British plug in one way round, you know, just to be clear about it. Um, the fact that you can't, um, uh, you know, uh, you, you know, there's only... I mean, I suppose it's kind of, I suppose you could put a DVD in upside down, but people don't. But, you know, there are things which essentially, uh, the perfect example is a pot which is, which has the spout on one side and a single handle, okay? And the handle is so placed that it's completely natural to pour that pot in the right way, and would feel completely unnatural to pour the pot, uh, incorrectly.

   7. DJDavid McIntosh Jr14:06

      [chuckles]

   8. RSRory Sutherland14:07

      And so really well-designed objects essentially communicate with the user without the need for an instruction manual, because they are their own instruction manual.

   9. DJDavid McIntosh Jr14:20

      So reflecting on that and trying to personify that, as a human, should we signal single affordance or should we be more multifaceted in, in terms of our identity?

   10. RSRory Sutherland14:32

       Oh, I see what you mean. That's very interesting. Um, I don't think, I, I, I don't think it applies to... I mean, there's an interesting question. If you're in a service industry, there is an interesting question which is, for example, I think a bad example of human affordance is, you know, I've done my fair share of staying in, in a blingy hotels on business, but I'm never quite clear... Okay, I, I'll give you a perfect example of bad human affordance or bad affordance between humans, which is when you're in a hotel and you want to call room service, okay? And it usually has in-room dining, concierge, front desk, housekeeping. Okay? Right?

   11. DJDavid McIntosh Jr15:17

       Yeah.

   12. RSRory Sutherland15:17

       And there may be a fifth and sixth one. You know, there's usually one for the like the s- um, it might be reservations for the restaurant or something, right? Okay. And except in a minority of cases, it's not really obvious who you're supposed to ring. So if they haven't put one of those things that you hang on your hotel room door to request Eggs Benedict at 8:30 or between 8:30 and 8:40 with a bottle of Tabasco and a pot of coffee, okay? Um, is that in-room dining? Probably. Okay, fair enough. But no, no, it isn't actually, 'cause who, whose job is it? I, I, I've never worked in a hotel. Is it housekeeping whose job it is to keep the rooms supplied with those funny little hang-on-the-door things? Is it in-room dining's responsibility? Is it the front desk's responsibility? Haven't got a clue. So an interesting case of that was the W Hotel chain introduced whatever, whenever, and it was a single button which basically said, "Look, just press this button if you've got some shit that needs sorting, and we'll take care of, you know, we'll take care of the second stage of directing your inquiry to where it's needed." And that was quite welcome. That was a notable thing with the W Hotel chain, whenever, whatever I think it's called or something. Obviously, because they both begin with W, so things in the W Hotel chain tend to like to begin with a W. And, um, that's a good example of taking a messed up interface. 'Cause, you know, okay, I imagine it, the way it works is housekeeping is who I ring if, if for example, I've [chuckles] murdered someone in my room and want to dispose of the evidence, okay? The concierge is the person you contact if you want a prostitute or illegal drugs.

   13. DJDavid McIntosh Jr16:57

       [chuckles]

   14. RSRory Sutherland16:57

       Or theater tickets, conceivably. Okay. And I assume, okay, the demarcation is something like that. But the p- the point that the W Hotel chain noticed is that most guest inquiries aren't as clearly delineated as all that. You know, if I go, oh, I, I'll tell you one of the funniest stories about hotels, by the way. Um, I have only stayed in about two hotels in my life which meet one interesting criterion, which is that when you have your dry cleaning done, they replace the dry cleaning shit, like the bag and the form, a- along with your dry cleaning being returned.

   15. DJDavid McIntosh Jr17:35

       [chuckles]

   16. RSRory Sutherland17:36

       Because if ever I stay at a hotel and I need dry cleaning done more than once, um, [chuckles] because I, you know, for whatever reason, okay? No, no.

   17. DJDavid McIntosh Jr17:46

       [chuckles]

   18. RSRory Sutherland17:46

       I'm just, I'm staying for a long time, okay? But also, to be absolutely honest, I mean, you know, I mean, okay, I'm traveling on business. The reason I tend to get a lot of dry cleaning done is it's a bit kind of crappy to come home, you know, and, you know, it's, it's nice to come home with a load of laundered stuff your next trip, you see? 'Cause you leave that stuff folded in your case, and you're ready for your next trip. Whereas if you take it out and get it washed, then it's a totally different thing. And so, um, uh, it's incredibly rare, even in fancy five-star hotels, for anybody to return the form and the polythene bag for your second bout at dry cleaning or laundry. I don't know why that is. You'd think it would be baked into the housekeeping job, which is, you know, check there isn't a dead body on the floor. Um, you know, check there aren't any turds in the toilet, fold loo paper into triangle for no readily apparent reason. You know, put chocolates on pillow. You know, you'd think they'd include in that list of things, check that there's the dry cleaning stuff, but for some reason they don't. And I did hear an interesting story about that, which is hotels have to offer dry cleaning, okay? And it's quite lucrative because they charge quite a lot of money for it, but they hate it. And there's a reason why they hate it, which is if it goes wrong, it can be a living disaster, right? You know, if someone's breakfast doesn't arrive, there's a plan B, okay? If someone has a bad night's sleep, well, you can apologize and, you know, comp them their room, okay? Right. There's a kind of way out of most guest problems. But if a hotel, if a hotel loses your clothes, right, and you're basically presented with the option of going to a business meeting in your underpants or in a toweling robe, okay, uh, or going sh- trying to go shopping at 7:00 AM in Zurich for clothes that will fit you, you know, while in your underpants, it really is a living disaster. So I think hotels particularly hate dry cleaning because although it's great when it's great, in the 1 or 2% of times where it goes wrong, it really, really goes wrong.

7. 19:54 – 23:00

   Concierge as life infrastructure: Pepsi’s corporate concierge and hotel operations quirks

   1. DJDavid McIntosh Jr19:54

      I'm reflecting on a really funny story that I want to share to you about concierge and how they're essentially the, the handyman of hospitality. They are single human affordance. Or they're not, sorry, they're not single human affordance. Um, I had a guest on called Andy King. Have you seen the Netflix documentary, Fyre Festival?

   2. RSRory Sutherland20:15

      Yes, I loved it. Absolutely, as did everybody else. But yeah. Yeah, he's in jail, actually-

   3. DJDavid McIntosh Jr20:19

      So-

   4. RSRory Sutherland20:19

      ... the guy who organized that, isn't he?

   5. DJDavid McIntosh Jr20:21

      Y- yeah, um, he-

   6. RSRory Sutherland20:22

      Can I just pause for one second? I'll just ask my wife for a, a drink. I'll, I'll just get her a drink very qui- I'll just repeat that. Yeah, I mean, I've come back with a kombucha, which is a product that nobody knew we wanted five years ago. Yeah, we aren't marvelous.

   7. DJDavid McIntosh Jr20:36

      [laughs] I, I still don't know what it is. But the, the Fyre Festival story, so I had the... You might remember the scene about the ultimate team player, the person that was going to take the ulcr- ultimate sacrifice to transport the water or allow the water in from customs. He, Andy King was the guy that was going to, um, perform fellatio on the custom officer, and bec- it became an internet meme and stuff like that. Um, but he came on my podcast to share his story, and prior to the Fyre Festival, he created a role as the world's first corporate concierge for Pepsi. And one of the s- like, a kind of illuminating example of how he was not single affordance was because one of the examples that he helped an employee with, um, I think it was the marketing assistant came back from a holiday in the Bahamas or s- came, came, came back from holiday, and found out on that holiday that her mother was not her real mother, and that she had been adopted. And within one hour, Andy found, um, the woman's real mother and got her on a flight to meet her real mother within an hour. So it just shows you, like, concierge is, um, the ultimate handyman of hospitality. [laughs]

   8. RSRory Sutherland21:49

      'Cause I kn- I know that Pepsi is very interesting on that. For example, um, Pepsi, if you work for Pepsi, they arrange for your car to be serviced while you're at work. So they do some quite intelligent things to ensure that your leisure time is kind of protected because they have people, you know, who will effectively do little things for you. It's very interesting actually, I've never, okay, not in one second have I ever asked a... I've had a PA for years now, but in Britain certainly, it, it varies culturally enormously. I imagine in Asia it's totally different. Okay? I would never dream of asking my PA to drop off or pick up my dry cleaning.

   9. DJDavid McIntosh Jr22:29

      [laughs]

   10. RSRory Sutherland22:30

       Uh, uh, you know, to me that's not, that's not their job and it's an abuse of corporate manpower. Now, in some ways, actually I think companies should do more of that. Uh, you know, should take care of people's life problems because, you know, work's tough enough five days a week without having to go home and coordinate, you know, kitchen repairs or something. Uh, you know, and taking your car in to be serviced on a Saturday, okay, that's your weekend gone. And so having a corporate concierge.

8. 23:00 – 31:46

   Fyre Festival, schadenfreude, and the gap between marketing and delivery

   1. RSRory Sutherland23:00

      The only thing I would've said about Fyre Island, okay, it's unusually woke comment from me, but, um-

   2. DJDavid McIntosh Jr23:08

      [laughs]

   3. RSRory Sutherland23:08

      ... the diversity, in particular the gender diversity of the organizers struck me as a problem from the off. Which is, uh, you know, um, I don't, actually at that kind of thing, I just don't, I don't think men are very good at that kind of org- you know. I, I mean, I've, you know... Well, actually, no. Okay. No, that's not fair. Okay. You could have got people in from the military, okay? But the, the people who did it were marketing geniuses in many ways. And by the way, I thought it was a very good idea, you know. I mean, okay, I, I, you know, 250,000, which I think was the highest price you, you had to pay to go to Fyre Island. And the fact that everything was fake, it wasn't a private jet, it was a chartered airliner dressed up to look like a private jet. And that, you know, your villa had hadn't been built, so you were actually put in a tent, which was really designed for refugees, okay?

   4. DJDavid McIntosh Jr24:00

      [laughs]

   5. RSRory Sutherland24:01

      I mean, part of the reason it was kind of so funny, okay, if that had merely been a disaster story about, you know, a weekend, uh, put on for, you know, impoverished schoolchildren, it wouldn't have been funny. Well, it still would've been a bit funny, okay?

   6. DJDavid McIntosh Jr24:16

      [laughs]

   7. RSRory Sutherland24:16

      But what made it really fun... I mean, other, I mean, other people's holiday disasters are hysterically funny, aren't they? I mean, schadenfreude-

   8. DJDavid McIntosh Jr24:24

      Definitely

   9. RSRory Sutherland24:24

      ... with holidays is, you know, if someone has a really bad time normally, you don't take particular pleasure from it unless you're really sadistic. But I remember [laughs] Some friends of ours, um, they were arrested for smuggling pine cones. All they'd done is they collected some pine cones in Switzerland, which apparently are disease vectors, and they put them on the rear p- parcel shelf of their car. And, um, uh, they, they arrive at customs between Switzerland and France, and the customs officer raps on the window. And they have these, like, foot-long pine cones on the p- back parcel shelf of the car, okay? And the chap raps on their window and goes, "Have you any pine cones?" Okay? And they, not unreasonably, think, "He's seen our enormous pine cones and he's telling a joke," right? Okay? There's no other reason they could conceive of why a policeman would rap on your window and say, "Have you any pine cones?" Okay. And they try, and they say, and, and they decide to play along with the joke. "No, no, we haven't got any pine cones. Wouldn't dream of having any pine cones." And they drive off, and of course this guy sees these sort of eight-inch-long pine cones for the first time, and immediately chases them and can't understand why they're lying about smuggling pine cones.

   10. DJDavid McIntosh Jr25:39

       [laughs]

   11. RSRory Sutherland25:39

       But they're some sort of disease vector. Don't ask me what. And then later on, um, the s- the swimming pool hadn't been completed in the place, so it was just a hole in the ground.

   12. DJDavid McIntosh Jr25:49

       [laughs]

   13. RSRory Sutherland25:49

       Which bear in mind, would happen a lot more before the internet, okay? 'Cause you know, when you went to a hotel before the internet, uh, okay, you can't trust the photographs, but the photographs can't really show a swimming pool when it's really a hole in the ground.

   14. DJDavid McIntosh Jr26:03

       [laughs]

   15. RSRory Sutherland26:04

       But back in 1979, you could say, "With swimming pool," and you know, you just had to take it on trust. Oh, and then the other thing was they, they took the children to what they thought was a circus, 'cause there was a big tent in the middle of a field.

   16. DJDavid McIntosh Jr26:16

       [laughs]

   17. RSRory Sutherland26:16

       And it turned out to be a Communist Party rally, and they had to sit there for two and a half hours listening to people basically, um, quoting Karl Marx in French.

   18. DJDavid McIntosh Jr26:26

       [laughs]

   19. RSRory Sutherland26:27

       Which must have been a blast for the kids, I have to say. But other people's holiday des- But the Fire Island thing was particularly funny, of course, 'cause it was kind of rich, slightly over-optimistic people.

   20. DJDavid McIntosh Jr26:36

       [laughs]

   21. RSRory Sutherland26:37

       And perhaps slightly over-self-satisfied people, who were mostly, but not exclusively, kind of the butt of the, the, the problem.

   22. DJDavid McIntosh Jr26:45

       [laughs]

   23. RSRory Sutherland26:46

       Um, but, but he, I think he's in jail. Um, the marketing was, I have to say, rather fantastic. And of course the marketing was a fantastic success. It was the delivery that was the problem.

   24. DJDavid McIntosh Jr26:57

       Uh, uh, and Andy himself, the, so Billy McFarland, the, the-

   25. RSRory Sutherland27:01

       Mm

   26. DJDavid McIntosh Jr27:01

       ... the head honcho of the event is in jail, but Andy is not. Of course, 'cause I didn't podcast with him from Guantanamo Bay or anything. But he has used that single line that he went viral for. I think it was, "I was fully prepared to suck his..."

   27. RSRory Sutherland27:15

       Yeah.

   28. DJDavid McIntosh Jr27:15

       That one line. He, he's turned into a cameo. He's, he's, he, he, he's doing birthday messages and stuff like that. And now he's, like, some really prolific events planner for Leonardo DiCaprio, The Rolling Stones, Mark Ruffalo. But he's used that one line, th- the ultimate team player, to kind of propel his career. I think it's fantastic. And it's weird-

   29. RSRory Sutherland27:35

       Is there a big, is there a big s- Is he Scottish, by the way? Or is he American Scottish?

   30. DJDavid McIntosh Jr27:39

       N- no, he, no, he's completely American.
9. 31:46 – 39:06

   Tourism and “auxiliary” products: golf in Portugal, Boots meal deals, and footfall ecosystems

   1. RSRory Sutherland31:46

      No, that's very interesting. It's very interesting that, isn't it? Which is, I mean, that's the other thing, of course, it embraces golf, embraces travel. Um, very interesting. I, I'm always really interested in these sort of economic mysteries. You know, I love books like Freakonomics, and I love books like The Armchair Economist and The Economic Naturalist. Um, uh, and looking at human economic behavior or commercial behavior through a kind of biologist's mindset. And one of the interesting ones I can never understand is why the hell is golf so huge in Portugal? 'Cause I like Portugal, right, and I don't play golf. And I'd always want to go and stay at this Portuguese hotel, and then you go, and, you know, the hotel overlooks the green of the seventh hole or something. And I go, "Well, I'm paying, I'm paying a premium for a sport that I don't play." I don't want to, and you know, I don't want to be staying in a hotel surrounded by golf courses, and it would piss me off. Then someone explained it to me. They said, "If you're Portugal," okay, the problem the Portuguese tourist industry has, and to some extent the Spanish one, but especially the Portuguese one, being on the Atlantic, is that your hotels are absolutely packed for the summer holidays. They're quite busy for the Easter holidays, school holidays, okay, and the rest of the year is dead, right? And they said, "On the other hand, if you have a golf course, what you have is you have effectively May, June, September, October, you get golfing trips, parties of old blokes," you know, in other words, with grandchildren or whose children have left home, or indeed women, who basically come out there to play golf in October. And so, the hotel still has guests in October. And so it's a weird thing, which is the golf course isn't really there for August. It's not, you know, the hotel would be full in August without a golf course. The reason you need the golf course is actually to get any guests in sort of, you know, late September, otherwise the place is just dead.

   2. DJDavid McIntosh Jr33:42

      Have you seen that unfold with other products or services? There's like an auxiliary part of the product or service that mitigates poor footfall or poor performance in other months or other times of the year.

   3. RSRory Sutherland33:53

      Yeah. I mean, well, I'll give you an example of where they probably got it wrong, is where Woolworths in the UK followed this Boston matrix, and they concentrated, you know, they, they probably kept the pick and mix, okay? But they concentrated on high-margin goods like children's toys, and they stopped selling things like reels of cotton, okay? And what they didn't understand, I think, was the complex dynamics whereby people went in to buy cotton and ended up buying toys. You know, that actually, you know, y- I mean, you know, part of the problem with a toy shop is unless you have kids and pester power, or unless it's the run up to Christmas, we don't generally go in them very often. I was debating today whether Boots does its meal deals really just to get footfall, okay? If you know you can get a sandwich, a drink, and a packet of crisps in Boots for whatever it is, £3 whatever, okay, a lot of office workers go into Boots and buy their lunch. And then while they're buying their lunch, they see high-margin items, particularly pharmaceuticals, you know, um, uh, ibuprofen, whatever it may be, which they also buy. But, you know, so understanding, I think, that, you know, may... in, in many cases your, your brand or business may have a Chesterton's fence. In other words, as far as you can see, it's pointless, but in the wider ecosystem of human behavior, it's serving a purpose which, um, uh, you hadn't really, uh, understood. And I think, you know, when I think Woolworths said, "We don't need to sell cotton reels, they're a low-margin business," and I, uh, to be honest, I don't mean cotton reels, pure and simple. You know, Sellotape, you know, practical shit like that. 'Cause you know, the great problem for WHSmith's really is that people used to go in to buy a newspaper, okay? So, you're guaranteed footfall, and then they bought higher-margin goods, in particular birthday cards. All right? I mean, cigarettes were a great thing, okay? 'Cause somebody who smoked went into a corner shop every day to buy cigarettes, matches perhaps, okay? Now, the corner shops didn't make that much money out of cigarettes, but they sold a hell of a lot of other stuff to the people who were buying cigarettes. So yeah, I mean, that sort of ecosystem thing I think is really interesting. I've always had a vague theory that the reason Starbucks came along is that not many people smoked anymore. You know, and now, okay, this is not the sole reason, okay? But I think it's a contributory reason, which is that when, you know, people sort of need a drug in the morning to just perk themselves up, okay? Uh, you know, y- you need what you might call a little mental aileron that just gives your brain a kind of fillip of some kind, you know? Um, whether it's just to chill you out or, you know, slightly perk you up, and, um, uh, nicotine was no longer doing that job. Now, okay, you know, I, I, I've got no proof of this whatsoever. It's impossible to prove 'cause we don't have the counterfactual. We don't have a weird universe where there are no coffee shops and everybody's chain-smoking around the place.

   4. DJDavid McIntosh Jr36:57

      [laughs]

   5. RSRory Sutherland36:58

      So it's im- you know, it's impossible to determine this. But you know, I, but, but I often wonder about the, the extent to which we hold businesses entirely responsible- For their performance. But quite a lot of what happens in a business can be actually independent of their own actions, um, the classic case being Motorola. Do you remember, you don't remember a mobile phone called the Motorola Blade, do you? It was a smartphone, very thin, aluminum, silver thing. You know?

   6. DJDavid McIntosh Jr37:25

      I'll d- I'll do a quick Google, Rory, whilst we're on-

   7. RSRory Sutherland37:28

      Yeah, Motorol-

   8. DJDavid McIntosh Jr37:28

      Oh

   9. RSRory Sutherland37:28

      ... yeah, have a look at the Motorola Blade. Pretty good phone.

   10. DJDavid McIntosh Jr37:31

       I, I recognize the name, I just can't remember what it looks like.

   11. RSRory Sutherland37:33

       Or was it the Razr? It might have been the Razr, R-A-Z-R. Was it-

   12. DJDavid McIntosh Jr37:36

       Oh, yes, I do remember that one

   13. RSRory Sutherland37:38

       ... the Motorola Razr, you remember that? Yeah, you can just about remember those. Okay. They sold, Motorola sold 130 million of those, and that was in the s- feature phone era, not the smartphone era. And basically they, you know, they, they were king of the handset category, and then the iPhone just came along and just redefined what people wanted from a phone, including, for example, thin and small, suddenly basically lost out. Now, Dell made a not bad attempt at a big, um, smartphone way before the iPhone existed, as did Nokia. But to some extent, except a bunch of, among a bunch of weirdos, including me actually, um, at the time, the fashion in phones was small, slim, and, and light. And so it didn't matter how, you know, even though these things were actually pretty good, they weren't good enough to actually basically subvert fashion, whereas the iPhone and the Apple brand, to be absolutely honest, was. You know. Very interesting question, if the iPhone One had been brought out by Dell, Motorola, Nokia, okay, would it have enjoyed the spectacular dominance that it enjoyed being brought out by Apple? I don't know the answer to that question, I have to say.

   14. DJDavid McIntosh Jr39:04

       Well-

   15. RSRory Sutherland39:05

       Probably not, no. It wouldn't have done.

10. 39:06 – 50:44

    Capitalism as discovery: fashion, iPhone disruption, and why “good” products fail

    1. DJDavid McIntosh Jr39:06

       W- w- one of my favorite quotes from your book Alchemy is that capitalism is, is a discovery process.

    2. RSRory Sutherland39:12

       Yeah, yeah, absolutely.

    3. DJDavid McIntosh Jr39:13

       And-

    4. RSRory Sutherland39:13

       It's not an efficiency. It's like everybody treats it as if it's an efficiency game, and it's not, it's a discovery game. Um, and-

    5. DJDavid McIntosh Jr39:22

       What do you mean by that?

    6. RSRory Sutherland39:23

       Well, okay, we don't, we don't know what we want, okay? Genuinely. We can't describe what we want in the future. We can't really accurately and honestly answer the question, "If I made something that did this, would you buy it?" We think we can answer the question, but we can't. Okay? And therefore, you don't really know what people want. And as a result, um, also the competitive set, fashion, tastes, circumstances, economic circumstances, social circumstances, um, social norms are always changing, okay? Which means that what there was a market for in 1987, there may be no market for in 2003. What seems to be a really great idea may completely fail to take off. So I mean, one of the weirdest things, okay? Extraordinary work really done by companies like ICI, um, in producing artificial fibers all through the '60s and '70s, you know, replacement for cotton. Uh, you know, w- you know, okay, there was crude polyester, but they were starting to make artificial fiber materials that felt like silk, you see? And everybody ended up wearing denim.

    7. DJDavid McIntosh Jr40:41

       [laughs]

    8. RSRory Sutherland40:41

       Right? I mean, what the... I mean, if you can g- if you can tell me, other than the fact that you can slightly piss in them without anybody else noticing, okay?

    9. DJDavid McIntosh Jr40:50

       [laughs]

    10. RSRory Sutherland40:50

        Right. That's, so that's from a Viz letter about a person complaining that the summer's come around again, because he said he likes the winter 'cause you can slightly, you can be slightly inaccurate with your urinating in the pub, and nobody gets to notice.

    11. DJDavid McIntosh Jr41:04

        [laughs]

    12. RSRory Sutherland41:04

        Whereas as soon as it's summer, you're wearing light clo- colored fabric, and urination becomes a kind of like, y- you know, a delicate operation like the docking of the space station or something, right? Anyway.

    13. DJDavid McIntosh Jr41:15

        [laughs]

    14. RSRory Sutherland41:16

        Anyway, but, but denim, denim genuinely, if you asked me to say what... Okay, it's low maintenance, I guess. But mainly it's fashionable because it's, you know, it's like cowboys and, you know, I, I mean, it is a bit weird, isn't it? That this fabric became so popular.

    15. DJDavid McIntosh Jr41:36

        Yeah, and I feel, it sounds so silly, but things such as the belt buckle is a very old piece of technology. The shoelace-

    16. RSRory Sutherland41:44

        Yeah

    17. DJDavid McIntosh Jr41:44

        ... is a very old piece of technology. I've seen these Nike shoes that fasten themselves. There's probably a replacement for the belt. The button, these things are very vintage-style technologies, but have never been changed or upgraded.

    18. RSRory Sutherland41:57

        No, and, uh, uh, th- I mean, you know me as an owner of a Japanese toilet, I can never understand that people are content with wiping their arse with dry paper. I get it, okay, if you just migrate to moist, like, loo paper, that's fair enough, you're making an effort there. You know, I don't expect you to, you know, trash your perfectly reasonable existing toilet and replace it with a Japanese one. Although if you do replace your toilet with a non-Japanese toilet, that seems a bit weird to me, okay?

    19. DJDavid McIntosh Jr42:24

        Mm-hmm.

    20. RSRory Sutherland42:25

        But, but people being satisfied with wiping their arse with dry paper is just ridiculous. You know?

    21. DJDavid McIntosh Jr42:30

        Well-

    22. RSRory Sutherland42:30

        And there, uh, it really int- it does really, really interest me. I mean, okay, there are categories where there, and, and, and, uh, th- this is the other fascinating thing, okay? There are these categories which are, albeit slow, they're ratchet categories. Like, I don't know if you've got a Nespresso machine or a cappuccino machine or-

    23. DJDavid McIntosh Jr42:48

        Yeah.

    24. RSRory Sutherland42:48

        Okay. You wouldn't really go back to instant coffee, would you? Okay? No. Um, and you know, there are, there are other things of that... I, I mean, I'm, I'm fascinated by the electric car, partly because although it's very difficult to explain what the difference is, um, having driven an electric car, you wouldn't really happily go back to a petrol car. So I've had an electric car. Now, if I had to rent a car somewhere, okay, it's gonna be difficult, but I would make an effort to rent an electric car, 'cause I just prefer driving them. Um, and it's, it, it's incredibly hard to actually express in words what the difference is, but it's just there, and once experienced, you wouldn't go back. But then there are other things, you know, there are other behaviors where, uh, people seem to stick with an antiquated technology for an absurdly long time. I mean, you know, you-- in fairness, right, elastic-waisted trousers are a pretty good thing, aren't they? Right?

    25. DJDavid McIntosh Jr43:46

        Yeah.

    26. RSRory Sutherland43:46

        Because depending on your posture, you know, your waistband actually shrinks or expands quite a bit depending on whether you're sitting in a car, sitting in a chair, sprawling on a sofa, whatever, walking around, okay? So to have a waistband that flexes a bit, and flexes a bit, let's face it, because we're probably fatter at certain times of the year than others, seems pretty damn sensible, doesn't it? And yet, do suits come with elasticated waistbands? Do jeans come with elasticated waistbands? No, they do not.

    27. DJDavid McIntosh Jr44:19

        Uh, and Velcroed shoes make you feel like a child, like you're juvenile-

    28. RSRory Sutherland44:23

        Yeah

    29. DJDavid McIntosh Jr44:23

        ... even though they're 10 times more efficient.

    30. RSRory Sutherland44:26

        Yeah.
11. 50:44 – 55:31

    Why creators say yes: podcasts, network effects, and “escape velocity” for speaking careers

    1. DJDavid McIntosh Jr50:44

       Uh, o- one thing I was curious about was that recently I've been on a runner's high with my podcast guests. I've had people who are heroes to me, such as yourself, Seth Godin, Neil E. Young, authors that I really, really admire, but that conversation was only facilitated because I have a podcast. You never ask for metrics or viewership, neither did they, but it's weird how the podcast signals a vehicle of content col- like collaboration and sharing but otherwise you-

    2. RSRory Sutherland51:10

       Can I explain, can I explain my logic here, which is that people say, um, "Do you wanna go on a podcast?" Okay, now I could ask for the metrics. I suppose I can ask for payment, in which case people would mostly tell me to piss off, okay? Because the convention is you appear on podcasts for free. Not quite sure why, because if you give a talk to a business audience, you're expecting to be paid. But nonetheless, the convention is you appear on podcasts for free. My logic's always been as simple as this, okay. One, it's recorded for posterity, so even if it only has one listener, well, at least it's there, right? And actually, in the course of the podcast, I may surprise myself, because a really good conversation doesn't just allow you to learn a lot from the interviewer. Actually, a really good interviewer allows you to learn a lot about yourself in a funny kind of way. But also, my logic is just network effects, which is, look, I'm spending an a- it's an hour, right? I don't have to leave home. I could do this podcast from a field or from a hotel room in Portugal or indeed, you know, anywhere, any, you know. So I'm not required to be in a specific place. That's the f- that's the first point. Okay. I could cancel. Okay? So it's not like agreeing to give a live talk to 200 people where you absolutely have to be online 20 minutes beforehand. If some absolute crisis happened, I could just say, "I'm terribly sorry, I can't do this. We'll have to reschedule." Thirdly, it's therefore a f- an hour of my time with freedom as to when and where it takes place, in which I will probably reach somewhere between 100 and maybe 100,000 people, okay, over time. Now, my answer is that talking to 100 people for an hour is a lot more efficient than talking to one person at a time for 100 hours-

    3. DJDavid McIntosh Jr52:53

       [laughs]

    4. RSRory Sutherland52:53

       ... and having to repeat yourself. And so my argument is, even if the audience is only 100, there's pri- quite a good network effect there. And if the audience is 1,000 or if the audience over months and weeks and years goes up even further, that- that's all to the good, and I haven't had to do any extra work, just more people are listening to it. And so my argument is that actually, okay, you know, it's not, it's not, um, uh, you know, it's not a Super Bowl ad, right, you know? But nonetheless, in terms of not a bad way to spend an hour of my time, a podcast always comes up there pretty high 'cause the opportunity cost is very low, it's flexible as to when and where it takes place, and, um, best of all, you know, you, you, you reach, you know, an order of magnitude more people than you would in everyday face-to-face conversation.

    5. DJDavid McIntosh Jr53:42

       Uh, I, I love that, Rory, and on the complete counter side of that, I'm obviously n- much younger in my career. I, I'd like to be a public speaker at some point, and I get asked to s- venture onto smaller podcasts, and I always say yes because of spaced repetition. Uh, I know you don't need this because you, you have everyone chapping your door for a podcast appearance, but unfortunately I don't just yet. So I just say yes to every podcast because I just wanna space myself into existence time and time again, so if I show up enough, people will want me.

    6. RSRory Sutherland54:12

       There, well, there's a f- there are a few really interesting things, which is, um, you can only, and this is really interesting in terms of sort of complexity theory, you can only do the public speaking gig if you do it a lot, okay? And there are two completely separate reasons for that. One of which is if you do it very infrequently, it's very nerve-wracking, okay? So if you do one speech in front of an audience of 200 people, okay, uh, and you only do that twice a year, for two and a half weeks before that talk, you'll be bricking yourself. Whereas if you do it once a week, you're actually relatively calm until 20 minutes beforehand, okay? So you retain your sort of, you know, your sanity in that way. But the second thing is nearly all recommendations to speak come in through referral. So the more it's, the more you do it, the more you're asked to do it. And there's a certain threshold be- below which if you drop below that frequency th- threshold, number of invitations drops b- to speak, drops below number of talks you're giving, and at that point, of course, uh, you know, you're, y- y- you've, you've lost escape velocity. You're basically heading to the ground. And so there's that interesting threshold where you have to be above escape velocity in terms of the number of talks you do.

12. 55:31 – 1:10:28

    Preferential attachment, winner-take-all careers, and hypercompetition’s hidden costs

    1. DJDavid McIntosh Jr55:31

       That's fascinating. I, I read a book, um, by Albert-Laszlo Barabasi called The Formula. Uh, I think it was kind of premised on network science and network theory, theory, and it talks about, it kind of showed this experiment of, of, um, Kickstarter campaigns, and there was say 100 Kickstarter campaigns, and they donated £1 to 50 of them and £0 to the other, and the ones that had just $1 or £1 of, um, donations or, um, funding went on to be astronomic succe- astro- astronomical successes. But the ones that had zero continued to remain at zero, and that-

    2. RSRory Sutherland56:09

       Yeah

    3. DJDavid McIntosh Jr56:09

       ... preferential attachment drove the success of these campaigns through the roof, and I wonder if that's the same with being a podcast guest, uh, or a public speaker.

    4. RSRory Sutherland56:17

       Yeah.

    5. DJDavid McIntosh Jr56:17

       It's just almost like TripAdvisor reviews, right?

    6. RSRory Sutherland56:19

       There're very v- there are very few jobs actually where you are, you, you are to- totally free to work the hours you work. Um, and the reason for that is even if you're a plumber, now in theory you could say, "I'm a plumber, I don't work on Fridays," but actually probably the majority of your plumbing jobs come through personal recommendations. So when you turn down one plumbing job because you don't work on Friday, you're actually turning down 1.8 jobs or 1.6. And so, you know, it pa- it disproportionately pays to be a hardworking plumber because the more people you plumb for, the more people who ask you to plumb for them.

    7. DJDavid McIntosh Jr56:56

       [laughs]

    8. RSRory Sutherland56:56

       And so it's, it's a, there are various things. It's a self-reinforcing feedback loop you could call it. It's a, you know, um, it, it's sometimes called the Matthew effect from that line in the Matthew's gospel, "To he that hath more," or it must be, "To him that hath, the more shall be given." Um, um, and it's very interesting that quite a lot of things in life are like that. I made the point just at the opening session of Nudgestock, which is there's a fundamental problem with seaside and park benches, which is people always leave commemorative benches with a bloody message that says, "To my Uncle Bob who always loved sitting here." Now, the fact that he always loved sitting here means by definition there was already a bench in that bloody spot-

    9. DJDavid McIntosh Jr57:42

       [laughs]

    10. RSRory Sutherland57:42

        ... or at least a wall on which he could sit, right? So what you're doing is you're saying, "Let's put a bench somewhere where there's already a comfortable place to sit."

    11. DJDavid McIntosh Jr57:51

        [laughs]

    12. RSRory Sutherland57:51

        Okay? And as a result, if you go to the seaside in Deal where I've got a little flat, okay, the number of seaside benches could probably accommodate the entire population of the town if they all wanted to sit down simultaneously. By contrast, nobody ever has a memorial bench on platform five of London Bridge Station saying, "In memory of my Uncle Bob, who could never find anywhere to fucking sit on this platform." Now, that's what we should be doing because we'd then be correcting a deficiency, but instead all we're actually doing is effectively, you know, giving, you know, is effectively piling on more where there's already more, and it's-

    13. DJDavid McIntosh Jr58:28

        Wow

    14. RSRory Sutherland58:28

        ... it is problematic because for all sorts of questions like equality, um, those things are, you know, uh, those things are very, very, um, potent forces, and it, it leads to things like, I mean, there's a lot, there's a lot of competition, okay? I think I talked earlier in the first half of the podcast about hyper competition, which is, you know, you know, I mean, you know, where I mean, writing novels would be an extreme case, okay? Um, apparently the average earnings of a novelist when you correct for inflation and everything else are about the same as they were 50 years ago, unless you take J.K. Rowling and Dan Brown out of the equation, in which case everybody else is left about 30% poorer. And so the extent to which w- particularly globalization drives this makes it even worse, okay? The fact that the gains at the very top are disproportionately, and actually almost pointlessly high, right? Compared to the gains only one step down. So I mean, for example, I mean, you know, uh, if you look at the world's number 207 tennis player, right? They're a really fucking good tennis player, right? If you're number 207 in the world, you are amazingly spectacularly good, and you can turn up at any amateur tennis club in the world, and you can absolutely trash everybody there, right? But you're practically living out of your car. You know, you're paying to go to tournaments.

    15. DJDavid McIntosh Jr59:59

        It, it's the exact same reason I know, know who Usain Bolt is, but I don't know who placed second in the same race that he got the world record. He has performances bounded, but success is unbounded. He has the Puma deals, he has the Virgin deals, he has the, the books and all that stuff, but I don't know a single fact or even the name about the person that placed second despite only being milliseconds, uh, not as great as him in terms of performance.

    16. RSRory Sutherland1:00:25

        No, I mean, actually that's one, one reason why I say to people, look, to be absolutely honest, go into business, okay? Because, um, uh, there's a, this is never better, um, exemplified than by a story a friend of mine who's an opera singer told, which is he was paid, he was living in Zurich at the time, to go and sing opera at the birthday party of a we- very wealthy Zurich banker. And the Zurich banker got talking to him about opera singing, and I s- he said, "I suppose," he said, "I suppose opera singing is very much like banking in that many, many people start at the bottom, but only very few make it to the top." And my friend replied, "Yes," he said, "except the bankers get paid quite well in the middle."

    17. DJDavid McIntosh Jr1:01:07

        [laughs]

    18. RSRory Sutherland1:01:07

        He said, okay. And there is that argument about, you know, business and capitalism, which is it provides you with very many opportunities to be successful and to enjoy reasonable status, and for the most part, you're reasonably remunerated on the way up, okay? Com- you know, compared to sports stars. I mean, to give you an example, you know, I d- I don't know what you earn, um, in the f- you know, the third division as a footballer, but you're, let's, let's be honest about this, okay? If you're playing in the third division of the British, E- English whatever it is, okay, you're a really, really good footballer, okay? But you're not earning that much, and your career isn't that long. You know, and broadly speaking, um, you know, going into some sort of capitalistic or business career gives you more opportunities to be successful in more different ways, and also rewards you reasonably well in the middle. Um, and, uh, and it's, it's not, it's not completely, I, I mean, I think, you know, CEO pay is excessive. I think it's ridiculous that the chief executive will get paid a multiple of 100 times more than someone on the shop floor of an organization, or even 1,000. Many cases it might be 1,000 times more, right? Okay. I think that's ridiculous, and I think, you know, it, it, it needs to be discouraged. But at the same time, you know, uh, you know, wanting to be successful, you can go from the McDonald's drive-through window to the McDonald's boardroom, you know. And, you know, if you, if you've got a, the right mixture of attitude, aptitude, and a degree of luck, because we're never gonna, we're never gonna completely correct for luck, okay? Then you can do that. And I think, I think it's, um, you know, it, it is worth noting that we, we, we venerate sport, music, okay? Um, uh, and I suppose the third one would be drama, you know, at schools. You know, we, you know, everybody el- everybody's forced through the, the academic mill, unless they're really good at sport, really good at music, or really good at drama, okay? Art, sorry, is the fourth one, would be a fourth one, okay? But what's weird about that is they're all four are lines of business in which there is one monumental success for every thousand complete failures. Now, don't get me wrong. If you're doing art because you really enjoy it, music because you really, really love it and you can't do anything else, sport likewise, great. But enjoy it for what it is. I'm not sure that actually giving... Um, it's wonderful for the quality of football, but is it wonderful for human happiness that 20,000 people are dreaming about being a Premiership footballer or even 200,000 people are dreaming about being a Premiership footballer, or 2 million perhaps, okay, for every one who actually succeeds? I don't know how great that is.

    19. DJDavid McIntosh Jr1:04:03

        It's a great observation, and I'm thinking the, the inequality between a League Three footballer and a Premier League footballer, uh, similar to the, the inequality between a drive-through operator and the boardroom staff of McDonald's. Is it the level of risk that merits the level of rem- rem- remuneration? Um, because not only do, does the CEO or the founder of an organization have the c- the capital at risk, but they also have the public image at risk-

    20. RSRory Sutherland1:04:33

        Yes

    21. DJDavid McIntosh Jr1:04:33

        ... similar with a Premier League footballer.

    22. RSRory Sutherland1:04:36

        That's a very interesting point, which is I suspect a lot of people who would d- in, who think they would love to be a Premiership footballer, even if they had the talent, probably couldn't face the scrutiny, okay? I don't know what the rate of stage fright is in football. You obviously have stage fright in music. You get very famous musicians who become absolutely paralyzed by stage fright. Um, I'm trying to think of the fantastic, uh, uh, English folk singer who was like that, who basically, you know, hated performing. Um, uh, the, it's a really interesting question. I- I don't think it's just that risk. I think it's a pyramid. I think it's a winner-takes-all, uh, sort of, it's a sort of Ponzi scheme at, at, you know, at the end of it, where, you know-

    23. DJDavid McIntosh Jr1:05:22

        It's-

    24. RSRory Sutherland1:05:22

        It's a pyramid scheme, and people, people like it. Now, my only argument is if you're, if you're really, really clever, uh, you know, if you, y- you might get into hypercompetition. I would argue that wise people step away from hypercompetition because they have the observation that the price of success, given the probability of success, is not worth paying, you know. I'll, I'll tell you a story about this, okay? About the difference between competition and hypercompetition, and it's, i- there's no better person to tell the story, which is the, um, uh, tennis player John McEnroe, okay? And John McEnroe was playing on the seniors' tour, you know. He was going in for, I guess he's 60 now. Is he? He's probably 70, 70, 61, 62.

    25. DJDavid McIntosh Jr1:06:08

        Yeah.

    26. RSRory Sutherland1:06:08

        But in, in his 50s, in his 40s, he was playing on the seniors' tour, and the young, really, really hot tennis players in their 20s came up to him, and they were quizzing McEnroe about his whole regime and approach to the game when he was basically winning Wimbledon. And they said, um, "So, what did you do to keep fit?" And McEnroe looked at them as if he was complete, you know, he said, "I played tennis." [laughs]

    27. DJDavid McIntosh Jr1:06:36

        [laughs]

    28. RSRory Sutherland1:06:36

        He said, no, they said, "No, no, no, no. But what else do you do to keep fit?" And McEnroe said, "I played tennis," right?

    29. DJDavid McIntosh Jr1:06:42

        [laughs]

    30. RSRory Sutherland1:06:43

        "That's what I did. You know, I played tennis a lot, and that made me quite fit." And they said, "No, but do you do weight training? Did you do, you know, I don't know, circuit training? Did you do spin classes or, I don't know, Pilates?"
13. 1:10:28 – 1:16:25

    Smoking, vaping, and behavioral side-effects of “truthful” information

    1. DJDavid McIntosh Jr1:10:28

       Th- that, that messaging that you kind of thought about giving to that child or that mother reminds me of something that you said. I, I don't know if it was on a podcast or I read it somewhere, but it was the messaging about the life ex- expectancy change if you quit smoking at the age of 35.

    2. RSRory Sutherland1:10:42

       Uh, yeah.

    3. DJDavid McIntosh Jr1:10:42

       Is it something like-

    4. RSRory Sutherland1:10:44

       Uh, it's, it, it, this is ac- I'm, I'm a bit wary about saying this on a public forum, but okay. It's a really interesting piece of information, right? Because in, in theoretical terms, science would just tell us the truth, right? And people would make decisions based on truthful scientific evidence. Now, Richard Doll finds two things from his smoking research, his statistical research into the, uh, link between smoking and lung cancer specifically, and the two things are if you smoke, you're much more likely to get cancer, okay? By an inordinate factor, I mean, lung cancer. Uh, you know, enormous multiplier, right? Okay? So it is highly significant to early mortality, right? No, you know, I'm highly skeptical about statistics, but if you look at these statistics, there's not even any possible doubt. The other finding is that if you quit smoking before the age of 35, you end up with pretty much the same life expectancy as though you'd never smoked. Now, the interesting thing about that second fact, right, is that you want everybody to know that smoking gives you cancer, right? But that fact about 35 is a bit complicated, isn't it? Because you want everybody at age 35 to know it. You definitely want everybody to know it on their 35th birthday or maybe their 34th birthday. You don't want 20-year-olds to know that because they'll go, "I've got another 15 [exhales] f- another 15 years left." Okay? So it's a really, really interesting question, and I don't know the an- you know, I, I mean, this is where it's very difficult to be purely scientific in that you have to... You know, what happens when you come up with a scientific finding for which the behavioral consequences are problematic? Now, you could say, uh, which I might say actually, that now we have vaping, which is quite a reliable way for people to quit smoking in a way that gum wasn't. Maybe we shouldn't care. Maybe we should just go, look, let it... You know, my kids smoke a bit. I don't, it doesn't bother me that much actually. They don't smoke very much. It's like, you know, they feel guilty. It's not like my time where people would smoke 20 a day. You know, they kind of feel guilty if they have five, okay? And I'm not that worried about that from a health point of view, and I also know that they can switch to electronic forms, uh, you know, if they need to when they get to 33 or whatever. But it's, but it's a tough one because the other problem is, by the way, is if fort- if 35-year-olds don't know that, they may go, "Well, I've been smoking since I was 20. Damage has already been done. What's the point of quitting now?" And if you tell them, "Well, actually you're only 35, so if you quit now, your life expectancy basically goes back to that of a non-smoker," they'll quit. Whereas if they think, "Well, damage has already been done, water under the bridge. What the hell's the point?" You know, in for a penny, in for a pound, then they won't quit. And I, I, I don't, I don't know what to do. You know, I, I mean, uh, you know, but all I'm saying is that you can't just present scientific facts as if the human behavior that results as a consequence will be necessarily what you think of as optimal.

    5. DJDavid McIntosh Jr1:13:53

       I, I don't know the health statistics around vaping, but it seems that vaping socially is portrayed as the exact same activity as smoking. Um, but you seem like more-

    6. RSRory Sutherland1:14:06

       It's not really. It's, uh, it, it's ... To be honest, it's on a par with coffee drinking or something like that. I, I, I [laughs]

    7. DJDavid McIntosh Jr1:14:12

       But so-

    8. RSRory Sutherland1:14:12

       Yeah

    9. DJDavid McIntosh Jr1:14:12

       ... but so- but socially we're ma- we're made to stand outside with the smokers, so they're very married-

    10. RSRory Sutherland1:14:16

        Well, I don't, I don't, I, I don't, I'm the Rosa Parks of vaping. I vape everywhere. Um, in the sense that I, I'll tell you why. And I get v- I get very cross 'cause my own company says you should go outside to vape. And I said, "Asking people who are quitting smoking to go and stand outside with a lot of smokers is a terrible thing to ask people to do." Because I said, "That's like holding a meeting of Alcoholics Anonymous in a pub," right?

    11. DJDavid McIntosh Jr1:14:38

        [laughs]

    12. RSRory Sutherland1:14:39

        Right? You're exposed to constant temptation. "Oh, can I just have one of your Marlboro Lights?" Right? Let 'em smo- let 'em vape inside. It's not inconveniencing anybody. It's not doing anybody any harm, that's for sure. I don't even think s- I don't even think passive tobacco smoke was doing anybody any harm, actually. I think they concocted the ... I, I, I, I, I, th- by the way, this isn't me speaking, right? Okay?

    13. DJDavid McIntosh Jr1:15:00

        [laughs]

    14. RSRory Sutherland1:15:00

        This is me speaking as a result of listening to some pretty damn good scientists who say, actually, they were desperately looking for statistics that showed a massive correlation between living with smokers and getting lung cancer, and the truth of the matter is they didn't really find any, so they cherry-picked about four studies which seemed to show a link. Okay? And, um, uh, yeah, uh, uh, they, they were desperate for the use of passive smoking statistics because it took away the argument, "Well, I'm not hurting anybody but myself," you see?

    15. DJDavid McIntosh Jr1:15:30

        Ah, okay. And w- uh, one of the questions I wanted to ask you was about the kinda one-hour window that we had to exercise during lockdown. Do you think there was a greater uptake in exercise because of the scarcity bias?

    16. RSRory Sutherland1:15:45

        Really, really interesting point, and, uh, uh, quite likely, yeah. Certainly a lot of people during lockdown lost weight, which is kind of interesting 'cause it's not what you'd expect. Now, I don't have the data on this, I've only got anecdotes, but weirdly, instead of people going, "Oh my God, I put on a ton of weight during lockdown," you seem to find quite a lot of the opposite. Friend of mine who's a scientist, science writer for The Economist, lost something like, uh, I think, uh, 30 or 40 pounds during lockdown. Um, whether the exercise thing, you're absolutely right, by rationing it you made it seem more desirable, and you made it seem more of a missed opportunity if you didn't exercise. Absolutely fair. Yeah.

14. 1:16:25 – 1:30:54

    Scarcity, paywalls, and the economics of adult content—plus the metaverse risk

    1. DJDavid McIntosh Jr1:16:25

       W- well, I wanted your opinion on the, the content creator platform Onlyfans. Do you think that has the same effect? Because p- like pornography's free online, but people subscribe for online por- pornography that's ring-fenced by a paywall. Do you think that has the same effect? Or same with Patreon. There's, um, the kind of content for YouTubers and stuff. There's free content on YouTube online, but you can s- watch the same creator by paying £3 a month.

    2. RSRory Sutherland1:16:51

       I, I mean, the, the-

    3. DJDavid McIntosh Jr1:16:51

       Do you think it's a scarcity bias that drives that?

    4. RSRory Sutherland1:16:53

       I mean, the, the only thing with porn, in some cases people are paying for personalized filmmaking, aren't they? So in other words, they get to dir- uh, I, I, I'm not an expert on this, trust me, but from what I can understand is that, you know, a lot of people have a particularly interesting paraphilia, and so they're asking someone to, you know, I don't know, make love to an inflatable goat or something. I don't know.

    5. DJDavid McIntosh Jr1:17:14

       [laughs]

    6. RSRory Sutherland1:17:15

       Right. Okay. And so you can't get that on mainstream free stuff. So that, that may be some of what's going on. It maybe, maybe just a sort of personalized thing. Or that, you know, um, uh, I mean, there's a fantastic, um, category of person, by the way, and I'm not making this up, who are effectively financial masochists. Okay?

    7. DJDavid McIntosh Jr1:17:37

       [laughs]

    8. RSRory Sutherland1:17:37

       And these are guys, and they must be, you must, you must be really onto the motherload if you find one of these guys if you're a sex worker. They have no urge to have sex, okay? They have no urge necessarily to meet you in real life, but they want to be financially humiliated. And so it's a peculiar form-

    9. DJDavid McIntosh Jr1:17:57

       [laughs]

    10. RSRory Sutherland1:17:57

        I- my guess is they're all accountants or something, okay? Right?

    11. DJDavid McIntosh Jr1:18:00

        [laughs]

    12. RSRory Sutherland1:18:00

        But literally, your job is to say, "My shoes are disgusting. You are such a useless worm. I want you to buy me a £250 pair of Manolo Blahniks."

    13. DJDavid McIntosh Jr1:18:11

        [laughs]

    14. RSRory Sutherland1:18:11

        And they go, "Yes, mistress. Certainly, mistress. Let me know your address." And they buy the Manolo Blahniks, at which point they become slightly tumescent. I d- don't ask me how this works, right, okay? Okay?

    15. DJDavid McIntosh Jr1:18:22

        [laughs]

    16. RSRory Sutherland1:18:22

        And they go and buy them and, and they feel suitably pained and humiliated by the woman demanding they spend money on them, and that's it. Okay? And so you basically, if you've got one of these guys, you just go, "My gas bill's come in, and you're such a worthless scumbag,"

    17. DJDavid McIntosh Jr1:18:37

        [laughs]

    18. RSRory Sutherland1:18:37

        "You're gonna pay it for me." Okay?

    19. DJDavid McIntosh Jr1:18:39

        [laughs]

    20. RSRory Sutherland1:18:39

        Now, can you imagine a better arrangement than that in terms of wealth exchange? I think it's fantastic.

    21. DJDavid McIntosh Jr1:18:46

        Uh, es- especially now that, um, fuel prices are going through the roof.

    22. RSRory Sutherland1:18:49

        I know, I know.

    23. DJDavid McIntosh Jr1:18:50

        Um [laughs]

    24. RSRory Sutherland1:18:50

        They're gonna be, they're gonna be absolutely orgasmic, aren't they, when they get those gas bills coming in.

    25. DJDavid McIntosh Jr1:18:55

        [laughs]

    26. RSRory Sutherland1:18:56

        It's gonna be fantastic.

    27. DJDavid McIntosh Jr1:18:57

        What do you think the psychology that underpins that, what do you think that is? Why would, like it makes most-

    28. RSRory Sutherland1:19:03

        Well, it's, it's, it's a-

    29. DJDavid McIntosh Jr1:19:04

        ... rational-

    30. RSRory Sutherland1:19:06

        [coughs] You need to read the books by a guy called Jesse Berens, who's written a book called Perv, uh, which is generally best read on the Kindle, not on the tu- if you're reading it on the tube.
15. 1:30:54 – 1:51:50

    Life hacks and hiring systems: two dishwashers, interviews, and credentialism

    1. RSRory Sutherland1:30:54

       Of course.

    2. DJDavid McIntosh Jr1:30:54

       Or two more questions. Why should people have two dishwashers?

    3. RSRory Sutherland1:30:59

       Ah. This is one of those interesting things which is only obvious in retrospect, which is if you say, "Well, you know, well, I'm, I'm not running a pub. Why would I need two dishwashers? I don't have that many plates." And it's completely not obvious until someone explains it to you, which is when you have two dishwashers you never have to unload the dishwasher because you have a, an empty dishwasher, you fill that with dirty plates, okay? Then you turn it on, and that's the clean dishwasher, okay? And then eventually you take those plates out, and you put them back into the other dishwasher after you've used them, and what was the clean dishwasher becomes the dirty dishwasher.

    4. DJDavid McIntosh Jr1:31:37

       [laughs]

    5. RSRory Sutherland1:31:37

       And you can cycle between the two, and therefore your dishwashers provide a form of storage, and you never actually have to unload the dishwasher and put something back on the shelf. So it's inordinately more efficient.

    6. DJDavid McIntosh Jr1:31:50

       [laughs]

    7. RSRory Sutherland1:31:50

       But it's completely not obvious until it's explained to you Which kind of fascinates me. Yeah

    8. DJDavid McIntosh Jr1:31:57

       A- a- after that sentiment, I'm going to trying to reach out for like a Bosch sponsorship after that.

    9. RSRory Sutherland1:32:02

       Yeah

    10. DJDavid McIntosh Jr1:32:02

        People will be buying two dishwashers after this podcast. [laughs] Um-

    11. RSRory Sutherland1:32:06

        In fact-

    12. DJDavid McIntosh Jr1:32:06

        So-

    13. RSRory Sutherland1:32:07

        In fact, you can actually buy on Amazon, uh, little things which have a little rotating wheel on them, and they're magnetic, and you buy two of them at a time, and they can say clean or dirty. Now, I think, to be honest, they're more commonly used in pubs than they are used in homes. But you can actually buy that on Amazon, and the whole point is that you cycle from dishwasher t- one to table to dishwasher two. Then when you finish the cycle through to dishwasher two, you turn dishwasher two on, and then you simply rinse and repeat. Whereas in another world, you have to empty a dishwasher before you can put anything dirty in it.

    14. DJDavid McIntosh Jr1:32:46

        Mm.

    15. RSRory Sutherland1:32:46

        So once you think about it like that, you realize it's a spectacular time and motion win, but it's completely non-obvious beforehand.

    16. DJDavid McIntosh Jr1:32:56

        Whilst I've got you, I've actually got two more questions for you-

    17. RSRory Sutherland1:32:58

        Go on

    18. DJDavid McIntosh Jr1:32:58

        ... 'cause there was something that really, really fascinated me that I wanted to unpick your brain about. You spoke about how y- even reflecting on the Ogilvy recruitment pro- uh, the Ogilvy position of employment in the '80s, that the work day started at 9:00, finished at 5:00. When you're in the office, that's when your day started.

    19. RSRory Sutherland1:33:15

        Yeah.

    20. DJDavid McIntosh Jr1:33:15

        I also think the interview and the recruitment process hasn't changed probably since the '80s. It's still, um, probably a logical reasoning test and an interview. The interview itself, to me, seems like such an outdated technique to measure someone's capability and success. I also think the CV similarly is the same, but we haven't changed, really changed those recruitment processes in 40, 50, 60, 70 years.

    21. RSRory Sutherland1:33:41

        Uh, I, I think you do, I think you do need to interview someone. Um, and there are all sorts of things which a sort of, you know, which tests, which paper tests can't capture. One of which being, for example, we... I, I'll just give you an example. We can probably spot psychopaths face to face in a way that we can't spot psychopathic behavior on paper, just to give an example.

    22. DJDavid McIntosh Jr1:34:07

        Yeah.

    23. RSRory Sutherland1:34:08

        So I d- I don't fully know why people perform interviews. Okay? But if, if you look at it, it may not be an optimization thing. It may be a l- 'cause if you think about it, the interview comes last. You don't interview everybody, partly because it's time-consuming. But is that the final check, which is, you know, are we making a, a, a huge mistake here? I'll tell you a very funny story. You know, we once interviewed, and, um, uh, uh, someone who'd done very, very good work, who was extremely good, who interviewed extremely well, and they interviewed so well, we thought, "Well, why don't we just..." It was the end of the day. "Why don't we just go out for a few drinks?" Okay? And the, the extraordinary thing was, after a few drinks, this person became a complete asshole.

    24. DJDavid McIntosh Jr1:34:51

        [laughs]

    25. RSRory Sutherland1:34:51

        I mean, to an extraordinary degree. I mean, to an extraordinary, you know, sort of sexist and, you know, and, and, you know. And actually, you know, it was, at that point, we basically looked at each other and said, "Okay, this hire is not happening." Now, okay, you can't actually get people drunk in an interview, but the interview may reveal things that no amount of paper assessment can ever actually reveal. Now, if you... It's, it's kind of interesting, I suppose, because the Persians used to have a decision-making process where they'd debate a subject sober, and then debate the same subject drunk, and it's only if they came to the same conclusion when drunk and when sober that they actually-

    26. DJDavid McIntosh Jr1:35:30

        [laughs]

    27. RSRory Sutherland1:35:30

        ... went ahead with the idea. That was a kind of weird test, but there's something kind of interesting. There's, uh... They were onto something there, okay? Which is if this idea seems a good idea to our animalistic selves, and it seems a good idea to our more rational, sober selves, then it probably has a greater chance of success than if it only works in theory or it only works in drunkenness.

    28. DJDavid McIntosh Jr1:35:53

        I, I, I really like that example, and I agree with you. Interviews are far superior than paper-based tests, but I don't think it should be the gatekeeper for employment. It should just be a supplementary part of the recruitment process because it's almost like a Tinder, for me, it's almost like a Tinder bio. You show your highlights. You signal what they want to see. And in terms of, like, I'm, I'm an advocate for social mobility. I chair an employee network. I found an employee network, and I think it's quite discouraging-

    29. RSRory Sutherland1:36:17

        Yep

    30. DJDavid McIntosh Jr1:36:17

        ... because-

Episode duration: 1:51:50