Ben Casnocha: The Blog

Ignorance is a Precious Resource

The value of what you don't know:

Little attention has been paid to ignorance as a precious resource. Unlike knowledge, which is infinitely reusable, ignorance is a one-shot deal: Once it has been displaced by knowledge, it can be hard to get back. And after it’s gone, we are more apt to follow well-worn paths to find answers than to exert our sense of what we don’t know in order to probe new options. Knowledge can stand in the way of innovation. Solved problems tend to stay solved—sometimes disastrously so.

The author goes on to recommend four ways to cultivate healthy ignorance in your organization.

Ignorance is one reason why young entrepreneurs succeed when they do -- they're ignorant about how the world works so they ask dumb questions, challenge inbred assumptions, and dare the thing that age will fear.

In a post I wrote 2.5 years ago entitled How do you fall upwards? I listed three suggestions in this arena, including "cultivate the naive mind" (not as tactically useful as the above-linked article) and "spend time with children."

(hat tip to the book Chief Culture Officer which comes out in November. I will blog more about it at that time.)

Appealing to the Classiness Aspiration of Young Men and Women

The Mexican beer Dos Equis has very popular TV ads running right now called "The Most Interesting Man in the World." Watch the 30 second ad here (viewed 800k times on YouTube!) or see the embed below.

The announcer boasts about the most interesting man in the world:

• The police often question him just because they find him interesting.
• His beard alone has experienced more than a lesser man's entire body.
• His blood smells like cologne.
• He once had an awkward moment just to see how it feels.

At the end the old man -- the most interesting man -- says, "I don't always drink beer, but when I do, I prefer Dos Equis."

Why does this advertisement work so well?

Seth Stevenson, at Slate, has a masterful analysis. He notes the counter-intuitive but spot-on ambivalence the man has toward the advertised product and the quirky, Wes Anderson-inspired imagery at the beginning.

His most interesting insight has to do with why a senior citizen is advertising an alcoholic beverage aimed to 20-somethings who like to go out on the weekends. Normally, beer ads have beautiful busty women circling the lucky 25 year-old clenching a Bud Light and flashing a wicked smile. The atmosphere feels like a frat party. It's obvious, right? Sex sells. The films hip young people go to are Old School, Wedding Crashers, and most recently The Hangover, right?

But this isn't the whole story when it comes to the emotional buttons of young men (and women).

The Dos Equis ad appeals to "dudes' self-conception, placing the focus on older gents who serve as models of masculinity." The Most Interesting Man wears nice clothes throughout; the women who surround him are similarly examples of elegance, no sluts here; the activities shown are not beer pong or football but sports like jai alai which have a certain high-minded eccentricity about them. Even the label "most interesting" is different than "most cool" or "most popular" -- in adult-land, interestingness rules.

The ad, then, appeals to the same aspirational quality that's at work when little children play grown-up. Even into our 20's we're still modeling ourselves after elders we admire -- their maturity, self-confidence, and relaxed ambition. And we know that Real Men (and women) don't binge drink on the weekends but rather enjoy a fine adult beverage while munching on cashews.

If marketers spent time on glitzy private college campuses they'd learn that drugs, sex, and alcohol are not the only considerations of the privileged young men and women who attend (and buy expensive beer and other products). If the marketers embedded themselves in Private College X they'd hear the word "classy" mentioned a lot as justification for certain activities. Rich kids like to be classy. They like to buy nicer alcohol, go to dinner parties, and dress up in fancy clothes more than you'd think from just watching Old School. Ramen noodles and a beer while watching the basketball game is not as cool as a three course meal with pricey wine to match, in many cases.

It's easy to be cynical about this phenomenon. Is being classy at this age not, at its core, simply a refined display of your parents' wealth? Is there something fucked up about a 19 year-old buying fine alcohol and dining at Beverly Hills' highest profile restaurants in pursuit of classiness, while a great number of students struggle with loans and night jobs? Sure there is.

But in some sense, who cares? A psychological soft spot ("this will help you be classy") has been identified in a lucrative target market: let's follow Dos Equis' lead and go take their money.

Best Reference Check Strategy Ever

In an excerpt from his book Hiring Smart, Pierre Mornell reveals the best reference check strategy I've heard of. It's fast and tip toes around the liability issues: ask a person's references to call you back if the person was outstanding.

Call references at what you assume will be their lunchtime--you want to reach an assistant or voice mail. If it's voice mail, leave a simple message. If it's an assistant, be sure that he or she understands the last sentence of your message. You say: "Jane Jones is a candidate for (the position) in our company. Your name has been given as a reference. Please call me back if the candidate was outstanding." The results are both immediate and revealing. If the candidate is outstanding, I guarantee that people will respond quickly and want to help. Take such a response as a green light. Proceed to the next level by checking out the individual. However, if only 2 or 3 of the 10 references selected by the candidate return your call, this message is also loud and clear. And yet - No derogatory information has been shared. No libelous statements have been made. No confidences or laws have been broken.

Brilliant. Mornell also advises you to ask the candidate beforehand, "What am I likely to hear -- positive and negative -- when I call your references?"

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Elsewhere in the article, Mornell suggests saying "We have about five more minutes..." before closing the interview. This will prompt a last-minute, crucial disclosure or statement from the candidate:

Pay attention when the candidate says, "By the way...," "Oh, one more thing...," and "I almost forgot...," which means, "This is the most important thing I'm going to say." In my psychiatry practice, I always announced when we were coming to the end of an hour, both as the timekeeper and because I knew there was another patient in my waiting room. Men and women invariably say something that's really important at this point, regardless of the time we've already spent together.

Lessons from the Tropicana Rebranding Disaster

PepsiCo has been trying to rebrand the Pepsi, Gatorade, Tropicana and Mountain Dew products. How's it going? Try this: "It represents perhaps the largest and most cavalier destruction of brand value we will ever see," says Grant McCracken, in his excellent analysis of what's gone wrong.

Peter Arnell, the Pepsi man assigned to the Tropicana orange juice rebrand, described his job thusly:

The objective was very, very clearly laid out.  We needed to rejuvenate, reengineer, rethink, reparticipate in popular culture. 

Here's McCracken:

But let's look at what Peter Arnell...thinks this means.  His first act of office, apparently, was to embark upon what BusinessWeek calls a "five-week world tour of trendy design houses."

This is where he went searching for culture?  In design houses?  Dude.

Classic. Spending time in design houses instead of spending time with your customers.

Tropicana rolled out a new design for its orange juice container -- the old design on the left, the new design on the right. Consumers were furious and sales plunged 20%. It's since been pulled from the shelves.

McCracken goes on to playfully mock the hip design types who think reparticipating in popular culture means just being "cool" and for ignoring the emotional needs of the 99% of the population who do not wear black thick rimmed artist glassses:

If you want to "reparticipate" in popular culture, well, you have your work cut out for you.  Going to design houses, that's a good idea.... And then, well, really, why not get out of the design houses into the lives and the homes and the kitchens of the other Americans?

The problem is simple.  When Arnell thinks design, he thinks cool.  When we ask him to redesign a Tropicana package, he's going to bless it with notions of cool now circulating in his own and other design houses. 

The trouble is that culture is only marginally about cool.  Cool may be the most active, the most talked about, the most flattering part of culture, but it is also a relatively small and evanescent part of culture.  Let's call it 20%. 

When you are told to put the brand in touch with popular culture, touring design houses won't do it.  Really, what you want to do, Peter, is talk to the owner-operators of this culture, Americans...living by the millions...out there...

Peter, here's the thing.  It's not about you.  It's not what you think is hip and happening.  It's not about cool.  It's not about New York City or design houses or startling images of the future, or breathtaking mastery of the design vocabulary, or breakthroughs that reinvent the brand.

It's about Americans at their breakfast table.

Bottom Line: For entrepreneurs everywhere, it's about the customer. It's about the customer. It's about the customer. Tropicana "branding experts" were wandering the halls of hip design houses instead of sitting at the breakfast table with Americans who at the moment are hurting for cash and craving stability and familiarity.

Why Setting Goals Can Backfire

Two years ago I wrote a post titled Are you an ambitious person who isn't big on goals? where I proposed that 80% of ambitious people are goal-oriented and 20% of ambitious people are not. See the very intelligent comments to the post.

I'm in the 20%. I have few specific long term goals. I have no idea where I'll be in 10 years.

I'm not opposed to making long term goals and occasionally I do so, but I think there's an underexplored danger to them. When you hyper-focus on a long term goal or plan you become blind to new and random opportunities which may come up as you get older and acquire new experiences and as the world changes.

In a recent article in the Boston Globe titled Why Setting Goals Can Backfire Drake Bennett discusses this downside. He also notes the psychology research around people losing intrinsic motivation or enthusiasm for tasks when the tasks are tied to goals carrying a reward. (E.g. Earn a $100 bonus if you achieve the goal of boosting sales by 5%.)

Overall I support goal setting in many situations. But the "importance of goal setting" is like "never give up - persistence is everything": a widely-accepted business maxim that is more complicated than it appears and entails risks and traps if you're not careful.

(hat tip Tyler Cowen for link)

What We Say Without Words

 

In this helpful slideshow of body positions and movements, a former FBI counterintelligence agent discusses what you can learn about someone's feelings / thoughts by how observing their body language.

The most interesting nugget's at the end: the best indicator of mood is what we are doing with our feet. If we move or kick our feet upwards, we're feeling good. Same with our thumbs or other gestures which defy gravity such as pointing our thumbs up in in our hands.

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Speaking of communication, here's the one secret necessary to resolve argument and conflict: ask a single clarifying question about what another person's view is about. That's it!

Observations on Restaurants, Tips, and Bread Baskets

21 million Americans eat at a full service restaurant every day, so I suspect some of these observations on the dining out experience will resonate:

# After I gave my order to my waiter, he said, "Good choice, you're going to love it." Ill-advised, right? Satisfaction with an experience depends significantly on our expectations going into it, and by telling me I'm going to love the food before I've tried it, I have very high expectations. However, with food I believe there's more of a self-fulfilling prophecy dynamic, and our enjoyment of food isn't even mostly dependent on the quality of the food itself. For this reason I think the waiter's statement works.

# Restaurant etiquette dictates that you are not supposed to use your hands to break off a piece of bread and put the other half back in the basket. Also, no one wants to be seen as selfish by taking the last piece of bread or the last appetizer. My advice: take the initiative. Break the bread in half (even with your hands) and offer it to the other person. Offer the last bit of appetizer to your partner, and if he declines, eat it. Many a good piece of bread and appetizer have been left in the center of the table due to excessive deference or fear of perceived selfishness. (For better or worse I'm not blessed with such selflessness -- I crush bread baskets, especially if there's olive oil nearby.)

# Why do waiters ask if you want to see the desert menu? This requires two "Yes" affirmations from the patron to place an order. Just give the desert menu and make the person say "No" to desert after seeing the description of chocolate cake.

# I have laughter control issues when eating at a high end restaurant where the waiter offers a range of meaningless adjectives to describe the food. The cheese is subtly fruity. The fish is prepared with a punchy tang to give it just a bit of Alaskan kick.

# The next time you eat at a restaurant with a friend who's been there before and chose the place, ask him, "What do you recommend?" I guarantee you the response will be, "Oh, everything's good here." Really? Have you tried everything on the menu?!

# If I were a restaurant manager I would spend 30 minutes with each of my waiters explaining the research around how to maximize tips from patrons. For example, leaving a mint with the bill or drawing a smiley face on the bill have been shown to increase tip. Research also suggests that the tip amount is only marginally connected with the actual quality of wait service. Bottom line is that many waiters miss out on easy psychological hacks that would increase their tips.

# Does disclosing your newness to a job help or hurt you? "It's my first day." Is this is a smart thing to say? Declared preemptively, no. If the waiter happens to mess up the order, then it might be a good explanatory device to win sympathy. But before anything happens, it's irrelevant and might even offend (I've been assigned the new waiter -- I must not look like a high roller). Elsewhere in the world of sales, regardless of whether an error is committed, be wary of disclosing your newness. I was recently helping a salesperson on his pitch and in response to a question for which he didn't know the answer he said, "Sorry, it's my first week, I'll get back to you." Again -- the prospect feels like he's been assigned the junior rep.

Since we're on the topic, here are Tyler Cowen's tips for ordering in a restaurant:

• At fancy and expensive restaurants, order the item that sounds least appetizing and the dish you're least likely to want to order. An item won't be on the menu unless there is a good reason for its presence. If it sounds bad, it probably tastes especially good. Most popular-sounding items can be just slightly below the menu's average quality. Beware roast chicken. Too many people like roast chicken, so it will be on the menu, but it doesn't hit the highest peaks of taste. The flip side: when cooking at home, be wary of trying something new.
• When at a restaurant, ask a waiter, "What is best?" Don't ask, "What should I get?"
• Tips for ethnic restaurants: appetizers are often better than main courses; avoid desserts at ethnic restaurants in America.
• Eat unhealthy food outside the home. Restaurants know how to make good unhealthy food. At home, eat healthy. And don't take recipes too seriously.

Grand Unified Theory of Economics of Free

Mike Masnick has a terrific, brief post up about the economics of free and the scarce and infinite components of a company's offering. It's a thought provoking framework to think about scenarios such as "All music is legally free for consumers by 2015 -- how do the artists make money?" Here's how Mike thinks a recording company should think about the economics of their business:

1. Redefine the market based on the benefits you're providing rather than the specific product you're selling. If you're a musician, for example, you're not just selling a specific song -- you're selling the experience of musical enjoyment.

2. Break the benefits down into scarce and infinite components. An infinite good is something that costs nothing to give away to someone else. E.g., the music itself. Scarce goods are everything else -- concerts, backstage passes, people's time and attention.

3. Set the infinite components free, syndicate them, make them easy to get -- all to increase the value of the scarce components. When people can easily listen to your songs, they're more likely to get interested in your concerts or merchandise.

4. Charge for the scarce components that are tied to infinite components. E.g., charge for the concerts and t-shirts, access to the band becomes more valuable.

Most record labels stumble on Step 1: redefining their offering in broader terms. Same with newspaper companies. Most have a hard time thinking about themselves as news companies instead of newspaper companies.

Speaking of which, Marc Andreessen says the "game is completely over" when it comes to newspapers and that the New York Times should turn off the printing press tomorrow. I assume he would also say record companies should stop manufacturing CDs and distribute music exclusively online.

(thanks Jon Bischke for pointing me to this article)

Steven Korman's Open Letter to CEOs

The following idiotic "open letter" advertisement ran in last Sunday's New York Times, Philadelphia Inquirier, and other newspapers:

Dear CEOs:

I have listened to the executives of many companies say that they are eliminating thousands of jobs to "improve the bottom line."

I own stock in many of these companies and would prefer that the company make a smaller profit and the stock fall, in the short term, rather than affect the lives of our neighbors and their families as jobs are lost.

Please join me in reminding all CEOs that we are not just dealing with numbers and profit, but with real people and real families who need to keep their jobs.

Please keep your employees working.

Steven H. Korman
CEO and Chairman of the Board
Korman Communities
kormancommunities.com

Apparently he's also sending this letter to CEOs of major companies. May I wear my snark hat and write a reply?

Dear Mr. Korman:

Your ad positions you as a nice guy. Someone who cares about his community and people. Heck, your company name even has the word "community" in it -- how cool is that? As you probably hoped for, people are praising this letter as an example of good corporate citizenship.

But alas your heart warming message cannot mask the brutal but necessary ways of markets. Let's parse your plea sentence by sentence.

I have listened to the executives of many companies say that they are eliminating thousands of jobs to "improve the bottom line."

Why do you put quotes around "improve the bottom line"? Are you skeptical that this is the real reason? Do you believe these capitalist monsters simply prefer to cut jobs? Hint: they're cutting 10% of jobs so they do not have to cut 100% of jobs.

I own stock in many of these companies and would prefer that the company make a smaller profit and the stock fall, in the short term, rather than affect the lives of our neighbors and their families as jobs are lost.

Tell me, how does a stock fall and profit shrink in the "short term"? What happens in the long term? When the company cares again about profit, what happens to the neighbors and families? Or should companies never care about profit?

Please join me in reminding all CEOs that we are not just dealing with numbers and profit, but with real people and real families who need to keep their jobs.

Yes. I also "need" a billion dollars. Anyway, please join me in reminding all sentient beings that companies which do not generate those pesky numbers and profit do not survive, and when companies do not survive, the people who work there lose their jobs.

Please keep your employees working.

Good point. How about the government just employ all of us? Then everyone can keep working!

Yours earnestly,

Benedict

Manifestos on Management and Happiness

Each of the following numbered/bullet points is worth reading.

Bob Sutton's 15 "Things I Believe" on work and management:

1. Sometimes the best management is no management at all -- first do no harm!
2. Indifference is as important as passion.
3. In organizational life, you can have influence over others or you can have freedom from others, but you can't have both at the same time.
4. Saying smart things and giving smart answers are important. Learning to listen to others and to ask smart questions is more important.
5. Learn how to fight as if you are right and listen as if you are wrong: It helps you develop strong opinions that are weakly held.
6. You get what you expect from people. This is especially true when it comes to selfish behavior; unvarnished self-interest is a learned social norm, not an unwavering feature of human behavior.
7. Getting a little power can turn you into an insensitive self-centered jerk.
8. Avoid pompous jerks whenever possible. They not only can make you feel bad about yourself, chances are that you will eventually start acting like them.
9. The best test of a person's character is how he or she treats those with less power.
10. The best single question for testing an organization’s character is: What happens when people make mistakes?
11. The best people and organizations have the attitude of wisdom: The courage to act on what they know right now and the humility to change course when they find better evidence.
12. The quest for management magic and breakthrough ideas is overrated; being a master of the obvious is underrated.
13. Err on the side of optimism and positive energy in all things.
14. It is good to ask yourself, do I have enough? Do you really need more money, power, prestige, or stuff?
15. Jim Maloney is right: Work is an overrated activity.

Gretchen Rubin's manifesto on happiness:

• To be happy, you need to consider feeling good, feeling bad, and feeling right, and an atmosphere of growth.
• One of the best ways to make yourself happy is to make other people happy; One of the best ways to make other people happy is to be happy yourself.
• The days are long, but the years are short.
• You’re not happy unless you think you’re happy.
• Your body matters.
• Happiness is other people.
• Think about yourself so you can forget yourself.
• “It is easy to be heavy: hard to be light.” -- G. K. Chesterton
• What’s fun for other people may not be fun for you, and vice versa.
• Best is good, better is best.
• Outer order contributes to inner calm.
• Happiness comes not from having more, not from having less, but from wanting what you have.
• You can choose what you do, but you can’t choose what you like to do.
• You manage what you measure.
• “There is no duty we so much underrate as the duty of being happy.” -- Robert Louis Stevenson

Criticalness of Giving and Receiving Feedback

A successful entrepreneur recently told me one of the main things he tries to determine when interviewing potential employees is their capacity to give and receive feedback.

Everyone involved in his start-up, he said, must be comfortable offering constructive criticism in real-time to bosses and subordinates and taking constructive criticism ("taking" is different from acting on all criticism). Rapid iteration of the sort that drives new companies can only happen if feedback constantly flows throughout the office.

I totally agree. You can never spend too much energy honing your skills at giving and receiving feedback. It is the distinguishing factor between those with "good" people skills and "great" people skills. Good businesspeople, and great businesspeople.

Looking for a Summer Job? Reach Out to a Hero

If you're young and looking for a summer job (or any job) here's one approach: reach out to somebody you really admire and ask if you can be his/her bitch for a few months. Say you'll be happy to do grunt work so long as you get lots of face time with him/her. Say you're a self-starter who won't be a nuisance but rather will find a way to make their life / work easier. Identify a few things that you think you could help them on (anything involving technology / blogs is good, or logistical help, or communications outreach).

Learning on the job comes primarily from the people you get to work with. So pick out a few people who impress you and send them an email and see what they say! Don't worry if their exact line of work isn't on your radar screen; the goal is to work with the most impressive person you can. I guarantee you'll learn more by being a supercharged personal assistant to someone really smart / interesting than you will by doing a generic internship.

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Unrelated but since we're talking about careers and young people: Your major in college doesn't matter!

OK, maybe it matters a little for your first job, but still, I can't believe the number of people who say, "As a History major I'm screwed because I now want to go into finance but can't because I didn't major in econ or business" or "No one wants to hire an English major." Bullshit! Employers hire people. Stand out, be remarkable, knock their socks off. Forget about your major. If you went to a liberal arts school it especially doesn't matter, since to "major" in something means to take a very small number more classes in your major topic than in any other topic.

And since I find myself in ranting mode: Economics is no more practical an academic undergrad major than English! Don't major in Econ thinking you're studying the most useful subject for getting a job. Major in what you find interesting.

Evaluate Quality of Decision Based on Process Not Outcome

Robert Rubin may not be the world's most popular man at the moment, but I still admire his decision-making philosophies as outlined in his terrific memoir In an Uncertain World: Tough Choices from Wall Street to Washington. VentureHacks recently quoted from Rubin's commencement speeches:

“Decisions tend to be judged solely on the results they produce. But I believe the right test should focus heavily on the quality of the decision-making itself…

“Individual decisions can be badly thought through, and yet be successful, or exceedingly well thought through, but be unsuccessful, because the recognized possibility of failure in fact occurs. But over time, more thoughtful decision-making will lead to better overall results, and more thoughtful decision-making can be encouraged by evaluating decisions on how well they were made rather than on outcome…

“It’s not that results don’t matter. They do. But judging solely on results is a serious deterrent to taking the risks that may be necessary to making the right decision. Simply put, the way decisions are evaluated affects the way decisions are made.”

In other words: you can make a good decision and still suffer a bad outcome (roll the dice again) or you can make a bad decision and enjoy the good fortune of a positive outcome (don't get cocky - improve the process).

Presentation Theory: Against Highly Interesting Details

Robin Hanson cites a recent study relevant to anyone who gives presentations. The study examined how well students retained information about the cold virus. In one experimental group the students read a packet with various peripheral details that were not very interesting; the other group read a packet with various interesting details. Conclusion:

In both experiments, as the interestingness of details was increased, student understanding decreased (as measured by transfer). Results are consistent with a cognitive theory of multimedia learning, in which highly interesting details sap processing capacity away from deeper cognitive processing of the core material during learning.

In other words: Interesting but not-quite-essential details distract from understanding the core point.

One of the classic books in the field of multimedia cognitive theory is Richard Mayer's Multimedia Learning.

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Speaking of presentations, I'm giving a free talk on January 14th at 12 noon at Foothill College (Appreciation Hall) in Los Altos Hills in the Bay Area. If you're local, come! No RSVP necessary. Email me if you have questions.

And Women Shall Inherit The Earth...

In the last year in the United States:

Men are down 1,069,000 jobs. Women are up 12,000 jobs.

Holy catfish. Tom Peters explains:

The principal reason is the continuing demise of male-dominated manufacturing jobs, and the continuing rise of service jobs. In particular, healthcare, where women constitute 80% of employees, has added 400,000 jobs during the period in question.

(Net: It is increasingly a women's world, called the global rise of "Womenomics" by one European observer. Another accelerator is the stunning rate at which women are eclipsing men on the education front, again pretty much worldwide—from primary school to Ph.D. programs.)