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Capacity Is A State of Mind

It’s tragic how we adults tell children anything’s possible while telling ourselves we’re out of options. It’s also frustrating to consider how we find ourselves in these deeply-grooved ways of thinking about nothing but our limitations. Why do we do this?

I think it’s a product of the group. It’s socialized thinking. We are naturally inclined to think about things in this grim, narrow way because that’s how others think of things.

So these attitudes help us fit in. We don’t want to be a weirdo. And for some reason, the cynical pessimist is always welcome.

So here’s a likely truth: everyone around you has some level of pessimism, skepticism, cynicism, and a lot of exhaustion.

Here’s another likely truth: they all want to be better than that. As do I.

To do so means that we have to take the lonely road to a very different attitude, one that is defined in the classic book The Magic of Thinking Big. Written by David J. Schwartz in 1959, the book is one of the best-selling works ever published in the self-help category. I think it’s the source code for just about everything that’s followed since. Because when you boil down every other bit of self-help advice, you get to a certain essence that Schwartz establishes very well with the concept of “thinking big.” So what is it?


First, consider what it isn’t. Thinking big is inherently irrational. Thinking big means having less reverence for the facts around your current situation.

This is difficult. Especially for people like me who recommend we keep a factful perspective in everything we do. Look no further than my praise for Hans Rosling’s book Factfulness (review here). Facts are our friends!

But our typical bias in heightened rationality is to look at current facts, project them into the future with a probablistic lens, and gauge our odds for success. We then ask ourselves some very responsible, very “adult” sort of questions like:

What am I most-likely to accomplish?

What is the most-probable outcome?

Is it worth the effort?

Again, such thinking is an excellent practice in rationality. I completely support it. Yet it isn’t enough to do the things that, deep down, you want to do.

Case in point, I’m quite certain that nearly everything I ever attempt has at least a 60% chance of failure. That is a rational, realistic assessment. Most things I try will end in failure by these simple odds.  

That isn’t exactly “thinking big,” is it?


Therein lies the problem. From the very start, my so-called “rational” view leaves me fixated far too often on the risk against success instead of the risk for success. Why not view the odds as 40% success rather than 60% failure?

That’s still factful. That’s still rational. More important, it removes us from the deliberate trap of the “hot stove” effect that surrounds potential losses. Couch something as a potential loss and we shy away. Couch it as a potential gain and we’re interested. Consider the following:

If someone told you there was a 90% chance you would not become a millionaire today, you’d probably think little of it.

But if you were told you had a 10% chance of becoming a millionaire today, wouldn’t you be a wee bit excited? People buy lottery tickets every day to manufacture such hope. At vastly smaller odds

My point here is that a lot of what I have written from past books, especially in the realm of psychology and decision-making and management, emphasizes the need for fact and rationality and structured methods of thought. The great tragedy is that this wisdom can be conflated with the idea that we should use those facts to build barriers, establish downsides, poke holes in our dreams, and discipline ourselves against hope.

By the way, “hope” is a strange word for me. I am somewhat averse to it. I’m not alone. The very fact that there’s a book that refers to hope as something audacious kinda says it all. This is our adult mental bias.

Additionally, James Cameron has been known to say “Hope is not a strategy.” I totally agree. But a good strategy can build proper, rational hope. Which is where we get back to Schwartz’s genius in the idea of thinking big.

Hope Manufactured

So again, what is “thinking big?” We see it isn’t “rational” in the typical way we think of rationality. But that was a canard. Because thinking big can be rational. It just doesn’t start there. We start with belief. Yes, that scary thing that us hyper-rationalists dislike:

Step one: believe it can be done. Here is a basic truth: to do anything, we must first believe it can be done. Believing something can be done sets the mind in motion to find a way to do it.

Makes sense, right? We usually cast empty smiles at kids when they say they want to be the president or an astronaut because we’ve run the numbers, we know the odds. It’s not in their favor. But we still encourage the belief in them. And many others. We just don’t encourage it in ourselves.

So the vast majority of us will fail at step one of thinking big. Right away. We will kill belief and boost probability instead, paying attention to only those things that carry a 50/50 chance. Because belief, like hope, isn’t a strategy.

The sooner we recognize this tendency, the better. Because it’s flawed.

There are instances where this practice makes sense, of course. A belief can be deemed faulty by its infinitesimal odds. For example, could I become an NBA player at this stage of life? Of course not. This is where being an adult is great! I know that it is a practical impossibility for me to join the NBA. No matter how deeply I might want to believe otherwise. So I abandon that belief.

But there are other things that I can believe in. Things that carry a 5% or a 10% chance of success. I could believe in doing those things but I often treat them as impossible. Like most rationalists, I kill the pursuit of belief in such low-probability ventures. Therein lies the problem. Because it leaves you with very little outside the status quo.

More importantly, those 5% or 10% are just the base rates. They are the unconditioned odds. Wrapped in massive assumptions and incomplete information. Which is to say that those odds can be improved drastically with the next step that Schwartz describes:

Think of something special you’ve been wanting to do but felt you couldn’t. Now make a list of reasons why you can do it.

List the reasons why you can do that low-probability thing you want to do. Easy enough, right? This list serves as a simple accounting of your strengths and capabilities. It is also the start of a logic that leads you forward. From that vision of what’s possible, you connect your inherent strengths and abilities and formulate actions to pursue the following two questions:

How can I do more of that?

How can I do it better?

Doing more of those things, and doing them better, will improve probability at every turn. This is where the rationalism comes into play. Fusing the dream of what’s possible with the strategy for how to make it so is what fuels us with the power of thinking big.

It’s a bias towards action. Which compels more action. Doing that work, improving that probability, strengthens your hope and resolve, which makes you do more of the work. It’s a virtuous cycle.

Such cycles lead people to incredible transformations. No matter the odds. I still think of Rosalie Bradford and how Richard Simmons helped her lose more weight than any other woman in history (768 lbs) by creating that upward spiral of success.

Success isn’t guaranteed, of course. That’s why the effort (what you can do, how you can do more of it, and how you can do it better) is more important than the outcome. The effort is what you control. In closing, remember this line from Schwartz. It’s a keeper:

Capacity is a state of mind. How much we can do depends on how much we think we can do.

It is astonishing to know how true that statement really is. And how rational it is. If you don’t think you can do anything else, you’re absolutely right.

But you don’t have to be right about that. Despite what your rational brain might be telling you, this is one instance where it would be good for you to be wrong.

Photo by manu schwendener on Unsplash

The Best Book for Noncompetitive Strategy

Blue Ocean Strategy

Rating 10/10

Best Line #1: To focus on the red ocean is therefore to accept the key constraining factors of war—limited terrain and the need to beat an enemy to succeed—and to deny the distinctive strength of the business world: the capacity to create new market space that is uncontested.   

Best Line: #2: Because blue and red oceans have always coexisted, practical reality demands that companies succeed in both oceans and master the strategies for both.  

Reading Strategically

Given the name of this service, Striving Strategically, it’s obvious that I value strategy. So much so that I’ve deliberately scoured a lot of mediocre books on the topic in order to find the few diamonds in the rough that are the most coherent, distinct, and helpful. There are four books that stand above the rest. They are listed below:

  1. Good Strategy, Bad Strategy (review here)
  2. Playing To Win (review here)
  3. The 33 Strategies of War (review here)
  4. Blue Ocean Strategy

I admire a lot of what others offer, whether it’s Mintzberg or Porter or the daily brilliance of Ben Thompson, but unless someone wants to be a deep scholar of the topic, these four books are the real foundation for strategic thinking. I offer them in a deliberate sequence.

Richard Rumelt’s book, Good Strategy, Bad Strategy, is the best place to start because he gives us such a clear view on how to think strategically. Far too often, we rely on poorly formed intuitions and fail to think consistently with what he calls “the kernel.” He clears the muddy waters better than anyone.

Playing To Win gets you the best of what our featured book would refer to as “Red Ocean Strategy.”

Meanwhile, The 33 Strategies of War lends a self-help flavor to the strategic mindset so you can think differently about challenges in your own life. It’s potent stuff packed in a set of principles that lend towards model thinking. It’s also just a really good romp through history.

Then we get to our feature book, which completely changes the paradigm. I don’t know if a person can really appreciate Blue Ocean Strategy without years of exposure to the more conventional thinking of red ocean strategy. It’s akin to a technology shift.

Like going from CD media to digital media. If you never had to lug around a flimsy wallet of CDs, and CD players, you can’t fully appreciate the incredible beauty of an iPod. Similarly, if you haven’t slogged through a lot of red ocean thinking, you can’t even recognize how different a blue ocean really is.

Anyway, whenever I find myself stuck on a problem, fixated on the constraints around me, or worried about what others are doing, this book brings me back to center. I’ve genuinely looked forward to the day that I would feature this book here on this service. I hope I have done enough with this week’s work to persuade more people to buy the book.

To illustrate some of the deeper concepts, I’ve offered the following articles for the week:

Monday: Blue Oceans Beneath The Duct Tape

Tuesday Blue Oceans and Industrial Heresy

Wednesday: The Head, The Heart, and Profit Margins

Thursday: Netflix’s Looming Merger

I’ll feature a few more concepts below and again invite you to purchase a copy yourself. As always, I do my best to give a productive, unique look at the ideas without explicitly plagiarizing. For more information, you can also check out the authors’ official website. It’s worth a visit. If only for the lovely feel of the homepage.

Where The Puck Will Be

As much as I support the iterative, feedback-driven methods of LEAN management, I’ve seen many of us (myself included) be shackled by feedback. This was never the intent of LEAN methods but it is the result of our perpetual focus on the validation aspect of the methodology. Are we doing the right thing? Is this useful enough to people? Will they be upset if Feature X or Product Y goes away?

That sort of information helps, of course, but I always remember the apocryphal quip attributed to Henry Ford:

If I had asked what people wanted, they would have said faster horses.

He didn’t really say that but here’s another oft-quoted industry titan, Steve Jobs, expressing the idea another way:

It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.

And finally, another well-worn adage, transposed from sports to business, belongs in this same thread. This one comes from Wayne Gretzky:

Skate to where the puck is going, not where it has been.

All three quotes express a central idea that we can lose position when we fixate too much on market/customer feedback for a specific product or service. Put more bluntly, no one really knows what they want until you show them. Feedback can help us validate what’s working, what isn’t working, but it can’t give us a direct signal of what will work. The steps we must take to move forward, creating what will be, are always less certain, obscured by uncertainty.

It’s the difference between using LEAN to improve a product and using Blue Ocean to help a customer.

I think this is wildly obvious but you can do a google search right now and find countless articles that criticize the sentiments expressed above. A lot of them conflate the idea of product development versus customer development. I suspect the critics have not read Blue Ocean Strategy. There’s nothing heretical about looking at where the proverbial puck (i.e. existing market offerings) is and formulating your identity on where you think it should be. In fact, anything short of this approach is just more of the same red ocean thinking that empowers someone else’s disruption.

Our authors write the following to illustrate:

Our research found that customers can scarcely imagine how to create uncontested market space. Their insight also tends toward the familiar ‘offer me more for less.’  

The trap here is that “more for less” and “faster horses” means you have to put your primary focus in a single vacuum: driving costs downward.

All you can do in these “more for less” circumstances is manage your product or service so that it becomes the cheapest game in town. That doesn’t have to mean lower prices; it can truly mean more for the same price. All the same, it’s a big, dumb race to the bottom of some cost factor and it leaves you barking the same slogans as those car dealerships who fiercely proclaim they will NOT be undersold.

Existing products matter. Existing customers matter. Existing markets are important. But this race-to-the-bottom more-of-the-same cost leadership is only good for those who have cornered their market and only lasts as long as the market itself (see Kodak’s 2012 bankruptcy).

Is there any reason to not try to capture the best value and the lowest cost? This is what our authors refer to as value innovation and it requires new thinking, movement to where the proverbial puck will be, and a departure from the typical guidance that market analysis yields.

As the authors write,

To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategy focus from competitors to alternatives, and from customers to noncustomers of the industry.

It’s the equivalent of keeping one eye on the horizon at all times. Without such a view, we lock ourselves into a fixed position where we only remain hypersensitive to existing customers and competition and the faulty desire to maintain whatever is familiar for as long as possible.

This isn’t just narrow-minded. It’s also fragile.

You can’t create the greatest value with the products or services you already have. This is why we see sequels in the entertainment industry. Whatever was the greatest value before creates an appetite for greater value later. The evolution is constant.

And we can squeeze more value out of anything. Even something as staid and glacial as real estate is seeing massive undercurrents of disruption as online platforms drink the brokerage’s milkshakes and offer something more convenient and effective.

Again, this feels blindingly obvious and yet our authors had to write a book that reinforces the idea for all the skeptics out there. And still people (myself included) will misinterpret the notions or fall back to old habits.

I think it’s because strategy is an unpracticed endeavor for most people. We just don’t apply it enough to have any real sense of comfort or mastery. So we need tools to help. Thankfully, Blue Ocean offers some of the best, most clarifying and accessible tools I’ve come across.

Four Steps To The Blue Ocean

The above subtitle is a twist on the title of another great business book, Four Steps to the Epiphany by Steve Blank. In this book, Blank explains the important distinction between product and customer development. Product development, while helpful, doesn’t yield success. Customers do. And through a series of four major phases (customer discovery, validation, creation, and company building), Blank guides us through the proto-version of LEAN management to see how new ventures can succeed not with new products but new customers.

It’s really great. I think it’s the best of what “design thinking” has to offer but with more transferable methods removed from the design of actual products. And when it comes to tactics for developing new ventures, it’s probably the best guide. Here’s a link to a brief guide on the concepts, written by Michael Batko.

But strategy comes before tactics, of course. So Blue Ocean is the first place to start before venturing into Blank’s techniques. Using a four-step process our authors devise in the book, you can determine the space where you think the proverbial “puck” will be. Frankly, the work is easier than I expected.

It’s also very graceful—free of any heavy reliance on data or forecasts. The authors gives tools that actually unearth the best of our intuitions while also helping us adopt an outside view from the standpoint of a consumer.

Step one involves the strategy canvas I highlighted in Tuesday’s article. In a very visual, even somewhat physical sense, you determine the open spaces in the existing industry and thus find the gaps where the “puck” might slide through. This requires a strong grasp of industry factors in order to feel real confidence in what you’re doing but that doesn’t take long to develop.

Step two is a method of alignment. Recognizing how you want to style your product or service, via the canvas, you then go through a straightforward exercise of measuring internal and external factors and categorizing your efforts on a simple four part grid. Each piece of the grid represents one of four basic actions: eliminate, reduce, raise, or change. This is also known as the ERRC grid.

A Brief Moment of Appreciation …

This model, at this stage, is the best thought generator that I’ve come across for this particular task. If step one helps you formulate a basic vision of what you want to create, through the strategy canvas, this model helps you quickly assess the cost of that vision. I honestly think that it’s the most important part of the four-step method. It can also be a real difference maker for anyone on the team that uses it. Why? Because most people don’t think about this as fully and precisely as the tool encourages.

Case in point, before really using this model, I had applied a simpler technique at this stage of ideation. Having a vision in-hand (thanks to step one), I previously used the more-basic question of what do we want to change and what do we want to maintain in order to achieve the vision? I featured this question in my coverage of the book Lean Analytics (review here). It’s the first question I would ask when faced with new information.

That practice was very powerful in its own right because many of us, as managers and leaders, often fail to think about what is going to stop in order for something else to start. We usually just bulldoze right past any constraints and delude ourselves into thinking we can just get more-more-more without any real shift in focus. Straddled, muddled strategy is the result. Nothing is optimized. It’s just maximized. That’s how you get low-grade results and a whole lot of mission creep.

But to switch that two-part question with this four-part model is something of an upgrade to my brain. This new thought (what to eliminate, reduce, raise, or change?) is obviously more precise, more nuanced, and practically as easy. It’s sharper thinking, through and through, and it helps us get out of the logjam of dichotomous thinking.

A pivot doesn’t have to be a blunt instrument. You don’t have to stop all things and do a complete 90-degree turn. Modest course correction is probably best and this question, again, puts us in the mindset to do so.

To some who read this, it may feel like I’m spending too much time on this one small thing. Maybe I am. But if there is one aspect of this book that is going to be perpetually overlooked and undervalued, I think this is it. The strategy canvas is deeply compelling. The later steps are really fun. But this second step, where the hard thinking about cost and change really comes into play, is a spot where I bet most efforts fail.

Anyone can drum up a creative strategy in stage one, thanks to the canvas.

Few will figure out how to accomplish that strategy in stage two. That failure won’t be the fault of the ERRC grid tool itself. It will be the fault of the users who skip this step or discount it.

Fairs and Displays

Steps three and four are where the big, fun, engaging aspects of strategy kick in. I have never been a part of something like stage three’s visual strategy fair; it makes me a wee bit sad to think of all the excitement I’m missing.

The fair itself is very much like a science fair. Team members build a variety of canvases, ERRC grids, and present their visions to a body of judges who then question, debate, critique, and select favorites. The importance of this process is that it develops that build-measure-learn cycle of the aforementioned LEAN methodology. But rather than make it about a product, per se, it’s about a strategy.

This is especially beneficial because the judges weighing in on each proposed vision must be external constituents—customers and potential customers. To have these people, your actual market, participate at this stage, before a product has even been developed, sounds very useful. It gives you a blend of Blank’s customer development process with our authors’ strategy-making process. After some guidance and refinement, you’ve basically stress-tested your ideas and validated a blue ocean to some extent. It won’t be perfect but it will definitely build confidence.

Next, in stage four, is the presentation or communication of a final approach. Whereas most strategic plans still rely on text-heavy, multi-page documents, the idea here is to build a beautiful one-page vision of the old approach and the new approach to symbolize the changes that lie ahead. I think this is a brilliant idea. Having both the old and new strategies, side-by-side, helps people understand the real distinction of this new strategy in ways they can’t understand without the visual contrast.

Such contrast has an effect on people. As the authors explain,

Employees were so motivated by the clear game plan that many pinned up a version of the strategy canvas in their cubicles as a reminder of [the company’s] new priorities andn gasp that needed to be closed.

Who ever gets excited about strategy? Few people. Mostly odd fellows like me. But this four-step process, specifically with these tools used in this sequence, gives you something few others seem to offer.


I hesitated to even cover the four-step process because I worried that people would read this and think they can just go emulate it without reading the actual book. I suppose some may feel that way. If so, I wish you luck but I think you’ll miss out on a lot more that a modest $20 investment can provide.

The process itself constitutes the first 100 pages of the book. There’s a great deal more that I cannot cover here. And there’s much more in the latter half about classic issues with alignment, drift, and some much-appreciated thoughts on misinterpretations that deserve your attention, too. Finally, the style of writing is a bit dry at times but the clarity demonstrates that our authors really understand strategy better than just about anyone I’ve come across.

Blue Ocean Strategy is, itself, a blue ocean in the strategy world. Some equate it to the work we find in Peter Thiel’s Zero To One. That is a fine book and an extension of blue ocean thinking. However, I find it truly better suited to startups whereas Blue Ocean can apply to practically any organization. It’s more useful.  

Especially when you reread it. Of my Top Four strategy books, this is the one that really helps me be a well-rounded strategist. The other books develop a logic and framework that is familiar to everyone. It starts with problem diagnosis and clear logic, a’la Rumelt. Then it leads to competitive strategies and alignment a’la Playing to Win. Then, for a more flexible mindset, there are the principles found in Robert Greene’s work. He even plants the seeds for Blue Ocean thinking on many occasions.

But for all the wisdom those resources provide, it’s the noncompetitive, customer-focused mindset of Blue Ocean Strategy that helps me transcend convention. As our authors say, we need both red ocean and blue ocean thinking. Theirs is the only book that I think can provide the last half. Here’s the link again to buy it on Amazon.

Netflix’s Looming Merger

Disclaimer: I’m not a prognosticator and I’m certainly not an entertainment industry expert. As a result, this article is more of a working paper rather than a final, absolute argument. The main objective is to illustrate a line of reasoning heavily inspired by current events and this week’s study of the brilliant book Blue Ocean Strategy.

Netflix and Fragility

A few weeks ago, I wrote about Netflix and it’s fragility problem. To put it simply, Netflix has always been a distributor of sorts, a centralized hub for entertainment. Just like Blockbuster. The two companies weren’t rivals, necessarily, because they operated on completely different service models. But they provided the same service. And as history showed rather quickly, Blockbuster’s model was inferior. Netflix’s initial success was anchored on the innovation of its DVD-by-mail system which offered greater value than Blockbuster (more selection, convenient browsing online) at lower prices.

To put it in Blue Ocean terms, Netflix’s model perfected the value innovation of home media distribution. With lower costs and greater value never-before-offered, they set themselves on a course for success. To their immense credit, they continued to chase that value innovation to the next evolution.

After seeing the potential of online streaming, Netflix ventured into its next Blue Ocean as a pioneer in the Streaming Video On Demand (SVOD) industry. Few were equipped to enter this space and being the first real distributor gave Netflix a chance to retain all the value they originally held and simply offer it in a new, more-frictionless channel. It would be akin to Amazon somehow creating the Star Trek replicator so that every product was available instantly on demand, eliminating all the wait times that goes into the shipping and delivery component of their service.

Which is to say that Netflix’s streaming was something of a miracle. No more worries about DVDs, preordering, or being locked to a single device (dvd players). Customers flocked to it.

We came for the novelty and convenience but we stayed for the value. That value was built on the content selection. By virtue of being so early to the game, Netflix offered content providers the only real channel to share their entertainment. As popular television shows and movies came to the service, customers found just about everything they had wanted from the mail-order service and thus shifted to streaming-only. New subscribers came aboard, too, and the business just grew by leaps and bounds.

This showed Netflix’s great strength. And its vulnerability. Because what draws subscribers to join is different from what compels them to stay. The convenience is an easy attraction but the content is what keeps us.

So what happens when the actual content providers decide to take their ball (i.e., content) and go home?

The Reddening Ocean

We’re about to find out. The shift is happening. Netflix is losing some of its most popular content as AT&T’s WarnerMedia launches its own ship into the reddening waters of the SVOD ocean. Disney is doing the same. And NBCUniversal. And Apple. And existing competitors like Amazon are strengthening their offerings with live sports and even beating Netflix at the distribution game with new partnerships that once went to Netflix when it was the only real game in town. Meanwhile, separate content providers, like CW, are now exiting any exclusive deal with Netflix so that they can draw new bidding wars in this expanded ocean.

I should mention, too, that Disney isn’t just offering their own service for their own content. They’re also taking over Hulu to broaden their SVOD value, expanding just as aggressively as Amazon.  

This will only continue. Because we’re still in the early dawning stages of the SVOD industry. And the action already casts an ominous shadow on Netflix. Despite all appearances, I honestly think they are in desperation mode.

Losing Grip On Value Innovation

To understand why, consider the following two bits of information:

First, as reported by the Wall Street Journal, non-original programming constitutes 72% of the viewing time spent on Netflix. In a simplistic view, this means that 72% of the value Netflix offers to customers is severely threatened as competitors regain their content.

Meanwhile, Netflix’s subscription fees have increased into HBO territory.

Value is decreasing rapidly from this one-two punch. Netflix is essentially being pushed to the ropes. They are losing what customers want and raising prices at the same time.

Hulu has already attacked this weakened position by lowering their subscription fees. Disney and others will also undercut once their services launch. And given that Netflix’s borrowing and spending has skyrocketed, the company can’t afford the pending price war.

Why has this happened? Because Netflix started and succeeded as a distributor. They provided content to people in convenient ways. Remove that content and you’re only left with convenience. This is the fragility.

If that sounds strange, think of it this way: imagine if Amazon could no longer sell major brands. Would you still keep a prime membership? The mass-market value of Amazon is built squarely on its convenient selection of major brands that consumers trust.

Similarly, the mass-market of Netflix is built squarely on the convenient selection of major entertainment that consumers trust. We are loyal to Friends, Frasier, The Office, Parks and Rec, and whatever else. We are not loyal to Netflix.

The only way for Netflix to guard against the fragility is to find new content that serves people just as well and build loyalty around it.

This, of course, is why Netflix exploded with a content-creation frenzy that dumped 1,500 hours of new entertainment onto the service in 2018. It’s almost obscene. And I think it reeks of desperation. Netflix saw this day coming and decided to go on a spending spree, borrowing and burning as fast as it could, to throw all the content it could onto the service and see what sticks.

Has it worked? I don’t know. I doubt it. And Netflix won’t give any straight answers.

I can’t help but think the company is losing its grip on the value innovation.

To refresh that idea, let’s return to Blue Ocean Strategy. The integral part of value innovation is to find ways to break the value-cost trade-off. As the authors write,

Value innovation requires companies to orient the whole system toward achieving a leap in value for both buyers and themselves.

That’s not happening anymore. When Netflix was a distributor of all the in-demand content, it had a perfect alignment of a convenient service at a low cost that continued to develop robust offerings, thus add more customers, thus add more content, in a virtuous cycle. Again, as a distributor, it worked great.

But with the non-original programming disappearing, Netflix is no longer a distributor. It’s an ersatz version of HBO. It’s another Disney. Another NBCUniversal. Its primary offering will be original content.

And given the quality of that content, it’s actually not a Disney or HBO. Instead, it’s more like Starz. Only more expensive.

That expense would not be an issue, per se, if there was a commensurate level of quality. Netflix is trying to provide that quality. But I don’t think it’s succeeding. The value innovation is disappearing.

Drinking Milkshakes

I’m reminded of the powerful ending scene in the movie There Will Be Blood. Without spoiling it, the film ends with the revelation of how the lead character used his wiles and the laws of gravity (i.e., drainage) to steal value (i.e., oil) from a competitor.

Netflix was the pioneer. It developed the model for true value innovation in the SVOD industry. In many ways, it created the technology. And while the company still has the advantage the single best streaming experience, that convenience can (and will) be easily copied. It’s already happening. That milkshake has many straws.

It reminds me of a very important observation from the authors of Blue Ocean Strategy,  

Value innovation occurs only when companies align innovation with utility, price, and cost positions. If they fail to anchor innovation with value in this way, technology innovators and market pioneers often lay the eggs that other companies hatch.

It brings new meaning to the idea that Netflix is walking on eggshells.

As those proverbial eggs hatch, Disney and NBCUniversal and others will draw us to their services with lower prices (free with ads!), better content, and free trials. Existing players like Amazon and HBO might even get aggressive with lower prices for a period.

Meanwhile, certain components of Netflix’s value—like it’s kid-friendly experience—will be gobbled up by Disney or others who have strong position in those areas.   

Netflix will also try to diversify. They’ve already ventured into interactive content and they’ll try gaming, too. But there are others already occupying that world and others moving in.

There’s no easy place to turn to hold onto value innovation.

Unless they merge.

The Consolidation

It won’t happen tomorrow but the entry of these new competitors offering trusted content at lower prices will create big shifts over time. Consumers will get frustrated by all the different services. The glory days will be behind us. Many will weigh the options between five or six competing services (to say nothing of regular cable television and the world’s greatest public access channel, YouTube) and start to trim their budgets.

Where do they go? History and current behavior shows they will go not with what is cheapest but with what has the most value. The value is in familiar, loyalty programming. Which Netflix will soon lack.

Nonetheless, there will be a price war to hasten this shift and, once it kicks into high gear, we’ll see the consolidation. As seen in countless industries before. Including cable tv.

Netflix will merge with someone who wants the remaining subscriber base, technology, and any of the valuable content that remains in-demand. Will it be Apple? Many hope for that. I think I see how they could combine to create something unique and valuable.  

All the same, we’re headed to the next stage of the SVOD industry. Netflix created it. Others now enter. The battle begins. And like Thunderdome, fewer will leave this arena than entered it. For reasons described above, I don’t think Netflix makes it out alone. Blue Ocean Strategy helps me understand this. Along with Taleb’s Antifragile (review here) and the nature of an entity’s response to stress and pressure.

So it goes to show: meet the new tv … same as the old tv. A blue ocean turns red. Some ships sink. Some combine. The waters grow calm. Balance returns as the many are winnowed down to a few and an industry matures.

Photo by Dawid Labno on Unsplash

The Head, The Heart, and Profit Margin

There is a great adage attributed to Jeff Bezos that goes like this:

Your margin is my opportunity.

It is largely suggestive of his approach to scaling Amazon. With perpetual reinvestment, Amazon grew in one primary area (bookselling), developed new technologies to support that area (computing power), spun off those off capabilities into viable services (a’la AWS), operated at low margins to price out competitors, gained through volume, reinvested in even more areas (Prime video), and thus continued the cycle.

So in the Bezos context, “their margins are my opportunity” stands for economies of scale, price wars, efficiencies, and races to a sustainable bottom. Bezos attacks areas where he sees soft margins and wedges Amazon into the space with something cheaper, faster, and eventually (thanks to the reinvestment) better.

But this can work the other way, too. As explained in the book Blue Ocean Strategy, it starts by recognizing the value of low-margin, low-cost ventures versus high-margin, high-cost counterparts. It comes down to either the head or the heart. At the most boiled-down, core essence, every customer chooses with one of these anatomical machines before choosing with the other. As explained by the authors,

Some industries compete principally on price and function largely on calculations of utility; their appeal is rational. Other industries compete largely on feelings; their appeal is emotional.

So to return to Bezos, no one really buys anything from Amazon from a basis of emotion. After all, Amazon is inherently a proving ground for humanity’s ability to delay gratification. I remember the feeling when I first used the service. It was incredibly strange to find myself ordering something sight unseen and with a two-day or occasionally three-day wait time.

People tend to forget that now.

Just as surely as people tend to not realize how many of our purchases fit in this utility-based, low-cost field the authors mention.

The point here is that any coherent business strategy must first recognize what part of the human body they wish to appease: the head or the heart? You can choose one but not the other. Try to do both and you’ll fail just as soon as a competitor enters those waters and cuts you out a’la Bezos.

Aligning Models

If people weighed every purchase with their heart and emotions, modern day retail would probably look a lot more like its long-lost ancestors. Mom-and-pop stores would be thriving. Business in the brick-and-mortar spaces would be booming. Amazon would be a feeble little thing still eking out a paltry existence.

Why? Because that old model of retail was precisely built to serve the emotional appeal of the classic retail experience, replete with the old school department store environment, the sights and smells and sounds of the mall, the haggling over price, service with a smile, the handshake over the counter, and the careful wrapping of those beautiful purchases in pretty ribbon and paper. As the Kim and Mauborgne write:

Emotionally oriented industries offer many extras that add price without enhancing functionality.

There once was a time when retailers, even grocers, couldn’t imagine another way of doing things. Neither could we, the shoppers. And department stores were always looking for an edge. But solely within that red ocean. So they’d build christmas decorations, add snow machines, provide a Santa experience for the kids. Because they, as classic retailers, had built themselves up to compete solely in that emotional space. And we had built ourselves up to expect nothing but that space. As the authors brilliantly write:

No wonder market research rarely reveals new insights into what attracts customers. Industries have trained customers on what to expect. When surveyed, they echo back: more of the same for less.

Then came Walmart. A new blue ocean is born where access (especially for rural markets), vast selection, and low price at-scale disrupted traditional retail. All the expectations were ignored. People were given something they didn’t even realize they wanted. All shopping, prior to that time, had been either uniquely specialized on emotions of trust and limited access (a’la Sears Roebuck catalog, local grocers) or emotions of status and luxury (a’la department stores).

Walmart didn’t try to top that. It just offered something else, something that would appeal to the head on a pure commodity/utility function for all the purchases where low prices matter more than just about anything else. You never saw luxurious decorations, Santa Claus, or even a food court.

The strategy worked. Copycats followed. Amazon is the latest in a long line. Only this time, the strategy doesn’t require the bricks-and-mortar.

All the same, to borrow from the authors, it’s still “more of the same for less.” Less inconvenience, less cost. Amazon will continue to iterate on this plane. They’ll continue to work and work and work to reduce delivery delays to 1-day instead of 2. Then 2 hours.  

Can anyone beat them? At best, Walmart will imitate just as surely as K-Mart imitated them. That’s the only way to go because Amazon’s model is matched as perfectly as the technology will allow to the predominant motivation (i.e., body part) that matters most to customers: their heads. Their brains. Their utility-driven, rational actor that chooses Amazon because waiting is fine if it means convenience or lower price.

So in the consumer market where we must appeal to the head or the heart, it’s fascinating to see a single entity like Amazon doing all this work to corner one half of the divide. For any purchase that is more utility-driven, you’re best served with Amazon on just about all fronts. Clothes, hardware, and haircuts excluded.

But there’s still opportunity, of course. Blue oceans abound in the retail game. Not Amazon’s version of the game but the other version. The part that is squarely planted in the emotional divide.  

Hearty Bookstores

We’ve seen a lot of success stories for independent booksellers. Everyone understands that these places are thriving today because they offer something Amazon cannot: the emotional experience of classic retail mixed with the specific tribe-like communion of a specialized store for a specialized interest. Mix in community-building events and clever hybrid concepts and you get miniature blue oceans that continually evolve in ways that Amazon cannot.

Does it make a book cheaper? Of course not. Does it expand the selection? Not at all. If that was the objective, these bookstores would have disappeared long ago. Because that is where Amazon competes—on price and selection.

So they beat Amazon by serving what Amazon can’t: the heart.

It probably feels like a simplistic model. I suppose it is. Choosing the serve the head or the heart is something of a false dichotomy. You can’t go out and create some wildly impactful service, like a bookstore, and charge $1,000 a book.

But you also can’t open up Norm’s Bookstore and just have books on the shelves, limited in number and listed at retail price, and expect people to come in droves.

More importantly, you can’t expect to win by lowering your prices further. You’ll never be reliably cheaper than Amazon. Instead, you have to go in the other direction. You have to make Amazon’s low margin your opportunity to tackle the high margin. That means add-ons, experiences, and other features that address the needs of the heart a’la the classic retail model of old. It means always tacking your course towards ever-greater customer experiences.

How? Well, that’s the tactical part that depends on each industry. And frankly, those tactics seem a lot more fun than what happens over at Amazon with their relentless pursuit for mechanized efficiency. But the strategy piece is the choice in this fork at the middle of the road.

On one side is scale, low price, high volume, low margin service for “the head” or the rational, utility-driven marketplace.

On the other side is short-head, long tail, high price, low volume, high margin service for “the heart” or the emotion-driven marketplace.

Every industry eventually crystallizes on one side or the other. Bookstores are just the latest to really understand this. Other industries will follow. It’s been happening with movie theaters for a while. Look no further than Alamo Drafthouse and the fast-following that occurs with Regal Theater’s Cinebarre concept.

I could go on and on. The point is that products and services blend towards one destination or the other. Over time, these things serve more and more to one of these ends. Choose your path (the head or the heart) ahead of time, and stick with that choice, and you might have a coherent strategy and a real chance. Otherwise, your margins will be someone else’s opportunity.

Image by ElisaRiva from Pixabay

Blue Oceans and Industrial Heresy

It took a long time—decades—for many of us to realize that there was more than one way to run a fast food restaurant. In fact, the words “fast food” had only one definition for nearly thirty years. Or was it forty years? It’s hard to say.

How long did we live with nothing but the standard commoditized prepackaged heat lamp barnacles we called fast food hamburgers? How many decades did we abide with those thin, flat, ultra-cheap things that were made in thin, flat, ultra-cheap buildings after being shipped from warehouses and processed from places of dubious origin? Was it really forty years of living with nothing but the standard YUM! brands, Burger King, Wendy’s, and McDonalds?

Did we Americans really go through forty years of eating hamburgers from a restaurant that actually identified itself more as a real estate company?

Did it really require Eric Schlosser to write the brilliant Fast Food Nation for us to understand the impacts?

I think so. Or so it seems. And in all that time, we had no idea what we were missing.

Some still don’t.

Until one has exposure to the likes of Shake Shack, Five Guys, Burgerville, and the classic In-N-Out, you might not realize that fast food can actually mean food cooked to order. Really. Made with fresh ingredients by people who are treated like people. Really. It can mean food served with some measure of dignity so that you don’t feel like it you just ordered a “product.” Oh, and it can taste really good, too.

Such places can also charge $13 for a meal and leave you feeling like it was a bargain. Such places can have lines so long that people gladly wait for forty-five minutes and think it’s worth it.


It starts with heresy.

The better fast food restaurants (to say nothing of those ever-growing fast-casual varietals)  have done deliberate work to upend the old false idols and industry truths. When McDonald’s set a standard for efficiency and fast turnaround times, putting the “fast” in fast food, other places made you wait. And while McDonald’s and its followers staked their survival on the drive-thru lane, some other franchises avoided it altogether. Then there’s the free peanuts. How does that make any sense?

It’s incredible to think that the more-dominant players in fast food (McDonald’s and its ilk) had the chance to thrive for so long by just copying one another in the red ocean of a crowded industry.

These new challengers, having risen over the past ten years, are gaining ground and delivering something better.

Actually, not “better.” Just different. In a way that better suits us.  

Industry Idols

Southwest is a commercial airline. Just like all the others.

[yellowtail] is a wine. Just like all the others.

Cirque du Soleil is a circus. Just like all the others.

None of that is true, of course. These are very different businesses for a reason. And in the book Blue Ocean Strategy, they are each featured as living proof of how effective the eponymous strategy is. By seeking new opportunities that deliberately upend the industry’s standard models, each venture achieved the sort of true differentiation that Seth Godin highlighted in his book This Is Marketing (book review here).

It wasn’t by accident. Each of these examples were born of deliberate choices. Strategy, in other words. And even though we’re tempted to call these businesses the stuff of some clairvoyant genius, the truth is that blue oceans can be formed by anyone. At any time. Especially in those “red oceans” of crowded competition.

It starts with a simple understanding of the primary factors within the industry and how the primary competitors treat those factors today. As an example, let’s start with the fast food industry. Here are some factors that drive the classic industry model:


Speed of service

Quality of service

Quality of food

Range of menu options

Drive-thru service

Dining space

McDonald’s, Wendy’s and Burger King all tend to operate on the same wavelength here. They value these things in the same way with McDonald’s leading the trend. Speed of service is typically high, as in highly-prioritized and thus quick. Quality of food, however, tends to be of lower quality in that classic fast-cheap-or-good tradeoff. Dining spaces are modular and, despite some executive’s very insightful efforts, of lower quality experience.

In a simple graph, the industry standard can be depicted as follows:

This is what the authors of Blue Ocean Strategy call a strategy canvas. It’s a fantastic device for conceptualizing the red oceans of today’s competition. It makes the rest of the work so very obvious. Want to avoid the competition and stake a new claim? Offer something on a curve.

To illustrate, here’s what I perceive as the Five Guys strategy canvas. Compare it to the dominant industry players and you see true differentiation immediately. It helps that Five Guys is a nationwide presence to demonstrate what’s possible on that scale.

What matters here is that, fifteen years ago, this would have been seen as a surefire recipe for disaster. The classic fast food strategy canvas showed fealty to the sacred truths of the industry. Back then, you never let your service be slower. Or prices be higher. To dare otherwise, and make a big bet on such derring-do, was heresy.

Nowadays, we can’t imagine a burger place that didn’t offer a more fast-casual, higher quality experience. The blue ocean has been accepted and we, the market, have gladly moved forward.  

New Self-Evident Truths

Let’s go a step further. There are instances, like above, where we can easily develop a blue ocean on the basis of existing industry factors. Or, as shown by our authors, we can create new factors. I think this is where the classic blue oceans unveil themselves.

Consider smartphones. What are the factors that drive that industry? Well, let’s start with factors that we, the customers, value when choosing a smartphone. A wee bit of internet research leads me to the following list. I’m no expert but I think this is a good, comprehensive inventory.

Factors include …









We can now take the two major categories, High-End Android vs iOS, and sketch out a simple perceived approach.

Is this perfectly accurate? No. But, as you can see, there is not a lot of differentiation here. Annual iterations over a twelve year period has led us to a red ocean where everyone converges on most of the same practices. Commoditization emerges and this graph explains why.  

Assume you and I are budding tech entrepreneurs. This graph explains why we are probably better served avoiding this whole scene. I don’t know of any startups looking to build smartphones but, if they exist, they can’t take this standardized approach.

What’s left, then? You could operate on higher or lower positions relative to this dominant curve but that feels like a crowded space, too. So in such a mature market, the real blue oceans are probably found by creating a new set of features. Such as the following:


Kid Friendly


These new factors, when combined just right, can create a blue ocean. So if we extend the curve to include these fields, we find that high-end smartphones are low in three of the four categories. And in those three categories, we find synergy to create something for a whole new market: kids.

If you mix the power of today’s connected age with the budding interest in “free range kids” and hands-free parenting, you can develop a new device outside the maddening crowd of competitors. Something that is portable, durable, kid-friendly, lower-priced, reliable, and capable of keeping parents in-touch with their children.

This strategy curve is viable. I should know. There are a lot of parents who struggle with the question of what device to get their children. And when. All in the name of keeping them connected and keeping them, the parents, aware. It explains why many parents give their kids their old phones. Which, admittedly, is nice but probably suboptimal. A duct tape solution of sorts.

It explains the rise in the very unique devices offered by Doki and Relay. These companies are forging ahead with a very distinct product in an otherwise mature, red ocean industry.

You could say it’s a whole other segment of the industry. You could say that these things offered by Doki and Relay aren’t smartphones. They aren’t even phones.

And I suppose you’d be right. In the same way that people are probably right when they say Five Guys isn’t fast food.

But both get the job done. Specifically, “the jobs to be done” that solve a market’s needs. In fact, they do it so well that these solutions might be deemed heretical. Some will reject the notion that they belong in the smartphone ocean.

This is precisely the point.


This strategy canvas is a really fantastic, wildly simplistic tool. I think it’s the bedrock of blue ocean strategy. But the real power comes not from the tool itself but rather than way it empowers us to think differently.

There is something weirdly dumb about rote, rational business strategy. It’s what leads to the sort of flat, thin, empty “product” of a 1990’s fast food industry. Because that’s what we think people wanted. A industry culture formed around those truths they held as self-evident. Want to win in the fast food game? Make mediocre food and serve it really, really fast.

What other sacred truths can we mistreat? What else can we overvalue or undervalue against the conventional wisdom? What heresy can we use as the core of a new business identity?

The answers lie in a firm understanding of today’s factors affecting the industry’s success.  Whatever those are, you should mistreat them. Over-invest. Under-invest. Or ignore them entirely while establishing entirely new factors a’la Doki and Relay.

Scratch it out on a sheet of paper. It’s easier than you may think. No precision required. Just some new thinking outside the box. Or rather, outside the curve.

Image by Magnascan from Pixabay

Blue Oceans Beneath The Duct Tape

Of all the different ways to think about a business venture, my personal favorite comes from the instant classic Blue Ocean Strategy. As a framework, it offers the richest set of tools for helping us mix empathy, creativity, and crunchy industry analysis into a viable business venture. Mostly by helping us search for that eponymous “blue ocean” that is free from the bloody, crowded competition of mature “red ocean” realms.

The idea paints a vivid picture. Consider all the red oceans of the current day. In fact, think of the one represented by the device you’re probably holding in your hand this very instant: the smartphone. How many companies are making these phones? How many models are offered at your carrier’s local store? We have these phones everywhere. At just about every price point.

It wasn’t always this way, of course. When Steve Jobs unveiled the iPhone in 2007, he was a modern day Christopher Columbus showing us the New World. I can’t think of a more immediate, tangible moment that a blue ocean was created. No one had anything like it. We didn’t even know it was possible.

Twelve years later, that particular body of water couldn’t be more red. Smartphones are turning into commodities, sales are declining, and products are all converging into the same forms and features. Pricing is shifting with new mass market strategies and the innovation of this current paradigm has been wrung dry.

Why is that? What has happened?

Bad Attention

Well, here’s one reason: the vast majority of smartphone manufacturers pay, at most, half of their attention to their customers’ needs. Every time I read their promotions, see their designs, and learn about the features, I find manufacturers delivering the same information and same pitch. It’s as if the competing products are trying their best to only differentiate on the smallest, most granular level. This screen has less of a notch than that other one! It reminds me of a line from the book:

… the more [companies] focus on coping with the competition, and striving to match and beat their advantages, the more they ironically tend to look like the competition.

It’s a self-fulfilling prophecy of any fast-following strategy. In such instances, the business waits for someone else to create the new market. They enter it at a later date, once the rules have been established, and start jockeying for space and “reddening” the waters by playing the game someone else developed.

By the way, when I mention “rules” here, I specifically refer to the rules our culture has established. We, collectively, have decided what makes a “proper” smartphone. These are the expectations of the consumer base. After all, would anyone accept a smartphone that didn’t have a touch screen? Or wifi? Or didn’t fit in either the Android or iOS world? Why is that? Because of government regulation? Of course not. It’s something even more powerful.

When these rules take shape and the industry matures, the main players that remain (all those fast followers) might think they have a steady situation. The ocean may be red here but at least the water is calm. In the case of smartphones, it means that, by 2015, Samsung, Apple, LG, and Motorola had found their place and sailed smoothly.

But the calm never lasts.

Tech is great because disruption comes in faster cycles. And in the smartphone world, these red ocean players have found themselves further disrupted with more entrants. New players have sailed into the red ocean to copy all the well-established practices, streamline the operations to greater efficiency, accept an even lower profit margin, drive prices into the ground, force others to do the same, and thus destroy the fleeting stability that the early entrants had created.

This continues in regular cycles until the veterans start to talk about how smartphones just “aren’t a good business anymore.”

The copycat behavior and fast-follower effects remind me of a classic line I read in some forgotten book:

Don’t look at the wall or you’ll run right into it.

Which retirates the line from Kim and Mauborgne’s book. The longer you stare at your competition, worrying over their actions, the more you’ll do precisely what they do instead of what we (the customers) want. Focus, instead, on the customer, or the missing value that everyone desires, and you’ll be able to pivot to new ideas, new innovations, bluer oceans. But don’t take my word for it. Consider this from Bezos when he explains Amazon’s success.

So again, I don’t think many smartphone manufacturers really pay attention to their customers. They pay as much attention, at least, to their competitors. Hoping to do at least as good as them. It’s a cardinal flaw that gets to the central warning of blue ocean strategy.  

Competition should not occupy the center of strategic thinking.

That won’t happen if you continuously measure yourself against the competition.

That won’t happen if you think of competing against the competition instead of for the customer.

This is easier said than done, of course. But there’s a great model that can help.

Don’t Overcomplicate It

The iPhone is a beautiful yet terrible example of a blue ocean. It is beautiful because it perfectly illustrates the basic elements of the strategic concept in ways that everyone can understand. It is terrible because it leads the uninitiated to think that the 2007 iPhone is the sole standard for what it takes to have a blue ocean.

This couldn’t be farther from the truth.

You don’t have to create a groundbreaking digital device that changes humanity in order to claim a blue ocean.

You don’t have to land a moonshot.

You don’t need digital technology or even design a new experience.

You don’t even have to create something that is truly new.

Instead, to find a blue ocean, find the place of simple, low-end, improvised innovation. Observe the people around you, everywhere you go, and find that instance of an inconvenience that is accepted for no good reason other than they (the people) feel they have no choice. Or better yet, look for the instances where someone decides to overcome the inconvenience with workable-yet-imperfect solutions.

In other words, look for the duct tape.

The Duct Tape Law of Innovation

We know that duct tape helps us solve many problems. From patching a pair of jeans to waterproofing, it is the #1 improv prop of every craft. Metaphorically, it is also the ingenious way people combine unlikely components to create something that makes life easier.

Consider the inspiration for wheeled luggage—an idea that was decades in the making. As featured in a NYT article, the story begins when the patent-holding inventor Bernard D. Sadow, spotted a duct-tape solution we can all appreciate. The article describes it as such:

First, the background. Mr. Sadow, now 85, had his eureka moment in 1970 as he lugged two heavy suitcases through an airport while returning from a family vacation in Aruba. Waiting at customs, he said, he observed a worker effortlessly rolling a heavy machine on a wheeled skid.

“I said to my wife, ‘You know, that’s what we need for luggage,’ ” Mr. Sadow recalled. When he got back to work, he took casters off a wardrobe trunk and mounted them on a big travel suitcase. “I put a strap on the front and pulled it, and it worked,” he said.

Thus a blue ocean was born. The only trouble is that Sadow had a hard time convincing others of this ocean’s existence. At the time, air travel was still largely the province of the upper-middle class or business travelers. As evidenced in the story above, these travelers would often pay people to carry their luggage. Or many men would willfully lug their suitcases around as a display of strength. This is true. In fact, the classic customer (male business travelers) balked at some of the early versions of wheeled luggage for this very reason of cultural machismo.

It took time for this opportunity to evolve.

But that isn’t the only absurd cultural baggage (pun intended) that surrounds this story. Mr. Sadow was not a luggage expert. He wasn’t a veteran of that industry. Thus, he could see what the industry professionals couldn’t. He could see the inconvenience of a non-mobile suitcase as a bug where luggage designers saw it as a feature.

Why is that? Why were luggage designers so blind? Because they were staring at the red ocean. Travel was luxury and luxury was other people carrying bags for you. Weight wasn’t a problem for the traveler. Ease of use wasn’t a problem for the traveler. Therefore it wasn’t a problem for the early luggage designers. Other designers entered, copying what predecessors had made, and eventually all that’s left is the tunnel vision of staring at everyone else’s designs instead of watching the poor worker in Aruba who jerry-rigged a solution from spare parts.

The point? Duct tape solutions open up new realms, vast blue oceans, and we often have to remember that the ocean exists because no one in the industry could see it. Because the culture, the “best practice,” has them looking elsewhere.  

Popsocket is another fine example of a blue ocean brought about by duct tape solutions.

The creator’s fantastic story of improvisation is briefly cited below. In this case, the duct tape is buttons and glue attached to a device but the idea remains.  

In 2010, our founder was looking for a way to stop his earbud cord from getting tangled, and he achieved this by gluing two buttons to the back of his phone and wrapping the earbud cord around the buttons. As ugly as the buttons were, they worked. In the course of improving on the idea, he developed about 60 different prototypes, making the buttons expand and collapse via an accordion mechanism, so that they could function as both a stand and a grip.

Everyday Blue Oceans

Before I read the book, my familiarity with Blue Ocean Strategy was as shallow as my familiarity with innovation. In both cases, I just attributed the concepts to tech, billion-dollar companies, globe-spanning industries, and revolutionary change. Every other ocean was red.

The truth couldn’t be more simple, more obvious. The blue oceans are all around us.

Somewhere this week, you will spot a duct tape solution. Someone will have a strange or clever way of dealing with a common problem. It could be anything. The solution isn’t the primary concern here. Instead, it’s the problem that matters. The solution shows that someone doesn’t want to deal with that particular problem anymore (e.g., wheel-less luggage, tangled earbuds).

This solution is a statement. It’s someone saying I don’t want it to be this way.

Hence the duct tape solution. That gives you a glimpse at new, blue waters. And eventually a better solution, one you can share with everyone, one that says It doesn’t have to be this way.

Low-end improvised solutions are business opportunities in the making. No competition required.

The Best Book for Understanding Persuasion


By Robert Cialdini

Rating: 10/10

Best Line #1: We all fool ourselves from time to time in order to keep our thoughts and beliefs consistent with what we have already done or decided.

Best Line #2: Very often in making a decision about someone or something, we don’t use all the relevant available information; we use, instead, only a single, highly representative piece of the total. And an isolated piece of information, even though it normally counsels us correctly, can lead us to clearly stupid mistakes—mistakes that, when exploited by clever others, leave us looking silly or worse.

Daily Persuasion

To some degree, every decision we make is the result of persuasion. Even the decisions that seem to be purely internal, with no outside factors. Those carry a degree of inherent persuasion, too. For example, no one asked me to write this review today but I feel the need because of the powerful factors of influence highlighted in Cialdini’s book. Specifically, factors such as consistency and social proof.

Why consistency? Because I’ve been doing this every Friday for nearly a year now.

Why social proof? Because the people I admire do this and recommended that I do it, too.

Neither the decision nor the behavior emerged from a vacuum. There was no hermetically-sealed environment where I operated purely on my own internal intuitions. So for those who have claimed that I’m an original, one-of-a-kind person for doing this, I appreciate the sentiment just as surely as reality rejects it.

So external influence is a regular occurrence—so common that it’s hard to recognize. Much of that influence can be deliberately engineered thanks to the work of Cialdini and others who have explored this realm. As a result, I once felt compelled to to write the headline We Are Being Manipulated. Which sounds a bit paranoid on the surface (the article isn’t, itself, paranoid). But the headline “We Are Being Influenced” should feel just as discomforting.  

Because there are many ways that persuasion and influence can truly be engineered. For good or for bad. Cialdini’s book showcases phenomenal ways in which these principles work to help people conserve energy, stop bad behaviors, and achieve some clear level of social progress. Just like Thaler and Sunstein’s book Nudge (review here), these positive examples carry a whiff of what the Nudge authors call libertarian paternalism that feels healthy.

But it’s still manipulative. It still pulls at the powerful levers that Cialdini highlights. Many say the ends justify the means. Largely because we’re nudged, manipulated, influenced, and persuaded regardless. Such is the core thesis of Thaler and Sunstein’s work. I think I agree with them.

Cialdini doesn’t go that far in this book. His intent is to make you aware of these levers, these tactics, so that you can decide the good and bad for yourself. I like that. This week’s work has been an effort to introduce these briefly, speak warmly of Cialdini’s ideas, and encourage you to read the book yourself. Here are four articles to help:

Monday: How Scarcity Persuades

Tuesday: Better Ways To Spark Reciprocation

Wednesday: How Consistency Shapes Our Identity

Thursday: Let’s Give Each Other Halos

I’ll highlight a few more concepts from the book. As I do, please note that anyone hesitating to buy this book should at least visit Cialdini’s outstanding website for more information. Also, his later book is just as worthwhile: Pre-suasion. It’s an impressive body of work. Professor Cialdini has really helped us all.


Forgive me for repeating myself but everyone should teach. Good, ethical teachers provide us with a positive source of social proof. When they teach us something worthwhile, not only does it ingrain the ideas in our minds, it further strengthens the ideas in theirs. The benefit leads to secondary effects that help everyone.

The teaching can happen anywhere. In classrooms, through services like this, with kids, colleagues, on and on. The point, I think, is that it is a healthy activity for all parties. And most important, it is an activity that we’ll engage in regardless.

Gossip is just another form of information that we share with others. To educate them on how so-and-so is a such-and-such. It might not feel like it, but we’re teaching people something in those moments.  

And that watercooler talk around the football game? Same thing. We sports fans convey the information (what happened), inform others of our views (why it happened), and attempt to persuade others we’re right.

Because teaching is an act of persuasion itself, these conversations are our way of already being teachers in a certain manner. So if we broadened those conversations, talked to one another about topics like the ones covered here, we can still keep the same pattern of discourse. Only, we’ll see it lead to more edifying results.

It reminds me of a line from Cialdini about self-persuasion:

Convince and ye shall be convinced!

The question then becomes: what do you want to convince others? The choice has deep ramifications that inform your entire information diet. Because whatever you try to convey, as a teacher of some kind, is what will influence your own thinking and your own information diet. That flow of information modifies your entire way of thinking.

Social Proof, Local Maximum

I mentioned before that social proof has a big impact on me. I do things similar to the way that people I admire do them. I’m not alone. It harkens back to an important truth that Jim Rohn first shared almost 50 years ago now:

You are the average of the five people you spend the most time with.

This is a great way to explain social proof. But I want to clarify some of the nuance in Rohn’s idea. Notice that he articulates this idea as the people you “spend the most time with.” These days, physical proximity is no longer required. Consider all the “influencers” found on social media. Those digital projections of a live human being have a far greater impact on their audience than any teenager’s parents would care to admit. Why? Because said teenagers spends most of their time with that influencer, watching the videos or reading the content.

New media has expanded the range, increased the granularity, and boosted the power of social proof to a global scale. For many of us, it might be the most powerful force of influence we experience. Particularly when we weigh major decisions.

As Cialdini writes,  

Without question, when people are uncertain, they are more likely to use others’ actions to decide how they themselves should act.

This is perfectly healthy when those “others” provide examples that are healthy.

This is perfectly unhealthy when those “others” provide examples that are unhealthy.

What matters here is that we are often bound by a limited set of options when we face a big decision. There is a local maximum that we must understand. It is built on the examples and options that we collect from the people we spend the most time with.

So when you are a child, and you live in a household where the mother and father are both computer programmers, you will probably think that most people are computer programmers. Social proof invariably points you to that conclusion.

Later in life, when your circle expands, your understanding expands. There are many other people participating in many other walks of life. Then you take your first trip to some foreign locale and find that there are even more walks of life, more kinds of people, more kinds of careers and trades and skills, than you ever imagined. Which is great!

But ultimately, the local maximum still holds sway. Because while you’ll have more awareness of the rich variety that life offers, you’ll still fixate day-in and day-out on what your five major “influencers” propagate. I don’t think this is avoidable. I don’t think it’s a bad thing, either. So long as we’re aware and deliberately choose where we will “source” our social proof.  

But Everybody’s Doing It

There’s one more thing about social proof that I want to highlight. It has to do with the virality of ideas and, more importantly, the nudge tactics we see from companies. So let me again restate Cialdini’s great line about social proof and indecision:

Without question, when people are uncertain, they are more likely to use others’ actions to decide how they themselves should act.

Now consider what I stumbled upon with Alaska Airlines. I recently booked a flight and, towards the end, they offered their flight protection plan for a “low-low rate of X dollars.” The offer required me to check a box before proceeding—either yes or no—and I wasn’t sure what to do. I didn’t even know what flight protection really was.

I faced uncertainty.

And to help me make a decision, Alaska Airlines had a nice little counter below the offer details that read something like this:

Over 4,619 people purchased the flight protection plan in the past 24 hours.

In other words, “We at Alaska Airlines want you to know that everyone is doing it and you should, too.”

I later saw this tactic when looking at hotel rooms on Travelocity. They mentioned the following about a particular room:

740 people booked a room at this hotel in the past week.

Well then! I should do the same!

Also, Travelocity invoked the scarcity principle by offering more information about that particular room:

12 other people are looking at this room.

So I better hurry!

These companies are turning the booking experience into an auction. Social proof and scarcity are the primary levers they pull in the user experience. I imagine it’s working quite well for them. I just hope it’s working well for us, too.

Framing Effects

I’ve written about framing effects before but Cialdini really helps me reframe it in a positive light. I usually fixate on all the problems with framing, how it should be avoided, but there are supremely effective ways that framing helps. For example, one of the first blog posts I ever wrote involved the powerful reframing around feedback.

Most people don’t want to give you feedback on how you’re doing.

But these same people usually like giving you advice.

What’s the difference? Not much. So Cialdini counsels us to simple reframe things. Ask for advice rather than feedback.

Here’s another example, derived from his work in the book Pre-Suasion:  

A company was introducing a new soft drink and had representatives stationed in a mall. Their job was to stop shoppers, explain the features of the new soft drink and attempt to gain the shoppers email address in exchange for the promise of a sample. The success rate was less than 33%.

But when a Pre-Suasion question, “Are you adventurous?” was asked prior to launching into the discussion about the new soft drink, the results were astounding. First 97% of the people responded that there were in fact adventurous. They all had a better than average sense of humour as well . But what was really amazing was that once people had affirmed they were adventurous, the success rate shot up to 75%.

Consider the fact that, in this sample, 97% of people consider themselves adventurous. That is patently false but, of course, we want it to be true when someone asks us the question. That desire to appear adventurous is the frame that triggers our open-minded attitudes, making us receptive to the rest of what the company surveyors wanted to do.

The example illustrates the power of deliberate framing. Remind people of their aspirations, their desired qualities, and you can actually reframe their thinking and override their skepticism. This isn’t so much a specific principle of influence as it is a tactic that engages those principles— everything from social proof to consistency to commitment to … well … all six principles. It’s another way of helping people return to the better angels of their nature.

Of course, that same question about your adventurous attitude can also lead a salesperson to persuade you on that new red convertible. So use this technique with caution. And be aware when others don’t.


There’s a lot more to consider in the realm of persuasion. Other works that I’ve covered, from Kahneman to Godin, view these principles in different ways. Many have built larger conceptual frameworks from this base foundation. Many more will do the same.

But regardless of your chosen style or framework or view of this topic, I think Cialdini really did lay the groundwork for us. His is the ground truth and these six principles are to communication as algebra is to math—a slightly more advanced set of necessary fundamentals.
So if you ever want to persuade or influence or sell or market or convince, this is the first and best book to read. Here’s the link to Amazon.  

Let’s Give Each Other Halos

Certain experts in certain fields can make very good judgements in a very short amount of time. These judgements are often as accurate as any finding that would be rendered in a more lengthy, more thorough analysis. Delivered with confidence and certainty, such quick assessments feel like a parlor trick of sorts.

It’s the way a practiced poker player can assess an opponent’s hand by factors and cues the rest of us don’t see. Or the way a veteran doctor or psychiatrist can make a proper diagnosis in three minutes. Or a firefighter can predict the movements of a house fire.  

This ability is developed over many years of practice and exposure, combining the best of the expert’s ingrained intuitions with the countless layers of technical knowledge that comes with experience. Psychologists call it thin-slicing. Many people will remember the term from Malcolm Gladwell’s bestselling book, Blink.

Before then, this ability was also deeply studied in Gary Klein’s classic, Sources of Power. I think it’s the best book written on decision-making. Especially since it demonstrates very clear ways that great decision-making is (and isn’t) achievable.

First Impressions, Second Thoughts

The trouble with studying these abilities and techniques is it leads you to imagine yourself applying the methods to your own life. After all, it would be great to be able to “thin-slice” and make fast, accurate decisions in everything. We are naturally inclined to do this anyway, even in areas where we lack expertise.  

This is why the halo effect exists. Our minds are naturally inclined to make superficial judgements based on aesthetic qualities that we then transfer to a person’s moral character. If you see someone wearing a suit, they must be smart and successful and responsible. See someone else dressed in dirty jeans and a ripped shirt, and you’ll think something very different.

Unless, of course, you happen to dress the same way.

The point is that the halo effect obscures our full view of an individual and leads our imagination to fill-in the information gaps with whatever biases, preferences, and ideologies we possess. This is what first impressions are made of. Simple projections on past knowledge, all of which could be deeply flawed to begin with.

Some of this simply cannot be changed. And probably shouldn’t.

Some of it is also unavoidable. Consider the example of a criminal trial. Most people are readily aware of the deliberate ways defense attorneys dress their clients for success. No defendant ever enters a courtroom without looking their best, as likeable and sympathetic as possible. We know such appearances have nothing to do with a person’s guilt or innocence and still the halo effect emerges. As Robert Cialdini writes in his book Influence:

Attractive defendants were twice as likely to avoid a jail sentence in a trial as compared to unattractive defendants.

By the way, it works for plaintiffs too. And it runs deeper than appearances. It includes body language and any distinct quality we don’t ordinarily see. For example, as an American, I always view people who speak with a British accent as sophisticated and intelligent. They could wear a Bud Lite t-shirt and flip-flops and I’d still expect them to live in a castle and hold afternoon tea.

I like that sort of thing. So I blend it all together even when it doesn’t make sense.

The point is that our attitudes and inferences of people can be very nonsensical in good and bad ways. It all comes down to the things we like. When we see more of what we like, we become more open to a person and give them more opportunity to influence.

As Cialdini writes:

The halo effect is well-documented but in the context of “liking” it’s the way we like a person’s style. It can be attractive in the perfunctory aesthetic sense or it can be attractive as something exotic and novel or indicative of other traits.

Additionally, there is a pattern to the things we like. Which means that we can each, here and now, identify the groups of people who have natural influence with us. This is a loose indication of our tribal allegiances. As Cialdini writes:

We like people who are similar to us. This fact seems to hold true whether the similarity is in the area of opinions, personality traits, background, or lifestyle.

There’s nothing groundbreaking about these insights. People like what they like and like other people who like what they like. Nonetheless, this simple notion of “liking” helps me maintain a certain necessary openness that I want to champion here.

Happy With What They’re Happy With

Cialdini’s book features a story about boys in a summer camp who, after being divided into two groups, immediately fell into tribal rivalries and fierce competition. It is surprising how fast the animosity grew. As he writes:

Simply separating the boys into two residence cabins was enough to stimulate a “we vs. they” feeling between the groups. Then assigning names to the two groups accelerates the sense of rivalry. Later, a recipe for disharmony was quick and easy: just separate the participants into groups and let them sit for a while in their own juices. Then mix together the flame of continued competition (through tug-of-way, races, treasure hunts, etc) and cross-group hatred grows to a roiling boil.

Later, the experiment showed how unity and friendship was restored once the boys were given common goals and shared experiences. We see this all the time in other stories, books, and experiments. What frustrates me about each of these circumstances is the mind’s deep persistence to make those halo-effect snap judgements based on such absurd, arbitrary cues.

We think we’re experts thin-slicing a problem. We see people on the other side and just know, within seconds, all their tendencies and motivations. The stories practically write themselves. We, on this side, would be so much better if those others, on that side, were like us.  

The irony, of course, is that they are.

The Good Common Ground Ignored

They, on that other side of the fence, aisle, hallway, or railroad tracks are very much like us. In countless ways that we can already acknowledge. In fact, as Jo Cox memorably said,

We are far more united and have far more in common with each other than things that divide us.

Why don’t we acknowledge this more often?

I think it’s because we recognize the strong influence that comes from likeability. We welcome that in certain tribes and not welcome it in others. For example, republicans and democrats alike will go to a concert without worrying about political allegiances. But they’ll never go to the other party’s rallies.

That’s fine. So long as we can still somehow remember that we both like the same music.

Why can’t we remember that? Why can’t we be happy, as a collective, with what makes us collectively happy?

It’s the competition, I suppose. The competition for power or some other such thing that we think is at stake. The dismal irony of that truth is that such competitive, close-minded, rivalrous thinking means we have less ability to actually get the things we want. As Cialdini reports from his outstanding website:

In a series of negotiation studies carried out between MBA students at two well-known business schools, some groups were told, “Time is money. Get straight down to business.” In this group, around 55% were able to come to an agreement.

A second group however, was told, “Before you begin negotiating, exchange some personal information with each other. Identify a similarity you share in common then begin negotiating.” In this group, 90% of them were able to come to successful and agreeable outcomes that were typically worth 18% more to both parties.

The first group was driven by scarcity, which has disastrous effects, and rivalry (we know who they are and so let’s just get to business). They are more ineffective.

The second group was driven by the sort of curiosity and openness that is championed in Chris Voss’s fantastic book on negotiation and Stone, Patton, and Heen’s book on difficult conversations. This group found common ground. I guarantee you it wasn’t hard. Especially if they used any of the techniques the aforementioned books share.

The results speak for themselves. I bet the group became creative, more relaxed. They put halos on each others heads right from the start.

It was a deliberate use of our natural tendencies for intentional, positive effect.

Why not do that more often? I can say, firsthand, that it makes you and the other person happier. Seriously. And we all want to be happier. That’s one of the many desires we share. The more we focus on these commonalities, the better. Nevermind the moral argument for this. Just keep it simple: we’re truly happier, healthier, and probably wealthier when we find the good in others. Let’s start there more often.

How Consistency Shapes Our Identity

Logic is lovely. It allows our minds to produce a sterling line of consistent thought, weaving facts we observe into theories we infer. Without it, there would be no science of any kind, no elegant solutions to known problems, no deductive reasoning. I can’t think of a more bedrock concept in human cognition.

Of course, no one said logic must make sense. It must only be consistent. This is how you get to very logical yet very absurd syllogisms. For example, consider one of the finest logical arguments ever made in the history of cinema. I’ll set the stage a bit:

In a medieval village, a crowd brings a purported witch to the public square, calling for the person to be burned. Sir Vladimir, future knight of the round table, asks the crowd to explain why they believe this person is a witch. The reasons are somewhat thin. Sir Vladimir then helps the crowd devise a method that can objectively test their case.

They start by first defining a witch’s true composition. This leads to a non-invasive process for detecting such composition in the test subject. Using logic, the test is discovered in the dialogue below:

“V” is Sir Vladimir

“P1 – 3” are people in the crowd

“King” is the great King Arthur, Lord of the Britons

V: Tell me… what do you do with witches?

P3: Burn’em! Burn them up! (burn burn burn)

V: What do you burn apart from witches?

P1: More witches! (P2 nudge P1)


P3: Wood!

V: So, why do witches burn?

(long pause)

P2: Cuz they’re made of… wood?

V: Gooood.

(crowd congratulates P2)

V: So, how do we tell if she is made of wood?

P1: Build a bridge out of her!

V: Ahh, but can you not also make bridges out of stone?

P1: Oh yeah…

V: Does wood sink in water?

P1: No

P3: No. It floats!

P1: Let’s throw her into the bog! (yeah yeah ya!)

V: What also floats in water?

P1: Bread

P3: Apples

P2: Very small rocks

(V looks annoyed)

P1: Cider

P3: Grape gravy

P1: Cherries

P3: Mud

King: A Duck!

(all look and stare at king)

V: Exactly! So, logically…

P1(thinking): If she ways the same as a duck… she’s made of wood!

V: And therefore,

(pause & think)

P3: A witch! (P1: a witch)(P2: a witch)(all: a witch!)

For more on this beautiful exchange, please watch Monty Python and the Holy Grail.  

But that’s just one of many priceless, absurd procuts of logic. Another favorite comes from Frank Zappa in an interview conducted with a radio host on October 22, 1966. The radio host, named Joe Pyne, tried to insult Zappa at the start. Zappa’s brilliant retort put Mr. Pyne on his heels rather quickly:

Joe Pyne: I guess your long hair makes you a girl.

Frank Zappa: I guess your wooden leg (Pine was an amputee) makes you a table.

Logic at its finest!

Aagin, none of this makes sense but it’s doesn’t have to. Sensible logic is nice but consistency matters more. This is logic, after all. And it’s the logical consistency that gives these two examples a real-yet-ridiculous quality of truth. That consistency creates a very powerful force for persuasion.

Waffles and Hobgoblins

Consistency is powerful because people don’t like change. Especially change that comes from other people. They don’t like it when we are not reliably consistent and predictable in our thoughts and deeds.

Such changes spell doom to politicians. If an elected official switches their position too often (i.e., once), they’ll be labeled as flip-flopping wafflers. This is the most grave of all scarlet letters.

Meanwhile, parents, teachers, managers, and entire businesses that decide to change draw the same level of anger. And yet, everyone seems to agree with Ralph Waldo Emerson’s quip:

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.

And we applaud Bertrand Russell when he boldly offers the following:

I have been accused of a habit of changing my opinions. I am not myself in any degree ashamed of having changed my opinions.

Indeed, why should anyone be ashamed for changing their opinions? I can’t think of a greater hallmark for intelligence than the ability to change one’s mind. Especially since it turns out to be a very difficult thing to do without the social pressure.

Why is it so difficult? The problem starts with logical consistency. We occasionally take it too far and paint ourselves into figurative corners. Hold too tightly to a single value or criterion and you’ll eventually find yourself trapped. It’s Maslow’s Law of the Instrument all over again. As he once wrote:

I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.

Except, in the case of logic consistency, the reality is that you might have many other tools. But if you sold yourself as a hammer specialist, or if you posed your whole argument on a single value, you will be typecast. Society won’t allow you to use those other tools or values. You may as well not even possess them.

“What are you doing with that screwdriver? I thought you were a hammer guy? When are you going to get back to using hammers?”

Such typecasting is well understood in show business. But it runs deeper than that, of course. Any change of heart, or expansion of perspective, is deemed by others to be a violation of some prior identity. It creates dissonance. Which no one likes.

I don’t think we’re changing this dynamic any time soon. So the best thing to do is to avoid the consistency trap by devaluing the importance we place on social expectation. Particularly when it comes to our thinking. This gets us to what Robert Kegan describes as a self-authored stage of human development.

The takeaway: until you can truly detach yourself from social pressure, don’t anchor yourself to narrow positions you’ll inevitably abandon. That’s how consistency becomes a trap.

On the flip side, we can also use the consistency trap to our advantage. We can ride the wave of social expectation whenever it fits our identity, our desires, and our broader strategy for progress. All it takes is finding a direction to which we want to be held accountable.

We Need Deeper Compliments

Robert Cialdini, PhD, wrote one of the best books on the psychology of influence. In it, he provides several key principles that drive human behavior and consistency is one of the precious few that affect us all. For reasons mentioned above, this principle can lead us into difficult logical traps, painting us into corners with our “foolish consistencies.” But it can also fuel our persistence when the needed. As Cialdini writes:  

Once you’ve got a man’s self-image where you want it, he should comply naturally with a whole range of your requests that are consistent with this view of himself.

This sounds very manipulative and I suppose it is. So intent matters quite a bit here. Self-image can be constructive or destructive. If one person’s self-image is that of a fast-living, hard-drinking party animal, then their friends will invoke that self-image and say that the person simply must come with them to the bar instead of going to the library to study on a Tuesday night. The pressure to do so will be quite powerful.  

But the pressure can be constructive. If you help a person cultivate a positive self-image, you will give them a much-needed boost towards fulfilling that image. Tell a child that they are just a trouble-maker and you effectively give them more reason to make trouble. Tell a child they are responsible and kind and you give them more reasons to act that way, too.

Notice that this is about the qualities of a person. Distinct compliments on our qualities reinforce the best part of our identities. Why? Because we all want to be the best version of ourselves. So I wish we offered these kind words more often.

Far too often, we compliment more specifically by highlighting certain acts or statements. It’s easier to do and feels nice. “I like what you did there,” or “I like what you said.” Those very specific compliments are welcome, of course, but the specificity compels us to continue to do and say and do those same things again and again.

Like a dog looking for a treat, we’ll turn to that specific thought or deed over and over to get another round of applause. We’ll focus on those specific, instrumental acts and statements and abandon the logic and paradigms that got us there and can get us to other, even better ideas.

It’s like Spongebob Squarepants in the Ripped My Pants episode. He finds one joke that everyone likes and uses it over and over again. Why? Because he was praised for the joke itself, not for the comedic timing or the slapstick approach. His identity was wrapped around the joke instead of comedy itself. Poor guy.

The point? A more narrow self-image, brought on by specific praise, leads to repetitions and reinforcements that no one really wants. We are more than that. So let’s try to compliment the quality of a person in addition to the specific actions or deeds. Link the two wherever possible. This helps us reinforce the deeper parts of ourselves. “I like that thing you did because it shows how thoughtful and considerate you are.”

Consistency and Commitment

Finally, one of the most uncomfortable ways that consistency can fuel persistence is with public commitments. As Cialdini writes:

It appears that commitments are most effective when they are active, public, and effortful.

Notice the three components that are necessary to really supercharge the change effort. I think this applies in the following way:

Imagine you want to run a marathon. How can this consistency principle work in your favor?

First, by making the commitment active. Tell everyone you are going to run every day and you’ll infuse your commitment with an active quality.

Second, by making the commitment part of a public goal. Tell everyone you’re doing these daily runs as a training plan to complete a marathon someday and now the goal is public.  

Third, by acknowledging the effort it will require. Explain how hard this will be, how you need people’s support, and you’ll create that real sense of challenge that makes it all worthwhile.

And if you want to go a step further, ratchet the “effortful” component by pledging your commitment through something like Beeminder. This is such a beautiful service. It offers a platform for making specific commitments and tying a financial stake to the outcome. In this case, the outcome doesn’t have to be the marathon itself. Rather, just the commitment to train for the marathon.

The smaller commitment to train allows you to overcome the inertia, channel the consistency effect, and induce action. Because, as Cialdini writes, inducement is all we really need.

People often can become committed to a choice through an initial inducement and still become more dedicated after the inducement has been removed.

Why? Because consistency wraps itself around that effort once it has begun. Momentum sets in. Identity shifts soon after. We continue to run regularly because we were already running regularly. It’s the sunk cost fallacy working in a positive direction. Carry that forward and logic dictates that, before you know it, you’re one of those people who run so often that you’ll go complete an entire marathon.

In closing, consistency is a powerful component of influence. We do a lot of things because we’ve always done them. To selectively remain consistent at a core level, rather than specific level, is crucial. We possess certain qualities and characteristics that should never change. Those parts are true to our core. That’s why consistency matters and is so influential. That’s how this principle helps us channel positive influence.

But only when we deliberately choose those qualities and characteristics for ourselves. Leave it to others and this form of influence gets very harmful very fast.

Photo by Will Myers on Unsplash

Better Influence With Reciprocation

Altruism is defined by its central quality of selflessness, a total abdication of our usual homo economicus attitude. We find this behavior in children, animals, and even our adult selves. It is a beautiful practice that doesn’t get enough attention. In fact, I was delightfully startled to find a story of altruism in the recent news. I have two more from April. The instant I read these stories, my outlook for the day improves. It’s the rare instance where the news actually uplifts.

The fascinating thing about altruism is the viral effect it creates, sparking all manner of third-party reciprocation. This behavior takes many forms. It is the occasional “pay it forward” line at the drive-thru. It is also the gentle peer pressure of one person’s charity sparking another’s decision to give. In any case, such behavior furthers our society in ways that we seldom appreciate. It sparks gratitude, a sense of accomplishment, and a well-deserved boost in personal pride. In many cases, it strengthens the bonds of a community.   

Indeed, to give is to gain.

It is harder to receive, of course.

How Can I Repay You?

In fact, many of us have difficulty expressing any sense of gratitude for the charity we receive. We instead feel a sense of indebtedness. That is not a mistake. In fact, some researchers argue that this sense of indebtedness is our primary, natural response and always has been. The authors of this analysis start with the very true observation:

Receiving favors is a mixed blessing.

Indeed. Such favors boost our sense of worth, community, and relief whatever strain we suffer. That’s nice. But the subsequent feeling that we must repay this charity, or pay it forward, or do some great deed to “earn” the gift is powerful. That feeling has driven the bulk of social exchange for eons. I wish I knew where it began.

Has this feeling of commensurate responsibility been cultivated through our culture? I don’t know. All I know is that it is deeply rooted in our psychology and is a primary lever for decision-making.

Therefore, it is also a primary lever for influence and persuasion—one that many people and organizations use to great effect. In Robert Cialdini’s seminal work, Influence, we dive into the social and psychological underpinnings of this powerful phenomenon. He starts with the very real benefit this impulse has had on our evolution as a species:

A widely shared and strongly held feeling of future obligation made an enormous difference in human social evolution.

This feels like an obvious-yet-necessary statement to plant at the start of the exposition. For all the manipulative sales tactics, marketing campaigns, and much more that emanates from this principle, we have to remember that the ultimate idea of obligation, and reciprocation, is a healthy thing. What’s the difference between the good and bad versions of this effect?

I think it centers on altruism. Doing something good for the sake of doing something good is … well … good. The power of altruism is that it is beautiful and selfless. It does not willfully induce a sense of obligation but we recipients often feel obliged anyway.

The more self-serving version of this principles is far more calculated. Far more stealthy. There is a profit motive that should be uncovered. But no one will do that for you.

I Don’t Need Your Charity

No one likes debt. No one likes talking about it, either. Personal financial debt often feels like a very private topic, hushed away with some degree of shame. People only seem to talk about it once they’ve paid it off. Like some rite of passage, this payoff brings life-altering effects.

Favors and small gifts carry similar weight over time. To this day, I feel guilty about not buying a nice gift for certain people who bought me nice gifts ten years ago. I have kept an account in my mind. It bothers me.

This is a very adult thing to feel. It is why adults fall into a weird gift-giving arms race where generosity leads to indebtedness leads to brinkmanship leads to some outer-circle friend receiving a far too generous gift. How does that happen? Well, you have two principles of Cialdini’s book working together. The first is, of course, reciprocity. The second is contrast. Together, these lead to something incredible potent. As Cialdini writes:

In combination, the influences of reciprocity and perceptual contrast can present a fearsomely powerful force.

So people buy other people things they don’t even want. It is accelerated by contrast (They gave me X so I must give them Y) but it begins with reciprocity.

We fight against this tendency wherever possible. We say no thanks to sensible favors. We insist on getting the next tab when someone else picks it up. It is also why we turn away free flowers offered by kind-hearted monks. In 1976, the New York Times ran a story about the Hare Krishnas, categorizing them as a sect of “religious panhandlers” who instigated our sense of reciprocity with a single act of kindness.

Was that kindness just a deft attempt at stealing our time and attention? I suppose. And I suppose this is why Hare Krishnas aren’t in airports anymore. As Cialdini writes,

It is a testament to the societal value of reciprocation that we have chosen to fight the Krishnas mostly by seeking to avoid rather than to withstand the force of their gift giving.

But isn’t this gift-giving just a simple, innocent gesture? Aren’t the Hare Krishnas just trying to spread a message of kindness and, well, altruism? What sparks this strange feeling of debt?

The Right Reciprocity

I dislike free samples. Most people have a far more balanced, healthy attitude about it. Companies calculate the costs and are happy to offer the sample as a way of showing that they stand by their product. Is it free? Yes. But it ain’t charity. So the sample provider doesn’t expect you to do anything. All the same, I feel some strange sense of obligation every time I try something.

So clearly, some of us are more sensitive than others. For the more balanced individual, taking a free sample is akin to any other transparent, rational exchange. It’s more like a test than a favor. You try the new salsa, judge its quality, and decide accordingly. So samples are a great thing, ultimately, and I need to get over my inhibitions.

Other interesting examples of sparking reciprocity are found in direct marketing campaigns. One story involved the unsolicited delivery of a free iPod to each of the top 25 law firms in the country. This was back when the iPod was a highly-coveted device. It was loaded with a promotional video and a return address. The total campaign cost quite a bit per mailing but the hope and strategy was to land a nice, asymmetric gain. As the author writes:

Each mailing cost about $400, but just adding just one new law firm meant tens of thousands of dollars to our client.

It’s hard to land such business in any conventional way. So a unique, novel, highly-prized gift is the equivalent of a free flower from a Hare Krishna. Only without the inconvenience of being stopped in the airport. Or the weirdness of being propositioned in-person.

For some reason, these two examples feel like good uses of the reciprocity rule. What makes free samples and iPods feel like welcome “favors” instead of cheap tricks? To determine that, let’s first list a few of the more ham-fisted efforts to spark reciprocity:

  1. Cheap, mass-produced swag
  2. Free-yet-unwanted gifts that come with a purchase
  3. The generic company christmas card
  4. The salesman purchasing your dinner
  5. Coupons and gift cards in exchange for a thirty-minute sales pitch on timeshares
  6. Free popcorn at the car dealership

Twenty years ago, these gestures and gifts were considered quite lovely. The novelty effect made us more receptive and, frankly, distracted from the real intent. But expectations have changed, these tactics have become widespread, and nothing about these efforts feels individualized anymore.

So the difference, I think, starts with clear intent. When these giveaways and favors come from a more transparent, deliberate effort to create an exchange, the act feels more honest and we seem to be more welcoming.

Next, a bit of novelty goes a long way. Getting a greeting card on a random day that has no association with holidays, birthdays, or other events feels lovely. It is utterly lost in the shuffle if we get it at Christmas time.

Value always helps. The more time or money spent, the more appreciative the reception.

Then there is individualization. Some of my favorite gifts of all time are things that the giver would have no business buying for anyone else. They really did think of me. It’s flabbergasting.  

So what is a good effort to spark reciprocity?

A gesture that carries clear intent (we would love your business, donation, time, attention),

Offers something unique (you can tell a real story about it),

That took time and effort to create (no junk or clickbait),

And connects with the audience’s sense of identity.

I think that’s how we can use this principle to beautiful effect.

And if it ever feels weird, then just shift back to altruism. Specifically, the anonymous kind. That’s always good in a pinch.

Image by Larry White from Pixabay

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