121. The Case for Thinking Differently About San Antonio (with Rory Sutherland – Live at Geekdom)

Bob Rivard [00:00:03]:
Welcome to Big City Small Town, the weekly podcast about San Antonio and the people who make it go and grow. I'm your host, Bob Brevard. This week's episode is a special one recorded live on April 25 at the Geekdom Events Center in the Rand Building in downtown San Antonio. That's where I had the pleasure of sitting down with Rory Sutherland, vice chairman of Ogilvy UK, celebrated advertising executive author and one of the world's most original thinkers on creativity and human behavior. We explored a wide ranging conversation from what San Antonio can learn from Buc ee's bathrooms to how cities build identity and magnetism, and why some of our city's biggest challenges might call for the most unconventional solutions. Stick around through the end for a lively q and a with the audience. Rory does not disappoint. Special thanks to everyone who made this event and this episode possible.

Bob Rivard [00:00:58]:
That includes Alfie de la Garza from Sound Crane Audio, our audio engineer, Erica Rempel, our videographer, Corey Ames of Ensemble Texas, our producer, and Geekdom, our generous host, and Sound City Productions, a production company based on West Commerce Street that provided the audio equipment for the morning session. Let's jump into the conversation. Well, Rory Sutherland, welcome to San Antonio. Welcome to the Geekdom Events Center, and welcome to big city, small town. Fantastic.

Rory Sutherland [00:01:31]:
What a pleasure. Thank you very much. I've absolutely loved it here. And I've already been sent back to London with a plea to get British Airways to operate direct flights to San Antonio.

Bob Rivard [00:01:41]:
Oh, we'll take it.

Rory Sutherland [00:01:42]:
So okay. So so I I I can't I cannot promise anything, but I'll do what I can.

Bob Rivard [00:01:48]:
Well, I thought that when you talk, people listen. So is that gonna happen? We'd love to have it.

Rory Sutherland [00:01:52]:
I'll try.

Bob Rivard [00:01:52]:
We'd all come visit you more often if we could go nonstop. Let me ask my first question. What the heck are you doing in San Antonio? And, you know, let let me preface this by saying it's weird. There's a small town right outside of, San Antonio called Sutherland Springs.

Rory Sutherland [00:02:08]:
I've been there. I was there

Bob Rivard [00:02:09]:
yesterday. Same name spelling as you.

Rory Sutherland [00:02:11]:
Yeah. I I can't claim any direct kind of descent or relationship because I did actually have a look at them because one of them, one of the family died at the Alamo, a chap called William de Priest Sutherland. And I just noticed this. So I'd always been intrigued in coming here anyway. I basically will come to Texas at the drop of a hat because I love it here.

Rory Sutherland [00:02:32]:
And I I I once wrote in the

Rory Sutherland [00:02:33]:
spectator actually that what I liked about Texas was that I I my mother's side of the family, not the Scottish side, were Welsh sheep farmers. And I said that everybody in Texas reminds me of what my mother's family would have been if they'd had oil rather than sheep, effectively, which which which does actually you know, there still is this kind of agricultural, you know, vibe to the place. And it's in the incredibly friendly, incredibly collaborative, really, really charming. I so every time I've been to Texas, I've always loved it. So, the Leapers reached out, actually. I think it's fair to say.

Rory Sutherland [00:03:08]:
Where are the Leapers? There was

Rory Sutherland [00:03:09]:
there there are other fans. And, they they they said, possibly accurately, that I had a kind of fan base in San Antonio, and I should come and visit. And I'm now engaged in making a kind of documentary, about, I suppose, my approach to problem solving and just my approach to, yeah, I suppose my approach to creativity, which partly involves a whole series of filming here in and around, San Antonio and, indeed, Sutherland Springs.

Bob Rivard [00:03:38]:
Well, you're, you know, you're kind of an international brand yourself now, a one man walking brand. Are we going to, I don't know, see season one of Rory Sutherland on Netflix? Is that or will we all be been watching,

Rory Sutherland [00:03:51]:
Well, we don't know who

Rory Sutherland [00:03:52]:
the streaming platform is gonna be. Yet, do we? But, you

Bob Rivard [00:03:57]:
know I was joking. He's not.

Rory Sutherland [00:03:59]:
No. No. No. No. No. No. No. There

Rory Sutherland [00:04:01]:
There was a great Ricky Gervais joke, wasn't there, about when it I think it was at the, Golden Globes where he said, you know, you're you're all preaching, you know, you're Hollywood woke, but let's be honest. You know, if ISIS launched a streaming service, you'd call your agents. I always remember that as one of the great kind of barbs. But, I mean, funnily enough,

Rory Sutherland [00:04:23]:
I've I've

Rory Sutherland [00:04:24]:
my original love affair with the American Southwest was, almost by accident, my wife and I ended up in Santa Fe, New Mexico. Actually, the whole of New Mexico was how we discovered it first. And we absolutely fell in love with New Mexico. And from there, I've just expanded, the whole love affair with the whole of the American Southwest, really.

Bob Rivard [00:04:42]:
Well, you, you you know, you can be an honorary San Antonio, and we'd love to have you back. And you could actually go to work on a few of our problems in this town, and we love to listen.

Rory Sutherland [00:04:51]:
I think I have one tomorrow, don't I? There's a brief on garbage collection and, illegal dumping. So that's that's my first challenge. But it it's very there's partly the thing as a also as a Brit, which is I never really see the point of places like San Francisco, Boston, and New York because they're kind of like trying to be European cities. Okay? What I like is the American cities that are entirely their own thing. So you often get that. I mean, Brits like LA. I mean, you could argue that you could argue that LA is a fantastic city or that it's terrible. But what it certainly is is completely different to what we're used to at home.

Rory Sutherland [00:05:24]:
But there's also the fantastic thing, which, you know, is partly why I fell in love with the Southwest is if you grow up in a country where everything has things growing on it and you wake up somewhere and you open your hotel curtains, and there's just a cactus. Okay? Okay. Now I know for you, it's completely mundane and boring. Okay? But for us, it's really magical.

Bob Rivard [00:05:46]:
Rory, I was gonna bring up some of the city's stronger points before getting into our challenges and problems.

Rory Sutherland [00:05:51]:
Okay. Go go.

Bob Rivard [00:05:52]:
But you've gone right into garbage and litter. And, I know you were impressed with the don't mess with Texas campaign, and it and, you pointed out that maybe San Antonio could use a version of that. I don't disagree.

Rory Sutherland [00:06:05]:
There's a colleague of mine in London who's actually an anthropologist. He's American, but he's made a study of the whole campaign. And it's just a remarkable case of taking effectively by, very, very cunning use of language. Okay? You suddenly make what you might call a form of proto environmentalism, effectively, or just cleaning up the place. It was actually sponsored by the highways department director, wasn't it? And you turn it into a badge of identity. There was somebody this is wonderful for anybody who's ever worked in an advertising agency. He told the story that when they first presented it, the people on the board of transportation who had to approve the line, three of them thought it was far too rude and direct. And one of them said, can we not just change it to please don't mess with the text of, which kind of destroys the whole text and nature of the thing.

Rory Sutherland [00:06:54]:
You know? You know? You know? Excuse me. Ever so humble, but I was just wondering if you could perhaps mess a little bit less with texts. No. That's that's not the same message by any means.

Bob Rivard [00:07:06]:
Well, the, you know, you know, the power of how you manipulate words is something you really cover well in alchemy. And if you haven't read, Rory's book, which was my introduction to him and his way of thinking, it's, Alchemy, the Power of Ideas That Don't Make Sense. It's a wonderful, book. I have become a fan of your column, Wikiman, which is in The Spectator. And, we're gonna talk about a few of those columns before we get off stage today. But I I, I saw one there was one anecdote about a a I think a restaurant in London that put up a a sign for its patrons saying, don't forget to turn your cell phone back on after you leave the restaurant as they came back Different cell phone. Came in.

Rory Sutherland [00:07:46]:
Yeah. No. So what was genius about that? Because we are having exactly this debate yesterday about whether the adoption of electric vehicles in places like Texas would have been faster if the government hadn't encouraged their adoption. Because if you have those cultures, my you know, I come from one myself, if you like, which is quite an independent minded culture where if somebody tells you to do I mean, sir Martin Sorrell famously said about managing advertising agencies, it's actually extremely easy. You decide what you want to do and tell them to do the opposite. And creative people will reliably, out of an innate sense of perversity. You know, if you tell them that you want them to do this, they will look for brilliant, you know, reasons why they shouldn't, Or they will naturally try and do the opposite in some way. And so, I mean, what's so ingenious about that is it's it basically is a way of persuasion, not in other words, you change a command to what you might call the implication of a social norm.

Rory Sutherland [00:08:45]:
So what it does, it's a French restaurant supposedly in Saint Emilion, and people look at that and get, I see. So it would be a bit of a social gaffe to actually take a phone call while I'm dining in this fancy establishment. And what a helpful note is to remind us all to turn our phones back on when we're leaving the restaurant. The net effect behaviorally, of course, is people turn their phones off when going into the restaurant. If anybody's been to a restaurant where or a place where it tells you to turn off your mobile phone, your first reaction is to try and come up with a good reason why you shouldn't. Because, you know, it's sitting there with your mo I mean, I've always noticed this. We we I went into a meeting once where they said, man, I want you all to turn off your mobile phones. Immediately, seven people said, actually, my father's in hospital at

Rory Sutherland [00:09:22]:
the moment.

Rory Sutherland [00:09:22]:
Okay. Now I think two of them probably did have parents in in hospital. Okay. I think the other five were just, you know, suffering separation anxiety. And but, that that was a very interesting debate yesterday. We we drove to Sutherland Springs in an f one fifty lightning, electric pickup truck. Yeah. Which we all have to say is magnificent, even more so after we discovered sport mode, which is totally insane because you have a three ton vehicle that behaves like a go kart.

Rory Sutherland [00:09:50]:
And and part of the things we were saying is that, actually, you know, a whole load of survivalists and doomsday preppers, if you told them they could have a vehicle that could run off their own solar panels, would have bought one without the need for government encouragement. In fact, the government encouragement may be counterproductive. So I think it is very, very interesting in understanding how people effectively respond to different stimuli. I I suppose the the perfect way of putting this is that there aren't any in human behavior, there aren't any context free decisions or behaviors. That what we do, how we respond to information is always context sensitive. You know? In other words, how it's phrased. Now I have I'll tell you a lovely story about this. So I had a friend who worked for Goldman Sachs for many years and, very, very good behavioral scientist.

Rory Sutherland [00:10:36]:
He was obsessed with he's also a guy called Paul Craven, very, very good amateur magician. So he understands all these techniques of sort of, you know, misdirection and so forth. And he gave one bit of advice which said, if you ever want anybody to do something for you, if you need someone to do you a favor, k, there's a magic formulation of the phrase which will work much better than nearly all titles. And the phrase he used is this. I wonder if you can help me. He said, not I'm so so sorry to dump this crap on you, or I know you were expecting to have the weekend off, but or I need to do you a favor. The the fantastic thing is you leave it open. I wonder if you can help me suggesting that the personal status would be considerably enhanced by the answer yes.

Rory Sutherland [00:11:28]:
And I've actually used it myself, but I have to say it's a brilliant bit of advice. Unfortunately, this fantastic bit of advice was slightly poisoned by the discovery about a year later that it was exactly the phrase that Ted Bundy used to pick up his victims. Okay? So he would the the has anybody come across the comedian, Andrew Shultz?

Bob Rivard [00:11:50]:
Right.

Rory Sutherland [00:11:50]:
Yeah. So he does an extraordinary routine on how on earth did Ted Bundy how much have so much success with the opposite sex while driving a tan Volkswagen Beetle. Okay.

Rory Sutherland [00:12:00]:
I

Rory Sutherland [00:12:00]:
mean, it's not suitable for family viewing, but it is it is an extraordinary few moments of comedy. And, apparently, he pretend to have broken down and asked people for help. But it's very interesting because what's so interesting is your emotional response to that sentence. I wonder if you can help me, which is still implicitly leaving me with the option to say no. Okay? Is somehow much more powerful than so many other alternatives. And yet when we're saying these phrases, we're not really that conscious of the different emotional effect we're engendering. Really fascinating.

Bob Rivard [00:12:33]:
Well, if there's one thing I took out of the book, it's to not assume that people think logically. So

Rory Sutherland [00:12:39]:
if if it was up

Bob Rivard [00:12:40]:
to me, Rory, I would say to this audience, I noticed most of you don't subscribe to my Monday Musings newsletter. And I really think you should because I work hard on that. Yeah. But I'm looking out at people that I think would benefit from my newsletter. You're looking out and saying, Bob, these are all irrational people. I haven't even met them, but prom I promise you they're irrational, and you're not approaching it right. So I think you're the behavioral scientist, and I'm the journalist. What am I doing wrong?

Rory Sutherland [00:13:11]:
It's very interesting in the sense that, this is quite important because, actually, you know, ultimately well, I think I think there are I think there are a lot of problems here. One of which is I've got a vague theory that if you look at 90% of really successful business startups, okay, either through instinct or or possibly just through good fortune or good timing, they stumbled on something psychologically important. Sometimes intentionally, as I said, sometimes without even realizing it. And, you know, the example I always give is I'm sorry to people who've had it before. The Uber map, I think, is a piece of psychological genius because it doesn't a logical engineer would say, how can we reduce the length of time people have to wait before their cab arrives? The psychological solution is to say, how can we make the experience of waiting less painful? And once you've got a silly little picture of a car, which does admittedly rotate occasionally in a rather off putting way. But once you got a picture of a car and you can tell yourself a story about where it is and when it's going to arrive, the quality of your waiting time is much, much better than if you're in a state of uncertainty.

Bob Rivard [00:14:20]:
Even if the car is not really where you think

Rory Sutherland [00:14:22]:
it is.

Rory Sutherland [00:14:22]:
Well, there is there is a school of

Rory Sutherland [00:14:24]:
thought certainly with Domino's Pizza that believes that actually a large part of that delivery sort of updates is kind of effectively conception. Now if you're totally amoral, you'd say, who cares? Because the people are chilled. Because what you're actually saying to them is, don't worry. We haven't forgotten you. So, you know, I I wouldn't I wouldn't support that level of dishonesty, by the way. I think as far as possible, you should tell people the truth. But there is a point that when you give people regular updates, what you're saying is, you know, don't worry. We've got this.

Rory Sutherland [00:14:55]:
And, you know, also, I suppose, you know I mean, I said this to an airline, British Airways. I said, look. There's a huge psychological difference between having a departure board where your flight just says delayed and delayed forty seven minutes. Okay? You know, delayed, first of all, means you cannot relax because you've gotta continually look at the screen. You can't go off and get your haircut or go, you know, go and get an elaborate meal. Okay? Because you you have no idea whether the delay is ten minutes or two hours. So part of that is practical, but it's also just your brain, I think, has evolved to always imagine the worst case scenario. And you start then to imagine that the flight might be canceled.

Rory Sutherland [00:15:34]:
Whereas delayed forty seven minutes, you basically go fine. And what I notice is that most, you know, airlines obsessively optimize objective measures like punctuality. But actually, what they should be optimizing for to a degree I mean, you can't be totally chaotic if you're running an airline. But what they should optimize for is effectively mental well-being. And so I I take this into a wider discussion in areas like transport where an awful lot of investment is spent investing in things like speed, whereas actually improving the experience, in some shape or form, improving the now the problem you have is that most decisions are taken by people like economists and engineers who always leap to quantification. You know? And with economists, it's the quantification of money. Okay? With engineers, it's the quantification of some SI unit like speed or acceleration or time. And the human perception of things doesn't correlate exactly or, indeed, sometimes not at all, with the things that those people like to measure.

Rory Sutherland [00:16:41]:
And so, you know, I mean, you can, for example, hugely I mean, an example would be and we were talking about this this morning. You know, if you built high speed rail between San Antonio and Austin, we'd probably be pretty sensible.

Bob Rivard [00:16:52]:
Yes, please.

Rory Sutherland [00:16:53]:
Okay. Okay. But, I mean, there's an interesting we're we're having this discussion, which is how fast does it need to be? Now engineers might say, okay. We've got to compete with the car. Okay? And I would say, well, actually, if you put big tables on the train and there's really good Wi Fi, effectively, anybody who you've you've added a a a two useful hours to their day because they're now sitting and working rather than sitting in a car. Actually, within I'm not saying you can go at 10 miles an hour. I did try and do that journey once, by the way. I discovered there's an Amtrak service.

Rory Sutherland [00:17:26]:
Is that right? Is that right? Yeah. Each direction. And it takes something like six hours

Bob Rivard [00:17:30]:
On a good day.

Rory Sutherland [00:17:31]:
And it leaves at, like, 10:00. I mean, it's a completely bizarre journey. But I didn't suppose many people take it. I think it's fair to say, because you could probably get there on one of those electric scooters in about the same at about the same time. But but but the the interesting question will be the engineers would obsess about the speed of the train, and you actually go, look. Okay. You know, you don't want the train to be not ludicrously slow. It'd be pretty good if it's not that expensive to make it go at, let's say, 80 or 90 miles an hour.

Rory Sutherland [00:17:58]:
But, actually, above that, you're engaging in a whole lot of cost for not much human benefit because, I mean, actually, it gets more interesting than that because I don't know if anybody's ever been a regular rail commuter, but some people actually complain that their commute is too short. And there's a weird bit of evidence. I've got a friend who's a transport economist, And he tends to find that for various reasons, people tend to live slightly further away from work than strictly speaking makes sense. And the two theories around that is one, you just like to create mental distance between where you live and where you work. And the other theory is that actually, that journeys of about forty minutes can be quite enjoyable where, you know, you can get into a book or you can watch a film on Netflix or whatever. Whereas twenty minute journeys are actually slightly irritating. Because the ratio of what you might argue about a very short journey is the ratio of dicking around to actually sitting down and moving becomes less and less attractive. You know you know what I mean? And that that that's the problem with very short flights.

Rory Sutherland [00:18:56]:
A very short flight from a very big airport is the most annoying experience because you basically spent sort of an hour and a half on the ground ticking around, and then there's sort of twenty minutes of travel. And so so, so, you know, these things once you actually look at what we're trying to do, which presumably is either to affect human behavior or their emotional state in some way, if you optimize for that, the rules are very different for if you optimize for engineering measures. But the thing is we don't have numbers for human emotions. You know, if we if we actually you know, I've often wondered what that would look like. You know, in America, you do something which I love, which I think is brilliant, which is you have the temperature and you have the feels like temperature. Now that's actually a brilliant distinction when you think about it. Okay? Because it doesn't really matter to me how actually hot it is. Okay? I mean, I'm not planning to, like, cook on the sidewalk or something.

Rory Sutherland [00:19:50]:
Right? The actual temperature doesn't matter. The question is, what do I need to wear? How hot is it gonna feel? And I think it takes account of humidity and breeze, doesn't it? So if you have a reasonable breeze and it's not very humid, the fields like temperature will be a lot lower than the actual ambient temperature.

Bob Rivard [00:20:05]:
Well, while you're here, Rory, I'm determined to get you to help us fix our city. So Go on. We were talking off camera about There's

Rory Sutherland [00:20:11]:
not much you need to do. You've already got great food and, you know, I mean, but by the way, I mean, actually, I always noticed this that cities that have this big inferiority complex actually are really nice places. Chicago. Have you ever been to Chicago? The inferiority complex there versus Chicago, okay, is just absolutely pathological. You know? For sure. Everything that or versus Chicago versus New York is absolutely pathological. And you go, but, architecturally, you crap on New York. What are you worried about? You know?

Bob Rivard [00:20:41]:
Well, here in San Antonio Yeah. We have a thing particularly about Austin up the road, but also Dallas and Houston, which is why we're a big city, small town. Yeah. If you listen to the mayors and other political figures, they'll refer to San Antonio as the seventh largest city in The United States, which fools nobody. Because of a census tract, that's true. But we're really about the twenty fourth or twenty fifth city size city. But instead of

Rory Sutherland [00:21:05]:
accentuating it metropolitan area versus the Yeah. Exactly. Because there's a weird thing you can win a lot of pub bets on, which is the largest city in Florida is Saint Petersburg or something. Is is that right?

Bob Rivard [00:21:15]:
It could be.

Rory Sutherland [00:21:15]:
It could be.

Rory Sutherland [00:21:16]:
Because their city limits are defined, like, I don't know, you know, astronomically or something. I can't remember. Yeah. So so in other words, the whole measures are a bit wonky. So Dallas is actually smaller than San Antonio Tech.

Bob Rivard [00:21:26]:
Technically. Inside the city limits. Yeah. Yeah. But it has four or 5,000,000 people, and we're half that size at best. Got it. So how do we tell people to stop calling us the seventh largest city and to find out what our true attributes are and assign those to people's identity outside of the city to what San Antonio really is.

Rory Sutherland [00:21:45]:
I mean, one of the things about cities is that the success of play I mean, where this is really magnified as a problem is what you might call in a globalized interconnected world. You get more of these winner takes all effects. Okay? And, actually, air travel is, in some respect so I wrote a piece on the spectator because I know because you read it, saying how great the car was as an invention. And effectively, it's sort of centripetal. The glorious thing about the car is effectively it it it disperses people and wealth rather than concentrating them. Because the network is fundamentally the road network is fundamentally less like a spider's web than you know, the the end the end network is terrible. The so what we've done when we invented air travel was we created this sort of disproportionate winner takes all effect for places that have happen to be hubs and concentrated more and more activity into into fewer and fewer spaces. And so you always get this phenomenon.

Rory Sutherland [00:22:57]:
I mean, I grew up in Wales. And what you get is what you might call the Cardiff Newport. And I I it's meaningless to the audience. I apologize for this. But you tend to have a big city and a slightly smaller city. And the first always seems to grow at the expense of the second. And this now in tourism, it's a catastrophic problem. Because what you're getting is the hideous overconcentration of tourist visitors in fewer and fewer places.

Rory Sutherland [00:23:25]:
And and and the extreme case, you if you go to the Louvre in Paris, Ninety Percent of the visitors are trying to see the Mona Lisa.

Rory Sutherland [00:23:32]:
Right.

Rory Sutherland [00:23:32]:
And yet, if you go back historically, the Mona Lisa is actually famous because of you guys. Do you know this? So it it was considered a very significant painting because, hell, it's by Leonardo. Okay? But sometime in the beginning of the last century, I think in about 1910, it was stolen. And journalists wanted to make a big story because they it was a quiet news day about the theft of the Mona Lisa. So they I know.

Rory Sutherland [00:23:56]:
We I don't know

Bob Rivard [00:23:56]:
what he's talking about. Okay.

Rory Sutherland [00:23:57]:
So I'm gonna blame okay. So they thought a bit of a quiet news day. They they, you know, citizen Keynes' phrase, make the headline big enough. I'll make the story big enough. So they basically decided for the purpose of newsworthiness that this was the greatest painting in the world because it made a much bigger story to say, you know you know, rather than Italian table mat stolen, which wouldn't have been very interesting, world's greatest painting stolen. And they eventually, of course, that that story would have gone nowhere had they not recovered the painting because everybody would have forgotten about it. But when they recovered the painting, it was now declared really by journalists as the world's greatest painting. So so the same thing happens in tourism, which is sometimes quite arbitrary things, will just create a kind of tipping point.

Rory Sutherland [00:24:39]:
And then this winner takes all, disproportion takes over. And I was gonna write a tourist book, fun enough, which San Antonio would definitely feature, which is basically, how to visit the third most obvious destination in every place. Because I I think they've come into a point where the third most obvious place to go is often more interesting than the most obvious place because the sheer number of tourists has made the most obvious place no longer resemble what it was when it was first appealing to go to. So, by the way, anybody who goes to France, particularly if you're Texan, go to Bordeaux for a few days. Okay. You know, it's it isn't it it's like a miniature Paris with the additional advantage that they get drunk in the evenings for some weird reason. Okay. So as a Texan, you might feel much more at home, to be absolutely honest.

Rory Sutherland [00:25:27]:
Okay. But

Rory Sutherland [00:25:28]:
So you do know a little bit about us. Exactly.

Rory Sutherland [00:25:32]:
Yeah. But there but there is

Rory Sutherland [00:25:33]:
the I mean, there is this

Rory Sutherland [00:25:35]:
I mean, I see this all the time. And, actually, you know, one of the interesting things about the car is nobody ever talks about it because it's fashionable to demonize the car. And every single discussion of transport has to say, you know, of course, with the need for people to trans, to to transfer to more sustainable forms of mass transit. Okay. But you are concentrating people with mass transit, whereas with the car, you're actually fundamentally so what, you know, what you can do, if you think about I'm a bit of a any of Georgists here? There's always one there sitting at nobody? So this is the greatest you okay. This is one of the greatest Americans that most people haven't heard of, the guy called Henry George in the nineteenth century who believed effectively, he had a school of economics, which was, cap free market capitalism with respect to everything except land. And his view that you should fund all public services through a land value tax. If you improved your land, the the gains to value were yours to keep.

Rory Sutherland [00:26:33]:
But the the in the innate value of the land you owned was what you were taxed on. And the argument is that when you use land, you're depriving someone else of it. Now if you concentrate everybody into one station in San Antonio, if you build your rail thing, what will happen is people will start businesses there because there'll be a lot of people coming off the train. The gains won't go to the people running the cafe. They'll go to whoever happened to own the land around the station. And that's called rent seeking in economics, and it's really a form of enrichment without actually effort or benefits to anybody else. And the weird thing about rent seeking is all economists agree that it's a really bad thing, but no economist ever proposes that something be done about it. And so there is what was magical about the car was it meant that a huge number of people who wanted to start businesses could escape what you might call expensive real estate.

Rory Sutherland [00:27:25]:
And if you're good enough, you could start a cafe in the middle of nowhere and people would drive to you. And I think that was hugely economically important, and yet nobody ever talks about this. The fact that when you concentrate people in places and when you have a hub and spoke transport so one thing I would propose if you do do rail between here and, say, Austin, is one good thing you could do is actually make the trains train line penetrate both towns. So rather than going from the middle of one to the middle of the other, actually start the opposite side, create a bit of extra station, you know, the far side of one city and then travel on to the far side of the other. So you're creating not only concentration in the the terminus, but you're creating extra land value somewhere where which creates opportunity for people fundamentally.

Bob Rivard [00:28:12]:
Your genius, Rory, is seeing things differently than the rest of us. So there's a lot of people in this audience that aspire to start their own businesses. A lot of people are skilled in, you know, the use of technology to solve problems. I I wonder if you would talk a little bit about the role of human nature in marketing that maybe people in that field aren't thinking very much about. And I'm I'm thinking of the example in your, in your book about why would anybody try to compete with Coca Cola. Yep. Will you tell that story about the product that's out there and

Rory Sutherland [00:28:44]:
I'm gonna go back with a principle, which I think everybody can steal from. Now I won't guarantee complete success in every single instance, but it strikes me as a now I've I've sort of stolen this idea. Has anybody read read Will Guidara's book, unreasonable hospitality? Gentleman at the back. Yeah. There was a story in that that fascinated me because it's the kind of thing that I would probably do. Okay? So he's running eleven Madison Park, which is the fiftieth best restaurant in the world according to the San Pellegrino guide. And he and between 2011 and 2017 or '18, he gets into number one. And what he did early on, sometime back in 2011, is he takes a bunch of his team to the best restaurant in the world, which happened to be a three star Michelin restaurant also in New York, I think.

Rory Sutherland [00:29:31]:
Okay. And of course, as you might expect, everything's brilliant. And he asked everybody, okay. They're all writing down, oh, good. We could copy that. And, you you know, they fold the napkins into a swan. We need to do I'm I'm making this shit up. Okay? But, you know, what whatever it is they do, you know, they go, oh, let's copy that.

Rory Sutherland [00:29:51]:
Oh, isn't that good? And And at the end of it, they've all got a whole list of things they really like. And he's not interested. He goes, what I want to know is, what about this experience, amazing as it may have been, was slightly disappointing? Okay? And they came up with two things. One of which was the coffee was just kind of okay. You know? Nothing wrong with it, but there's nothing special. And, of course, because he'd taken, I think, some of the kitchen stuff along, quite a lot of them are beer drinkers, not wine drinkers. I I think that's only right and proper, by the way. But, anyway, I'll I'll I'll I'll part that.

Rory Sutherland [00:30:24]:
And he they said the beer experience if you're a beer drinker, you're treated like a second class citizen compared to the people who are drinking wine. So immediately goes back to his restaurant. He points one guy as the beer sommelier. Okay? There's a guy who's obsessed with craft brewing. He says, you're now the beer sommelier. And there's another guy who's obsessed with, like, single origin, you know, dark roast, whatever it is. And he appoints him a coffee sommelier. He said, okay, your job is to make that those two experiences just freakishly good.

Rory Sutherland [00:30:50]:
Now, if you think about it, most people we were talking what's the chain of gas stations where the toilets are amazing? Buc ee. Buc ee's. Okay? Now, I call it I call this exercise reverse benchmarking. What most people do and what McKinsey do is they go, let's look at your competitors and make you a bit more like them. And what reverse benchmarking does is say, okay. Let's take our competitors' weak spot. Do that brilliantly and really, really now it it what you're doing there, I think, is optimizing for attention. You're you're a journalist.

Rory Sutherland [00:31:22]:
Right? The famous thing is there's dog bites man, not a story. Man bites dog, that's a story. Okay? Right? I mean, that's I think you're all taught that day one, aren't you?

Bob Rivard [00:31:32]:
Yeah. I'm taking a beating up here.

Rory Sutherland [00:31:34]:
No. No. No. No.

Rory Sutherland [00:31:35]:
No. No. No. No. No. No. No. No.

Rory Sutherland [00:31:35]:
No. No. No. No. No. No. No. No.

Rory Sutherland [00:31:35]:
No. No. No. No. No. No. No. No.

Rory Sutherland [00:31:35]:
No. No. No. No. No. No. No. No.

Rory Sutherland [00:31:35]:
No. No.

Rory Sutherland [00:31:35]:
No. No. No. No I call this optimizing potential there. Okay. A lot of people won't drink beer when they go to 11 Madison Park. You know, there are people who don't drink coffee. But if you're a beer drinker and you're expecting to go, yeah, yeah, we got Sam Adams in bottles and we got this on draft.

Rory Sutherland [00:31:55]:
And the guy comes along and says, well, actually, we've got these 15 craft beers. This citric IPA goes really well with fish. And the beer guy starts talking about food pairings. You're gonna go, this is the best restaurant I've ever been to in my life. Okay? It's just fantastic. And I think, you know, I think there's something brilliant there, which is if you now look at a lot of successful businesses, I think intentionally or accidentally, they've emerged from reverse benchmark. And the classic case is what there are a lot of things that stop people reverse benchmarking. One, they want to impress their peer group.

Rory Sutherland [00:32:29]:
So if you look at the whole tech world, it's all about and so the whole tech world was all about geeky people trying to impress other people with things like, you know, if you're old enough to remember, like, RAM processing power, clock speed. Okay? They had all these geeky engineering metrics. What they'd failed to notice in the PC world until Steve Jobs came along was that a computer looked like a particularly ugly bit of office equipment. So that if you put it anywhere in your house, whatever room you put a PC in, might as well be an off I mean, you could just put us go the whole hog and put a filing cabinet and a photocopier. Right? Because you destroyed any room by putting a computer in it aesthetically. And so Steve Jobs comes along and comes out with mildly inferior, technology, but hits it out of the park in the thing that the competition were completely ignoring. Buc ee's the the the gas station. Okay? What's the one thing that's famously bad about gas stations? The toilets.

Rory Sutherland [00:33:28]:
So what you do is you don't just say, we'll make sure our toilets are clean. You go basically insane. I've got some friends who run a chain of men's hairdressers in The UK. And when they open up a new hairdressing salon, they spend about $50,000 on the toilets. Okay? And everybody goes, well, look, most people don't even use the toilets. And they go, I know. That's the problem. And I suppose you can serve them loads of diuretic drinks to encourage the child to see it.

Rory Sutherland [00:33:52]:
Here's your second free Grande coffee. Okay? But what they said is the people who go in, you've all had this experience. You're in quite a nice looking hairdressing place or a barber's, and then you ask to use the restrooms, and it's kind of like, you know, you you is it has anybody been to a five star hotel and you accidentally go through a door that says star phone me and everything's total shit? Okay. It's it's like the magic toll booth in reverse, isn't it? You're in this hotel, and everything's five star. Oh, please step this way. And you accidentally go to the room that says staff only, and it looks like some sort of dystopian hell house. And so what often happens is you go to the hairdresser, you go to the loo, and they have to move like a mop and bucket out of your way. And in this thing, you go in and it's got a marble and glass and fresh flowers.

Rory Sutherland [00:34:39]:
And I think that's optimizing for attention. And I think I think it as a business strategy, what I call reverse benchmarking, which is spend a lot of time looking for what nobody else cares about and then do it amazingly well. What I think is quite weird is it's often quite cheap to do, I

Bob Rivard [00:34:56]:
think, genuinely. Well, how did somebody do that with Coca Cola?

Rory Sutherland [00:35:00]:
Well, Red Bull was literally a case where, this is the fascinating you've probably read this if you read my book. But it always fascinated me because, objectively, anybody who wanted to compete with Coke would say, okay. The drink's gotta taste nicer than Coke. It's gotta cost less than Coke, and it's gotta come in a really big can because people want value for money these days, what with the, you know, you know, the the economic crisis or whatever. And Red Bull comes along. It costs a fortune, comes in a tiny can, and tastes disgusting. Okay? And when I say that, I mean, they objectively researched it. And some of the research respondents, this is a company that only researches carbonated drinks, and they said it's the worst drink we've ever researched.

Rory Sutherland [00:35:39]:
Some of the respondents are saying things like, I wouldn't drink this piss if you paid me to. And yet they can run is it two formula one teams they run on the on the profits and those drink? Okay. And this is kind of fact when I think about there's no con context free perception. Okay. If you cut your knee. Okay? And you spray it with one of those sort of antiseptic things. And it sounds like you want it to hurt, don't you? Because the hurt is actually reassuring. Okay? You go, okay.

Rory Sutherland [00:36:10]:
I know it's working now because this is stinging like a bastard. Okay? Phew. Okay. That's great. You know? Okay. This stings like a bastard. It must, you know this is great. I'm I'm feeling so much better now.

Rory Sutherland [00:36:21]:
And, actually, if you made it not hurt, you go, come on. Now I think there's something there, which is if you sell something as medicinal or psychoactive or psych psychotropic, the fact that it tastes horrible actually convinces you of its efficacy. And so this is this also leads into my other great comp point, which I think is significant, which is the opposite of a good idea can be another good idea. It obviously, in, you know, in in math, the opposite of a good idea is usually wrong. Okay? But actually in psychology, the opposite of a good idea often is a weirdly underexplored other good idea. And what tends to happen is businesses benchmark against each other and they all end up in a cluster effectively optimized around the same thing. And what I love if you run a hotel I mean, I'm a big fan of the, you know, the DoubleTree cookie. You will you will presumably had a DoubleTree cookie at some point.

Rory Sutherland [00:37:19]:
Now what's brilliant about that is precisely that no other hotel does it. I mean, it's just that simple. Now it's quite common you go and stay in a hotel and they said, we've just been renovated at a cost of $75,000,000. And you go, reno you spent $75,000,000 to make my room look like every other hotel room I've ever stayed in. Okay. And so, you know, there's no you're not optimizing for attention. You're not optimizing for surprise there. Whereas if you go I mean, when I first came across this DoubleTree cookie okay.

Rory Sutherland [00:37:49]:
You know, I was kinda like all I can remember was in Chicago, and what the hell is this? I actually thought, you know, well, first of all, it's a brick. They're called biscuits. I I didn't lecture how much Biscuits. Etymology. Yeah. So we call cookies biscuits, and I had biscuits for breakfast here. It's a different thing. But, fantastic thing about biscuits and gravy.

Rory Sutherland [00:38:10]:
You've got breakfast sewn up in this place, by the way. Cuevas rancheras, biscuits and gravy. I mean, it's like, I'm, you know, I'm I'm a bit, sorry.

Bob Rivard [00:38:18]:
We're the seventh largest city. Right.

Rory Sutherland [00:38:20]:
Yeah. Of course. We're the seventh largest city. Yeah. Yeah. Absolutely right. Yep. But, but what's so interesting about that is that then I took them upstairs, and I was surprised they were warm.

Rory Sutherland [00:38:32]:
Okay? Because they keep an oven under the check-in desk at the, Doubletree. And I took them up to my room. I started to turn on the TV. And I don't know when these cookies are warm. I wasn't really planning to eat them, but since they're warm, I better eat them. And they're absolutely fantastic. I don't know if you remember. They're just extraordinarily good.

Rory Sutherland [00:38:46]:
During COVID, they actually gave away the recipe intriguingly. But what I'm saying is that actually, it's benchmarking in marketing terms is a really dumb exercise because what you effectively do is you make yourself you commoditize yourself because everybody goes well, there's no real difference between x y and zed. So why should I pay a penny extra? I'll just buy on price. Whereas if you if you differentiate yourself and it weirdly, I think it can be surprisingly irrelevant. You know, the way in which you're surprising or different can be almost, you know, slightly trivial in some respects. You know, the biscuit in here. Now the point is that the finance department of DoubleTree apparently been trying to kill this off for years. Now, actually, how many people thought Southwest made a terrible mistake getting rid of the free checked in baggage? Yeah.

Rory Sutherland [00:39:37]:
Okay. But the whole point of that wasn't really what it was. It was the fact that they did something that nobody else did. And also, there's a kind of sincerity to having a principle like that which you stick to. Yeah. I would have by the way, I understand their need to make money in fairness. But I'm I'm absolutely convinced there was a better way to do that, you know, which is not to say that you you know, you know, maybe there are other things. By the way, I might make a little point, which is that by giving allowing people to check-in their luggage for free, my hunch would be that turnaround times are a lot faster.

Rory Sutherland [00:40:13]:
What you're now gonna find when you make people check-in their luggage is everybody now has one of those clamshell cases that are maximum allowable size, which means that boarding a plane is now like a game of Tetris in the overhead lockers. So I'm not even sure that's a great move because if you factor in the cost of turnaround you know? And so boarding, once you charge we have an airline called Ryanair in The UK, and people actually board wearing four sets of goddamn clothes. Okay? You know, they look like the Michelin man basically getting on the plane because they're extremely restrictive in terms of baggage. And, actually, it's one fair point is, you know, actually look at, you know, look at the second order implications. Ryanair, they go to they they go to the guy, famously stingy CEO, and they offer him free newspapers to give to all the passengers. He said, no. No. He said, I'll, he said, I'll sell newspapers if you want.

Rory Sutherland [00:41:04]:
They said, I'm not giving them away. And they said, well, why not? He said, because, if people buy a newspaper, they take it off the plane with them. If we give them a free newspaper, they leave it on the plane, and someone's gotta clear it up. You know? It's very, very, you know, very good business people are very good at that second order thing.

Bob Rivard [00:41:20]:
Rory, you mentioned, the toilets at Buc ee's not one for twice.

Rory Sutherland [00:41:23]:
I haven't been yet. It's it's worth it,

Bob Rivard [00:41:25]:
is it? I mean, you know, it Yeah.

Rory Sutherland [00:41:27]:
I mean, seriously.

Bob Rivard [00:41:28]:
I'm gonna veer off my notes here a little bit. I read a really fascinating column, that you wrote about how people tend to be marketed to by nationality. Every kitchen in The UK has an electric tea kettle, which is a much more efficient way to heat water. You can't find one in The States. I was reading that with interest Anybody

Rory Sutherland [00:41:48]:
got a kettle? Okay. This is this is impressive.

Bob Rivard [00:41:51]:
But not electric. Electric. Eric got one. I'm wrong.

Rory Sutherland [00:41:55]:
You should secede and come and join us.

Bob Rivard [00:41:59]:
Well, my Or you really should. My point there was

Rory Sutherland [00:42:01]:
I have made the point, by the way, that two hundred and fifty years ago, you started a war of independence over tariffs on two. And I think I think the irony of that does need to be rubbed in a bit. Okay. You know, it's not even as if you drank much tea, is it? You know, let me be honest. Because you haven't got the kettles, you see. Anyway, sorry. Sorry. Yeah.

Bob Rivard [00:42:24]:
I was gonna say you definitely turned that column into a treatise on the Japanese toilet, which, flushes not only after you've used it, but it flushes before, which seems a little overkill to me, but you really

Rory Sutherland [00:42:37]:
enjoyed it.

Rory Sutherland [00:42:37]:
I went for the basic one. I I I didn't go for the one with the remote control because I think that's silly. Okay? And, but it's one of those interesting things. We were talking about electric cars. There are certain how many people have air fryers? That'd be an interesting one. Okay. Because I was, very, very early predictor of the success of the air fryer. So a very simple observation, which I recommend to everybody who starts a business, which is the only really robust measure of the business is repeat purchase or or loyalty.

Rory Sutherland [00:43:08]:
Fundamentally, that's that's the measure of what you whether you're doing something right. Because someone who has experience of not only, what you promise but also what you deliver chooses to keep coming back. That's a real, real badge of recommendation, I think. And so what always interest me is technologies I mean, who who are the electric car drivers? Anybody? Okay. We got three. Would you go back to a gasoline car? No. This is the interesting thing. So there's huge resistance.

Rory Sutherland [00:43:35]:
I mean, air fryers, actually, you know, people got slightly abused because they were air fryer evangelists. Okay? And the people who bought air fryers did, including me, become a bit weird. Okay? Basically, you know, have you got an air fryer? I can't believe it. How come you don't you know? But but what was interesting to me was that everybody who got one basically became a convert instantaneously. Also true of electric cars. So and what's interesting is everybody will resist these things because as humans, we're I think we've got three really strong habits as humans. Social copying, do what everybody else does. Habits, do what I've done before.

Rory Sutherland [00:44:13]:
And self justification is our third one. So if we currently drive a petrol car and people tell us electric cars are better, obviously, you know, it's a bit like someone insulting your dog. Right? Okay. Obviously, people will immediately assemble. They'll reverse engineer reasons why electric cars aren't better because they have a petrol car. In The UK, not relevant here. In The UK, for fifteen years, everybody came up with totally stupid reasons about why they didn't like automatic transmission. I mean, you know, oh dear, the fuel economy is not as good, which was true a bit at the time.

Rory Sutherland [00:44:46]:
But, oh, I like the sense of control, I don't know, stick shift, blah blah blah. Everybody who bought an automatic never went back. Okay? You know, you just don't. And so it is it fascinates me because it's so important this to if you're an innovative business, finding what you might call the gentle off on ramp for people to change an old behavior and move to a new one. Because, fundamentally, people are creatures of habit. We're also a kind of herd species. And so in the early days of any innovative new technology, you're asking someone to do, in a sense, you know, well, three difficult things. Okay? You've got to do something you didn't do before.

Rory Sutherland [00:45:23]:
You've got to do something that other people don't do, and you've got to explain yourself. And I often think their winner takes all effects in terms of things you don't have to explain. So, actually, does anybody here make hard cider? Okay. I've come across it.

Rory Sutherland [00:45:40]:
We've done

Bob Rivard [00:45:41]:
that in our house.

Rory Sutherland [00:45:42]:
Okay. Because I'm convinced that will be an absolutely massive growth industry in The US if you introduced it. But it is difficult because if you're in a beer drinking culture and you order something that isn't beer, you have to explain yourself. I know that sounds really weird, you know. But, the Coca Cola is magical. And one of the magical properties of Coke, which is when you think about it extraordinary, is you can walk in anywhere that serves beverages and say, I'd like a Coke or a Diet Coke. And if they haven't got it, it's their fault, not yours. Okay.

Rory Sutherland [00:46:16]:
Now, actually, here, they're probably Doctor Pepper loyalists among you. Are they yeah. Yeah. That always fascinates me. There is no Pepsi here. Is that at all, basically? Or is it? But it's basically Coke Doctor Pepper state. Is it that's the the divide? But what always fascinates me is that, okay, in The UK, if you could not go into a restaurant after Doctor Pepper, they look at you as if you are mad for asking. Okay? Genuinely.

Rory Sutherland [00:46:39]:
Whereas you ask for a Coke, they would have to explain why they don't stock it. And so there's something really interesting there about what you might call sort of psychological lubrication. In other words, we often seek the path of least resistance. And so it's much much easier to say to your friend, I'll have a beer versus in The UK, cider's probably ten, fifteen. But it it goes up in the summer when it's cooler. But, you actually I'll have beer as well versus, oh, actually, I'll have a cider because it's a hot day. Okay? You literally feel you have to explain yourself. And so it always fascinates me that, of course, any new idea requires people.

Rory Sutherland [00:47:16]:
And I used to think and it's it's it seems logical. Okay? The bigger your idea, the less marketing it needs because the more significant the benefits it brings. That seems a sensible thing to say. What I suddenly realized years later is the bigger the idea, the more marketing it needs because it's requiring people to change their behavior a lot and they find that really painful. But there is a kind of cheap I think which is how would I describe this? If you want to change behavior, you can either ask a hundred people to change their mind or you can change one context. So if you come up with a new phrase or you come up with a new norm or you somehow change the context or even the place, I'll give you an example of this. I mean, the biggest behavioral change from McDonald's is on the screen ordering, Okay? Because if you order on a screen, you'll order in a fundamentally different way to the way you order when you're face to face. And do you know that one of the biggest things McDonald's have noticed? Loads and loads of guys now order a meal with two burgers in it.

Rory Sutherland [00:48:20]:
Because you never do that face to face. Because the guy will go, what what what do you what do you you know? In other words, the guy would sort of raise his eyebrows. You know, well, hang on. You've got one lot of fries and two burgers. What's going on here? And you'd feel you have to explain yourself. Whereas the screen is anonymous. You know? You can so you you you discover all these things where just tweaking the context changes loads and loads of behaviors painlessly, whereas actually asking people to change their behavior is is one person at a time and it's painful. If you can so I mean, you know, one thing that actually must terrify people like Google, okay, is if AI just creates for most of us a different interface we go to when we want to make a decision.

Rory Sutherland [00:49:03]:
Now I don't Complexity. I I don't know. It could be perplexity. But my my question is actually, it's all too textual at the moment. Does anybody agree? Because I feel like, you know, never you know, I've you know, I I studied classics, but I've never felt like the emperor Augustus. I've never thought what I really need is a scribe. Okay? And so my my okay. My this is where the billions need to be made, which is everything we've learned in tech suggests that loads and loads of really clever tech people compete for years and years and years to improve microscopically the capabilities of the actual technology.

Rory Sutherland [00:49:36]:
And then someone else comes along with acute user interface, makes all the money. Okay? I mean, that's kind of a bit true. And I what strikes me as weird with AI is, you know, is it I mean, do I talk to a human who can also show slides on a screen? I'd you know, or pictures. What would be the absolute fantasy way of choosing a holiday? And we were talking about this fascinatingly saying a lot of people think about human decision making, that what you want the AI to do is to go, hello. I'd like to buy a toaster or a kettle for those of you who are still, you know, lagging around in the nineteenth century of tea making, you know, deserts. Okay? But, if I'd like to buy I'd like to buy a toaster. Okay? And a lot of people assume that what we were just debating this, That what we want the AI to do is go, here is the perfect toaster for you. Okay? And my theory and your theory is, actually, we don't like making decisions like that.

Rory Sutherland [00:50:33]:
What we want is, here are five good toasters. These are the relative strengths and weaknesses of the of these. We think these are probably the best. There is one wild card thing out here, which is a glass sided toaster. Didn't we come across these? So you can actually just look at how brown it is and pop it up just just the right moment. Here's this glass sided toaster, which you might be interested in. Here are five really good toasters of varying price levels. Now choose between them.

Rory Sutherland [00:50:58]:
Because my hunch is we can't actually want something unless we have comparisons. You sort of mean that it's like no. If if somebody showed you a house, you need to see three other houses before you could buy that house. Even if when you first saw the house, you thought it was a brilliant house. And I think I think we may also want AI to be kind of iterative where it goes, you know, I'd like to go, you know, I'd like to go to Greece, you know, in 2026. Over the next few weeks, can you just show me some interesting places I could go or some hotels where I can stay? And then, you know, three days later, the AI goes, oh, by the way, I found you this new hotel in Greece. Oh, that's quite nice. What else is around that area? And, actually, we need we to understand how to make AI really work for us, we need to understand how humans make decisions.

Rory Sutherland [00:51:49]:
Because I think a lot of people genuinely think what people want is an absolute, you know, straight line route from problem to solution. And I think that the the journey we go on to to solve a problem is sometimes more important than the destination.

Bob Rivard [00:52:05]:
Well, speaking of people that need some help solving a problem, you brought up tariffs, not me. So Oh. Let's put you in the Oval Office with Trump. Telling him telling him he was wrong isn't going to work. So what kind of advice would you give him on finding a way to maybe, change the status quo that he's created?

Rory Sutherland [00:52:25]:
Well, I have to admit complete bafflement because by by European standards, I'm, you know, relatively right wing, certainly a free marketer to an extreme degree. And I don't quite understand why he's chosen to make that his kind of the hill on which you die as it were. Because, you know, some of the other stuff he's actually doing is not unintelligent, and some of it's, some of it certainly has a popular mandate. But, actually, the extreme there there is an argument for it in some cases, which is effectively resilience, which is if you have a completely globalized world, you gain efficiency at the price of redundancy. And so you create a single point of failure can cause catastrophe. So some degree of, like, diversifying where manufacturing lies, diversifying. Some of that is quite in is is not totally insane, by the way, from a kind of complexity perspective. But some of this just seems to be an exercise of power.

Rory Sutherland [00:53:22]:
It's worth noting also that manufacturing is only 10% of employment anywhere in The US. Isn't it? I think I'm right. So most people are employed in a service economy.

Rory Sutherland [00:53:30]:
Absolutely.

Rory Sutherland [00:53:30]:
So it seems a bit weird. Even if you could double the size of the manufacturing economy, it wouldn't you know? It is it it does create disproportionately more wealth manufacturing, fair to say, because you have the real gains to sort of scale and, you know, all the Fordist magic. But it does it does strike me as a very strange first thing to do. I I don't quite get it.

Bob Rivard [00:53:50]:
I knew he wouldn't wanna hear from you.

Rory Sutherland [00:53:52]:
No. But but how you change his mind is interesting, which is what you would do is you would point to the fact that in some senses, a shot across the bows isn't totally insane. Okay? I also think, by the way, he's right in terms of bullying Europeans to step up to the plate in terms of defense expenditure and things of that kind because, you know, there are basically you know, there are there are 40 countries which effectively had a free ride.

Bob Rivard [00:54:18]:
And that's working?

Rory Sutherland [00:54:19]:
That's working. And that's that's necessary and important, by the way. So some of that bravado stuff strikes me as actually pretty worthwhile and not a bad idea.

Bob Rivard [00:54:29]:
Well, we're time's ripping by, and I wanna get some q

Rory Sutherland [00:54:31]:
and a from the audience. So the one other thing is, I mean, beating up on Canada does strike me as a bit weird. Okay. You know, of all the people, she should've been.

Rory Sutherland [00:54:41]:
Okay. You know, I I know. I get it.

Rory Sutherland [00:54:42]:
You know? They're, you know, they're hostile actors out there. But it's kind of like, you know, it's kind of like beating up on your friendly neighbor. Does seem just a bit of a strange place to start. You know? I know. What do we do now? I know. I really like my next door neighbor. Let's pick a fight with them. Weird.

Rory Sutherland [00:54:59]:
But, anyway Yep.

Bob Rivard [00:55:00]:
We have a microphone here because we are recording. So let's, let's do it here and not from the audience.

Rory Sutherland [00:55:06]:
What's,

Bob Rivard [00:55:07]:
Are we on? Live. Maybe. Maybe not. Is it on, Alfie?

Rory Sutherland [00:55:13]:
It's on.

Rory Sutherland [00:55:13]:
Yeah. Oh,

Bob Rivard [00:55:13]:
there we go.

Rory Sutherland [00:55:14]:
Live now. What's the third best place to visit in the British Isles?

Rory Sutherland [00:55:18]:
That's a great quest that's a really, really good question.

Bob Rivard [00:55:22]:
The third best place where

Rory Sutherland [00:55:23]:
probably number one. The standard one would be London then Edinburgh. What would the third best place to be to visit be? Actually, a weird one, actually, seriously, the countryside. Okay. Country pubs, etcetera, etcetera. The reason Americans tend not to do it is you're disproportionately terrified of driving on the left hand side of the road, so you don't rent cars. The only thing I can tell you is, so the third the third best thing to do in The UK actually after you've done, let's say, Edinburgh, you know, or London and Edinburgh would be to rent a car. And actually, you know, e even within 10 or 20 miles of London, there's some pretty good countryside.

Rory Sutherland [00:56:03]:
You know, fifty, sixty miles away, there's some fantastic stuff. And actually, I completely understand. I mean, it's a bit there's a sort of asymmetry there which is if you're British, you realize you've got to learn to drive on the right hand side of the road. Otherwise, you know, you'll have to go on holiday in Australia every year, which is expensive. Whereas I understand that if you drive on the right already, the idea of driving on the left seems terrifying. If you're in a right hand drive car, it's pretty easy. Okay? And and there are two okay there are two occasions where you can make a mistake. If you set off really early in the morning and if you get completely confused at oh, because you're confused by roundabouts, aren't you? You're not you never really quite adopted the roundabout and the kettle.

Rory Sutherland [00:56:45]:
Two things that you you've resisted. But but, actually, genuinely, driving in The UK is, you know, it's pretty easy. I mean, one trick would be to take a train out of town and then rent a car, you know, rent a car from somewhere like Oxford and then drive around the Cotswolds. The reason I say that actually is that in all the holidays I've taken, if I was to make one generalization, it would be that the holidays where I've rented a car have been better than the holidays where I didn't rent a car. And the reason for that is serendipity. That if you if you don't rent a car, you know, I was talking about, you know, trains and aircraft all concentrate people. If you don't rent a car, you'll end up basically going where everybody else goes and seeing what everybody else sees. And then, a k if you rent a car, you'll actually, one of the best things that can happen to you on holiday when you rent a car is you get lost.

Rory Sutherland [00:57:41]:
And then suddenly, you end up somewhere, which my wife and I discovered Santa Fe, New Mexico by accident. Okay? We knew absolutely nothing about it. We were driving up at, from, I think, El Paso, which isn't really a tourist destination. I think it's fair to say. Okay. But we we we we started out in El Paso. We were driving north to, Alamogordo, and then we kept on going and discovered Santa Fe. We knew nothing about it.

Rory Sutherland [00:58:08]:
We had no expectations, and we've been back four times since then because we just thought it's fantastic. And so that business of, you know, what you might find yourself doing if you rent a car. I gen we're talking about this. Any Nassim Taleb fans here? Yeah. Okay. What what Nassim would say is you should in life, you should increase your surface area exposure to positive upside optionality. Now in a car, if you drive somewhere and you discover it's not very nice, you just drive on. Okay? This is what Nassim would call optionality.

Rory Sutherland [00:58:38]:
But if you discover somewhere which you go, hold on. This is amazingly lovely and I've never heard of it before, you stop. And so I mean, other other places I've been in Tucson, Arizona, we just we we we drove through it and ended up staying for three days, you know. And that kind of optionality if you do a car trip, but also you discover things which I mean, as I said, I mean, you know, I've I've been I think, yeah, five times I've been to Santa Fe. Okay? And that was entirely an accidental discovery. I didn't know anything about it. I've never read about it. I just thought, wow.

Rory Sutherland [00:59:09]:
This I mean, they call it the city difference, don't they? Which is slightly weird use of word order, but otherwise, but otherwise, pretty sound as a claim. And that's the kind of thing, and then then, by the way, further serendipity, I ended up staying in Santa Fe. And there's a talk on, the Santa Fe Institute is holding a talk in some civic hall. And I pitch up, it's Murray Gellman, the Nobel Prize winning physicist. And you go, shit. Okay. And all of this stuff. So that business have actually, and I I think it when businesses optimize their ability to be efficient, the hidden price they pay is they're actually doing that at the expense of the chance to get lucky.

Rory Sutherland [00:59:50]:
Because efficiency tends to mean you do one thing really, really well. Whereas luckiness actually tends to require variety or variation. You all know my bee thing, do you? Okay. So bees basically, 80% of bees sort of follow the waggle dance, and they do what they're told. And bees tell them through the dance, okay, head one and a half miles in that direction. There's a reliable source of pollen and nectar. Okay? And then they studied bees, and they discovered that 20% of bees varies hugely, okay, depending on a whole lot of factors. 20% of bees just go off at random.

Rory Sutherland [01:00:23]:
And the point about those bees is they do three things. They stop the hive becoming over optimized on past information, which is where pollen used to be as opposed to where it now is. So they update their their information at preventing you being over trapped in a local maximum is what what the tetra does. Secondly, it allows the hive to grow because if you don't have exploratory bees, the size of your hive is constrained by what you already know. And the third thing is they're just a way of getting lucky, literally. It's when bee scientists first looked at this, they said, this is really weird. You've got all these dilettante bees wandering around. You'd think they'd all be required to follow the waggle dance to map that in the short term that would maximize the efficiency of pollen collection and the speed of pollen collection.

Rory Sutherland [01:01:11]:
But the bees that did that no longer exist because evolution basically took them out. There's an even weirder discovery. Do you want the best one of all? Which is they discovered a technology that allows them to basically spray miniature barcodes onto ants. So you can actually model ant behavior at the level of an individual ant. And they made the absolutely bizarre discovery that something like 35% of ants do absolutely nothing of any value whatsoever. Okay. So they literally they're just basically just hang around. Okay? I don't know whether they're smoking some sort of ant spliff or whatever it is.

Rory Sutherland [01:01:46]:
Okay. But they and they they they were completely baffled by this. And what they are is then they did a brilliant second experiment, which is they said, well, maybe these ants they don't want these ants messing around in the ant economy because they'll just mess things up. We've got enough of us to deal with, you know, carrying this leaf or whatever it is they need to do. Okay? So why would you have all these redundant ants? And they figured out that they're in reserve in case either you're attacked, okay, by other ants, or else there's some flood or some fire which wipes out. So they then did the brilliant second experiment, which is they took out, like, 20% of the useful ants, and they found that a corresponding number of useless ants all stepped up to the plate. So they're actually kind of a reserve labor force. Really, really fascinating.

Bob Rivard [01:02:31]:
Rory, in his book, and he talks about bees a lot, He calls a flower a weed with a advertising budget.

Rory Sutherland [01:02:38]:
Absolutely right. Yeah. Yeah.

Bob Rivard [01:02:40]:
For bees. Next question.

Bob Rivard [01:02:42]:
Good morning, Rory. Thank you, for coming here into San Antonio, and welcome. I run the local microtransits, system here in San Antonio.

Rory Sutherland [01:02:50]:
I'm gonna be visiting. Is that right? You've promised me this. So tell yeah. Tell tell me how micro it is. How does it work?

Bob Rivard [01:02:55]:
It's about this big. No. It's it's it's about, a six passenger, micro mini bus, if you will. Runs fully electric, zero emissions, and, we cruise around town, pick people up. The idea is to have this ride share. They do it in Mexico, and it's called the convi.

Rory Sutherland [01:03:11]:
Yeah. I've heard of this.

Bob Rivard [01:03:12]:
And so in Mexico, there's this, you know, feeling of just community based. You know, you you have somebody sitting, you know, of different economic skills, sitting right next to each other. And so the idea is to really blend the community in the concentration of of of the urban core. And so

Rory Sutherland [01:03:27]:
You see, I think this by the way, I think the reason that, you haven't come across the Heathrow pod, have you? Which is a similar thing but driverless. And currently, it's just in demonstration mode. It goes from a car park about a mile from the terminal.

Bob Rivard [01:03:40]:
Yes. Yes. There's some there's some autonomous, systems that they're trying to launch here in The US, and there's there's tests going on in in the major cities, San Francisco.

Rory Sutherland [01:03:47]:
You will have a problem with the autonomous ones, which is apparently people have sex in Waymo cabs. Have you come across this? I've heard of this. There there there is this there there there are I think I think they're called tertiary users in architectural parlance or something.

Bob Rivard [01:04:00]:
Oh, my question my question was this, so you, you mentioned something about, the emotional journey, and so to me here in San Antonio, there's something that we just can't put our finger on, but that's what makes us special. And so what we do at the local is really try to, like, highlight this feeling of, just warmth and, you know, you're a friend riding with somebody else and you become kind of

Rory Sutherland [01:04:22]:
I love that.

Bob Rivard [01:04:23]:
Quick friends, sample serving. But then you see them again the next day or a week later, and so then you start building this relationship, and and then you start caring about each other. And so then what ends up happening is now instead of just being siloed as, a person, now and you're focused on going to your job, now you have some kind of, investment in saying, well, how was your day? How can I help you? And then the the luckiness starts to happen there. Those little sparks of

Rory Sutherland [01:04:48]:
I totally I totally buy that. I think that's lovely. So they're human drivers at the moment. All electric minibuses.

Bob Rivard [01:04:54]:
And I they they are human drivers, and I think that is important. I think a lot of people, there's gonna be there's gonna be, again, right, that push back against autonomy just because we like we're human. We like that connection. It's novel when there's nobody driving, and it's pretty neat at the beginning, but, you know, at some point, you know, it's lonely out there. And so, the loneliness factor, I think, is what's gonna, like, not let us fully, you know, embrace autonomy. But, how would you how would you describe, the objective versus the emotional journey? So the KPI, if you will, what would that look like

Rory Sutherland [01:05:27]:
for a customer? That's a really, really interesting question, which is you could I mean, it's perfectly okay. I mean, laughter as a KPI would be a great KPI, wouldn't it? Okay. I mean, the the reason I mentioned the Heathrow Pod, okay, is that the price of parking in Heathrow Pod parking is only about it's dynamic pricing. It's only about 3 when I park, it was only about £3 less than parking in the short stay, which is right next to the airport and doesn't have the ride in the pod. And I actually talked to colleagues of mine who said, that occasionally, they turn up to the Heathrow pod parking. I said, I'm terribly sorry the pod parking is full. We've upgraded you to the short stay next to the terminal parking for free. And their immediate reaction is, but I wanted to ride in the pod.

Rory Sutherland [01:06:12]:
You've ruined my day. And actually, optimizing for delight in a form of transport and therefore, actually looking to the extent to which people find the ride funny and amusing and charming, okay, would be a totally reasonable metric. I mean, actually, really interesting. I'm not totally against metrics, but really interesting metrics, I think are really, really because what I think I think the reason, okay, a lot of innovative transport systems don't don't happen. Do do you have a thing here called procurement? It's a total poison if you ask me. The entire business world is poisoned by procurement because what they want is three very similar people pitching so they can make a comparison. They want everybody presenting their idea to be have exactly the same solution so they can drive them down on price. And weirdly, if you come up with a better idea, which is incomparable, they go, no.

Rory Sutherland [01:07:05]:
No. We don't want your better idea. You're gonna be able to save you, like, 30%. And they go, yeah. But we can't compare your prices with their prices. So as a result, you come up with a really boring proposal? And this literally happens in advertising. Okay? They say we want you to do three TV commercials and five press ads. How much does it cost? And you go, well, let's look at your problem first because maybe that's not what you need.

Rory Sutherland [01:07:24]:
Okay? And they go, well, no. Because and then we come back and say, actually, if you just put a sticker here and you rename this something else, you'll probably achieve the same effects for 1% of the price. They go, well, that's no good. You go, why is it not good? We saved you 99% of your budget. They go, go, no. No. No. No.

Rory Sutherland [01:07:41]:
We need you to present for, you know, XTV commercials and 5% so we can compare you with the other five agencies. And I think that happens in transportation where every innovative mode of transportation is like a reverse benchmark. It's may maybe your things aren't that fast. Right?

Bob Rivard [01:07:57]:
They're not that fast.

Rory Sutherland [01:07:57]:
They're not that but but, actually, if people really enjoy riding in them, nobody is nobody ever says, look how fast our cruise ship is. Right? Because the whole point of a cruise ship is that you enjoy the time on board. Right? Yeah. Okay. So and what happens is procurement, because they'll go out and they'll issue some RFP. And what they want is six really boring proposals along the lines that they envisage will be the solution. And everything that's new and different, I mentioned that about Apple that technologically it wasn't brilliant, but everything looked great, okay and felt great, Okay. In the same way, I think new form what the question is you can amplify, you know, transportation, which maybe it's maybe it's 20% slower, you know, maybe the carrying capacity isn't quite as good as a tram.

Rory Sutherland [01:08:42]:
But if everybody riding on the thing is smiling. And, you know, you know, I I I think look optimizing for psychological things like that

Bob Rivard [01:08:50]:
For sure.

Rory Sutherland [01:08:51]:
Really, really interesting. We've got a crazy thing in London, which is, to be honest, it's well, actually, it's an interesting idea. It it it was literally intended as a cable car across the Thames. And a lot of people complained because they go, yeah, but it it is it is quite heavily used, but most of the people are tourists. And you go, well, does it matter? I mean, if people are traveling on something because they enjoy it rather than because they want to get somewhere, does that actually matter? You know, the whole cruise industry would go out of business Yeah. On that measure.

Rory Sutherland [01:09:21]:
Thank you.

Bob Rivard [01:09:21]:
Let's let's get another question.

Rory Sutherland [01:09:22]:
I'm really intrigued by that. I'm gonna have I'm gonna come and test it out.

Rory Sutherland [01:09:27]:
Hello. I have a question from the small business side of things. If you look at my business from a psychological lens, I believe there's a ton of potential. That's not biased.

Rory Sutherland [01:09:39]:
No. No.

Rory Sutherland [01:09:40]:
But, when I'm trying to compete against some major contenders from that small business side of things, What are some commonly overlooked strategies that could lead to large impact?

Rory Sutherland [01:09:53]:
Are you b to b or b to c? Both. Both. B to b is difficult because the reason b to b companies often in point by other large companies is actually nothing to do with the quality of the actual offer. There's a whole load of loss aversion there, which is effectively, it's the modern equivalent and no one ever gets fired for hiring IBM. Okay? So if you go with a mainstream provider and everything goes wrong, it's what I always said jokingly. I call this the, you know, British Airways Heathrow effect. If you book your boss on a flight on British Airways Heathrow to JFK, if anything goes wrong, your boss blames British Airways. If you do something imaginative, if anything goes wrong, you get blamed for not not booking someone on bridge.

Rory Sutherland [01:10:32]:
Do you know what I mean? So you have this fundamental asymmetry of comparison, an asymmetry of reputational risk when you appoint a small supplier if you're a large business. And so it's really worth being alert to that, that there's a bias in that respect. In b to c, you can make a real virtue of it.

Rory Sutherland [01:10:50]:
Okay.

Rory Sutherland [01:10:50]:
Because, you you know, effectively, the per you know, if what what sort of business is it?

Rory Sutherland [01:10:55]:
On demand trash removal.

Rory Sutherland [01:10:57]:
Oh, yes.

Rory Sutherland [01:10:57]:
Of course. Yeah. And I

Rory Sutherland [01:10:58]:
know all about this. Yeah. Okay. So so that's both missed collections and getting rid of fly tipping and everything else.

Rory Sutherland [01:11:06]:
Yes, sir.

Rory Sutherland [01:11:08]:
I think you I mean, you have a huge I mean, look, actually, if I'm right, the whole US trash system is being consolidated into, like, one or two huge is that right? They're they're these sort of garbage collection

Bob Rivard [01:11:19]:
Right.

Rory Sutherland [01:11:20]:
Monster companies that just bought up all the smaller entities. And actually, there's there's when that happens, there's always space for a boutique operator.

Rory Sutherland [01:11:30]:
Mhmm.

Rory Sutherland [01:11:31]:
And you you absolutely are really, really explicit about how small you are. Because actually, peep I mean I mean, capitalism is partly transactional and it's partly relational. And what I think people are missing, particularly in the digital age is the relational nature of capitalism where you feel that every interaction contributes to the building of a relationship and mutually enhanced trust. Whereas you slightly feel in online optimized for efficiency businesses that everything is just about the individual transaction, and they don't care who you are. Mhmm. So anything you can do to kind of emphasize the personal nature of what you do. And also, I think you've got a kind of mission, haven't you? So in other words, you're you're are you not for profit?

Rory Sutherland [01:12:17]:
Or for profit.

Rory Sutherland [01:12:18]:
You're for profit. Okay. That's fine. But I mean, there there is that thing of and then that second thing of literally what you could do is try and create a norm, I think, where everybody tends to think there's one right answer to a question. Mhmm. I think the right answer of lot to a lot of questions is one thing and then a bit of the opposite of the thing. Okay? You know you know what I mean? It's kinda like everybody goes, what's the optimal thing? And once you say rational, once you use the word rational, rational implies there's one answer and everything else is wrong. And quite often, the best thing to do is a bit of one thing and a bit of the opposite thing.

Rory Sutherland [01:12:59]:
And, actually, if you could create a norm with businesses, which is every business should have a large trash supplier and a small trash supplier who does the things that the big company can't do, if you could create that kind of norm. In Britain, they're weird. You're you're a soccer fan more than I am. But there's a sort of weird thing in Britain where people have the big team and they have their small team. You probably don't baseball or, you know, whatever. Okay? That probably if if you can actually make that case, which is okay. When I when I moved into my house in Kent, you can steal this. There was a guy called Ron, and his business was called Call Ron.

Rory Sutherland [01:13:38]:
Okay? Because he was. And the entire ad was this. Call Ron o one nine five nine five six five six two two. Okay? That was his phone number. This was in the parish magazine. And there was a line underneath which had done him proud for something like twenty years before, tragically. I think he either died or retired. I can't remember which.

Rory Sutherland [01:13:58]:
The line underneath just said, I do the small jobs the builders don't want.

Rory Sutherland [01:14:03]:
And I

Rory Sutherland [01:14:04]:
actually said to Ron, I said, I worked in advertising for twenty years. There's no way I could improve on that. It's a single sentence positioning and, in a in terms that everybody recognizes. Okay? You want some bookshelves put up. You know, you want a guy to repair that dodgy system in your thing. Okay? You can't ask a builder because they're just not interested. You know, if it's not a 20,000 quote, they're not interested. And so call Ron.

Rory Sutherland [01:14:28]:
If you can actually if you can you can steal from Ron if you like. That kind of line, I I always thought I said to Ron, I said, jeez. That's, you know and he said, well, he said, I've been running it for twenty years in the parish magazine, and I've never been sure to work. I was I'm

Bob Rivard [01:14:44]:
not surprised. You've just described the business

Rory Sutherland [01:14:46]:
in a sentence. Alright. Next question.

Rory Sutherland [01:14:48]:
Thank you. Best of luck to you too.

Rory Sutherland [01:14:50]:
Fantastic. Hello.

Rory Sutherland [01:14:51]:
Hello. Mhmm. I have a very technical product.

Rory Sutherland [01:14:55]:
What you need me to repair your laptop? No.

Rory Sutherland [01:14:59]:
And everyone all the marketers I've talked to have said, to dumb it down, dumb it down, simplify it. But it's very technical by nature. I think that AWS, web services solves this problem by paying an army of presenters, and they go to conferences, and they have a captive audience in a room for forty five minutes. And they can explain what the thing is and why it's useful. How does everyone else do this that doesn't have that on?

Rory Sutherland [01:15:26]:
Weirdly, there's an Australian company, which I sort of act as a little bit of a kind of, cheerleader for. And it's one of the most interesting ideas in B2B, which is you know I said the flowers are weed with an advertising budget. A lot of advertising is costly signaling. One of the reasons why physical direct mail by the way and don't reject physical direct mail as a medium because it works incredibly well, especially for digital businesses because it makes them seem tangible. And there's a sort of human assumption which is you spend a couple of dollars to write to me, you must have something to say. Now what a lot of b to b marketing is, and you you made this point exactly with AWS, is you go to some massive trade fair and you have a huge stand and it, you know, it occupies some enormous part of a bloody exhibition hall the size of the Hindenburg Hangar. And you you organize golfing days and you do all that stuff. All that is is really costly signaling.

Rory Sutherland [01:16:20]:
Okay? It's saying we're so committed to our belief in what we do that we're spending a lot of money to tell you about it. Okay? It's the same reason why car advertising works. You know, If it wasn't worth you test driving this car, it wouldn't be worth us spending, you know, X million on a Super Bowl ad for it. Now what this company does called meetmagic.org, it's only nascent at the moment, but I've been talking to people to try and actually get it larger is you simply say to someone who's a potential buyer, if you give me an hour of your time on Zoom, I'll give a thousand dollars to the charity of your choice. Now, I had an idea earlier which was a slightly a joke for Zoom. Okay? David Ogilvy said the best ideas often arrive as jokes. And I said, part of the problem Zoom had was that if let's say, we had to pitch for a client in Frankfurt. Okay? And we knew that the other three agencies would fly a team out to Frankfurt and we suggested a Zoom meeting.

Rory Sutherland [01:17:19]:
Okay? We look like the lazy guys who couldn't be bothered to spend, you know, dollars 3,000 on flights to Frankfurt even though the Zoom meeting will be a much better use of everybody's time. So I jokingly suggested that what you should do is say to your clients, we're going to do a Zoom meeting with you from Frankfurt. But to prove how committed we are, we're going to burn £3,000 worth of cash during the meeting just to show we really can. Okay? Okay? We're just gonna set fire to a whole pile of money just to show we didn't wanna waste our time on the plane because we could be better off working in a business. But we didn't want you to think we weren't committed to your business. So here we are. We're gonna create this. Now, obviously, the company's health and safety people would have gone blah blah blah.

Rory Sutherland [01:18:00]:
But what this thing says is, okay, we're gonna show our commitment not by burning the money, but by giving it to a good cause. Now, the reason I think that's really interesting is that they think, well, first of all, I'm gonna get a good presentation because these people have spent a thousand dollars to make the presentation. They're gonna get ready. They're gonna understand my business. They're gonna put a bit of effort into it. They are confident enough in their belief that I'm a valuable prospect that they're prepared to offer a thousand. By the way, a thousand is variable. And if you're the chief buyer for Walmart, it could be 20,000, you know, okay, right.

Rory Sutherland [01:18:32]:
But we we know in return for this meeting on Zoom, we will basically as a mark of our commitment and to the value of your time. And then you also think, well, what's the worst that can happen? I waste an hour of my life, but I've given a thousand dollars to charity. There are far worse things you can do with a wasted hour. Okay? There are probably better things, but there are worse things you can do. And I think it's really, really interesting idea because I think it gives, it gives small businesses small businesses for a whole load of asymmetric reasons are always at a disadvantage up against larger businesses. And there's a very has anybody read a thing by Joel Bolsky, I think he's called? Joel on Software, the famous blog. And it's a it's a blog post from about fifteen years ago called Camel Something and Rubber Duckies. And his point is, weirdly, if you're selling software solutions, he said, there's a market for software that cost $999 and there's a market for software that cost $200,000 There is no market in between.

Rory Sutherland [01:19:32]:
And the

Rory Sutherland [01:19:33]:
reason for that is, if it's $999 you sell to the IT guy who puts in his corporate AmEx and then he claims for the $999 no one cares off it goes, you sold your software. As soon as you make your software cost, let's say, $1,500 he now needs to get approval from procurement. Okay? Suddenly, three other decision makers get involved. You've now got to employ an IBM sales sales force of people in order to sell in the product to multiple decision makers, which means you gotta charge $50,000 or $200,000 for your software. So it's called Camel's Something and Rubber Duckies by Joel on Software. And it's just a fantastic thing about how weird pricing is. And what really appealed to me about this idea of meetmagic.org is most reasonable guys would go, okay, if you're if you're genuinely giving a thousand dollars to this entity, and, the worst that could happen is, you know, I've got a I've got a high expectation that you have something worth saying to me because you're paying money to say it. Now by the way, some of the weirdest businesses in the world are B2B signaling businesses.

Rory Sutherland [01:20:36]:
There was I think it was Jack Nicklaus who had a golf course design business and somebody wanted to buy it. And they said, what I don't understand is you seem to have this weird business that makes like $20,000,000 a year and we don't understand what you do for it. And apparently, Jack Nicklaus said, it's really, really easy. It happens about 10 times a year. Someone wants to spend two hours with the chief executive of Toyota. Okay? It's impossible with one exception. If you say to the chief executive of Toyota, do you want to play a round of golf with Jack Nicklaus? He'll get on a plane. And so Jack Nicklaus was literally this b to b facilitator of three hour meetings.

Rory Sutherland [01:21:14]:
And, you know, someone will pay him a few million dollars and he'd play a round of golf some random business person. And all the while, there was this really irritating guy to the left going on about supply chain. Okay. But that has anybody heard the even better story about this? Has anybody heard this? So Frank Sinatra you must have heard this. Frank Sinatra was approached by someone who said, look, I'm gonna be with some really important clients at this bar. And if you could come over and just pretend to recognize me, okay, it would really, really impress them. So if you're in this bar and you come up and you come and say hello to me, I'm prepared to give you, like, $200,000 or something to say. And so, apparently, he gets paid the money, turns up at the bar, okay, and sees the guy.

Rory Sutherland [01:22:03]:
He's talking to his clients. He goes over and says, Bob, really great to see you. And Bob turns to me and goes, piss off, Frank. Can't you say I'm with some people?

Bob Rivard [01:22:14]:
Let's get the next question.

Speaker H [01:22:20]:
Hi, Rory. My name is Ashley Landers, and I own, an ad agency here. Actually, in this building on the Second Floor.

Bob Rivard [01:22:28]:
Texas Creative.

Speaker H [01:22:28]:
Texas Creative.

Rory Sutherland [01:22:29]:
You're hiring because I'd love this place. Yeah. I'm just gonna say. Yeah. I'd love

Speaker H [01:22:32]:
to really hear it. No. I've been at Fannie years for a long time. I actually grew up in the holding company world under the greats Kevin Roberts, the group

Bob Rivard [01:22:40]:
Of course.

Speaker H [01:22:41]:
Who I know you know well from

Rory Sutherland [01:22:42]:
I know. Yeah. It's fantastic. Yeah.

Rory Sutherland [01:22:44]:
Was

Speaker H [01:22:44]:
a mentor of mine in New York at Saatchi and Saatchi. And I am curious, knowing your background as well through that space, what advice would you have? We talked earlier about the sort of inferiority complex that we have as a city. And Ah. I think it's very telling that there are no holding company agencies in San Antonio. No. They skip us for the Dialysis, for the Houston

Rory Sutherland [01:23:09]:
By the way, I think the holding companies, the fact that they have a problem is actually evidenced by their geographical location.

Rory Sutherland [01:23:16]:
Yeah.

Rory Sutherland [01:23:17]:
So I I would say to WPP and Omnicom and all those people, hold on. You're overweight in New York and Chicago and probably a bit of Chicago.

Speaker H [01:23:24]:
Yeah.

Rory Sutherland [01:23:24]:
You're completely underweight on the West Coast and in Texas. Yeah.

Rory Sutherland [01:23:28]:
Because if you

Rory Sutherland [01:23:28]:
look at where the economic growth is, what that suggests is you're still serving businesses that were created in the nineteenth century, not businesses that were created in the twenty first century. Yeah. I mean, I I mean, our you know, I've I've done I hope this doesn't get quoted. But, actually, our footprint kind of frightens me. You see what I mean? I mean, there should be a, you know yeah. If if you put me in charge, there'd be a 300 peep person WPP office somewhere in Texas in the Texas Triangle or similar. Yeah.

Speaker H [01:23:55]:
Well, so my my question is, a little bit twofold because I I've said for a long time, I think San Antonio is best positioned to lead in the creative economy over any other market in Texas.

Rory Sutherland [01:24:07]:
That's interesting. Yeah.

Speaker H [01:24:08]:
It's in our DNA. Yep. But we're not seen as that. Number one, we don't do a very good job of positioning ourselves and pushing that outward, from this side. But, what advice would you have for, an independent agency in this market to try and get their foot in the door with, bigger businesses. The way that the holding companies are able to they're they're invited. How how do you get noticed? How do you get

Rory Sutherland [01:24:32]:
there is an interesting thing which is that I think that, video conferencing actual so one one way is to specialize. If you're if you're specialist, you can be anywhere you like. Okay? So find find a specialism. And actually, the other thing I think is interesting is that the the the whole business of video conferencing first of all means you can do this thing where you basically have a bank of talent on tap. Because I I would argue that video conferencing has created a kind of spot market in creative talent. And there are a whole lot of reasons for that which I don't think get discussed enough like the opportunity cost of an hour of my time on Zoom is just an hour of my time. If someone says to you, I want to go and talk to you for half an hour on Zoom. I basically I find you know, because maximizing opportunity, the cost is half an hour.

Rory Sutherland [01:25:20]:
If you agree to meet someone physically, it's a day out of your life. Okay? And also, it's a week where you can't go on holiday because you've gotta be in Amsterdam on Wednesday. Okay? Whereas if you're on holiday and you've agreed to an hour on Zoom, you just come in from the beach and have the decency to put a shirt on. You know? That's the kind of, you know so I I I think the opportunity to, be in different places and actually also the opportunity to create attract creative talent is really, really interesting. Because I mean, you know, it's it's I mean, if you had fast rail to Austin and a few other places, it would help further. But I I've tried to persuade unsuccessfully WPP to open a campus by the sea. And and affordable housing is increasingly important to younger people. Okay? And, you know, one of the things that really infuriates me about the ad industry is they basically it's fine if you're my age because I kind of I I wasn't very good at it, but I sort of rode the wave of the housing boom to a point where, you know, that's not my biggest problem.

Rory Sutherland [01:26:21]:
Yeah. If you're 25, okay, demanding that 25 year old talent lives in the most expensive real estate, you know, on the planet, which is basically what ad agencies do, just strikes me as increasingly ridiculous. So I mean I mean, I mean, I suppose, we mean, Kennedy showed you can do it, you know, in Portland. If you're distinctive enough or you have a real specialism or you just have a completely different model which makes geography irrelevant. So, you know, maybe you need a two person office in Austin. You know, I mean I mean, one one thing one thing I one thing I joked about is, you know, actually, you know, you can outsource to places like Toronto, which is half the price of New York. Okay? I I I just I don't understand why we don't we should just run a a fake office in New York. Okay? And then basically just brief all the Canadians on Zoom not to say a boot or hoose.

Rory Sutherland [01:27:14]:
Okay? And they can probably pass for New Yorkers, you see, you know, to just make them a bit ruder. You know? And, but but, I mean, I actually I, you know, I I I I can't answer your question. The only thing I I think is there is this time of upheaval in terms of what geography means, what location means. And, I would argue you you can probably play it to your advantage. Also, my guess is is your place there are a lot of direct flights, not from London, but a lot of direct flights from The US to San Antonio. It's a place clients wouldn't mind visiting. Okay? Actually, you know, we can you know, there there are there are there are interesting upsides. But, also, I mean, you know, I I also think there's a there's a very, very big source of what you might call semi retired creative talent that doesn't want to work in an office five days a week, but is available online.

Rory Sutherland [01:28:08]:
I mean, Graham Fink, who is the creative director of the whole of Ogilvy, Asia, for example, or certainly China, you know, basically, it was in deal on the Kent Coast. And he he works for clients. He does it partly through Zoom. And he travels into London sort of, couple of days a week. There are a hell of a lot of people. Once you get older, you actually you actually understand the work lifestyle trade off a bit better.

Bob Rivard [01:28:33]:
Last, we're out of time. Absolutely. Almost out of time. This is the last question and and make it pretty brief. We're over time. Go ahead, sir.

Rory Sutherland [01:28:42]:
Really quickly. Ben Hodge, bad student entrepreneur. And, I guess, because I'm going through the MBA program and there's some of the other students

Rory Sutherland [01:28:48]:
I'm Oh, brilliant. Okay.

Rory Sutherland [01:28:50]:
And we're learning a lot about frameworks. And so not having read your book, I apologize, trying to lift the framework you've been discussing today out of kind of the world or whatever have you of, it seems like you've described humans almost like contextual generators. They're always

Rory Sutherland [01:29:06]:
Yeah. Yeah. Yeah.

Rory Sutherland [01:29:07]:
Context for each little bit of experience that comes in. They're dropping that experience out and other context generators are then generating their own context.

Rory Sutherland [01:29:14]:
That's a beautiful description, actually. It's lovely. Yeah.

Rory Sutherland [01:29:17]:
And, well, when I'm looking at all these context generators and I don't know if you've heard, like, group think where if you get people to get a group of people together and you get them to guess how many marbles are in a jar, they get very, very close Yes.

Rory Sutherland [01:29:30]:
That's right. Yeah. Perspective.

Rory Sutherland [01:29:31]:
But if you give them context before you then ask them, the the answer veers off in a, you know, separate, direction further from the actual average. And so I was wondering from your framework perspective, it speaks to diversity, the importance of having a lot of different perspectives to actually get at what is actually happening in the world, not sit down.

Rory Sutherland [01:29:53]:
Well, this is actually brilliant brilliant way to end, actually, because, you know, I mentioned the bees. That same thing apparently occurs in algorithm design. Okay. There are people, a few academics who believe, that it's called the explore exploit trade off. Now interestingly, and I would argue wrongly, we call it a trade off. But if you look at it holistically, exploit funds exploration, explore direct exploitation. So they're actually it's not a trade off at all. It's two mutually reinforcing parts of the same benign process.

Rory Sutherland [01:30:26]:
If you were Asian and familiar with sort of yin and yang and the unity of opposites, you probably wouldn't see that as a trade off or a contradiction or paradox. You'd see it as just a complex unitary system. And now so I mentioned the fact that, you know, in algorithm design, you have this thing, which is to what proportion of resources do you devote to exploring, what what proportion do you devote to exploiting what you already know. It obviously appears in ants and social insects. There's a researcher in the University in London who makes exactly the same point about human neurodiversity and indeed cultural diversity, which is she thinks that neurodiversity evolved because humans are a social species. And in any group of people, let's say we were a group of people of a 50, the Dunbar number, you know, maybe 200, maybe a hundred people. It's hugely beneficial to the group overall if you have four or five people who think look at the world differently. And so I would and by the way, there's a good book.

Rory Sutherland [01:31:25]:
There's a guy British, writer called Matthew Syed, who's also written about this, which is that, teams tend to become quite homogeneous. But actually, the, if you inject a diverse viewpoint into a team, if you do it in the right way, it's generally hugely beneficial. So actually, you know, I I thought it was a very interesting take on neurodiversity which is that, you know, we're we're probably wrong to I I I jokingly say that advertising is a great way to monetize ADHD. You know? But we're wrong. I I worry sometimes when we slightly medicalize these things because, you know, if you want a really weird view on it, I also think humor plays a similar role. You know, David Ogilvy said the best ideas and arrive as jokes, as I said earlier. That actually humor is what you might call an emotional kind of reward, a little sort of mental orgasm reward for looking at the world in a different way. You know, if you either get, well, hold on.

Rory Sutherland [01:32:26]:
This is ridiculous because that or, you know, or you make a joke. I mean, it serves other functions as well, I'm sure, in terms of conflict resolution and everything else. But humor is a kind of emotional reward for being able to see something differently. You know, whether it's a play on words, whether it's something else. And so, and the the really vital thing which I think is kind of evolutionary conflict is that in a way, in the evolutionary environment, it didn't pay for us very often to be happy with ambiguity for a time. Now John Cleese writes about the comedian writes about this experiment done by a guy at Berkeley in the nineteen fifties. He looked at really, really good architects, fantastic top of their game architects, and he took a group of people who were he he got people to nominate architects who are completely workaday and uninteresting. Obviously, they he didn't tell them that.

Rory Sutherland [01:33:18]:
That would have upset them. And he looked at their working patterns, and all of them had completely different working patterns in terms of working early, working late, doing this, being sober, being drunk, whatever. But there was one thing, all the the indifferent architects started work straight away. They just got on with it. And all the all the really good architects basically spent five, ten, fifteen days trying to be lucky. Going, okay. Well, this okay. Let's see if I can have another idea here.

Rory Sutherland [01:33:42]:
Maybe I'm just assuming something that's wrong. Now an awful lot of human decision making, I think, understandably makes us uncomfortable being ambiguous. Because, you know, if you're attacked by a lion, okay, making a quick decision, whether it's an average decision or a brilliant decision, is more important than making a per you know, a perfect decision. Hey, lions. Interesting. Yeah. You know, that's not a good evolutionary response on the on the savanna. Okay.

Rory Sutherland [01:34:09]:
So it pays to be quick. But what seems to distinguish the creative people is they're actually happy spending a bit of time being ambiguous. And a book by Margaret Heffernan, who's an American actually a Texan on that, living in The UK. And it's called I think it's called something about ambiguity. She's just sent me a copy. It's really, really interesting on that. That actually, the really great creative people are pretty happy spending a time not really being sure what they're doing before they because they're waiting for inspiration. I think that's really important.

Bob Rivard [01:34:42]:
Rory, it's been absolutely delightful to have you on. We're a little over time, but I'm probably gonna look at the world a little bit differently going forward than I did before we met. So thanks for coming on to Big City, Small Town, and come back someday.

Rory Sutherland [01:34:56]:
Great. Great name. What a pleasure. Thank you very much indeed. Thank you.

Bob Rivard [01:35:04]:
Please share this episode with friends and colleagues, and do sign up for Monday Musings, our weekly newsletter, at bigcitysmalltown.com. Big City Small Town is brought to you by Western Urban, building the city our children want to call home, and Geekdom, where startups are born and smart ideas become businesses. Our producer is Corey Eames, video by Erica Rempel, and sound engineering by Alfie de la Garza of Sound Crane Audio. We will see you next week.