Alchemy

the French are astonishingly productive on the rare occasion they are not on holiday;

The human mind does not run on logic any more than a horse runs on petrol.

In fact, we derive pleasure from ‘expensive treats’ and also enjoy finding ‘bargains’. By contrast, the mid-range retailer offers far less of an emotional hit; you don’t get a dopamine rush from mid-market purchases.

Adam Smith, the father of economics – but also, in a way, the father of behavioural economicsfn4 – clearly spotted this fallacy over two centuries ago. He warned against the ‘man of system’, who: ‘is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it … He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse [sic] to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.’

The fatal issue is that logic always gets you to exactly the same place as your competitors.

‘The trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say.’ People simply do not have introspective access to their motivations.

All progress involves guesswork, but it helps to start with a wide range of guesses.

Most heroin addicts may have started with cannabis, but then, most cannabis addicts probably started with tea and coffee.

It seems likely that the biggest progress in the next 50 years may come not from improvements in technology but in psychology and design thinking. Put simply, it’s easy to achieve massive improvements in perception at a fraction of the cost of equivalent improvements in reality.

regardless of what we say, we are much bothered by the uncertainty of waiting than by the duration of a wait.

Bad maths is the palmistry of the twenty-first century.

the number of people who think they understand statistics dangerously dwarfs those who actually do, and maths can cause fundamental problems when badly used.

what happens on average when a thousand people do something once is not a clue to what will happen when one person does something a thousand times.

As I always advise young people, ‘Find one or two things your boss is rubbish at and be quite good at them.’

In this model, reason is not as Descartes thought, the brain’s science and research and development function – it is the brain’s legal and PR department.

It is always possible to add functionality to something, but while this makes the new thing more versatile, it also reduces the clarity of its affordance, making it less pleasurable to use and quite possibly more difficult to justify buying.

‘No one ever got fired for buying IBM’ was never the company’s official slogan – but when it gained currency among corporate buyers of IT systems, it became what several commentators have called ‘the most valuable marketing mantra in existence’. The strongest marketing approach in a business-to-business context comes not from explaining that your product is good, but from sowing fear, uncertainty and doubt (now commonly abbreviated as FUD) around the available alternatives. The desire to make good decisions and the urge not to get fired or blamed may at first seem to be similar motivations, but they are, in fact, never quite the same thing, and may sometimes be diametrically different.

This theory, if true, also explains some counterintuitive findings in customer behaviour: it has long surprised observers that, if a customer has a problem and a brand resolves it in a satisfactory manner, the customer becomes a more loyal customer than if the fault had not occurred in the first place. Odd, until you realise that solving a problem for a customer at your own expense is a good way of signalling your commitment to a future relationship.

In any complex system, an overemphasis on the importance of some metrics will lead to weaknesses developing in other overlooked ones.

We will pay a disproportionately high premium for the elimination of a small degree of uncertainty – why this matters so much is that it finally explains the brand premium that consumers pay. While a brand name is rarely a reliable guarantee that a product is the best you can buy, it is generally a reliable indicator that the product is not terrible.

Like many things that emerge from the technology sector, we become so drunk on the early possible benefit of a technology that we forget to calculate the second-order problems.fn7

We should also remember that all big data comes from the same place: the past. Yet a single change in context can change human behaviour significantly. For instance, all the behavioural data in 1993 would have predicted a great future for the fax machine.

The Polish-American academic Alfred Korzybski (1879–1950) is perhaps most famous for his dictum that ‘The map is not the territory.’ He created a field called general semantics, and argued that because human knowledge of the world is limited by human biology, the nervous system and the languages humans have developed, no one can perceive reality, given that everything we know arrived filtered by the brain’s own interpretation of it.

it is only the behaviour that matters, not the reasons for adopting it. Give people a reason and they may not supply the behaviour; but give people a behaviour and they’ll have no problem supplying the reasons themselves.

Robert Cialdini has observed that, as you are closing a sale, the admission of a downside oddly adds persuasive power: ‘Yes, it is expensive, but you’ll soon find it’s worth it,’ seems to be a strangely persuasive construction – explicitly mentioning a product’s weakness enables people to downplay its importance and accept the trade-off, rather than endlessly worrying about the potential downside. If you are introducing a new product, it might pay to bear this in mind.

People who are happy to spend £300 on a pair of designer sun-glassesfn2 feel resentful when they are required to pay that amount on funding healthcare, policing, the fire brigade or defence, yet many of us would voluntarily pay more tax if it were possible to specify which service would receive the money.fn3