SD#50: Belief-bias, principles, and creativity
January 8, 2023
Hi friends,
Happy New Year and welcome to 2023 and to the 50 edition of Seven Dawns. How time flies. Hope you had some rest over the festive period.
A new year is a strange time when all of us come energised with hundreds of new goals we’ll achieve in the year ahead. Let’s remember that it’s okay to take things slowly too, allow things to settle down before we roll our sleeves so cheers to that.
Our seven ideas this week:
1. (Marketing) If something seems far-fetched or too good to be true, we assume it is. This is Belief Bias at work Buyers are sceptical of big, audacious claims. They believe that if it sounds too good to be true, it probably is. When evaluating your solution, they’re biased by their own beliefs and past experiences. Buyers are wired to avoid making decisions they’ll regret, and making huge promises can trigger alarm bells. Don’t say your products are life-changing or that you’re the absolute best in the business. Claims like these feel like too much of a stretch and scare buyers away. Instead, explain exactly what will change in their lives and use numbers to show you’re a pioneer of your industry. Realistic claims build trust between the brand and the buyer. Having other people back up your big promises naturally makes them more believable. Especially when those people are everyday folks like them (customers) or people they already know, like, and trust (authorities in your niche). Why we buy |
2. (Productivity) It’s easier to hold your principles 100% of the time than it is to hold them 98% of the time Take, for example, a diet. If you’re only 98% committed to a diet, then that means you haven’t yet made the decision. If you haven’t made the decision, but are only partially committed, then you don’t know what the outcome will be in future scenarios. Not knowing the outcome of your behaviour can create problems in your confidence and identity. Motivation requires simplicity. Complexity kills motivation. Consequently, you want to make a decision, have a clear outcome, and carve a clear path to getting what you want. As you make progress, you’ll begin to develop efficacy or confidence that you can complete. Instead of dealing with decision fatigue at 98%, one could make a decision at 100%. Although difficult, this could solve a lot of willpower problems. By committing 100% to something, like say, a diet, even for a short period of time, you can predict your behaviour in future situations. You can know that regardless of what is being offered, the decision has already been made. That decision was made in better conditions than in the heat of the moment. Therefore, you don’t have to deal with the back-and-forth struggle of decision fatigue in unideal decision-making conditions, such as when your best friend is offering you a soda. Psychology Today |
3. (Creativity) Anyone can be trained to be creative Researchers from Ohio State University developed a new method for training people to be creative, one that shows promise of succeeding far better than current ways of sparking innovation. This new method, based on narrative theory, helps people be creative in the way children and artists are: By making up stories that imagine alternative worlds, shift perspective and generate unexpected actions. The narrative method of training for creativity uses many of the techniques that writers use to create stories. One is to develop new worlds in your mind. For example, employees at a company might be asked to think about their most unusual customer — then imagine a world in which all their customers were like that. How would that change their business? What would they have to do to survive? The point of using these techniques and others like them is not that the scenarios you dream up will actually happen. Creativity isn’t about guessing the future correctly. It’s about making yourself open to imagining radically different possibilities. Science Daily |
4. (Marketing) Don’t try to price promote during a recession. Discounting is more likely to damage profits, particularly as competitors follow, rather than maintain sales. Dropping price won’t save you from a recession There is considerable evidence that relative prices matter, this isn’t to say that brands have to have similar prices, only that you should maintain an appropriate differential between your brand and competitors (depending on relative quality). So in a time of rising costs, if competitors raise their prices you are very safe to do likewise. Analysis suggests a fairly straightforward relationship between price level compared to rival brands and market share. If the differential is increased a brand’s market share moves down to a new level, not immediately but gradually over a year or so. If the differential is reduced the brand’s market share moves up a level, also gradually. This shift overlays the brand’s current sales trajectory (up, down or, more usually, stable). Thus lowering the price of a brand that is declining boosts sales without altering the fundamental trend downwards. The same pattern has been observed for price promotions, they cause sales spikes but once these are accounted for the brand’s fundamental share trend is unaltered. Ehrenberg-Bass Institute |
5. (Productivity) Animals that meet their survival needs with the least amount of work are most likely to survive Idle Theory says that the least idle animals have the highest chance of survival. In other words, animals that meet their survival needs with the least amount of work are most likely to survive (due to energy conservation). The Siberian Tiger weighs up to 600 lbs. It can survive in sub-zero temperatures. It has night vision. It can run 50 mph. It can leap 16 feet in the air and broad jump 25 feet. It can swim up to 7 miles a day. It can bite at 6x the force of a human being. It can shatter the jaw of a bull with the swipe of its pall. Yet, its superpower is this… The Siberian Tiger sleeps up to 20 hours a day. If we look at how hard top performers really work, we will see they work more like Siberian Tigers than the start-up founders humanity seems to be so obsessed with. In Rework, the authors argue that Charles Darwin worked only four hours a day and Kobe Bryant six hours a day yet the former was able to produce the masterpiece The Origin of Species and the latter was able to win 5 championship rings. When you look at these two examples, you feel a bit silly working 40, 50 and sometimes 60-hour weeks, lying to yourself that it’s helping you get ahead. Cole Schafer |
6. (Technology) If the proximate purpose of technology is to reduce scarcity, the ultimate purpose of technology is to eliminate mortality At first, that sounds crazy. But let’s start with the premise: is the proximate purpose of technology to reduce scarcity? Think about how a breakthrough is described: faster, smaller, cheaper, better. All of these words mean that with this new technology, one can do more with less. In the digital world, Google made information on any topic free to anyone with an Internet connection, and WhatsApp made it free to communicate with anyone. In the physical world, innovations like the Haber Process or the Green Revolution allowed us to produce more with less. In a real sense, these technologies reduced scarcity. Now for the second half of the sentence, the logical implication. Is the ultimate purpose of technology to eliminate mortality? Well, mortality is the main source of scarcity. If we had infinite time, we would be less concerned with whether something was faster. The reason speed has value is because time has value; the reason time has value is because human life has value, and lifespans are finite. If you made lifespans much longer, you’d reduce the effective cost of everything. Thus insofar as reducing scarcity is acknowledged to be the proximate purpose of technology, eliminating the main source of scarcity – namely mortality – is the ultimate purpose of technology. Life extension is the most important thing we can invent. Balaji Srinivasan |
7. (Psychology) The default effect is our tendency to go with the status quo, even when a different option would be better for us Many studies show that we tend to generally accept the default option—the one that was preselected for us—and that making an option a default increases the likelihood that such an option is chosen. One of the theories behind the default effect is that humans are hardwired to avoid loss. We feel a strong aversion to any kind of loss. This aversion is so strong that it can override our logical thinking and lead us to stick to what seems like the safest path. Another theory relates to the cognitive effort needed to consider alternative options. It’s much easier to go with what’s right in front of us, compared to researching and evaluating other potential choices. Opting for the safest path may seem like a good idea but it can often lead to suboptimal decisions. For example, we might choose the default health insurance plan, even though there are better options available. Or we might stay in our current job, even though we’re unhappy, because the idea of starting over is too daunting. Ness Labs |
Fun things to click on:
A graveyard of apps killed by Google. Days Since Incident is a constantly updated list of earthquakes, typhoons, tsunamis, asteroid impacts, volcanic eruptions, tornadoes, etc. How hand-painted billboards are replacing digital ones.
Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.
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Speak soon,
Tom