It's a pleasure. It's anaudiencethat I don't normallyspeakto.
Andsoit's anaudiencewhich I thinkisparticularlyvaluable, particularlyimportant, butalsoactuallyprobablycouldbenefitquite a bitfromjust a littlebitofextrapsychology.
Notleast, notleast, bytheway, a verysimpleobservation, whichisthatdonotthinkthatgoodproductsautomaticallysucceedorthebadonesnecessarilyfail.
Feedbackisnotusedjustas a waytoprioritizewhattobuild, butalsoas a toolthatcreatestrustwithallstakeholders.
Signupfor a freeCycletrialtodayatcycle.appslashLennyandputyourfeedbackonautopilot.
That's C-Y-C-L-E dotappslashLenny.
I had a conversationearliertodaywithsomeonewho's inthehotelindustryandisin a particular, withoutgivingawaywhereheworks, he's lookingtoreinventthehotel, arguing, I thinkwithsomereason, thatit's oneofthoseareaswhichisactuallyripefor a gooddegreeofdisruption.
Soactually, theDanishstatebroadcasterendedup, hesaid, thereshouldbe a statueofmeoutsidethisDanishbroadcasterbecause I endedupmakingthemtensofmillionsofpoundsbybothsellingtherightstoTheKilling, theoriginalseries, andalsobyNetflixbuyingtherightstothebasicstoryline.
I said, well, whydidyoudothat? I said, whatmadeyoubuyit? Andhesaid, greatphrase.
You'renotsittingtheregoing, whatthehellisgoingonhere? Whyisthismandoingthis? Basically, they're a bitlikeus. They'reenoughlikeusthatwebasicallyfigureoutwhat's goingon.
Butthey'reweirdenoughtomakeitjustthatlittlebitmoreinteresting. And I think, youknow, I thinkthat's partofthereasonforthepopularityofScandinoirandScandicrimeisthey'retherightamountofweird.
And I think I thinkthat's trueofproductdesign. I thinkwithRaymondLoewe, I thinkthethingwashemade a fan. If I'vegotthestoryright, hemade a fadthatwasinsanelyquiet.
Andpeopledidn't believeitworkedbecauseitwasjusttooquiet. Andyearslater, I rememberthatstorybecausetherewas a guywhohadthisextraordinarykindofmachinelearningandAIdevicethatwasbeingusedbyengineers.
Andhewasproducing a I thinkitwasanelectrictoothbrush. Whatmighthavebeen a razorwasothermen's razorwithanelectricmotor, whichwasthattheycouldsomehowmakeitinsanelyquietbyusingsomeweirdmachinelearningalgorithmaboutwhatcausedthenoise.
I saidtohim, look, be a bitcarefulbecauseit's probably a goodideatomake a razor a bitquieter. Butifyoumakeittooquiet, wegenuinelywon't believeit's working. Actually, it's thecracklynoisethatwhenyourubitoveryourface, andit's thebuzzofthethingandthevibrationofthethingthatactuallyconvincesusit's doing a job.
I lovealltheseexamplesyou'resharingofwaysproductsstandout, sometimesbyaccident, sometimesintentionally. Ifyouif I weretozoomoutandtrytodescribewhatyouencouragepeopletodo, youbasicallyareintentonconvincingpeopletothinklesslogicallytothinklessrationally, which I thinkisprettycounterintuitiveto a lotofpeople, especiallyinbusinesswherethey'retold, bemorerational, bemorelogical.
I think I thinkwhatitisispsychologyis a branchofcomplexitytheory. OK, andtherearelotsofthingsinitwhicharenonlinearbutterflyeffects, smallthingsthathave a hugeeffect. Andtherearealsolotsofthingswhichareifyoulikeyinandyang. Inotherwords, what I sayistheoppositeof a goodideacanbeanothergoodidea.
Youknow, I wouldsaytherearetwogreatwaystocheckinto a hotel. Oneofthemisinsanelyhightouch. Andtheotherwayisnotouch. It'd beprettycooltocheckinto a hotelwherebasicallyyoujustwalkedinwithyourmobilephoneandunlockedyourroom. That'd beprettycool. It's alsoprettycoolifyougototheMandarinOrientalinHongKongthattheytakeyouuptoyourroom, showyouhowtousethetelevision, theshower, I hope, becausethat's always a bafflingthing.
Andthatactuallymakesyou a cupofteaintheroomwhileyou'refillingoutthepaperworkatyourvastdesk. They'rebothprettygreatwaystocheckinto a hotel. They'recompleteopposites, buttheyaredistinctive. I thinkunderstandingthefactthatwhatwe'retryingtodoiswe'retryingtoruntheworldofbusinessentirelyto a reductionistkindofmathsandphysicsandfinancemodel.
Youknowwhereeverything's kindoflinearandeverythingworksinstraightlinesandeverything's proportionateandtheoppositeof a goodideaiswrong. Andthepastis a fantasticguidetothefuture. We'rebasingourdecisionmakingonkindofhighschoolmathsquestions.
Italwaysbothersme, bytheway, thatintelligencetestsaremultiplechoice. TheSATsaremultiplechoiceintheUS, I think, aren't they? Veryweirdly, a greatauntofmineactually, whospentsometimeintheUS, I thinkatPrinceton, wasactuallyinvolvedwiththeguywhodesignedthosekindofearlyintelligencetests.
Bytheway, shehadherdoubts. Oneofthethingsshecommentedonwasthatbasically, iftheydidanintelligencetestinwhichkindofwhiteacademicsdidn't cometop, theyrejecteditas a measureofintelligence. Sotheyfound, forexample, I thinkthatNativeAmericansandAfrican-Americanswere, forinstance, betteratmemorizingpoetrythanwhitepeople.
OK, allcredittomygreataunt. Theyrejectedthisthenas a measureofintelligencebecauseitdidn't fittheirnarrative. Buttheotherthingthatbothersme, I'm slightlyproudofmygreatauntforspottingthis, callingthisoutas a bitofbullshit.
Buttheotherthingthatalwaysbothersmeisthatbydefinition, multiplechoicequestionshave a singlerightanswer. OK, theoretically, youcouldhavemultiplerightanswersandyousimplyhavetochooseonethatisacceptable, I guess. Butbasically, theygot a rightanswerandthreewronganswers.
AndifyoucanGoogleit, becauseitthenappearedin a Chinese, I think, a Chineseschoolexam. Anditwas a veryinterestingexperimentdone, I think, by a Frenchphilosopherorpsychologist, whichiswhathappensifyouactuallyjustgivepeople a loadofdataandthenyougivethem a question. Aretheysohabituatedbyhighschoolquestionstoassumethatwhat's inthequestionmustthereforegiveyou, youknow, a singlerightanswer?
Yeah, there's a fewreallyinterestingstoriesofcompanieswhichhave a muchlesstopdown. Inotherwords, it's a muchmore, youknow, youknowhowinevolution, there's thistheoryofmultilevelselection, whichiswedon't justselectforindividualsorgenes, weselectforgroups, forexample.
Twoexamples I'veheardofanecdotally, whichareinteresting. There's a BritishcompanycalledOctopusEnergy, whichalsohas a softwaredivisioncalledKraken, whichis a kindof, it's effectively a wayofmanagingutilitiesin a muchmoresophisticatedpricingenvironment, youknow, andtheyhaveextraordinarytariffswhere, youknow, ifyouchargeyourcaraftermidnight, you, youknow, youpay a tinyfractionofwhatyoupaytherestofthetime.
Andthatthere's thatfamousDonDunbarnumbercoinedbyRobinDunbar, oncedescribedasthenumberofpeopleyouknow, whereyoucouldjoin a conversationinwhichtheywereengagedwithsomeoneelse, withoutitfeelingweird.
Mostpeopleknowabout 150 people, whereeffectively, youknow, you'reat a party, youseefriend X, who's oneofyourDunbarnumber, oneofthe 150 peopletalkingto a completestranger, andyoucangooverandjointhatconversationwithoutfeelingyou're a bitof a kindofwallflowerorbeing a bitofanidiotbybuttingin.
Andthat's theDunbarnumber 150. Theredoesseemtobesomenumberaroundsportsteamsaround 10. Sothat's a wayofdesigningforhumanityratherthandesigningfortheorganogram. And a thirdcasewouldbesomeoneat a verysuccessfulBritishonlineretailercalledAO, AppliancesOnlineiswhatitstandsfor.
And, youknow, thiswouldapplytocallcenterstaffaswellis, youknow, youknow, imaginetreatthecustomerlikeyou'retalkingtoyourgran. I said, therearelotsofdifferentwaysyoumighttalktoyourgrandmother, you'veallgotdifferentgrandmothers, etc. Butbasically, everybodyknowswhatthatmeans. Andsimilarly, youknow, makeyourmumproudiseffectivelythebrief.
And I think, youknow, I thinkundoubtedly, youknow, oneofthetwogreatvirtuestothis, oneofwhichisthatthemetricsoftenactuallygetgained, ortheyleadto a completedistortionofbehavior. Thesecondthingwithmetricsisthateitherpeoplegainthemtotheiradvantage, ortheyobeythem, butfindthemstupid.
Butthelossofautonomythatresultswhenyou'resimplychasing a fewmetrics, imaginewhatit's liketoworkin a callcenter, whereyou'rebasicallyincentivizedtogetthegetthecustomeroffthephoneasquicklyasyoupossiblycan. Okay. Thelossofautonomyandjudgment, thatthetokens, I think, that, youknow, isdeeplydepressing, it's deeplydemotivating.
SofinalcaseofthatisZappos. We'retalkingtothefantasticguywhois, I think, ChiefMarketingorOperatingOfficerofZappos. Youwon't believethis. I thinkthatherefusedtomakespeed a measureinthecallcenter. Hesaidthecallisaslongasitneedstobetosolvetheproblem. Andtheyhadoneextraordinaryoutlier, whichwassomethinglike a customerservicecall, whichwassevenhourslong.
Now, I thinkitinvolved a coupleofbathroomvisitsonbothsides. I havenoideawhattheproblemwas, butthatwasalmost a pointofprinciplethatifittakessevenhourstosolvetheproblem, that's howlongwespendontheline.
We'veactuallycreatedwhat I callSoviet-stylecapitalism. It's deeplydemotivating. It's allaboutquarterlytargets. I mean, atleasttheSovietUnionhad a five-yearplan. We'vegotthesestupidquarterlyobsessionswithrevenueformeetingourforecastforquartertwo.
Andeffectively, peoplefeelit's likemetropolisandpeoplefeelfundamentallydehumanizedbythis. Andthepersistentcostcuttinghaseffectivelydestroyedmuchofthepleasureoftheworkplace, I think, becausethere's nodiscretion.
There's nosortofdiscretionaryjudgmentallowedanymorebecausesomeonesawanydeviationfromthisimaginaryoptimumasbeing a cost. Andwegointoworktosomeextenttoexerciseourhumanity. Andthatwouldincludenotonlyeconomicsorreasonorlogic.
Itwouldalsoincludethingslikeethics, forexample, what's fair. And, youknow, thisattempt, thegreatboldCanadianphilosopher, I didn't reallyknowmuchaboutuntil I cameacrosshimat a festivalinWaleswherehewasspeaking, calledJohnRalstonSaul, whowrites, hewrites, actually, I wish I'd knownaboutthiswhen I wrotemybook, becauseitiskindofthisbookfamouslycalledPascal's Bastards.
So, youknow, we'veevolvedtoeffectivelyoperateindecisionmakingunderuncertainty, asHerbertSimoncalledit. Andyetmostoftheactualdesignofproceduresthatweencounteraredesignedforeffectivelyinformation, youknow, decisionmakingundercertainty.
Andthat's a veryspecialcase, whichactuallyneverappliescompletely, I wouldargue, butcertainlyveryrarelyactuallyoccursintherealworld. Itmainlyactuallyisfoundinkindofeconomicmodels.
Youhave a reallygoodinsightintowhywethinkinthisirrational, illogicalway, which I love. I thinkyoutalkabouthowifwewere, youknow, evolvinginthesavanna, ifananimalisverypredictableandverylogical, they're a loteasiertocatch.
Yeah. Yeah. Canyoujusttalk a bitaboutthat?
No, no, no. I mean, I mean, thingslike, youknow, theabilitytobehaveirrationally, youknow. OK, there's a claim, bytheway, ofallthenegativereviews I get, theyweren't what I expectedatall. There's aboutthreepagesinthebookwhere I basicallysaybeing a bitdoubleTrumphasitsvirtues.
OK, farfromit. ButtheguyhasoperatedinliketheNewYorkrealestatesceneforquite a longtime. Andoneofthethingsyou'vegottoyou'vegottolearninthatbusinessisthat, youknow, noone's goingtosurviveinNewYorkrealestateiftheycanactuallypredictwhatyou'regoingtodo.
OK. Right. OK. I imagine. OK. Thatisnot a worldwherebeingcompletelyconsistentlylogical, neverlosingyourtemper, neverwalkingawayfrom a deal, etc. Youknow, noneofyouhavetobeabletoplaythatplaythosegametheoreticmoves.
OK. Therewerepeoplewhobasicallyencounteredthisthing. Maybe I shouldputitrightattheendofthebookand I putitsomewhereearlyon, whowerethendrivenpracticallyinsanebythisassertion. Butthefactremainsthat, youknow, therearecertaincircumstancesinwhichtheabilitytobehaveirrationallyisactuallyatthemetalevel, highlyrational.
Youknow, thefactthat, youknow, OK, OK, if I'm nevergoingtofightbackagainstanybodywho's slightlytallerthanme, veryrational. But I'm goingtospendmywholelifebeingdickedaroundbypeoplewhoare a quarterofaninch, youknow, tallerthanthat. Allright. Veryrational. OK. They'rebigger, strongerthanme. Neverdoanythingtoretaliate.
Yeah. Butno. OK. WehavetohavesomedegreeofDarwinspottedthissomedegreeofkindofrandomnumbergeneratorinourmakeup. Andtheclassicexampleofthis, whichis I learnedfromRobertTrivers, theevolutionarybiologist, isthatwhen a hareisbeingchasedby a dog.
Itgoesintothisincrediblyrandompatternofmovementwhereitwillkindofzoomstraightupintheair. Itwillsuddenlydo a 90 degreeturntotheright. Itwillthensuddenlydoublebackonitselfathugespeed. Anditappears, I don't knowhowtheyfindthisout, thatitdoesn't actuallyknowwhatit's doing.
Butthere's a kindofrandomnumbergeneratorinthehares. I thinkit's calledinsubmarinewarfare. It's calleddoing a crazyIvanwhereyoujustexecutekindofcrazymaneuvers. ItwastheRussiansubmarineswhenbeingpursuedbyAmericansubmarineswoulddosomethingcalled a crazyIvan.
So, youknow, butthereareotherreasons. I mean, thereareotherreasonswhyweneedtobeirrationalfromfarlesscontroversial, youknow, orfarlesssurvivaldependentreasonsthanthis. Forinstance, theexerciseofsocialintelligence. Wehavetwoverystronginbuilt. Wedon't utilitymaximize. Wehavetwoverystronginbuiltdefaultmodesinthehumanbrain, oneofwhichishabit.
Dowhat I'vedonebefore. Andtheotheroneissocialcopying. Dowhateverybodyelseseemstobedoing. Andtheymakeextraordinarilygoodsenseinevolutionarytermsbecauseanorganismthathadtolearneverythingfromfirstprincipleswouldeat a hellof a lotofpoisonousberriesratherthangoing, look, I'vealwayseatentheyellowberries. I seemtobefine. I don't havetheshits. Let's juststicktotheyellowberries.
Well, unlessthere's a massiveshortageofyellowberries, that's probably a prettygoodidea. Orequally, ifyoufindyourselfin a newenvironmentornewhabitatandalltheotherprimatesareeatingthepurpleberriesandnobody's touchingtheyellowonesinthatenvironment, it's probably a goodideatocopythem, youknow, becausethere's extraintelligencethere.
Youknow, inotherwords, I canlearneffectivelyfromcopyingmypastbehaviororcopyingthebehaviorofothers. I can I canactually, youknow, it's a fairlylowcostwayofdiscoveringlowvariance, lowdownsidebehaviors.
Bytheway, veryinterestingly, itactuallywasan A.I. whichactuallywentintoinvestigatingwhatwouldbenecessaryformorepeopletohavesolarpanelsandmorepeopletohaveheatpumps. Anditisnottotellthemtheenvironmentalbenefits. Itisnottellthemhowmuchmoneythey'd savebyhaving a heatpump.
No. Thesinglethingthatwouldpersuadepeopletohavemoreheatpumpsisifthreepeopleontheirstreethad a heatpump. Okay. Now, toaneconomist, thatdrivesthempracticallyinsanebecausetheygo, no, no, no. Thebehaviorofyourneighborsshouldbeentirelyrelevant. Youknow, youshouldsimplydothemaths, calculatehowmuchyou'd save, comparethatagainstthereturnyougetin a highinterestsavingsaccountandthendecidewhethertheheatpumpisworthyoftheinvestment.
Youknow, I havefriendswhoboughttheearlyflatscreentelevisionsandtheypaythousandsandthousandsofdollarsforthesethings. Andyougointotheirhouse. God, that's shit.
Youknow, so I mean, anawfullotofthesethingsare, youknow, instinctiveintuitionthatwe'vejustlearnedthroughexperience. Andwedon't knowwhatthefutureisgoingtobring. Butactually, it's whatyoumightcalldecisionmakingbasedon a reasonableexpectationofsomething.
ThisepisodeisbroughttoyoubyCoda. And I meanthatliterally. I useCodaeverydaytohelpmeplaneachepisodeofthisverypodcast. It's where I keepmycontentcalendar, myguestresearch, andalsothequestionsthat I plantoaskeachguest. Also, duringtherecordingitself, I have a Codapageuptoremindmyselfwhat I wanttotalkabout.
Whyisthissoimportant? So, youknow, there's manywaystotrytowininbusiness. There's, youknow, likethetypicalapproach, justlet's thinkandbrainstormandcomeupwithourbestideas. Yourbasicpremiseistoomanyofthesearejustveryrational, logicalapproachesto a solution. Whyisitsoimportanttothinkoutsidetheboxlikethis?
There's a jokeintheUK. It's lesstruethanitusedtobebecausetherewas a famousactorcalledJean-ClaudeVanDamme, whoisknownasthemusclesfromBrussels. ButtheoldBritishjoke 20 yearsagowasthattherearenofamousBelgians. Okay. Andit's a bitweird. WhyaretherenofamousBelgians? Anditturnsoutit's a bitlikewhytherearen't verymanyfamousCanadians.
Andthereasonis, ifyou're a famousCanadian, everybodyassumesyou'reAmerican. Andifyou're a famousBelgian, everybodyassumesyou'reFrench, unlessyou're a painterfromtheMiddleAges, inwhichcaseyou'renotcalledBelgianatall. You'recalledFlemish. Okay. Thereareactually a lotoffamousBelgians, buteverybodyassumesthey'reeitherFrenchorthey'recalledFlemishbecausetheypaintedinthe 16thcenturyorsomething.
Andinterestingly, forthesamereason, therearen't verymanyfamousmarketingcampaignstolaunchnewinnovativeproducts. Becausewhen a productsucceeds, everybodyforgetsthefactthatitwasthemarketingthatwasinstrumentaltoitssuccess. When I saymarketing, I mean, initswidestsense, I don't justmeantheadvertising, thecommunication, I mean, thepositioning.
Wetendtolookatgreatproducts. Wego, youknow, iPhone. Okay. TheFordModel T. Okay. Andwetendtogo, everythingwas a bitcrap. AndthenHenryFordcamealongwithSteveJobscamealongandtheyhadthisinventionandeverybodyimmediatelysawthatthiswasbrilliantandtheywentandboughtit.
I'vegotadvertisementsfrom 1916 advertisingthebenefitsofelectricityinthehome. Infact, thatwasanadvertisingcampaignthatwentonforabout 30 years. I spentanearlypartofmyworkinKoreanadvertisingpersuadingpeopletogettheInternetinthelate 1990s. DialupInternet. Now, weforgetallthatbecausewhenwelookback, wekindofconcertinahistoryandwego, therewasnoInternet. AndthenTimBerners-LeecameupwiththewebandeverybodywantedtheInternet.
Now, 20 years. Okay. I mean, youknow, thereare I mean, okay. Themobilephonewasfreakishbecausethatwasactuallydrivenbysocialpressureinpart. Youknow, youhadnoevenpeoplewhodidn't reallywant a mobilephoneendeduphavingtogetonebecauseyoulooklike a bitofanarseholewhenpeoplesaid, what's yourmobilenumberandyoucouldn't giveone.
Andalsoitbecameimpossibletomeetyourfriendsbecausetheysaid, OK, I'm notsurewhichpubwe'regoingto, butwe'llringyouonthemobile. Ifyousaid I haven't got a mobile, peoplewillgo, well, sodyou. Okay. Butmostofthesethings, includingsmallpoxvaccination. Okay.
Hugeopposition, unbelievablescepticism, massivesuspicion. Ifyouthoughtthatanti-covidvaccinationorsomething, thiswason a parwiththat. HismarketingcoupwasgettingtheBritishroyalfamilytovaccinatetheirchildren, I think. Okay. Now, sowhatwe'resayingisthat, firstofall, whenproductssucceed, weforgettheextenttowhichmarketingwasactuallyinstrumentalordecisiveintheirsuccess.
I mean, SteveJobswasnot a technologist. Hewas a pitchman. Hewas a huckster. I mean, thisiscompliments. Okay. Hewas a brilliantsalesman. Hewas a fantasticmarketer. ThetechpeopleatAppledidn't respecthim. Theysaid, I don't getwhatSteveevendoes. Like, hecan't evencode. Okay. Buthewasabsolutelybrilliantateverythingfromproductdesignto, youknow, tofocusingon a on a limitednumber, toextraordinarytaste, togivingthosepresentations.
And, youknow, sellingthingsas a magician, makingmakingeverybodybelievethatApplewascapableofmagic. Andtherefore, youdidn't needtheskeptic. Now. So, firstofall, marketingplaysandtimingandluck, bytheway, let's alsoincludethose. Theseotherfactorsplay a muchgreaterroleinboththethespeedofadoptionandthesuccessofadoptionandanythingremotelynew.
Butinhindsight, weweforgetthemarketingandwedon't sayweneversaybecauseofthegreatmarketing, I boughtthatproduct. Wego, I boughtitbecauseitwas a greatproduct, butwethoughtitwas a greatproductbecauseofthemarketing.
TheRomansneverinventedthestirrup. Doyoubelievethat? Theydidn't actuallyhave a stirrupforhorses. Soyoubasicallyhadtoclickonwithyourknees. Oh, okay. Sowhat's sofascinating? Thewinebox, bytheway, reallyfascinatesmebecausein a logic, theKindleisonlyreally, youknow, it's kindoftakenuptowhere I thoughtwhentheKindleandtabletcamealong, I admitthis, I thought, okay, well, that's theendoftheflinglineforphysicalbooks.
Andinfairness, I travel a lot. So I havequite a lotofebooksbecause I canthenpackonetabletinmybag. I'm carrying a libraryaroundwithme, whichis, youknow, quite a longplaneflight. It's a lotbetterthanhavingtopackeightbooksanddecidewhichoneyou'regoingtoreadwhenyougetthere. Butifyoudon't travelaround, peopleseemtopreferphysicalbooks, forexample. Peoplelikethesethings, actually, like, what's thatfunnyScandinavianthingyouwriteon? Youknow, thatpadthing?
Remarkable, remarkable.
Okay, peoplelikethat, actually, becauseitallowsyoutodoless. Okay. Itallowsyoutoconcentratebecauseyoudon't getemails, youdon't getdistractions, etc. Butthewinebox, I mean, youknow, itshouldhavebasically, youknow, weshould. Itkeepsforweeks. Okay, it's gotitsowntap. Youcanhave a glassofwineintheeveningwithoutopening a bottleandlettingtheotherfive, youknow, fiveglassesgooff. You'renotforcedtobecome a ragingalcoholic. Ifyouleave, you'renotforcedtobecome a ragingalcoholic.
$110 millionorsomething. Andyou'vegottowipeyourownass. It's 110 millionforthisplaceandthetoilets. Now, I imagineifthere's a MiddleEasternowner, they'llgoandretrofitsomebumgunsinthere. Howflamingweirdisthat? Youknow, I mean, seriouslystrange. Andyourealisethatactually, youknow, I mean, GoogleGlass, I mean, itwaskindofmarketingcockup, theylaunched a bittoosoon.
Because I wouldreally, reallylikebeingabletowalkaround. Now, I don't knowwhat I'm tellingyou. Now, I don't knowwhatthetimeis. I don't knowwhenmynextmeetingstarts. I don't knowwhattheweather's likeoutside. If I justhadregularin-eyeupdates, a kindofheadsupdisplayforshitthat's goingoninmylifethatjustremindsmeofstuff. I easilywithouthavingtolookat a digitalwatch. I boughtthesebloodybothAndroidandApplewatches.
Andyeah, I mightaswellgetmyphoneout. Basically, I'vegotanordinaryanalogwatchhere. Butactuallyhavingsomethingwhichyoucanwear, whichjustgoesyournextmeetingstartsinfiveminutes. Theguyyou'retalkingtoiscalledLemmy, youknow, allthatstuff. Wereally, reallygood. I havenoideawherethemetaportaltoyouapartfromthisbusinessoftheprivacythingwithFacebook. Butifanyproductdeservedtosucceedinthepandemicforcryingoutloud.
Youknow, thatactually, I mean, quite a lotofInternetideasfailed, I thinkquite a lotofonlineideasfailbecausetheywerejustmistimed. Typically, youknow, somegoodideasweretooearly. GreatlittlethingactuallycalledtheChumby, which I hadaboutthreeofthem, andtheywerelittleInternetconnecteddevices. Andtheyjustcycledthroughlittlescreens, whichwouldsaylikelittleapplets, likelittlekindofyouprobablyaniPhoneuser, butwhatwecallthemwidgets.
Okay, onthescreen, andtheygo, thesearethetrainstoyourlocalstation. They'reontime. They'renotontime. They'rerunninglate. Thisistheweather. ThisisthelatestnewsflashfromtheNewYorkTimes. Andtheyjustcyclethroughthatstuff. They'd sitin a littlecuddlylittlething. I hadaboutthreeofthese. I thoughttheywerefantastic. Butagain, I mean, okay, I'llgiveyoutwoexamplesofthisabouttiming.
It's 1989. Okay. I signout a mobilephone. It's like a brick. It's madebyMotorola. Signout a mobilephonefromtheofficein 1989 because I'm goingto a meetingsomewhereoffsiteand I needtobecontactable. Soyoudidn't haveyourownmobilephone. No, theofficehadabouteightofthemandyousignedoneoutandtheywerekeptchargingintheoffice.
Yousignedoneout. Youtoldyourteamwhatyournumberwasforthedayandyousetouttoyourtrip. So I'm walkingdownOxfordStreetwiththismobilephoneandsomeoneringsme. So I haven't gotanychoice. I havetoanswerit. Okay. So I'm speakingon a mobilephoneinOxfordStreet, BusinessStreetinLondonin 1989. Twopeopleshoutabuseatmefrompassingcarsforusing a mobilephone.
Secondcasein. Letmeseeif I candatethis. Itwouldbeabout 2000 and. Oh, crikey. I guessabout 2003, 2004. Therewas a companystartedbysomeAmericanexpatscalledFoodFerryinLondon, and I thinkitwas a hybridCD-ROM.
Youactuallyhad a CD-ROMofmostofthestuffandyouwentonline, youorderedyourgroceriesandtheydeliveredthemtoyou. And I mentionedtosomeonein 2000, itwouldhavebeentheearly 2000s, that I actuallyorderedmyhomegroceriesontheInternetandtheylaughedinmyface.
Therewasmassive. I mean, OK, onestory. I thenboughtmyownmobilephone. Thiswouldhavebeenaboutnine. Thiswaseightynine. I wasborrowingthephone. Itwouldhavebeenaboutninetyfive, ninetysixwhen I actuallyhadmyownmobilephone, maybeninetyfour.
I'm tryingtoworkitoutand I'm onthetopof a businLondonandsomebodyringsmeandtheyringmefromtheStates. It's myfriendTed, whois a biochemistatPenn, I thinkatthetime. And I saidsomethingonthephone. I'm sittingonthetopof a busand I saidsomethingon a phonewhichmadeitobvious I wasspeakingtosomeoneinAmerica. Itwaslike, whattimeisitwithyouorwhat's theweatherlikeoverthere?
Basically, itwasobvious I wasmakinganinternationalcallon a mobilephone, thetopofthebus. I actuallythoughttherewas a mildriskofphysicalattackbecausethatwassuchanextraordinarilytwattythingtodo. And I suddenlyrealizedit's because I'm old. I'm fiftyeight. Youknow, I suddenlyrealizedthat a lotofyoungerpeopledon't havethechronologicalcontext.
Theyjustassumethat, youknow, therewasnoInternetandthentheInternetcamealong. Soeverybodygotit. Youknow, OK, thesmartphonewasthemobilephoneitselfwasnotrapid. They'veexistedforabout 50 years.
Right. Youhavetobeprettyrich. Most, mostpeopleinpeople's cars. I sawsomeonewith a portabletelephone, I think, in 1984. Andthatwas a reallyweirdthing.
Theyweren't fast. Thesmartphonewasprettyfast. I grabbedthat. Thatwasthatthatwas a thatwas a freakexception. MostofthesethingsarereallyGod, I'm slow. Andalso, ifyougetyourmarketingwrongorifyoumissifyoumisstime, yourlaunchorifyoujustmisjudgesomeaspectofyourlaunchpsychologically, youcantakesomethingwhichisintrinsically a brilliantproductanditwillfailtobite.
That's why I thinkthisisreallyimportant, becausewewehavesurvivorshipbias. Weonlylookatthesuccesses. Noone's theregoing. I mean, certainthingslike, I mean, thefactthatwestillopenourhouseswithkeys.
I agree. I'm excited. I'm excitedfortheTeslaversion.
Yeah, I'm completely I'm completely.
You'vesharedalltheseamazingexamplesofproductsthataregreat, butdidn't workout. Manyofthereasonsthatthathappensiswithin a company, it's veryhardtoshareandsuggestsillyideas, asyoudescribe. Andyouhavethisactuallyreallycoolsuggestionthat I wantedtohighlight, whichisfirstsharelikethelogical, rational, typicalanswer.
Andthen I thinkit's greattimetothinkaboutthesilly, crazyidea. Canyoutalk a bitaboutthat, justhowtooperationalizethis a littlebit?
AccordingtoHerodotus, writinginaboutwhatisit, I suppose, thesixthcentury B.C. I wasthereaboutfifth. I shouldknow. TheancientPersians, whentheyhadtodeliberate, theydebatedeverythingtwice, oncewhilesoberandoncewhiledrunk. Andonlyiftheyagreedinbothstateswouldtheygoaheadwiththecourseofaction.
Now, I don't knowwhetherbeingdrunkisjustanopportunitytocomeupwith a betteridea, OK, orwhetherit's a questionofdoesthisappealtousrationally? Doesthisalsoappealtousemotionally? OK, I don't know. There's somethingreally, reallyinterestingabouthavingwhatyoumightcallto a twostage, a doublelockofdecisionmaking, whichisOK.
There's thisfundamentalasymmetry, whichiscreativepeoplehavetopresenttheirideastorationalpeopleforapproval. OK, fine. Don't mindthat. Neverhappenstheotherwayaround. Younevergetyounevergetengineersoraccountantssaying, well, I thinktheansweristhreepointsevenfive. Butbefore I goandpresentthis, I'm goingtoshareitwithsomewackypeopletoseeiftheycancomeupwith a neater, morecunningidea.
Sothat's oneissue. I mean, theotherissuewouldbe, I mean, talkingaboutproductsthatfail, bytheway, FordandEdison, OK, collaboratedonanearly, I thinkthefirstdecadeofthe 20thcentury, anearlyelectriccar.
Now, watchthisonJayLeno's garage, bytheway. I thinkthatJayLenois a greaterphilanthropistthanBillGates. OK, BillGatesisquiteusefulifyou'reinAfrica, ifyou'vegotmalariaorsomething, buthe's notmuchusetome. JayLeno, ontheotherhand, takes a vastfortune, buysandrestoresamazingcarsandthensharesvideosaboutthemonYouTube. Now, that's greatifyou'reinAfricaandit's greatifyou'reme. OK, it's fantastic.
Right. Andtheuserimagerywasbecauseitwasquiet, youdidn't havetohandcrankit. Itdidn't giveofffumes. Itdidn't make a loudnoise. Theywerereallypopularwithwomenandtheybecamestereotypedaslikewoman's car. Meanwhile, allthepeopledoingthejalopyracingandthatkindofcustomisation, allthefarmboyswereusinggasolinecars.
Now, fastforward. What's sofascinating? Fastforwardto 2025. I'm quitepro-electriccars. I'vegottwoandmywifehasoneofthem. And I likethemboth. I wouldn't gobacktogasolinebecause I thinkthey'regreat. OK, they'relovelytodrive. They'relike a limousineand a go-kart. Theyhaveveryfewmovingparts. They'reincrediblyquiet. They'rejustlovely. OK, justdriveoneandyou'llseewhat I mean.
Andwhen I writeinfavourofelectriccars, I getallthesecommentsinthespectatorcommentsbelowofpeoplewhoreallyhatethem. Andwhentheywritetome, whatitboilsdowntoistheythinkit's userimagerylikeGoogleGlass.
Andactually, there's a problemwithalltechproductsbecausethefirstpeopletoadoptinnovativeproductstendtobeslightlyweird. OK, andweirdpeopledonotconferthereassuranceofkindofsocialnormsinthewaythatadoptionbyconventionalpeopledoes.
Ifyou'vegotyourweirdmillionairerichnutterandhe's got, youknow, he's got a windfarmandhe's got a heatpump, itdoesn't makeordinarypeoplethink, oh, I mustdothesame. Now, what's happeninghereisthat I didn't realisethis, butallthepeoplewhodon't haveelectriccarsseethepeoplewithelectriccarsgosmugenvironmentaltosserwho's lookingdownonmebecause I'vegot a dieselandthinkshe's savingtheplanet, eventhoughyou'vehadtomineallthiscobaltandlithiumandwhatever.
Toproducethebattery. What a trap. Now, theinterestingthingaboutthis, OK, isthatinveryfewcases I canencounter, I canremember, OK, istheelectriccarownersactuallyveryinterestedintheenvironment. They'renot. Similarly, whenyoumeetenvironmentalpeople, OK, theydon't haveelectriccars.
They'vealwaysgotsomecrappyexcuselike, yeah, butmywifeneedstodotheschoolrunandsaidwedecidedweget a diesel. Right. Right. I don't knowwhy. OK, youmeetthesepeople, yougotoenvironmentalconferencesandyousay, soyou'rereallykeenontheenvironment. You'vegotanelectriccar. Well, wethoughtaboutgettingone.
It's actually a hugeobstacletoadoptionbecausepeoplejust I don't wanttobethatkindofperson. Now, actually, OK, I wentaheadandelectriccarthreeyearsago. Therearefewerchargingpointsthantherearenow.
Brighton, whichislikethemostrightoncityonthesouthcoastofEngland. Nowheretochargeatall. Butyouwentsomewhere, youknow, youwentsomewhere a bitbling, a bit.
Allright. Arereallydoingthisforenvironmentalreasons. Theymaybehappytohavezeroemissioncars. I wouldliketogetsolarpanelstochargemycar, notreallytoreducecarbonemissions, butjusttobereallycooltohave a carthatrunsonthesun.
OK, I'd quitelikesolarpanelsonmyhouse. Notreally. Somesaytheplanet, but I likeit. Dinnerpartiesto, youknow, orratherlunchtime, wouldn't it? Yeah. Togoto a picnicandgo, well, I'm getting I'm gettingtwokilowattsonmyapp.
It's famouslytheargumentisthatbirdsevolvedwingsassexualdisplayplumagebeforetheybecamelargeenoughtofunctionas a modeofpropulsion.
Sobirdswhichseemtohaveevolvedfromdinosaursforthemostpart, thelogicisthattheytheyfirstofallgotwingsas a formofsexualdisplay. Thepeacockgotthetail. OK, butmostotherbirdsdidthedisplaywiththewingstolookcool.
So I thinkdinosaurshadfeathers, didn't they? Theythink I'm right. OK, sotherewasnosexualdisplaythinggoingon. Andeventuallytheythought, oh, actually, youknow, I didthistoshowoff, but I canactuallygettothatbranch.
Butwe'vegottobeconsciousofthefactthat. Andalso, ifyoureallyevangelizenewthings, youknow, I wasanairfryerevangelistliterallygoingbackover 10 years, 15 yearsago.
I wasliketheJohntheBaptistofairfryers, youknow, and I occasionallysaytoanaudienceof 500 people, ifyou'vegotanybodyheregotanairfryerandthere'd alwaysbesixpeoplego, yeah, bestthing I'veeverbought.
Andit's somethingthatcametomethatactuallyin a waythatthatactuallyannoyseverybodyelse. It's notpeoplegoing, comeon, thesepeoplewithairfryers, theyreallyliketheseairfryers.
It's a slightlyunusualkindofcorporateenvironmentwherepeopleactuallywanttokindofeffectivelyplayconstantgamesofoneupmanshipwiththeirkindofworkmates, whichtendstohappeninmarketingandotherfunctionsandtendstohappenactuallyatthehigherlevelsofcorporations.
Butit's actuallyvery, it's actuallyslightlyanunnaturalstate. Soyou'regoingtobeverycarefulworkingin a marketingdepartmentorbeing a personwhoworksinmarketingtocontinuallyremindyourselfthatyou'reanoutlier.
Itwouldhavecost 50 centsbecauseapparentlytheybuiltthefirstWalkmanonthe, I thinkitwascalledtheSonyTalkman, whichwas a dictatingmachine, whichhadboth a speakerandithad a microphone.
Anditwouldhavecostlike 50 cents a dollarperunitoftheWalkmantoaddrecordingfunction. Andofcourse, lateron, theydidaddthatmuchlateronwhenpeoplewerefamiliarwiththeconcept.
But I thinkitwasMarita, I thinkitwasAccio, Marita, Sonny, whowasthekindofinstigatoroftheWalkmanproject. Andhewasthesingledriverwhosaidno.
WhatDonNormanwillcallanaffordance. OK. Youdon't wantanyambiguityaboutwhatthisthing's for. Whatthisthing's forisforlisteningtohighqualitymusicwhileyou'reon a flightoron a trainjourney.
Andit's forthat. It's a personalentertainmentdeviceandnothingelse. Oncepeoplestartgettingusedtothedictaphone, doesithave a corporatefunction?
Youknow, should I useittorecordconcerts, etcetera? Onceit's gotmorethanonefunction, peopledon't knowwheretostart. Andso I thoughtthatwasanabsolutelyinspiredthing, whichisactually, youknow, inmanycases, lessismore.
And I thinkTesla's quitecleverinthechoicearchitectureofTesla's isjusttherightamountofchoice. Youdon't wantonecolor. OK, andyoudon't wantonebatterysize. Butequally, theyhaven't gonesilly. OK, youknow, they'rekindoftwointeriors. Youcanchoosefromtwosidesofwheels, fivecolors, fivebasiccolorsandtwopremiumones.
Soit's quiteright. Youknow, that's kindofaboutmanageable, youknow, whereas I had a lookatcustomizingthenewelectricRangeRovertodayandit's just. Well, itdrivesyouinsanebecause, youknow, yousuddenlyrealizeyou'regoingtobespendingbasicallythepriceof a housebythetimeyou'veaddedallthestuffyoureally, reallywant. Youcan't actuallyjustifybuyingthevehicle.
OK, somaybe a lastquestion. We'vecovered a lotofstuffatthispoint, whichmakesmeveryhappy. I askedpeopleonTwitterwhat I shouldaskyouwhenyouwerecomingonthepodcast. Andthemostcommonquestioncamearoundbrandingforstartups. Sosayyourstartup, you'retryingtofigureouthowdowebuild a brandforwhatwe'redoing. Doyouhaveanyadviceforearlystagefounderstohelpbuildtheirbrand, strengthentheirbrandovertime, somethingtheycoulddoearlyon?
So, firstofall, whenyouarenotfamous, youhavetofindallyourcustomers. Suddenly, youreachthismagicalsortofescapevelocityoffamewherepeoplestartcomingtoyouandtheystartsaying, haveyouthoughtofusingthisforthis? Oractually, youdidn't thinkofthisasanapplicationforyourproduct, but I'veactuallygotthis. Youknow, I actuallyuseitforthis.
OK, orserialkillers. Allright. OK. If I hadn't killedallthosepeople, noonewouldhaveheard. OK. OK. Therearepeopleforwhomfameislikeattributable. Butformostmostpeople, it's a wholewhatyoumightcallamalgamofdifferentactivities, youknow, goingbackyears.
OK, ifyou'refamous. Right. People, youknow, peoplegiveyouifyou'vegot a greatbrand. Thebestdefinitionof a brandisfromtheguywho's calledEricJohnson, I think, whowrotethebookBlindsight. Andhe's alsowritten a bookcalledBrandsThatMeanBusiness. It's a greatbook. Itdeservestobemuchmorefamous, actually.
Andhisthere's a sentenceinthatbookwhichsayshaving a greatbrandmeansyougettoplaythegameofcapitalismoneasymode. And I genuinelycan't thinkof a betterdefinitionthanthat. Now, thepointaboutplayingoneasymodeis. Canyouquantifythevalueofthat? Well, no, becauseyoudon't knowwhatyourscorewouldhavebeenifyouwereplayingonhardmodeorpsychomode.
I'm not a gamer, but, youknow, youknowwhat I mean. OK. Andcanyoualsosaywhichofyourvariousactivitiescontributedtothatthebuildingofthatgreatbrand? Well, no, youcan't, becauseit's actuallynotevenit's notevenanamalgamofthings. It's actually a kindofconcatenation. It's, youknow, youknow, thereare a wholesetofelementsherewhicharecatalytic. They'renotlinear.
It's a bitlikewhen I firstgot a pensionforthefirstfewyears. Brandbuildingis a bitlike a pension. Right. Thefirstfewyears I had a pension. Oh, God, I'm payingthisguy a fewhundredquid a month. Andlook, I mean, youknow, halfit's goneincommissionandgoes a lotofwork. And I'd ratherhavethemoneytohaveanIndianmeal. Youknow, I don't knowwhy I'm doingthis. Oh, look, it's hardlygoneupatall. Andwhat a bore. What a wasteoftime. I thoughtthatforaboutthreeyears. I'm 58 now. I got a pension. I go, wheredidallthismoneycomefrom?
I don't rememberpayingthis. Itreallyislikethat. It's a compoundingeffect. Andeverybodyeffectively, becausewehavefinanceandROIandallthosethings, everybody's usingaddition, multiplication, subtractionanddivision.
I lovethatbecauseovertimeitwillbuildinthecompounds. It's like a drip.
The I lovethethreepointsyoumadeabouthowtobuild a greatbrandconsistency, distinctiveness. Whatwasthethird? Itwasfamous.
Oh, yeah. I mean, I mean, consistency, distinctiveness. Probablyclarity, clarityandjustbefamous. Yeah. Yeah. Somesortofsomesortofclarityofpromise, I think. Amazing. I think I think a goodbrandis a sortofpromise, butalsotheextenttowhichitcontributestotrust.
OK, whichisthatifyoumet a celebrityonthestreet, right. OK, I don't mean a serialkillercelebrity. I mean, a famousactor. OK. Onethingyouwouldn't thinkaboutisaretheygoingtostealmywallet? Aretheygoingtomugme? Aretheygoingtodoanythingwiththat?
Theymayhavelots, lotsofvices, butgenerallypeoplewhohave a lotofreputationalskininthegame, who'veinvested a lotinbuildingup a reputationovertimearegoingtobemuchmorecautiousaboutdisappointingtheircustomersorriskingnegativefeedbackthansomeonenobody's everheardof.
Right. I mean, andlet's behonest, OK, it's even I thinkit's evenmoreextremeintheUnitedStatesthanitisintheUK. Therelationshippeoplehavewithcelebritiesiskindofpervyandweird. Youknow, theyyouknow, theyimbuethesepeoplewithsuperpowers. They'reactors, right?
Threepeopleontheboardhaveneverheardofthecompaniesthattheywantyoutogobackandcheckwith. Andthenyouwalkinandyouknow, andit's kindofyou'refamous. Therulesaredifferent. Andwhen I saytherearealsotheseinflectionpointslikeescapevelocity, I alwayssayaboutCoke.
ButCokehasreached a magicalleveloffamewhereitisyourexpectationthatanyshoporbarorcafeorMichelinstarredrestaurantwillstockit. And I canaskforthisanywhere. OK. Andiftheyhaven't gotit, it's theirfault, notmine. That's that's reallykindofmegafame.
Ifyouappointsomeonenobody's everheardoftobeyourauditorandsomethinggoeswrong, everybodyblamesyoufornotappointingPricewaterhouseorEY. Youknow, it's ratherlikeoneofthereasons I flywith, youknow, I wouldn't goon a businesstripwithRyanair, eventhoughthey'reactuallyprettygood. They'reverypunctual. Right.
Isiftheflightgetscancelledordelayedand I ringtheclientandsay, I'm terriblysorry, theBAflight's beendelayed. OK, theygo, oh, well, nevermind. Youdidyourbest. Andif I ringupandsaytheRyanairflight's beendelayed. OK, it's notquitethesame, isit? Right. I hadn't necessarilytried. I'vekindofskimpedonthat.
Youseewhat I mean? Andso, youknow, variousthings. It's notjustwhatthingsare. It's whattheymean. Andweusebrandsaskindofextendedphenotypestoexpressourselvesinallkindsofways. Sothisistheotherthingwithbrands. It's notjust a simpleconsumer. It's notjust a simplebusinessconsumerrelationship.
Thereareallkindsofthings. Whatdoesthebrandthatyousayaboutme? It's dothepeoplewho I whoknowmeknowwhatthisbrandmeans? It's nogoodbeing a luxurycarthatnobody, theonlyrichpeoplehaveheardof, becauseinordertoconveyprestige, it's necessaryforyoutoknowthatotherpeopleknowthatBMWis a prestigiouscarbrandandsoonandsoforth.
Sotherearelotsofthingshere, whicharesecondorder, thirdorder, non-linearcompoundingfactors. OK, youknow, wejusthavetorememberthisis a differentkindofmaths. Andyetwe'rebeingjudgedon a kindof, youknow, X minus Y equals Z maths. Doesn't makeanysense.
Maybeas a finalquestion, isthereanythingyouwanttoleavelistenerswith, folksthatarebuildingproduct, anylastingpieceofnuggetoradvice?
Thatallowsthemtodosomethingbyusingsomecleverapplicationoftech. Tryandusethosethreethingsinparallel, because I thinkwhatmostbusinessesdoistheytryanddothingsinseries. AndbusinessesborrowanawfullotfromthekindofFordist-Tayloristproductionlinementalityoftheprocess. OK, andtheprocess, wehavetopretendthattheprocessislinear.
Theprocessofanykindofinnovationordevelopmentisnotlinear. Thereareloadsofproductswhich, bytheway, havecompletelyfailedatfirstiteration. Andthensomeonesoldthemin a differentway. Andtheythenturnouttobecompletelysuccessful. I mean, thepivotisanexampleofthat.
Famously, WrigleystartedoffsellingsoappowderinChicago. Thenhestartedgivingawaybakingpowderfreetosellthesoappowderandthenrealizedhe'd startmakingbakingpowderandsellingthat. Andhegaveawaychewinggumthatwentonthebakingpowderas a gift. Andthenpeoplelikedthechewinggum a lotmorethantheylikedthebakingpowder. Soas a result, Wrigleybecame a chewinggumcompany.
Sobutwe'realwaystryingtomakethisthinglinearbecausewhenwetellstoriesbackwards, wepostrationalizeandwereverseengineerandwereverseengineerouractionstomakeitallseemperfectlylinearandlogicalas a kindofsensecheck. Therealprocessisneverlikethat.
And I thinkyoushouldhavemarketing. I thinkmarketingandtechnologyaretwosidesofthemarketingandinnovationaretwosidesofthesamecoin. Youeither, as I oftensay, youcaneitherworkoutwhatpeoplewanttofindout a cleverwaytomakeitoryoucanworkoutwhatyoucanmakeandfind a cleverwaytomakepeoplewantit.
Andactuallythegreatestthingismanagetodoboth. Simpleasthat. So I don't doitonethantheother. Don't leavemarketingtothelastminute. Butequally, well, youknow, workinparallelasfarasyoucan.
WherecanpeoplefindyourbookandNudgestock? Pointthemrealquick. Nudgestock.com. Thebook's calledAlchemyandit's got a varietyofsubtitlesdependingonwhichcountryyou'rein. ButifyoulookforAlchemybyRorySutherland, theaudiobookisprobablythebestthingtobuybecause I actuallyreaditmyselfand I kindofriffed a bitfromthat, butalsoavailableonKindleandfromallgoodbookshopsandquite a fewrottenones.
Andthere's also a book I'veco-writtencalledTransportforHumans, co-writtenwithPeteDyson. Ifyou'reinthetransportationindustry, I'd recommendthatone. Amazing. Rory, thankyousomuchforbeinghere. Thankyouforthat. Alwaysenjoy.
Seeyouinthenextepisode.
SteveJobswasnot a technologist, hewas a pitchman, hewas a brilliantsalesman, hewas a fantasticmarketer.
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