This week, we’re revisiting a previous episode of The Craft, where Hian, our General Partner, discusses behavioral psychology with Rory Sutherland - author of Alchemy and Vice Chairman of the Oglivy group. Here are 5 key takeaways we gained from their conversation:
People pay for what things mean, rather than what they are.
Citing the example of Uber’s map display when when waiting for a car, Rory explained how this change in display is a psychological solution to reduce uncertainty while waiting for their driver, a much more cost-effective solution than hiring more Uber drivers.
To be brilliant, be less logical.
A degree of creativity is needed for good solutions. Logical solutions are easy to find and probably already created. Instead, utilizing unconventional thinking leads to disproportionate value upon success.
Find ways to reframe problems.
The same product can be viewed in many different ways based on how it is packaged and priced. Notions of value to consumers are easily influenced by how a product is presented to them. In the case of Nespresso, packaging coffee in individual pods rather than a large jar shifts the frame of price comparison to Starbucks - a more premium option rather than Nescafe.
The presence of invisible asymmetry.
Models tend to assume that the world is symmetrical, which often leads us to create solutions for the average person thinking that it is reflective of the masses. However, this is hardly the case and as VCs and startup founders, we should be focused on giving people capital to identify these invisible asymmetries.
Adoption of revolutionary technologies often follows a sigmoid curve
Take the iPhone, for example. It’s adoption took time, but once it gains acceptance, it grows exponentially. This is especially the case for network technologies like Zoom, which requires mass cultivation of habit, social norms and widespread adoption.
For the full episode, click here to watch.