Placebos and Behaviour Change – Rory Sutherland

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Um, this is a talk, I suppose, about placebos, but it's not a talk about placebos in many ways because my contention is that everything is a bit of a placebo. By which I mean that drugs work, or possibly don't work, at a pharmacological level, at the level of chemistry, but they also work at the level of psychology. And some enough, after I wrote the book *Alchemy*, I've been bombarded by emails. The most recent one, only yesterday, by someone who worked in pharmaceutical research, which said, quite commonly, if you produced a very successful drug, they were testing, I think, a beta-blocker at the time. The beta-blocker had highly significant effects on 80% of people. However, the placebo had highly significant effects on 40% of people.

Now, the interesting thing about medicine is, everybody in pharmacology wants to distill out the bit that works through chemistry and get rid of or discard the bit that worked through psychology. That is, at least, everybody in the West. In Japan, interestingly, they take a slightly different view. They argue that the placebo effect is also something that contributes to the efficacy of drugs and treatments, and therefore it's something you should welcome and encourage and try and magnify. In the UK, we're uncomfortable with it because we don't know how it works, and it's something we try and actually effectively remove from the model.

Now, I would argue this is an enormous mistake. Because if something can work without us knowing why, does that mean we shouldn't use it? Just to be obviously clear about this, I mean, no one knew how aspirin worked until about 15 years ago, okay? Secondly, if we were to be banned from using all the products of progress which were discovered by luck rather than by the scientific method, okay, we actually wouldn't be able to give ourselves penicillin. A very large amount of scientific progress is actually made through luck and happenstance and random accident.

And so there are very interesting and very strange things going on. For example, painkillers are more effective if they're red. Okay? Sleeping pills are more effective if they're blue. Although, according to one survey, that isn't true in Italy. Okay? Now, this is how strange. And one theory, which I, is purely a theory, okay, is that because their national sports team is blue, and usually two Italians, the Azzurri, they're called blue, is actually a color of excitement rather than the color of a color of somnolence. Um.

There's a big difference to the placebo effect if you give people three small pills rather than one big one. That's another interesting fact. But let's take this a bit further. Wine tastes better if you pour it from a heavier bottle. Wine tastes better, who tell people it's expensive. Painkillers are more effective if they're branded, and painkillers are more effective if you tell people they're expensive. So I'm the only person in Britain who complains that you can't get expensive aspirin anymore because my argument was, I haven't got a 49p headache, I've got a £2.50 headache.

Now, interestingly, Nurofen in Australia got into trouble because they sold a whole range of variants of Nurofen, including European for period pain, and it was Nurofen for colds and flu, which were chemically and pharmacologically identical to standard Nurofen, but they charged a premium for them. And the Australian Consumer Rights Council, or whatever it was, took them to court and demanded they stop the practice. If you're a chemist, that's a good thing. I'm not sure it's a good thing if you believe in the placebo effect, because making someone pay more for a drug that says "for period pain," whether you like it or not, will make that more effective at treating period pain than if you take the generic Nurofen at the ordinary price.

But I said, they didn't go far enough. They should have had Nurofen for people whose neighbors like reggae, and I've lost my car keys again. Nurofen for removing stress. But it raises really important questions here, because if what, how we perceive something and how we react to something, not just emotionally, by the way, but also physiologically, is affected not only by what the thing is, but by the context in which we consume it, you've got two choices. You want either say, "Actually, this is kind of okay. We ought to encourage this." Because, let's face it, what's the job of a painkiller? It's to reduce pain. Okay? Now, if you can reduce pain with words rather than with chemicals, who's to say that's an invalid thing to do?

Now, I understand that's an incredibly self-serving justification and defensive marketing to some extent. But undoubtedly, by the way, you can make a longer taste better by doing good advertising for it. Okay? Lilt would not taste so good had you not been reminded that it was totally tropical. Okay? But I'm not sure that the grapefruit, strictly speaking, is tropical. But they didn't actually, you know, they didn't actually stick too much to absolute accuracy in the depiction of Lilt, the Caribbean drink, for that matter. They don't actually drink on Bongo in the Congo, as far as I know. But it does actually alter the nature of the thing, the enjoyment of the thing.

And therefore, we come to a really interesting thing, which is we can create value, arguably, in the mind, just as much as we can in the factory. Now, at the very end of the talk, I'll talk about two strands in economics. The mainstream strand of economics does not accept the psychological creation of perceived value because it's based on the idea that we all have perfect information and perfect trust, and that we know exactly what we want to buy and how much we're prepared to pay for it, and we know exactly how much utility we can expect from that purchase. And therefore, there's patently no need for any marketing because we are already purchasing optimally using our perfect knowledge and perfect trust in this imaginary kind of Minecraft model of the world which economists have created.

And by the way, that's why typically your finance director hates spending money on advertising because in his model of the world, advertising is an inefficiency. The only way you improve a product is you either make the product objectively better, or you reduce the price of the product. During a funny ad campaign that tells people that the drink is tropical, or gets them to associate the drink with Caribbean islands, which undoubtedly increases enjoyment of Lilt. In reality, to a finance guy, that's cheating. Okay?

Now, just to be fair, so he sees advertising as a necessary evil, at best. It's a cost to be minimized, not a source of value generation. There's a different school of economics called the Austrian school. Hayek, von Mises, people like that, who took a completely different view. They took the view that what something was worth was simply what the given individual might be prepared to pay for it. And therefore, you could create value not only by actually reducing the price or changing the product, you could create value by telling a story about that product. It's only a very simple story about how working in advertising sometimes, very, very simple Don Draper tricks really work.

So my dad, he's 88 now, he loves factual television. Give him a drama, can't stand the bloody stuff. Okay? But give him something like "Nazi Mega Structures" or shots of the Serengeti, and he's happy for hours. Okay? Now, I spent ages trying to persuade him to get some sort of multi-channel TV, which, given that he lives on the Welsh borders, basically means Sky. All the more imperative, by the way, if you live in the Welsh borders, that you get multi-channel TV because, of course, what if you only hold terrestrial TV? One of the four is actually in Welsh, which my dad doesn't speak. He grew up in Riga, but no one, including it, really spoke Welsh in the time of his childhood.

And it got to the point where I actually offered to pay to get him the Sky Family Pack. And he said, "No, no, it's too much money. In the time, £17 a month." I said, "Well, I'll get it for you." "No, no, it's far too much money." I said, "Well, it isn't £17 a month, is it? It's 60p a day. What difference does that make?" "60p a day is kind of £18 a month." I said, "Yeah, but you spend £2 on newspapers. So if you spend £2 a day on two broadsheet newspapers, spending 60p a day to get 200 extra channels of television doesn't seem that crazy, does it?" "What? No, I see what you mean." And about a week later, he got Sky with his own money. I didn't even have to pay. Okay?

And he's now become this weird advocate going around all the other retirees of the of the Wye Valley, going, "You really should have seen that 'Nazi Mega Structures' on PBS + 1 HD or whatever it was." Okay? And he obviously loves it. And the same thing presented in two different ways can be good or bad, entirely dependent on context. And that's because everything is part placebo.

My grandfather, by the way, in Trigg, funnily enough, was effectively at in at the very beginning of the National Health Service. Trigg is where Nye Bevan got the idea for the NHS from. And my grandfather was a GP working for the Trigg Working Families Miners' Medical Cooperative Fund, I think I've got that acronym right, which was where everybody paid us a set amount every week in return for free healthcare, which is where Nye Bevan got the idea from for the NHS. And my grandfather admitted that, to be honest, before antibiotics came along, as a GP, you were about 30% doctor, 70% shaman or placebo. As much of your value was created by reassurance, jollying people along, getting to wrap up warm, giving them confidence. As much of your job as psychological as it was pharmacological.

And my view is that's kind of fine. And in fact, I mean, the most reviled bit of political communication in the last 20 years was the Ed Stone, if anybody remembers it, which was Ed Miliband's idea to put a load of pledges on a stone tablet. Now, the Ed Stone contained the line, "An NHS with the time to care." Now, I must admit, I saw that line and thought that was spot-on. Because your reaction to, for example, a hospital visit is not actually your emotional reaction. It's probably as much to do with the feeling you're looked after as it is to do with the actual chemicals you're exposed to.

Now, Nick Humphrey, who's a psychologist at Cambridge, has a theory around this, which is that I'll share it with you, and it remains a theory, and I ought to be, you know, we all ought to be cautious about it, but it seems plausible. Okay? So, we all evolved in a world of much greater scarcity than one we find ourselves in. Okay? For most of our evolutionary history, we were always at risk of freezing to death, starving to death, being eaten by things, getting ill. You know, there are a huge number of risks which beset us. And Humphrey's idea is that we have a kind of inner finance director in our body that is responsible for the delegation of resources. And so, overly dedicating resources to healing, in other words, over-investing in the immune system, is actually dangerous in the evolutionary environment. Because if you're over-invested in the immune system, you could freeze to death in the night.

So Humphrey's idea is, depending on the circumstances, our immune system will either work at full tilt or work in kind of first gear, depending on how this internal mechanism, whether it thinks it's safe to invest in immunity or whether it isn't. Now, one very interesting, obvious, and true fact that would be true if this theory were true would be that people will get more ill in the winter than they do in the summer, which seems to be the case. And by the way, despite lots of conflicting theories, no one's quite sure why that would be. If this theory isn't true, and the reason for this is, if the summer is a time of great abundance where you're not short of food and generally don't get all that cold in the night, and therefore, if you're in warm, bright, sunny surroundings, it would make sense if this internal financial finance director, or this internal accountant, said, "Let's spend pretty big on the immune system now because we can afford the risk. We can afford to take the risk." Whereas on a really cold, rainy day where you're shivery and it's dark, the natural tendency would be, "Conserve resources as far as you possibly can."

And there is some evidence, by the way, that if you take, I think it's hamsters, not guinea pigs, and you basically delude them as to what the season is, that you can actually see that patterns of illness in a fake summer are much, much lower among hamsters than in a fake winter. And so that's the theory. Now, is that theory true? Actually, if you are subjected to stimuli like taking pills, which you generally associate with getting better, okay, white coats, taking pills, people bringing you chicken soup, okay, all those things may be symbolic acts which you internally are used to trigger an elevated immune response. Okay? So actually, how you treat people matters as much as how you treat people in some context. Again, it's a theory.

But if you think about how much of what we do in our bodies is actually either part instinctive or completely instinctive. Heartbeat, pretty much entirely automatic. You know, we can't hack it, but we can't control it. Okay? Breathing, you can do both. Most of the time, you do it without thinking. You can consciously breathe. You know, if a GP is holding your testicles and asks you to, you know, you can do that weird breathing thing. But most of the time, we're not going, "Don't forget to breathe, Rory, because otherwise you'll suffocate." Okay? Blinking, another thing that's a halfway house. Pupil dilation, entirely automated. You can't actually consciously will your pupils to get bigger or smaller. You can't go into a dark room or into a bright room. So you can hack the effect obliquely, but you can't control it directly. Okay? You apparently can dilate your pupils by looking at pornography as well. I have no idea why that is an evolutionary response, but who knows. It makes you more attractive. Well, that makes sense. Having larger eyes. I don't know. It might be one of those strange things. Germans have a phrase, "bedroom eyes," don't they? Which is bedroom eyes. May be something to do with that. Lucky they didn't call it "porn-eye," really, isn't it?

But this is interesting because those things about our physiology and those things about our psychology which are not directly controllable. I can't will my heart rate up or say, "Pupils, contract now." Okay? I suppose sexual arousal is another one which is kind of a halfway house. Okay? I always liken them to the automatic gearbox. You can override them, but most of the time, what you do is you hack them. Does anybody here drive an automatic? Because everybody who doesn't drive an automatic, "Oh no, I couldn't possibly drive one." "Because you don't have any control." Right? The truth of the matter is, when you drive the same automatic for any length of time, you actually learn to control what gear it's in rather well. Because what you actually do is you go, "Actually, I don't want the thing to turn down, you know, to change down at the top of this hill." So you just release the pressure off the accelerator a bit, and it doesn't do it. So actually, you learn to control it, but you don't control it with a gear lever. You do it obliquely. And it's one of those things you kind of control through oblique means, not direct means.

And I think, um, I think this is really interesting because we've spent so many years, the last decades, absolutely fetishizing those things that are the product of pure science, and we've equally devalued and discarded these things which are the product of magic. Now, I'll tell you a very quick story. Okay? Here's a placebo way to reduce NHS waiting times. Okay? Just, just retell this. I'm not making this up. My cousin was a nanny consultant for many years in Lancashire. And here's the very true and interesting fact. Now, do you want to reduce waiting times, or do you want to, you know, reduce patient annoyance? Now, by the way, that is an important question. And by the way, the answer to it is probably both. You know, there were a massive inefficiency if you made NHS waiting rooms unbelievably entertaining, like the IMAX NHS waiting room, so that people willingly spent days in, okay, with free coffee, you would have a problem with efficiency and overcrowding. So at some level, you want the experience to be fairly quick. But at the other level, you want to minimize the time, don't you? In fact, it's more important to have knowledge of people than in there. The difference between 45 minutes and 30. Here's the weird truth. Okay? If you get someone seen by a triage nurse, the triage nurse says, "You need to see the consultant, but I'm afraid there's gonna be a wait of two and a half hours." If you then show them through into a different waiting room, they're totally happy. Okay? If you send them back to the original waiting room, they're totally pissed off.

Now, funnily enough, some quite rich companies do this. I went to see KPMG, and after you've arrived at their ground floor reception, which is sort of marbled with dispatch motorcycle dispatch people coming in and, you know, and a lot of sort of, you know, not very comfortable furniture, once they've actually established that you're there for a bona fide meeting, okay, they show you through to a mezzanine floor which has an espresso machine and a lot of sofas and copies of magazines. And I noticed exactly the same thing as my cousin noticed in the NHS waiting room, which is strangely, when you're shown through into a new area and you feel you've made progress, okay, they were actually, they kept me waiting for half an hour. If I mean, kept waiting for half an hour at reception on the ground floor, I would have started to get a bit pissed off, to be honest. I was quite right enjoying being there. There was good Wi-Fi. They could have left me for another hour, I wouldn't care. And what that is, okay, is there's the bit of the brain that perceives the world objectively, that cares about SI units like time, you know, and delay and duration. But a large part of the monkey brain is kind of social and it's emotional, and it reacts not to facts, but to meaning.

Okay? And the interesting thing, I suppose, is that if you're shown through into another waiting room, you feel you've been upgraded. And if you're sent back to the original waiting room, your monkey brain feels you've been rebuffed. Okay? And the emotional outcome of those two different things is really, really different. So your mood is more driven by your inner monkey than it is by your inner timekeeper. I think. I think that's just, I think that's just really interesting. Because, you know, a large part of the way we perceive the world. This is a church designed by an architect somewhere in Florida. We can't help but see it as a chicken, can we? Okay? It's now known as the Chicken Church. This is known as pareidolia. Evolution has wired our brains disproportionately to be alert to everything which has two eyes, no nose. Okay? That's why you see faces in clouds. And that's because things with two eyes and a nose are disproportionately important. They might be something we can eat, or they might be something that's about to attack us. But also, having that two eyes and a nose module probably helps us process facial expressions, which in any social setting, I, you know, understanding whether the guy's laughing or not laughing in that scene in Goodfellas, "You mean, I'm a funny guy?" Okay? The ability to read that kind of thing accurately probably had a major determinant effect on them on survival.

And we're also, I was in Ireland yesterday, and I made the point that although there are no snakes in Ireland because St. Patrick got rid of them all, apparently, you know, Irish people are still frightened of snakes. And the reason is that you're calibrated. If you think about the calibration of an emotional response, it's much better, like a smoke detector. You don't want a chilled smoke detector. You want your smoke detector to be slightly paranoid. But here's the downside of a paranoid smoke detector: as it goes off when you make toast, and that's annoying, but it doesn't kill you. Whereas a stone smoke detector, which went off when you make toast, is probably making tasting them, whatever, right? Okay? Okay. The upside is it doesn't go off when you're making toast. The downside is you die in your sleep. And so evolution also calibrates a lot of our perception, playing on the side of safety. And it calibrates our perception in the same way. And it's more important that, put very bluntly, okay, simple fact about evolution. And in a few weeks' time, Robert Rivers is coming to speak at Ogilvy, if anybody's interested. I'll try and find the date at the end. He's written a book on deceit and self-deception, which is why he believes that our ability to deceive ourselves is actually fundamental to our survival as a social species, because we need to delude ourselves in order to delude other people. Okay? Because someone who went around telling the truth all the time would be, you know, kind of awkward. Okay?

And so the point is that if evolution can get a 2% gain in fitness at the price of a 10% loss in accuracy and objectivity, it'll take that trade every time. And similarly, here's a beautiful case where the reaction is what you might call part rational, and then the emotional kicks over. Now, it's good to refer to the inner chip, but these are actually monkeys to begin with. And it's a fascinating experiment which shows that in the absence of any social context, monkeys will behave quite a lot in the way that economists would predict would be rational. Okay? Which is, if it's worth doing this thing, I'll keep on doing it. Okay? The second you introduce a second monkey, a different mental module kind of kicks in. Actually, what we really need to do in politics is to have a really interesting, deep debate about what fairness really means to humans, because it's actually quite complicated.

So I'll give you a weird example. Okay? If you take this idea, generally people on the right resist redistribution of wealth. Now, the assumption is, and by the way, if you ask them, they say, "It's my money. You're taking it away and you're giving it to someone else. I've earned this money," blah, blah, blah, blah, blah. But here's a really weird thing. If you take the guaranteed basic income, which is everybody's paid a certain amount of money by the state, okay, and that you, you're basically paid enough to live on, and then what you earn on top of that is up to you. Now, what you earn on top of that is taxed at a higher rate, okay, to pay for the basic income. What's weird about that is quite a lot of right-wing people quite like that idea. Richard Nixon was in favor of it. Milton Friedman was in favor of it. My grandfather, the doctor, and Rodrigo, who is actually a pretty right-wing fellow, was also in favor of it.

Now, what's going on there? I think that's very interesting because what right-wing people are muttering about, what they're saying is irrelevant. Okay? What people say, people don't actually, the monkey brain comes with it, basically controls your behavior through emotions. It doesn't come with reasons attached. Okay? And so what we do is we post-rationalize appropriate reasons to explain our emotional predisposition. But that those post-rationalizations of why we don't like tax systems, by the way, okay, are probably totally inaccurate in terms of the real emotional response. Because the guaranteed basic income is quite redistributed, actually. It also poses the risk, which is a risk, by the way, which people, basically, ten people will pull their basic income, move to a big house somewhere really obscure where property prices are really cheap, and live in a commune doing nothing all day, which will be a problem, I think, with the tabloid newspapers, to be honest.

But what is interesting is why right-wing people probably don't mind it is because it preserves incentive structures. Just gonna mean, which is that if a guy works 10 hours harder than the guy next door, he's 10 hours of work richer than the guy next door is. And so it preserves a kind of desert idea, which some forms of redistribution don't do. I don't know the answer. The expressions, all I know is that it's worth doing lots and lots of thought experiments because the, when people are describing emotions which arise in their monkey brain, okay, all they're really doing is coming up with a plausible-sounding post-rationalization. They're not really describing what is the origin of that emotional response.

And anybody here know John Haidt, who wrote a book called *The Righteous Mind*? He uses his analogy of the human brain as a rider on an elephant. And the rider is the conscious bit, the bit that does all the talking and the bit that does all the conscious thinking. And the elephant is essentially the unconscious bit, which makes most of the decisions and is effectively more powerful than the rider. It's much stronger. But the interesting added dimension is that the rider deludedly believes he's in control of the elephant. And there's another analogy here as, as, which is the conscious brain thinks it's the Oval Office, when in reality it's more like the Press Office. Okay? That the conscious brain thinks it's making the decisions. In reality, it's doing what a press office does, which is hastily constructing a plausible-sounding explanation for a decision that was taken somewhere else for reasons it doesn't fully understand. Okay? If anybody's worked in a press office, I think that's a fairly accurate description of what you end up doing. You know, "We put our prices up." Oh, [expletive], how do I explain that? Oh, let's say that war materials have become more expensive. You know, the, and actually, you know, they have maps, that's not the reason for the price rise. But you can't say greed, can you? And so this is the problem. Okay?

That in politics, and to a large extent in business, left-brain, what you might call rider thinking or elephant thinking, dominates decision-making. And weirdly, when we design a chair, we design it for the evolved shape of the human body. Now, when we design a steering wheel, okay, when we design a door handle, we design it for the evolved shape of the human hand. We put it at a height where most people can reach it, unless you're one of those people who have young children, where the lock on the loo door is like six feet up in the air. You know? But basically, we tend to put those things that are at a height where everybody can reach it, and we design it around that the body shape that evolution has given us. But when we design a tax program, we don't design it around the brains that evolution has given us. We design it, we get it designed by economic man, you know, who makes a whole series of assumptions about what people are motivated by.

Now, as that thing shows, fairness is a very, very deep motivation. And we care not only about wealth. Economists probably only think we only care about utility, and that the utility that other people are getting shouldn't concern us at all. We should simply maximize our own. Now, a fairly shallow observation of humankind shows that we care about relative things a great deal. It used to be that joke in the 1930s, which is, a rich man is anybody who earns more than his wife's sister's husband. You're all doing that, all the blokes are doing the calculation there, aren't you, very, very rapidly. But actually, you know, status is to a huge extent, of course, a relative currency. Okay? It's not an absolute one.

And by the way, that's, I would find that quite sad because if you take fairly basic bits of consumer electronics, if you'd gone to Louis XIV with a 55-inch LED TV, he would have given you half of France for that. With me, right? And yet, because everybody else has one, we don't regard those things as magically as we probably should. You know, we've put, you know, we probably should spend more time sitting down, going, "Actually, you know, just from the context of my own grandmother, this stuff is unbelievably cool." And we rather sadly, I think, derive less pleasure from amazing things once they become actually more widely available, which is kind of sad.

But this is a point made by Richard Thaler. As a general rule, the United States government is run by lawyers who occasionally take advice from economists. Others interested in helping the lawyers out need not apply. And again, the placebo element of government, okay, doesn't get a look-in. You know, what is psychologically appealing? One of the things I said, by the way, which I think would work, is someone rang me from one of the political campaigns and said, "What do you think about tax cuts?" I said, "They're rubbish." I said, "What do you mean?" "Well, they're miserable after about two years. Nobody notices them anymore. You just become acclimatized to the rate of after-tax income." What are we much more interesting is to keep the tax system the same and rebate people every year. A, they notice. B, they get a lump sum. C, you now have a perfect point in the year in which to encourage philanthropic activity. Okay? So, you know, it would be very hard to get me to write a £500 cheque to the NHS. Okay? If you wrote to me and said, "You would do a rebate of of £1,000. Most people give at least 30% of it to the NHS. How much would you like to give now?" To an economist, those two things are identical. Okay? They both involve the loss of £500. To the human brain, to the monkey brain, they're actually very, very different indeed. In other words, allowing someone to withhold a windfall causes much less pain than actually asking us to pay some money.

If you don't believe this, probably anything you buy on a contactless credit card feels 14% cheaper. Okay? I think you've noticed, haven't you, as well? It does feel, you know, that taxi experience is just a degree less painful. Now you no longer actually have to reach into your wallet and hand over a note. And I think the trouble is that everybody in positions of decision-making and power has started to use this, what I call, the into the economist map. And by the way, it's not a totally terrible map, but all maps by necessity contain distortions. And the problem happens when everybody starts using the same map, and they all use the same map for years and years and years. Eventually, the distortions become more and more pronounced, and they create greater and greater biases in behavior.

Just really quick ones from the Tube map. Okay? The Central Line is overused because it's red and horizontal. So you look at the map and you go, "I want to get from east to west. Ooh, look, there's a straight line that's red. That's doing that." John. Okay? The Victoria Line, which is a very, very good line, but was added last to the map, that's underused because in order to fit it onto the pre-existing map, they had to make it look curved. And there aren't many people looking at a map going, "How can I go round London in a roundabout fashion?" Okay? It also leads to other delusional subset of people who live in Fulham think they live centrally because they're on the tube. In my view, it's so far west, it has its own time zone. But people who live on the tube think they live centrally.

So I'm not making this up. Some friends of mine, or friends of friends of mine, moved from Fulham to Herne Hill because they wanted an extra bedroom. You're a really good tip for anybody here who wants property tips. If you want to buy or rent property, get a copy of the Tube map and ask yourself, "What isn't on it?" Because everybody else is using the Tube map to decide where to live because they think it's a map of London. Okay? It doesn't show Thameslink. It doesn't show any of the South London rail network. As a result of which, North Londoners have no idea how people in South London get to work. Do they? Yeah. I think North Londoners think the people in the South basically put their possessions in a red and white spotted handkerchief and tie them to a stick and sort of start walking in about 3 o'clock in the morning. Okay? But the people who moved from Fulham to Herne Hill, you get an extra bedroom. Basically, it had "Hill" in the name, and it wasn't on the tube. They were expecting deliverance, pretty much. Okay?

You know, they were basically expecting a squeal piggy, as far as they were concerned. And then, to their complete bafflement, on their first day at work, they discover their commute took half as long as it had done from Fulham. Okay? So there are a whole load of things which the map doesn't show. But we, the most common tourist journey undertaken on the tube is Leicester Square to Covent Garden. Now, there are single tube stops up in the northwest that are probably four and a half miles. In central London, you have to massively expand distance because otherwise the stations are, when we said, densely packed. And be able to read the map, because it isn't a map, it's a schematic diagram. The guy who designed it, Harry Beck, was an electrical engineer, and he based the whole design on wiring diagrams. And as a way of working out how the lines connect. It does a pretty good job most of the time. If you are going from a tube station to a tube station, it does a reasonable job. Not always. Most people who go from Paddington to, say, somewhere on the Central Line, tend to go round to Notting Hill Gate, which actually involves going quite a long way west. But the map doesn't show a familiar dependence or Central Line walk to Lancaster Gate, because it's downhill, there's a good kebab shop on the way, and there's there's a lift at Lancaster Gate. But again, the map, you had that, we would have no idea from that map that Lancaster Gate was an easy walk from Paddington.

And so what's happened is the economist's map, and what I might call the medic's map, the placebo-free man, has become territorial. I have sort of turned my phone off. This is really weird. Um, this has become, that maps have become overused, and the psychology maps have become underused. Okay? Now, I'm not suggesting that's just, think there's no room for science around the place. You know, next time you fly on a, you know, on an aircraft, you want some engineers to have done some mathematical work around the aeronautics. Okay? Next time I fly on a plane, I don't want to think the people, you know, who are tightening the wheel nuts, are while the creative people writing, "Let's try it clockwise this time, just for the lols." Right? Okay?

But the fact that scientists get to this problems first, define the problem in scientific terms, which means using SI units, time, weight, distance, you know, what we know, electrical conductivity, and they define the problem in those terms, and then solve the problem for those terms, creates biases in problem-solving because the psychologists are never allowed anywhere close. And this is known as the McNamara fallacy, actually, which is that we tend to obsess about whatever can be easily measured, while we're measuring an interest in waiting times rather than NHS waiting irritation. Okay? Because it's easy to measure time, but it's not easy to measure irritation.

Now, when I, when I said about the IMAX NHS, and a, yeah, you know, I'm only half joking, by the way. You know, I'm only half joking. I apparently became famous because of a joke I told in a TED talk, which is, rather than spending six billion making the Eurostar to Paris about 50 minutes faster, what else could you have done that would have made the journey better, but which an engineer would never have thought of? And the first suggestion was, just put Wi-Fi on the trains, which they only did last year. And my argument was, first of all, when you're using Wi-Fi, you're not really conscious of time anyway. Okay? My daughter has just introduced me to Red Dead Redemption and the PlayStation 4, and I've just discovered basically how to lose all track of time. You know, you suddenly realize you're in a pool of your own urine and it's 5 o'clock in the morning. Okay? Right? But also, it makes the journey productive rather than useless. Now, if you want to compete with airlines, actually airplanes are really faster than trains, but the reason people go on a train is because there's less [expletive] around. You get on the train, you sit there for three hours, you get off the train. Okay? You don't have to have a taxi or a tube at either end. You don't have to go through about seven security procedures. And so Wi-Fi would actually be much more than knocking 50 minutes off the journey, would be the killer competitive advantage over flying.

And then I made a joke. I said, if you wanted to, you could bank £5 billion of the six, spend a billion pounds hiring all of the world's top male and female supermodels, getting them to walk up and down the train handing out free shotty Oprah truce to all the passengers. You'd save £5 billion. And people would ask for the trains to be slowed down. And so, I mean, there are perfectly serious questions to be asked about NHS waiting times, which is, why do they do what cheese counters do? You know, they give you a number, don't they? Airline check-in, nobody's thought of this, have they? Why do they make you stand in a row when they could say, "Here's number 47. There's a cost of coffee over there." Right? We've got text messaging. It would know, obviously, you need to text people ten minutes before they're needed. To make sure there's anybody got an emergency passport ever from from that place in Victoria? It's weirdly non-[expletive], isn't it? I don't know if you have the same reaction. But basically, they make you take a lot of numbers. So you're sitting down and rather than standing up, and you keep moving from one room to another, and eventually they tell you to bugger off and come back in three hours' time to collect your passport, rather than making you hang around like a dog.

So we're the, I went there and was basically, you know, practicing breathing exercises because experience of heavy duty bureaucracy is something we're inclined to cause me to go off on one, you know. And I was terrified he's gonna turn into a bit like that film *Falling Down*, you know? Okay, right? And actually, I went through the whole thing with my family, and I didn't even get mildly irritated once. And I forget someone's looked at the emergency passport system in Victoria, and they've designed it around psychology, not around McNamara metrics. McNamara was the guy who fought the Vietnam War on the body count because he thought you needed a measure. And therefore, how if you didn't have anything you could measure. Now, the body count was a terrible, terrible metric. It might not have been a terrible metric for fighting a conventional war. For fighting a guerrilla war, it's an absolute catastrophe because arguably, everybody you kill unjustly creates three volunteers. So actually, minimizing the body count might be a far better approach than actually trying to maximize it in many situations.

And so this is where I think we get everything wrong. Apart from the SI units, the units of measurement that people tend to use, only one SI unit gives the game away. Only when I signed it, pays any attention to human perception at all, and that's the lumen. Because the lumen only measures light that's emitted by a light-creating device or bulb that's in the visible spectrum, and it's weighted towards that part of the visual spectrum that helps you to do intricate things like thread a needle or read a book. Okay? Because otherwise, you could produce a light which had fantastic efficiency in terms of lumens per dollar hour, but where everybody was bumping into the furniture because it was all produced in the ultraviolet spectrum. So the lumen is actually perception-dependent as a measure. Nothing else is.

There was a big argument about temperature because should the temperature of the atmosphere, you know, there's American forecasts that say, you know, it's 85 degrees Fahrenheit, feels like 81. They had a big argument about this. They said, when you give the temperature for weather purposes, shouldn't it be corrected for A, the level of breeze, and B, the level of humidity? Because actually, 85 degrees Fahrenheit, whatever that is in the new money, okay, 85 degrees, depending on the humidity and the level of breeze and a bunch of other things, can be a really pleasant day or absolutely intolerable. Right? I mean, London, if you remember when London went above 100 degrees, I'm a fat guy, I didn't even go into work. Okay, right? Because I'm fat, it's humid, it's 100 degrees, I'm not going anywhere. Right? Strangely, I can wander around Scottsdale, Arizona, at 100 degrees, happy as Larry, because it's very, very low humidity. And so there was an argument that said, actually, the essentially the scientific measure doesn't capture the emotional response. And "feels like" is a really interesting question because actually, you know, if you think about it, temperature is not a good guide.

The other thing, by the way, about weather, apart from anything else, with temperature, it's also based on expectation. Right? So in Britain, I think this is true, if it's a sunny day, it's a nice day, isn't it? Doesn't know what the temperature is. You know, if there isn't a cloud in the sky, it's a lovely day. Okay, right? That's the rules. Because I arrived in Johannesburg in their winter, and it was a glorious day, absolutely blue is everything. Okay? Came on the hotel, picked up by some people, road there with your hands blowing. They said, "I'm sorry, I had to arrive during some [expletive] weather." And I burst out laughing. People are [expletive] idiots. Right? And they explained that actually, for six months of the year, Johannesburg never gets a cloud. So all through their winter, blue sky is basically that standard issue. You know, that's, you know, that's not an optional extra. You get that standard. You know, okay? And so the fact that it was very cold, by which I mean it was about three degrees centigrade, meant it was bad weather. I generally couldn't understand what the hell they were talking about. I thought they would be totally deranged.

But I mean, actually, to factor in what's a nice day, you need about five or six other things other than temperature. Okay? And like, since humans behave according to their feelings, not according to objective measures. Right? We don't look at our thermometer, see that it reveals a high figure, and immediately walk around in our bathing trunks. Do it right? Okay? We react according to how we feel. That's right. Does anyone else have the hysterical thing where you go somewhere like Portugal in the winter, and you're wandering around in a t-shirt, and the locals are all in like Canada Goose puffer jackets, right? In after that's in the winter. People wear fur coats. I mean, it's ridiculous, you know? Okay? But it's a fancy only chance you get to wear a fur coat, I guess. There's some sort of logic to it. But actually, how we behave depends on how we feel, which is a mixture of context, a whole variety of variables. Therefore, trying to change behavior but only looking at the objective measures is a total mistake.

I always remember that lovely thing. We remember that lovely top tip in the Vis, which said, "Save money on foreign holidays by simply putting sandpaper on over your carpet, turning up the central heating, and walking around the house in your underpants." I've always wondered whether that kind of work. So that. But here you go. Okay? Now, here you talk about, you see what I mean about hack your metabolism. This is some weird American product, but just do it like wellness [expletive]. Okay? But I mean, again, can't get metabolism is actually what we're trying to do most of the time, to some extent. You know, placebos hack the metabolism. Having someone in a white coat. Now, this is a really mysterious thought. Anybody here in the health, in the NHS, or welcome to health? Okay? Don't ever repeat that I said this. Ninety percent of people who go to the doctor are not going for medical treatment. They're going for reassurance. Of people who have young children, it's probably 100%. And the motivation for going to the doctor is entirely, "If it really was meningitis, I couldn't forgive myself." Okay?

Now, my suggestion that you could replace GPs with actors, okay, then have any medical training at all, they're just going to be really [expletive] reassuring. Right? Okay? Now, don't quote me on that.

Okay, but it would work okay anyway. This is a total hack, by which I mean the screen you're looking at right now, right, your TV, okay, produces a billion colors. It doesn't. It produces three.

Okay, that 55-inch flat screen, by the way, does anybody got into this business? You can do Trainspotting over YouTube on your telly. If you've got YouTube on your Smart TV, there's a thing called Live Rail Hub in the US where they've set up webcams at railway stations, and you can just sit there all day, and every now and then you go, "Oh, look, a train."

Okay, sorry. The reason I tell you this is because when you're working, then you want a bit of background noise, but not too much to distract you. It's fantastic.

Okay, right. What is going on here? How can this telly produce a billion colors? Right. The answer is, it hacks your perception. It hacks your epistemology. Um, the, the human eye has three types of cone. They are differently sensitive to three parts of the light spectrum: red, green, blue. Okay. By producing those three colors in different strengths, right, our brain infers where on the spectrum that color lies and produces the color in our head. Right. So color mixing is entirely a psychological phenomenon. It's not a physical phenomenon. If you mix red and green pixels, right, you don't get yellow pixels. You get red and green pick... sorry, if you mix red and green photons, you don't get yellow photons. They're red and green photons. They stay red and green. Okay. The brain can't distinguish between equal amounts of stimuli to the red and green detectors and yellow. So it produces yellow. Magenta doesn't even exist at all in physics. Right. So magenta is cobbled together by your brain because when you fire equal amounts of, of basically red and blue, but no green, right, the brain goes, "This is a total man [ __ ] because halfway between red and blue should be green, but I can detect green and I'm not detecting any." So it invents a color in your head that doesn't exist to make up for the basic, the deficient system.

Is the other thing about your telly is it's species-specific. Okay. When you bought your Samsung telly, it didn't say on the box, "Optimized for higher primates." Okay. And the reason it didn't say that, it's because dogs don't buy TVs. Right. But actually, your dog thinks your TV is [ __ ] okay because it can only detect two colors, and one of the colors is nothing like the color we can detect. If you've got a pet pigeon, it really thinks it's crap. It's you've made any hundred dollars of this washed-out piece of [ __ ] right. That's just pigeons to detect five colors, and one of them is kind of ultraviolet. Okay. So to a pigeon, a gorilla, on the other hand, would go, "Yeah, pretty good picture." Right.

The reason I think this is important design is there people there things were attuned to, and there are things we're not. And I think economics spends a lot of time producing things, effectively producing light in the ultraviolet spectrum. In other words, it produces things that economists think are great, but we don't notice or don't care about. And I noticed this, one of the things I really protect Silicon Valley. It's not just a corner of Silicon Valley's guilty of this. Okay. If you talk to McKinsey, or you talk to economists, or you talk to people in the engineering background, they think because they cannot has told them this, that efficiency is effective. Okay. So if you can make something more efficient, you make something better. And I've always argued this isn't true at all. Because what you generally do is you define the function of something very narrowly, you make the thing more efficient at delivering that thing you've already defined. Okay. And you assume you've made it better. And I call this the "Mien Illusion."

Which is, you know, an automatic door. What McKinsey would do, or what Silicon Valley would do, is they'd go to a hotel and they'd go, "There's a doorman there that costs $30,000 a year. Okay. Now we can his function is to open the door, and we can replace him with an automatic door mechanism, which will only cost you a fraction of the cost of the doorman. So that will represent a cost saving." But of course, in reality, the doorman isn't really there to open the door at all. And yes, he opens the door, but actually he provides recognition for frequent guests, he hails taxis, he helps with luggage, he does a whole bunch of functions, he maintains the status of the hotel. You can't really charge 300 quid a night if you haven't got a doorman, you know? Okay. He also actually has, he also provides a measure of security. You know, hotels with doormen don't get vagrants sleeping in the doorway, you know, that kind of stuff. Okay. And so, well, it's very easy to do is to define something very narrowly, optimize that thing you've defined, throw away everything else as if it doesn't count because it isn't captured by your metric. And what happens? You get rid of your doorman, and six months later, your rates have fallen through the roof, you know, nobody wants to stay in your hotel anymore. Your most regular guests really miss Tony. Okay. And you've actually made the hotel worse.

And actually, a lot of technology does this. I'll admit this. Okay. When the Kindle came out, and when the tablet came out, I thought, "Okay, that's it. Print media is basically dead. Who's going to buy a book?" Wouldn't even have a kid. How many people when they first had a Kindle had the same reaction? And that's because when a technology's new, the things the technology can do that the old one couldn't do are very salient to us. We go, "[ __ ] this is unbelievable. I can buy a book, I can get it delivered instantaneously. Okay. And and it's totally immediate. And basically every time I go on holiday or I have to go on a plane, I don't have to have that, 'Oh, which book should I pack?' dilemma, 'cause I just take the whole lot. Okay. And you're going in this Kindle's [ __ ] amazing. It does everything I could possibly on. Who is ever going to buy a book?"

But over time, what you realize is that books mostly aren't about that at all. Probably 50% of publishing is gift-giving, and you can't really give an electronic book. Okay. You can give a Kindle, but you can't give an individual book. About 50% of publishing is actually around Christmas, to be honest. It's really weird things about publishing. By the way, its majority female to a huge extent. Even really, really weird things. Because I was discovering talking about publisher that, um, true life crime is majority female and its readership. Because I'm a bit of a true life crime addict, and I always thought sitting there reading about, you know, the decomposing headless torso discovered in a stream, you know, rigor mortis had just set in, blah, blah, blah. I assumed that kind of serial killer stuff was kind of a bloke's pastime. Completely the opposite, apparently. Bit weird, isn't it? Bit scary, really, when you think about it. But anyway. But this, this doesn't do what a book does. Okay. Just as an automatic door doesn't do what this guy does. And actually, this doesn't do what a magazine does. Just to your examples, the number of printed books now is higher than ever. The use of electronic books is has basically plateaued. Okay. It's reached a kind of maximum at a percentage of all books. And I write for The Spectator. The Spectator's paper subscription is higher than it's ever been now. Don't get me wrong. Okay. Daily newspapers on paper have been kind of stuffed. Weekly publications doing fine. The Economist, The Spectator, they're all doing the week, they're all doing really, really well. And partly the death of the newspaper actually makes necessary, I think, you know, the weekly news periodical to some extent.

But we've got to be really, really careful about this. Because what we do is we define a problem, we get an engineer to define the problem, he defines what a book is in very small terms, which is information provision, solves for that, and then you forget everything else. Just as an email doesn't replace the wedding invitation. Okay. But you could, informationally, you would just go, "The parents of, you know, this Sir and So-and-so request the pleasure of your company at the wedding of their daughter." You can send that by email. It doesn't do the job. Why? Because actually, a wedding invitation is going to be [ __ ] expensive. Because everything about a wedding is going to be insanely expensive. Because if you don't spend an amount of money that hurts, okay, it's just you're not really serious. Okay. That's what an engagement ring is. It's upfront expenses, proof of long-term intention. Right.

Now, interesting. What's interesting about this is costly signaling theory. Now, a book called called "The Elephant in the Brain" by Kevin Simler and Robin Hanson suggests that about, in a developed economy where people are no longer really focused on survival, about 80% of our energy actually goes into signaling things. That actually 80% of our kind of activity is self-advertisement, heavily disguised, not least to ourselves. Okay. And what you're doing when you have, you know, when you buy someone a present, when you, when you have a wedding invitation, it's got to be costly. It doesn't have to be expensive if you've got no money. But you're a talented musician, and you record a really good song as your wedding invitation, somehow managing to get the address of the church and the postcode to rhyme, right? And you send it, you post it to YouTube, and you email a link to that to all your guests. That's a really good wedding invitation because it's involved something that's costly, which is talent. But if communication doesn't have either expense or talent or humor or rhyme or music or humor or bravery embedded in it, it's a cheap communication because you haven't invested significantly in what you're saying or the other means of delivery. Just as if you got back to your desk on Monday morning, and there was something there sent to you by FedEx, you'd open it first, wouldn't you? Because someone spent nine quid to send you that. Therefore, they're not [ __ ] around. Okay. And so there are things which only make sense if you understand signaling. And there are a lot of things which we don't trust unless someone does a costly signal first. Okay. So you can have the best product in the world, but if you don't invest a bit of money advertising it or making a lot of noise around it, nobody wants it.

And I always made this point. Okay. If you think about it, spending money on advertising for a manufacturer is equivalent to betting money on your own horse. If you are, if you've got a friend who owns a racehorse, and you ask them, "Is your horse going to win on Saturday?" Everybody says yes, because everybody says that. Right. Okay. If they say, "Come with me," and they take you to the bookmaker and they put £5,000 on the horse to win, that's serious information now because there's a cost to them being wrong. An advertising where you have to spend the money upfront, you only make sense if you genuinely believe your product is going to be widely and repeatedly popular. That's true of a flower, which is basically a weed with an advertising budget. Again, the cost of the petals says to the bees, "You wouldn't do this unless you actually had some good nectar, because it wouldn't pay you to spend all this effort on petals if I came and visited you, found there was no nectar there, and never came back." It only pays if I'm prepared to go back to the hive and say, "Wow, a lot of nectar over there." And so because it doesn't pay to do a lot of advertising if you've got a bad product, in fact, the argument is that actually good, good advertising kills a bad product even faster. Okay. The, what you might call the obverse of that is that good advertising is a reasonably reliable indicator that you have faith in your own product.

Now, just to prove this point, I always wanted to do this experiment where someone got a really, really good product and advertised it atrociously, just to prove my point. Now, obviously, no one's going to agree to do that. But luckily, I found two Melbourne comedians who did something very similar. They got the hottest property in the entertainment industry and they sold him in the crappiest way possible. So they took...

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pay to us. And out of two hours, 23 minutes, including some presentations, we finally found...

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I'm thinking now, the incredible thing about that is that if you, they're charging two Australian dollars, which is about 120-130. Okay. If you'd put an ad in the Melbourne Age a week beforehand, half-page ad, okay, you could have charged $200 and you could have had people queuing around the block. The interesting thing also is that when he finally persuades those people to go in, he uses two or three tricks from behavioral science. Which is, "It's gonna get pretty busy later on." "He's only there till midday." "You both can come if you want." Okay. They're all things which, interestingly, could be used to make things easier. There's a woman, similarly, "You both can come, what you want, as long as you just got the Nobel Prize for Economics." It's only the second woman to be given a Nobel Prize for Economics after the brilliant Elinor Ostrom. And one of her findings was, if you want people to vaccinate their children, if you have two nurses and you allow two mums to go along with two kids, they feel much less nervous about it than if you make them go one at a time. You can use something you find in a joke. David Ogilvy said, "The best ideas come as jokes." You can use something you find in a joke that works in that setting, and you can deploy it in something really, really serious like childhood vaccination in the developing world. I find that really, really interesting. And this is the kind of thing which an economist would say was irrelevant. The, the whether you wanted your child vaccinated was to do with the cost of the journey. Okay. But you know, less the value of the vaccination. But actually, the emotional cost of the health thing isn't factored into the economic model at all. And the emotional cost is, "I'm doing something a bit scary, and I'm going off on my own, and I don't like doing something to my kid which everybody else isn't doing to theirs." Okay. All of those monkey things are completely factored. And what happens? Actually, I have to say this, if anybody's keen on being an entrepreneur, one of the bits of recommendation is, is there something about your imagined idea which is actually a bit stupid, silly, comical, or weird? Because in many cases, okay, all the rational solutions have been tried. Problem with rationality is, it gets everybody to the same place. If, on the other hand, you can stumble on something which is a brilliant piece of psychology which an economist wouldn't understand, you might have a space to yourself.

And just, I'll give you an example. Okay. Let's imagine you want to compete with Coca-Cola. Now, for about 50, 60, 70 years, Coke has been the most popular cold, non-alcoholic drink in the world apart from water. And you get that in a room, wouldn't you say, "We want to compete with Coke?" Well, actually, straightforward, you need to drink the taste nicer than Coke, you've got to have a drink that costs less than Coke, and it should come in really big cans so people get great value for money. And every go, "Yep, that makes sense. Let's go and do that. Fantastic." Now, the only problem of that course of action is that the most successful attempt to compete with Coke in 50 years is that comes in a tiny can, costs a fortune, and it tastes disgusting. Okay. Now, when I said it tastes disgusting, they researched it. They went to a company which only researches carbonated drinks, and the company said, "This is the worst drink we've ever researched." Normally, I'm, you know, normally research respondents say, "It's a bit cloying, it's a bit too sweet for me, maybe it's more for kids." Here, they said things like, "I wouldn't drink this piss if you paid me to."

Now, interestingly, I think the reason it works is because it's not a drink at all. It's a placebo. Small dosage, small can says, "This is really powerful. We can't give you a full-size can, or you'll go do lollies." Okay. High price. Remember, weird taste. Drugs have got to taste weird. Right. Nobody wants to be given in the course of oncology treatment and say, "Do you want strawberry or blackcurrant?" Right. We believe that drugs are effective in proportion. Now, I never trusted Nurofen milk [ __ ] because they were too tasty, basically. Okay. Health food. It's got a case to it. Weird, hasn't that? Right. Wheatgrass. "Well, this tastes like [ __ ] so it must be doing me good." Right. You can lick the underside of your Flymo and have much the same effect, I suspect. Now, Sebastian, for those old people in the room, is anybody remembers that as tonic wine? The last chemical they introduced in Sebastian was actually a chemical that was just there not to taste very nice because if you're marketing it as a tonic wine, it had to taste a bit weird for people to believe it had medicinal properties.

There's a weird thing going on with alcohol, which is, if anybody can solve this problem, Diane Trio is mystified by the fact that given how much we enjoy Bailey's, we drink surprisingly little of it. Yes. Okay. It's a bit embarrassing to admit, isn't it? But is there anybody who doesn't like Bailey's? Seriously? Kids? But, but, but actually, most people [ __ ] love it. Right. Okay. Okay. There is not a single occasion that wouldn't be improved by having a glass of Bailey's. Either we're embarrassed by the fact that it's so tasty, or, but then that's a monkey reason, it's not a rational reason. Equally, there are totally weird successes out there which totally defy logic. I would argue, in fact, okay, here's another billion-dollar brand. Okay. Dyson. Now, I'll admit, they say I've worked in advertising for 30 years. If Dyson had come to me and said, "I'm thinking of producing a premium vacuum cleaner around about the £450 mark," right, I'd go, "Don't give up the day job, mate." Because if ever there was a distress purchase, it was the vacuum cleaner, wasn't it? You only bought one because your old one broke or became rubbish, or because you moved out of rented accommodation, you had to buy your own, and you grudgingly went and spent sort of as little as you could to buy an acceptable-looking brand. Maybe there was a little bit of novelty there, like a self-retracting power cable, which you found, you know, which appealed to your monkey brain a little bit. Okay. But basically, it was a distress purchase. And anybody who could spend £500 could have a vacuum cleaner, it probably has a cleaner, in which case they don't give a [ __ ] anyway. Right. Okay. Genuinely, I would not have predicted the success of this at all. And yet, my dad, who's basically a bit of a tightwad, has two of them. Okay. I can't me now. As for £400 for a hair dryer? Yep. That sounds about right. I mean, those things were walking off the shelves, weren't they?

Now, I don't quite know. I have a theory about this, but it's only a theory, which is broadly speaking, you don't get an endorphin rush from mid-market retail. Okay. You get a bit of a thrill from an extravagance, and you get a thrill from a bargain. In other words, you get a bit of a hit from TK Maxx, and you get a bit of a hit from Fortnum & Mason's. But you don't get a hit from the middle. Do right. And the only time I ever came across that in my own life, it's purely a theory, that actually, you, the argument is, I'm gonna spend some money, so I'm gonna spend some money, I might as well get some fun out of it. I went shopping for my wife for bedding. Okay. And after about half an hour, so, "Can we make a deal here?" Say, "Can we spend one of two amounts of money? Nothing, or a lot." That doesn't make any sense. Okay. Look, I'm kind of happy with our existing bedding. It doesn't, like, bother me or anything. And therefore, if we spent £200 getting bedding that's just like our existing bedding, but a bit new, I've spent £200 that I could have spent on a drone or something. Right. And I haven't got much excitement. Okay. If we spend nothing, I can go and buy a drone. On the other hand, if we spent £500, I can get nerdily excited by thread count, Egyptian cotton, hog values, mattress toppers, and by the way, Oxford pillowcases, Citroen is, which are pillowcases which have like a three-inch rim of fabric around the outside, which for no explicable reason are much nicer than the other kind. Everyone else agree, if you've got a pillowcase which just has that unnecessary fabric around the outside, obviously you can't see because your wife's put four decorative cushions on top of it. Okay. But for some reason. And so you can then invest in the mattress topper, and the sort of all-season duvet, and the other [ __ ] and now you've got a bit of excitement. Home new. Now, that's about the only explanation I can make sense of.

I mean, Uber. Brilliant. Think of the NHS waiting room. Yet, actually, the really big idea behind Uber was the map. That we don't mind waiting that much for a cab if we can watch it coming. The thing, hate our chimp brain. Okay. Hates uncertainty much more than that hates duration. So the best advice, I think the most important thing I've ever said in 30 years of marketing life, I said to British Airways, "If you've got a flight that's delayed, okay, just put an estimate of the delay up. It'll make people okay." Right. If you had delayed 120 minutes, you make a phone call saying, "I'm gonna be seriously late here." Okay. You probably go and find yourself a lounge or a restaurant or a place to work, bit of Wi-Fi. Geneva Airport, I got my hair cut right because a barber there, right. But you can find a way to kill two hours. And I'm on the airport in the same way. Okay. When you can look at the map and go, "Oh, look, he's stuck at those traffic lights. I'll have another pint." A 12-minute wait isn't that bad. When you don't know when the guy's gonna turn up, you go insane. Okay. He had the idea watching the James Bond film Goldfinger, by the way, the founder of Uber, in which Bond has that little map in the dashboard of his DB6 with a dot which lets him track Goldfinger's car. Nice. And that's what should happen when you order a taxi. And there are other things too. There's no, there's no paper changes hand. So when you get out of the car, it's a completely seamless operation because it's contactless. It feels cheaper than it really is because you never actually hand over any money. And there's a bit of ego. Does anybody else do this where you time your arrival onto the pavement to coincide with the car drawing up? Because it makes you feel like Keyser Söze at the end of "The Usual Suspects." Right. Okay. Now, if you think about it in monkey terms, okay, walking out of a building, a car draws up, you get in. Okay. That feels like a high-status action. Doesn't mean we're standing around in the rain going, "Is that my car over there?" Or in one case, mistaking boxing promoter Frank Warren for your taxi driver, which is what mistake I've made once, survived that one, fortunately. Um, okay. But standing around in the rain going, "I don't know where my car is," feels like a diminished, demeaning activity.

Yesterday, we went to do some work with Dublin Airport on the psychology of queuing. Variance, Timorous College, and killing duration isn't the big factor. Disney knows what they're doing. Okay. If you have little signs going, "Five minutes to go, four minutes to go, three minutes to go," along the queue, queueing is less painful because you've got a little mark of progress. Okay. Um, a queue in which you keep moving is much less stressful than a queue in which you've grown to a halt. If the end of the queue is out of sight, people get really, really panicked. And finally, if you really want to piss people off in a queue, you have another queue alongside their queue which is moving faster than theirs. That's, that's the absolute death knell for a queue. Right. And so the psychology of time, we know this from linguistics. Okay. It was the longest five minutes of my life, or time flies when you're having fun. Time does not map neatly onto experience or emotion. And therefore, it doesn't map neatly onto behavior. So solving problems by trying to minimize the time of something. If you want anybody in marketing here, if you want another really weird one, and I don't understand this entirely. Um, those, those things where you deal with a company like Vodafone through live chat. Okay. Objectively, it takes twice as long as handling the problem over the phone. The reason they can't afford to do it. Okay. I'm really going to ruin something for you here, is that most of them are actually handling three people at the same time when they're doing live chat. Okay. I don't know what their personal lives are like. They presumably have like three wives or three husbands. I just sort of float for her. I don't know what effect that has on your brain, spending your entire working day dealing with three people in parallel. Okay. The weird thing is, customers sodding love it. Okay. It's actually objectively slow. If you're measuring live chat simply on its objective things, you go, "This is a terrible way to handle customer complaints." Oddly, and for reasons I don't fully understand, people, the levels of satisfaction and the levels of kind of warmth and bonding towards the brand are absolutely massive. Go figure. I mean, this is what I'm saying. Okay. We can't confine ourselves to doing things that make sense. I mean, what the [ __ ]? Right. Okay. Seriously. Okay. It costs the same as a bottle of spirits, but it's got no booze in it. The family's got no booze. It means you don't have to pay any duty, which means their margin is utterly insane. Okay.

Now, I'm going to be very quick here. Very few tips. One of which is actually, with placebos, they're probably more powerful on certain individuals than there are others. Okay. That's just the interesting way of looking at it. If you look at the average effect of placebos, they're probably less exciting than they are for certain people under certain conditions. Looking at how you can maximize placebo effects for different people is therefore a really exciting area of scientific research. I think. And there's something about economics. You know, I said this is the science of knowing what economists are wrong about. There's something about economics which causes everybody to look at things as if by average. Now, let me just tell you a few things where I think that the economically rational and psychologically done. Some of you may have a thing called a NISA. And it's a tax-free sort of wrapper in which you used to be able to put £3,000 a year. Okay. And that was any gains from that were protected from capital gains tax. It was a way of encouraging people to save. And to encourage people to save more, they increased the threshold from £3,000. So it's now about 20. And everything about it, you, your wife or husband or partner can have another 20. And you can even have a NISA for your kids, which is another six. This is all three. I don't notice it. Maybe it sings. Okay. Now, let's just park for a second the fact that why on earth people who can save £52,000 a year out of their after-tax salary really need help from the government. Okay. Because those people are probably going to be saving as it is. Okay. So let's park that fairly obvious objection, which I think is ridiculous, by the way. Okay. It also makes it much less motivating to people who can only save two or three thousand pounds a year. Because when you can only save £3,000, you have people who could save £1,500 quid thought, "I better put £50 on to quid now because otherwise I'll have missed out on my £3,000 allowance." Okay. Once you make it 20, normal people just go, "Well, there's no particular urgency. I didn't put 20 in next year. I put three and next year, not six in next year." So the brilliant psychology and the ISA, which says, "If you don't put it now, you know, speak now or forever hold your peace," which was an actual stimulus to get people to save, was destroyed when they put the limit up.

Here's an interesting one. Weimar. Rising house prices. Always a good news story. Now, this is getting into interesting and weird territory. And I can apologize, it's going to get a bit nerdy for a bit. But talking to some physicists, I'm always intrigued to know what economists are wrong about. Because economists make a lot of decisions based on economic assumptions. And therefore, like the Tube map, if you find out there's something the Tube map's wrong about, you can find yourself a cheap flat. Right. You know what I mean? I'm, by the way, I mean, has anybody ever, if the other thing to do when you're looking for a flat, has anybody ever looked at an isochronic map? So you put your place of work down as the center, and then you have a slider which is the acceptable length of your commute, five minutes, 10 minutes, 15 minutes, 20 minutes in time, and it shows on the map those places which were at that time. It's very weird because they're placed in Southwest London which are absolute dead zones in terms of getting to where my office is. Equally, there are places well inside the M25 in Southwest London which are much much longer to get to the office than places like Harpenden, which happen to be on the Thameslink line. Okay. It's that weird. Strangely, Ashford in Kent, because of High Speed 1, shows up long before some places inside the M25 show up. But that's why I mean about, don't you know, when we look at a map, we kind of assume that distance is proportional to time. And the nothing of the kind is true. Find out what the maps wrong about, and you've got a competitive advantage. So therefore, I'm always fascinated there, what economists are wrong about. And one interesting thing about marketers is we are the only people in a business who say, "What's this like to an individual experiencing it over time?" Okay. What would make me do this the first time? What would make me do this the second time? What would make me do this the third time? Because there are some products and behaviors. Anybody here use Ocado or Sainsburys grocery delivery? The first three times you do it, it's easier to crawl to a supermarket on your knees over broken glass than to order online. What's interesting about online shopping is the fifth time you do it, it's a piece of piss. Right. Because it's got all your favorites, you know, everything you want, you can basically do a whole kind of weekly shop. I used to do this actually. Do you remember when planes used to make you turn your mobile phone off? I used to do the on-plane equivalent of supermarkets. We'd, okay, well, I'd have to do a whole weekly shop from Ocado before the stewardess told us to turn our phones off. And it was kind of a stupid competition, to be honest. Beloved. There we go. But the point was that over time, things are different. Okay. Economists don't. And what this physicist is saying, Olli Peters, is that economics doesn't understand time because it deals with a snapshot average. And the snapshot average does not relate to the individual time series experience. Okay.

Now, let me give you an example of this. Electric cars. So I want to buy an electric car and test driving one actually next Friday. And to be honest, it's not like I care about polar bears. They just don't really [ __ ] cool. Very half a joke, by the way, which is the way to sell people, the way to sell people on any kind of environmental behavior is to make it a bit selfishly enjoyable and a lot beneficial to the public. Okay. We'll do things if you can focus on a selfish benefit. Right. Then we'll do things that have a huge collective benefit. But there's got to be a tiny bit of selfish benefit. Okay. We don't do things with a wholly altruistic. Now, let me just explain that. Okay. Unilever and P&G probably did more for public health until the advent of things like antibiotics than medicine did, because they encouraged people to basically practice cleanliness and hygiene, and they produced a lot of products which had germ-killing characteristics. But interestingly, if you look at how they sold soap in 1920, they didn't sell it on, "Pair soap and help prevent a cholera outbreak." That was the big social benefit. Right. But they sold it on an entirely selfish premise, which is, "If you don't buy Pair soap, you're going to die single, alone." Now, I'm only half exaggerating, by the way. "Always the bridesmaid, never the bride" is a phrase that comes from a Listerine advert. Okay. It was very, very Darwinian. The cell, it basically said, "If you're clean, you will enjoy a social advantage." The mass benefit was much more important, which was the collective benefit, but they didn't sell it on that. Now, what you do, I would argue, and I think the environmental movement to do this is what I call "sending the soap." You put a little bit of something in which makes it selfishly enjoyable, struggling the pill, if you want to use medical terminology, and then the far greater benefit is collective. But asking people to engage in purely self-sacrificial behavior is absolutely fine for about 20% of the population, but it doesn't get any bigger than that. And I think there's a reason for that, by the way, which is a thing called counter-signaling. Right. If you're a Hollywood A-lister and you turn up to the Oscars in a Prius, right, nobody thinks you're doing that out of necessity. They know you could afford a stretch limo. And therefore, the decision to turn up in a Prius is a very effective signal to the fact that you're, you know, that you care about the environment. Okay. If you were for Pizza Hut and you turn up at work on a bicycle, it doesn't mean you care about the environment. It means you can't afford a car. Okay. So there's a high-status group of highly educated people, usually in very cool jobs, usually who have a huge amount of social status accruing to them. To other things for whom self-sacrificing behavior works. Okay. The problem with that approach is it doesn't scale. Because what, what, look, if you're the Mayor of London, cycling to work sends a really powerful signal. Okay. And it feels damn cool doing it. Right. If you're actually, you know, in a lower status occupation, doesn't send the same signal at all. And so once you understand that dynamic, I think one of the things you realize is that if you want the behavior to become widespread, you need, I don't think that's difficult, because what's the benefit? Okay. We can decide whenever we get people to pay attention to that becomes important. If we get people to pay attention to the bit that's actually a selfish advantage, they'll think that's important, and that's what they'll do. Okay. I know it's a bit weird, but I mean.

Now, here's an electric car example. Okay. So I want to buy an electric car. And so I go along to the electric car chaps, and they say, "Great time to actually choose an electric car because the government gives you a sort of £5,000 subsidy on a purchase price, and it's a very tax-efficient leasing deal." So, "Great, I'll get one of those." But again, actually, I don't need an electric car until I've got one of those seven-kilowatt charging posts at home. Because I don't want to buy a car and then spend the next five years with an electric cable coming out of my bathroom window. Okay. So I ring up the people and say, "Can you install one of those seven-kilowatt charging things, please?" And they said, "It's a great time to get one of those installed because there's a £300 subsidy from the government where they pay for half the cost of installation." So again, "Hit me with one." And they said, "No, you got to prove you an electric car first." And what that means is, no wonder the Department of Transport has red tape 22, basically. Okay. Now, I went to them and said, "Look, actually, to be honest, you don't need to subsidize the car that much. If you can encourage anybody with a suburban driveway to get a seven-kilowatt charger in their driveway, and you can get them to pay a few hundred quid, albeit heavily subsidized, to install that thing, which is desirable anyway because it means their mates with electric cars can come and visit. Okay. But if you paid £300 to have a seven-kilowatt charger on your driveway, your next car is going to be an electric car, isn't it? Because you feel a bit of a [ __ ] buying a diesel. Right. So if you understand path dependency, you can actually encourage people to move to electric cars much more quickly and much less expensively than if you're an economist.

And so this is the point about the path dependency of NHS waiting. If you send them back into the original waiting room, they're upset. If you move them into a new waiting room, they're happy. Here's my most contentious one. So first of all, I'm skeptical about High Speed 2. Let me explain why. Okay. High Speed 1 is a really good idea. If you want to spend money on transport, it should be one of two things: it should be quite useful to a huge number of people, or unbelievably useful, life-changing to a smaller number of people. Right. Now, when you calculate time savings for a model the transport economists use, all you measure is aggregate time saved. Now, High Speed 1, if you live in, anybody here live in Canterbury, Ramsgate, Margate, anyone like that? Okay. If you live out in East Kent, right, High Speed 1 has changed your life because it now means you can commute to London. But just Canterbury used to be 90 minutes, and you could only go into Charing Cross. Now it goes into St Pancras, and it's about 58. Total game changer because you're saving half an hour, 400 times a year, assuming you traveled into London 200 times a year. That's saving you 200 hours a year. That's like eight days. That's a fortnight. Okay. Total game changer. And the problem in High Speed 2 is that nobody travels between Manchester and London that frequently. So instead of now saving one person 200 hours a year, it's a big deal, saving 200 people one hour a year is just a mild convenience. Now, the model doesn't distinguish between the two, but I think they're totally different. And I travel to Manchester more than probably all but 4% of people in the UK. I probably go five or six times a year. Okay. Saving me an hour each way, even if you can do that on the journey to Manchester, well, okay, it's a bit of a convenience, it's a bit of a novelty. But okay, it's not changing anybody's life, is it? I've never woken up in the morning on, I would go to Manchester today, but it takes now too long. Right. It's not really going to change my behavior. And my argument, I said, "Yes," I said, "very simply, I said, 'Why are you spending £60 million? You want to reduce journey time to Manchester and you want to increase the capacity of the network. And you've got a budget now of £60, 70, 80, 90 billion pounds. I could do the same job for you, not to the same extent, but I can increase capacity of the network and I can reduce journey time, and I can do that in six months with a budget of about a million pounds.'" And they said, "Have I said it's really easy?" "Every time I go to Manchester, you book an advance ticket, don't you? Because if you don't, it costs a million quid. Right. And because you booked an advance ticket, you have to leave a huge margin of error getting to Euston because if you miss your train because you get stuck on the tube, your ticket becomes worthless, and you have to buy a full-fare ticket for a million quid." Now, by the way, I've said this repeatedly to rail companies. Are in a monkey thinks that's a con? I think if you have to buy a full-fare ticket because you miss your train, they should deduct the thing you've paid for, the, the advance ticket. I think that's just what monkey thinks is fair. Okay. Because making people pay twice, you're penalizing them twice, and I don't think you should do that. I think monkey just sees that as exploitation. But it's not, every time I go to Manchester, I arrive at Euston about 45 minutes before my designated train leaves. In five minutes and 25 minutes from our arrival, two trains leave for Manchester, 20 and 40 minutes before my own train, which are half empty. If you want to reduce my journey time to Manchester, an hour, 40 minutes, just give me an app that says I'm at Euston now, and the train company says, "Five quid, and you can go in carriage 8 on the train leaving in five minutes." Okay. One, you reduce journey time to Manchester. Two, you've reduced the shitty bit of the journey, which is hanging around at Euston like a [ __ ] not the nice bit of the journey, which is sitting on the train looking out of the window, which is fun. Okay. So you reduce my journey in its worst aspect, but you've also increased capacity. Why? Because it's good practice in yield management to always allow someone to travel on an earlier vehicle. Right. If there's free capacity on an earlier departure, to maximize the capacity of the network, you should always allow people to jump forward. Right. If you don't notice, if you've seen the Americans evacuating the American embassy compound in Saigon by helicopter, they got as many people on each helicopter as they could, didn't they? They didn't say, "No, sorry, mate, you're booked on the 12:30." Right. Right. That would have really pissed people off. They didn't leave with a half-empty helicopter going, "No, I'm terribly sorry, you've got the wrong kind of ticket." Okay. So you could achieve both those ends. I'm not saying you could achieve them to the same extent. But while you're spending £60 billion solving the problem of the engineering before you've even tried spending £2 million to part-solve the problem in psychology, it genuinely doesn't make any sense.

So anyway, I'll skip very quickly to the end. Why rising house prices? Always a good news story. Because economists look at the world in aggregate and they say, "On average, household wealth is increasing, so therefore everybody's kind of happier." No, it doesn't work like that. But it's for 90% of your adult working life, you want house prices to stay fairly flat. Why? Because your next move is either your first home or a bigger home than the last home. So if house prices stay fairly flat, the difference between your present accommodation and your next accommodation remains relatively small. If house prices go up, the next house you want to move to, the gap becomes bigger and bigger. Right. So rising house prices are a massive pain to 90% of adults and an insane lottery win to that tiny proportion of adults at the end of their life where they're planning to downsize or like, you know, move to Spain or something. So something that's bad news for 80% of people and very good news for 20% of people is not good news. But to economists, they thought it was. Nobody says, "Hey, great news if you've got a full tank of petrol, petrol prices are going up." Do they? You go again, "Yeah, I bought it yesterday, losers." Right. Nobody does that with petrol. But with housing, they did. Okay. And so this is because there's a fundamental mistake in that we tend to look at everything through an aggregate average in a single time period, not through the eyes of an individual over time. And technically, there's a lot of maths about this, which is about ergodicity. Okay. This is a bet where heads your wealth goes up by 50%, tails your wealth goes down by 40%. Now, on average, across four people, that's a good bet. Okay. Or across a hundred people, it's a good bet. But is on average wealth gives up by 5% every time? This is what happens. Okay. So most...

If you go, that's really good. Bet. So, every time I toss a coin, heads means I get 50 percent richer, and tails only means I get 40 percent poorer. Wow, I'm gonna get rich now.

First coin toss, two people end up with 152, people end up with 60. So, half of the richer, half of the poorer. But on average, the net wealth is now 420 pounds. On average, they're now five percent richer because they got 105 quid each on average.

Toss the coin again. You get one person who's hugely rich. You get two people who are poorer than they were when they started. And the third person is seriously skipped. In fact, this guy now has to throw three heads in a row just to get his initial stake back. So, what's a good bet from an aggregate perspective is a bad bet for an individual perspective. And it looks as though economics doesn't understand this distinction, whereas evolution does. Which is why we're disproportionately cautious in decision making.

So, the way we look at risk is not the same as how most economists look at risk. The way we look at expected utility is not the way that economists do. And in many cases, what economists call biased or irrational behavior was actually just because evolution did a better job of calibrating the maths. Did so. I won't give you all the ogre disti thing except to say that under an honor Dalek time series and the multiplicative dynamics, low variance is a good thing. Two times two times two times two times two times two is a bigger number than three times one times three times one times three. That was one, right? Very simple bit about one of them, 64. The other was 27. In additive dynamics, it doesn't make any difference, does it? Well, two plus two plus two, three, you know, is exactly the same as three plus one. Sorry, two plus two plus two plus two is exactly the same as three for three.

From multiplicative dynamics, low variance is good. I'd argue as humans, we don't know it, but our monkey brain is calibrated towards low variance. Which is why McDonald's is the most successful restaurant in the world. It's not 'cause it's very, very good. It's because it's very, very good at not being terrible. Okay, now if you think about it. Okay, it's not Nitin. No one would take someone to the dogs on a date. That's what Nando's is for. Cause, okay? It's not the place to show. But if you just basically don't want to get ale, and you don't get ripped off, and you want to be sure your kids will eat the food, and you want to be sure the toilets will be okay, and you want to be sure that the food's reasonably fresh and warm, it never fails. Okay? It's unbelievably good at not being there.

Now, I've had the shits from Michelin star restaurants, you know, probably one time in six. Okay? Never, never got a leading McDonald's tall. Never the slightest ill effect. Okay? Do you know what she's saying? Baljeet's for two weeks before he competes in the Olympics, chicken McNuggets. That's it. Right? Why does he do that? He says, right, I'm basically the best runner in the world. Okay? The only reason I'm not gonna win is because I make a mistake. There are two mistakes I can make: not enough protein and getting ill. Food poisoning is food poisoning is the real cure. You try and get too clever with your diet as an athlete, and you end up getting ill. That's how you lose. Okay? So he's saying, both basically pitches up and has a load of chicken McNuggets because you ain't gonna get him.

And I would argue that habit, okay, going with the crowd, social copying, with and habit, which habit, if you think about it, is social copying sort of in the dimension of time rather than events, to one place. All of these things we do are basically instinctive behaviors because they minimize variance of outcome. And I'll argue that brands are the same thing. You pay 200 quid extra for a Samsung TV over a TV made by someone you've never heard of, not because you think it's better, but because you think it's bound to be somewhere between okay and pretty good. Whereas the TV you've never heard of could be somewhere between brilliant value for money and a crock of [ __ ]. And we instinctively go for outcomes which have relatively no variance because that's the rational way to maximize your time series quality of life.

So, I'll end very quickly on this, except just to say that when you don't admit psychology and problem solving, you use economics and you use physics and engineering. And the terrible thing about those sciences, they don't allow for magic. Okay? Thermodynamics, there's no magic. In economy, in economics, no such thing as a free lunch. In psychology, there's magic all over the place. In psychology, you can make something crap amazing by telling a story about it. Okay? When they, this is a thing called Kano theory, which is the model of product design. They're going to be a bit careful about this about time. Okay? Kano theory says that products are perceived in three dimensions. There's basically what you might call threshold attributes. That's something where if it doesn't do that basic job, you won't buy it again. A milk carton that leaks fails to meet the basic threshold for milk. Okay? But nobody ever comes home and goes, [ __ ] brilliant milk, the carton doesn't leak. That's what you expect. Okay? Then there are performance attributes. That would be something like sound quality in a cassette deck. Okay? The reason I'm saying cassette deck, not digital music player, will become clear in a moment. Then there's something which is weird. There's a linear relationship between sound quality, battery life, other things like that, and happiness. Okay? Then there's something which is called an excitement attribute, which is often surprisingly irrelevant to the main function of the thing you're supposed to be producing.

So, to give an example, an excitement attribute. Those of you who are old enough will remember buying a cassette deck in the 1980s. And then logically, what you should have done is you said, what's the battery life like? The build quality, sound reproduction, is that good? You know, you know, is this, you know, is this reasonably loud? Does it distort at higher volumes? Did you do any of that? Now, you press the eject mechanism, and if the eject mechanism hissed and whirred with the pneumatic damping mechanism, you thought, what a brilliant cassette deck, I have to have that. And if it just went clack, you went, that's a piece of [ __ ], I'm not gonna give that house rub. And you can do that all over the place. You know, the first thing an accountant will kill is the excitement attribute because it looks to him irrational and irrelevant.

When they reopened St. Pancras station, how many people remember this? Okay? Freud Communications in every single press release mentioned the fact that St. Pancras station had the longest champagne bar in Europe. Right? How do you remember this? Okay? It's not even predict. I mean, nobody cares, right? Nobody ever goes on TV, "Angela, champagne bar this evening." Do you know any long ones? Or I used to get, I used to go to that champagne bar, but it just is long enough. It's a [ __ ] superlative. Okay? It's a totally crap toast. Right? But it's a carnival bit exciting about it. You would break, you go, I'm gonna go and have a look at that. And it tells you that this is a station that's actually a destination in its own right, and it's a meeting place, not just a utilitarian transit hub. And as a result, you might want to go there even if you don't have a train to catch. And that's a brilliantly irrelevant wacko thing.

Now, they spent more money on London Bridge station. Everybody, how many people know London Bridge station? They completely forgot to add that one bit of magical bollocks than name, okay? They spent a billion pounds on the new London Bridge. Okay? And the simple fact is, if I mean, if I mean in charge that London Bridge station, really, really easy. All I'd say is, okay, we're gonna have two shops that aren't there to make money, they're there to be really [ __ ] cool. Okay? So what we're gonna do is, when you get rid of one Oliver bonus because there are enough of them. Okay? I think oncologists should study on it. Oliver bonus for the speed at which something can spread unnecessarily. To be honest, it makes it makes no sense to me. Right? By the way, did you know when I suggested the idea for high speed 2, about you could board your train 40 minutes earlier, an engineer actually said to me, they said, yeah, but if you allow people to board their trains faster, we lose retail sales. I said, holosync, you mean you mean to tell me you're spending 70 billion pounds to prop up Oliver bonus? Because I think there are cheaper ways of doing that. Right?

Now, what I would have done is I said, okay, we're gonna have Europe's largest florists. And as you come down the escalators in London Bridge, there's gonna be a massive carpet of flowers, and it's gonna be fantastic. And we'll let them have the thing rent-free as long as they're open for really long hours. And it just becomes down so everybody, they, what do you think of the new London Bridge station? The flowers are really starting cool, right? Yeah. Just do something really, really weird. Okay? And actually, it's really difficult to do because the finance director will kill that. The first thing he'll kill is you and your sodding florist. Right? But consumers, that's what they notice. That's what they care about. The longest, it's not even that [ __ ] long, is it really when you think about it? I was expecting something where you could see the curvature of the earth. You know, it's like 15 bloody seats. Anyway, tell a story, you can make [ __ ] things good.

I mean, there's coming into land, easyJet flight, Gatwick, right? And the engines wind down, and all of us, we're about a mile from the terminal building, and all of us have the same thought, which is, oh [ __ ], it's gonna be a bus. And you always have the same thought on the plane, right? Now, the pilot was an absolute genius because he said, I've got some bad news and some good news. He went, "Till we'd lack, you don't to hear that at 30,000 feet." We landed, okay? Right, I've got some bad news. Good. The bad news, I won't be able to get you an air bridge because there's a plane blocking the gate. But the good news is, the bus will take you all the way to passport control, so you won't have far to walk with your bags." Oh, that's always true, isn't it? I'm sure I'm quite glad there's a bus. So he made us think of the bus as a conveyance, not as an inconvenience.

Next, on a plane, you can do the same thing. If you just say, I'm quite glad there's a bus, actually, because you can end up with a huge walk to your passport control and baggage reclaim, and the bus drops you right next door. You've just synthesized happiness. And everybody in earshot, okay, that's what advertising does. Top line, that's an ad for bloody Hertz, right? You flip human attention. So it's about our attitude to our customers, not about size. It's now an ad for Avis. Get someone to pay attention to a different dimension of comparison, and you can make something good. That's what Kano had to do, right? Jet engines came along. They were competing for the blue ribbon, how fast can you get a liner across the Atlantic overnight? That became totally irrelevant because you could do it by plane in a day. What do they do? They got people focused on why the journey was actually enjoyable. Change people's focus of attention, and you can make a weakness a strength. The Eurostar is slower than flying, which it still is, probably end to end. Okay? Certainly trains are slow on the aircraft. But actually, if you get people to focus on the quality of time, I plum gas in seats in central London, get on with whatever you want to do, eating, drinking, Wi-Fi, remove us from seat in Paris, job done, uninterrupted free time. Get people to function on the quality of time, not the duration. The Eurostar wins. Okay? So you don't need to improve the objective qualities of something. You can improve the subjective qualities of something and then get people to look at that instead.

And so, here's an interesting, just a tiny little end end piece that I'm kind of running out of time. Hannah, do I overrun? I think you can solve train overcrowding in two ways. Okay? One, overcrowding on trains does not distinguish between ten people who have to stand 100 percent of the time and a hundred people who have to stand ten percent of the time because it's an average. Now, I'll add you psychologically, there's a totally different. Every time I get on the tube, I have to stand ten percent of the time. Doesn't make me angry. I just find it in the [ __ ] happens. Draw, right? Okay. If you bought an annual season ticket and you end up standing every day, you rightly feel robbed and seriously pissed off. Therefore, if you want to reduce train overcrowding, you should focus your of your efforts not indiscriminately on a monolithic problem. You should focus on the people worst affected. I said, if you just run from, let's say, Tunbridge Wells to, I mean, I don't know where the bad overcrowding when the bad overcrowding is because I travel in late. You know that jokingly said Americans didn't like this talk. You know, Swiss Tony, right? Okay, the character comedic count no dare. If you don't, because I made this part of Twitter, that traveling on public transport is like making love to a beautiful woman. You just have to do it at a different time to everybody else. Okay? Now, just to be clear about this, but is like making love to a beautiful woman is a Swiss Tony quote from America, from a British comedic show of the 1990s. Okay? A whole lot of Americans on Twitter who had no idea were reporting me to Ogilvy for gratuitous sexism. I'm terribly sorry. Okay? So just explain the context on that one so I didn't lose my job. Okay? But my problem was, if you ran special trains at peak times to a day exclusively for people with annual season tickets, okay? Right? So that anybody with an annual season ticket was more likely to get a seat than anybody without. In the annual season ticket, okay, ninety percent of the psychological problem can be solved at five percent of the cost of solving the problem for everybody.

Secondly, ask yourself a psychological problem, why don't people aren't standing on trains? Because I don't know the answer to that question. By the way, a lot of people choose to stand at a pub, don't they? Right? Now, one thing is, if you've got somewhere you can lean, standing is a lot less irksome, isn't it? If you've just got a ledge, right? Standing is kind of alright because you can regain your balance. If you've got to hold on to a post, it means you lose the use of one hand. So you can't read a book, you can't look at your phone, you can't look at a tablet, you can't do anything, right? So that's my first point. What if you designed a train so that people would choose to stand up because there was a trade-off between sitting and standing? Remember I said that we perceive things relatively? Okay? Um, at the moment, if you get a seat on a train, you've won the lottery. And you've got a plug, you got a tape, put your laptop down, you can put your coffee down, you get a few out of the window, you got a place to put your bag, and you go to seat, right? If you don't get a seat, and it's red, you get [ __ ] all right? You're standing in the middle, you lose the years in one hand, you're worried about someone nicking your bag or treading on it, you can't use your phone, there's no way to charge your phone, everything's shite, right?

What if you redesign the trains for the seats are in the middle? So all you get is a seat and maybe a cup holder. And then you have leaning bum rests all along the outside of the train, which have a ledge for your laptop, two USB charges, a hook for your bag. I think half the people on train will choose to stand for shorter journeys. Oh, they'll go, I've been standing at my office all day. I've been sitting on my desk in my office all day. Wouldn't hurt me to stand for 25 minutes. I'm not talking about 3-hour jets. I'm talking about London to Edinburgh. Right? I'm talking about commuter journeys. If you designed it so there was a 50-50 trade-off between sit or stand, okay? You can actually get people to stand as a choice. And then once they can tell a story that it's a choice, not a compromise, they're less angry about it because they tell themselves a story that is what they wanted to do all along. Aesop's wanted that. Well, the earlier psychologists, if you think about Aesop, the Fox and the Grapes, it's called adaptive preference formation. That quite often, if we're forced to adopt A rather than B, we'll look for reasons why we always wanted A. Or A lot, provided we can find some. If you give someone a case where they've got to have B, and there isn't a single story they can tell as to why B is better, that's when people get really upset. So we perceive things relatively. We perceive color relatively. If you color the join on the left, you'll see that actually the bottom is exactly the same shade of gray as the top. Your brain's making it white to compensate for what it imagines is some sort of shadow.

As I said, evolution would rather have fitness than it would accuracy. It's weirder than that. You right now. I said that wine tastes better when you pour it from a heavier bottle. Try this, baby. [Music] We'll be more body by sense. Our brains reward job being sensible. [Music] [Music] Has to change in everything. You money never get involved. [Music] Because what you're seeing, everything is effectively interrelated. Okay? We think we can separate what we hear from what we see now. Okay? Wine tastes better when you have a bottle. Your car is a much better car when you've had it validated, isn't that? Okay? I'll clean. Okay? Take your car, fill car wash. It's not just a cleaner car. It drives better. It's smoother. It's quieter. The ride's better. Everything about your car becomes better. It's a placebo car. Right? So my argument is, you can try and dismiss this, or you can use it. I mean, interesting questions about how you make things emotionally congruent. That's all it is. We design seats for our evolved asses. We should design loyalty programs or customer service for our volunteer. A more complicated than that, not least because there are tons of things which aren't economic at all. The fact that I didn't fix my dish by washbasin, by the way, anybody had got a Japanese-style toilet? Best thing you can ever buy. Seriously. And I'll explain why in a second. Okay? But but if you're Japanese or Muslim, you're excused because you have proper approach to actual anal hygiene. But the toilet gaijin in the West, you have filthy ideas of using dry paper, completely failed to spot this obvious technology. Nothing to do with economics, to do with culture. Okay? 71 percent of toilets in Japan clean your ass. Okay? Right? In the UK, I think 1% of Toto's sales are in Western Europe. Now that you've done nothing to the economic stock because Western Europe's poorer. It's just a cultural thing. Okay? Why didn't I fix my wash basin? If I could have man paid 200 pounds, swipe the card over it, had it replaced instantaneously, I would have done it the day it happened. Okay? It's the coordination problem of getting a plumber on a day when you're off. It's the pain of all that coordination. Right? And so there are loads of things which can't beat video conferencing. We should use it much more for mental reasons, but also for selfish reasons as well, because it's really [ __ ] easy, right? Okay. If I have a 7:00 a.m. meeting at work, or an ATM waiting at work, it drives me bloody insane because I've got to get up then at 6:00 in the morning, or 5:00 in the morning. The trains are crowded, everything's [ __ ]. Right? Tip for blokes, I don't know what the female equivalent is. If you've got an 8:00 a.m. videoconference from home, put a cardigan on over your pajamas. You'll get away with it. Okay? Right? So you get straight out of bed, video code. Everything about video conversing, Zoom, blue jeans, the software's now brilliant. We should be using it 10 times more than we are. I don't know why it's not economic because it's free, for God's sake. It's practically free. It saves you a fortune.

I have a hunch that the great mistake the videoconferencing made is the comparative frame. It shows it sold itself as the poor man's air travel, not the rich man's phone call. Okay? So it was kind of like, what your Junius, that was like having a pager when your company didn't trust you with the mobile phone. You know, I mean, we won't send some of the Frankfurt because he'll probably empty the minibar and watch a porn film in the hotel. So we'll trust him to go down to a basement room where he can stare at Jurgen on a bad screen in a windowless room for half an hour. Okay? It was like the crap version of British Airways, not the posh version of British Telecom. And I think because they sold it that way, it's always been seen as an inferior substitute to something else.

This is a brilliant product called the Meeting Owl. It's about 800, 900 quid. It's one of the greatest things you can buy. It's got a 360-degree camera on top. So you plunk it in the middle of the table, an AI camera work focuses on whoever's talking. If anybody who has meetings attended by remote people, it's a complete game-changer. Okay? And then along the top, there's a picture like Leonardo's Last Supper of everybody in the room. So everybody know that joke? Jesus goes into a restaurant, says, "Table for twenty-six, please." And the maitre d goes, "But there are only 13 of you." And she says, "I know, we're all going to sit down on one side."

I'll end very quickly. This, if you change the comparison, the context, the story, the area of focus, you change the perception of the product, and you change the value of the product. This is why I love rings. What Mises said, there's no sensible distinction to be made in the restaurant between the value created by the man who cooks the food and the value created by the man who sweeps the floor. He explicitly means marketing and advertising. That when you, that in order to sell great food, it's not enough to prepare great food. You actually have to create the context in which it's possible to enjoy it. If you change the context in which people do things, you change what they do. If you want diversity in employment, if you hire people in groups, you get it automatically. Hire one person at a time, people go for conformity. You had ten people at a time, people go for complementarity. You'll get cognitive, ethnic, gender diverse, feel that all forms of diversity automatically as a product of the choice process. If you hire people in groups. If you get people hard one at a time, you get the opposite. Okay?

And finally, this is the great problem, okay? That rational people dominate defining the problem, and they dominate essentially the evaluation of the problem. And it doesn't matter that creative people, when you have a creative idea, I have to present things to rational people. That's only fair. The problem is, it never happens the other way around. You never get a bunch of accountants going, "All this seems to make sense, but before we present it, let's go and show it some wacky people to see if they've got an alternative idea." Nobody planning HS2 for a large engineering firm would be asking the question, "Can we solve this problem psychologically?" That's what we do. That's us. That's who we do it for. And that's the book in which it explains how to do it. Thank you very much, David. [Applause] You. [Music]