Ben Perreira

My head's dropbox.

Patient and Fearless

Don’t let the title mislead you – I am neither.

However, as I was sitting in the back seat of my friend’s car on a 12 hour adventure to Lake Tahoe at the end of last year, I took some time to think about things that hold me back. Maybe they hold other people back too.

It seems that successful people (defined as you wish) are probably very patient. They know that things come and go. They know that it is ok to wait for the right circumstances.

They are probably also fearless. They have failed enough to know that failure sucks but is also instructive. And they know that when the right circumstances arise they need to act decisively, unafraid of what they estimate to be a small downside.

So this year has been a work in progress. Seeking out things that scare me and waiting on things I would rather not wait for. I’m still impatient and scared of tons of things, but I recommend the exercise.

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Insight

In the advertising business, if a copywriter’s output is words and an art director’s product is visual imagery, then a planner’s contribution is insight.

“Insight” is so commonly used that its meaning has worn around the edges a bit.

A lot of people use the word to mean a finite factoid – “an insight.” I’ve been guilty of this, but I don’t think it captures what the word is supposed to mean.

To me, insight is what happens when you succinctly answer a great question. The answer to “Why do our customers prefer our competitors even though they offer inferior products with higher prices?” would offer a good look into the psyche of your customer – an insight.

These kinds questions are answerable, but not on a survey. We can’t expect to ask people these questions and get usable answers. That’s where we come in. We have to read between the lines.

If planners do this well, they come up with an idea that makes us take a step back and think, “Huh, I’ve never thought about it quite like that before.”

HSF

A few months ago I got a call to come in the following Monday for a brainstorm on “an entertainment property trying to reach tweens [8-12 year olds].” That was all. I agreed to do it.

I walked in excited and a little nervous. Who would I be meeting? What was this project all about? Is marketing to tweens a little weird?

It turned out that Disney was looking to get tweens interested in Disney World. They needed an approach to get there. A handful of us sat around a table all day eating candy and tossing around crazy ideas to try to find something that would stick. Over the course of a couple weeks we formed some pretty strong concepts. I’m hoping they’ll be executed so I can share them.

The project was fun and I had awesome time working with riCardo Crespo, the person leading the project. He came in with an infectious level of enthusiasm and with a seemingly bottomless toolbox of ways to bring good ideas out of people.

As we vetted ideas he would sometimes say, “I like this, but it’s missing the HSF – the ‘holy shit factor.'” 

Simple yet effective, the HSF quickly became part of my approach as another way to solve demand problems.

It forces strategic and creative people to go beyond doing typical marketing. It should be clever and well-executed, whether its a stunt or a TV commercial for toothpaste. It should force people (whether they are being consumers at that time or not) to pause in delight and wonder how anyone thought of it. As the name suggests, it should make you say “holy shit!”

If you want to spend a couple hours watching riCardo talk marketing, he is speaking at the SIMA Boot Camp tomorrow, July 22, in Irvine, CA. Get a ticket here. You won’t regret it.

Emotion For Sale

In my quest to understand how and why people do what they do and buy what they buy, I often think about myself. There is a ton of bias in studying oneself, but there is also a lot more to work with. Once you begin to figure out how to pick that apart you can learn a lot.

I also look at what may make people consistently choose one of multiple options that would be basically indistinguishable from one another when stripped of branding.

The way we buy things can be seen as a complex system of social, price, actual/ rational need and other dynamics. That’s the context in which our purchase decisions exist. But what we can more closely study and affect is the emotions we hope to get by buying certain things.

For example, a couple feelings I get from buying an iPhone are acceptance (having something that many people consider to be the best) and status or achievement (owning something for which I paid a premium when I could get the functionality I need for much less).

The emotional utility of a given product changes over time. Some of the sentiment only available to iPhone owners when it came out in 2007 (e.g. innovativeness) is now also available to HTC One and Samsung Galaxy S5 owners.

Good brands tell stories and position themselves in ways that give their customers emotional capital. The feeling one gets from consuming a Coke is different from that one gets from Pepsi. The products are very similar; the way they are positioned is not. The emotional capital that Coke gives us is based on the brand’s imagery around happiness and smiling.

Enough consumption decisions that involve consistently choosing a product (Coke) over a similar one (Pepsi) allows one to borrow that emotion and transfer it to other parts of our lives. Put another way, you are what you consume. Your decision to become a Coke drinker (i.e. what happens when that’s your soda of choice) establishes you as the type of person who prefers happiness imagery to the more pop culture, aspirational imagery that Pepsi uses. That then becomes a part of your self-concept, encouraging you to act in a similar fashion in other settings to remain consistent with this established pattern of behavior.

This is partly how great brands affect wider culture. They find an emotion that we have been missing out on and offer it to us in exchange for our purchase of their products. Other brands, filmmakers, writers and artists identify the success of that emotional arbitrage and use it to reach larger populations that are also unfulfilled when it comes that having that particular emotion.

For most of us, though, we just think we’re picking the best product.

When Service Becomes a System

The following is a post from my good friend and former colleague Ross Guthrie. A few times a year we get together to surf and discuss interesting business ideas, among other things. His take on ecommerce is especially important as more companies not only move much of their business online, but also have to find ways to use these ecommerce platforms as competitive advantages. 

The old business adage, “you cannot separate your service from the person providing it” implies that no matter how air-tight your employee handbook is, there is always the human factor; emotions, personalities, physical appearance, etc. But what does that mean in world where consumer touch points are increasingly digital, and business decisions rely on real data?

First, the benefits. Digital systems don’t have emotions and you can dress them exactly the way you want/need. You might be thinking, “But wait, digital systems don’t have personalities.” In this case, you would be wrong my friend.  Software is anything but perfect and I don’t think I need to tell you neither are the cables through which the data travels. Depending on your proximity to CDN, your browse behavior (machine interactions), and a myriad of other factors one can have many different experience as a user, developer, or integrator.

Now, some things to consider as you integrate new, commerce systems. Academically, information systems are judged by users on three major points; perceived usefulness, perceived ease of use, and media richness. As a business, you need a transactional engine, confidence in your data, and sound strategies for actionable tactics based on that data. Notice ‘business intuition’ is not included?  No more “I think this will work” or “I think we should” as a basis for revenue generating activity. We have machines specifically designed to observe and collect data for us and these same machines can even transform that data into information. It’s still up to you to turn that information into knowledge.

“That’s some fancy word-smithing, so what do I do?” When it comes to designing your interface, think inside the box or, more specifically, design for the smallest medium in which your customer could interact with your interface, think smartphones. This forces you to focus on essential functions and features; plus, you can always scale up. Also, follow the trends…if that little magnifying glass has proven a ubiquitous symbol for search, use it! Don’t get creative. This improves the perception of usefulness and ease of use.

Next, keep it snappy! Features are great, but if the page takes longer than 3 seconds to load you’re losing orders. Simple UI + Fast Load times = less opportunity for customers to exit the funnel.

In a brick and mortar store you can look at your customers and compare them to purchases; in the digital world this is not the case.  Configure your analytics to paint a complete picture of your customer through the purchase process. Use at least 2 but no more than three mechanisms for capturing data. That way you can extract, aggregate, and normalize data to account for any differences in methods used to collect the data.

And finally, get ahead of yourself but don’t bite off more than you can chew. Think about where you want to be 1-3 years from now.  Dream big, and then cut that dream into small bite sized pieces that a finite set of resources can realistically achieve in a given time frame.

The mechanics that come into play here are broad and complex. But if you, as a decision maker, can simplify the need into its essential components you’re left with a clean, predictable foundation on which you can build an empire. Good Luck, Godspeed, and may the coffee be plentiful.

Gassed

Have you ever gone out of your way to go to a cheaper gas station? This one is for you.

My friend and I just got back from a cross-country road trip. We filled our tank about 10 times and drove over 3400 miles. That’s a lot of fuel. It also gave us a lot of time to think about rationality and gas prices (which, by the way, are $0.75-$1.00 cheaper outside of California).

Most of us fill up on regular schedules. We work X miles away and drive round trip to work 5 times per week. Our extracurricular activities tend to fall on the same days each week and month. Aside from a few outlier weeks (like mine two weeks ago), our fuel consumption is fairly steady.

Economists call consumption (or demand) like this “inelastic” in the short term. It is unlikely to vary significantly week-to-week. Demand for fuel is more elastic in the long term because consistently higher prices may cause us to buy more fuel-efficient cars, seek alternative means of transportation, move closer to work, or change jobs altogether, all of which with the goal and presumptive effect of reducing consumption.

Now back to those of us who seek out cheaper gas. This map from GasBuddy.com shows the price of regular gas at all gas stations within about a 3-mile radius of my house over the past 48 hours. The range is $3.97 to $4.99, although most prices are in the $4.15 to $4.40 range.

Image

Imagine you live in the top left corner and you work in the bottom right corner of this map. That would take you about 25 minutes in typical LA morning traffic. You need gas tomorrow before work. Where do you stop for gas?

You live pretty close to a $4.25 station and will pass two stations that sell gas for just under $4.00. Your gas tank holds 16 gallons and you need 13 gallons to fill up. By seeking out the $3.97/ gallon station you will save $3.64 (13 x $0.28) or 6.5% off $55.25 that a fill-up would cost you at the $4.25/ gallon station. That would save you $182 per year (I multiplied by 50 to account for vacation weeks). No bad, but worth it? If it’s at all out of the way, it’s probably not worth the time.

The coffee you stopped for on the walk to your car cost you almost that much, and because you probably only fill up once per week versus daily for the coffee, the coffee is a 5x more costly expense.

So you need gas tomorrow morning before work. Where do you stop for gas?

At the station that is easiest to get in and out of. That’s more valuable than your savings of $3.64.

Rather than spending time trying to save a few bucks a week, making one’s morning coffee at home could save $500 per year (at $1 per cup vs. $3 per cup five times per week for 50 weeks).

It is important to note that people will always seek out cheaper gas even knowing that, when accounting for time and using extra fuel to drive out of one’s way, it is an irrational decision. Sure, it may save you a little money, but so would not having utilities at your house. Most Americans wouldn’t consider that a rational financial decision.

However, in the case of gas prices, in irrationality can come peace of mind: “This is just how I do it.” The satisfaction we get from being savvy shoppers is much more difficult to quantify than the simple model I used to make my gas purchase decisions. In these kinds of irrational rituals are opportunities for marketers to speak our language, because if it weren’t for a little irrationality in how we purchase, most marketers would be looking for new jobs.

Somber Reflections

As a student at UCSB I lived in Isla Vista. IV is as close to a collegiate paradise as you can get. I constantly tell family friends to send their kids there because it was such a great experience for pretty much everyone I know who went there. The combination of a UC education, living on the beach, the hills a few minutes’ drive away and throngs of young people everywhere makes it a special place. I still have several friends who live in Isla Vista and I visit frequently. In fact, a large group of my friends usually holds a reunion in the area on Memorial Day weekend every year. A wedding between two friends who met at UCSB meant the venue was moved this year. Otherwise we would have all been a couple of miles away.

When I heard about the shooting I immediately knew what the streets if IV would have looked like on a Friday night – students riding bikes to parties, picking up alcohol, getting a last minute bite to eat before looking for some fun, others would be coming back from the library after a long day of studying. IV is one of few places in which bikes have the right of way (the local Sheriffs would disagree, but it is the de facto rule). The thought of a car driving at speed through IV is scary. The thought of a gunman in that car is unfathomable.

I’ve spent the past few days thinking about this rampage. How could anyone do this?

Some have pointed to misogyny as a reason. I’m not a mental health professional, but having grown up around a lot of people whose backgrounds mirror that of the killer (from wealthy parts of Southern California and ending up in Santa Barbara for college), and having read through much of his manifesto, I have a different take.

To be clear, I do not sympathize with the killer at all. I do not think what he did was just in any way. I think it was horrendous, but I also think attempting to understand it is a worthy exercise.

Read any page of the killer’s manifesto and you will see the word “sex”. He becomes obsessed with sexuality and relationships. It appears to me that the killer’s obsession with lack of sex as a reason for his rage is a red herring. It is his own retroactive Freudian self-analysis going back to childhood that has been sullied by an adult lens.

Sex is symbolic of love, which is symbolic of the deepest kind of acceptance. Throughout the manifesto he describes becoming enraged when he saw couples being affectionate toward each other. He later speaks of wanting to lure beautiful people to his apartment and kill them first because he assumes they have the best sex lives.

Without a doubt the killer was brilliant. He saw himself as an ubermensch. Perhaps the only thing he failed to capture was why other people didn’t see and treat him as such.

The irony is striking and tragic. The killer was handsome, smart, and came from a wealthy family. That put him in the minority of how American society (however wrongly) evaluates males as suitable mates. He was, on the surface at least, more sexually desirable than many of the men around him.

He describes his loneliness and isolation while at the same saying the sorority he was targeting was full of women who “would” have rejected him. His self-loathing was so deep that he set out to kill those who had not yet wronged him in retribution for all those who, in his mind, had.

If you take gender out of the equation this goes far deeper than misogyny. He felt he was the victim of a conspiracy of sorts. In his mind, men and women alike rejected him as a viable member of society, but women rejecting him made him less than human. His words: “The females of the human species have never wanted to mate with me, so how could I possibly consider myself part of humanity?” (p. 135).

Dating in Isla Vista can be humbling for anybody. The volume of desirable prospects seems outweighed by the competition, all of whom seem to have an edge. However, the idea that good looking people have robust sex lives while average looking people (with whom the killer seems to identify) struggle to get in is a farce. The people in IV who I was aware of having had the most, um, “opportunities” were those who figured out that meeting a suitable match requires enduring constant rejection from less suitable matches. It’s a numbers game, if you will. Those type of people tend also to be very socially adept. A pretty face helps, but a timely joke  and general affability can carry much more weight.

He didn’t need to go far to find information on this. UCSB boasts one of the country’s top programs in the study of human sexuality, with a wildly popular undergraduate course taught by Janice and John Baldwin.

It seems that the killer’s desire for social acceptance goes far beyond sexuality. Sexuality is more of a symptom than what he was craving at a more base layer – being understood and valued by those around him. Diagnosed with Asperger Syndrome, he lacked the ability to pick up on subtle social cues. His inability to communicate from a young age likely contributed to that. Likewise, he lacked perspective on what relationships entail.

A hyper-idealization of relationships and sexuality combined with an inability to engage in the minor interpersonal elements of communication required to create and sustain relationships (love or friendship) appears to one of the sparks of the killer’s rage. More succinctly, he was frustrated that he was unable to get something that didn’t really exist.

People blame mass shootings on many things. We blame guns or hatred for certain groups – religious, national, gender, or otherwise. We claim that the shooters are just evil and that these incidents are isolated. Those can be ways into the true motivations, but they tend to be band-aids themselves.

Further, these things we commonly blame for mass shootings are larger social issues that are much more difficult to change. We should start with the things we can most quickly address, then the others as possible. Changing an entire culture’s views around gender relations takes a little longer than, say, updating protocols around how law enforcement reacts to calls from relatives or therapists of troubled people.

Mass shootings like this can be prevented. We just need to be willing to figure out how.

Thanks to my friend Jake for the long and spirited discussions on the topic as well as feedback on this post.

Faking It

Last night I went to watch five startups present their ideas to a room full of techies and investors in Santa Monica, then met a friend for drinks at a nearby wine bar. My friend is a lawyer who knows a lot about branding and trademarks. Our discussion grew especially spirited when we started talking about counterfeit goods and copying designs. 

In 2012 In-N-Out sued the founders of CaliBurger for opening a “tribute” to the California chain in China. Today QZ posted an article that states that half of the Chateau Lafite wine sold in China is counterfeit. While I don’t want to single out China, a very large and growing economy is fertile ground for counterfeit goods. 

The point about copying other brands is a larger one: the damage to a brand is generally pretty minimal. Imitation is the ultimate form of flattery, they say. Being copied is a sign of strength. Just ask Apple

Why don’t counterfeit goods damage a brand, one could reasonably ask?

New entrants (i.e. copycats) copy products that are too expensive for a large portion of the population. Someone who wants a real Rolex is unlikely to consider instead buying a counterfeit Rolex for 1/4 the price. S/he is going to ensure s/he has bought the real thing. Peace of mind is part of the value marketers add to a product. They remind buyers of the history or process by which a product is made. A counterfeiter sells only a cheap veneer. 

How we use a product after we buy it is also an important part of this equation. I sometimes use the anticipation-experience/ use-memory model to outline the three stages of product purchase. Since memory is generally the longest and most complex stage, as well as self-regenerating (e.g. you create your own memories with your car), having an authentic product is critical. Imagine showing your friends your fake Rolex that cost you $1000. Your self-image around owning a genuine Rolex and the image your friends have of you as an honest person suffer from that purchase. All of a sudden $1000 seems like a pretty high price to pay for something that is symbolic of only phoniness.

I find the article about Chateau Lafite interesting because it speaks to the power of branding. Few products are subject to the placebo effect in the same way wine is. It could be the air of elegance combined with the complexity of taste compounded by alcohol, but something about wine makes the bullshitter is us come out. Chateau Lafite’s brand would certainly be damaged by counterfeiting if counterfeiters are selling the wine at market price, indicating purchasers are being fooled by the branding (and, of course, their own senses of taste). The net effect of the damage is the amount of market share lost to counterfeiters selling the product at market price.

The people who know, know. They ensure what they’re paying a large premium for is the real thing. Sure, companies can help protect their brands by making this easier to do. But the rest of the people who bought counterfeit goods probably weren’t going to buy your product to begin with. Buying knockoffs, be they counterfeit or not, at a cheaper price will always be a practice for a large segment of the population. Great ideas will always be copied. I’ll take my chances (and margins) by building a strong brand and continuing to innovate in ways that would only exhaust copycats. 

 

Good Problems

Jay Z and I have a few things in common. We both like basketball, a strong beat, collaborating with talented people, surfboards and identifying problems.

My operations professor in business school liked to talk about bottlenecks. To promote efficient operations, one must identify a bottleneck, solve the problem, then identify the next bottleneck. “What if there are no bottlenecks?” someone asked. “There is always a bottleneck,” he replied, chuckling.

I have a friend who works for a leading energy drink company. Last year the company identified its bottleneck, which is also one of the best problems a brand can have: there are more people love the brand than there are people who purchase the product. Now, this problem is not exclusive to the energy drink brand. Nike probably has the same issue (although the barrier to purchase may more frequently be economic). But when your product line is small and everything on it is considered unhealthy by your detractors, who otherwise love your brand, you have your work cut out for you.

I recently attended a talk with the founders of a new beer brand that has a similar dynamic: great branding and a small product line. The CEO mentioned parenthetically that apparel sales were better than beer sales.

So what do you do if you’re at a brand like either one of these?

First, acknowledge that there will always be people who don’t want to purchase your core product. It sounds obvious but it can be hard to accept.

Second, figure out how you can use everyone who is exposed to your brand, purchasers and non-purchasers alike, to your advantage. This is sometimes referred to as propagation. If I love a brand video that the beer company produces, but I don’t drink, or I only drink certain brands of beer, I may still pass the video along to my social network. Or I may pick up a case of the beer for a party I’m attending.

I wrote a couple weeks ago about the need to look at things in a nonlinear fashion. Marketing doesn’t work like this: spend money reaching person X, person X buys product from brand. Person X has several streams of influence lap upon him before he ultimately decides to buy a product. Brands that understand this are able to find new ways to reach the people who will ultimately purchase or consume their product. They also create zealots who are willing to do irrational things to share the brand’s message (i.e. purchase a hat with a logo, driving revenue and free advertising and conversation). These people help turn a good problem into a good business.

The 3-Day Rule

We’ve all heard of the 3-day rule. When a guy gets a girl’s phone number he’s supposed to wait three days before calling her as not to appear desperate. I think it’s bad advice so I’m going to hijack the term.

Most people I regularly hang out with (work included) are pretty damn passionate about something. It may be production, photography, writing, psychology, sports, or anything else. They don’t have time to do things that aren’t extremely captivating.

In order to live one’s life with this brand of gusto, one much put one’s ego on the line. The confidence that comes from small successes sustains us day-to-day, but a desire for something greater in the long term is more suitably nourished by ego. Success is partially a function of luck, which is itself a function of fucking up less frequently than you did previously. Ergo, success begets success. 

Sometimes, however, people of passion fail. When passionate people fail it shakes them to their core. It is much worse than physical pain, the likes of which they have likely endured many times on the road to previous successes.

Here’s where the 3-day rules comes into play. Whether the failure is professional, personal, sports-related, romantic, or other, three days appears to be the appropriate time to recover. The general succession:

Day 1: Bewilderment

Day 2: Licking wounds

Day 3: Learning and planning for the next time

When the founder of Mint.com was developing the product he encountered failure on a daily basis, usually by himself. He used to play Frank Sinatra’s “That’s Life” to remind him to collect himself and move on.

For the passionate, fervent and maniacal among us, old blue eyes’ message does the trick.