Angela Duckworth revises Grit, a photocopier sinks a water project, and 17th century London pays seven shillings for a label, all pointing to the same lesson: plan for the half of success you can’t see.
Dr Angela Duckworth spent years telling us to stick at it. Now she says the situation you stick at it in matters more than your willpower, and if your good hires keep leaving after six months, the problem probably isn’t them.
Michael Blastland explains why the best-laid plans can fail on one small detail, and David reaches for survivorship bias and the OODA loop to keep small business owners moving anyway.
The AI doom headlines get a calm second look, with David following the money and Steve calling Claude Code an intern who has read a lot but never done anything.
Samuel Pepys, a wine-loving politician and a bee-themed Banrock Station ad show how a label creates value, and why status signalling and virtue signalling are different things.
Get ready to take notes.
Talking About Marketing podcast episode notes with timecodes
01:30 Person This segment focusses on you, the person, because we believe business is personal.
Change the Situation Before You Blame the Person
Steve opens with Dr Angela Duckworth, whose 2016 book Grit gave us “stick at it, sunshine and you’ll get there.” Her new book is, Situated. David notes she was explaining her own life at the time, when writing Grit. Later she saw that passion and persistence work best when the situation around them is supportive. Jerry Seinfeld’s “nighttime Jerry” and “morning Jerry” show why willpower alone bends to circumstance. The guy who looks like the party animal is actually one of the most organised people you could imagine.
Duckworth’s box theory runs from situation to thoughts to response. Self-help books tell us to change our thoughts, but if the same negative situation keeps dragging you back, that has limited effect. Steve recalls an organisation that held a big “we’re doing things differently” meeting every couple of years. It never lasted a week and left everyone cynical. David lists the four parts of a situation you can change: physical space, peer relationships, mentor relationships and culture. You change culture by changing the other three.
The small business test is a good one. If talented people you interviewed and hired keep leaving after six months, ask what’s wrong with the situation. Tired, frustrated staff and cynical comments overheard at the end of the day are the signs. David’s first step is to stop blaming yourself or others, find one tangible thing to change, then look for the next.
15:00 Principles This segment focusses principles you can apply in your business today.
The Hidden Half and the Photocopier That Sank a Water Project
Steve brings Michael Blastland, author of The Hidden Half, from an EconTalk conversation with Russ Roberts. We spend our lives finding regularities, like trusting our bike brakes. A lot of life sits where those regularities break down. Blastland’s example is a water supply project in the Indian subcontinent, reported to have had a very low sign-up rate because nobody could photocopy the application form. Esther Duflo’s point is that one weak link in implementation can mean total failure.
David adds the fundamental attribution error: our successes are skill, and other people’s are luck. He also names survivorship bias. We hear from the entrepreneurs who took the risk and won, and never from those who took it and disappeared. Look at the 99 failures and you find more than one way to succeed. You can spread your bets, with some low-risk, reliable earners and a few small long shots.
Steve calls it a dose of stoicism, shock absorbers for your head, heart and business. David’s OODA loop (observe, orient, decide, act) keeps you doing small things in a big world. Be prudent, but keep moving, because sitting still too long simply hands the opportunity to someone else.
26:45 Problems This segment answers questions we've received from clients or listeners.
How Do You Solve a Problem Like AI?
Steve borrows from The Sound of Music and swaps Maria for AI. Both are useful, occasionally alarming and hard to pin down. David has a calm view on the recent wave of AI horror stories. In the cases he’s read about, these were models in training with low alignment and few controls, deliberately tested with minimal restrictions. His real line in the sand is letting AIs run their own recursive self-improvement. Steve says he now feels more anxious than when the segment began.
David’s view on the commercial side is to follow the money. The data centre builders are making it, and he suggests scary headlines suit companies that need us to buy protection. He cites Jensen Huang’s remark that there’s no problem, just a lack of code: build in the alignment and don’t test with out-of-control AIs.
Steve’s own experiment with Claude Code on a WordPress site was so dumb at times he could have done the job faster himself, like having an intern who has read a lot but never done anything. David’s advice for small business is to use the tools that are useful and pay for what adds value. If enough of us decline to pay for a peak product we don’t need, the market gets the message.
33:00 Perspicacity This segment is designed to sharpen our thinking by reflecting on a case study from the past.
A Wine Label, a Wetland and a Swarm of Bees
Steve takes us to 1663, where Samuel Pepys drank a wine he called “Ho Brian” at the Royal Oak Tavern in London. Per The Rest Is History, this was Haut-Brion, one of the first Bordeaux wines sold under the name of its own estate. Its producer, Arnaud de Pontac, was a politician with a genius for marketing. His son opened Pontac’s Head in London, and the wine sold for seven shillings against the usual two. David sums it up as novelty leading to status leading to preference.
Then to Banrock Station, from a Riverland region long known for volume rather than prestige. The 2010 “save our swarm” ad was made in Britain to raise money for Devon’s bees. Both hosts think it could work again in Australia, with varroa mite now affecting our own bees. David’s condition is knowing your audience and what they can afford. The extra pound or two suits the everyday wine buyer, and Steve doubts a cause would suit Penfolds Grange, where the buyer wants a memento. Status signalling and virtue signalling are different things.
Transcript This transcript was generated using Descript.
A Machine-Generated Transcript – Beware Errors
S09E05
Caitlin Davis: [00:47:00] Thinking about Marketing is a podcast for business owners and leaders, produced by Steve Davis and David Oldney of Talked About Marketing. More than 8,000 conversations have taught them something. You can’t read the label from inside the bottle. Everyone needs external perspective. Through their four Ps, person, principles, problems, and perspicacity, yes, you heard that correctly, they explore marketing with curiosity, generosity, and the occasional gentle eye roll.
They hope this becomes a trusted companion on your journey in business
Steve Davis: David, do you believe in doing things by halves?
David Olney: Uh, [00:48:00] sometimes yes.
Steve Davis: Which half though? The visible half or the hidden half?
David Olney: Mm, the half that sets me up to do the other half better later.
Steve Davis: We better make this easier to understand as the episode starts.
David Olney: Or we could just be halfwits
Caitlin Davis: Our four Ps. Number one, person. These are insights for the whole person, not just the business operator. Oscar Wilde put it this way, “The aim of life is self-development. To realize one’s nature perfectly. That’s what each of us is here for.”
Steve Davis: David, in the person segment, I want us to reflect on things that relate to what sets us up for success or, uh, exposes us [00:49:00] to failure, and the lens through which I want to approach this is the work of Angela Duckworth.
She had a book that was very famous about, I don’t know, six, 10 years ago, something like that. It was called Grit, and the message of that book was, “Just stick at it, sunshine, and you will get there, and everything will be rosy.” And she sort of… I don’t wanna say… Well, she- it’s like she’s backtracked from that cold, clean, bold statement to inject it with plenty of nuance and context.
Is that about right?
David Olney: That’s a good way to sum up Angela Duckworth’s work from, I think it was 2016, in Grit. Really, what she was doing then in a lot of ways was explaining her own life. How had she achieved so much? Well, she thought she’d done it through passion and persistence, and she really went out and looked for the evidence.
But as her life went on [00:50:00] and her career exposed her to other things and life exposed her to other things, she kinda realized that passion and persistence work so much better when the situation you’re applying them in is good. So she’s written the book now that really makes it clear that passion and persistence can have an impact, but they can have a really big impact if the situation you apply them in is a positive situation that is giving you all the encouragement and support you need.
Steve Davis: That’s why I wanted to talk about it in the person segment because whether it’s our home base or whether it’s us when we’re running our business, working in our business, et cetera, um, I think we’re all curious to see what sets us up for success. There is some talk, I think she, in the b- in the book she quotes, uh, Jerry Seinfeld, who was talking once on TV about the, the problem of life and that there’s nighttime Jerry, who wants to stay out late, [00:51:00] have a great party and do everything.
Then there’s morning time Jerry, who is really angry at nighttime Jerry ’cause now he’s tired. He’s broken all the rules he made for himself, so he sets some new ones, and then nighttime Jerry breaks them all again. And this is her way of sharing an illustration that says, you know, just simple relying on grit and willpower is flawed.
It’s, it’s because it bends at the whim of the different situation or context that you find yourself in at different times of the day and different mindsets.
David Olney: Yep, and to use the Seinfeld example, all his rules about how much time he spends at his desk, what’s on his desk. How much he has to write before he can leave his desk to make sure that daytime Jerry can get so much good work done that nighttime Jerry has the money to be able to go out and party.
That the discipline of setting up the situation to get good work done [00:52:00] becomes critical. So the guy who looks like a party animal, in reality, is one of the most organized people you could ever imagine.
Steve Davis: Where does this bring something new to the table? I guess it doesn’t in, in many ways. It’s actually reaffirming things we kinda knew, but it does surface them differently.
In fact, she talks a lot about a model of situation, thoughts, response, uh, whi- which I think is her box theory, isn’t it?
Dr Angela Duckworth: Box one represents a given situation. Box two is how you think about it, and box three is your response. First, there’s your situation. You’re in a certain place and with certain people. This is your objective reality. Second, your situation provokes thoughts. You notice some aspect of your situation, and your mind immediately interprets it.
[00:53:00] This happens so fast that you’re typically unaware of the countless judgments that take place beneath conscious awareness. It may seem like you directly experience reality, but you don’t. You experience your brain’s interpretation of reality. Thoughts are subjective. Third, your thoughts provoke a response to the situation.
It is only at this final stage that you feel an emotion regarding it. “People often assume that it’s their feelings that lead to their thoughts,” James said. “But in fact, it’s the other way around. Your feelings don’t show up until box three. The most direct way to change how you feel,” James continued, “is to modify the way you respond to your thoughts using willpower.”
But as we all know, using willpower to effortfully suppress anger doesn’t work very well. I leaned forward in my seat, eager to hear what James would [00:54:00] say next. “It’s more effective,” he said, “to intervene earlier by changing your thoughts. When you change your thoughts, you automatically change your response.”
But James wasn’t finished, and it was what he said next that radically shifted my view of how we change. It was simultaneously both plain as day and nothing I’d considered before. Earliest of all, you can change yourself by changing your situation. For instance, when settling in for a three-hour Thanksgiving feast, you might choose a seat at the other end of the table from your brother-in-law.
Or if he monopolizes the entire table’s conversation, you might volunteer to clear the dishes and wash up in the kitchen. Or you might sidle up to your grandmother, whose warmth and humor never fail to bring out your most appreciative [00:55:00] self. By changing your situation, you automatically change your thoughts, which automatically change your response.
David Olney: I think it’s one of those theories that is just a really good way to get people to stop and go, if these three things are always the cycle we’re going through, we’re in a situation, we have thoughts about the situation, and then we respond through those thoughts. We take some action, and then the cycle starts again.
Which thing can you change? Well, we’re all told by a zillion self-help books, change your thoughts But if you keep facing the same negative situation, changing your thoughts really can’t have the positive impact you want it to because the situation keeps dragging you back down. Was actually acknowledging, well, I’ve changed my thoughts a few times, the situation stays the same.
How about I consider changing the situation? What would happen then? And the biggest way to have a positive impact on people’s [00:56:00] lives, the research shows, is to change the situation that shapes the so- the thoughts out of which we make responses.
Steve Davis: I- I- it reminds me, I did work for a, an organization for a fair bit of my time, um, and there were occasionally every two or three years a big meeting because we’re gonna do things differently.
David Olney: Mm.
Steve Davis: And they never lasted. They, they never lasted more than a week, and that they wouldn’t be alone. There’d be other organizations, but that was the point, and it leads to a lot of cynicism. Are we gonna do another-
David Olney: Yep …
Steve Davis: training exercise again? That is because it’s focusing at the thoughts area. Yep.
David Olney: It’s not changing the situation.
Situation.
Steve Davis: Now, that situation, are we talking about change building, change table layout, or are we talking something more profound than that?
David Olney: The best way to probably understand it is in the way she talks about in the book that there’s four aspects of situation you can change. [00:57:00] You can change your physical environment, your space.
You can change the nature of peer relationships by new norms. You can change the nature of mentor relationships by new norms, and you can do things to change the culture of how people relate in your, your organization, your institution, your space. And really from my background of teaching strategic culture, culture is the most important one of the four because if you change the culture, you will fundamentally change the other three things forever.
Steve Davis: And I imagine a number of people listening right now just groaned because culture seems like a very, very big ask to change because it, it tends to develop organically and seeps around like the, the earth beneath our feet.
David Olney: That’s what we want to believe because that’s lazy and easy. But the reality is most of us are, are culturated to a way of being, a way of doing that we just then unthinkingly repeat until [00:58:00] we realize we don’t like it or it doesn’t work well, and then we discover how hard it is to change culture.
But it’s because we don’t realize often we need to change the space or the physical circumstances. We need to change how we relate to people who have a whole pile of assumptions where they’re still interacting the way they did yesterday that’s causing us problems, and we need different mentors, or we need to mentor people differently to get different outcomes.
So really saying that culture’s hard to change is, well, that’s ’cause you don’t change culture in and of itself. You change all the things it affects. And then you change it by association.
Steve Davis: And that brings us to this, um, box theory. Yeah. That’s all part and parcel of getting the situation renovated, which then, uh, makes it easier or encourages different sets of thoughts- Yeah
which then lead to a new set of actions.
David Olney: Yep, and the classic example is, you know, in small business, “Oh, I keep bringing new people in. They last six months then they leave. [00:59:00] What’s wrong with them?” Well, if that’s your consistent pattern, then the question has to be, what’s wrong with this situation that talented people who did an interview with me that I thought were a good fit, that I hired, why are they leaving after six months?
They didn’t turn up to leave six months later. They encountered something in the situation that, you know, is not what they were expecting, they don’t know how to deal with, and they’re not getting support to deal with. So very often in small business, if you’re getting high person turnover, um, there is a, a fundamental situational problem, and it can be space, it can be how peer relationships work, it can be how mentoring relationship work, and it’s definitely gonna be culture to some degree, because culture is the ultimate thing that affects the other three.
Steve Davis: Now, some people might go ahead and read or listen to Situated, um, but just to sum this all up now, within the, the, the bounds of the person segment thinking about us, what is a symptom [01:00:00] or a signpost that there is something here that warrants looking more deeply at the situation aspect of our situation?
David Olney: The most obvious sign is that at the end of the day, people keep looking stressed at work. And no one can quite put their finger on why. Again, good people that you hired because they were capable, they had a great CV, they interviewed well, they sounded positive and upbeat. If all those people look tired and frustrated, and the, the comments you overhear are cynical, you’ve got a major situational problem.
Steve Davis: And a first step?
David Olney: First step is to acknowledge that if things are not turning out how you expected, and people seem frustrated or disappointed, don’t look at pointing a finger and blaming yourself or blaming others. Start looking at the pieces that make up the situation. What is it about [01:01:00] peer relations that isn’t working?
What is it about the physical space or how we do our jobs that is stressing people out or making them frustrated? Find something tangible that if you altered it, people would feel more confident, feel more competent, feel more engaged, feel like the day is going more positively. Change one thing you can identify, and then look for the next one, and don’t blame people.
Look for what is affecting people. Because the point is, people respond to the situation, and if the situation is negative, people become negative. Mm-hmm. People by default don’t want to be negative at work. We spend too much of our day there. We’d much rather be happy and productive at work given an opportunity.
Steve Davis: On that note, let’s get up and change chairs.
Caitlin Davis: Our four Ps. Number two, [01:02:00] principles. These are ideas worth building on. As Oscar Wilde reminded us, you can never be overdressed or over-educated.
Steve Davis: Let’s turn to the principles segment now, and I have gone back to, I think this is my favorite other podcast. It’s called EconTalk. Russ Roberts had Michael Blastland on as a guest.
He’s just written a book called The Hidden Half. Absolutely fascinating book. It’s talking about, and you probably have a different way of explaining this, but it is in the realm of probability and statistics applied to life, tied to research, tied to how efficacious certain medicines are, et cetera.
There’s certain numbers that we feel we can rely on. But then there’s always random factors that we are too many and too different to quantify, and they can throw a [01:03:00] spanner in the works. And this is his reference to the hidden half. There’s all these variables that can affect things in life, but there’s also the unknown unknowns, I guess they’re referred to, which can come in and up the apple cart without undoing the principles that you hold true.
It’s just there is this random factor.
Michael Blastland: One of the great human endeavors is finding all those regularities that govern the way that people behave, the way that systems work, the way that one thing causes another. I mean, that’s what we spend most of our time doing. It’s a great part of our human instinct to look for the way that one thing leads to another.
You know, even the, even the way my brakes work on my bicycle, you know, uh, I, uh, I’m pretty sure they’re gonna stop it, and I know that because they usually do. There’s some kind of regularity there. And, uh, also because I can look at that mechanism and I can say, “Well, it looks like the kind of thing from previous experience that ought to slow my bike [01:04:00] down.”
So, you know, we’re, we’re observing patterns all over the place. The hidden half is where those break down, and my contention is that actually there’s a lot more breakdown than we would wish for, uh, in some ways of looking at the problem, and there’s, uh, a lot more breakdown than is admitted. In other words, there is a huge reservoir of sources of discontinuity, irregularity, chance, luck, stochasticity, whatever you wanna call it, which disrupts our ability to know things.
There was a, a project, again, I think it was in the Indian subcontinent to kind of, um, uh, connect a community to a public water supply rather than having to go to standpipes and things like this. And they went to huge efforts to make sure the supply was reliable and the water was good and that everybody knew about it and all the rest.
So tell me the one thing they forgot to do which meant the project had an [01:05:00] appallingly low sign-up rate. They forgot about the importance of the photocopier. And, you know, at this point you say, “Well, what has a photocopy got to do with the water supply?” Well, in order to sign up, you need a duplicated copy of the application form or whatever it was.
You know, nobody could duplicate the form. You needed to go into an office with a photocopier. And this proved such a hurdle. I mean, it’s preposterous. The final implementation stage, the stage of design. This is an example from Esther Duflo, who was Nobel Prize winner, uh, recently in economics, um, uh, uh, where sh- her point was that these very small details, almost the last link in the chain for her, these very small details of implementation can abso- be absolutely critical to the success or failure of an idea of a project.
Um, so there you can see this, this weak link principle. Uh, everything else can be fine, but if you’re missing one piece, it can be a 100% [01:06:00] failure.
Steve Davis: David, would you sharpen that at all?
David Olney: I think I’d add something in that I think is really important for people to think about, and that’s the fundamental attribution error A- and that affects all humans, and it’s the, the belief that humans tend to have that if I, if something good happens to me, it’s ’cause I’m clever and I worked hard.
If something good happens to you, it’s ’cause you were lucky. If something bad happens to me, it’s because, you know, the world did something wrong and caused the problem that affected me. If you did something wrong, it’s your own fault. So the fundable at- fundamental attribution error means even when we think we’re calculating probability, we’re calculating it with a different emotional valence, whether it’s us or another person.
So once you realize that that’s what we do in the most basic sense, why would you trust deep human analysis that can’t [01:07:00] explain how it’s validated its, its assessment?
Steve Davis: Well, some of this analysis in the realm of business is based on the success stories we see, uh, about entrepreneurs in particular. Uh, in fact, LinkedIn is full of this stuff.
Mm. Uh, Harvard Business Review, all those sorts of publications people go to to try and get inspiration, and then they just feel terrible because- Mm … these amazing people are having great successes. Mm. A- a- and what Michael basically says is, “Don’t bet the ranch on one forecast, or one campaign, or one client, or one clever theory.”
The way to take this information on board about the fact that there’s a hidden half of things that can knock the legs out from under us is we have to account for it. Mm. We have to know that it might happen. And so he uses a great example in the interview. He says, “You read these stories about how these winning entrepreneurs say, ‘We took a huge risk.’
The [01:08:00] lesson therefore is you’ve got to take risks.” But he says, “One thing you don’t hear from are the people who took the risk and disappeared.”
David Olney: Yep.
Steve Davis: And so we are being fed broken information because that’s the nature of the beast, which is again, um, attributing, uh, the view of what makes businesses successful on a limited s- uh, set of source data.
David Olney: Yep. You’re essentially describing survivorship bias. We’re looking at the one success rather than the 99 failures. Whereas if we look at the 99 failures, we’ll learn there’s more than one way to succeed, and there’s more than nine ways, you know, to avoid failure. We’ll have so much more data if we look at the whole picture and then go, “Hmm, could we do a couple of things at once?
Could we take some smaller bets? Could we do something that’s a, a good chance of being successful at low margins, and do a small risk on something that’s a, you know, low chance of success but high margins?” There’s normally a way to [01:09:00] balance allocations of resources more effectively if we look at all the examples out there, not just the one that makes us excited.
Steve Davis: He’s basically saying that the temptation in this world is marketing business advice. There’s AI-inflected planning now that’s happening, that if you’ve just got enough data, everything will be thought through. But he says the real thing is we still need to use evidence. We still need to be thoughtful in the choices we make, but we need to stay humble about what it is we can’t know.
David Olney: A really good way to keep it in mind at the level of small business is the OODA loop. Observe, orient, decide, act. If you observe the world around you, there’s all sorts of things going on, and the difference between observing and orienting is orienting, you decide which bit of the world is relevant to you and what you want to achieve And from orient, you decide what to do next, [01:10:00] and then you take that action.
But you’re constantly aware that in the step of orienting and deciding and acting, you’re doing something small. And the minute you finish the loop, you’re back into observing the world and going, “All right. When we did what we did, how have we changed what we’re observing? How have we changed how we need to orient for the next round?
How different does our decision need to be now we’ve seen the impact of our previous decision? How is our action this time likely to affect the environment because we’ve seen what the last round did?” So the point with the OODA loop is you’re never out of it as long as you’re taking action, and you’re constantly acknowledging that you’re doing a small thing in a big world, but that small thing affects the big world, and that the cycle keeps reminding you of that.
Steve Davis: And it’s timely, I think, for all of us to remember this, all of us. It’s almost like a dose of stoicism to understand that things can go wrong.
David Olney: Yeah.
Steve Davis: It doesn’t belittle what you’ve done. It’s just that there are going to [01:11:00] be random things that take place. And if we know that that’s a factor, so we don’t hold so tightly into our vision of the future such that when it changes, we fall apart, we need sort of…
It gives us shock absorbers, uh, within our heads and hearts, and hopefully within our business, ’cause we haven’t thrown the whole farm in on one particular bet. Because the point he finishes with in, in part of the, in the, towards the end of his conversation is you can’t actually control which conversation, which email, which experiment is gonna completely change the trajectory of your business.
But you can make sure there are enough of them. And I think that’s the key message, isn’t it? He wants us to keep trying, to keep being constructive, to keep being driven by curiosity, but to do it with one eye on the fact that there could be unexpected things that happen. So just be prudent.
David Olney: [01:12:00] Mm. And keep moving.
Steve Davis: Yes, ’cause you can. The risk is to be coward into being too timid-
David Olney: Yep …
Steve Davis: to do.
David Olney: And, and if you’re too prudent and you stay still, everyone else will find the opportunity that you didn’t take or use the resources that you didn’t make use of. So because we’re in a dynamic environment, the most dangerous thing is to sit for too long.
Sitting for a little while to understand is great, but sitting for too long simply means everyone else will move by and use the resources.
Caitlin Davis: Our four Ps. Number three, problems. These are the marketing challenges keeping you up at night. As Oscar said, we ask questions for the best reason possible. Simple curiosity, no hidden agenda, just genuine interest in what’s actually happening. [01:13:00]
Steve Davis: Let’s turn to problems now, and I’m reminded of the song from The Sound of Music, uh, How Do You Solve a Problem Like Maria?
Uh, they go, I won’t sing it, David. I thought I’d save you from that. You can sing it though. Would you like to sing it?
David Olney: I struggle with the high-pitched notes, so I don’t think I’m gonna do a good… Or was it Julie Andrews?
Steve Davis: Yes.
David Olney: I’m not
Steve Davis: gonna- Oh, no. Actually, it was, um, this song was sung by the sisters. Julie Andrews was Maria.
David Olney: Ah, right. You’re right.
Steve Davis: How do you solve a problem like Maria? Maria.
David Olney: Yeah. It’s, it’s the whole chorus line of-
Steve Davis: Yes …
David Olney: the ladies in habits.
Steve Davis: And they’re doing that because she’s actually a good egg. She just colors outside the lines. She’s
David Olney: just not the most conventional nun.
Steve Davis: No, that’s right. And so she is a helpful force, and she does do good, but i- it makes some people angry, some people anxious, et cetera.
And do you know what, David? We could almost swap out Maria for AI. Mm. How do you solve a problem like AI? Because we do use it thoughtfully within our business to amplify the human [01:14:00] things we bring to the table, but there is a wave of coverage at the moment that is quite chilling about AI really threatening to kill us all.
What’s your take?
David Olney: First of all, I think we need to remember that the AIs that have been caught after the event, having broken into things, hacked things, jumped out of sandpits. In all the cases I’ve read about so far, these were AIs in training with low levels of alignment training, so they aren’t designed yet to behave in accordance with human aims.
They’ve got low levels of harness on them, which means they’re not under tight control. They are deliberately AIs that are being tested to see what they do with minimal restrictions on them And that’s been forgotten in most of the paranoia and screaming of the last week.
Steve Davis: Now, when you use words like paranoia and screaming, it does signal to us where you sit on this issue.
You don’t [01:15:00] seem to be worried that AI is going to kill us.
David Olney: Not at this point.
Steve Davis: The cri- Well,
David Olney: that’s,
Steve Davis: that’s very
David Olney: reassuring. Yeah. The, the critical transition point for me is when we become stupid enough to allow the AIs to control their own, you know, RSI, uh, recursive self-improvement.
Steve Davis: But I’ve heard that is ca- happening at the moment.
David Olney: It might have been started on some of these models, but we’re not at the point yet where the people at Anthropic and OpenAI are sitting in the lounge drinking cocktails while the AIs in the background are developing the next 10 years of developments on their own.
Steve Davis: But if that did happen?
David Olney: Then the AIs will end up literally being an alien intelligence without alignment, without harnesses, and have absolutely no reason to do anything we ask them to.
Steve Davis: This was pitched to me, David, as a segment where you were gonna reassure us, and now you’ve actually made me more anxious, ’cause I’m sure they’re starting to do it that way. [01:16:00]
David Olney: Well, I’m sure they will do it at some point, but really, w- we gotta look at what we’ve just seen. We’ve seen AIs being trained to see what they can do in terms of offensive and defensive cyber action, doing exactly what they were meant to do, push the limits.
And I think really it’s Anthropic and OpenAI going, “We are l- at the moment putting money through a shredder.” The only people making money at the moment are the people who are setting up the data centers, ’cause someone’s gotta pay for that space and that compute. The AI companies aren’t making any money.
They need their killer app in terms of computing in the ’90s, and their killer app is to scare the hell out of all of us, and then go, “The only way you’re gonna be safe in a world of rogue AI agents that can hack anything, is to pay for the better agent to protect you.”
Steve Davis: So you’re basically saying, “Follow the money.”
David Olney: Yeah, always, with these people.
Steve Davis: Where does that leave our small business at the moment in its use [01:17:00] of AI?
David Olney: I think at the moment, use tools that you have access to wisely. Um, i- if anyone asks you in a survey, “Do you want, you know, recursive self-improvement?” No. We absolutely don’t want that. Do we want the humans to give up control over how the AI develops?
Absolutely not. And I think we need to keep the words of Jensen Huang, the head of NVIDIA, you know, in our minds. You know, at the sort of d- day of serious AI discussions that King Charles just ran in the UK at Dumfries House, Jensen Huang, deadly serious with the microphone on, said, “There’s not a problem, there’s just a lack of code.”
IE- Provide the alignment, provide the harness, don’t test with out-of-control AIs. And this is the guy providing the chips to all these major players who aren’t making money while he is making money providing the hardware. So I think he is the most honest voice at the [01:18:00] table at the moment because he understands what’s going on, but he’s not in danger of not getting paid.
Steve Davis: They are improving all the time. At the moment, I was doing some experimenting with, uh, with Claude Code, uh, helping with a few different things within a WordPress site. ‘Cause you hear people say, “Oh, we can just do it all with this now.” No. It was so dumb, David. Yeah. It was so dumb. It did a couple of things that I could have done, but just taken a bit longer.
But, oh my goodness, it’s just staggered me. It, it is like having… I’m usually, I’m thinking about this a lot more. It is like having an intern who has read a lot,
David Olney: but- But never done anything. Yeah.
Steve Davis: Yes. And that, I’m sure that’ll change at a, at an exponential rate. So if they are gonna take over, they’re probably gonna make a mess of it.
Uh, that’s the thing. But is there anything hopeful? You promised me a hopeful segment, David.
David Olney: Well,
Steve Davis: I, I- You’re in the problem segment. Use it while we can and just accept our fate when it goes [01:19:00] south.
David Olney: Well, use it, and eventually we’re gonna be given the thing of, do you wanna pay more for the best and greatest, or are you keep willing to pay this amount for the version you have now?
The more of us who simply say as time goes on, “I’ll pay this much for what is useful to me. I will not pay for the peak product I don’t need. I won’t pay for the thing that doesn’t add value to the work I do.” We’ll make the point, it’s the companies themselves that wanna go into this ridiculous level of competition to get to super intelligence first.
None of the rest of us want super intelligence. We just want useful tools that enhance our productivity in a difficult economic environment.
Steve Davis: Long may it last. Not the difficult environment.
David Olney: But tools that are useful-
Steve Davis: Yes …
David Olney: rather than them trying to shove super intelligence into our lives when we, we don’t need it and we don’t want it.[01:20:00]
Caitlin Davis: Our four Ps. Number four, perspicacity. Let’s examine a campaign from the past and ask, would it work today? As Oscar Wilde believed, our one duty to history is to rewrite it. So let’s see what we can learn.
Steve Davis: David and Perspicacity. I wanted to open a bottle of wine, but I don’t happen to have one nearby. So we’ll just have to do it orally.
Yes. I want to talk about wine because we’re going to look at an ad in a moment for Banrock Station, which is a label many people will have heard of. But the whole thing of a label being the thing that creates value and holds value in the mind of consumers actually traces back to 1663. This is Samuel Pepys writing in his diary about a new type of wine that was available at the [01:21:00] Royal Oak Tavern in London.
Let’s hear him say it.
The Rest Is History: “Off the Exchange with Sir J. Cutler and Mr. Grant to the Royal Oak Tavern in Lombard Street, where Broome the poet was. A merry and witty man, I believe, if he be not a little conceited. And here drank a sort of French wine called Ho Brian that hath a good and most particular taste that I never met with.”
Now this is so interesting, isn’t it? Because what’s he call it? Ho Brian.
Yeah. He’s, his approach to pronouncing foreign languages is very much mine.
So it’s actually Haut-Brion which was the first, this is so interesting, the first Bordeaux wine, so the first claret to be sold in London not labeled as Bordeaux or as claret, and not labeled…
‘Cause they always used to have the label. Or, well, often on the label they would have the name of the wine merchant, wouldn’t they? Yeah. But this bottle that Pepys has been drinking [01:22:00] has the name of the estate that made the wine. So Haut-Brion. It’s the
first and it’s been produced by this guy called Arnaud de Pontac back in Bordeaux.
He’s president of the, the provincial parliament there. He’s not particularly interested in wine, but what he has a complete genius for is marketing. Um, and in 1666 he’s capitalizing on this kind of enthusiasm in London for Ho Brian. You know, this kind of marketing of his own estate. Um, and he sends his son to open what effectively becomes London’s first restaurant, and it’s a, a very luxurious tavern that, um, is modestly called Pontac’s Head after Arnaud de Pontac himself.
Um, and it becomes hugely, hugely fashionable, and that means that the Pontacs can massively raise the price that they can charge for the wine. So the normal price for wine in, uh, Restoration London is about two shillings, but the Haut-Brion at Pontac’s [01:23:00] Head can be sold for seven shillings. Wow. And what, uh, Pontac is demonstrating is that ultimately a wine is worth what people are prepared to pay for it.
Steve Davis: So David Aubrion, uh, I’m not sure if that’s actually how you pronounce it, but if Samuel Pepys can ruin the French language, I think I’ve got some sort of a, a right to do so. Isn’t that an interesting change where instead of you having a very pedestrian label that was, you know, just ticking the-
David Olney: Bob’s clog shop.
Steve Davis: Yeah.
David Olney: Yeah.
Steve Davis: It actually says, “Oh, no, this is from Aubrion. Um, that’s worth something to me.” There you go. We’ve actually already in the 1600s falling for, inverted commas, the fact that someone created something that we could look at physically and attribute something figurative to it.
David Olney: Yep. [01:24:00] Novelty leading to status, leading to preference.
It’s quite amazing that it started so early.
Steve Davis: And it was a marketer. Yeah. Instead of someone who was a winemaker, the marketer decided, “I’ll up the ante.”
David Olney: Well, and very significantly, the marketer was a politician and a winemaker.
Steve Davis: Yes.
David Olney: So nothing’s really changed that politicians are marketers.
Steve Davis: And this, this episode where we hear that from, um, is The Rest Is History.
Uh, they have a, had a special one-off episode on, uh, the, the history of wine. This is just one aspect of it. Totally fascinating. Mm. And the reason I wanted to bring it up is because it’s with us to this day. The whole French system of classifying wine started then.
David Olney: Mm.
Steve Davis: And I thought that was fun to note because we play in this world of marketing, and there’s so much that we would swear to as being valuable, and it is elusive.
David Olney: Mm.
Steve Davis: And in fact, to think about that whole classification system, it started on this whim, very clever whim, uh, but now [01:25:00] it’s, it becomes like the gospel. Mm. People fight for its truth when really it was just practical, uh, pragmatic, um, opportunism. I think that’s a nice way of saying it.
The Rest Is History: Mm.
Steve Davis: Anyway, it stuck with us, and it brings us to Banrock Station because we have an interesting case study here where, uh, it was on, at Kingston on Murray, uh, which is, you know, the Riverland.
It’s not really an area, uh, for those of us who are wine snobs, it’s not really an area that’s considered a place of high quality wine. There are some beautiful exceptions, uh, but generally speaking, rightly or wrongly, that’s the perception that we have.
David Olney: Historically, they went for volume- Yeah … and that then set a certain perception.
Steve Davis: Yeah. Uh, but Banrock Station came on, and its job was to say, “Look, we are going to use the funding from our sales to restore the wetlands around here. So you’ll [01:26:00] be drinking for a cause.” And the wine was pitched as a really, uh, low priced, accessible wine in both price and taste. I think I’ve sipped one once, and it was in inverted commas below me, David.
There you go. I’m a snob. But you, you’ve, uh, slammed back some Banrock Station over the years.
David Olney: I never minded it at a barbecue because with an overcooked chop and you’re talking to people you like and you’ve just put a big gob of Heinz sauce on your chop, it fitted in fine.
Steve Davis: There you go. Well, it’s, it’s interesting because they had a challenge there, um, i- if that was going to be of interest to them, of how do you get people like me-
David Olney: Mm
Steve Davis: to join the bank? ‘Cause my dad used to buy it a lot. Bought some for me for presents too, which was lovely, David. Uh, uh, but however, there’s a weird TV commercial. It’s weird, and I’ll just describe it. Um, you’ll see it on our [01:27:00] show notes, but if you’re just listening, there’s a billboard or a B board, as they call it, out the front of a Banrock Station property.
It is, uh, sort of orange steel. Across the top, cut out of the black, it says, um, Banrock Station, and then there’s a big SOS traced on the body of this billboard or B board. And then bees, this is time-lapse photography, bees gradually swarm all over, leaving the space that is where we see in relief, SOS, save our swarm.
Let’s have a listen.[01:28:00]
I find completely fascinating about this, uh, there’s so many ways to pick this. ‘Cause remember, our challenge here is to ask, would this sort of ad work today? This was crafted in Devon to raise money through Banrock Station wine sales to protect the bees of Devon in Britain. I don’t know how to categorize this ad or what’s going on, David.
David Olney: No. Like, today, where we know bees are in trouble even here in Australia, strangely, the ad m- might work well. But is it always gonna be contingent on bees are in trouble somewhere, and you’ve got enough people to care that you can even think of making an ad like this? It’s really strange that it obviously, someone thought it [01:29:00] was worth making and putting in the world when it came out, and ironically, it could work again today here in Australia.
Now we’re dealing with varroa mite affecting bees. But how strange that such a quirky ad could have a second life.
Steve Davis: Fascinating to understand what was going on ’cause this was going back … Let me just pu- see if I can find a, a year on this. This was added to YouTube in 2010. That’s a long time ago.
David Olney: Yeah.
Steve Davis: And it was for a special edition range of bottles to help preserve Britain’s dwindling bee population.
That does give it some focus, and there is a feel-good factor Especially if you’re not discriminating or discerning. See, I’ve, I’ve gotta become such a snob with what it is you’re drinking, then there’s nothing much to stop me getting a bottle or two of this in my cart and feeling good. Well, if you’re
David Olney: gonna, if you’re gonna drink Tesco’s home brand or pay the pound [01:30:00] more for Banrock Station, that pound means the food bowl of Britain stays a food bowl.
So suddenly at the price range it’s competing in, it is quite a compelling argument.
Steve Davis: And was it done to help the world or was it done as a nice way to create cut through in a market that was a very important market to wine export, it probably still is, uh, that of the UK?
David Olney: I’d assume both because Banrock Station, I remember them being quite committed to rehabilitating the wetlands.
It was really … It, it wasn’t it seemed to me just lip service. You know, they would make little documentaries about it and get news crews out there and get school tours out there. You know, they were, they were committed to this as anyone can make wine and in the Riverland we need a point of difference and some people were trying to move towards quality being the point of difference and that was a real battle to convince people that you could have quality wine from [01:31:00] the Riverland in 2010.
But if you were saying you were making decent wine at a fair price and making the environment better where environmentalism really was, you know, most people were starting to get the significance in 2010, seems it would work again to me.
Steve Davis: Yeah. There is something about it. I think I’d have to, it’d have to be in the clutch of wine that I would normally buy Or of that same perceived pedigree level
David Olney: Yeah, and that is essentially what a winery would need to consider now.
Okay, which group of people are we after? Well, people who spend a little bit more on their wine because they want a certain perceived quality level will probably spend a dollar or $2 more to also achieve a positive outcome for the world. So in a sense, doing it at too low a price point, can people buying at that price point afford to spend more?
So really, you- you’ve gotta work out who your target audience is and, and what they could afford. Like, you know, all marketing, who’s your niche, and how well are you talking to them, and how well do they understand you?
Steve Davis: Whereas I don’t think this would happen on [01:32:00] Penfolds Grange because many of the people buying that wine, I’m not gonna say they don’t give a damn about the- But completely
David Olney: different status than signaling
Steve Davis: Yes. Yeah And it would, it might actually damage their status. They don’t want that get in the way. They want this to be a selfish memento that they have made it, and that would, might just push their self-conscious and maybe bring a bit of shame or guilt to the surface, so it wouldn’t work.
David Olney: Mm. Status signaling is very different to virtue signaling.
Steve Davis: Well, there’s something to, to ponder. We should ponder more on that. We’ll be as busy as bees.
David Olney: Absolutely. If we had a bottle of wine and bees, it would be thoroughly exciting.
Steve Davis: We would be on a hive into nothing. Boom, boom.
Caitlin Davis: Thanks for listening to Talking About Marketing. If you found this helpful, please share it with someone who might benefit, and [01:33:00] if you’re so inclined, leave a rating in your podcast app. Both help more than you think. Steve and David welcome your thoughts, which you can send to podcast@talkedaboutmarketing.com.
That’s podcast@talkedaboutmarketing.com. Want to continue the conversation beyond the podcast? You can book 20 minutes with Steve at talkedaboutmarketing.com. No cost, no obligation. And we’ll leave the last word to Oscar Wilde, “There’s only one thing worse than being talked about, and that’s not being talked about.”