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106. Network Effect: How to Leverage the Power of a Group (A Behavioral Economics Foundations Episode) Jun 26, 2020

Show notes

On today's behavioral economics foundations episode we are going to be talking about the network effect (or perhaps it is more accurate to say "networking effects" because as you will learn throughout the episode, there are multiple kinds and situations for how they can be useful in a business). I am also going to talk about some pitfalls to look out for and how to incorporate behavioral economics into all of that.

This episode is related to the topic from last week about subscription models and even more directly to membership groups. I will explain that specifically throughout the episode, and if you haven't listened to that one yet you will want to check it out. It's episode 105 and there is a link for you in the show notes. Today, I'll tell you what the network effect is and how it works, what it is not, some pitfalls to look out for, behavioral economics concepts to keep in mind, and so much more.

And before we jump right into the network effect, a quick shout out to Clayton Key, whom you can all thank for today's episode. Clayton and I connected on LinkedIn and in our messenger conversation he recommended the topic of this episode. Do you have a topic or question you'd like to suggest for an upcoming episode? Connect with me (Melina) on the socials using the links below.

Show Notes:

[01:01] This episode is related to the topic from last week about subscription models and even more directly to membership groups.
[03:27] Thank you to Clayton Key for this great episode suggestion.
[04:09] In its simplest form, the network effect is when the value of a business increases as the network grows.
[05:51] The network effect makes it so new people joining the network increases the value for everyone.
[06:51] Ebay, Etsy, Facebook, Twitter, Linkedin, YouTube, PayPal, Uber, Lyft, AirBNB, Google, Wikipedia, Pinterest, and Apple's App store are just a few of the many businesses these days built on the network effect.
[08:18] A direct network effect is when an increase in usage and users leads to a direct increase in the product or service's value for other users.
[08:59] When you get to a platform business they are a little more complex because there are multiple user groups to consider, which is when you get to a two-sided network effect.
[10:37] The key difference from a two-sided network effect and a direct network is that the type of user joining matters.
[12:19] In the case of a social network, which is a two-sided network as well, they need to be monitoring their user quality to remain viable and increase value.
[13:47] To attract the advertisers and make money, you need good users.
[15:14] As each local network grows and increases engagement, the value of the entire network grows along with it.
[16:50] People can of course be a part of many groups, and so attracting diverse users who understand all the content they can get access to on the platform is key.
[18:19] Network externality is an economics term that is showing how demand increases when other people buy a product.
[19:36] A business can have network effects but not be "viral".
[21:18] If you are looking to start on a network effect business, you need to understand when you will hit critical mass, what it looks like when you get there, and what you need to do to get there quickly so you can move into that value point.
[23:14] So, when setting up this model remember that you need to be able to stick it out for a while up front while it may be costing you money, knowing it will pay off once you hit critical mass.
[25:13] This platform model is looking for quality growth.
[26:34] Network effects are not quite a house of cards, but being dependent upon users working harmoniously together does make a somewhat precarious beast that needs constant monitoring and attention.
[29:07] 5 C's of network effects are connection, communication, collaboration, curation and community.
[30:16] Help make it easy for people to feel like they are part of the global community so they can take ownership over their content and be part of quality creation within the platform itself.
[32:29] Put effort in to retain the customers you've added.
[34:56] You want a platform people actually use so the network effect can grow and thrive.
[37:10] Brand extensions are a delicate balance of finding something that is related enough to make some sense for tying it to the original brand, but not so close it feels like it should have been part of the main offering to begin with.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Let's connect:

More from The Brainy Business:

Master Your Mindset Mini-Course
Brainy Mindset Course - use code BRAINY to save 10%
BE Thoughtful Revolution - use code BRAINY to save 10%
The 10 Behavioral Economics Concepts You Need To Know (and how to apply them) ebook
Brainy Pricing Course - use code BRAINY to save 10%
Freebie Worksheet

Articles and Past Episodes:

105. Subscriptions and Membership Programs: A Behavioral Economics Perspective Jun 19, 2020

Show notes

Today, we are going to be talking about subscription models and membership groups. I have been thinking about an episode on this for a long time. As many of you know, if you've been listening and following The Brainy Business for a while, I launched a membership group at the beginning of 2020. It's called the BE Thoughtful Revolution, and I'll use examples from my experience of setting that up (as well as others) throughout the episode.

At the center of any really strong business is finding the experience people want (the biggest benefit to them) and showcasing the value in a way that makes it easy for them to say yes.

Even if you are thinking about creating a subscription or membership now because you think it will benefit your business, solid customer experience has to come first in the design and final decision. You need to think of the people you are creating this for, what they want and what they will be excited to pay for.

In this episode I'll talk about the behavioral science concepts behind subscriptions and memberships, how to consider if they are a fit for your business, and then I'll do a Q&A with the actual questions listeners like you posted to me on social media. If you don't yet follow The Brainy Business, you can find me as @thebrainybiz on Facebook, Twitter and Instagram. Links to all the socials below!

Show Notes:

[01:35] The environment is going to be changing constantly over the coming months (and possibly years) as we all adjust to the impact of coronavirus.
[02:24] What we can do is take a look at our businesses and industries to determine how to reinvigorate the offerings we are putting out there, and provide them in a way people want to do business with us instead of what was convenient for us to set up in the past.
[04:03] At the center of any really strong business model (subscriptions and memberships included) is finding the experience people want, the biggest benefit to them, and showcasing the value in a way that makes it easy for them to say yes.
[05:43] Being inside a business or industry, it is far too easy to get hung up on the specifics of what you do or offer. The problem is then you lose the big picture and in many ways don't see how you are becoming obsolete.
[07:23] I remember my professor saying, "People don't want a drill, they want a hole." Such a simple shift, but it completely changed my brain and approach to business at that moment.
[09:15] Melina shares a story about Henry Ford from Harvard Business Review.
[11:47] Ford put customers first. He found a price where the masses could buy a car and then figured out how to build a business to make it happen.
[14:13] Thinking about customer experience is always a great place to start.
[15:31] Any business model takes work to create value and be something people want.
[17:41] It is important to think through what you will be offering and how it compares to what you do now.
[18:04] A subscription is something that people pay for on an ongoing basis and they get access to a product or service.
[19:52] Another model for subscriptions that has become very popular is the "free version" and "paid version" models.
[21:05] The difference with a membership model is that you are typically paying for the right to have access to things, but you don't necessarily have to take advantage of everything included.
[23:24] With a membership, you still have the benefits of a subscription type model, that you can plan for payments to be coming in regularly, and the people who sign up get more for less than what they would pay for single-use or to buy all the things themselves.
[25:05] If you are on retainer, someone is prepaying for access to you for a certain number of hours.
[26:24] Is a membership or subscription right for you? Walking through a "writing club/coach" example.
[28:36] You will need to do the upfront work to set everything up, but eventually, you could hire someone to manage most of the group stuff, so it doesn't take up too much of your time, which frees you up for more time at your $200 an hour rate.
[29:54] Taking the risk out makes it an easy yes for people.
[31:40] If you do set up a membership group or subscription, consider launching at a discounted price for a very limited time to help set up a foundation of participants.
[32:32] People pay for all kinds of things and are happy to do so when they know what the value is.
[34:01] The value proposition is clear because there is an established "other option" that is more expensive.
[35:07] If you don't consider and establish the comparison point and point it out with the proper high anchor, your selling conversations will be a lot more difficult.
[37:06] Framing, anchoring, relativity, and knowing your value are very important in the way you communicate any opportunity.
[39:13] Instead of creating an offering that seems like the best fit and offer for your business and then finding a way to sell it to people, start with what they want and find how that can be done by your business and if it is actually a fit for you.
[39:38] Trial periods are really helpful in letting people see the value of the offering, so they can be useful.
[42:18] I tell clients all the time that not everyone is your customer.
[43:36] Narrowing down your scope makes it easier for people to find you, know you are a fit for them and have confidence in your offer.
[44:57] The first step is to know what you want to nudge people toward, what the best offer is for your business.
[46:49] There are lots of different ways to frame the message and help it to showcase what is the best fit for your business. Try to think outside the box.
[47:52] You can do whichever makes sense for your business so there is no "only" way to price. You should go with two options max.
[48:37] When it is a monthly payment, you are able to get the value as those payments are made, in smaller doses, versus needing to help the conscious brain justify a large amount once a year, where you could lose people.
[52:49] It is definitely easier to sell things when you have a solid email list.
[54:40] Once you have done some of this prep work to find what your niche will want, just go for it. Build it, pick a model, choose your pricing, and sell it.

Speaking of membership groups, now is a great time to join the BE Thoughtful Revolution - use code BRAINY to save 10%

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Let's connect:

More from The Brainy Business:

Master Your Mindset Mini-Course
Brainy Mindset Course - use code BRAINY to save 10%
BE Thoughtful Revolution - use code BRAINY to save 10%
The 10 Behavioral Economics Concepts You Need To Know (and how to apply them) ebook
Brainy Pricing Course - use code BRAINY to save 10%

Articles and Past Episodes:

104. How To Ethically Influence People: Interview with Author Brian Ahearn Jun 12, 2020

Show notes

Today, I am very excited to introduce you to Brian Ahearn, one of only 20 trainers certified by Robert Cialdini to teach on his behalf in his methods of influence. There are episodes of the podcast on reciprocity and social proof which are concepts featuring some famous studies by Cialdini, which have changed the way we communicate and persuade.

In our conversation today, Brian will tell you about his book Influence PEOPLE (for which PEOPLE Is an important acronym). We also discussed a serendipitous moment from about 30 minutes into our pre-call conversation...

Brian is a wealth of knowledge and a fantastic guy. There are links to connect with him in the show notes and to check out his book Influence PEOPLE, which is definitely worth the read. Listen up for the Post-It Note study - it will blow your mind!

Show Notes:

[02:04] In our conversation today, Brian will tell you about his book Influence PEOPLE (for which PEOPLE Is an important acronym).
[03:34] Brian's main focus over the last two decades has been working with salespeople, but he also works with business leaders, business coaches, and attorneys.
[03:47] Brian's strength is the application of the psychology of persuasion.
[04:18] There are only 20 people (including Brian) who are certified around the world to teach the Cialdini method.
[07:34] Cialdini was so excited as they shared how they were taking his life's work and using it to better their organization, selves, and relationships.
[09:20] The book Influence PEOPLE was created to help people apply this research.
[10:16] The book offers very practical examples in short chapters to help readers put the research into action.
[11:48] Brian shares a story from the book about a friend named Jim.
[12:48] In an email if you reply to the entire group you can often put enough pressure on the members to encourage them to complete a task quickly.
[14:48] When using this example you can be general without specifically naming the person you are waiting on.
[17:14] Brian really works with people to get them to a point where they feel like they can totally run on their own.
[18:08] "There is nothing high or low, but comparing makes it so."
[20:01] The PEOPLE acronym stands for Powerful Everyday Opportunities to Persuade, that are Lasting and Ethical.
[20:23] It is powerful because it is backed up by research and it is an everyday skill.
[21:17] When Briain talks about persuasion he doesn't mean only changing hearts and minds, he also means changing behavior.
[22:15] If it is done right, sometimes it can lead to lasting change.
[22:21] It all has to be done with an ethical framework.
[22:51] Brian shares about the Post-It Note Nudge.
[24:10] Using a sticky note will probably get a lot more people to do what you are asking them to do and has many other benefits.
[26:56] Brian shares a story about a community that added a sticky note on an info flyer about a bond issue.
[28:46] The moment when we need to use these tools most is when our brains are most likely to be overwhelmed. Our subconscious is likely to take over and we are going to revert to what has worked or we have done in the past.
[29:25] Always stop and re-read an email before you send it. Ask yourself, "Is there anywhere I could be more persuasive?"
[31:01] Ending on a question is so important and it increases response rates.
[32:06] Brian learned that if he asked one question at the end of the email, people would often come back with longer, more thorough responses and it increased his personal brand.
[34:21] People do business with people they like and want to be associated with.
[36:45] Melina always ends really important emails with a question and she has seen it boost response rates.
[39:39] Brian shares the story about the photocopy shop and how we are so conditioned by the word "because" as we grow up.
[40:41] If you need someone to do something, ask them, say "because" and give them a reason. Also, don't ask on the drop-dead date.
[44:52] The Post-it note is able to cut through the subconscious filter and draws attention to something being different
[46:05] Next week, in episode 105 we are going to be talking about subscription models, different businesses that apply them, and how to be thinking about them in your business.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Let's connect:

More from The Brainy Business:

Master Your Mindset Mini-Course
Brainy Mindset Course - use code BRAINY to save 10%
BE Thoughtful Revolution - use code BRAINY to save 10%
The 10 Behavioral Economics Concepts You Need To Know (and how to apply them) ebook

Connect with Brian:

Articles and Past Episodes:

103. How To Revisit & Update Your Lead Magnets, Freebies & Opt-Ins Jun 05, 2020

Show notes

Today's episode discusses why every business needs to revisit their lead magnets, freebies, and opt-ins right now. I've mentioned on a couple of recent episodes that I have been working with a lot of clients on lead magnets, most specifically with those in the BE Thoughtful Revolution membership group where we have spent over a month working through updating everyone's lead magnets, opt-ins, freebies, as well as setting up solid drip campaigns.

For many, this was an opportunity to create their first lead magnet. Perhaps it was on their to-do list for a very long time, but they never quite got around to it.

Now is the perfect time to work on your lead magnet for a couple of reasons. First, the environment has changed. Maybe your old opt-in is outdated and doesn't make sense anymore or maybe it is still relevant but there is something else you could share that would be even more impactful and tie into what matters to people today, while still being true to your brand. One of the reasons I decided to do this episode right now is because this is so important for every business to be successful during COVID and beyond.

CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes:

[01:32] Now is the perfect time to work on your lead magnet for a couple of reasons.
[03:26] You are giving something away for "free" which is valuable enough that the recipient is willing to reciprocate by giving you their email address and knowing that they will likely be placed onto your larger list.
[04:31] Episode 3 was about what a lead magnet is and if you need one (and in general, the answer to that is yes). At any time, businesses can benefit from having at least one opt-in or freebie.
[06:42] Just because you started with one lead magnet doesn't mean you need to keep it. I know there was an investment to create it, but if it isn't aligned with what people need today it is time to swap it out.
[07:30] There are a few things different today that impact the style and content of what makes a lead magnet desirable.
[07:52] Your customer's brain is overwhelmed so quick wins are more important than ever.
[08:41] When the podcast started, I began creating freebie worksheets. Most of them are one page and have a few tips and lines to take notes. Some of them are two pages, but they are all very simple to use and apply the learning from a specific concept or topic.
[10:42] I created a new freebie (Master Your Mindset Mini-Course) which lets people see where all the courses are housed and get a taste of what a course from The Brainy Business is like.
[12:20] If I was looking to create a new lead magnet, I would start by thinking about what people need now. What is keeping them up at night? What expertise do you have to share in a simple, easily digested way so they can get a great quick win and build a positive association with your brand?
[14:19] You will feel like whatever you are creating is not enough. That it won't justify the need someone has or feel like it is worth the time or exchange of their email address.
[15:29] Too much means no impact on a lead magnet.
[15:53] One quick win means it is direct, to the point, and easy to take action on.
[16:52] Being instantly accessible is critical to a lead magnet's performance because people don't like to wait for things these days.
[18:01] Having an automated response that is less detailed but can be sent within seconds of hitting submit is WAY more important on this initial opt-in item.
[19:39] A solid lead magnet will showcase you and your expertise and make them associate you with the items they can hire you to solve.
[20:56] Lead magnets are about overall brand awareness and the long game.
[22:37] Remember that the lead magnet you set up now, especially if people can't buy from you in your traditional model, is about a long game. You are laying the groundwork today for a future state that could be many months from now.
[23:23] There are all sorts of drip campaigns, but whatever you create should have at least three emails and be thoughtful about how it ties in with the lead magnet, customer experience, and the future offers that will be made to them.
[26:49] Remember, now is the time for everyone to look at and rethink their lead magnet because you need to make sure it still fits the market. Is this what people need today? What would make it more valuable?
[27:02] There are more people online than ever before and they are looking to solve problems that never existed. People are trying out new types of businesses and changing their habits. It is the perfect time for a company to provide value and create new loyal connections.
[28:16] Less is more, especially in these times.
[28:54] Want to get the full Lead Magnet Course? It's EXCLUSIVE for members of the BE Thoughtful Revolution – use the code BRAINY when you join to save 10%

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Let's connect:

More from The Brainy Business:

Master Your Mindset Mini-Course
Brainy Mindset Course – use code BRAINY to save 10%
BE Thoughtful Revolution – use code BRAINY to save 10%
The 10 Behavioral Economics Concepts You Need To Know (and how to apply them) ebook

Articles and Past Episodes:

102. Confirmation Bias: How Your Subconscious Beliefs Shape Your Experiences (A Behavioral Economics Foundations Episode) May 29, 2020

Show notes

Today, we are going to be covering confirmation bias – I know this sounds like one of those concepts you probably think you "get" and that it might not be necessary to listen to...but believe it or not, that is actually your confirmation bias talking. This episode will help everyone understand just how much confirmation bias is impacting your life and business. I will give examples and tips throughout the episode.

In its most basic form, confirmation bias comes down to the brain's desire to be correct and the subconscious filter deciding what gets through and stored...and what gets ignored. Because the subconscious is working from established, proven rules to make these choices, it is looking for stuff that fits those existing rules.

While the brain can look and find things that disagree with its perspective, that isn't the natural tendency. The easiest thing to do - the most satisfying thing - is to look for items that confirm what you believe. That makes you feel safe. This is why two people can witness the same event and have completely different interpretations of what happened. You are seeking out different information and retaining different pieces to suit your brain's needs. Some of these are ingrained in us genetically over thousands of years, but many of them are built over our lifetime.

Confirmation bias doesn't have to be a bad thing and it can very much work to your advantage in life and business. The flip side of the confirmation bias coin is knowing that your brain naturally does four things and so if you are selective about your goals and what you want to change in your life, you can set up your brain's natural tendencies to align with them.

Show Notes:

[00:57] This episode will help everyone understand just how much confirmation bias is impacting your life and business.
[03:10] The numberless scale (Shapa) we discussed in episode 101 that has the potential to change the way we think about health and wellness. It's a super cool product and you should definitely check it out.
[04:28] In its most basic form, confirmation bias comes down to our brains' desire to be correct and the subconscious filter deciding what gets through and stored...and what gets ignored.
[06:57] You could see the exact same event as someone else and have a completely different interpretation based on your existing beliefs and confirmation bias.
[08:19] Confirmation bias is especially ramped up and more prevalent in circumstances that are tied with emotions.
[08:39] Melina shares the four main ways you see confirmation bias.
[09:44] Kids' behavior does not get more hyperactive when they have sugar.
[12:19] You will seek out information that supports your belief, and be more likely to believe, remember and share those items that support your belief.
[15:06] This reinforcing tendency is because of illusory correlation, which is when we overestimate the relationship between two items even when no relationship exists or it is very weakly associated.
[16:53] We humans are pretty bad listeners by nature because our brains are processing so much information at any given time.
[18:21] For many people in business, if you aren't confident in your offers or pricing, you may end up recommending something smaller than they would actually want or need because it feels better for you in the moment.
[19:49] It is important to not start the conversation with a predetermined recommendation before they have had a chance to tell you about their situation.
[23:29] If you can convince your brain that it IS worth it and that the price is reasonable, they will be more likely to hear it that way.
[24:39] Look at where you may be biased in a way you don't want to be, and try to be more open minded.
[25:43] If you are selective about your goals and what you want to change in your life, you can set up your brain's natural tendencies to align with them.
[26:15] If you want to set up a new belief (and only pick one at a time until it becomes a habit) then you can eventually reinforce it until you naturally confirm it all the time.
[27:18] Eventually, I changed that confirming bias and pushed past that belief and started to think of myself as a runner.
[28:20] People who have been injured will often see themselves as a victim, especially while dealing with the legal stuff.
[30:12] Being able to run and train up for my half marathon is very important to me, and picking new beliefs that I want to confirm are central to that success.
[31:27] Athletes, actors, really successful business people all use visualization techniques and affirmations to help them reach their goals.
[33:18] Next week, in episode 103 I am doing an episode dedicated to rethinking your opt-ins and lead magnets during coronavirus and beyond.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Let's connect:

More from The Brainy Business:

Master Your Mindset Mini-Course
Brainy Mindset Course - use code BRAINY to save 10%
BE Thoughtful Revolution - use code BRAINY to save 10%
The 10 Behavioral Economics Concepts You Need To Know (and how to apply them) ebook

Articles and Past Episodes:

101. Dan Ariely Interview: Discussing Shapa, the Numberless Scale May 22, 2020

Show notes

Today's episode features a discussion with Dr. Dan Ariely – you know that name by now right? We talk about the numberless smart scale from the company he co-founded, Shapa, and all the research behind it.

I am very excited to introduce you to Dan Ariely, one of the best known behavioral economists in the world whom I have mentioned many times on the first 100 episodes of the show, and I know I will continue to do so after he helped me kick off these next hundred. He wrote Predictably Irrational and several other books and has done some amazing research.

As I mentioned in the opening, Dan has worked on a huge amount of projects, and while this conversation could have gone in a million directions, we are specifically talking about Shapa. The company he co-founded showcases a numberless scale that was created to change the way we all think about our health and make it easier to do something that many of us find scary…stepping on the scale.

The discussion ties back to a bunch of past episodes (including loss aversion, partitioning, the focusing illusion, herding) as well as on an experiment I did which was influenced by one of Dan's studies from Kenya. We also talk about overall health (emotional, physical, financial) and how it is all related. I hope you enjoy the conversation as much as I did, and thank you again for joining me Dan!

CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes:

[02:18] In this episode we are specifically talking about Shapa. A company Dan co-founded for a numberless scale that was created to change the way we all think about our health.
[03:26] Shapa has many components. How would a social scientist approach helping people lose weight?
[05:04] The struggle for health is a daily struggle. You can't be healthy five days a week. It doesn't work. Your healthy life needs to start in the morning.
[07:08] They started studying the bathroom scale. They learned it is a good idea to stand on the scale every morning, not at night.
[08:01] The second thing they learned is that weight fluctuates from 2-8 pounds a day. (wow!)
[09:38] They also learned that people think their weight will change very fast if they go on a diet. The reality is that it can take 8 days to two weeks to see results.
[12:31] A year where nothing bad happens is an amazing year.
[12:36] The story of obesity in the U.S. is a story of gaining a little bit throughout the year and not losing - especially in November and December.
[13:39] Shapa created this 5 point scale which includes, "congratulations nothing bad happened!" They tested it and the studies were great.
[15:34] We are obsessed with absolute levels. People usually want to know how what they are doing is improving their health and they want to be motivated.
[16:55] When people go to the doctor they get stressed and their blood pressure goes up. If you go to the doctor and you are the kind of person that gets stressed because you're seeing a doctor, they might prescribe you blood pressure medicine because you are stressed because of the doctor not because you are really stressed usually.
[18:29] The way they start the process with Shapa is that they ask people to tell them about their environment.
[19:54] Suggestions are sorted by the probability that you will take them and then they give you tips.
[20:07] They focus on small changes and do it for two weeks and then add the next one.
[22:53] Look with fresh eyes from social science about little things in life and then use the digital revolution to really change things.
[24:51] The problem is that the scale has become so negative and the numbers are so depressing.
[25:44] How much do you want to be in a race where the best you can do is not that bad?
[27:59] We need to change our thinking about finances and health. We need to do more things that give people a sense of success and achievement.
[30:34] Finances and health are both long-term and often painful struggles; we need strong motivation to achieve there.
[32:17] What are the incentives we can give people to behave in a certain way?
[33:30] Shapa has five levels and they each have a different color.
[34:39] Mostly we want to have no change with improvements from time to time.
[35:12] Focus on the things where you can make the biggest behavioral impact.
[37:02] The feeling of success is important to keep people motivated.
[39:46] It is time to fix some of the habits we got wrong during the coronavirus crisis. It is time to take care of ourselves and feel better about ourselves.
[43:10] It always comes back in this way, and you never know what is around the corner.
[43:33] If you are working on a health journey as well, with a Shapa or on your own, let's support each other and do this together - connect with me on social media (links below!).

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

100. 100 Episodes - 1 Big Insight May 15, 2020

Show notes

It is amazing to realize that we have been together now for 100 episodes and that by the time this comes out there will be more than 180,000 downloads in over 150 countries.

It is a significant understatement to say that the podcast has far exceeded my expectations for what it could be, and leading up to this milestone I have been reflecting a lot and trying to decide the best way to approach this important episode. I thought about doing 100 small tips and insights for 100 episodes (which would have been a very rapid-fire hour to be sure!)

But, in the end, I have decided to boil that into the one really big thing that has set me and The Brainy Business apart. Looking back on these 100 episodes and the success I've seen in the podcast (knowing there is always a lot of opportunity to be better and do more) but relative to the "average" podcast, this one does significantly better, and there are many things I have done intentionally and because they are my natural style to help support that.

And, that is what I am going to try and articulate for you in this episode, with the hopes that it can bring some increased success for you as well – in whatever corner of the world you may be listening from.

This episode includes a lot of stories from my life and experiences that come together over time to show what I think is at the root of the success of the show and the business.

CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes:

[02:30] The US still has the most downloads by far, followed by the UK, Canada, Australia and India, which have been in the top for some time.
[03:03] California is the state with the most downloads.
[05:49] I have always been pretty confident in my abilities and generally stubborn, which has culminated in me having big dreams and ambitions that I expect will work themselves out.
[08:13] As legend goes, in 4th grade I walked to my teacher's desk and politely explained that I was sure the assignment had been turned in and asked if I could go through the files to find it. She said yes, I went to the filing cabinet, found the missing assignment, got my grade changed to a 10 out of 10, and went on my merry way.
[08:55] I am a classically trained opera singer and have done a lot of national anthems over the years.
[10:05] These stories from my childhood showcase some very important characteristics about me, my style, and my nature which have carried into my work and helped to make my business successful.
[11:42] I am proud to wear my bossy pants every day and have been my whole life.
[13:32] I believe it is important when you are marketing things to understand how everything works and the business comes together, from the warehouse to the sales floor. (With a story of my worst job ever!)
[14:52] At the root of all this is a common thread that has carried into The Brainy Business. I believe I will be successful, even if something doesn't work out. Even when something goes wrong I just assume it isn't the end and that it will all work out for me in time. (A lesson from the peak-end rule)
[15:51] Networking skills and genuine interest in people have also worked to my advantage in building my career.
[16:37] When it came time to start the podcast, having the confidence in myself to know I could do it when I had to go out on a limb was scary, but exciting, and I looked at the silver lining.
[18:18] This business is me. I own it and am confident in its potential just like I was as a 5 year old who wouldn't misspell my name.
[18:44] Every email, Linkedin connection, Twitter conversation, in person meeting after speaking at an event or person I happen to be seated next to at a conference is an opportunity to learn and engage.
[20:01] I have dedicated time each week to have conversations with people who are looking to pursue careers or study behavioral economics or behavioral science to help them feel comfortable in the choices they make.
[20:36] The story about how taking the extra step when responding to an email led to a relationship that blossomed with the Human Behavior Lab at Texas A&M University.
[23:24] Some people suggest concepts or topics, and then I get to give them a shout out when I cover that topic and it keeps everything moving up in a virtuous cycle.
[23:54] Most podcasts don't make money. A lot of them cost businesses money in fact, but The Brainy Business has allowed me to have some amazing connections and clients and be profitable early on.
[25:29] Genuine interest in people, and a willingness to give the gift of time to have conversations that may never be more than just a few moments of interaction, but could turn into something amazing.
[26:32] Whatever your vision is for the future, whatever you see for yourself, what you think the top of the mountain is, the place where you think you will say that you "made it," that thing out there that you think is a big deal - you aren't thinking big enough.
[28:57] THE ULTIMATE LESSON: Be open to the possibilities of tomorrow, be generous and kind with your time and confident in your abilities. And, of course, be thoughtful in all you do. You are bigger than you can possibly imagine and you will do great things, I'm here to cheer you on, and if you haven't reached out and connected yet, please do.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

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99. Bikeshedding: Why The Simplest Tasks Can Keep You Stuck (A Behavioral Economics Foundations Episode) May 08, 2020

Show notes

Today, we are going to be talking about bikeshedding, also known as Parkinson's Law of Triviality. There is definitely a reason I am talking about this topic right now, as it very much impacts us all at this time of extreme change during the coronavirus pandemic. This is part of a series of sorts in talking about concepts that are relevant to our changing lives and many of us being sequestered at home and doing most everything virtually (some for the very first time).

As with most concepts you will hear me talk about on this show, bikeshedding is something we do all the time and don't really realize it is happening. The thing that makes this concept different from a lot of others is how much it is holding us all back ALL THE TIME without our conscious consent. You may call this "being a perfectionist" and many of us ambitious folks struggle with this tendency. The thing is, for the most part people are not suffering from perfectionism in every aspect and possible decision. They tend to get hung up on really tiny details that don't matter so much in the long run.

The question is: why do those things get so much of our attention? Why do they feel so important in the moment and like you can't move forward until they are dealt with?

More often than not, this is because your brain is bikeshedding (and essentially avoiding a more important topic that makes it scared or nervous).

Here's what you can expect in this episode: I will give you an explanation of what bikeshedding is, with some of the most common examples. Then I am going to give you a list of questions that you can ask yourself (and explain why those particular questions matter) to help you shake things up and get out of that bikeshedding mindset so you can actually achieve goals and move forward. Be sure to get your freebie worksheet on bikeshedding to help you overcome this sneaky brain trick.

Show Notes:

[02:36] Bikeshedding is something we do all the time and don't really realize it is happening.
[03:53] The term "bikeshedding" was coined by Cyril Northcoat Parkinson, who came up with the term.
[04:22] Parkinson's Law states that work will expand to fit the amount of time allocated to it.
[06:05] Just like a goldfish will grow to the size of its bowl, our tasks will take up as much time as we will allow them to.
[06:57] Parkinson's Law of Triviality finds that people will waste time focusing on trivial details while ignoring the bigger, more important problems. As a result, those important problems end up with less time than would be optimal.
[08:25] We tend to get hung up on really tiny details that don't matter so much in the long run.
[09:57] The consequences of picking the wrong shade of blue in your logo (potentially a bikeshedding issue) are not that big, and the mistake could be fixed relatively easily down the road if need be.
[10:52] Your brain hates the idea of entering an uncertain territory, so it will make other things seem more important than they are to keep you dwelling on them, and therefore stick in the status quo it loves so much.
[11:27] Overcoming bikeshedding is sometimes a battle with yourself and your brain's natural tendencies. It takes conscious effort to say, "No, that's not important right now" and you can only do that if you know your goals and take the time to prioritize what matters.
[11:57] When you don't have a plan, your subconscious can run rampant and decide what it wants you to focus on, and its priorities don't always align with your conscious goals.
[12:17] Tackling Parkinson's Law of Triviality can help with time management, resource allocation, project management, project planning and general direction for your work, business and life.
[13:37] Having a good name for your business is important, but it isn't everything.
[15:28] You have to start swinging. Try for things, follow up with things, do some research so you don't look ridiculous, but pick your top outlets and send a personalized pitch.
[17:31] You don't want to perfect a course and spend hours and days of your time agonizing over it when you don't even know if people want it.
[18:59] In business you have to write the content first. Come up with the plan and write it all out with the least amount of words possible and your designer can come up with something great.
[21:06] Will I even remember this 5 years from now? Or even 5 days?
[22:19] What is the consequence if I get it wrong?
[24:34] Is this decision helping me reach my goals...or keeping me from them?
[25:38] Having an accountability buddy that you trust can be really helpful. They can help shine light on things, but don't ask a ton of people advice on every little problem you have.
[26:45] Many people get sucked into bikeshedding because they are too worried about what other people think and are trying to please others with their decisions instead of doing what would make them happy or help them achieve their own goals.
[27:41] What makes you happy and feeling fulfilled is central to you. Don't make all your effort about other people's opinions.
[29:18] Your brain preference to focus on trivial stuff instead of big stuff is not limited to your own trivial problems. It can also easily and happily consume itself with everyone else's trivial junk (and them with yours).
[30:14] The lesson here is not to ask for other peoples' input if it is a bikeshedding problem, especially if their opinion will not coincide well with your goals and happiness.
[31:07] Bikeshedding is an ongoing problem which makes it so your brain wants to focus on little, inconsequential details so you never have time to tackle the big stuff that moves you forward toward your goals and shift the status quo.
[33:16] Bikeshedding makes you feel worse and you don't achieve your goals.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

98. Behavior Change at WW and Beyond, an Interview with Dr. Julie O'Brien May 01, 2020

Show notes

Today, I am very excited to introduce you to Dr. Julie O'Brien, a behavioral scientist applying concepts from behavioral economics in business. In today's episode, we talk about research Julie has done herself or is particularly interested in, both as part of her time as a principal behavioral scientist at the Center for Advanced Hindsight at Duke University (which, for those of you who don't know, is lead by Dan Ariely, one of the best known behavioral economists in the world. He wrote Predictably Irrational and several other books I reference often on the show. Julie is currently the Director of Behavior Change at WW.

I so enjoyed talking to Julie about all the amazing work she has been doing on bringing behavioral science out of the lab and testing things within real businesses – and I love all the practical applications of behavioral economics being applied to health and fitness. As many of you know, one of my top 3 goals is centered around health and I have been training up for a half marathon (admittedly, with some gaps recently…but back on the train!) as well as using my Peloton as I mentioned in the show.

Julie talks a bit today about some research using the peak-end rule in health and fitness as well as so many other concepts and fascinating applications for behavioral economics. We touch on a lot of concepts in the conversations, and there are links to nearly all of them, including the episodes on memory biases, the peak-end rule, habits, goals, counterfactual thinking, the overwhelmed brain, optimism bias, fundamental attribution error, how to set up your own experiments, and more. We behavioral economists are working to help businesses to use and implement the learnings from the field to have stronger communication, and that is a big reason this podcast exists – to help you understand the concepts on a deeper, and more applicable level so you can try them out.

Show Notes:

[03:24] Julie is a behavioral scientist with many experiences.
[05:17] Julie did many different projects including traditional academic lab studies and applied field interventions at Duke University's Center for Advanced Hindsight.
[06:45] They ran an experiment to understand the emotional experiences people have when they are faced with a medical decision.
[08:28] They were interested in what happens to people when they learn about the details of this kind of colon cancer surgery.
[11:12] They looked at the data and found the disgust emotional reaction that participants had after learning about the colostomy bag is what actually reduced their ability to remember information.
[13:04] We probably can't (and shouldn't) remove emotions from medical decisions completely, so we have different strategies to help people make the right choice.
[15:16] It raises interesting questions around nudge vs. shove and do we want to be making a judgment about what is actually rational in this case.
[16:22] It is all these different pieces of behavioral science. It is never just one concept at play. In this case, we have prefactual thinking, an overwhelmed brain, and different pieces of nudging.
[17:18] One of Julie's favorite studies was Zach Zenko and Dan Ariely's study on how to get people to love exercise.
[18:04] Zach and Dan's question was how could we reshape the exercise environment to make it more enjoyable or to make it feel more enjoyable so that people would be interested in repeated exercise.
[18:16] Often behavioral scientists look at the world as it is now and say if we were to assume that this is not the optimal design, how might we change the design to make it more optimal.
[20:37] Just by changing the way that we structure that workout we can actually change the way that people think about the workout which then influences their interest in repeating the workout.
[23:27] Julie and her colleagues did a study where they showed you could keep the baseline physiological sensation the same but you could change the way people interpreted that sensation so that it becomes less unpleasant.
[24:26] When you don't know exactly what is going on, your brain is conditioned to stop, but that is actually where the transformation happens.
[26:07] Often times we talk ourselves into stopping a little bit too soon, and if we could get a little bit further it would work out for us better in the long run.
[27:22] Julie is the Director of Behavior Change at WW. She was very excited to come to WW for many reasons.
[29:47] Working at WW is very exciting for Julie because it is a strongly mission-driven organization, tech organization and it is one that is based in science and has a very strong commitment to doing things rigorously and with scientific validation.
[30:57] There is a huge opportunity with technology to help things like habit formation and overcome challenges in the moment to have a huge impact.
[33:03] Any company that is looking to support behavior change has to look at what the science says, what is relevant to consumers, what actually works in the real world, and finding that intersection to focus.
[36:21] Making it easy for people to do business with you and be successful can make a big impact on behavior.
[36:55] At WW there is a priority around what makes somebody healthy rather than just losing weight.
[39:33] Julie has been looking at the way we behave counter to what we might want to do with eating, weight loss, and dietary splurges.
[41:18] We tend to give ourselves the benefit of the doubt when maybe we shouldn't.
[43:05] We are pretty good at adjusting within the same day for large dietary splurges, but we are not as good at adjusting from day-to-day.
[46:01] Julie is looking at how we help people enjoy those meals and make it fit into their overall plan so it doesn't turn into something that they feel bad about or derails them or that they don't have a plan for overcoming.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

97. Peak-End Rule: Why Averages Don't Always Matter (A Behavioral Economics Foundations Episode) Apr 24, 2020

Show notes

Imagine any experience, from eating out to buying something online, and consider these questions you have probably heard a lot: "How was everything?" or "How did it go?" How do you answer these questions? More often than not you probably just say "fine" but if you were really going to think through and give the most thoughtful possible answer...how much more effort would you really put into the response and does it actually encompass any more of the truth than the quick reply?

This is where the peak-end rule comes into play. The peak-end rule is one of those concepts that is super easy to understand and get your arms around but it can be difficult to overcome and implement the logic in practice. Essentially, the peak-end rule shows us that people do not rate experiences on all of their details…instead, only two points are used to determine the overall opinion of the event: the peak (which can be either positive or negative) and the end.

The peak-end rule can have a huge impact on your business. First, start by knowing what type of experience people have with you. This can help determine what peaks you are dealing with, and where they should fall in the overall experience. The best thing to learn from this rule is that while it is important to consider everything in an experience to ensure you don't have any big negative peaks you aren't aware of...At the end of the day, there are only two points that really matter so you can focus on those two things and not have to worry so much about everything else. During the episode, I will talk about how the peak-end rule impacts brand engagement, personal relationships, employee reviews, medical procedures, pricing, and more.

Show Notes:

[00:43] Today I am talking about the peak-end rule, which ties into how people rate experiences.
[02:57] The peak-end rule shows us that people do not rate experiences on all their details instead only two points are used to determine the overall opinion of the event: the peak and the end.
[04:48] Your brain is probably exhausted thinking about all the thought that needs to be put into an adequate response about your experience. That is why the peak-end rule, a heuristic or rule of thumb, has been so widely adopted.
[05:15] What your brain ends up doing is forgetting about everything except for the peak point and the end point. All the other things sort of fade into the background.
[06:50] Having a little time for a negative peak to taper off and not be the final moment makes the entire experience feel better.
[08:23] When the peak is negative, you don't want it to line up with the end because it will make the entire experience feel particularly awful. In the opposite situation, when the peak is a really good thing, ending on the peak is actually very valuable.
[10:39] So knowing what type of experience people have with you can help determine what peaks you are dealing with, and where they should fall in the overall experience.
[11:37] It is important to break this process down into its smallest pieces. The free Master Your Mindset Mini Course has a worksheet that can help a lot with this.
[14:16] Whenever possible, don't get bogged down in what you are doing now and try to tweak little by little, instead look at what the experience would be in your ideal state and consider how you would build that out.
[15:32] The best thing to learn from this rule is that while it is important to consider everything in an experience to ensure you don't have any big negative peaks you aren't aware of, when there are only two points that matter you can focus on those two things and not have to worry about everything else.
[17:28] I'm not suggesting that you should lower the average across all experiences, but you don't have to worry about every single moment and data point so much.
[17:49] Unexpected moments of delight drive loyalty and ongoing happiness with your brand.
[19:17] Even if you don't have the opportunity to create a positive peak, putting a little effort into ensuring the last moment isn't the worst can have seriously positive benefits on the overall perception of the experience.
[20:49] REAL LIFE EXAMPLES starting with customer service experiences.
[22:28] Businesses will always benefit from thinking about the long term experience with you.
[22:43] When you treat everyone as if they might come back someday (look on the bright side, and don't burn bridges) it can help with overall reputation and memory of working with you.
[24:42] We are going to think outside of the box now and consider employee reviews.
[25:48] As an employee, it is important to know that most managers will look at the peaks and very recent stuff when working on your review, even though it is supposed to encompass the whole year. The brain has a hard time grabbing all that information.
[27:47] When you are tasked with giving an unbiased and holistic review of a giant span of time (like a year) it is important to not be swayed by the peak-end rule, so taking notes during the year is important. See the links below for an article I wrote on this with steps for managers to follow.
[28:18] The last place I want to touch on where the peak-end rule comes into play is pricing strategy.
[29:27] The peaks are setting anchors for your brain to help you determine value and how you ultimately feel at the end even when the final number is exactly the same. (Example using home values.)
[29:58] The stock market is a great example of this. People are really good at building big dreams around the highest value on their portfolio even though those numbers are always changing and not guaranteed.
[31:43] Experiences can be lengthy or short, and no matter how many points we could consider to evaluate them, more often than not, there are only two points considered: the peak and the end.
[32:06] Look at all your experiences. Both the ones you go through each day and for your customers to find points where you can use the peak-end rule to your advantage and increase the overall experience people have with you and your brand.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

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