Invest Like the Best with Patrick O'Shaughnessy
· Wolfgang Hammer
[00:00:00] S1: I think sometimes it's because doing the thing is so difficult and complex that the idea of having to frame this now on top of everything else in some sort of philosophical way is overwhelming and doesn't even seem necessary at times. Of course, it's always present and people just are not conscious of it. So when the predicate understanding of what is actually happening is made conscious and it's communicated in a way that doesn't quite name the thing, but is able to metaphorically describe it, it can be extremely inspiring because it simply—it seems that these three elements of the external, the internal, and the philosophical combined unlock something that moves people very deeply. I was at Stanford when the turnaround for Apple in its second inning—I should not be using baseball metaphors because I have no idea what they are—but this was a man who had a philosophy, a personal worldview, and knew exactly what he was fighting against at all times and then acted accordingly with unbelievable discipline and courage and created something that was a work of art in many ways. He literally wanted to make business art, and he kind of did. Every one of these instances is completely unique, obviously, but I think that is what's possible. It also makes it just more interesting in general. It's very easy to be conformist in some sense because you know what's expected, but there's a lot left on the table too. At the same time, espousing a new narrative or finding a predicate understanding just unlocks a ton. It doesn't need to be this life-changing. Sometimes it can be incremental and just unlock a whole new world of potential that is very easily implemented. And in many ways, stories are very good at creating symbols which represent some sort of transcendental belief that people participate in. So in the sense that everyone has an ultimate concern, something that they're in absolute ways concerned about, we'll talk about it. But it can be many different kinds of things. It can be money, it can be a deity, it can be truth. And to be able to present an ultimate concern around a business organization that makes a product of some kind, I think fulfills personal life picture for the people you're communicating it to. So it just feels more important, it feels truer, and it feels more meaningful and worthwhile.
· Patrick O'Shaughnessy
[00:00:00] S0: We're going to talk a lot about applying some of these principles to the world of building companies or making things. One of the very first things I can remember you teaching me is something to the effect of everyone focuses on the new when trying to tell you about their thing, but that the right approach is maybe only 20% new and 80% familiar or something like that. Can you say more about this principle of storytelling or of delivering a message or conveying something to people, that the trap we fall in of trying to just focus on the exciting new thing?
· Wolfgang Hammer
[00:00:00] S1: The interesting thing about this whole world is that there are no rules to it. Everyone gleans and tries to come up with rules for themselves sometimes that seem to work more often than they don't work. But there's no book on this, really. Raymond Loewy, the designer, had a similar rule around 80/20. The most tolerable amount of ‘new’ before the human mind rejects it as incomprehensible. With the idea of originality and creativity, there's a sort of tension. Even that of itself is a story. There's this tension, especially now. Originality is highly prized. And there's sort of this belief that only the very new is truly novel. And with storytelling especially, but I even think, maybe this is confirmation bias, but I even think in business or in innovation, the new is really just the obvious uncovered through systematic trial and error over a certain period of time. So that by striving to stay within the obvious and trying to find a variation on the obvious, I think you have a higher chance, at least in storytelling, of discovering something novel that will still feel intelligible enough to categorize in the world. Some people have an ability to see something truly new and immediately categorize it. Those people tend to be very successful investors, for instance. But generally speaking, I think the idea of original is overrated. And the great filmmakers know this, great novelists know this, that you can begin with something very familiar and make it feel totally new incrementally.
· Patrick O'Shaughnessy, Wolfgang Hammer
[00:00:00] S0: Tell me about the short film that you like so much that's nothing more than a camera panning back and forth. [00:00:00] S1: It was a project where simply there's a camera installed in the room, and the camera would move back and forth across the room and each time uncover a little bit more of the room. And nothing else happens. There's no payoff to it. But the suspense of seeing a little bit more information about the room is absolutely riveting. Even just this tiny amount of new information being given creates enormous suspense. Because somehow we're good at anticipating. We're really always anticipating. And each new piece of information gets put into some kind of puzzle. So by the end, the suspense is unbearable. [00:00:00] S0: If you think about the power of communicating by starting with the familiar and the known, how would you encourage CEOs, companies, people talking about their thing, use that truth? What is the method that you've seen the best explain accepted reality before trying to explain their new thing? Is there a method that comes out of this that you think is useful to founders especially? Is the group that I'm the most interested in. [00:00:00] S1: The reason storytelling to me is so effective is because you have a subjective point of view that an individual can relate to because it's imitating and processing the character's point of view. So it's subjective in that way. The subjective access to storytelling would be a universal truth, but that can be only accessed subjectively.
· Wolfgang Hammer, Patrick O'Shaughnessy
[00:00:00] S1: The reason storytelling to me is so effective is because you have a subjective point of view that an individual can relate to because it's imitating and processing the character's point of view. So it's subjective in that way. The subjective access to storytelling would be a universal truth, but that can be only accessed subjectively. [00:00:00] S0: Does that mean that in trying to reach the mind of a customer, let's say, the right thing or allocation of time for the founder is to spend most of their time understanding the story of the customer as it currently exists versus how it should be and then build off of that?
· Patrick O'Shaughnessy, Wolfgang Hammer
[00:00:00] S0: Does that mean that in trying to reach the mind of a customer, let's say, the right thing or allocation of time for the founder is to spend most of their time understanding the story of the customer as it currently exists versus how it should be and then build off of that? [00:00:00] S1: I think that's exactly right. Someone called me, I hadn't heard from them in a while, and they said, we realized we've been selling to the wrong level. We have to sell to C-level as opposed to frontline manager level. And the sales pitch didn't work to the C-level. It was because they had not changed the framework, the subjective personal philosophy. The C-level has a very different worldview of what's happening in company than the line manager. And we worked on it and it was like magic. It was like magic. All of a sudden closing huge national deals with huge companies because they understood the psychology of the C-level manager business. I think it's easy to forget that you're dealing with human beings who have a human experience at the same time as having a professional experience, and story is really good at seeing these two layers at the same time. There's subjective experience that a human being has, and then there's the professional experience on top of it. And I think you want to combine these two and understand you're dealing with human beings first and foremost. And I think the greatest founders and the greatest builders understand this instinctively.