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In 2006 Apple’s revenues were $19 billion.

The iPod alone was $7.7 billion of that, it had 90% of the personal music-player market.

Things were looking good.

So why did Steve Jobs wake up in a sweat?

Why did he start writing numbers down, making phone calls, rushing into work the next day arranging meetings and cancelling projects?

Why did Steve Jobs think he had to avert a crisis?

Well precisely because things were looking good.

The previous day, Steve Jobs had seen the new Nokia mobile phone.

No big deal, just another mobile phone: It had the usual range of trivial features.

One of the gimmicks was you could download six tunes onto it.

Not very useful, no one cared.

But something at the back of Steve’s mind nagged away at him.

And he woke up in the middle of the night thinking “If they can download six tunes what happens if they can download sixty tunes? Or six hundred tunes? That’s the end of the iPod – that’s fifty percent of our business gone – It’ll be too late to worry then, we won’t have a company.”

And he started writing down numbers, doing calculations, and as far as he could see there was only one answer.

So he started making phone calls, organising meetings and cancelling projects.

The next morning he got his people together and he said “We’re getting into the phone business”.

Naturally they thought he was crazy, he was being paranoid.

But he explained they had no choice.

Either they ate Nokia’s lunch, or Nokia would eat theirs.

So in 2007 Apple launched the iPhone.

By 2009 the iPod still made up $8 billion of their revenue, but the iPhone was nearly $7 billion.

By 2013 the iPod had dropped to $2.3 billion of revenue, but the iPhone had grown to $91 billion.

Apple is now the world’s largest smart phone manufacturer.

Nokia, who Steve Jobs was scared stiff of, barely exists anymore.

Mainly because he was frightened and they weren’t.

He knew that fear is the most valuable tool an entrepreneur can have.

Fear will give you an edge on the competition.

Recently I was reading that fear is one of the great strengths of species that evolve.

Suppose you can’t tell the shape of a bear from a rock.

If you always assume the shape is a rock most times you will be right, and you’ll lead a more relaxed life.

Right until the time you’re wrong and it actually is a bear.

Then you die a painful death.

But suppose you always assume that shape is a bear, and you run.

Most times you will be wrong, because it actually is a rock.

But the one time it really is a bear, you’ll survive.

So species that respect and cultivate fear are the ones that survive.

They learn to make fear their unfair advantage.

They are more aware, more attentive, and have an edge over the competition.

Like Steve Jobs, they know fear is their friend.


Marc Koska is not a doctor, yet he’s saved nine million lives.

How did he do that?

He did it by preventing doctors doing what they see as their job.

But how can that be a good thing, isn’t that harmful?

No because, amazingly, fatal diseases are being spread by doctors.

He’s preventing a great deal of that.

This didn’t happen back in history, this is happening right now.

Doctors are transmitting fatal diseases by re-using and recycling hypodermic syringes.

In India and Africa the scale of the problem is vast.

Every year 23 million cases of hepatitis are transmitted via re-used syringes.

Every year 300,000 cases of HIV are transferred via re-used syringes.

Marc Koska secretly filmed a hospital where forty patients were given injections from just two needles; whatever disease anyone had was passed along to the rest.

Koska secretly filmed doctors injecting patients suffering from syphilis and HIV, then immediately using the same needle to inject babies and small children.

Nurses tell Koska their hospital routinely uses each needle on thirty to forty patients a day.

Then it’s washed in the same luke-warm soapy water as all the other needles and they’re all used again tomorrow.

Marc Koska has invented a way to stop this happening.

He’s invented the single-use hypodermic syringe.

It’s made on exactly the same machine as ordinary syringes but after one use the plunger breaks off and it can’t be re-used.

It costs 5 cents.

The World Health Organisation estimate it’s saved nine million lives.

The problem is it seems a waste to throw away a syringe.

To doctors a needle is just a way to deliver medicine.

They don’t understand washing and re-using a syringe is doing more harm than good.

Hospital authorities estimate single-use syringes cut an average 60% off the time patients spend in hospital.

So every $1 spent on these syringes saves $200 in hospital costs.

But in India, when 495 people contracted hepatitis, the government spent $150,000 on mass vaccinations.

Each vaccination cost twenty times as much as a disposable syringe.

But 92 people died because the government saved money by re-using and recycling their hypodermic syringes.

And yet in India a bottle of Coke costs 50 cents, the same as ten single-use syringes.

The problem is that doctors have a high-status occupation.

They’ve had many years of training.

They’ve learnt to recognise the symptoms of many diseases.

They know the names of all the medicines available.

They can’t be bothered with something as trivial as needles.

How the right medicine gets into the patient is a trivial concern.

So the doctors concentrate on the complicated part of their job and ignore the simple part.

Because humans are always attracted to a complicated solution.

The more complicated it is, the better it must be.

We are all susceptible to that.

And, like the doctors, we ignore the simple solution and are seduced by the most complicated explanation available.

Which is why, like those doctors, most of what we do doesn’t work.

We never learn: simple works, complicated doesn’t.


Every year two million stray dogs are put to death in the USA.

They are taken to shelters to see if anyone wants them.

Hardly anyone does of course.

They’re dirty, often diseased, undomesticated.

No one has the time and patience to clean and train them so they die.

What’s the alternative?

If only there was a group of people that had enough time to clean and train those dogs?

They’d be much more likely to find good homes.

Then they wouldn’t have to die.

But where could you find a group of people like that?

People who would do all that work for no pay?

A group of people with that amount of time to spare?

There is one place: prison.

In prison there are lots of people with nothing but time.

So the Massachusetts Department of Correction tried an experiment.

They partnered with a rescue charity called Don’t Throw Us Away.

They asked prisoners to volunteer to train and look after dogs.

For eight weeks a dog would share an inmates’ cell.

Each inmate would keep the dog clean and handle all its medical needs.

They would feed and exercise the dog.

And they would train the dog in basic obedience, so that after eight weeks the dog could find a good home.

And they wouldn’t have to die.

The results were better than anyone expected.

Inmates couldn’t wait to get a dog to share their cell.

From hardened criminals came an outpouring of pent up emotion.

Feelings they couldn’t show in front of the other inmates.

But they could to a dog.

And prison authorities found the inmates began to open up and learn tenderness, care and companionship.

And an amazing thing happened.

While the prisoners were helping the dogs get better, the dogs were doing the same for the prisoners.

As one inmate said “When you’re in prison you put a wall up. A dog is a live being that trusts you totally, so you trust the dog. You don’t need that wall.”

More than that, the inmates felt sympathy for the abandoned dogs.

The dogs had had a rougher life than they had.

Another of the inmates said “People forget about you when you’re inside. Just like these dogs been forgot about. They have to learn to trust again.”

And for once the inmates could see the benefit of rules.

If they could teach the dogs to learn to obey simple commands, they had a chance of finding a good home.

And the inmates worked with the dogs on learning the rules.

Another inmate said “Some of these dogs have been through a lot. I’ve got to show her there’s a better life.”

And, when their dog actually gets a good home the prisoners are thrilled. It’s almost like graduation.

And gradually, without realising it, the inmates are also being rehabilitated back into the world.

They are learning about patience, responsibility and trust.

As another inmate said “I’m learning to be a dad, to be part of my family when I go home”.

It reminds me of an ad Neil Drossman wrote years ago in New York.

It was for a charity that retrained disabled people, and it showed a man in a wheelchair repairing a TV set.



Harland David Sanders was born in Indiana in 1890.

In 1903 he got a job painting horse-drawn carriages.

In 1904 he became a farm hand.

In 1905 a streetcar conductor.

In 1906 he joined the army and drove a team of mules in Cuba.

In 1907 he became a blacksmith in Alabama.

In 1908 a fireman on the railroad.

In 1909 a labourer in Tennessee.

In 1911 a lawyer in Arkansas.

In 1913 he was selling life insurance in Indiana.

In 1924, for the first time, he moved to Kentucky and got a job.

He ran a Shell station and discovered the concept of franchising.

The more he sold, the more money he, and Shell, made.

Harland David Sanders loved the idea.

He began thinking of ways to get people to choose his station rather than the one across the street.

He started selling food: country style ham, chicken, and steak.

He began by selling it from his own kitchen table.

It was so successful he eventually bought the station across the street and began serving his food there.

In 1937 he opened a motel and restaurant selling his food next door.

Trade was so good that the Governor of Kentucky made him a ‘Colonel of Kentucky’.

This was a purely honorary title given to any businessman who contributed to the good of the state.

The Governor made 5,000 ‘Colonels’ that year.

In 1952, aged 62, Sanders decided to try the franchise concept with his food.

He had a friend who owned a diner in Utah and he persuaded him that fried chicken would separate it off from the local hamburger joints.

And Sanders would get 5 cents for every chicken sold.

In order to make it a franchise he needed a brand.

He decided to call it ‘Kentucky Fried Chicken’ to make it sound different to ordinary fried chicken.

He used the line ‘finger lickin’ good’ to give it the feel of southern down-home quality.

And he decided that he himself would become the symbol that sold the franchise.

So he began to dress like a Southern, civil-war era, plantation owner.

He called himself ‘Colonel Sanders’ (although he’d only ever been a private in the army).

He wore a white suit and a white hat, he wore a string tie and carried a cane.

He grew a goatee, which he dyed white to match his hair.

And everyone accepted him as ‘The Colonel’.

Despite the fact that this was 1950s America, and no one had dressed like that for a hundred years.

And so no one questioned ‘the Colonel’s secret recipe’ embodied the quality of ‘Kentucky Fried Chicken’.

In fact it soon became America’s alternative to hamburgers.

‘Colonel Sanders’ travelled everywhere promoting the brand.

By 1965 there were 600 franchises.

In 1969 the company was listed on the New York stock exchange.

In 1986 PepsiCo Inc bought the company.

Today KFC has 37,000 outlets in 110 countries.

And ‘Colonel Sanders’ is still on every box, every bucket, every sign, every napkin.

As Harland David Sanders knew, all you’re ever selling is yourself.


Henry George was an enlightened economist.

Martin Luther King, Albert Einstein, Franklin D. Roosevelt, George Bernard Shaw, and Leo Tolstoy have quoted him.

He proposed a third way, between capitalism and communism.

His main principle was that a man should profit from his labour, but not profit from what belonged to everyone.

So, instead of income tax, he proposed a tax on the value of land.

Because the land itself belongs to everyone.

One of his followers was Lizzie Magie.

In 1904 she decided this should be taught to children.

She turned it into a game, so they could learn while playing.

It was called ‘The Landlord’s Game’.

It was designed to show children the cruelty of profit for greed.

It consisted of rents, mortgages, deeds, imprisonment and fines.

The object was to keep acquiring land until you owned all the land in a certain sector.

Once you had a monopoly, you could charge double or treble the normal rent.

The goal of the game was to bankrupt every other player.

Lizzie said of her game “It is a practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences. Let the children once see clearly the gross injustice of our present land system and when they grow up, if they are allowed to develop naturally, the evil will soon be remedied”.

Not surprisingly, it wasn’t a big success.

Except in the Quaker community in New Jersey.

These people used it as Lizzie intended, to teach their children the evils of profit for greed.

But in 1933, an unemployed salesman named Charles Darrow was visiting a friend in Atlantic City.

His friend showed him ‘The Landlord’s Game’ and Darrow liked it a lot.

Not for learning the evils of greed, but for the exact opposite reason.

The fun of taking money from the other players.

In 1933, he patented the game under a different name: ‘Monopoly’.

Inside a year he was selling 20,000 sets a week.

Monopoly went on to become the biggest-selling board game ever.

To date, it has sold 275 million sets worldwide.

It’s sold in 111 countries, in 43 different languages.

So far, 10 million Monopoly phone apps have been downloaded.

Because, as Charles Darrow spotted, it wasn’t teaching children the evils of unrestricted capitalism that people wanted.

Exactly the reverse.

It was having fun with the evils of unrestricted capitalism.

That’s what games are about: someone wins, someone loses.

That’s the fun.

In the year 2000, in a masterstroke of irony, the toy store FAO Schwartz sold a special edition Monopoly set for $100,000.

The dice was 22 carat gold and had diamonds for dots.

The ‘Chance’ square was dotted with emeralds.

The ‘Community Chest’ square was dotted with sapphires.

And on ‘Free Parking’ the car’s rear-lights were rubies.

We should learn from Lizzie Magie and Charles Darrow.

People don’t necessarily want what we think is good for them.

People want to have fun.


There seem to be two main opinions on The Sun’s page 3.

One is that it demeans women by showing attractive young females posing naked.

The other is that it’s free speech: if you don’t like it don’t buy the paper.

I can see both sides.

But I think it helps to know why page 3 came about in the first place.

When I was growing up, my mum always bought the Sun.

My dad never liked it, he thought it was just gossip.

But Mum had always bought it because her dad always bought it.

The Sun was originally the Daily Herald.

My grand dad was involved in the trade union movement and the Daily Herald was the official paper of the TUC.

Consequently it was mainly left wing politics.

In the early years the Daily Herald had massive support but over the years the public got bored.

Most of the working class switched to the Daily Mirror which was more fun.

The Daily Herald changed its name to the Sun, but it was still dull.

Eventually, it was losing so much money it was sold.

To Rupert Murdoch.

Being Australian he was more brash, and decided to take on the Mirror at its own game.

He put in more sex, more jokes, more gossip, more fun.

In particular, the Mirror always had a bathing beauty in a bikini.

Murdoch decided to go one better and lose the top half of the bikini.

(Controversy is always good for a challenger brand.)

My mum didn’t take much notice.

The Sun’s readership was 41% female, and they didn’t really care.

Which was the best influence of page 3.

It normalised nakedness.

Before page 3 no woman would have dreamed of sunbathing without a top.

Having topless women in a national newspaper made it more normal.

Women became less ashamed of sunbathing topless.

Even women that didn’t look like page 3 models.

When their husbands said “Put your top back on” the woman could say “You don’t mind looking at page 3”.

But people who weren’t around in those days won’t remember that.

They’ll say that page 3 only ever shows attractive women.

Well yes, but the media has always shown attractive people.

At GGT, when Steve Henry wrote the Holsten Pils campaign it was the same situation.

I’d shown the creative department Steve Martin’s ‘Dead Men Don’t Wear Plaid’ as a starter.

Steve was the only one who could make it work: a comedian talking to dead Hollywood stars.

Steve wanted Robbie Coltrane to be the comedian.

At that time he was new, no one had heard of him.

We shot a test with him and Humphrey Bogart and it looked great.

But the client turned him down.

It was a rule in beer advertising that you never used fat people.

It might remind men that beer makes you fat.

So we had to cast for a thin comedian, and we ended up with Griff Rhys Jones.

Steve wasn’t happy because Griff was more mainstream.

And he was right, it wasn’t as daring.

But people want what they want.

Should we try to force people into having what we think is right?

Or should we let them have what they want?

Everyone has to decide that for themselves.


1993 was the year ‘the brand’ died.

At least that’s what all the marketing experts thought.

Investors wiped $13.4 billion off Philip Morris shares, because they owned the most profitable brand in the world.

And they wiped billions off the owners of the other valuable brands: Proctor & Gamble, Coca-Cola, PepsiCo, H.J.Heinz, RJR Nabisco, Quaker Oats, and many more.

So why did the experts suddenly decide ‘the brand’ was dead?

It started with Marlboro cigarettes.

Marlboro had 24.3% of the American cigarette market.

They sold as much as the next five brands combined.

But this had fallen to 22.2% because of cheaper cigarettes.

Marlboro were selling at around $2.20 a pack, but cheaper cigarettes were selling for half that.

Previously, Marlboro decided they could charge a premium for ‘brand’.

Now, they decided all consumers cared about was price.

So Marlboro cut 20% (40 cents a pack) off their cigarettes.

It was called ‘Marlboro Friday’.

Marketing experts saw it as proof ‘the brand’ was dead, you couldn’t charge a premium for brands anymore.

And investors began dumping shares in big brands.

But the marketing experts had been concentrating on the wrong thing.

They hadn’t spotted the real problem.

Marlboro had always kept profits high by encouraging stockists to over-order.

To take more cigarettes than they actually needed.

But how do you get stockists to do that?

The best way was to keep putting the price up.

If stockists buy them now, before the price goes up, they can sell them at the new higher price later.

So that’s what Marlboro did.

They knew people would always pay a premium for a brand.

They kept putting the price up, sometimes 10% a year.

Sales kept going up, profits kept going up.

You’d think experts would spot this couldn’t go on forever.

But they didn’t spot it.

And eventually, Marlboro got to be too expensive for some consumers.

So they switched to cheaper cigarettes.

Marlboro decided ‘the brand’ was dead and announced they were cutting prices.

And guess what?

What the marketing experts hadn’t spotted happened.

The stockists stopped over-ordering cigarettes.

Because cigarettes would actually be cheaper next year.

In fact they stopped ordering any more stock at all while they sold all the stock they’d built up.

It’s estimated that alone cost Marlboro nearly a billion dollars.

The problem wasn’t that the brand was dead.

Because the brand is never the only answer.

The brand is always just one of several possible answers.

By ignoring everything except the brand the experts got themselves in trouble.

Then, by ignoring everything except the brand again, the experts got themselves in worse trouble.

But surely these were ‘marketing experts’.

Isn’t pricing and distribution part of what a marketing expert does?

Ensuring the pricing and distribution of the product is right?

Apparently not.

Apparently these marketing experts were so busy worrying about ‘brand’ they didn’t have time to worry about things like that.


Joe Stegner had often been asked to make recommendations to the board on profitability.

There are usually two ways to increase profitability: raise income or cut costs.

Joe Stegner worked with numbers.

He saw an obvious and simple way to cut costs that could save many millions of dollars.

The company had lots of factories that bought their own supplies.

They negotiated their own prices.

But the negotiations differed from factory to factory.

It was a waste of time and money for everyone to do separate deals.

Stegner had tried presenting this argument to the board before.

Usually they saw his presentation and nodded along with it.

Then nothing happened.

It was presented as slides of abstract numbers.

Very logical, very sensible, very reasonable.

And that was the problem, it appealed to the wrong side of the brain.

The reasonable side of the brain likes to put things on the back burner while it thinks about them.

And company-wide savings on every purchase seemed like something that needed a lot of consideration.

So nothing happened.

Joe Stegner realised he had to talk to the other side of the brain.

The emotional part, that feels it rather than thinks about it.

So he chose just one item.

One of the things each factory was purchasing was work gloves.

Dozens of different factories meant dozens of different prices.

So Joe Stegner briefed an intern to buy a pair of each of the work gloves that the factories purchased.

That made four hundred and twenty four different pairs of gloves.

Then he got the intern to put the price tag on each pair.

Then he waited for the next board meeting.

Before it started he took all the gloves and placed them in a huge pile on the table.

So when the board members filed what they saw was the polished boardroom table with a massive pile of work gloves in the middle.

Of course they asked “What the hell are these?”

And Joe Stegner explained the problem.

The board members began picking up and examining the gloves.

They all looked identical but some had $3.22 price stickers, some had $5.00, some had $10.55, and some had $17.00 on them.

The board members looked at each other.

This was crazy, who the hell was paying $17.00 for gloves that could be bought for $3.22?

Why wasn’t someone in charge of this?

If this madness was happening over work gloves, imagine what else it was happening on.

The company must be haemorrhaging money on this wastefulness.

And the board members immediately agreed to centralise buying and negotiations across standardised deals.

The same four hundred and twenty four gloves were taken to every factory to explain what was happening and why it must change.

Buying across all commodities was centralised.

In their book “The Heart of Change” Kotter and Cohen explain how profits increased massively because costs were slashed.

Costs were slashed because it wasn’t just abstract board members looking at abstract numbers.

It was human beings looking at simple, everyday objects.

We can learn a lot about communication from that.


Dr. Tina Seelig is a professor at Stanford University.

David Williams pointed me to an article about her in Psychology Today.

Her course is on ‘Creativity, Innovation, and Entrepreneurship’.

She gave her class a project as follows:

Each of the fourteen teams was given five dollars.

Who could make that money grow the most?

The teams had from Wednesday to Sunday, then on Monday they had three minutes to make a presentation to the class.

Dr Seelig asks the question “If you were given five dollars and three days, what would you do to grow it?”

Most people answer ‘Online gambling’ or ‘Buy a lottery ticket’.

She says the problem with this is it’s high risk with hardly any chance of a return.

She doesn’t consider these people entrepreneurs.

The second thing people say is to start washing cars.

She says this is safe, but will deliver a minimum return.

She doesn’t consider these people entrepreneurs either.

Neither of these groups are looking at the problem creatively.

Instead, they’re concentrating on the restrictions: only five dollars and only three days.

The entrepreneurs in the group were the ones who concentrated on the opportunity.

What was it that people locally really needed?

One group spotted that, in a college town, it was really difficult booking restaurants.

The real drag was having to queue for ages on a Saturday night.

So that group phoned the restaurants on Wednesday morning and made bookings for Saturday night.

Then they went along the queues at the various restaurants, selling their bookings to the highest bidders.

That group made two hundred dollars.

Another group noticed that students were too lazy to keep their bike tyres pumped up.

So they set up a stand outside the student union and offered to pump them up for a dollar.

They realised that, to students, laziness is worth more than a dollar.

And they were right.

That group made over a hundred dollars.

Both groups opened the problem up beyond only three days and only five dollars.

But the winning team were by far the most creative.

They stood back from the problem and looked at what they had to sell.

And decided the most valuable thing they had to sell was three minutes of the attention of the most entrepreneurial students at Stanford University.

Now who would want to buy that?

And they approached the companies that were trying to recruit exactly that kind of students.

And they sold that time slot to the highest bidder.

Those students made six hundred and fifty dollars, without even touching their original five dollars.

And, as Dr. Seelig says, you couldn’t see that answer from the original question.

You have to stand really far back, move beyond the standard responses, the traditional assumptions, and stop framing the problem so tightly.

To be an entrepreneur you have to be creative.

You have to question the question.


Paul Smith was a producer, he made programmes for television.

At least he did when he could sell them.

He’d been trying to sell a particular idea for two years.

It was a quiz show where the correct answer was from a choice of four on screen.

If the contestant got all the answers right, eventually they could win a million pounds.

Smith had sent it to the BBC, Channel 4, Channel 5, but no one would touch it.

What kept him going was one person loved it: Claudia Rosencrantz at ITV.

She showed it to her boss, David Liddiment.

But Liddiment was worried about the whole idea.

He told her he could lose a million pounds an episode with the answers on the screen.

Paul Smith said he wanted a chance to present it to Liddiment, himself.

Smith knew there was no point in a logical argument.

The only way was to get him to play the game.

So first off he asked Liddiment to take his wallet out.

Then he asked him how much was in it, Liddiment counted out £210.

Smith said “Okay add an IOU for £40, making it £250, and put it all on the desk.”

Then Smith took out an envelope containing £250 and placed it next to Liddiment’s money.

He said “If you can answer a question, the whole £500 is yours, if not you lose your £250”.

And he showed him the choice of four answers.

Liddiment started asking Claudia Rosencrantz which she would pick.

Smith said “You’re using your ‘phone-a-friend’ lifeline”.

Liddiment said okay, but he and Claudia couldn’t agree on the answer.

Smith said “You could use your ‘50/50’ lifeline”.

Liddiment said okay, so Smith took away two of the answers.

And Liddiment guessed the right one from what was left.

Smith gave him the whole £500 and said “That’s all yours, unless you want to double it by answering the next question”.

And he put an envelope containing £500 down next to it.

Then he showed him the four choices.

Liddiment started discussing them with Claudia Rosencrantz.

Smith said “Hang on, you’ve used the ‘phone-a-friend’ lifeline. You can’t use it again.”

Liddiment asked what options he had left.

Smith said “You’ve got your ‘ask-the-audience’ lifeline”.

So Liddiment opened his office door and began discussing it with all the staff sitting outside.

But everyone had a different opinion of the answer.

Liddiment frowned and closed the door.

He said to Smith “No, I’m going to take the £500 instead”.

And at that point, Paul Smith knew he’d sold the idea.

Because Liddiment saw he wouldn’t lose a million pounds an episode.

The ‘sunk cost’ heuristic would prevent it.

And David Liddiment was hooked.

In fact he loved the idea so much he arranged to run the show every single night of the week.

And ‘Who Wants To Be A Millionaire?’ went on to pull in bigger audiences than Eastenders.

And it only happened because Paul Smith stopped expecting the client to understand the game rationally, and got the client to feel it.

Because, as Daniel Kahneman says, that’s where the sell happens.

Paul Smith moved the sell from System Two thinking (slow, rational) to System One thinking (fast, emotional).

As in any sell, desire must precede permission.

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