Clinical vs. emotional thinking (Marc Andreesen)

How is that professional gamblers consistently win? Andreseen explains in his interview with The Observer Effect:

“I would never be a professional gambler but one of the things you find about professional gamblers – they may play poker at night but what they do during the day is they hang out together and they make side bets for large amounts of money. And it’s literally a side bet of sitting in a diner and betting on whether there are going to be more red cars than blue cars passing by. What they’re doing is ‘steeling’ their own psychology to be able to pull the trigger on bets like that with a purely mathematical lens and with no emotion whatsoever. They’re trying to steel themselves to be able to be completely clinical. And so as contrast, what they then hope for that night when they sit across the table from someone is to hope they’re dealing with somebody who’s super emotional. Because the clinical person is going to just slaughter the emotional person.

It’s this weird thing where it’s the kind of activity that should result in these wild highs and lows but the true pros are just indifferent. They don’t care because it’s a probabilistic outcome. That’s just part of the game and they’ll come back and they’ll probably be better the next day.”

What is marketing? (Rory Sutherland)

I love this philosophy on marketing from Rory Sutherland. Rory is the Vice Chairman of Ogilvy & Mather Group, and I heard this on Invest Like The Best (Source).

Begin quote:

First of all, don’t think that marketing is marcoms. Because is very many businesses the two are conflated to a point where marketing is sometimes dismissed as “the coloring-in department”.

Marketing should basically be the repository for any psychological insights, particularly those which are counterintuitive, or which run against normal economic assumptions in the space of human perception and behavior. That would apply also, by the way, to internal relations, shareholder relations, and obviously customer relations.

So marketing, in a sense needs to step back up to the plate and not allow itself to be trapped in the marcoms/communication “ghetto”. The second thing is, by being trapped in that ghetto, [marketing] tends to get framed as a cost; as a necessary evil, and not a source of value creation. Once you’re in that marcoms ghetto, you’re essentially a cost center. As a result, what you get judged by is the efficiency with which you perform the necessary. This turns the whole thing into this sort of marcoms insanity, where everybody is trying to target 2% more efficiently every month.

And I would argue that a large part of marketing needs to be both experimental and probabilistic. We shouldn’t turn it into this efficiency/optimization game.

…Maybe, actually you should do very inefficient mass advertising, simply because it increases your odds of getting lucky. You can’t predict how in advance, and you can’t attribute the success in retrospect, but yet nonetheless, fame is valuable, on balance. More lucky things happen to famous people simply because more people have heard of them.

…that’s the first thing [for new clients]: don’t turn into an efficiency/optimization game. Accept that it’s probabilistic. And accept that there need’s to be a trade-off between exploit and explore.

End quote.