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- [00:01]
Host
Two years ago I released two episodes on Steve Jobs. The episodes were very popular on the podcast, but like with all podcast episodes, they slowly get forgotten as time goes on. However, the episodes have gone a little bit viral on YouTube. Almost 100,000 people have watched the videos on there. They've received thousands of likes. So I thought for a bit of an end of year special I'd re release the two episodes, combining them into one trimmed down mega episode. Today you'll hear how Steve Jobs uses psychological biases and principles to influence, persuade and manipulate people. Steve was a master of persuasion, but he wasn't superhuman. He just used simple tactics that you can replicate. So keep listening to hear how Steve Jobs persuaded the world. The OPS Authority, hosted by Natalie Gingrich, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Every week on the Ops Authority, you'll hear transformational stories of powerhouse business owners who value business operations. You can't ignore the back end pieces that have to work together and flow smoothly to build a brand, grow a community or disrupt an industry. If the operations side of your business is a mess, putting out fires will always take priority, leaving no room for the behavioral science improvements that I think every business needs to make. So listen to the OPS Authority wherever you get your podcasts. I've spent over 50 hours looking into Steve Jobs past, analyzing how he persuaded, influence, motivated and even manipulated people. He did so with incredible success throughout his career, convincing established CEOs to join his startup, influencing marketing agencies to produce ads for his tiny company, and encouraging extraordinary engineers to go and work for him. But Steve, he wasn't superhuman. He simply leveraged common, well known psychological principles to influence people. Sure, he was a one of a kind genius, but the methods he used to convince and persuade people are methods that all of us can adopt. Today, I'll look back on Steve's early career and showcase how he used those principles to establish Apple, achieve success, and produce the greatest ad of all time. But I want to start with a disclaimer. Steve was a brilliant man, a genius no doubt, but he didn't always do the right thing. There will be a lot of examples I will share today where he's manipulated someone to do something they ought not to. So even though you'll learn how Steve did it, that doesn't mean you should blindly copy him. Just because Steve Jobs did it doesn't mean it's right. Alright, enough with the disclaimers. Let's get into it now. When most of you think of Steve Jobs, you Probably think of this.
- [03:00]
Steve Jobs
There's just one more thing about the ipod mini, which is it comes in colors. So in addition to silver, we have gold.
- [03:09]
Host
That's the charismatic Steve Jobs that dazzled us with new innovations and groundbreaking tech during keynotes at Apple. But Steve was able to influence people decades and decades before that. Probably the first notable example of this is an old school picture with Steve and his classmates. The picture was taken when Steve was just a young boy. Now in this picture, all but one student is wearing a Hawaiian shirt. It was a Hawaiian shirt themed day at school, so all the kids brought in a shirt to wear. You might expect Steve to be the odd one out. He's not by the way, he's wearing a Hawaiian shirt. But the story is that Steve had forgot his shirt. The only reason he's wearing one is because he persuaded a friend to swap shirts with him. His friend is now the odd one out. So Steve knew how to get his way. From a young age. He knew how to convince people. Now, we don't know what tactic he used back then to convince his friend, but it's an early sign that Steve Jobs has a knack for persuasion and he'd use this skill for good and for bad. Steve Jobs met Steve Wozniak back in high school in 1968. The two of them would stay close friends for years, eventually co founding Apple together. Steve Wozniak, or Woz as he's known, was, and of course is an incredible engineer. One of the first projects Steve and Woz worked on was, well, mischievous. They loved playing pranks on strangers and started to build contraptions to take their pranks to the next level. Their favourite prank involved a custom built TV jammer put together by Woz. It's essentially a TV remote that could cut the signal to any TV and turn it back on with the click of a button. Stephen Woz would creep up to a stranger's house, peek through the front window and then they'd turn on the jammer and watch the family get frustrated. They keep turning the jammer on and off. Annoying, usually the dad to no end. This was pretty funny to them and I can imagine why. But Steve Jobs had an even better idea. He'd come up with a strategy to make it even funnier. He'd only turn the signal back on once the dad was standing next to the TV with his hand on the aerial. After doing this a few times, it made the father believe that the only way the TV would operate was if the dad stood next to the tv. With his hand on the aerial, Stephen was would leave in fits of laughter, wondering how long the dad would stay there with his hand on the aerial. It's a funny and I think fairly harmless prank. And it shows again that Steve understood the basic principles of human behaviour. The obvious principle here is the principle of conditioning. Steve is building a behaviour in someone through repeat conditioning over time. I think it's the earliest example I could find of Steve using a psychological principle to influence someone. And it's something that he would continue to do throughout his career, not always through conditioning, but through other psychological principles that influence and persuade. The next example comes later on in his life. It's with another Stephen was invention. See, the two stayed close friends in high school during that time. Wozniak designed what he called the blue box. The blue box generates sounds to manipulate the telephone network and make free long distance calls. See, this is back in the day when telephone calls played a sound to make the right connection. Play the right sound and you'll be able to make that call without having to pay the hefty fees at the time. Now, obviously this is totally illegal, but it's also a fun and potentially profitable way for the two high schoolers to make money. Was built the blue box and Steve, well, he was in charge of selling it. Now, put yourself in Steve's shoes. You're a senior high schooler, just 16 years old. How would you sell the blue box? Now, if it was me, I'd be at a bit of a loss. I guess I'd go speak to my friends, start telling them what the product is, what the benefits are. Maybe I'd tell them how much they'd save and ask them if they want to buy. I doubt I'd think of anything smarter than that. But Steve isn't like the rest of us. He intuitively used a psychological principle called social proof. Social proof is a principle that affects all of us. It means that we follow the actions of others. It's why when we know something is a best seller or most popular, we're more likely to use it and more likely to buy it. It's an evolutionary trait developed tens of thousands of years ago to keep us alive. If a bunch of cavemen were running out of a cave, you wouldn't go in that cave. You'd follow the actions of others. Social proof is used today in marketing. Richard Shotton, a marketing psychologist, added a best selling sign to a beer in a London pub and increased its sales by 2.5 times. However, social proof is notoriously hard to Use for products that aren't popular. This is a problem for Steve. He can't say the blue box is the best seller because no one has bought it. So Steve uses social proof in a different way. What he did is he went into the dorms of other seniors at high school, and he'd say, is George here? Now, the seniors would often say, no, because there was no one called George there. They would say, no, why? And Steve Jobs would say, ah, George was interested in buying the blue box. No problem, I'll come back later. Now, in most cases, before Steve could leave, the seniors would stop him and ask him, what was the blue box? Steve would then start his pitch, and in most cases, he would get a sale. This is a genius tactic, one that some of the best salespeople use today. Now, obviously, George doesn't exist, but that doesn't matter. Merely suggesting that someone is interested in buying your product will pique the interest of others. What's impressive is that Steve intuitively knew this at just 16 years old. It takes some salespeople decades to discover a tactic like this. Steve knew how to persuade and manipulate people at a young age. He might not have known he was using social proof or conditioning, but he knew what worked. Let's fast forward a few years. After one semester at college, Steve Jobs dropped out. It wasn't for him. He went back to his parents and he needed a job. But the story behind how Steve Jobs got his first job is another example of his persuasion tactics, and it's one that he continues to use time and time again in his career. He'd read an article about the company Atari, and the article spoke about what a wonderful place it was to work. The staff there were laid back. They were building exciting new video games. So Steve said to himself, I'm getting a job there. Problem is, there were no job openings with Atari at the time. But this doesn't bother Steve. He decides he'll get a job there anyway. So he goes to the office of Atari and refuses to leave the lobby until someone at the company would interview him. Remember, at this stage of his career, he is a complete unknown. He's dropped out of college, and yet he has this huge confidence in himself that he'll get a job. Now, they tell him to leave the lobby. They tell him no one will interview him, but he doesn't. He sticks around and stays in the lobby. Steve here is using sunk costs to prove his worth. Now, you might think that sunk costs affect you as an individual and not those around you. See, sunk costs is the idea that the more money or time or effort you spend on something, the more you'll value it. But it's a risky tactic because it works the other way too. If you see someone sinking time or money or effort into something, you'll value that thing highly too. For example, if you know someone has spent 10 years painting a watercolour, you'll value it much more than if you knew it only took 10 minutes. It links with the endowment effect and labour illusion, other principles we've spoken about on the show. Steve's showcasing his own sunk costs. Here. He's spending hours in the lobby quietly waiting for an interview, sinking all his time and arguably reputation into this makes the folks at Atari value him a little bit more. It's a bit like a hunger strike. The longer someone goes on strike for, the more we value and pay attention to their cause. I should highlight though, this is a really risky tactic. It only works if you have strengths to back it up. Sunk costs might get you an interview, but you'll be held to a much higher standard than a normal interviewee. And if you don't have the skills to back it, you'll be disliked even more. Arguably, there's a study by Elliot Aronson that highlights this. He filmed an actor answering quiz questions correctly. The actor got 90% of them right, and then the actor spilt coffee down himself, appearing clumsy and showcasing a weakness. What's interesting is people liked the actor more if he spilt coffee down himself. Matching a weakness, say, clumsiness with a strength. In this case, intelligence, made the actor more likable. But in another variant of the experiment, when the actor got most of the quiz questions wrong and was seen as stupid and then spilled coffee down himself, he was disliked even more than if he hadn't spilled the coffee. What this tells us is that if you showcase a weakness and a strength, you'll be liked more than if you just showcase strengths. However, if you showcase a weakness and and another weakness, you'll be heavily disliked than if you just showed one weakness. So Steve, he can get away with this. He's showcasing a weakness, which is his stubbornness and inability to say no while waiting in the lobby. But he can match it with a strength. He comes across extremely knowledgeable in the interview and gets a job. He realizes that he can manipulate people this way by sinking hours into contacting them and then dazzling them with his knowledge. And he uses this same tactic of sunk costs multiple times in his career. Later on at Apple, he desperately wanted a world renowned marketing Agency to come aboard and create the 1984 ad for Apple. Apple was too small a client. It didn't work with companies of that size. So Steve called the head of the agency dozens of times every day for a week, even on weekends, until he finally agreed. Sunk costs made the head of the agency pay attention. Steve uses the same tactic when recruiting the famous logo designer Paul Rand from IBM to design a logo for his newest company. Next. Now, IBM wouldn't let this logo designer Paul Rand leave to join Steve, and most people wouldn't fight that. He's at IBM after all. But Steve isn't most people. He called the IBM vice chairman three days in a row before he eventually agreed. Steve is not afraid to showcase his commitment to sink time and reputation into a task to get what he wants. Most people, if they did this, would come across as petulant, stubborn and childish. But Steve gets away with it because he's got other strengths that make up for it. It's a smart tactic that Steve uses to manipulate people, but one that you and I probably couldn't replicate, as we haven't got Steve's charisma or raw intelligence anyway. Eventually, Steve decides he wants to leave Atari. After all that work getting a job there, he's become a bit of a hippie at the time and decides to go to India to find his guru. Seriously, that's not a joke. That is what Steve decides to do. However, Steve has no money for his flight to India. He's skint. The job doesn't pay very well and he hasn't saved any cash. Most of us would get a second job to save up, but not Steve. He decides to persuade Atari, his employers, into paying for his trip to India. He does this by using what I think is his favourite psychological anchoring. Anchoring is the idea that we are heavily influenced by the initial piece of information we see. Imagine you look at a menu at a restaurant and you see that most bottles of wine are priced at £40. You'll think that a £30 bottle of wine seems like a good deal. However, if you went into another restaurant where most of the bottles are priced at 20 pounds a bottle, then a 30 pound bottle, well, that will seem overpriced. We are anchored by the information presented around the offer, and it changes our perception and our decisions. Steve uses variations of the anchoring bias dozens of times during his career, but one of the first examples I noted was how he left Atari. So he simply told his should pay for my flight to India. I've been a tremendous employee I've outperformed my peers. I've done everything you've asked of me, so buy me a flight to India now. Unsurprisingly, the Atari bosses laughed at him. He was leaving. Why on earth would they pay for a flight for him to go on holiday? They've never done this for anyone else, especially not a junior employee like him. But it crucially set an anchor, something that Steve could use to negotiate down from. Steve was able to say, okay, if you can't get me that flight, how about you send me to Munich? I'll do a bit of work for the German branch of Atari and then I'll go to India after that. Now, this appears to be a much more reasonable request. And Atari ultimately agreed to it. They thought, look, of course we can't send him to India, but Munich's much more reasonable, it's a bit cheaper, and if he does a bit of work for us, then why don't we do it? It's classic anchoring in action. He frames the request in this way to make it seem much more reasonable. If he'd asked to be sent to Munich outright, Atari probably would have disagreed. But through the frame of sending him to India, the ask to go to Munich seems much more sensible. Steve uses this same tactic throughout his career. In fact, he used it to convince Woz to drop everything and co found Apple with him. Initially, Woz was dead against starting a business. He simply refused. And Steve had a really hard time convincing him to co found Apple. That's until Steve Jobs used anchoring to reframe the decision to convince Woz. Steve Jobs said, we could lose all our money, but we'd still have a company. That that one line that convinced was, according to him, that's what changed his mind. Why did it change his mind? Well, I think it's because it's a smart bit of anchoring, because he eliminates the objections. Steve Jobs is agreeing that, you know, Apple might not work, they might go bankrupt, but they'd have a company. They would have built something that was worth something. That's the anchor that convinced Woz to join Steve and co found Apple. And much later in Steve Jobs career, he used again the same tactic, but this time with Pixar. Jobs was CEO of Pixar at the time. That's the Pixar behind the world's most successful animation films, like Up, Bug's Life, Wall E. You know who Pixar are. But before Pixar had created any of those films, they solely worked on smaller shorts that hardly drew in any revenue. In fact, the company was really struggling at the time. However, they had one incredibly talented animator on staff. His name was John Lasseter. He's probably the best animator of all time. He creates a short film for Pixar called Tin toy. It cost 300,000 to produce and didn't make anything in return, but it won an Oscar for Best Short Film. It was the first Oscar win for Pixar and the first ever CGI film to win an Oscar. Obviously John Lasseter was good, really good. And Disney, who had no connection to Pixar at this time, Disney saw how talented John was. So Disney tried to hire him. They offered him a huge pay rise, much more responsibility. But John says no, he's not interested. He's happy at Pixar. Most CEOs would be happy to hear this. They'd be delighted. They would say, great news, John, thanks for agreeing to stay. But not Steve Jobs. He saw an opportunity to anchor. He tells Disney they can work with John, but only if they help Pixar create a feature length film. See, Pixar didn't have anywhere near enough funding, equipment or manpower to create a feature film, but Disney, Disney did. So Steve used John as his anchor to get what he wanted. Steve suggests that Disney and Pixar co produce the first ever animated feature length film and John Lasseter would direct and write it. John would stay on the Pixar staff, but Disney and Pixar would split the profits. Disney agreed. Of course they couldn't turn down the offer to work with John. And even though they'd be helping a rival, they thought it was worthwhile. And that film, well that was Toy Story, one of the most successful movies of all time, generating $362 million worldwide, making it the second highest grossing film of the year and also winning three Oscars. And it wouldn't have happened unless Steve Jobs had used that opportunity to anchor. Disney wouldn't have agreed to co create a feature film with Arrival if Steve had just asked. But by using John as an anchor, by saying, you can't poach John, but you can work with him if you help us out, Steve Jobs was able to get what he wanted. As I mentioned, Steve used anchoring extensively in his career, especially during his keynote presentations for Apple. I'll dig into that in part two of this show, which will come out on Nudge in a week or so, so make sure you're subscribed if you don't want to miss that. But for now let's focus on some of the other Tactics Steve has used to convince and arguably manipulate people while building Apple. Now, one of the things all great CEOs seem to have in common is the ability to reframe things. To take a problem, explain it in a slightly different way to help people discover a solution. Elon Musk does this a lot. He reframes sending satellites into space for commercial gain as a way to save humanity by building a future settlement on Mars. He reframes expensive electric cars as a chance to save the environment and signal your commitment to stopping climate change. But Elon doesn't come close to Steve Jobs when it comes to reframing. Jobs was the master of reframing. He would take a problem that seemed impossible and help someone solve it by reframing the problem in a different way. There's one brilliant example of this. When Steve was overseeing the creation of the Mac os, the engineer Larry Kenyon had done everything he could to make the Mac boot up as quickly as possible. He'd spent months working on this boot up startup sequence and had finally presented the boot up sequence to Steve. But Steve wasn't happy. He wanted it to boot up even faster. Now remember, Steve has no reason to believe it could boot up faster. Steve was not an engineer. He didn't know how to make the Mac turn on faster. He just believed it could. So Steve used reframing to reframe the problem for Larry Kenyon. Steve described the problem in a different way that persuaded Larry to dig even deeper and find a better solution. He asked Larry, if you could save a person's life, would you find a way to shave 10 seconds off the boot up time? Larry Kenyon said, wow, yeah, I would do it if it would actually save someone's life. I could probably find a way. And then Steve pulled over a whiteboard and he started writing. He did some calculations. He showed that if 5 million people use the Mac and it takes 10 seconds longer to boot up, that adds 300 million hours of waiting time per year. That equals 100 lifetimes each year. This is classic reframing. Increasing the boot up time doesn't remove a tiny unimportant wage. No, it saves 100 lifetimes worth of waiting each year. He said to Larry, this won't save one life. If you do it, it'll save 100 every year. It might be an annoying thing to hear as an engineer, but it is certainly motivating. A few weeks later, Larry Kenyon presented the new boot up sequence to Steve and it was 28 seconds faster than before. Now, Steve was happy Steve comes back to reframing time and time again when he's trying to motivate his team. He used reframing again during the development of the first ipod. When the team started the project, he kept repeating the same point. He said, I have to be able to find a song that I want in three clicks or less. Now, to everyone who heard this, at the time, it seemed totally impossible. No MP3 at the time could do this. Just think, you have to press a button to open music. You have to press another button to open songs. You have to press a bunch of buttons to type in the song you want, and then you have to press a final button to play. That's at least a dozen taps and clicks. But Steve was insistent he reframed the project. It wasn't about building a nice ui. It was about doing the impossible. Finding a song in three clicks or less. Obviously, this reframing pissed off his engineers. They thought he was mad. But by reframing the problem and intensely focusing on letting users find a song in three clicks, the engineers discovered a breakthrough, an innovation that actually made it possible. You'll know what it is. It's the ipod scroll wheel. This was on the first iteration of the ipod. It was a big wheel that people could scroll through to look at a list of songs. They would simply scroll, find one they wanted, and click play. It took just three clicks to find a song with no typing. If Steve hadn't reframed the problem, there is just no way the engineers would have come up with that innovation. They would have built some normal user interface at the time that required double the amount of clicks, and the ipod probably wouldn't have been the landmark product that it was. There's one final reframing example that I'm sure you've heard because it's famous. When Steve was reviewing the final design for the first ipod, the engineers in the room were tense. If Steve approved, they'd finally be able to ship this product after months and months of long hours and hard work. The story goes that Steve was tossing the ipod prototype in his hand. And as he was looking at it, he starts to shake his head, and he says, it's too big. The engineers at this stage went berserk. The engineers explained to Jobs that it was simply impossible to make it any smaller, that they would have to reinvent the invention to make a smaller ipod. And Jobs. He was silent for a few moments with the ipod in his hand. And then after a few minutes, without saying anything, he stood up, walked to an aquarium, which was in the corner of his room and dropped the ipod into the water tank. The device fell to the bottom and small bubbles came out of the ipod and floated to the surface. Steve said, those are air bubbles. That means there's space inside. Now go and make it smaller. The engineers went silent. They couldn't complain of this. Steve was right. There clearly was excess space in the ipod and it could be made a little bit smaller. Steve did a classic bit of reframing here. He didn't just say, make it smaller. He said, eliminate every bit of spare space. And that the engineers could do. They went away, they removed the space, and the ipod became that little bit smaller. If you run a team or a company or need to motivate a team, think about how you can frame the problem you're trying to solve. Because subtly reframing the problem can help someone come up with better solutions and in Steve's case, groundbreaking technological innovation. So let's go back to 1983. Steve Jobs and Apple commissioned an ad for Apple at the following year's Super Bowl. The ad was directed by Ridley Scott and produced by Fairbank Films. And Steve Jobs loved it. Today we celebrate the first glorious anniversary of the information purification of victims we have created for the. It depicts a dystopian setting from Orwell's book 1984. Big Brother is lecturing an audience while one woman, the only person dressed in color, runs through the scene, chased by the thought police. She hurls a hammer towards the screen, which is projecting Big Brother's face, and the screen is destroyed, leaving the audience in shock. We shall prevail. On January 24th, Apple Computer will introduce Macintosh, and you'll see why 1984 won't be like 1984. The screen fades to black and the voiceover ends and the rainbow Apple logo appears. Steve is in the room when the Apple executives first see this ad. And the response is unanimous. The executives hate it. It doesn't show the product. It doesn't say what Apple is. It doesn't say how much it'll cost. The Apple CEO at the time, John Scully, asks if they should fire the ad agency who created it. But Steve Jobs loves it. He thinks the ad is brilliant. He thinks it's a work of art. Problem is, Steve doesn't get the final say. Apple's CEO John Scully does. And John Scully tells the agency to sell off the ad slots for the Super Bowl. They won't be airing this ad. We're not going to put it out. But Steve intervenes. He tells the agency on the sly to keep the slots and to lie to John Scully and say that they can't sell the slots. It's too late in the year. Steve tells the ad agency that they'll have no choice but to air the ad or lose millions of dollars. So Apple had no choice but to air the ad. They go ahead and play the ad at the 1984 Super Bowl. And as many of you know, this ad is an unprecedented success. In fact, it is considered milestone event for Apple, one which elevates them to a legendary brand. The ad wins numerous awards for best advert of all time. And $3.5 million worth of Macintoshes were sold just after the advertisement ran, which Brent Thomas, the art director at Apple, called an absolute success. But why? What was so good about this ad? And how come Steve knew it was so good when no one else did? Well, there's one thing that Steve knew that others didn't. He knew about the curiosity gap. It's a really simple principle. If you pique someone's curiosity, saying a new product will change the world, but don't reveal how the new product will change the world, then you'll capture more attention and more interest than if you had actually revealed what it is. Leaving something unknown captures attention. This is why trailers are so successful. They show just enough of the film to pique our interest while leaving enough unknown to make us watch it. It's why cliffhangers works. A TV show ends, but we don't learn the whole story, so we play the next episode to find out what happened. I've extensively explored the curiosity gap in a previous episode of Nudge. It's called I used an ancient storytelling trick to get 11,000 TikTok fans. Go and listen to that episode if you want to learn more. Steve knew all about this curiosity gap. He used it time and time again at his keynotes. And he knew it would make the ad a success. So he defied his leadership team and went ahead and aired the ad. And this works. The ad hints that Apple will change the world. And it piques people's curiosity, triggering the curiosity gap and making viewers interested to learn in what Apple is building. Without Steve Jobs, that ad would have never seen the light of day. And there's one more example I wanted to share before ending today's episode. It is four years after the Super bowl ad. Since 1984, Steve's had trouble at Apple. The company was failing, and Steve was disliked by many of his peers, not least because he is constantly undermining them and constantly as we know going behind their backs. He is eventually ousted as board member and leaves Apple unfazed. Steve goes and starts a new tech company called Next. The company itself isn't too notable. It's arguably one of Steve's few failures in his career. But Steve's first keynote presentation there, his first presentation to the press, is fascinating. It's another glimpse at how Steve uses psychological bias to manipulate and influence people. First, he rents out a huge arena, one used for concerts, not business presentations. He invites thousands of people and has them waiting for hours for the event to start. This annoys some people, but it piques the curiosity of others, building anticipation. Eventually, he comes on stage and with some classic anchoring, he says.
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Steve Jobs
Thanks for joining us today. I think together we're going to experience one of those times that occurs once or twice in a decade of computing. A time when a new architecture is rolled out that's really going to change the future of computing. And we've worked on this for three years. It's turned out incredibly great. So I hope that.
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Host
He'S anchoring their expectations. This isn't just another presentation, this is history. He goes on to say that this is the biggest invention since the printing press. Now, we might be used to this type of hyperbole now, but at the time this was unique. No businessman had the audacity to say stuff like this, but Steve would. He knew the power of framing and anchoring and would use it to raise expectations and increase awareness. And he pulls it off. Not really, because the product he presents is a success, but because of the product demo. For the demo, he invites a world famous violinist on stage and has him play a song accompanied by Steve's Next computer. Now Remember, this is 1988. Computers were giant boxes with the computing power of a modern day calculator. They weren't known for playing music and definitely weren't known for accompanying famous musicians. But that's what this Next computer did.
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Steve Jobs
And now I'd like to introduce Dan Colby Alka, the principal second violinist with the San Francisco Symphony Orchestra. Thank you. Good luck.
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Host
It's another Steve Jobs masterclass. He's reframing the classic product demo. Most CEOs would walk through features, talk about benefits, present financials. Steve knows that doesn't interest people. People don't like demos, they like music. So Steve uses music to demo his product. It works. Hundreds of articles are written about the event. People are suitably excited about NEXT and predict it to be the next great innovation in the tech industry. Now, ultimately, NEXT fails to hit these goals. And it didn't reach those lofty heights. But Steve managed to convince people that it would. And he did so by using a number of psychological principles. Steve leaned on four core principles. He used sunk costs to showcase his commitment and get what he wanted. He used anchoring to win at negotiations and change people's perspective. He used reframing to help his employees come out with unbelievable innovations. And he used the Curiosity gap to capture his audience attention and get them hooked on his product. Steve Jobs came back to these principles time and time again throughout his career, using them to create more award winning marketing campaigns, create new breakthroughs in technology, and ultimately make Apple the world's most successful company. I should add that anchoring, sunk costs, reframing and the curiosity gap aren't the sole secrets of Steve's success. Of course they are not. There is much more to him than that. He's also smart, focused and incredibly diligent. But those psychological principles, they probably gave him the edge. By leveraging those principles, he managed to manipulate people to get what he wants. Whether that was funding from Disney to produce Toy Story or a Hawaiian shirt from his school friend. And while I wouldn't endorse you or others to follow his tactics, using them in the right circumstances is a no brainer if you want to build your company, motivate a team or persuade an audience. So that's how Steve Jobs used psychological principles to climb to the top of the business world. But it's just the start of the story. Next up, after this quick break, we'll cover how he used the same persuasion techniques to make Apple the most successful company in the world. Once on holiday, a local asked me to explain what marketing actually is and I struggled. How do you even begin to describe marketing? You have to generate leads, you have to score leads, you have to contact leads, you have to create content, you have to gather data. And the next day you'll need to do it all again. And you wonder if it's even working. It's clear that marketers are spread far too thin trying to do so many different things. But HubSpot really can help. With the help of Breeze, HubSpot's collection of AI tools and features like Content Remix can really help. With Content Remix, you can turn one piece of content into a suite of assets. With HubSpot, you can also pinpoint the best prospects with a predictive lead scoring system. And you can level up your campaign's KPIs with a new analytics suite. So your day to day becomes less busy work and more Driving revenue through the roof. Even if all of that won't actually help me explain what marketing is, visit HubSpot.com marketers to learn more. Now, let's start by taking a listen to this keynote from Steve Jobs. It's his first keynote back at Apple, recorded in 1998. He's been rehired as the interim CEO. While he was away from the company, Apple started to fail. Revenues fell and profits dwindled. It was vital for Steve Jobs in this keynote to rebuild confidence in Apple. Here's what he chooses to say.
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Steve Jobs
It's been 10 months since a new management team took over at Apple. People have been working really hard. You can see a lot of cars in the parking lots and nights and the weekends. And because of their hard work, I'm really pleased to report to you today that Apple's back on track. And.
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Host
What do you notice? What stands out? Well, there's one tactic he is using to build confidence in Apple, to make viewers and investors value the company more. And he uses this tactic time and time again. He uses it when introducing the iPhone.
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Steve Jobs
This is a day I've been looking forward to for two and a half years.
- [40:22]
Host
And then during one of his last keynotes, when he introduced a new version of the iOS about 10 years ago.
- [40:30]
Steve Jobs
We had one of our most important insights, and that was that the PC was going to become the digital hub for your digital life.
- [40:42]
Host
Steve Jobs regularly chooses to start his keynotes by highlighting the amount of work Apple has done, how they've been working weekends for the past 10 months, how he's been looking forward to this keynote for over two years, how 10 years ago, they discovered an insight that led to the innovation you'll see today. This can't be by accident. Steve almost always highlights the labour that has gone into his work. Why does Steve do this? Well, because Steve knows the power of the labour illusion. The labour illusion is a fairly simple psychological principle. If you see the labour going into a task, you will value the end product more. If you see chefs cooking your food, you'll say the food tastes better. If your real estate agent spends hours crafting a bespoke list of houses for you to view, you'll value those houses more. In fact, a paper published this year called Pulling Back the Curtain found that going on a brewery tour and seeing the work that goes into making beer will make visitors 32% more likely to buy that beer than if they hadn't seen behind the scenes. The labor illusion is powerful. And Steve understood this. So he took every possible chance to emphasize the work that's gone into creating something. So when he introduces the new ipod nano, he doesn't start by telling you what features it has. He starts by looking back at the previous four generations and all the work they've done.
- [42:09]
Steve Jobs
This is the first generation nano. It was a breakthrough. The first high capacity flash based music player. And it was a stunner when it first came out. The next generation, we took it to extruded aluminum is even better. Third generation, the fourth generation had an even taller screen on it and the most recent generation, an even taller screen. Now, how do we make this better?
- [42:36]
Host
Steve deeply understood the psychological principles that influenced people. He knew exactly what persuaded people and what convinced people. And he adopted several of these principles in his work, not just in his keynote presentations, but in the advertising he commissioned for Apple. One of the principles he used was the halo effect. The halo effect is a bias that all of us have. It means that if we have positive associations with a person, we'll often have positive associations with the things that person is associated with. So if you like George Clooney, you'll be more inclined to try the coffee he's promoting and you might even say it tastes better once you know he's promoted it. Thorndike, an American psychologist, discovered the halo effect way back in 1920. His study revealed that employers would rank attractive people as more competent in their job. Their appearance, including how attractive and well groomed they were, would influence how competent the employer presumed them to be. Their attractiveness gave them a metaphoric halo. This same effect happens in school too. A study By Hurry and McDavid found that teachers perceptions of students changed based on the attractiveness of their first name. Overall, the study found that essays with names that were associated with positive stereotypes received higher grades. I tested the halo effect for myself on this very podcast, nudge. I gathered 200 people and asked them if they would listen to my podcast. One half of the participants saw my podcast logo. When they were asked so they saw the logo and I asked, would you listen to this podcast? The other half saw my logo alongside a bunch of other very popular podcasts. I asked the same question, would you listen to this podcast? But my logo was with other popular podcasts. I wanted to see if merely being in the presence of other popular podcasts would boost the likelihood that people would listen to Nudge. And it turns out people were three times more likely to listen to Nudge podcast when it was pictured alongside other well known shows. Steve Jobs knew the power of the halo effect. He knew that Successful, courageous, admirable people had this halo effect. And he wanted to associate his brand, Apple, with those people. So he did so in one of the best performing campaigns of all time, the Think different campaign.
- [45:10]
Steve Jobs
Here's to the crazy ones, the misfits, the rebels, the troublemakers.
- [45:19]
Host
Steve Jobs cried when he first saw this ad. He loved it. He called it complete purity. It pictures some of the world's greatest individuals, the likes of Gandhi, Einstein, John Lennon, Picasso. These are risk takers, entrepreneurs, innovators. The advert linked these people with Apple. It said, these great people, they're like Apple, they think different. It's classic halo effect. Because we have positive associations with these great people, we associate those positive feelings with Apple. And it worked. The campaign saved Apple from bankruptcy and propelled them to success. Genius, because the people who are crazy.
- [46:03]
Steve Jobs
Enough to think they can change the.
- [46:05]
Host
World are the ones who do. The ad won the 1998 Emmy for Best Commercial and the 2000 Grand Eiffel Award for the most effective campaign in America. It marked the re emergence of Apple as a global powerhouse and reversed Apple's decline in market share. The slogan behind the campaign, Think different is so successful that as of 2020, it is still printed on the back of the imac box. It's no wonder Steve loved it. He understood the power of the halo effect. He knew that by associating Apple with these greats, it would boost people's perception of Apple, just like it boost the perceived value of my podcast with the test I ran. There's even more behavioral science packed into this though. If you look at the slogan, you'll notice something interesting about it. Think Different. Now, this slogan is more memorable than a normal slogan. But why? Why is it more memorable? Well, it's because it sounds strange on purpose. In the book read 10 lessons for writing Great Copy, the authors suggest that Apple purposefully used the sort of poorly written slogan Think different rather than the more appropriate Think differently. Because the weird version, the think different version, is just more memorable. Twisting the language just a little makes the slogan stand out and stick in the mind. It's the same reason why Alexander the Meerkat in the UK says Simples, not simple and why 7up promoted itself as the uncola standing out increases memorability. Steve uses this principle with the Think different campaign and later in his career with the imac launch. During the keynote for the imac launch, Steve loaded up a slide containing a picture of all the current desktops on the market.
- [47:59]
Steve Jobs
Now, what should it be? Well, we went out and we looked at all of the consumer products out there, this is a picture of one of the better ones. And we noticed some things about them pretty much universally. The first is they're really slow. They're very slow. They're all using last year's process. Second is they've all got pretty crummy displays on them. They're generally 13 inch, a few 14 inch, and the quality of them is very poor. And these things are ugly.
- [48:29]
Host
So distinct imagery stands out in our minds. This is known as the von Restroth effect. Her research shows that numbers are 30 times more memorable when placed alongside letters in a memory test. Almost 100 years after her research was conducted, Richard Shotton replicated the research, this time finding that one brand from a different category, say fast food, is four times more memorable when placed alongside multiple brands from one category, say the automotive industry. Standing out increases memorability. And Steve applied this effect with the imac. On screen was a picture of all the existing desktops on the market. All gray and all ugly, according to Steve. Then on stage, he whipped off a black cloth to reveal the imac, and it had this distinct curved design and a distinctive blue case. This is the 1998 edition of the imac, and it helped change the trajectory of Apple, finally returning the company to profits after years of decline. Much of that is down to its technological capacity. But Steve understood that that alone isn't enough to persuade buyers they'll need to remember the imac. And to make them remember it, it'll need to stand out in comparison to its competitors. So he designed the iMac with seven distinct colors. Green, yellow, orange, pink, purple, blue, and silver. Most technically minded CEOs would laugh at this. Why would you bother? Surely it's what's inside that counts. But Steve knew that that wasn't the case. All too often, psychological innovations have the same impact as technological innovations. An initial reference point can influence our subsequent purchase decisions. And no one, I think, knew this more than Steve Jobs. Here's how Steve Jobs used anchoring to launch the ipod. Now remember, the ipod was expensive, much more expensive than traditional MP3s. So to make it seem like better value, he created a new anchor. Not the price of the MP3 player, but the price per song.
- [50:38]
Steve Jobs
You can buy a MP3 CD player or you can buy a hard disk based jukebox player. These are the four choices for portable music right now. So let's take a look at each one of those. A CD player costs about $75, holds 10 to 15 songs. On a CD, that's about $5 a song. You go buy a flash player, pay about double that. About $150 holds the same 10 to 15 songs, or about $10 a song. You can go buy an MP3 CD player and an MP3 CD which you can burn on your computer, costs about $150, but holds 150 songs. You get down to a dollar a song. Or you can go buy a hard drive jukebox player for about $300. It holds about 1,000 songs and cost about 30 cents a song. So we looked at this and studied all these and that's where we want to be. And we are introducing a product today that takes us exactly there. And that product is called ipod.
- [51:37]
Host
The iPod cost $399. The normal price of an MP3 at the time was $150. The iPod was more than double that. Usually this would kill a new product. No one can charge two times more and expect to capture more than 50% market share. But that's what Steve did because he set a new price anchor price per song. The iPod cost $250 more than an MP3, but per song it was 60% cheaper. It's a genius bit of anchoring by Steve, which has been copied by dozens of other brands, most famously nespresso capsules. These RRP at 50 cents per capsule. That's insanely expensive for a cup of coffee at home, especially when you compare to ground coffee or instant coffee. In most cases, that is 10 times more expensive to your other at home coffee brands. But Nespresso set a new anchor by comparing themselves to the coffee you'd buy at a cafe. They'd compare themselves to a three dollar coffee at Starbucks. And now Nespresso looks cheap just for a fraction of the cost of what you'd pay at Starbucks. You can get a Nespresso. And that anchoring helped Nespresso capture 34% of the coffee capsule market. Anchoring can be used to change the perception of your price From Gee, that's 2.5 times more expensive to whoa, that's pretty good value. But Steve Jobs doesn't just use anchoring to make the ipod seem like good value. He uses it to highlight how portable the ipod is.
- [53:16]
Steve Jobs
What's so special about ipod here? It's ultra portable. An ibook is really portable, but this is ultra portable. And let me show you what I mean. Ipod is the size of a deck of cards. A deck of cards. It is 2.4 inches wide. It is 4 inches tall. This is tiny. It also only weighs six and a half ounces. That is lighter than most of the cell phones you have in your pockets right now. So this is what's so remarkable about ipod. It is ultra portable.
- [53:53]
Host
Steve could just say it's ultra portable. He could just read out the measurements and announce how much it weighs. He could just take it out of his pocket and show it. But he doesn't. He wants to anchor the audience first. He wants them to truly believe it is ultra portable by comparing it to familiar anchors. So he uses three anchors in that 40 second segment, comparing it to the size of a deck of cards, saying it's more portable than the ibook and saying it's lighter than the cell phone in your pocket. And we know Steve doesn't do this by accident. He knows how powerful anchoring is because he does it time and time again. Just listen to how he launches the ipod Nano in the 2005 keynote.
- [54:36]
Steve Jobs
It's really small. Let me show you how small this is. This thing is thinner than a number two pencil. Thinner than a number two pencil. Now let's go ahead and compare. Compare it to the original ipod. This is the original ipod that also held 1,000 songs in your pocket. The iPod Nano is 80% smaller in volume than the original iPod. 80% smaller means it's 20% of the size. It's one fifth the size of the original ipod that we shipped less than four years ago. Okay, let's compare it to the ipod mini. The ipod mini, an incredibly successful product. The ipod nano is half the thickness. It's 62% smaller by volume. That means it's almost one third the size. Now let's take a look at some competitors, some of their flash products. Here, here's iRiver, 68% smaller. It's one third the size of a competing player that doesn't hold anywhere near the number of songs. Here's another one by a company called creative. I think it's called their zen player. Again, 69% smaller, 1/3 the size. Here's another one. I think this is the Zen neon. 58% smaller, less than half the size.
- [55:55]
Host
You get the picture. Steve loves anchoring, and it's no surprise. It was the best way to help people understand and appreciate the significance of his innovations. During that keynote, Steve mentions a famous line, one that marketers and advertising folks across the globe admirer. A thousand songs in your pocket. Now, I've spoken about this tagline before on the pod and I've talked about why it is so successful. And long story short, it uses everyday language that we all understand. While other competitors were talking about how many gigabytes they had and what their bitrate was, Apple used terms that your grandma would know. A thousand songs in your pocket. I'm not sure how much involvement Steve had with the tagline, but I wouldn't be surprised if he played a part. After all, it's anchoring. And just in case you were still on the fence about how important anchoring was to Steve Jobs, take a listen to this 2010 keynote for the iPad. Nine years after the ipod had launched.
- [56:53]
Steve Jobs
And I am thrilled to announce to you that the iPad pricing starts not at 999, but at cheap $499.
- [57:09]
Host
Did you hear it? Not at $999, but at just $499. That smashing sound, by the way, is a custom animation that Steve asked to be put in on the screen behind him. The $999 price is actually crushed by the actual $499 price. Steve literally crushes his anchor and the crowd goes wild for it. Okay, let's move on from anchoring. I've spent the previous episode and the first part of this episode reviewing Steve Jobs persuasion techniques. And that review obviously wouldn't be complete without taking a look at the iPhone. The iPhone is undoubtedly Steve Jobs greatest success. It is the best selling product of all time. That's right, the best selling product of all time. Over 1 billion have been sold. That is more than double the next best selling product, which is the Harry Potter book series. Now, this doesn't obviously include consumable goods like Coca Cola, but it is still impressive. The iPhone will go down in history, but let's take a look at where it all started. The iPhone announcement keynote. In this keynote, Steve Jobs uses a number of nudges that we've covered so far. He uses the labour illusion.
- [58:23]
Steve Jobs
This is a day I've been looking forward to for two and a half years.
- [58:27]
Host
He also uses anchoring.
- [58:29]
Steve Jobs
And today we're going to show you a software breakthrough, software that's at least five years ahead of what's on any other phone.
- [58:38]
Host
But one of the most interesting persuasion technique he uses is chunking. Simply put, chunking means that people remember grouped information better than individual information. Grouping or chunking as it's known, helps with recall. Now, Steve Jobs had a bit of a problem. The iPhone had hundreds of new features, each of them noteworthy, but each individual feature would be hard to remember. So Steve chunks the core benefits into three categories.
- [59:06]
Steve Jobs
Today we're introducing three revolutionary products of this class. The first one is a Widescreen ipod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device.
- [59:37]
Host
Rather than listing dozens of features, Steve groups them into three categories. This helps people remember the key benefits, and it also triggers the labor illusion. You think, gee, they built three unique products here. But then Steve reveals the twist. These aren't three different products.
- [59:54]
Steve Jobs
Three things. A widescreen ipod with touch controls, a revolutionary mobile phone, and a breakthrough Internet communications device. An ipod, a phone, and an Internet communicator. An ipod, a phone. Are you getting it? These are not three separate devices. This is one device. And we are calling it iPhone today. Today, Apple is going to reinvent the phone.
- [60:39]
Host
If you're trying to persuade someone, don't list every benefit, don't walk through every feature. Group your benefits together. Highlight three unique benefits, and that'll be far persuasive. This tactic of focusing your message on what's really important is a tactic that Steve lived by. He knew that the world was noisy and that most people won't remember 90% of what you say. So you have to be specific, you have to be clear, and you have to be focused. Don't just take my word for it. Here's Steve talking through his approach to marketing.
- [61:12]
Steve Jobs
Marketing is about values. This is a very complicated world. It's a very noisy world. And we're not going to get a chance to get people to remember much about us. No company is. And so we have to be really clear on what we want them to know about us.
- [61:33]
Host
Now, those of you who are familiar with Steve's keynotes will know that I am missing one more thing. Literally one more thing. This is how Steve ended almost all of his keynotes. Holding back one more exciting feature or benefit, saving it till the end. He'd say, oh, just before I go, here's one more thing. He did it with the ipod.
- [61:59]
Steve Jobs
There's just one more thing about the ipod mini, which is it comes in colors. So in addition to silver, we have gold.
- [62:08]
Host
He did it with itunes.
- [62:10]
Steve Jobs
Well, there is one more thing that we're announcing today that you can buy off the itunes music store, and that is TV shows.
- [62:22]
Host
Now, it's how he introduced FaceTime. This is probably my favorite one more thing.
- [62:27]
Steve Jobs
But there is one more thing.
- [62:32]
Host
And.
- [62:32]
Steve Jobs
I think it's better that I just show you. Hey, Johnny.
- [62:41]
Host
And the tradition even continued after Steve Jobs had passed away with Tim Cook introducing Apple music.
- [62:48]
Steve Jobs
One more thing. I'd like to tell you about something that we've been working really hard on and something we are super excited about about today we're announcing Apple Music, the next chapter in music, and I know you are going to love it.
- [63:08]
Host
You'll notice a bit of labor illusion used by Tim Cook there, showing that many of Steve's persuasion techniques are still being used by the folks at Apple today. But what is it about these one more thing endings? Why did Steve insist on them? Well, it's down to the recency bias. The recency bias is a psychological principle that shows how we favour and remember recent events over historical ones. If you give participants a list of things to remember, they are more likely to remember whatever was last on that list. If you give participants a bunch of chocolates that all taste similar and then say this is your last chocolate, they'll rank that last chocolate as the most flavoursome 60% of the time. Even when the taste is identical, we have a strong preference for whatever comes last. It's why a lawyer spends most of her time preparing the closing argument. And it's why good TV shows always leave you on a cliffhanger. Steve knew the power of these final moments. So rather than ending on a whimper and dampening the value of the presentation, Steve would hold one cool feature back right until the end. There's one study from 1993 that highlights why this is so important and perhaps this study inspired Steve. The study is by Nobel laureate Daniel Kahneman. His team exposed a group of students to two particularly uncomfortable experiments, both involving bone chilling cold water. In the first trial, students were asked to hold their hands in an ice bath at 14 centigrade for a total of 16 seconds. In the second trial, they were instructed to plunge their other hand into the very same water for the same duration, but this time keep their hands submerged for an additional 30 seconds while the temperature was raised ever so slightly to 15 degrees. Following these first two trials, the students were given a choice of which condition they would do again if forced. Now, for those of you listening, the answer should seem obvious. Most of you should go for option one. It is shorter, it's only 60 seconds long. That second option is almost identical, but it has 30 extra seconds with your hand kept in the water at 15 degree heat, which is still bone chillingly cold. So we know objectively that the second option is worse. But when asked to repeat the experiment again, most students opted for the second option with a longer amount of time in the water, but a slightly less uncomfortable finish. Kahneman concluded that subjects choose the longer experiment simply because they love the memory of it better than the alternative. This experiment uncovered a fascinating element of our evolved how things end dramatically changes our perception Steve Jobs knew that exciting endings weren't a nice to have. They were vital in changing the perception of the whole event. It's why he ended one of his very first keynotes with a violinist playing a symphony with his next computer. And it's why he added one more thing onto almost all of his Apple keynotes. Steve Jobs knew how to persuade. He systematically applied psychological principles of persuasion across his work. He used it to craft the most persuasive presentations, create memorable marketing, and to motivate his team to do the impossible. Steve is a one of a kind genius, there is no denying that. But what I find interesting is that he still chooses to use these principles. I find this eye opening. You might assume that someone of his intelligence, his genius, just wouldn't bother with this. Why bother trying to persuade someone when everything you create is so great? Yet Steve knew something that all too many of us forget. Most technological innovations won't survive without psychological persuasion. Google Glass, Microsoft, Zune, 3D TV, Concord. These are all impressive technological innovations that failed because they couldn't persuade the masses to use them. And if there's one takeaway from this episode, it's this. If an entrepreneur as wildly successful as Steve Jobs studies and applies and repeatedly uses nudges in his work, then surely the rest of us should too all right folks, that is all for today and it is all for this year of Nudge episodes. I really hope you enjoyed this throwback episode. Many new listeners to the show probably haven't heard it, but even if you have, I think it's just as valuable today as it was two years ago. As I mentioned, this show did very well on YouTube. I post not all, but some of the episodes on YouTube with audio and visuals and animations and lots more. So if you'd like to go back and listen to some of the old episodes, you might actually enjoy watching them back on YouTube. Just search for nudge podcast. That's nudge podcast on YouTube and you'll find the channel there. If you want more nudge, please do consider subscribing to the newsletter. Each week I spend 18 hours scouring marketing psychology research and translating it into a really easy to read Friday newsletter. The newsletter has grown really rather dramatically in popularity this year. It's grown by four times. So with all the new followers, I'm going to be spending even more time creating the very best newsletter I can create on behavioral science next year. So if you'd like to subscribe, just head to nudgepodcast.com and click Newsletter in the menu. Finally, I want to end the year with a massive thank you. Thank you to you for listening and supporting Nudge you tuning in and listening well. It allows me to have really great fun creating these episodes and you've genuinely given me the best job I could ever do, I could ever dream of. I love doing this job and so thank you for supporting the show. I greatly, greatly appreciate it. Okay, thank you again. Happy New Year. I'll see you all in 2025. Cheers.