Published in the San Diego Union-Tribune, July 9, 2018
I watch the news at 6 p.m. most nights (I will not reveal the channel), and I am struck by the advertising that runs at that time. Almost all of the ads are for some medical treatment, a drug that you should take for the disease you have, and the last half of the ad is filled with all of the possible disasters that can strike you, the disclaimers that tell you the side effects, including but not limited to dropping dead right there at the kitchen sink. And then at the very end of the ad, they want you to consult with your physician before beginning this medication.
Imagine calling your doctor and telling him about an advertisement you saw for a drug and what does he think about you beginning to take it. I am astounded by this advertising. But it works. Otherwise big pharma companies would not spend the money — $2.4 billion was spent on this kind of advertising in 2016.
Now here is the dirty little secret. Those severe warnings, dire predictions and danger — beware this is not good for your health — words don’t really work, according to professor Leslie John of Harvard Business School. In other words, the verbal disclaimer has little to no effect. People tune it out.
The images the drug ads usually show are beautiful people having fun and enjoying life. Smiles and hints of romance. Those images are in direct contrast to the words that tell you about the risks. So what John has shown in her study is what we already know — the image, the picture, the thing itself has vastly more impact than the words of caution.
John says that if you want to change behavior, the thing that really works is graphic pictures. Showing a distended stomach is more effective than telling me how many calories are in a soda and that I should not drink so much of it.
The nuance in this research is why do people ignore warnings. They are clearly printed and presented. The highway sign says slow down, but we don’t, and when there is a crash, we come to a crawl and look over to see the accident. In my line of work, this all comes back to measuring risk. You can’t see black ice, but that doesn’t mean it isn’t there on the bridge.
I recently had a very tough negotiation. I was being extorted (in my opinion) with a gun to my head. I was not sure it was loaded, and my assessment was that there was only a 15 percent chance that the threat would be carried out. So the odds were good that I could call their bluff. But stay with me; 15 percent against me is not zero. The odds were not zero, and we all know about the Black Swan, and the downside of holding to principle, of not negotiating with terrorists, of standing up for decency and honesty and fair play. What if I was wrong and the deal cratered over a couple of points — points that in the end might prove to be worthless anyway? The cost to cave was measured against the certainty that the company would soldier on with a chance at greatness. I made a calculation and held my nose. It happens all the time, and I am not so certain that the smell is all that bad.
A similar negotiation (this was a very interesting week) took place when a co-founder felt slighted, wanted more equity, felt marginalized. Of course with those feelings came the implicit threat that if you don’t give me some acknowledgment, I can potentially cause trouble for the company. In this case I was reasonably sure that the threat was an idle one, but I thought about dilution (and delusion), and I gave up some of my equity to calm the waters. Risk and reward, like Scylla and Charybdis, are the twin sea monsters who inform all decision making.
In my personal life, I try to hold to the highest standards of principle, decency and equity. In the trenches of a startup, making the deal to calm the seas, living to fight another day and settling/standing in the other person’s shoes — well, everyone has a line they won’t cross. Mine is simple. Will I sleep well at night?
Rule No. 567: Like a baby and I don’t snore.