Predicting investment trends by seeing the world through consumers’ eyes
Summary
TLDRIn this lecture, Marius dicacos, an economist and entrepreneur, delves into the reasons behind the failure of Google Glass, the allure of cell phones, and the success of TikTok over other social media platforms. He shares his journey from a traditional financial analyst to an ethnographic researcher, emphasizing the importance of understanding consumer behavior and cultural values in investment and entrepreneurship. Dicacos illustrates his points with personal anecdotes and insights from his global studies, advocating for a people-first approach in business strategy.
Takeaways
- 🎓 The speaker, Marius Dicacos, emphasizes the importance of understanding consumer behavior and personal stories over mere numbers in investment decisions.
- 🔍 Marius shares his journey from a traditional financial analyst to an ethnographic researcher, highlighting the value of firsthand consumer insights for long-term investment strategies.
- 💡 He introduces the concept that people, not companies, dictate trends, urging investors to prioritize understanding consumer perspectives for successful entrepreneurship and innovation.
- 🕵️♂️ Marius spent 13 years conducting ethnographic studies across different cultures, advocating for immersive research to grasp the nuances of consumer behavior.
- 👓 The discussion on Google Glass's failure underscores the importance of consumer feedback in product development, showing that even innovative technology can fail without proper market fit.
- 📱 The analysis of mobile data usage in India reveals cultural insights, such as the use of cell phones as a means of personal space in collective societies.
- 📈 Marius explains the evolution of consumer behavior through the lens of societal development, using the example of fridges to illustrate the shift from efficiency to indulgence as economies grow.
- 🌐 He discusses the significance of cultural context in consumption patterns, suggesting that understanding these contexts is crucial for predicting market trends and investment opportunities.
- 🤔 Marius challenges the 'build it and they will come' approach to innovation, citing the need for deep consumer engagement to ensure a product's success in the market.
- 👥 The speaker introduces Shalom Schwartz's values framework to understand the dynamics of societal values and their impact on consumer behavior and decision-making.
- 🚀 Marius concludes with advice for entrepreneurs, emphasizing the importance of empathy, endurance, excellence, and managing expectations for long-term success.
Q & A
Who is the speaker of the lecture and what is his background?
-The speaker is Marius Dicacos, an economist with a distinguished career in financial and investment analysis. He studied at Cambridge University and has recently moved into entrepreneurship, creating an investment firm.
What are the three main questions the speaker aims to address in his lecture?
-The speaker aims to address why Google Glass failed, why people spend so much time on their cell phones, and why TikTok succeeded when other Facebook challengers failed.
What significant change in perspective did the speaker experience after meeting a psychologist and a social anthropologist?
-The speaker realized that his methodology, which relied on speaking to companies for information, was incomplete. He learned that people dictate trends, not companies, and to be a long-term investor, one needs to account for people and speak to them first.
How does the speaker describe his ethnographic studies and what do they involve?
-The speaker describes his ethnographic studies as a structured methodology involving six months of planning before meeting people in their homes. It includes understanding their lives, sitting with them, sharing food and drink, and sometimes even sleeping on their floors to collect their life stories.
Why did Google Glass fail according to the speaker?
-Google Glass failed because it did not consider consumer feedback and concerns about privacy. It was seen as an isolating technology rather than a connecting one, which did not align with consumer preferences.
What is the speaker's view on the importance of understanding cultural context and values in investment decisions?
-The speaker believes that understanding cultural context and values is crucial in making informed investment decisions. Culture and values are the invisible hand that influences behavior and consumption patterns.
How does the speaker explain the shift in values over time in society?
-The speaker uses a framework by psychologist Shalom H. Schwartz, which categorizes values into four quadrants. Values shift gradually through societies and can be understood by how they get re-prioritized within these quadrants.
What is the significance of the speaker's study on refrigerators in understanding consumer behavior and investment opportunities?
-The study on refrigerators helps the speaker predict consumption patterns across different socio-economic groups. It provides insights into the evolution of consumer needs and wants, which can guide investment decisions in various sectors like food and beverage.
Why does the speaker believe that cell phone usage is high in India among millennials?
-The speaker believes that in collective societies like India, where family is always around, the cell phone provides a sense of personal space and an escape, allowing for personal time which is otherwise limited.
What advice does the speaker give for success in entrepreneurship?
-The speaker advises focusing on empathy, endurance, and excellence while minimizing expectations. He emphasizes the importance of understanding and feeling what others are experiencing, working hard without complaining, striving for excellence in all endeavors, and managing expectations to avoid disappointment.
Outlines
🎓 Introduction to the Lecture Series on Innovation and Entrepreneurship
The speaker, Marius dicacos, introduces himself as the chairman of the Council of Entrepreneurship University and sets the stage for a lecture series on innovation and entrepreneurship. He mentions his distinguished career in financial and investment analysis and his transition to entrepreneurship. The lecture aims to address three key questions related to the failure of Google Glass, the allure of cell phones, and the success of Tick Tock. Marius promises a unique perspective on these topics, suggesting that understanding these cases can provide insights into broader societal and investment trends.
🔍 The Shift to People-Centric Investment Analysis
Marius dicacos recounts his career shift from a top analyst at a traditional investment firm to an investor running funds. He emphasizes the importance of understanding people's lives and stories over mere numbers in investment decisions. This change in perspective was prompted by a conversation with a psychologist and a social anthropologist who pointed out the limitations of company-centric analysis. Marius has since conducted ethnographic studies across various emerging markets to gain insights into consumer behavior and market trends.
🌏 Ethnographic Research and its Impact on Investment Insights
The speaker describes his ethnographic research methodology, which involves spending time in diverse locations to understand people's lives deeply. He shares examples of his studies, such as visiting the slums of Mumbai and interacting with social influencers in Brazil. Marius explains how immersing himself in different cultures has provided him with a more profound understanding of consumer behavior and market trends, which has been valuable for making informed investment decisions.
🚀 The Evolution of Consumer Behavior and its Influence on Innovation
Marius dicacos discusses the evolution of consumer behavior, particularly focusing on the use of mobile data in India and the cultural significance of family and personal space. He explores the concept of time and its impact on consumer choices, using the example of the fridge's role in various socio-economic groups. Marius suggests that understanding these cultural and behavioral nuances is crucial for predicting market trends and making successful investments.
📱 Understanding the Cultural Context of Mobile Data Usage in India
The speaker delves into the reasons behind high mobile data usage in India, attributing it to the collective nature of Indian society and the desire for personal space. He contrasts this with individualistic societies and discusses the implications for businesses and investors. Marius emphasizes the importance of recognizing cultural contexts to make sense of consumer behavior and to identify investment opportunities.
🌐 The Role of Cultural Values in Shaping Consumer Trends
Marius dicacos introduces a framework by psychologist Shalom H. Schwartz to understand how values shift and reprioritize within societies. He discusses the impact of cultural values on consumer trends and behaviors, using the example of fast food consumption across different socio-economic groups. Marius illustrates how understanding these value shifts can help predict and capitalize on emerging market trends.
👥 The Impact of Socio-Economic Status on Travel Behavior
The speaker explores how socio-economic status influences travel behavior, using the evolution of travel albums as a metaphor. He discusses the different motivations and preferences of travelers from conservative to creative and curious values, and the implications for the travel and tourism industry. Marius suggests that understanding these value-driven behaviors can inform investment decisions in the sector.
📈 The Success of Tick Tock and the Changing Social Media Landscape
Marius dicacos examines the success of Tick Tock, attributing it to the platform's ability to offer a new and engaging user experience that differentiates it from Facebook. He discusses the importance of innovation and the need for companies to adapt to changing consumer values and behaviors. The speaker also touches on the unpredictability of success in the tech industry and the importance of managing expectations.
🛠 Keys to Entrepreneurial Success: Empathy, Endurance, and Excellence
In the final part of the lecture, Marius dicacos outlines the key attributes for entrepreneurial success, emphasizing empathy, endurance, and excellence. He argues against the common narrative of overnight success and instead promotes a mindset of hard work, continuous learning, and the ability to manage expectations. Marius shares anecdotes and examples to illustrate the importance of these qualities in the world of business and investment.
🤔 Reflections on Investment Decisions and the Role of Expectation Management
The speaker concludes the lecture with a personal anecdote about an investment in a social media company that faced unexpected geopolitical challenges, leading to a significant shift in its valuation. Marius dicacos reflects on the importance of managing expectations in investment decisions and the need to adapt to unforeseen circumstances. He encourages investors to maintain a realistic outlook and to be prepared for the ups and downs of the market.
Mindmap
Keywords
💡Innovation
💡Entrepreneurship
💡Ethnographic Studies
💡Consumer Feedback
💡Market Trends
💡Investment Analysis
💡Cultural Context
💡Values Shift
💡Emerging Markets
💡Social Media Platforms
💡Expectation Management
Highlights
Introduction of Marius dicacos, chairman of the Council of Entrepreneurship University, and his distinguished career in financial and investment analysis.
The speaker's transition from investment analysis to entrepreneurship and his unique approach to understanding consumer behavior through ethnographic studies.
The importance of understanding people's stories and how they influence market trends and investment decisions.
The failure of Google Glass and the significance of consumer feedback in product development.
The role of ethnographic research in Google's understanding of consumer behavior and its impact on their business strategy.
The myth of Henry Ford and the faster horses, illustrating the misconception that innovation is about building without consumer input.
The story of Alfred P. Sloan Jr. and General Motors, emphasizing the importance of consumer feedback in shaping successful business strategies.
The impact of cultural context and values on consumer behavior and the need for businesses to adapt to these factors.
The speaker's framework for understanding cultural values and their influence on consumer choices, such as the example of the fridge in different socio-economic groups.
The evolution of the fridge as a status symbol and its reflection of a society's values and economic status.
The use of mobile data in India and the cultural reasons behind the high data consumption among millennials.
The role of personal space and privacy in the context of collective societies and the use of mobile phones as an escape.
The importance of understanding 'why' behind consumer trends and the pitfalls of investing without this understanding.
The speaker's experience with predicting consumer behavior and the investment opportunities presented by understanding cultural shifts.
The concept of 'modernization without westernization' and its impact on consumer preferences in emerging markets.
The success of TikTok and its alignment with emerging consumer values and behaviors, contrasting with traditional social media platforms.
The four key attributes for success in entrepreneurship: empathy, endurance, excellence, and managing expectations.
The Stockdale Paradox and its application to entrepreneurship, emphasizing the importance of perseverance and realistic expectations.
Transcripts
so let's start good afternoon everyone
welcome to the series of lectures in
Innovation entrepreneurship
my name is Marius dicacos I'm the
chairman of the Council of
Entrepreneurship University
yes I did the initial election for those
of you that remember me
so today we have the the pleasure and
the honor to have with us
who is an economist
he studied at Cambridge University he
has a long and distinguished career in
financial and investment analysis and
recently not so recently he he moved to
entrepreneurship so he has created the
investment
firm and he's going to talk us about his
experiences so thank you thank you very
much for those of you who came here to
see an economics lecture you will be
grossly disappointed so I'm here when I
answer three questions why did Google
Glass fail
why do people like to spend so much time
on their cell phones and third why did
Tick Tock succeed
when all these Facebook Challengers
failed and I'm gonna try and give you a
very different perspective and when I
show you that I'm hoping that I will get
you to see the investment World in a
different way entrepreneurship in a
different way and it will also help you
understand which of your personal
relationships are likely to fail who of
your friends is likely to get divorced
next so it's going to be a very
different lecture than what I would have
thought I would have given maybe 20
years ago so I'm gonna go back 18 years
uh to 2004. now I had reached the high
point of my career that far I had worked
for uh 12 years and I made it to the
cover of this traditional investor which
is the most accredited well-known uh
magazine which does a survey and I was a
top analyst not only my sector but for
the whole of Europe
and I have spent 12 years of my life
analyzing companies trying to understand
the risk trying to understand what's
priced in by the stock market
and
the talk I'm giving today is a very
different perspective how did I get to
this different perspective two years
after this uh this picture was taken I
moved from Credit Suisse which is a big
Investment Bank
to be an investor and start running
funds and by the end of 2008 I was
managing about 5 billion US dollars in
in funds so you can imagine my surprise
when some stage in 2009 I met a
psychologist and a social Anthropologist
who had never met a portfolio manager
before so she asked me to explain what I
did and when I finished explaining she
turned around and said this is
fascinating but this flood is incomplete
so um when I tell the story now I
pretend that I was very receptive and I
really was constructed but I was like
what do you know who I think I am I'm
really important you don't understand
what I do but actually she had a point
she argued that
all my methodology that we follow as
economies as investment people relies on
speaking to companies the companies are
the for the source of information and
actually people dictate Trends not
companies and if you want to be a
long-term investor you need to account
for people you need to speak to the
People First
so for me that was a big change and it
caught me on this big Journey so since
2010 over the last 13 years I have
traveled from the slums of Lagos to the
middle class homes in Medellin in
Colombia through drug trafficking
villages in Mexico to the grasslands of
inner Mongolia they were growing cities
of China through rural India and 15
different Emerging Markets have done 27
major ethnographic studies where I go to
people's homes trying to understand
their their lives sit with them share
the food share their drink and sometimes
I even had to sleep on their floors
and with that I've realized that
it's more than numbers that you have to
work on and with that I became a
collector of people's stories and where
numbers told me what was happening
people's story explained to me why
things are happening and showed me a
path to the Future
this is what a typical ethnographic
study looks like here I mean the slums
in the in Mumbai this is from a few
months ago I'm speaking to a social
influencer
in in a favela in Salvador in Brazil and
it's a very structured uh structured way
that you go about in doing a ethnography
and with that I'd like to finish sorry
I'm just joking we're just starting so
um
so they start going back this is where
the sonography looks like so it's a very
structured methodology it takes about
six months of planning before you go to
the ground to meet people in their homes
like for the example these women sneha
on the left she is a low in comparison
um and we want to plan together
presentative sample of Indian youth they
say it's not enough to go and meet
somebody who goes to University somebody
who has Rich parents you need to meet
also she works she lives in the slums
her father is a driver her mother is a
maid and she also works part-time to put
herself through University so that's how
you get represented across section and
we have very open-ended discussions with
them I sometimes follow them where they
go to meet their friends in the cafe
sometimes I give them money and go to
the supermarket to see what they would
they would they would buy
and this is a study I'm about to start
on Monday and uh I am flying to I'm
starting from Goa and we're meeting with
people I'm going down to Karnataka and
traveling around Karnataka State and I
want to study the lives of migrants and
to understand the lives of migrants
so to the center type of microns
is and here is a problem I struggle
sometimes with investment people you
know you want to speak to one of my
Indian analysts and they say yes I know
Indian people you know I know they're
low income people have a mate who were
who is low income but by having a maid
who is low income it doesn't mean you
understand here you understand her hopes
her dreams her aspirations so for me to
understand these migrants what I'm
planning to do I'm going to spend four
days in a coffee plantation I will work
with the migrants I will go and pick
coffee I will sit with them I will eat
with them and I will collect their life
stories and um and I have to admit I'm a
bit nervous because I did another study
before where I went to rural India to
understand about the risk to their lives
and they have snakes that bite and they
kill you within half an hour so I'm a
bit nervous about that and that's the
type of research that you have to do so
with this I'm gonna I'm going to
have these three questions do you have
in three Innovation gifted Visionaries
or is this from consumer feedback so my
first question Google Glass who knows
what Google Glass is
excellent
I would love anybody to tell me why they
failed because Google Glass was an
amazing Innovative technology we have
seen that still is being used in
industry they did this amazing hype
launch they got their these media and
influencers you have there King Charles
Prince Charles in the old day and
they seem to have been doing everything
right why did this thing fail
is this an audience that speaks anybody
who is brave enough to shout why do you
think it failed
oh perhaps it wasn't fit for the market
maybe the demand assessment wasn't
careful enough that's actually a very
valid valid reason demand because they
did not speak to the consumer so what
happened with Google Glass they were
they were not allowing in the
restaurants concerns about privacy and
they were they'll probably killed them
you were a glass hole if you were the
Google Glass but imagine it from from
somebody's perspective if I were a
Google Glass I will have a phone like
this in my face and you're talking to me
how am I connecting with you and
responding and people want to connect
with other people so maybe it works for
industry but it doesn't work for for
these consumers I have to tell you when
I started doing this ethnographic
research which I've been doing now for
the 13 years the number one user of this
data used to be people like Proctor and
Gumball it used to be Unilever Nestle
and now the biggest user of data of this
ethnographic search is actually Google
Google has every algorithm that you can
imagine on the planet they collect if
you're talking about Big Data the
biggest data says that you can imagine
but they still need to get inside
people's heads to understand why things
are happening so after this event Google
had changed their attitude so I go back
to this quote that started me on this
journey from 2009. the company does not
dictate the trends consumer to pay the
trust and the companies have to get it
right or get it wrong and Google got it
wrong had they done proper work with the
consumers they would have seen a
different Vision now the biggest
pushback I get on this is the following
if I had asked people what they wanted
they would have said they wanted fastest
faster horses Henry Ford about the
fourth Model T
now
there is no evidence that actually Henry
Ford ever said this which is the most
coded
thing from Henry Ford coming out
actually
he did say that you can have any model
of the four Model T you wanted as long
as it's black so he actually did not
care much about what consumers thought
he produced the car and he was grossly
successful and therefore there is this
image that
if you want to innovate you build it and
people will come
here is another point though who in this
room has heard of Alfred P Sloan Jr
you have not heard of him
no okay there's a key was he wrote this
amazing book he was the head of General
Motors from the 20s on work and after it
was when I was a consultant in the 90s
and when I worked with CEOs and they
were new in their job I always gave them
this book as a gift I think is the best
management book there there is about his
travel and he has a really great vision
on looking from the consumer side so
what did Alfred peace loan did to Henry
Ford he went and spoke to Consumers and
consumers said to him uh we what will
change every year we want car that we
can afford we want to be able to trade
in our car
and all of a sudden you see this tagline
a car for every person every person ever
every purpose so when you hear this code
that you know it he would have given the
Faster Horses
4 19 20 65 market share by 1927 15. the
biggest distraction of market share they
were the leaders they got killed in 1927
they would tried to bring out the Ford
Model A too late the other guys were
already connecting with their consumers
they never caught up caught up with them
so in my head I was asked this question
why though did people want a car what
would have happened if they had that
ethnographic studies like I do and go to
Consumers home and my beliefs are
probably the people wouldn't have told
him they want to Faster Horses they
would have said we want faster and
cheaper horses that's what they would
have asked for and why does that happen
and I believe the reason is because of
the construct of time
so a car ultimately is a time saving
device
and there is a great book about the
geography of time when they looked at
different cultures and the concept of
time and they did the following three
tests they were in different cities in
different countries and then and they
measure how fast somebody walks 20
meters in the street 60 feet so they
made sure different times of the day the
person had to walk alone they went and
they gave five dollars to buy a stamp
and time how quickly it took to get this
transaction get the money back and then
finally the time accuracy of clocks in
different bags and based on that they
came up with three conclusions
the degree of urbanization and
industrialization changes the speed
people move and if you're working in a
rural area you move slower weather
affects you colder climates work faster
than warm climates and I'm not talking
about so much of the culture even
individual people when they are somebody
on warm weather how long does it take to
to tell me when it's 60 seconds have
passed they get it pretty accurately and
then you ask that person the same person
during winter and he thinks that 50
seconds at the minute has passed so the
construct of time effect is affected by
the weather and then individualistic
versus Collective societies which I'm
going to talk about further down the
line but let's first focus on
industrialization because this affects
Emerging Markets where I spent a lot of
my time these for me surprises me
because I can't understand why somebody
working in a rural area will move slower
because they are as busy apparently as
the people in the big cities when I
speak to my father he tells me that his
father who was a farmer used to work
like a slave when I asked him how many
days he didn't work he says to me none
he used to work 380 days in a year now
this doesn't match with what I find when
I'm doing as a graphic studies in
Emerging Markets so my I think my father
is not telling completely the truth I'll
give you an example this is British who
lives in rural Maharashtra and I met him
in Pune when he was in his village he is
he's he doesn't own any love he just
works in other people's lands and it's
him that's his mother with his father he
has a wife and a young daughter
they could there is a drought they only
worked about half days in a year that's
the productivity that this man has and
they could not even get two regular
meals a day
so pre uh so what British did he moved
to the city so he works when I met he
was working as a guard at the school and
then he had a rick show which is this I
don't know if you've seen them these two
like taxes with the three-wheelers he
would drive it and then when he was
working as a guard his father would
drive it his father also worked as a
waiter his mother worked as a maid and
she started this this restaurant table
of little don't see all the restaurant
imagine it like I might throw a kitchen
where she cooks for students who are in
a boarding school and his wife also
worked so imaginely you have this family
moving from a village to a city their
income increased tenfold tenfold that
means these people start imagining a
future where they can provide Better
Health Care education even some
Financial Security for their kids and
still aspiring for more and better and
with that these people now their value
of their time changes and they need
efficiency devices so this woman sortie
she was a beautician she worked out of
her home she bought one day a fridge by
having a fridge she could work three
hours more a day that means she could do
more customers than with that money she
bought a motorcycle and instead of
servicing people in the low income area
that she she lives she could go now with
a motorcycle in more in more affluent
areas and get more customers
so
what happens when people get their first
fridge
the first fridge is an efficiency device
people use it to store ingredients
leftover food or pre-cooked food
that's what saved them the three hours
when you become middle class you start
indulging yourself and your family you
store in your fridge soft Peas the soft
drinks beer butter ice cream wine and
then when you become affluent you want
to live out forever that's what the rich
want to do and it's a piece of
immortality it's fat free everything you
know probiotics diet diet food
so we can look at the evolution of
fridges in this Emerging Market from the
various socio-economic across various
socio-economic groups so you can see for
example in the Assad efficiency stage
China has an Indulgence Brazil is at the
health stage now India is going to enter
the refrigeration is going to exceed
about 50 in about three years and it
will enter an indulgent phase in three
years
that doesn't mean their fridge will look
like the middle class Chinese fridge but
I have pictures of the Indian fridges of
every socioeconomy group so I can
predict what they will be consuming more
of so when I look at it I can see a lot
more ice cream probiotics yogurt a lot
of dairy based products so when I think
about about Investments then I can go
and look for data look at from the
forest to the richest India that in
wheat what goes from 1 to 1.8 so the
reaches India had it only 80 percent
more wheat when they get rich rice one
to one point nine look at now Dairy what
happens to it 13-fold in rural areas
goes almost 20 fold so you can see what
products will benefit the most
now I'm gonna do a little parenthesis
and check my time I don't overrun
um I did this I did this research on the
on the fridges and um I wrote an article
about the woman who told me that a
fridge would change her life and it was
a very heartwarming story I wrote it
before Christmas in 2013 and I published
in the financial times and it was voted
there no it wasn't it was the eighth
most read uh blog in the financial times
in 2013. so in in 2014 The Economist
came and said what goes in a person's
fridge when they buy a fridge and I said
I've done this amazing analysis I've
analyzed all these fridges I'll give it
to you I've written this article but
I'll give it to you
um and um at the published it I think I
can't even remember
something cool developments or something
like that it was some catchy title the
economy is published as this article in
in May 2014 and at the beginning of 2015
the BBC comes to see me in my office and
I when I went to sit down with them to
see what they wanted they were four
people and they asked me are you the
father of free genomics so one day
university courses will be teaching free
genomics next to economics and I am the
one who started taking all these
pictures of all these uh of all these
fridges
so I want to go to the second question
the use of data mobile data why is it so
high for India it was a question I want
to answer and if you look at the data
usage I basically pay for 12 Giga
Mountain I use one and this guy go from
5 to 17 and we thought you know they
don't have Broadband a million excuses
so we went and did this study of
millennial youth in 2018 I spent
probably about two weeks studying 32
people's life in a lot of of detail
and what it came to realize is that
if you're a collective Society like
India you spend a lot of time with your
family the family is all around you you
don't have any personal time and the
cell phone is an escape it allows you
personal space that's how they see it so
the personal space comes by sitting on
their cell phone in a personal space
that comes also by going to a cafe even
to be alone or to be with friends it's a
search of of of of some privacy and um
and that told me economics changes in
the way I think about when we look at
the at my kids at home and there is a
very interesting study by Jonathan High
which looks at the age when
kids are left unattended to go outside
so just to wake everybody up I'm going
to ask you this question okay
who was allowed to go with nobody
watching them actually it's too risky
for a group I'll ask it anyway
who was allowed to go out unattended
from the age 12 onwards
okay
who was allowed to go from the age of
five or what
okay so let me tell you what the study
shows study of Jonathan Hyde said
anybody born before 1995
and you ask this question you were
allowed to roam the street from the air
roughly and attended from five to seven
years old and anybody after 95 generally
that shifted by eight years becomes 13
to 15. so a lot of the time we get
frustrated we used to roam the streets
to be alone a lot of the Escape before
of my kids is the time on their computer
otherwise we are in their face all day
at home asking about don't do homework
now
when I looked at investing in this team
I thought okay these people escape his
cafes we should invest and I have two
potential well I have two Investments
one in Indonesia and one in Latin
America or Starbucks but both also own
fast food and the question I have in my
head is do I want to buy this because
I'm going to end up with fast food is
fast food also a good Trend I should
invest in
and
the most important thing that the
photographers tell you is before you
invest
people we hear somebody tells us what is
happening and we think immediately I
know what's going to happen next a
sonographer tells you never ever invest
unless you understand why something is
happening and here
I don't know
why people are consuming fast food
and now let's understand that why I
cannot make an investment and if I ask
the question why do you think of people
fast food everybody has different
hypotheses so I'm gonna show you the
framework we use
the framework is that you need to
understand the cultural context and this
is the most important thing I'm gonna
talk about today
culture and values are the invisible
hand that make us behave in a certain
way culture is lived it's not
articulated and you will feel it but you
are not able to express it because you
don't have a framework for it
values are not stable they shift
gradually through societies for example
in my father's time the values are very
important in the secret society was hard
work honesty integrity and then all of a
sudden people started talking about
working smart not hard Integrity went
out of the window and then we ended up
with financial crisis kurima Etc and
then people started finding about hard
work again so values are not stable they
are almost sometimes like a ferris wheel
and they shift
for me I have adapted in this work a
framework by a psychologist called
Shalom shorts from Jerusalem University
who said that
if you can understand how values get
repriorities and shift you can explain
political movements changes in
consumption patterns and Trends and I'm
going to explain this model within five
minutes in a very simplified way
so what shorts said is think of it in
four different quadrants
here at the bottom right hand side is a
conservative quadrant think of the
values of your grandmother okay and your
grandparents do not stain the family
name sacrifice yourself for the greater
good of the family here in this
Collective societies you find that the
kids come home and they give their
parents or their grandparents all the
money and then they give them some money
or some of the money back
they the extended family is gonna pull
together to protect you somebody gets
sick in the village who is your relative
you will give your money to them and
they will pull to protect you that's
where your security and that's why you
never break any of their values because
it's like a taboo you will be ostracized
now most of the American markets I I
cover shift from this Collective values
to individualistic and they enter this
competitive quadrant that they're trying
to compete Pete and I'll do each other
through acquisition of status symbols
through grooming education
and that values shift until to this
quadrant where the individual is no
longer trying to compete with others but
they are trying to compete against
themselves so they I want to
continuously learn they want
they want to have Independence or how
they set their time and and uh and
continuous learning Learning Journey
sorry did I move it out
and then
final top right is a higher set of
values where according to short he found
that France and the the better Lex
countries were at the time with
Universalist benevolence where people
care about social justice they care
about the environment
now
very interesting when we look at it from
a political side uh short this is
positioning from the 1990s from his
studies the United States was firmly in
that core quadrant and what short and
what happened is uh September 11
happened and while you started to
conserve this it started shifting this
way and Trump is an outcome that
happened uh I out of September 11.
now for me one interesting thing that
sure says is that values in the opposite
quadrant contradict each other and I'll
give you a very simple example I used to
work for a big asset manager and we used
to say we are relentlessly competitive
of this quadrant
okay we're collaborative
short said this is
you cannot be collaborative and
competitive at the same time competition
kills collaboration so in our firm we
try to stifle that because we need to be
collaborative a photography is a
collaborative process the same thing you
know Japan never achieved what they
could really achieve this quadrant
because they're very traditional not
because they buy all the time and how
the angles that you have to bow but you
have 12 I became to power that had 12
percent of women in my Nigerian
positions he said he was going to make
it to therapy and he failed abroad the
targets down
now
I said at the beginning I'm going to use
this model I'm going to explain to you
to predict which relationships are
destined to fail and who which of your
friends is going to get divorced next
I'll give you a simple example I have a
friend he is very family in this
quadrant he lives and he works in a band
he drives a Porsche he's a very flashy
guy and couldn't entertain amazing nice
guy his wife is a film director she
travels around poor areas and does
social justice videos the two values are
opposite each other so for every single
when he wants to buy a Porsche she wants
to
you know bashed his head on the wall and
when she talks about the people in the
Islams and the social justice she he
gets so annoyed with his
self-righteousness and she he gets on
his nerves so one night we were having a
few too many drinks and said to him you
know you realize that when he was
complaining and like his wife doesn't
understand me I said you know you're
going to get divorced in the next five
years and within three years he got
divorced but the worst thing was that he
went to his wife and said tazos told me
we would get divorced you never
understand me you know what I said so
she stopped talking to me yeah but so
people in this opposite it doesn't it
doesn't work so many times when if your
friends come and say oh I broke up with
her or him and there were horrible they
were this they were never horrible
excited they were here you're here and
you started working together and any an
alignment of values and beliefs is core
to any long-term partnership whether
this is a business relationship whether
it's a marriage or a commercial
relationship it's really important and I
don't believe you can never move away
from being acquaintances to real friends
unless you really understand the other
person's values and where these people
are coming are coming from so I did this
long
a side track because I want to show you
about fast food and the question so when
I I looked and I I looked at fast food
consumption and food consumption in
general by socioeconomic group let me
tell you how it works when you're
conservative you basically eat at home
and you have guests at home the men go
outside they would cook a souvla these
are the women they eat they cook and
gossip the men cooking because if they
drink beer and the two are separated
right then what happens when you become
competitive you start catering and if
your cousin catered you know this food
from this really good Chef you're gonna
cater from a sushi restaurant and they
will get upset and they were gonna cater
next time for me Vietnamese and they try
to outdo each other fast food a lot of
fuel Emerging Markets don't really like
it they're not used to it so in
Indonesia they tell me they don't eat
beef they eat twice a year so do they
like McDonald's no but it's a bunch they
put on their shoulder to brag to their
friends that you know I went to it goes
to the village and said I ate McDonald's
it was these you know this clown biting
and these flavors burst in my mouth it
was amazing and you know it's just that
is it's a sign of competitivity I give
you I think about this okay I went for
coffee today to where did I go to brew
bro I want to brew is a badge on my
shoulder and the next guy comes and says
yes but I go to collaborative another
badge on the shoulder and we all go yes
but blue is better done because I have
better taste I know I don't like it so
all these are indications of the values
where you are now what happens when you
people move to the Squadron there they
find little places flavors from their
own country that try to explore
different countries Cuisine they will
eat you know Vietnamese food and read
about Vietnam and they want to have
different different things from the
culture and understand it
now
I'm going to give you one more example
when you go
to people's home I asked to look at
their albums for the last 30 years and
the albums look like something like this
they visited their grandparents to go to
their home towns of crowded trains and
now they become tourists with their
friends they go by plane
I'm gonna make a hypothesis who knows
what what two operators are packaged
tools that you buy you all know right
good I want to make hypothesis you
should invest your money on package
through operators in this country yes or
no who would invest it
which country
this country that I just showed you the
pictures of
there we now are traveling with a
nuclear family by Friends by plane who
would invest this
so the company is based
industry yes would you invest it in
package tours
preset six cities in seven days yes or
no
why
uh I don't think the consumers I don't
want to you know offend anyone but I
don't think they look like people who
can afford it first okay that's one of
you any other View
okay it's too specific it's too specific
a package tool contains approximately
five to six countries so what if I spend
half the money
researching about the trip three months
before
visiting 10 countries and I always have
the money all right people for research
and know how 2022 Works will not invest
in this what are what values do you
think those people who research have I
showed you those quadrants show me here
where are those people what quadrant do
you think they are
oh
with the very right side in the middle
who continuously research study and they
look so you have a very specific and I
think you got the right answer though
because the answer is it depends
what I just did I try to do a trap for
you and this is what happens to
investors all the time I gave you
information I told you what is happening
I told you I didn't tell you why this is
happening when people came up with views
and that's what we do as investors all
day
oh sorry
this perfect so let me show you the by
this framework to explain so what
happens when you have conservative I'm
gonna ask you questions so yeah they
when you're conservative you go by train
to visit your family you're gonna be
going to see your family because family
is really important to you you never get
on a plane when you're competitive let
me tell you we're gonna do you're gonna
travel six cities in seven days You're
Gonna paste it on Facebook every single
picture goes on Facebook every meal you
eat you're gonna paste it on Facebook
make sure your cousin who who got that
catered meal and try to be smart show
him what travel is like that went
through through operating works and what
happens when you become creative and
curious you basically want to go and
learn from destination so India might be
still here China is too late it's there
I went to I was seeing this woman in
China looking at her albums and she had
been to Japan and I was seeing all these
pictures of Japan this toilet do you
know what Japanese toilets look like
with the sprinklers and the automatic
sea is going up and down and then when I
did the tour of her house she bought the
Japanese toilet embroidery and installed
it in China so you go you travel and you
want to bring these new things with you
that you've learned from this from this
place
so now that we understand yep uh could
you please go to the previous slide okay
so yeah that's it no no the next one
performance that one so you asked me
before where I think that somebody who
researchers it yes and I'm not I don't
think it's creative and curious and let
me explain to you like some of
researches is not
how you actually describe the person I
just
described his actions it's a guy who is
also conservative and compassionate why
because the conservative person yes
and the compassionate person usually
wants to save money therefore I said
that he researched before about it not
not actually to explore exotic
destinations I said here but to save
some money and time
yeah so therefore he wants to do a more
free travel so he wants to travel home
by train he wants to domestic travel he
wants to save up money he wouldn't mind
exploring exotic destinations yes so
he's like the average of the three in my
opinion yeah no no you have a very valid
point there saving you you brought a few
things together you're right these two
could be either yeah the guy whose
values are here can tell you what they
do they will research value for money is
really important for them because
exactly they want them to stretch their
money for their family as much as
possible because there's a lot of money
when I've done the research a lot this
guy here is
they won't go to for Indonesia I'm not
gonna go to make how long I'm gonna take
my whole family with me always about the
whole family and taking the grandparents
and yes you're right value for money for
these consumers it's a huge thing and
you hit the nail on the head because
remember when I started what did I say
about the horses
faster and cheaper horses because money
you will see from these consumers
exactly the guys who don't respect it
are the ones who haven't worked hard to
earning the harder you work and these
guys work like my God two three jobs
they're they're super smart to
understand value for money so they yes
they will do but they will do different
things it's a family it won't be with a
nuclear family it won't be the
individual that will show you the
pictures the nuclear you need to be
individualistic if you're you're if
you're individualistic you will go
package is for you you're gonna be here
if you do anything outside package you
are up there it doesn't I mean if
somebody is a simplification right you
want customized travel so if you're
gonna be in China who just customize
travel I'll tell you what you're gonna
do you're gonna go you're gonna spend
enough time researching you're gonna
wait on the internet you're gonna go to
c-trip which is on the internet to break
it down in every component and you're
gonna find the cheapest hotel of
everything with the high score and then
cut a trip and build it for yourself and
nobody else has has the same thing
for you this guy is a living hell to put
him on a bus let's go stand in front of
the Eiffel Tower chick chick go next and
change it all the time so
Tick Tock versus Facebook Facebook
challenges are coming on wire has taked
off been successful
any ideas
why is Tick Tock successful
okay
what behind yeah I think it's because
they were actually after so many years
they got bored a bit bored for of
Facebook and they wanted something new
something that's fast and something that
you can consume a lot of and basically
with Tick Tock that they're like 10 20
seconds videos they just consume okay
whatever they give them and this is some
that's a platform that's very
interesting and has a very nice concept
and design and yeah you could do it you
could do a lot with that and you so
Facebook started off as a place let's
say to share ideas online even though
there were
many more at its time Facebook was the
hit because they kept adding new stuff
like mini games chat afterwards and then
many many other stuff then you could
post videos in pictures and you could
like them then you could react to them
differently loved their Suds and all
those but why why because there are a
lot of people in Myspace all these
things came okay you uh because of their
algorithm uh jigsaw shows you what you
want to see
yeah so if I'm interested in football it
will always show me uh videos of
football yeah I think that Facebook uh
doesn't work uh very much these so I get
many uninteresting things on Facebook
and Tick Tock I'll get more okay
interesting I'm gonna show you this is a
keynote I gave in Australia 2019 okay I
asked at the time I get I spoke about
Tick Tock seven people out of 700 knew
what Tick Tock was okay so hopefully
that audio plays that's another place
foreign
with a story of of tiktok and uh
I have shown you the values framework
I want you to think from values
perspective
what the 2D the
community
okay
let me try it and it doesn't work how do
I reference here
let me see if you're here
today
I met people by Chaya the 30 year old
leader
videos on Tick Tock now she did not
values of a typical Facebook
for China it was a Channel of expression
called The Voice she never knew she cut
and he gave her confidence
has such things connected with her on
her body
she found this exclusive
culture called Perfection event on a
diet
that is the greatest content she saw a
small judgmental painful
to go through an urban area in India
of telling you
cultures that have in the developed
world
so in vesting with those values and
attack is also playing from an emerging
Trend that we're seeing in Emerging
Markets which modernization without
500 going to play
at the time nobody knew sorry they're
gonna be sure
[Music]
[Music]
that you would see on Facebook where
and
look the length of value you can see why
consumers
to monitor on all social networks
okay so oops so
do you Do You Hear What I was trying to
say so basically I go in 2018 March and
it is made and she was she's not a
typical user who posts on Facebook and
she was amazing she was doing all these
creative videos on her way back to work
coming up with ideas posting every day
by then she got over 70 000 followers
and she got she got such confidence in
herself and she would never post
anything on Facebook if she failed that
everything was judgmental on Facebook
but here all of a sudden you have people
who have these values who are willing to
put content well generally Facebook was
for these people down down here and as
such it was only like using a sergeant I
spottedly it was only a very different
competitive a competitive threat to a
Facebook and that's why I thought it was
quite quite an important one I want to
make sure I don't run out of time and
I'm gonna I'm gonna finish off by going
about this aspect of Entrepreneurship
and the study of views and the things
that start in my mind
so
in my time when we had a question of
willing text to be successful I would go
to my father he would tell me oh it's
all about hard work honesty Integrity
like I said yes your grandfather worked
380 days in the field and you have to
work like a slave but the today's
generations
when they want to find out about how to
do something they never go to their
parents what they do is they go to
YouTube and they write there how do I
become successful and all of a sudden
what you get is a series of people there
we all have the same narrative and
basically goes something to the effect
like I used to work nine to five for the
man and I was on this hamster wheel of
hard work and I hated every minute of it
and then one day I looked deep inside my
soul and I found my true purpose and all
I needed to do was to believe in myself
and then I resign from my job I did
something entrepreneurial and I bought a
Tesla I follow Elon Musk on Twitter I
run to work every day and I'm the
happiest and if I could do it you could
do it too
and this is the biggest horseshit that
you see on this crap and I will tell you
if you are an investor you cannot be
able if you're useless to survive one
maybe two years but we look at three
years
five years generally institutional big
passion plus won't give you money unless
you've proven yourself for five years
I've been doing this job for 23 years
I've been investing
and I have zero belief in myself and the
reason I survived this long is because I
don't believe in myself because every
Dragon who believes in themselves comes
and loses loss of money and we fire
them so what really does it take to be
successful so I will tell you the four
things I think you need to think about
three you need to try and work on and
one you need to minimize and they all
start with a knee so you can remember
them the first is empathy and these are
ironical I have my picture there because
after 13 years of doing this this is the
hardest thing to learn feel what
somebody else is feeling not sympathy
where I feel sorry for them but when I
see something get inside their psyche
and feel the feelings they would feel
and how they will respond to it their
emotional response
endure us
I mean your hard work and killing
yourself so I was we were in Brazil
recently there was this woman she was a
street food seller and she said she sell
these African street food Korea is this
big black woman with wearing white
clothes
happens she cannot sell street food in
the fair because they're shut down she
has women working for her she puts a
cart in the street and sells
drive-through inflation happens they
don't do like Alpha Mega doubling the
prices she says I cannot sell to my
customers at a higher price it's unfair
for them so she starts going to farmers
markets everywhere to bring the cost of
the food down people start paying back
credit cards credit can say take three
and a half percent of Pay Here a month
later she cannot if for you to do
accounting she doesn't understand the
matching principle so she has to pay
everybody today for the cost but she
gets money 30 days later she cannot
manage it instead of complaining she
goes and does an accounting course for
me that is endurance she doesn't
complain she just gets on and works hard
Fair excellent this is another big
problem a
at the early stages of school you can be
a good student and there is a spread but
as you get to University as you get out
to a job
the difference in intelligence between
you and the stupidest employee is about
five percent the guys you're competing
with five percent the guy who works five
percent harder than you can kill you
okay just remember that so I have the
following test
imagine you're working in the back and
you get a call at 5 30. you're about to
leave to go have dinner with your family
and the client asks you to do something
you have two choices choice one you do a
five minute job that the kind of things
is good enough option two you do three
hours you do an amazing piece of work
the client will think you're a hero and
will love you forever and he will be
your loyal client which are one of the
two you do I can tell you everybody will
tell you they do the second and most
people will say at that stage your
family is important to spend time well I
will believe you if your values are at
the bottom right hand corner and you do
it but if you are on the anywhere on the
top or on the left on the left there is
no way it's just an excuse because of
laziness so excellence
every single thing you do has to be
amazing and then finally the thing you
need to do the list of expectations
this
is where a lot of people come with high
expectations of themselves for me the
best
um has anybody heard of the stock tail
paradox
okay Stockdale was the was a device
Admiral he was a fighter pilot in
Vietnam he was shot down he was the
highest Naval ranking officer he shot
down in 1965 he was a prisoner of war
for eight years of the Vietnam they used
to call it the Hanoi Hilton where they
used to keep them so
they ask him couldn't survive and The
Optimist didn't survived the guys who
said we're going to be out by Christmas
and then they were not and then they
said by Valentine's in the world and
then they were by Eastern they were not
that they were there for eight years
they broke down in business you have to
say I have a very varying belief that
I'm gonna succeed but I don't know how
long and what it will take for that to
happen and for us every time we have a
win and everybody starts to project I
say no things are going to get much
worse before they get better for us and
that's the attitude you do need to take
with work and I see it with these
consumers I asked them if they're
optimistic about their life if they had
two or three events that went their way
they're like they think their life is
there they have three things like this
they think it's the end of the world and
they get depressed and life as in
shandrix used to say it's a cycle and
you have your big Target then you you
focus on that but know that it's gonna
be always worse before it gets better so
three is
okay I'm glad you're happy to be there
so so the three is empathy endurance
excellence and minimize expectations and
with that I'll wrap it up and I don't
know if I have time if you guys have
time to ask any questions I'm free
for everybody who wants to ask any
questions
oh yes
is easy but you predicted it yes
yes the failure of where I went wrong
with this
um I almost made a lot of my I made
money for clients I cannot invest in
private companies I made money for
clients who invested in it but who are
not my clients but what I found was
there was another company called like
tiktok was number one but like he out of
Singapore was number four and in rural
areas it was shooting through the roof
because he was going through the local
language in local vernacular so we made
an investment and tiktok was valued at
120 million this company was 520 billion
this was 5 billion and it has sold to
Baidu their operations and we were
getting 6 billion in cash so I was
getting this campaign for free so I
thought I'm gonna make so much money
remember expectations I set my
expectations to make lots of money
and then I wake up one day and there was
a square Miss fight at this Skirmish
where they were the universe China and
India soldiers killed each other and all
of a sudden there were 60 apps that they
were consider of Chinese origin and they
were banned by India and there were my
investment expectations expectation
management
yes and my question is
how can you designed these things your
problem because the the Facebook become
like this by Design I mean was it was
the Suzuki America Vision of I mean if
you had asked Zuckerberg back then maybe
he would have said oh no I don't want
that I want Facebook to be more intimate
more through more more everyday and
perhaps you know the owners of tiktok
did not
have this kind of behavior emerged right
there by Design but this is just what
happened maybe they were too busy just
figuring and solving technical problems
to really think about they finally by
accident right so a lot of times I will
tell you when we do this research we
have a clear purpose in a firm we want
to go to the consumers to understand
what solutions they see to their own
problems the second is to connect with
companies and get them to stop seeing
the work with their roast into
spectacles and the third is to
communicate This research like I'm doing
here so you can find other people to
understand really what happens in the
apps and the second point when it comes
to companies is that companies see
everything through the list of their
operations and a lot of times do not see
the trends and they hit them by by
chance so uh I do an analysis where I
think dark chocolate is going to become
very big in India but today nobody eats
dark chocolate because everybody eats
male chocolate but the same way if you
went to Cyprus maybe 20 years ago my
generation we used to morning coffee
biscuits dunk in Milo was amazing I used
to take them in England with me 30 years
ago who here it's morning coffee who
here thinks is mirroring is good
everybody likes Oreos you know so these
things and a lot of these companies you
go and speak to these companies and I
think the trend is 10 years away and
they might be too early so a lot of the
companies yes they are they are they are
they are it's a mixture some of them are
good some of them are hitting it by by
luck but what I do as a test if you're a
CEO I do a test where I say to you okay
Mr CEO
that woman I showed you you're 22 years
old you live in the slums and your
parents doing this your mother's doing
this you're earning this money tell me
how much money do you save
and the good CEO will turn around can
tell me
about 50 lower income kids will save 50
of their money A bad CEO says to me oh I
spent the dollar and I say this is a
true story from the CEO of Malik one of
the biggest in their campus I said why
she said oh because my daughter doesn't
save any money I said your daughter has
a reach that
but none of my employees do either they
are all rich so do you realize the CEOs
who do spend a lot of time with their
customers and they know them and the
guys who don't and we need to educate
and find the companies that are very
responsive to this but this is a very
time consuming and very expensive
research and very hard research to do
well I'm gonna be around if anybody
wants to come and ask me any questions
I'll be starting here
so everybody wants to go can run off
thank you very much
[Applause]
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