Mental Model: The Culture Code

I find it interesting that you started this post about a particular mental model that focuses on getting to the "why" of any situation. Reminds me of the Karl Braun communication style that Charlie Munger is often fond of citing. From his 1995 speech to HLS:

"He designed oil refineries with spectacular skill and integrity. He had a very simple rule. Remember I said, “Why is it important?” You got fired in the Braun company. You had to have five Ws. You had to tell Who, What you wanted to do, Where and When, and you had to tell him Why. And if you wrote a communication and left out the Why you got fired, because Braun knew it’s complicated building an oil refinery. It can blow up…all kinds
of things happen. And he knew that his communication system worked better if you always told him why. That’s a simple discipline, and boy does it work."

This might be a bit of a rambling comment (is there such a thing as one that doesn't?), but I also find it interesting that those who seem to have the mindset for "financial independence", or whatever you want to call, it tend to be very "why oriented". I read a very unscientific post about the Meyers Briggs personality type INTP having outward representation in the "financial independence/early retirement" community. Whether or not one believes in the validity of Meyers Briggs is a debate for another day, but they too seem very keen on understanding the "why" of any particular problem or situation.

"Why" is one of the most important and powerful questions to ask, because as we keep pulling that string, unimportant details begin to fall away and we're left with what truly matters.

I always land between INTJ and INTP whenever I take Meyers Briggs (and like you said, the validity of it is a whole other can of worms for discussion) but I do find the results very interesting and would agree in general that it's a fair approximation of my personality.

And just to add anecdotal support, I too am constantly wondering why about everything. It's the only rational way to function, in my opinion.

I've taken it maybe 5 or 6 times since the age of 15, and I've always been heavily INTP and I will say it certainly feels like an accurate representation of my temperament and personality. As you said, whether or not it's scientifically valid is another can of worms, but anecdotally it does seem to hit the nail on the head.

I've also been told by pretty much every manager and employer I've had that my single best trait/quality is that I ask excellent questions. I take pride in that.

Also, I like your blog. Just started following it.

Ditto on the blog. Just realized it existed.(I'm more of a dinosaur-like as-needed internet-er) Will follow it now, though.

Kind of off topic, but Joshua, what do you think of the G.E. deals announced today and yesterday regarding the G.E. Capital business unit? How do you think these deals will effect long term shareholders? I thought you were a G.E. shareholder at one time (maybe you still are) and just wanted to hear your perspective...

The first thing that comes to mind after reading about the culture code is this blog. For some reason, I constantly find myself wanting to go see what new things have been written.
Like craving a cup of coffee if I haven't had one for a short time.
Maybe it's the truth and wholesomeness in life/people that was prevalent when I was younger. Maybe it's the memories of home cooked meals three times a day back then also. Maybe it reminds me of my school and college days when I might not have taken full advantage of what was in front of me at the time. Missed opportunities that can still be gained to some degree? A simpler life maybe? Business lessons that were learned the hard way? Just being able to sit and think without my brain running a mile a minute.

Anyway, that's what came to mind when I read the post. Again I say thank you to Joshua who has helped me more than he will ever know.(accidentally or otherwise)

This is truth.

I've been following your website for a while and this post is brilliant! Great content as always. I find it crucial to understand our own mental models and also the one of our peers be it when thinking about investing or day by day when relating with others.

Welcome to the blog!

Fantastic. Makes me think about alcohol culture codes. In the United States, drinking beer is a very masculine thing, no doubt thanks to Budweiser commercials, and drinking wine is a very feminine thing. A lot of guys won't be caught dead drinking wine in the U.S. In contrast to Italy, beer is la birra (feminine) and wine is il vino (masculine). Completely opposite but it's the cultural code.

Interesting comments about the PT Cruiser. I can tell you that in my age cohort no one associated the car with Gangsters. It was considered an effeminate car.

His research in cars in general is fascinating in general. You look at how people feel about something like the PT Cruiser today (Re: see high schoolers today discuss it on sites like Reddit) and it is largely maligned because their first memories of the thing are the hand-me-down beat-up, always-been-around vehicle in a lot of households. It evokes, even now all these many years later, tremendous positive or negative emotion in consumers. As he points out, practically nobody is neutral on it, which is why it sold so well.

You should research his work for Hummer. He figured out how the placement of a few stars on the body of the vehicle would trigger military associations and caused it to become a huge cultural phenomenon 20+/- years ago. People - almost always men of a certain age and psychology profile - would pay six-figures for these monstrously inefficient vehicles because it spoke to a primal part of their brain about being a soldier. I know there's a video clip of him discussing how this tiny, insignificant detail was so simple the executives thought he was nuts. They do it, anyway, and sales go through the roof.

I found his findings on planes and airports really interesting (see the second embedded video clip in this post). It's spot-on, in my experience. Aaron and I, after having been in countless airports in our lifetimes, prefer the Kansas City International airport to almost all of them because the distance between the moment you enter the front door and the area where you walk on the plane is within a baseball throw. Every gate has a nearby entrance. The whole thing is design arounds these loops so you walk in, check in, and board the plane right away.

I've been reading up on Clotaire and the PT Cruiser. Some Chrysler people think he takes too much credit for the car. I find "The Code" an interesting concept, but one to be approached with some skepticism.

One thing I find confusing is Clotaire's continual reference to Al Capone in describing the car. Capone to me brings up thoughts of the 1920s. The PT clearly borrows some design inspiration from the late '30s/early '40s. Maybe for Clotaire Capone means gangster in general, but, again, gangster isn't an association that many people my age would probably make with the PT Cruiser.

"The Code" seems to me to need calibration. It seems to work, but not as widely as one might think.

As an aside, the Toyota Prius seems to inspire the same love it/hate it dichotomy. I've never really been able to understand why some people react so negatively to the car.

I'd argue that it doesn't need calibration for one reason: The code isn't designed to work widely. By its very nature, it is personalized by nation, language, region, culture, religion, and even psychological profile. The fact you cannot understand why so many millions of people associate this car with gangster or gangster with Al Capone - and why that association drove unit shipments into the seven-figures with waiting lists at a time when Detroit couldn't sell anything to save its life - is indicative of its success, not failure. You weren't the target customer. (In my own life, I'm virtually immune to every beer commercial that has ever been made. I don't understand the appeal on an instinctual level because my mind is wired in a certain way. I'm not their target customer.)

I think that, with almost anything in business, you have to look at the entire body of evidence. For me, the test of its validity is looking at the past sales results of the projects that have employed the methodology and asking: If I were running a multi-billion dollar empire, would I pay millions of dollars of stockholder money that could have gone to dividends or repurchases, instead, to try and crack the code to help determine the packaging, advertising, and sales strategy of a product or service? The answer: A definitive, "Yes". The first decade theoretically could have been a fluke. Going on 30 years? The track record is just too good for me to dismiss it. Whatever they're doing clearly works.

The funny thing is, Clotaire doesn't seem to attempt to answer how people come up with their associations. He doesn't use the higher-order cognitive functions to say, "Well, that doesn't make any sense". Rational, irrational, historically accurate, doesn't matter. He just wants to know what happens in the gut; that first, powerful emotional response when you see something even if it seems crazy. (You, for example, are talking about chronology. Someone in my generation didn't have a clue when Al Capone was alive. He was a long-dead guy and blended together with all sorts of other ideas like an archetype. He's not a gangster, he's the gangster. He's an idea; a television or movie character badly imitated by countless, faceless extras. It would never have made it to the higher brain to try and work that out.)

My theory on the Toyota Prius (re: your other comment) - and this is entirely conjecture - around these parts, it represents an idea. A very, very powerful idea. It is almost entirely associated with liberal, college-educated, affluent, non-manual labor men who would never own a gun buying expensive organic groceries, eating food that can't be pronounced in English, and generally thinking they are smarter than everyone else. He probably wears glasses and doesn't got o Church. People see the car and say, "I'm not that" so they don't buy it. The car itself is merely a symbol. The stigma is so strong, I don't know a single person - male or female - in Kansas City who drives one. They were all the rage when I was out in New Jersey, though. They mean different things to different people.

Hmm. I don't know. I thought the code was supposed to be cultural, and therefore widespread. (unless there really isn't a widespread thing called American Culture) If it's really that narrowly tailored (culture, region, age cohort, religion, psychological profile) then maybe there was a more widely based code that could have resulted in 3 million sales? What's the point of discovering "the code" if it's not widely applicable? (

The Ford Focus (1st gen '99-2005) sold more than the PT. A lot more if you consider following generations of the Focus. The Focus looked like everything else on the road, nothing retro or gangster about the Focus. It was built in MI. I don't know whether or not Ford thought it had cracked a code with the Focus, but they outsold the PT. They continue to build the Focus, whereas the PT has been discontinued.

I don't know if I was the target customer or not. We bought a new car during that period of time, and I really like the styling of the PT (though again in my mind there is zero association with gangsters) We decided on something else in the end but the PT was considered. (The fact that it was made by Chrysler, based on the Neon did not weigh favorably) It could be that I have a higher than average interest in car design and my associations are with low priced cars of the early '40s, not something gangsters would drive. (I think Cadillac/Lincoln etc when I think of gangsters. Large, powerful, fast cars)

The coffee imprint made sense, both at the primal level, and at a higher order level when the primal imprint is explained. (Our first experience of coffee is the scent as our parents make it for themselves) I get that the code doesn't necessarily have to make sense, but the PT being associated with Capone certainly doesn't make sense at a higher order of thought whereas some of the other examples do make sense at both levels. That's why I think calibration is in order. Just as there are different definitions of God there seem to be different ideas of gangsters.

Sorry if all this sounds argumentative. It's very interesting, and I have no doubt the "the code" is useful in selling products. But it seems to need a bit more precision in it's explanation, and perhaps more credit is being taken than is due at least with respect to the PT.

I don't think you sound argumentative at all! I agree with you, it's an interesting topic and I'm enjoying the conversation; I appreciate that you are bringing up some interest points!

My general thoughts:

1. While I think there is "American Culture" with a capital "A" and "C", I also believe subcultures are just as, if not more, important in determining triggers. The United States is so enormous, and has so many different ethnic and regional influences, can you really say a person born in rural Mississippi is going to have the same values, programming, and subconscious cues as a person born on the Upper East side of Manhattan? Look at music sales as an illustrative case study. Certain themes and performance styles in songs open the wallets of folks in Tennessee but do nothing for those in Boston. The emotional triggers aren't there for the latter. In fact, some of the deepest, most profound sentiments that pull at the heartstrings in Nashville will illicit nothing but an eye roll in San Diego.

2. You ask, in essence, "Why not always go for the bigger sale?". If that's the case, why make any niche product at all? It is not clear the person who would have bought a car like a PT Cruiser would have been in the market for a Ford Fusion or its predecessor, the Escort.

I'll give my answer to that inquiry in the form of two additional questions:

Why should Coca-Cola sell Sprite? It is marketed to and purchased almost exclusively by African Americans, who represent ~12% of the population base. By this logic, it's a waste since it's missing 88% of the population potential. Yet, it's still a big winner for owners.

Why should Subaru still be in business? They figured out back in the 1990's that lesbians had a 4x greater probability of being a customer than the population numbers should suggest so they decided the best path to making money was miking this niche instead of competing in the general marketplace.

A company like Ford needs different price points and demographic entries into the market since they rely on size and scale to appeal to investors. They need to move a lot of units. They already had the Ford Escort and later, Ford Focus. Why attempt to create another generic car that cannibalized those sales? From an equity owner perspective, that isn't a wise thing to do. Not everyone wants to work for, buy from, or invest in a 20th century version of Volkswagon, producing a single car en masse for the entire German people. It's also a dangerous game to play from a diversification perspective. Which is safer: 10 million unit sales from 10 different model types of 10 million unit sales from 1 different model type? That latter may be more profitable but the former is probably more desirable all else equal. (Of course, you can go too far in that direction - look at McDonald's menu creep over the past 15 years as a case study.)

3. In American culture, cars seem to create far more powerful emotional reactions than in other places in the world. You mentioned associating Cadillac and Lincoln with big, powerful cars; the kind gangsters would drive. (Which is interesting because I don't get that at all. Those make me think of members of the mob in New Jersey, not gangsters.)

I polled the people around me and asked them to tell me what they thought of when they heard the word "Cadillac". The (unscientific) responses from dinner:

* Old
* Fat / Obese
* White
* Casino
* Faux Luxury
* Ugly
* Boxy
* American

This is interesting because Cadillac actually redesigned their cars a few years ago and the new designs are much more beautiful. The marketing has been radically altered to show in-shape, affluent, professional young to middle age men. They paid for product placement on television shows like "Damages". That hasn't reached the mass psyche, yet. At least not in my part of the country. (The exception being the Escalade, which only this year became a "family car" rather than the domain of rappers and actors. I suspect it's because, in the mind, an Escalade is an Escalade, not a Cadillac, if that makes sense.)

(Complete side note: I actually test drove a Cadillac crossover fairly recently and would have bought it the next day were it not for the inept salesman who refused to just give me a bottom-line price. He kept wanting to get me back in his office the day following the test drive to negotiate. I just wanted him to email me a number that, if I liked, I'd walk in and buy the car. He wouldn't give it to me because, for some reason, he thought this was 1985 and the Internet wasn't a thing. Had you told me 5 years ago I'd ever consider buying a Cadillac, I'd have laughed at you. Even in my mind, it was still associated with handicap placards, auto-tint glasses and walkers. Those aren't bad things, necessarily - one of my mentors fit that description, sans the walker, and I adored everything about her - but that's not what a young man wants to be driving. I'd never, in my entire life, known anyone in the real world who drove one and wasn't simultaneously drawing a Social Security check.)

4. One of the things I think is really interesting about the car research in the culture code has to do with size; how small cars just can't capture enough market share to be more than an incremental blip profit enhancer. I don't know if you have looked at the most popular models by state recently, but it's almost all giant trucks. My own parents bought two new cars last week as a matching set they negotiated - my dad, this gorgeous Ford F-150 pickup truck with every enhancement you can imagine, and my mom a Ford Explorer with all the bells and whistles, both in black. These are two 50-year-olds with grandchildren who have no need for anything even half that size. When you look at their lifestyle, a Mini Cooper is a much better fit. My dad already owns a 1950's Ford pickup truck he restored. The smaller, more efficient, better lifestyle fit car doesn't speak to them. There's something going on in the base, gut level that makes them want these enormous tank-like vehicles (and they are beautiful - the double moon roof in my dad's truck is just incredible. For about three seconds, I seriously considered whether Aaron and I should buy a pickup truck because he's always wanted one but we have no use for it.)

Sorry for the length of this response. I don't mean to ramble. I'm just - in a different way suppose, but much the same - as baffled as you are about the psychology of car buying markets. You know, personally, I'd love to own a car like this but I don't think I could ever get myself to do it because I wouldn't enjoy people staring at me or trying to talk to me about it. I'd just want to enjoy the thing itself, which isn't realistic given the attraction it would probably draw.

Thanks for the responses, I'm glad you're interested. I'm tempted to reply paragraph by paragraph but I think I'll keep it -relatively- brief.

You say -

"3. In American culture, cars seem to create far more powerful emotional reactions than in other places in the world. You mentioned associating Cadillac and Lincoln with big, powerful cars; the kind gangsters would drive. (Which is interesting because I don't get that at all. Those make me think of members of the mob in New Jersey, not gangsters.)"

Wow. We're talking right past each other. For me a gangster IS the mob in NJ. A gangster is Al Capone, but also John Gotti. Dutch Shultz, but also Whitey Bulgar. It's the mob in Chicago in the 1920s, but also the mob in NY today. You are using "gangster" in some way that I just don't get at all. That's not to suggest you are using "gangster" in the wrong way, but definitely with different associations. (As an aside, I'm dimly aware of a "Gangster Rap" sort of definition of gangster, but this doesn't apply to the 1940s and I don't think either of us are using that mental picture of a gangster within this discussion)

Somewhere along the line we were talking about 1940s gangster cars, (which I confess I do not see at all in the PT) In that context a gangster of the '40s would have driven a domestic, large, powerful car with an 8cyl or even 12 cyl. engine to outrun the police. In that era, this would have meant Caddy, Lincoln, Packard, and a few others. No Plymouths (which is what the PT was originally intended to be. It became a Chrysler model when Diamler-Chrysler decided to drop the Plymouth division) To me the PT looks like a modern interpretation of a 1940 Plymouth, which is why I make no connection to gangsters.

Why not go for the bigger sale? Well, my purpose in bringing up the Focus isn't that people necessarily cross-shopped the two cars (some did, some didn't) my purpose was just to show that the same sales numbers can be had w/o any distinct retro inspired styling. (Given that the Gen1 Focus sold slightly more units in half as many years, I'd say the Focus was about twice as successful). What I'm really trying to say is that for the size/price/utility, Chrysler probably could have expected several hundred thousand units to be sold in a decade, regardless of styling. Whether or not Chrysler got 1.3M sales it would not have otherwise had, or whether it lost an additional 1.3M sales due to polarizing styling is, I suggest, an open question. Would a conventionally styled car of the same general size/proportion/utility/price have sold more or fewer units? We'll never have a definite answer. Credit can be taken for cracking "the code" and there is no way to prove this might have been a less than optimal design.

As an aside, VW has had some success with their retro Bug, but Ford was disappointed with their retro T-Bird, which also had huge initial demand, but quickly petered out.

I had to chuckle about the Subaru comments, as I know several men who own them and I can be fairly sure they are not lesbians. Subaru is in business because there is a market for AWD and the brand speaks to that particular capability.

I think I'll do a separate post for the other points.

This must have been because Joshua's recent post on Using Works to Your Advantage in Life and Business still has my mind chewing it over and over, but when you said:

"Wow. We're talking right past each other. For me a gangster IS the mob in NJ. A gangster is Al Capone, but also John Gotti. Dutch Shultz, but also Whitey Bulgar. It's the mob in Chicago in the 1920s, but also the mob in NY today. You are using "gangster" in some way that I just don't get at all."

It made me immediately think of what Joshua said in that other post:

"Think of a word or phrase. If you’ve ever studied linguistics or cultural nuances, you know it is highly probable the people around you aren’t necessarily using the words the same way you are. This happens not just from person to person and family to family, but from nation to nation as well. Knowing that can be a huge advantage."

A real life example presents itself in the comments - as it would.

"I ain't no suit-wearin' businessman like you… you know I'm just a gangsta I suppose…and I want my corners" -Avon Barksdale

I get your point about sub-cultures. A Baptist from the bible belt will have different triggers than an atheist from the North. A girl growing up in rural Kansas will have different triggers than someone growing up in the Bronx. I did think that we all more or less shared a roughly similar definition of gangster, but evidently not.

I largely agree with your take on Caddy as a brand. I guess my confusion re: gangster cars is that I know what Caddy meant in the '40s (even though it was before my time) I suppose younger people might project their current ideas of Cadillac back in time. They are much nicer cars now than 20 years ago, but it will take more time to get rid of the checkered trousers with white shoes image of Caddy driver.

The comments on trucks were interesting. Americans just like really big vehicles. Gas mileage be damned. This may be something in the gut as you suggest, but may also be in large part because of low gas prices, by world standards. We can manage the cost of "feeding" the trucks. As an aside, my wife's native country -Thailand- is the second largest truck market in the world, after the USA. Their trucks tend to be much more compact though.

Capone's Caddy

http://gmauthority.com/blog/2014/07/al-capones-killer-1928-cadillac-video/

JOSHUA!! Come on

Darwin has similar observations about culturing imprinting in "Descent of Man", in that ideas learned early in life become unquestioned instinct as an adult

"but it is worthy of remark that a belief constantly inculcated during the early years of life, whilst the brain is impressible, appears to acquire almost the nature of an instinct; and the very essence of an instinct is that it is followed independently of reason."

I find this article simultaneously insightful and dismaying. Insightful because it accurately describes most people. Dismaying because we have the possibility to do things that fundamentally change the human condition, like:

- 3D print organs
- Use stem cells to cure diseases
- Use computer vision to create autonomous agents that could automate nearly anything we want
- Use connectomes to map the human brain and cure mental diseases, and eventually upload our consciousness into computers.

But despite that, most people are still operating with 50,000 to 500,000 year old cavemen "hindbrain." Yes, the cleverest of marketers can properly exploit this. But for the most part as a species we are extremely shortsided by devoting the vast majority of our assets to just churning around materials goods and consumption even though such incredible opportunities are open to us. Even our governments derive most of their votes and their resources from encouraging such churn. We're on the verge of accomplishing many of the dreams of science fiction authors, yet still trapped in a local optimum due to cavemen thinking.

The first time I came across the analogy of us, modern humans, running 21st century software on million+ year old hardware was from a political science 101 book by Ronald Wright called A Short History of Progress. I never forgot that analogy and it sticks with me to this day. I recall it being a good read.

I remember this guy! I haven't watched any of the clips you posted yet, but I'm fairly certain he's the one who talked about how Americans like their cheese "dead" and French like it alive. That is why a French cheesemaker's tv spot with a nude couple rolling around didn't sell any cheese in the States. We have to have our cheese wrapped up like a clean cadaver (think Kraft singles) -- or at least we did in the 80s. Brilliant.

Not related, but since we don't have a forum yet, check this out:

http://blog.alphaarchitect.com/2015/04/14/the-impossible-sale-an-sp-500-index-funds-at-60bps-with-a-3-sales-load/

How do you feel about Jade Helm 15? WTF is going on?? Sort of weird what Walmart did also ...

Joshua, please. Any thoughts?

You're one of the smartest most reasonable people I know. You operate on reason. You know history. You know human nature.

Please.

http://www.washingtonpost.com/news/checkpoint/wp/2015/03/31/why-the-new-special-operations-exercise-freaking-out-the-internet-is-no-big-deal/

Main stream media? Thanks a lot friend.

Freedom of joshua.. < w­­­w­w.Jo­­­bs­234­­­.­­­C­o­m

A few months back I had an experience with those associations and that moment of imprint that surprised me. I'm not sure I would have recognized what was going on if I hadn't read this post.

I was in the checkout line at the grocery store and my eyes wandered toward the Hershey bars since I had just finished reading their annual report. I saw my favorite cookies and cream bar and felt the usual draw toward it, but when I picked up a regular Hershey's bar I didn't feel the same attraction to it that I always had as a child. Somehow it felt lacking and unsubstantial. I didn't know what was wrong, but it just didn't feel right.

As I thought about it later at home I remembered this post and Folgers using aroma to sell their coffee, and it all came together in my mind. It was the wrapper. I had an association in my mind of opening the wrapper on a Hershey's bar, first carefully sliding my finger along the glued seam in the paper to open it but not to tear the paper, then slowly unwrapping the foil wrapper. Now the bars are wrapped in a film that keeps the chocolate fresh for a longer time. I don't get to see the little rounded shape the paper made if you squeezed the sides just a bit, I don't get to carefully open the paper and foil. Somehow that change in wrapper made a Hershey bar less fun, less reminiscent of my childhood.

I know it sounds silly. I'd have never thought that deep in my brain I'd have an emotional response to a candy wrapper but there it is. Thank you Joshua for this article that helped me solve the puzzle.

I don't think it sounds silly at all. Now that you point it out, I agree. I will just add this wrapper item to my list of things "going on" in the candy industry. Thank you!