An interview with Peter McGraw
author of Shtick to Business: What the masters of comedy can teach you
about breaking rules, being fearless, and building a serious career.
- [00:58] “that guy”
- [03:53] behavioral economics
- [06:59] group genius
- [12:09] liminal spaces
- [15:45] warm team and feature creep
- [23:26] two paths to a creative solution
- [26:18] writing is a cheat code for life
- [34:19] where you find a lot of growth
[Andrew] Hello. My name is Andrew Everett and today my guest is Peter McGraw, who has some very impressive and interesting credentials so let me go through that. He’s a behavioral economist with a PhD in quantitative psychology. He’s a professor of marketing and psychology at the University of Colorado at Boulder. He teaches a PhD course in behavioral economics as well as MBA courses in marketing management. He’s the director of the Humor Research Lab known as HuRL, which may or may not be a reference to Wayne’s World. We can ask him about that. And he teaches MBA courses at UC San Diego and the London Business School. And if that’s not enough, he has a blue check mark on Twitter. And he’s the author of Shtick to Business.
So, you wrote a book before this called The Humor Code which was about what makes things funny. But this book is different, so could you start out explaining the premise of this book and who you wrote it for?
[Peter] Sure. Yeah, thanks Andrew. You know when I hear these things I recognize that I’m good at least labeling stuff. I’m good at naming things. The first book was a travelogue, a memoir, a pop science book about what makes things funny. My co-author and I traveled around the world answering these puzzling questions. And I always said I would never write another book. People were like what’s your next book? No, never going to write it. And then I had this idea. So I had been thinking, how can I bring my day job teaching MBAs and my night job decoding comedy together? And my first thought was to write a book about being funny, about how to get ahead in business by being humorous. And I even gave some talks and started working on the idea. And I just found myself standing on stage in front of 100 or 500 people and becoming concerned that I was going to do more damage than good by encouraging them to go forth and be funnier at work. And the reason for that is while there are some people who are obviously quite adept at comedy, and I’m not just talking about professionals I’m talking about regular everyday people, there are also people who are really quite underskilled. And if you license them, you give them that encouragement, you’ve really got to worry about what I call “that guy” — the guy who thinks he’s funny.
So I was losing faith in this idea and then I got asked by Google to give a talk around a similar topic. And I had this moment where I realized it’s not about being funny. It’s about thinking funny. And having studied comedy and studied the world’s funniest people for as long as I had, I had this realization that these people, yes they’re naturally talented, but they have practices, they have perspectives that help them create this very difficult product and help them pursue novelty in a way that that most other businesses don’t need to, but could stand to learn from.
And so Shtick to Business is a book about thinking funny. It’s about how to develop more of a marketing mindset. How to be a better manager. How to develop your careers using tactics from the masters of comedy.
[Andrew] Great. One more question before we get into the meat of the book, which might inform how you approach this. When I think of behavioral economics, I think of the book Nudge. I see that you also you teach marketing classes. You’re kind of at the intersection of psychology and marketing, and I wonder if your focus is consumer behavior. So, what is behavioral economics?
[Peter] I like to say it’s better to be lucky than good. When I was beginning my PhD program there was no such thing as behavioral economics. At least it didn’t have the name behavioral economics. Really what it was, and this goes all the way back to the 1950s to Herbert Simon who won the Nobel Prize in economics based upon his on this idea what he called bounded rationality. Essentially that the economists of the world, the micro-economists of the world were unnecessarily assuming that human beings, people like you and me, are able to act like microeconomic utility models. That is that they have a lot of ability to calculate, a lot of energy and motivation to get the answers right to maximize utility, as they like to say.
[Andrew] Perfect information.
[Peter] Exactly. That’s right. An understanding of probability theory and so on and so forth. And so while economics was sort of the dominant theory of the social sciences, this group of economists and psychologists were pointing out the flaws and how it was sort of overly ambitious.
[Andrew] It’s not how the real world works.
[Peter] Exactly. And so this this field has grown and really has been introduced to the everyday world through pop science books. Books like Thinking Fast and Slow and Nudge and Predictably Irrational and Freakonomics and so on. And so I grew up in academia studying emotions and decision making and looking at things like how do people’s feelings about money affect how they spend it. If you’re an economist you think of money in a very cold fashion, but if you’re a psychologist you recognize how emotional money is to people. And when you start adding emotions into these models you start having a much better ability to predict real behavior. Rather than to do what economists ought to be doing which is how to prescribe rational behavior. That is, if you want to optimize here are the rules that you should play by. Simon said most people are just interested in satisficing. They just want an answer, a solution, an outcome in life that’s good enough.
[Andrew] Thank you for that background.
[Peter] No problem.
[Andrew] Okay. So I have a group of things that I lump together here. There’s a quote that says, “Without Larry David there would be no Seinfeld.” And then you also use a phrase that I really like called “group genius.” I also lumped in collective intelligence versus individual intelligence and cooperate to innovate. These all seem like related subjects. Maybe you could speak to that general category.
[Peter] Indeed. So there’s a tendency I think in the world of entertainment and certainly in the world of business, and some of it is perpetuated by journalists, it’s much easier to write about one person than it is to write about two people or 10 people or 20 people or an entire company. So we have this idea of the lone genius. You know, the Edisons and the Steve Jobs and the Dave Chappelles and the Seinfelds of the world. That is, these are a solitary individual who create great products over and over and over again. That’s a real test of genius. Not only can you do it once, but can you continue to do it. What I have noticed from both of those worlds is that while a lone genius may come up with an idea, the execution of that idea typically requires more than one person. So when you start to look behind the scenes of these geniuses you start to see other people of great importance. So for example Dave Chappelle. In Chappelle’s Show, it’s named after him. Arguably the best sketch comedy show ever made, certainly in the modern era. Well, behind the scenes there was Neal Brennan. Brennan co-created Chappelle’s Show, was a writer on every single one of those sketches in the show, including all the ones, especially the ones that are famous and made its way into the into the sort of popular vernacular of the time. Seinfeld has a show named after him. And yet Larry David and Seinfeld worked very, very closely together.
[Andrew] But Larry David was behind the behind the scenes on that.
[Andrew] So how does that relate to business and careers?
[Peter] Well, because I think the issue is this. When you’re making a product, when you’re building a business, you need other people. It’s very difficult to do it alone. I tell a story in Shtick to Business about Steve Jobs. To put it nicely, he was persnickety. And you could put it much less nicely.
[Peter] So there’s a story about the iPhone teams. An iPhone team is a small group of people. These are these are high level engineers. These are people who could work anywhere. And one of them shared the same name, Steve. And this caused problems because someone would say oh yes Steve approved that or Steve said that. And it was not clear. Are you talking about Jobs or this other Steve? And in a moment of frustration Steve Jobs said to Steve your name is now Margaret. And so was that coming from a place of love or was that coming from one of those other more negative descriptors of Steve Jobs? I found that to be really bothersome because Steve Jobs needed this other Steve in order to create the iPhone. I think Bill Burr has a funny bit about Steve Jobs. He points this out also. Steve Jobs says, all right take all these things and put it in here. Now get to work. And so we need other people to innovate. And then to be able to do that, we need to be able to get along with other people. We need to be able to encourage other people. We need to be gracious and thankful for these other people. We need to be able to hold them accountable. There’s a whole set of very important skills for the lone genius to be able to actually execute something.
[Peter] And if I may, just one other thing. Even Jerry Seinfeld, one of the world’s most popular stand-up comics who’s writing his own material, even he needs audience members to tell him what’s funny and what’s not funny. So all of his practice sets where he’s trying out jokes prior to a special, is an act of cooperation where the previous audience members are making a more enjoyable experience for subsequent audience members. No comic tapes a special without having tested their jokes over and over again.
[Andrew] So people don’t people don’t work in a vacuum. I like to think that that a company should be more than just a collection of individuals. There’s more power in people working together. What you just said supports that thought.
There’s another interesting phrase you used. “Comedians live in liminal spaces because they never quite belong.” I think liminal spaces comes from anthropology. Is that correct?
[Peter] I think it does. To be honest it’s not something that I had ever studied, at least not directly. Early in my career I had done research on mixed emotions, on when people feel happy and sad at the same time. One of the things that that we noticed was when is it that people feel this mixed emotion is often when they’re undergoing transitions. When they’re simultaneously looking forward and looking back. So at things like graduations and so on. You can imagine a liminal space as a physical space. So a foyer is a liminal space. It’s a place that you transition from outside to inside. But it can also be developmental or psychological. A lot of rituals are built around liminality: as you transition from being a child to an adult, from being a worker to being retired, from being not a mom to being a mom. The idea essentially is that when you’re in this space either physically or psychologically, there’s opportunity to see the world in different ways. I got this from one of my interviews who pointed out that comedians are liminal workers.
That is, that they sort of they live in these liminal spaces. They’re just not good at fitting into the world in general. So they’re always sort of in this place where they don’t quite belong. And there’s a power to that. Because they notice the things that normal everyday people, audience members, don’t notice. They just take to be normal. And they do that until a comedian points out the classic “have you ever noticed?”, pointing these kinds of things out.
Now the question becomes that’s useful for comedy, but that ought to be useful for business also. Because business is really built on identifying problems. And what’s really interesting is if you can identify a problem that no one yet realizes is a problem. It’s not a problem because there’s no solution to it. It’s just the way it is. And so there are these moments of time where the entrepreneurs of the world really seem like comedians. The creation of Uber really comes from a place of “Now why can’t I just call a car easily to this spot to pick me up right now?” It’s just, everybody’s like, well you just take a taxi or the bus or you walk. That’s just the way it is. And the founder of Uber questioned why that’s the way it is.
Okay. So there’s another topic. You talk about Net Promoter Score, which is basically those one through ten customer satisfaction surveys that you get. You say “Remember, the power of the chasm is not compromising. It’s making people simultaneously love and hate you. Don’t waste time and energy trying to raise the low numbers. Instead, figure out what you’re already doing to attract those weirdos who love you and then do more of it.”
[Peter] Yes, right. This is in a chapter I call Create a Chasm. And this came from my observation of how comedians like a Bill Burr in particular, or even like a Dave Chappelle, have people who love them. And the more that people love them there is also a counter weight of people who hate them. That is, the comedy is based upon individual preferences and values and lifestyle. And so it’s almost impossible to make something universally comedic. So what happens is, even though these comics are getting in trouble for the jokes that they’re telling, they’re going to continue to keep telling those jokes as long as the audience in front of them, the audience that they care about, are laughing. What happens in business, there is a reluctance to disappoint people. And I think that in general you should avoid trying to disappoint customers.
[Andrew] I don’t think it should be the goal.
[Peter] But it shouldn’t be the goal. That’s exactly right. And the reason is that not everyone is your customer. So most brands, not all, but most brands, especially when they’re starting out, are focused on a niche of people and want to build loyal customers. And the way to do that is to focus on their needs and make them happy, essentially make them laugh, whatever that equivalent is, and to be unconcerned about non-customers. And so it’s why customer satisfaction is something that that companies care about. Because when people really, really like you they engage in positive word of mouth. They’re less price sensitive. They’re willing to tell you what the problems are with your product, not because they’re angry but because they want to help you improve them. And so on. But when you look at a mean or when you look at an average of a customer satisfaction score, that’s not telling you the full story. Does it mean that everybody thinks that you’re a three you’re sort of in the middle of the scale? As I like to say you’re serving warm tea.
[Andrew] I love that analogy.
[Peter] If some people want hot tea and some people want iced tea and you serve everybody warm tea…
[Andrew] You’re satisfying nobody.
[Peter] That’s exactly right. But if you imagine you have a customer satisfaction survey which half the people give you a five and half the people give you a one and your average is still three that’s the company I want to manage. That’s a company that I want to work for. That’s a product that I find exciting. Because now you’re best in class for half of the marketplace. And so the net promoter score is like super, super popular. In the net promoter score for your listeners and viewers who aren’t familiar with it, what they do is they ask first of all for a recommendation: “How likely on a on a one-to-ten scale are you to recommend this product or service to someone else?”
That’s already a problem because there’s a class of products and services that you just don’t recommend. The other problem is, what the net promoter score does, it takes your promoters, the people who are 10 or 9, and it looks at the percentage of those and then it subtracts what they call detractors, the people who are six and below. And then you get the score along zero to 100. It allows you to track your satisfaction over time or at least these referrals over time.
[Andrew] It’s really flawed because somebody who gives you a one or a six is the same.
[Peter] That’s definitely the case, but the thing is, why do you even care about the people who give you a one? What you should be focused on is the distribution of scores. That’s the thing that’s important. Because getting someone from a four to a five has no effect on the bottom line, has no effect on anything. But if you can get someone from a seven to a nine, that has a huge effect on your business.
[Andrew] It sounds like, to apply this to business and your marketing courses and so forth, this sounds like product positioning.
[Andrew] If you’re Porsche, you don’t care if people complain that your car is no good off-road. You leave that to Jeep.
[Peter] Yes. That’s exactly right.
[Andrew] It also I also I think relates to something I think Drucker spoke to, which is that it’s better to focus on building upon your strengths than to focus on your weaknesses.
[Peter] I agree.
This is why we get things like feature creep. You just keep adding things to a product. What you should do is just play to your strengths, and be unapologetic about it.
I use the example in the book of Barry’s Bootcamp. You may be familiar with Crossfit and Orange Theory and F45, these sort of high-intensity training exercise programs. They work. You know what I mean. They burn calories. They build muscle. They’re fun. There’s community. There’s all these things that are there. Well if you go to Barry’s Bootcamp, which tends to be on the coasts of the United States. It’s also a bit international and so on. And prior to Covid it was growing really rapidly. You go in there and the music is blaring. Like it’s so loud. And it’s sort of like club music. It’s like you’re working out in a in a dance club. I went to a Barry’s Bootcamp in Hollywood and it was so loud I got off the treadmill and I went to the front desk and I asked for earplugs. And they had them in a big jar. This is not an unusual request. The room is bathed in red light, which if you don’t know this, makes you look fabulous. It just removes all of your flaws. And especially because people barely wear any clothes in these workouts. So men remove their shirts and work out shirtless. Women are in their sports bras and so on. So honestly, you can imagine, this is not for everyone. But that’s what makes it popular with Kim Kardashian and Jake Gyllenhaal who have used it. If they turn down the volume and change the music in order to make me happy, now the folks who go to Barry’s for this club-like atmosphere, now are not. They serve hot tea.
[Andrew] Don’t design your product for the mythical average customer.
[Peter] Absolutely. Yes.
[Andrew] Another topic in the book was third thoughts. Could you explain that?
[Peter] Sure. Yeah. So I spend a lot of time in the book talking about creativity and the value of creativity to comedy and to business. And my definition of creativity is an original appropriate solution to a problem. That is, it solves the problem and it solves the problem in a way that other people aren’t solving it. Good jokes do that. Comedy rewards novelty. So much so, not only can I not tell a joke that’s similar to another comic’s joke, I can’t even tell a joke similar to my previous jokes. There is no greatest hits in comedy. You can’t be the Rolling Stones and play Street Fighting Man every single concert.
[Andrew] If I already know the punch line it takes away the impact.
[Peter] Indeed. Yes, that’s right. There are two paths to a creative solution. One is divergent thinking. Out of the box thinking. There’s a variety of different ways of taking things that that don’t seem to belong together, and putting them together. There’s a lot of ways that people may try to improve their divergent thinking. Some people are better at it than others. But another way to be creative is through persistence. That is to just come up with lots and lots and lots and lots of ideas. What will happen, for example, on Saturday Night Live, is someone will pitch a sketch to Lorne Michaels and he’ll say not a bad idea, but that’s a first premise idea. Come back to me with something else. It’s the same idea that an audience member would have and so it doesn’t feel that special. So I talk about having second thoughts and then I want to say you want to have third thoughts you want to have four thoughts you want to fifth thoughts.
[Andrew] Right, but it’s not just about having more thoughts, it’s about having an iteration, building on the previous idea… it sounds like.
[Peter] Sometimes, but they could be completely independent. In some cases that can happen but the point is this. It’s not sexy. It doesn’t sound fun. But you’re just banging on an idea for a long enough period of time… Shtick to Business wasn’t the first title of the book. It took some work to get that moment of “ah”. As soon as I had Shtick to Business I knew I had the title. But luckily I didn’t settle on an idea too early.
You write about writing, actually. “68 percent of comedic brilliance is the outcome of writing as a craft.” And you also talk about specifically about writing with pen and paper.
[Peter] Yeah. Of course I just made up that number.
[Andrew] Yeah, yeah.
[Peter] One of my friends who was an early reader of the book said that she’s read 200 business books and she’s never read a business book that talks about writing. I took that as a great compliment. And the reason is, I think writing is a cheat code for life. And comics, we tend to think of them as performers, as people who are good at spoken word. But what underlies most comedy with the exception of improve is writing. So obviously film, television, sketch is built on writing — and largely on writing. So much so that Larry David and Jerry Seinfeld would lock themselves away and be unavailable when they were finalizing a script because they knew that if the script wasn’t funny it didn’t matter how good the actors were. Nothing else mattered. The script had to be very funny. In comics, the stand-up comics, most of their jokes come from a writing process. They are sculpted, they’re adjusted, they’re changed, they’re tweaked, they’re thrown away based upon their performance on stage. But the writing is the backbone to the jokes.
And so the argument that I make with regard to the value of writing is threefold. One is that to write is a great way to keep records, that is to organize your thoughts. And so when you don’t have a regular writing practice, we regularly have ideas and reflections and observations about the world and they can just flutter away.
[Andrew] They evaporate.
[Peter] They do. And so if you don’t write it down… I think I have this… Look at this. Here’s my notebook. You know what I mean. It’s right here and it’s just ready to go. And I’ve got my pads of paper. Admittedly I kill trees. I’m sorry. I recycle as much as I can.
[Andrew] I’m with you.
[Peter] So the second thing is that writing not only record keeps, but it clarifies. So there’s a precision to writing that allows you, excuse me, requires you to be very precise and clear in what it is you’re saying and why you’re saying it and how you’re saying it and your choice of words and your choice of language and the way you position things. Writing helps do that. It’s not as sloppy as thinking.
[Andrew] Right. Sometimes you think you have something figured out in your head, but when you try to write it you realize you don’t.
[Peter] Absolutely. And then the last one is to communicate. That is, then to take your ideas and have someone else read them and understand perfectly what you’re trying to say without them having to ask you to clarify anything. Anytime I have a new project idea I write a one-pager. I write it first for myself and then I write it second for my advisors, my mentors, potential customers. It serves as the basis for the copy that I use. I wrote a one pager for Shtick to Business. You can actually read the one pager. It’s in a workbook that you can download off of off my website petermcgraw.org. You can read the one pager for the book and the one pager and the book look very, very similar. Because I did the hard work early on in that way. I recognize that writing is difficult. I know that not everybody likes it. But fortunately it is, like many skills, something that you can get better at as you get more experience and you develop a practice around.
[Andrew] Going back to the idea of trying to clarify your thoughts, and it actually also relates to this idea of the genius, I think there’s a perception that that good writers just write. But writing is a process of developing the idea as well. You know, you write it and you rewrite it, and you rewrite it until you until you figure it out.
[Peter] Part of the reason I became a not-bad writer was that I got very serious about understanding what went into good writing. And what’s fascinating is that the world’s best writers lament how difficult it is to write. So once you understand that it’s hard for them then you can then take it easy on yourself when it’s hard for you.
[Andrew] Right. And so any further thoughts on the importance of, or an example of, how writing is useful in in the business environment?
[Peter] Yeah, well okay. As an MBA professor I’m not a big fan of huge marketing plans and huge business plans and so on. I like the one sheet. I like the one pager. I like an economy of words. One of my favorite stories is that if you’re going to launch a new product at Amazon you have to write the press release for the launch prior to starting on developing the product. The idea is that if you can’t write a press release that’s newsworthy, why this product is going to be interesting and valuable, then it’s probably not worth all the effort to create the product.
[Andrew] And in order to write a press release you have to know who the target market is as well, so you really have to think the whole thing through.
[Peter] Yeah. You have to articulate the problem. You have to articulate the solution. You have to understand who the competitors are. There’s a lot.
And your point about why I like paper so much, I think it just slows you down. When you’re not on your phone and you’re not on your computer there’s just less… When it’s just you a pen and a legal pad there are less distractions, first of all. The other one is I just like the idea of you can write something you can scratch it out you can draw a little line. It’s less linear. And it’s slower. Sometimes you’re thinking as your hand is moving versus when if you’re a fast typist… you know.
[Andrew] As a psychologist do you think that there’s any hand-eye coordination, is there any reasons for that?
[Peter] I’m not sure the answer to that. There is some evidence that when it comes to note taking that handwriting via note taking is superior to typing on a keyboard. And the reason for that is when you type on a keyboard you can basically type close to what’s verbatim being said because of the speed, but when you write by hand it forces you to sort of summarize, put things in your own words, pick the most important things. And so you move from having a transcript to having a tighter summary that you’re much more involved with.
[Andrew] You’re actually producing something instead of acting as a copy machine.
[Peter] Indeed. Yes.
[Andrew] You touched upon it, but one of the things you wrote in the book is “after 91,000 miles crisscrossing the globe Joel and I had plenty of material for our book The Humor Code.” You must have stories of interesting places or interesting people or interesting experiences. I was wondering if you could share one or two.
[Peter] Sure. Yeah, so the subtitle for Shtick to Business talks about breaking rules being fearless and building a serious career. So how can you learn from the masters of comedy to do this. One of the things that I think is impressive about comics is they are open to new experiences. They say yes to a lot of things.
They experiment a lot with life. I think that’s where you find a lot of growth. You know, personal growth professional growth, is saying yes to something challenging. Trying something new. Recognizing that risk and reward go hand and hand. So one of the things that that we did for The Humor Code was we went to Palestine. We went to the West Bank. I’m really proud of that trip. I went ahead and scouted it in advance. I was in Tel Aviv and I got connected with a sketch comedy group that had a TV show on Palestinian national television. And I took a car to the border one day and crossed over and met one of the performers and one of the writers at a cafe in Ramallah. And you know, that was that was an exciting, scary proposition, but it was one that I realized was not as scary as it’s made out to be. It was a really wonderful connection and ended up being a really great chapter. It’s one of my favorite chapters in the book because it’s such an adventure to be able to go and see comedy in a place that most people never get to see comedy because (a) there’s not a lot of it and because (b) no one goes to Palestine. And as a result of it I have a much richer understanding of the Middle East and of the relationship between the Arab world and Israel as a result of that. People have to work within their comfort zones. I was a very comfortable world traveler at that stage in my life. I would say if you’ve never traveled abroad don’t start off by going to Palestine, but if you can look for places in your life where you’re going to seek out new challenges I think that there is really an opportunity for growth and a better understanding of the world. And in this case it made for a better product.
[Andrew] Great. Alright, well, I thank you so much for your time today. The book again is Shtick to Business. Thank you for joining me and I think it’s a wrap.
[Peter] Andrew, I have to say this you’re super kind and I really appreciate both the thoughtful things that you’ve asked and the thoughtful things you’ve written about the book. It’s nice to know at least one person likes it.
[Andrew] Okay, thank you very much.