Archive for October, 2008

Oprah: Heartfelt Storyteller or Paid Shill?

Oprah is a good storyteller who’s even better at facilitating a story.

More than any single element, Oprah has turned tapping into the emotional reservoir of her viewing audience into an art form.

That’s why when Oprah came forward on Friday and proclaimed Amazon’s Kindle (e-reader) as life-changing people paid attention.

In fact, Oprah’s revelation created more noise in the blogosphere than any activity orchestrated by Amazon’s marketing department over the past three months.

Yet, this was hardly a heartfelt moment. Amazon paid for the product placement on Oprah’s show. It’s really no different than BMW cutting a check for one of its cars to appear in a chase scene in a 007 movie, only in this case Amazon got two for the price of one (Kindle + Bezos show appearance).

Last month I addressed whether a good story by definition needs to be authentic, making the observation that you need to be who you say you are (Stephen Hawking I’m not). Oprah certainly passes this test. That was definitely Oprah touting the Kindle.

Giving Oprah the benefit of the doubt, the story starts out authentic and heartfelt. She received a Kindle as a gift and it changed her life. Wonderful. Everyone should be so lucky as to have their lives changed by an e-reader in these economic times.

But why is it that Oprah didn’t go public with her revelation until Oct. 24?

In a word, money – nicely timed to build momentum into the holiday buying season.

Does the fact that Amazon put a few dollars - OK, more than few – into Oprah’s wallet lessen the power of the story?

If the tears from the audience when they got word that the grab bag would be a Kindle are any indication, the answer is no. 


Warren Buffett Tells a Good Story

It’s not enough that Warren Buffett has generated a net worth of around $62 billion, making him one of the richest men in the world.

He’s also a world-class storyteller. (If it makes you feel any better, at least he’s not handsome.)

With Warren Buffett in the spotlight for rescuing Goldman Sachs with a $5 billion infusion, lending his wisdom on the economic turmoil, and talk of landing the Secretary of the Treasury gig, I thought the timing was right to revisit his other gift.

No question, Warren - I’m adopting his propensity for down-home casual – knows how to turn a phrase. Referring to derivatives as “financial weapons of mass destruction” serves as exhibit A.

But to say that Warren has honed the art of a sound bite sells him short.

This is a guy who knows how to tell a story and effectively apply the technique to the business world as illustrated in his annual letter to shareholders. Yes, the letters contain the facts and figures behind Berkshire Hathaway’s financial performance, but they also bring an element of levity to the equation.

One of my favorite passages appeared in his 2006 shareholders letter:

To add to the Sunday fun Ariel Hsing will play table tennis (ping pong to the uninitiated) from 1 pm to 4 pm against anyone brave enough to take her on. Ariel, though only 11, is ranked number one among girls under 16 in the U.S. I played Ariel, then 9, thinking I would take it easy on her so as not to crush her young spirit. Instead she crushed me …

Self deprecation plays in Peoria.

That same 2006 document shows off Warren’s gift for narrative as he pays homage to friend and fellow investor Walter Schloss:

Let me end this section by telling you about one of the good guys of Wall Street, my long-time friend Walter Schloss, who last year turned 90. From 1956 to 2002, Walter managed a remarkably successful investment partnership, from which he took not a dime unless his investors made money. My admiration for Walter, it should be noted, is not based on hindsight. A full fifty years ago, Walter was my sole recommendation to a St. Louis family who wanted an honest and able investment manager.

Walter did not go to business school, or for that matter, college. His office contained one file cabinet in 1956; the number mushroomed to four by 2002. Walter worked without a secretary, clerk or bookkeeper, his only associate being his son, Edwin, a graduate of the North Carolina School of the Arts. Walter and Edwin never came within a mile of inside information. Indeed, they used “outside” information only sparingly, generally selecting securities by certain simple statistical methods Walter learned while working for Ben Graham. When Walter and Edwin were asked in 1989 by Outstanding Investors Digest, “How would you summarize your approach?” Edwin replied, “We try to buy stocks cheap.” So much for Modern Portfolio Theory, technical analysis, macroeconomic thoughts and complex algorithms.

Following a strategy that involved no real risk – defined as permanent loss of capital – Walter produced results over his 47 partnership years that dramatically surpassed those of the S&P 500. It’s particularly noteworthy that he built this record by investing in about 1,000 securities, mostly of a lackluster type. A few big winners did not account for his success. It’s safe to say that had millions of investment managers made trades by a) drawing stock names from a hat; b) purchasing these stocks in comparable amounts when Walter made a purchase; and then c) selling when Walter sold his pick, the luckiest of them would not have come close to equaling his record. There is simply no possibility that what Walter achieved over 47 years was due to chance.

I first publicly discussed Walter’s remarkable record in 1984. At that time “efficient market theory” (EMT) was the centerpiece of investment instruction at most major business schools. This theory, as then most commonly taught, held that the price of any stock at any moment is not demonstrably mispriced, which means that no investor can be expected to overperform the stock market averages using only publicly-available information (though some will do so by luck). When I talked about Walter 23 years ago, his record forcefully contradicted this dogma.

And what did members of the academic community do when they were exposed to this new and important evidence? Unfortunately, they reacted in all-too-human fashion: Rather than opening their minds, they closed their eyes. To my knowledge no business school teaching EMT made any attempt to study Walter’s performance and what it meant for the school’s cherished theory.

Instead, the faculties of the schools went merrily on their way presenting EMT as having the certainty of scripture. Typically, a finance instructor who had the nerve to question EMT had about as much chance of major promotion as Galileo had of being named Pope.

Tens of thousands of students were therefore sent out into life believing that on every day the price of every stock was “right” (or, more accurately, not demonstrably wrong) and that attempts to evaluate businesses – that is, stocks – were useless. Walter meanwhile went on overperforming, his job made easier by the misguided instructions that had been given to those young minds. After all, if you are in the shipping business, it’s helpful to have all of your potential competitors be taught that the earth is flat.

Maybe it was a good thing for his investors that Walter didn’t go to college.

Classic storytelling.

He builds both context and empathy for the main character. The drama comes in academia refusing to consider that there might be “life” beyond efficient market theory (EMT). Humor is woven throughout the story. And you don’t need to be a numbers jockey to appreciate the benefits of an open mind.

The same mentality comes out when Warren verbally articulated his views in a recent interview on the “Charlie Rose” show. (Thanks to my college fraternity buddy Jim Engle for passing that along.)

He’s definitely figured out a conversational tone trumps striving for the smartest-kid-in-the-class crown.


The Evolution Of The Tiny Story

If you ask people what’s the one digital device they absolutely can’t live without, the mobile phone comes out as the clear leader.

That’s why you have industry heavyweights like Google’s Eric Schmidt calling mobile advertising the  single most exciting opportunity for the do-no-evil guys as far back as 2006 (The Wall Street Journal).

It also explains the strategic importance of the Android platform for Google. Mobile search and the ads that come along for the ride will be a massive market.

While predicting the size of such an embryonic market is a little like Mrs. Magellan asking how many lunches to pack, this hasn’t stopped the prognosticators from taking a shot. Industry analyst firm Informa, for example, forecasts annual expenditure on mobile advertising reaching the $11.4 billion mark by 2011.

Whether you buy this number or not, the point is that people are increasingly turning to the phone for content … which brings us storytelling on the “small screen.”

Rudy De Waele’s blog called Mobile Media Lifestyle looks at this very topic. In fact, De Waele delivered a presentation called Mobile Digital Storytelling in Seoul last week (appreciate Kathrin Eiben in Spain flagging it) that even touches on the tools emerging for packaging a story for display on mobile phones.

Obviously, a tiny screen puts a premium on the visual element.

You can check out the early days of visual storytelling on Flickr via its “tell a story in five frames” initiative, which offers the following guidance:

Guidelines are not rules, but a formula that can be used to suit your creative imagination. Several avenues exist for story telling, such as journalistic reporting, sequential photos that reveal a moment, photographic poetry, and narrative. The following guidelines are for narrative.

A good story has characters in action with a beginning, middle, and an ending. Fortunately a lot of information can be given in a single photograph, enhancing the limitations of five photographs for your story. Location, time, and atmosphere aid viewer imagination. Keep standards of pictorial beauty, but pack as many storytelling elements in one photograph as possible to develop an action.

1st photo: establish characters and location.

2nd photo: create a situation with possibilities of what might happen.

3rd photo: involve the characters in the situation.

4th photo: build to probable outcomes

5th photo: have a logical, but surprising, end.

Like any form of storytelling, drama keeps an audience engaged. 

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