This is an exciting episode for us.
We like to talk about your company because we see it online
all the time, right? I'm not, I'm not going to do
it's a spoiler alert for those that that know a little bit
about marketing that are on Instagram.
But I want to give you the opportunity, Matt, to explain,
to own your own narrative, introduce yourself to our
audience, and then we can start to talk about the bottlenecks
that you've been solving and working on across your career.
My name is Matt Paulson. I'm the founder and CEO of O
Maze Amaze offers the chance to win once in a lifetime
experiences and dream houses and also benefits charity.
The origin of the stories. I was a filmmaker before amazed.
My passion was using storytelling to inspire action
and I had done a bunch of big projects in that world.
We were the first directors on this thing called Live Earth,
which was the biggest concert ever thrown to raise raise
awareness for climate change was on 7 continents and one night
with everybody from Beyoncé to The Rolling Stones.
We did a documentary series called Go Rising that was funded
by Oprah Queen Ronnie of Jordan. Meryl Streep was a narrator
about girls education, developing world, bunch of big
projects like that, Bono and Jay-Z and you know, Bill
Clinton, all that and and then realized we were creating a lot
of awareness around those projects, but not a lot of
impact. And I was endemic to the space.
So I went to Business School and tried to surround myself with
people smarter than me. I'd never even opened Excel
before I got to Warden. I was purely on the creative
side. And then when I was in school, I
went to this event that Magic Johnson, the basketball player
was hosting where he was auctioning off the chance to
play basketball with him and go to a Lakers game.
But it was one of those things is only be able to high net
worth individuals sitting in the room.
And we were in the room, but not high net worth individuals.
We are the guys who get invited last minute, didn't come for the
free drinks, you know, And so I'm sure you guys been a lot of
these rubber chicken dinners before.
And so we watch as the auction went up to $15,000.
And Magic was our childhood hero.
But we cannot afford to participate.
And so when you're driving home, we said that makes no sense.
Magic is fans around the world, not just in that room.
This is 2000. 11 Why is that a closed event?
Why is it a closed event? Yeah, yeah.
And social media was just starting to happen for
celebrities. Actually weren't really on
social media then, but we're like, they're going to be and
now they're going to be able to reach their fans in a whole new
way. So if we make it so anybody can
donate $10.00 for the chance to win, you could raise so much
more money, so much more awareness, open up a whole new
donor base. So that's how it that's how it
started and. It's amazing because so you
started in the States and you expand to the UK or are you
based in the UK now? We are.
We're only in the UK now. Well, UK and Germany now.
We're no longer in the States. It's a crazy story of how we
moved from the US to UK, but basically I had a near death
experience and flatlined for 4 1/2 minutes.
They brought me back to life. That changed the trajectory of
the business and our strategy from celebrities to doing
prizes, and then there's a whole story of how we went to the UK
from that. Is, does that come from just
like the, the working being an entrepreneur or is that just
like unrelated and just like a, a life experience that's
happened? Yeah, yeah.
That was from I was I was supposed to die when I was born.
I was born with my stomach twisted and then and I and the
scar tissue from that surgery broke off 40 years later,
created a bowel obstruction, led to this crazy series of events
where I was flatlining in a hospital room and my mom, who
had gone down to get my brother and sister, had come up and
heard of the loudspeaker code blue and room 437.
And my mom works in a hospital. So she knew that was my.
She knew that meant flatline. Wow.
And she knows my room. So she ran down the hall.
She got to the door and the nurse said, I'm sorry, you can't
come in. This is really serious.
And she said, look, I was there when he came in this world.
If he's leaving this world right now, I'm going to be in that
room. So they let her in the room and
it was flat lined on a kind of table like this one in front of
us. And they were doing the the
paddles, the Electro, the defibrillator and and I've.
Always thought that could be a prize, by the way, the chance to
operate a defibrillator. Just to say so, you know, just
one city of life. The ability to go stand there.
OK. Bang.
OK. I don't.
You know, I wouldn't want to do it repeatedly.
So that is a terrible suggestion.
No, no, no. It's a completely different
space. Yeah.
Yeah, Yeah. Sorry.
That is hilarious.
Is it welcome to the podcast. There's things that everybody
should do once. I've always thought that you
couldn't have tube trainer drivers because everybody would
love to drive a tube train for a day, wouldn't they?
OK, so you could actually just make that an auction off prize,
drive a tube train for a day. Eventually you could get rid of.
I think there would be safety implications and training.
Implications, of course. Yeah.
I mean, everyone could be a pilot for a day.
Oh God. Oh, the emotional roller coaster
I've just gone through. Sorry, sorry.
That is Oh my God, that's funny. I did not even.
I didn't see that coming. Sorry, that's not an eye.
Yeah, but everybody who's watched the ER has a small
fantasy about operating those paddles.
Yeah. Yeah, I would agree with that.
Yeah. Where do you pick up the
sunshine? Up to the near death anyway?
So basically my mom basically saved me.
Here's what happened. She like she when they, she saw
me, she saw me with the defibrillator, the prize.
And she said, can I do this? No, But they, she, she, you
know, started to crumble. And then basically she looked
outside and she saw all these nurses and staff members and
doctors had gravitated outside the window of the ICU.
And there was like 40 of them just looking in, sending this
positive energy to her son, like sending love to her, the son
that they didn't even know. And she was so moved by these
people that it was like a spiritual transformation for
her. And she instead of starting to
crumble, she gathered her strength and she started like
basically talking shit to me was like Matthew, David Poles.
And these people are fighting to save your life.
They're fighting so hard to bring you back and you're not
fighting hard enough. And basically because she
fought, they kept fighting. And I fought like 4 1/2 minutes,
but I don't usually go that long.
But because she had fought, they kept fighting.
And then at one point, basically the, the main doctor kind of
like shook his head to say, this is done, this is going on too
long. And my mom grabbed him and said,
please don't call it yet. And then he turned back and he
said, wait a second. And then they said they saw
something never seen before in a hospital instead of the flat
line just going along and then like, maybe tip taking up, it
was just going along and all this the nice popped up.
Yeah. And I kind of gave like, like I
remember looking and seeing all the people looking for the
window and then I saw my mom and it came kind of give a thumbs
up. Yeah.
Yeah, but that she. Was presumably worried they've
been lasting damage. Well, yeah, I was supposed to,
yeah. When I left the hospital, the
doctor was like when I finished my career 30 years from now.
And I'm talking about the most extraordinary case I've ever
seen. This is going to be it.
We thought we had you had zero percent chance of survival.
And so the fact we have you going home with full faculties,
we have no medical explanation. Yeah, God.
So that changed after that. I did woke me up to a lot of
things. And that's when the business
changed. OK, so so Amaze has already
started, but it was in the US. It was in the US just doing
celebrities. OK.
And then you decided to change and go to the UK because usually
the reason why I ask is I speak to so many entrepreneurs and
everyone and leaving the UK and Europe and wanting to go to the
US and wanting to go to different spaces, right?
So it's very, I'm very curious because you don't often see
people going from that side of the world coming to this side.
So that's why I also wanted to obviously the near death
experience and the business changing.
So it will be really interesting to understand obviously from a
personal perspective, but also from a business side, why you
felt that it was the right move. Yeah, it was.
Yeah, it was a very unpopular decision.
It was really simple, though, actually.
We had done just celebrity experiences until that point.
The stuff like riding a tank with Arnold Schwarzenegger and
crush things or when a Lamborghini where Pope Francis
hand you the keys like. Crazy stuff.
We're going to get into that. So we had, we had just done that
stuff. And then after the experience, I
was like, we're never going to be truly world changing if we
only do celebrity experiences and you just become hyper aware
of how short your time is. It's.
A finite supply and yeah. Exactly, yeah.
And and stepping, I was out of the business for multiple months
as I was recovering, you know, and so you just you get
perspective you didn't have otherwise.
Like when you're in a day in, day out, it's really hard to
step back and say, hey, this might not work long over time.
And so, and we had done a campaign with Daniel Craig where
you got to go to New York, you got to go to the Aston Martin
track, you got to ride around in a one-of-a-kind Aston Martin,
and you got to keep Pastor Martin.
And that was the first prize we had.
Done. Basically Mr. Beast before Mr.
Beast, Yeah, he, that's a brilliant, that's brilliant.
Yeah, yeah. I mean, not the story.
Yeah, yeah, yeah. It is an extraordinarily
interesting question, isn't it? The whole Mr. Beast, in other
words, amazing things that now scale.
Yeah. It is an extraordinary idea.
Yeah. It's brilliant, Brilliant
insight. Yeah.
They always say that the reason why Mr. Beast does very well or
the brands that do the best are those that do what people
believe the government should be doing.
So it's like, oh wow. So, so actually a sound strategy
is for the community that I want to serve.
What does everybody expect the government to do?
And why don't we do it as a brand, right?
And then that's how you actually get people to, to, to, to
galvanized and come around the brand because they're doing
things that the, the, the, the powers that be should be doing.
So what is he doing that the government should?
Be so basically like going to Africa and Building Schools and
building well, so everyone's like, well, the world leader
should be doing this yes, like and Mr. Beast, the YouTube is
doing it and that's the you couldn't.
Predict it. Couldn't you, as a good
economist, that there would be a Mr. Beast?
Yeah. In other words, the per, you
know, in other words, you know, so it's a winner takes all idea
to some extent, isn't it? Because the person with the most
money can do the most remarkable things which will attract the
largest audience. And so you could have
effectively predicted the emergence of Mr. Beast.
There's a really interesting idea by the way, which is
invented by an economist called Matt Tabarock, which is it's
called a dominant assurance contract and it's a way of
getting people to effectively engage in communal activities
without a free rider problem. The idea would be if you had a
community which wanted a footbridge across the local
motorway, OK, the problem would be that you could ask everybody
to donate 5 lbs to the footbridge.
But then of course there'd be free riders, people who wouldn't
give £5 because they were relying on everybody else to pay
for the footbridge. And the dominant assurance
contract works, which I think is that an entrepreneur commits to
build the footprint, then sets out to raise money from lots of
individuals. And the deal is they have the
risk, which is if they're, if it's underfunded, they take the
loss, if it's overfunded, they keep the game.
And it's actually a very interesting solution to kind of
coordination problems. I always thought, you know, I
always thought it's an idea that the, in a sense it was made for
the Internet in a way. And so there's, I mean, there's
an interesting possibility that you could do, you could extend a
maze to community projects. So we're doing it.
We're doing it. We're building a full hospital
wing at Great Ormond St. Hospital, right down the street.
Whoa. Yeah, yeah.
Oh, this is incredible. Yeah, we fund the London Air
Ambulances, those helicopters like we fund.
We fund those, yeah. But here's the thing to the Mr.
Beast effect is he's just the one That story told it the best.
Well, I think so we, it's actually, it's painful to listen
to as you understand, because it's probably true, because we
know he came after us and we know we saw like footage of him
with like go Maze stuff on there, like vision boards and
stuff. But he did a better job of
storytelling it. And maybe Mr. Beast is a better
brand or whatever it is. Like he's, what he's built that
into is is probably a space where we probably could have
gone. You know, it's a good lesson to
learn. But but you can still do it.
Oh, yeah, absolutely. Like Steve Jobs always says,
there's no one more powerful than a storyteller, right?
Yes. And The funny thing is there's a
lot of organizations that do a lot of things.
But how you story tell in a way that people actually like, can
grasp on to understand and actually see the the the value
that you're providing. I think I always tell people,
whenever you're doing something, yes, you should do the right
thing, but you should also think, OK, how do people that
are not involved this this in this thing, find out about the
good work that we're doing so that he creates that compound
effect that other people want to do it too.
That's what Mr. B starts. So I know that a lot of people
are talking about creators and the fact that actually, if you
do care about the good, then you're not going to tell
everybody, but actually, how do more how do you encourage more
people to do the same thing? Right.
So by by them having and, and I know you talked about the fact
that initially people want the house, but then the fact that
they're also doing yeah, is also a great thing, right?
But. We teach storytelling classes to
everybody out of maze, even accountants.
Like everyone has to just take a a full half day storytelling
workshop. Interesting.
Very, very shrewd, yeah. Because all storytelling is the
most powerful, probably the most underrated skill in
entrepreneurship, right? It's because it's not just
marketing, it's not just product, it's also fundraising.
It's setting a vision, it's hiring.
And if you think about really, all social change starts with
the story. Yeah, just even amaze.
What's amazed next year is just a story.
Projection forward of a new possibility.
Absolutely. I've always wondered whether one
of the the United States just seems to have an advantage in it
in that if you watch, for example, whether it's The
Apprentice or Shark Tank or, you know, Dragons Den, as we call it
here. One of the most painful things
in the UK variant sometimes is people who patently have a very
good idea but have no clue how to wrap it up in a story.
And there are various debates about why that is.
Is it because American schools have show and tell that, you
know, from quite a young age you're encouraged to basically
stand up and give an account of something?
We've we've always debated that. Well, I mean, I think I would
say the UK like punches way above its weight class in terms
of like creative output, storytelling, writing.
But in America, you're taught believing that transformation is
possible. Yes, right.
And it is, it has geographic advantages in that, right.
It was founded by people that transformed their lives.
You have to be an insane optimist to make that journey in
the 1st. Place, but it's it's, but we're
also like, we are, you know, life, liberty, the pursuit of
happiness. It's this individual expression
of change. Yeah, I this is really.
Sometimes I think it's unkind in the sense that, well, no, the
narrative that you are the author of your own success and
anybody can be anything is, I think, a deeply unkind narrative
to people who are unlucky. On the other hand, it has net
positive effects, I think, because the percentage of people
who at least try is that little bit higher.
Yeah, I think, I think it is definitely net positive economic
effects. I don't know if it has net
positive overall societal happiness.
Interesting. Question.
Which is because being here has changed my perspective on that a
little bit, you know, because like, I mean community.
At the end of the day, what really brings happiness to joy
is a sense of connection. We all want to feel a sense of
belonging. In America, though, you you work
so hard to belong by being better than everyone else.
I always talk about like, if you confuse like.
So if you have to boil it down, I think audacity is a word that
you can use to, to have the the audacity to dream and believe it
can be something bigger than yourself.
And I always say that if you confuse American audacity or
American pace with European taste, right?
I always say that that fusion works really great.
Because I think that a lot of the times when I speak to my
friends that are in the UK, in France, they know everything.
Like you can speak to them about what's happening in crypto,
what's happening in the stock market.
They know it theoretically, but then you ask them, have you done
something with that? And a lot of the times they're
like, no, they don't want to take the risk.
Whereas I have my American friends that'll be like, oh, I
heard about this thing. I'm going to try it, right?
I'm going to try it. So if you have the ability to to
to, I think. That's where the length of
history isn't on their side, you know, because they build up a
series of patterns and historical context where they
like just. I can't.
Though I can't do that or I can't rise up this class system
where our ignorance is a little bit helpful in America, you
know? But also like the end of the
day, geography is really powerful and like we are the
land of milk and honey with like 10X more navigable waterways
than any other country, which like is 90% less effective or is
more cost effective. So you have like some also
systemic things in there that make this mindset a little
easier. You know, Australia like is the
same size country, but like in order to survive in that
country, you have to work with your neighbor to do it.
Like it's not the land of milk and honey, right?
So you can't just be this entrepreneurial person going out
to create your fortune to the West because you're going to die
on the way where in the US like you can.
So there's some, there's some of that that perpetuates it a
little bit too. So.
So you talked about the fact it was an unpopular decision coming
over. So, so walk us through that.
So you come from the land of milk and honey, right?
Right. And you decide to come to to the
UK. And so how was that like?
Like, why did it make business sense to you?
Because I know that a lot of the times in the entrepreneurial
space, everyone has an opinion. But when you have the
conviction, when you see something, you know that's the
right move to take. So So what is the thing that you
saw that made you want to make the move beyond the the the the
life experience change? Yeah, it was.
It was really pure, purely business oriented.
What happened was after that, after I came back from the near
death experience, we did the Daniel Craig thing.
We said, OK, let's start doing prizes that we control rather
than relying on talent. And so we started doing holidays
and those worked well and that kind of flywheeled and then we
started doing cars and that worked well and we said, OK, you
know, what's really at is houses.
A car changes someone's lifestyle, house changes
someone's life. And it's all of Maslow's
hierarchy of needs in one image, right?
Safety, security, status, relationship, self realization.
And so we said that where we can get the, the transformation of
like what a lottery does, but with the storytelling and impact
and salt like sense of like beauty that you didn't have and
that hadn't been done. And we launched that in the UK
because of smaller country, less expensive houses.
We thought all the houses would be more relevant to people.
We weren't sure how to do it regionally in the US and we had
a good business going with the celebrities in the cars and we
didn't want to kind of mess that up.
So we said if it's just houses in the UKA subscription, that
could be really powerful. And then we launched it here
while we're still in the US and it just like took off.
I mean, it was like a rocket. And, you know, like, similar
like to Netflix or Airbnb or Amazon.
Even in their early years, it was really, really fast growth.
And it was so extraordinary. They were like, OK, we should
just be doing houses. Like we had 25 people doing it
here, 200 people in the US doing the other thing.
They're about the same sales run rate after like 18 months.
Wow. Yeah, it was crazy.
And so I was like, OK, clearly we should just be doing houses.
And then the question was, all right, should we be doing that
in both markets or just focus on the UK?
And everyone's like you obviously do it in both markets,
do it in the US. But what they underestimated, I
thought was 21 is just like we have to buy 8 houses out in
front in order to do a house every single month, we have to
build and design those. So it's a lot of, it's a lot of
capital. We had probably like just enough
to do in both markets. But what doesn't show up on the
spreadsheets is the emotional cost that we would have to go
from 200 people down to 20 people in the US.
There's no reason to have so many more people doing this
thing that didn't require the same amount.
And the emotional toll of all these amazing people that have
been together for a decade. And then just thinking, oh, you
know, our investors, like, just take the best 20 people and
restart. And it's like, that's not how
people work. And like that's, you know, so a
fresh start plus like focuses the price of greatness.
And if we focus on this market and we get this big, then we can
come back to the US much stronger.
So that was a decision I made. I was very like, I was heavily
criticized for it for the reasons you discussed.
The board thought like that's crazy.
You're leaving the biggest market to go to that market.
But that was, you know, that was the decision we made.
So much so that I thought that makes was the British brand.
Yeah, some ways it is now like you know more majority of our
brand is just an expression of your culture, right.
The culture is just an expression of what people do on
day in, day out. And the majority of people that
work at the company are now British.
So like it's kind of so there is an.
Interesting question about an idea which which is to what
extent does it scale? I mean, I've always thought that
to some extent US lotteries are slightly insane because the
amount you win, you know, and some of those very large
lotteries is so insanely disproportionate.
OK, so winning a house seems to be about right in terms of
changing someone's life absolutely permanently.
One hopes for the better, although you can never predict,
of course, for those wins. Winning $200 million when you've
been living in a trailer park strikes me, is actually
something which is, you know, almost problematic.
But also in terms of the geography, I can see Amaze
working really well in smaller countries.
You know, you it could work in Ireland, it could work in
Denmark, I think maybe in the US if you live in New York, winning
a house in Arizona. Yeah, we would do.
Weirdly, you did do it regionally.
We would do it regionally, yeah. Yeah.
But your point around the
jackpot's really interesting because people can't really
conceptualize 200 million. No, right.
Like that's kind of why this works.
If you think about like if you were driving home on the A-40
and you saw an advertisement for a lottery for £8,000,000, it's
probably just a billboard that you said £8,000,000.
You probably wouldn't catch your attention because you've seen
the EuroMillions for 100 million or whatever.
Yeah, yeah, yeah. But if you've seen £8,000,000
house in Cornwall. Oh yeah, yeah.
That would capture your attention.
Absolutely, right? Because when you think about
winning the lottery, what's the first thing that you dream
about? Buying a house.
Buying a house, yeah. So you're kind of shortcutting
that. You're taking all the calories
out of the processing for people and then that's why like it has
the same emotion of the of the big cash without like all the
fixed costs of doing that. And did you guys just go like,
did you go straight into it? You bought the 8 houses or did
you test one first? Like when you did make the step
into the UK market and go into housing?
Because as you mentioned, it's a massive investment upfront,
right? Did you just go and make the bet
and say, oh, did you guys do some research on like what did
people actually need going back to the months hierarchy?
So what made you take that first step?
We we started very slow. It started with a £1,000,000
house in Cheshire. Yeah, I can never say that.
Right. But I think but like, but I
think I remember this. Yeah.
Got quite a lot of press coverage.
It did, yeah. It was actually an old house,
wasn't it? It wasn't a new build.
I remember this. I think I entered that.
Did you? Yeah, Yeah.
And there was this amazing story where the the guy who won was
this guy named Ian Garrick out of Lincolnshire.
And he had lost his wife to cancer.
So he entered because it was for Teenage Cancer Trust, but his
wife had also passed in the house that his two sons lived in
and he wanted. And so he did it and then he
won. And when he found out he won, it
was just like amazing emotional story and that kind of like that
just set us off a little bit. And then we went from a
£2,000,000 every house every three months to a 3,000,000
every two. And now we're doing, you know, 5
million every month. And you talked about
subscription, yeah, which is really interesting.
So are people liking the fact that they don't have to bother
with like keeping, like they don't forget, they don't miss
out. And always the intangibles that
are associated with being like a subscribed member, they're like,
walk me through the business model of being a subscription
instead of just being like a one off.
We're on and then we're not on. Yeah.
We do both. We make it so you can, you can
choose either subscription or come whenever you want. 70% of
the business is subscription. Wow and what you get for that is
you get additional entries for being subscriber versus the per
per pound. You get a chance to win what's
called monthly millionaires. So there's also a million like
we also make someone a millionaire every month in
addition to the house. There's other kind of benefits
of that. We're getting even more out roll
out more rewards for subscribers in the future where you
eventually feel like your subscription is free, you know,
and then and so that's why you get it.
Some people like the feeling of the autonomy of choosing.
I don't want the, I don't want the, you know, Cotswolds house.
I only want the Lake District house.
Yeah, but but yeah, but that's why.
But then there's also the convenience of just like it's a
reason to dream every single month.
But but, but when I talked about the fact that this feels a lot
like Mr. Beast, I think a lot of the times people think there has
to be somebody yelling in front of a camera, but this is
effectively Mr. Beast but without a face.
Right. Yeah, which may be why Mr. Beast
is is one more known, you know. No, but, but I think that if you
make the people, people that win the heroes, I think that's
actually like a much more sounder strategy because you
don't have to have a face, right?
I think that a lot of the times people have a face because the
brand itself cannot take the role of a human.
But I think that if the brand is acting like a human and this
becomes a platform for great human experiences, I think that
you just make the people that you are impacting the heroes.
Actually, 100% one of our tenants, our storytelling
tenants is make the customer the hero.
Yeah, we are the guide. Yeah, yeah, right.
And and and too many companies make themselves the hero, right.
That's why title lost and Spotify won.
Like they made those videos are all about Jay-Z and Beyoncé and
their plight. You know, it's like no one
wanted to see that like. And so yeah, we you're right.
If we, we really do work to make the customer the hero in
everything that we do. By the way, it's a very
interesting do you get economists come and approach you
and ask to research, for example, the effect on the
winners? Do you ever get?
No, we haven't. You must get television
companies approaching you all the time.
I was going to say Channel 4 must be on the phone more or
less continually going. Please can we film a winner?
Yes. Have you gone for that yet?
Or we. Haven't yet.
Not because we don't think it's good storytelling, because it is
a classic hero's journey every month, right?
Yes, it's every everybody, every customer wants a brand to help
them participate in their transformation, right?
Like it's essentially what almost every consumer brand is
selling, right? Put this rubber and leather on
your feet and become an athlete. Put this piece of metal around
your your wrist to become a Princess.
You know, like that's what most. So, yeah, a lot of people want
stories of transformation, so they come to us about it.
We we think we will do it one day.
We just want to do it on our own terms, probably on our own
distribution. But yeah, we think that's a big
opportunity. And that's really interesting.
I always say that it's funny how the brands that do the most for
you are usually the the worst at storytelling and you guys are
great at storytelling, but I've seen that they're usually, I did
a tour called Sexy Brands and Unsexy Industries.
And, and typically the Unsexy Industries are the ones that
actually are the most useful for you.
Just like food, like the food that you don't like, typically
that you like, that's great for you.
But usually the sexy brands are the ones that have to
overcompensate for the fact that they don't have any inherent
value and they have psychological value.
Yeah, or survival. Value.
So survival value, right? So when you're saying buy this
bag for 1000 lbs versus a typical bag for £100, that bag
probably cost the same to make. You're just adding storytelling
value on top of it to justify the fact that you.
Have well, the survival value there is your status.
Yes, yes. I have now higher status as a
result of having this bag so that when the group moves on,
I'm not going to be left behind and beaten by the Sabre tooth
tiger. Yeah, that's really, I mean,
that's still our neurology. No, it is.
Absolutely. Yeah.
I mean, we, we'll store well. Well, you know who wrote the
status game? I understand that.
It's fantastic. Very, very good.
But slightly depressing because you realise when reading it how
much of your motivation is really reputational.
Yeah. And that humans, in a way, the
argument is it's a good thing because humans are a prestige
culture, not a dominance culture.
Yeah. And so a lot of primates, a lot,
you know, effectively a lot of chimps.
Whatever you talking about that where like you wouldn't wear a
luxury brand into your pub where you grew.
Up. No, no, because it's very what?
The Hell's wrong? Yeah, yeah, yeah.
If I was so massive or she knows some back in the pub, what the
hell, Everybody knows who you are.
But, and there was some wonderful, there was some
wonderful findings which showed that you you get very high
status competition when you get an excess of males and also
people are strangers to each other.
So they have the chance to reinvent themselves.
So oil, the oil industry, of course, somewhere like Dallas
was absolutely sort of status seeking central because the oil
industry brings in disproportionate numbers of men
who are all effectively starting afresh.
So whereas, so the I think there was a fantastic paper which
explained effectively why Neiman Marcus launched in Dallas, not
in Boston, because in Boston it was where you went to school.
Yeah. It was all that sort of stuff.
People knew who you were. Whereas of course people went to
Dallas and effectively you were reinventing yourself from
scratch. And.
And of course those things mattered much more than the
famously American Express had that Do You Know Me campaign
back in the 1960s, which was really, I suppose, the anxiety
of people who are quite a big fish in Peoria, IL.
But when they went to a city 300 miles away, no one knew them
from Adam and they needed to kind of assert some sort of
status or prestige when you travel.
That's how well that that. Probably goes my airports are
probably full of luxury goods when you think about it, because
I'm going to a place with a load of strangers.
So suddenly I need a pair of sunglasses with machino in 2
inch high letters. I'm not really not a sponsor.
Yeah. Yeah.
No, no, no, no, no, no. I was using it as a very, very,
you know, a very, very out there, unapologetic luxury
goods. Do you know what I see a lot
though? I see a lot of like people
buying gifts for their partners, like last minute gifts as well.
So I think that there's a, there's a little bit of that,
but there's also a little bit of, oh, I need to get my my
partner something as I come back home.
So I see a lot of people like gift buying or people on the
phone to their partner saying, is this what you're looking for?
So, so I think there's a lot of that.
Happening they're very strange and then I mean the whole
airport retail thing I I asked the people at Toblerone you know
what is it about flying that makes people suddenly discover
the need to buy, you know, a toothless A Toblerone the size
of a baby's arm or a giant super chips.
What what's going on there? You know, they're not really
naturally connected and they, they seem to think it was
funnily enough just as kind of a snowball effect, which is they
happened to be in airports early and therefore they had an
unusual dominance of airport retail.
And it's just effectively been self perpetuating since then.
Part of it is also people are just like looking for permission
to justify an unusual action, right?
Like my? Girlfriend is the healthiest.
Person in the world, but on the airplane cheats terribly.
And it's like, well, I'm on an airplane, Yeah.
The usual rules. It's like people who drink at
8:00 in the morning because I'm in an airport.
Yeah, yeah, yeah, yeah, yeah. I'm in an.
Airport, yeah, the amount of like pre noon drinking that goes
on an airport is shocking. You know, you're like, there's
people like in suits. Very interesting thing by the
way, which is I think the question of course arises, which
is whether gambling or you know, or games of chance are rational.
And I think these games of chance are rational because if
you say actually X wouldn't change my life that much, but 5X
would really change my life. So I'll, I'll tell you a funny
story about this, which is back in about 1994.
Very good. Still do have a very good friend
called Tal Adams, who's kind of like a semi professional poker
player. And we were going to have a
Christmas party and the budget was cut by half.
So we said, well, there's not really that much point in just
having a rubbish party where we all go to the pub.
And my suggestion, which I never got permission for, was why
don't we take the now halved budget of 15,000 towels to the
casino, put it on red right. If we win, we go out and have a
fantastic party, OK, as we planned.
If not, yes, we've lost £15,000. We'll all go to the pub at our
own expense. But we can also tell our friends
for the rest of our lives about the time we lost 15 grand on a
single spin of a roulette wheel, and we all thought that was a
completely sensible thing to do, but we couldn't get anybody else
to agree. With me and my Me and my good
friends from LA used to do this. We called it Denny Wolinski and
we would go to Vegas all dressed up in suits when we were like
20-3 years old and had no money. We'd pull all of our money.
Yep. And we'd put it on the roulette
table or sorry, we put on craps. And if we and if we hit, then we
went to Smith and Wolinski's for dinner and got.
Amazing things. And if we didn't hit, we went to
Denny's. Brilliant.
Yeah, actually, I think that's, you know, that's total, actually
sensible, Yeah, as an approach to say, you know, certain things
in life. Creates memories.
Yeah, right. And you can talk about it on the
podcast. There you go.
Yeah, I've never talked about it.
Yeah. But but The funny thing there is
obviously if a lot of people, because you talked about the
fact that also that the danger of making the the customer, the
audience, the hero is also about like privacy.
There's all these different things in there.
And also I guess when usually when somebody loses, you would
think that the national reaction just like you saw in the Oscars
for everybody to clap for them. But sometimes you also get like
negativity. People are like, well, how did
you pick winners, et cetera, et cetera.
So walk me through like how you guys actually, you guys have a
massive job of selecting somebody to win, right?
There's a lot at stake here. How do you guys do that?
Like, like what's your selection process to make sure that you
pay you, you pick people the right way.
The people are agree that it's fair so that it keeps it a
positive energy because that's super important.
Yeah. I mean, we have super smart
technologists who who have figured that out.
Basically we from the beginning, we worked with this organization
called random.org, which is a bunch of like steps PhDs at a
Trinity College. And these guys are amazing.
They, they detest pseudo randomness, computer generated
randomness because it doesn't incorporate the unpredictability
of nature, but they love natural randomness.
And so they basically created this beyond my pay grade, but
they, they basically like can channel in like radio frequency
through like atmospheric noise. Sometimes you hear people doing
it through lava lamps. Essentially they can bring in
the in nature, bring in through hotbeds and then they can create
an actual like true randomness generator.
And so that's how we, that's how we select.
So. So why is that better than
computer jet computer? Generated randomness isn't
actually all that random. It's hacked, it's eminently
hackable and all that stuff. Yeah, yeah.
What I can see Rory going. Then I'm fascinated by this.
Yeah. The other weird thing about
randomness, of course, is that it is actually it.
Often true randomness looks less random than fake randomness to
the human eye. It's the same same human aspect
I suppose, where we see faces in clouds we're we're over
optimised for pattern recognition, randomness.
Is scary it's. Total randomness.
I mean, I always wonder about that, which is if we, if you
realise how completely random world history is.
Oh, yeah. So for example, World War One
sort of happened because the chauffeur of the of the
archduke's car took a wrong turn and then it was a car that was
very difficult to get into reverse.
Yeah. Have you read Fluke?
Fluke Brian class. It's absolutely brilliant book.
Fantastic book. And it is interesting because he
he makes the point actually, that it does actually suggest
that although life is much more random than we think, our power
to influence things may be actually greater than we think.
Yeah. Yeah.
Fairly small things can have really quite consequential
effects. Yeah.
But it, it, it I think, I think that's one of the best books
I've read in the last 10 years. Yeah.
Absolutely. Yeah.
So, so amazes now over £100 million business, right?
So you guys making the move to go to the UK, that probably was
a massive tick for you. And everyone was like, yeah,
that was the right call. So, so, So what went through
that journey? So you go to EU, the UK year
one, year 2 until now. Like what is the growth
trajectory from a financial standpoint for the business?
Yeah. I mean it's we, you know, we
went from zero to over 400 million run rate in, you know,
just under five years and and profitable.
Yeah. So it's it's and now we launched
in Germany, which is really interesting.
And the growth of your donations is going up pro, yeah.
Yeah, exactly. Yeah, we just passed.
We've given, you know, we're top five corporate donor in the UK,
five years in the other AstraZeneca, Glaxo Smith, Kline,
Barclays, Tesco, you know, so yeah, we've given over £120
million to charity in the UK. So it's like it's real.
Like it's, it's, it's real impact, you know, weird.
It's, it's definitely like having quite a, a ripple effect,
you know, and it's like really tangible projects for like I
said, the great Orange St. pediatric cancer unit that we're
building has this space editing treatment that is the first of
its kind. We actually helped fund the very
first person they ever did it to save this girl with, with life
threatening leukemia. Now it's going to be able to
house 200 kids a year. Like I said, the the London Air
Ambulances, like we fund those, those helicopters above London,
they now have the first mobile ECMO unit in the UK.
And I was actually saved by the very first mobile ECMO unit in
the world. When I was saved, the first time
it ever was moved was to save me.
And now we funded the first one in the UK.
We're, we're funding the New Eden Project.
We, you know, we're, we're building a Cancer Center with
Maggie's, which is going to be designed specifically for
patients recovering in new ways. Like it's, it's, you know, it's
real ripple effect. It's more than just giving away
houses. Oh.
Yeah, although actually I will also place a little bit of a
bonuses. You're also funding pretty good
architecture. I mean, absolutely, if you think
about it, that, you know, country house building by the
independently wealthy is in decline when you think about it,
that's one of our great, you know, in the UK, not always the
money raised from the best sources, I might add, but
nonetheless, it's a fantastic sort of patrimony.
And, you know, you know, you know, I mean, the National Trust
and the general British country house thing, along with
landscape gardening, it was a huge cultural contribution.
I mean, you know what, whatever the actual origins of the wealth
and actually building really first rate houses is worthwhile
in itself. Yeah.
Yeah, we, yeah, it's a big passion ours, you know, we're,
we're, we don't build every house, but we're building 3 a
year and eventually that'll be, you know, 6A year or
refurbishing every one of them, you know, so it gets, it's hard
to find like these great, like, you know, historic houses in the
Lake District or Cornwall that also have modern amenities.
And so like, that's a really fun thing for us to do.
I've got a cunning idea. One of them I've got a couple.
One idea, by the way, which is the the effectively things which
are hybrid charities and businesses really interest me
because I think we have a false dichotomy between it's either
charity, which is 100% sacrifice, or it's entirely
selfish. And economists don't really
understand the power of generosity because generosity in
itself can be enjoyable. And I for ages tried to get
someone interested in this idea where I was talking to Transport
for Wales. And one of my arguments is that
a lot of car parks are kind of you.
A lot of station car parks are kind of useless after 9:30
because you can't be sure of parking there.
And so I said, look, if you're a pure economist, you'd say we'll
have 10 spaces, which is just three times as expensive as all
the other spaces which are for people to use in emergencies.
You know, you've got a job interview at Goldman Sachs, you
know, OK, it's £30 to park rather than 10, but today it's
worth it. And then I thought, well, the
problem with that is the council then, or whoever operates the
car park looks as if they're price gouging.
And I said, if you had every street, every car park had 10
spaces which are the same price plus 20 lbs given to charity,
you've actually uncovered willingness to pay.
In other words, who really needs this parking space while
benefiting a charity without the operator of the car park looking
greedy? And there's also the
psychological reframing, which I find really interesting in this,
which is there's this huge argument about hospital parking
in the UK and now, you know, are they profiteering?
Is it too expensive? Should have hospital parking be
free? Well, the only problem with that
is you, unless you turned up at 5:00 in the morning, you'd never
be able to park. But it always struck me that
would people complain about hospital parking if the sign
says 80% of the proceeds from this car park go to the
hospital. In other words, would we
complain if we had to pay a parking fine, if, if you know,
or a speeding fine if it said the 100 lbs go towards Rd.
repair or goes towards, you know, Rd. safety campaigning or
whatever it may be. And the government is very, very
bad at effectively this business of hypothecating money
psychologically. And it's it's it's a treasury
item of faith that all, all money raised through the tax
system must be unhypothecated. In other words, it's for the
Treasury to do what the hell they like with.
And it always struck me the the Liberal Democrats did have that
idea, didn't they? 1% on tax for the NHS and you
paid this extra 1% of tax and it was probably separately itemized
on your P11 or whatever. What do they call?
OK, And it said, you know, this 56 lbs that you've paid extra or
whatever it might be. That's quite a lot actually.
But this month, OK, yes, you are paying £56 extra in tax, but
this isn't just tax, it's going straight to the NHS.
Now that struck me. If you, I don't think economists
understand that we do actually care where the money goes when
we spend it, I think he goes at some level.
I think he goes even further. I think the reason why a lot of
charities are finding it very difficult right now, it's
because, like you said, it goes to the NHS.
But what does that actually mean, right?
Like people want to be able to see the tangible like, and
that's why I think that amazes so.
Integration The local hospital. Yeah, yeah, because you can see.
Yeah. What's going to be done, what
you're going to get, who gets it and what is the mechanism for us
doing it? And that's why Mr. Beast does so
well, because people can see the tangible impact, right?
I think there was a, there was a tweet with Elon and like, I
forgot the, the global charity that it was, but I think it was
like not UNICEF, but it was like a world charity.
And I think they went on their back and forth like Elon does.
And then he said, I'll give you the, the 70 billion or whatever
it is that you need, but I want to see where every penny goes.
And there was no response, right?
And I think that that's just a, that's just a, a, the reality of
how people are. The first thing they'll say is
I'm pay all these taxes, but the roads aren't working, right?
So that they want to see where it's going to go.
And I think that if people actually said.
This is where degree is. Here's the storytelling you did.
There's actually like there's, there's a lady in Kenya and she
has a YouTube channel and she looks after some children.
She's in a local area and people can donate and they can see the
stuff arriving and like the shoes that you've given and
who's wearing it and what's happening.
And people are more investing into that because they can
actually see the tangible benefits of the village that's
that they're seeing on the usury channel.
So what it looked like a year ago, and it's after putting like
the money in, what they've built, how they've helped the
people, there's more just about like transparency, right?
And I think that the more you can see the tangible impact of
where it's going, the more trusted you're able to gain that
people want to give. They're going to make sure that
they're not just putting it into a black box and like it's
disappearing. And then you don't actually know
what the impact is. I would, yeah, I would agree
with that. People definitely want the
tangible impact. But I also think we hold
charities to standards that we would never hold for profit
businesses. Yeah.
We don't want them to pay well. Yeah, like people trying to
solve solve societal problems they must take.
Huge. There's a famous example of this
from the US which I heard on a podcast which is some guy took
over a cancelled charity and he basically spent the.
The AIDS red one you're. Talking about it could well be
someone spent a fortune on marketing and raised an absolute
fortune. OK, right.
And after three years of this, they said only 70% of what we
raise is going is going to charitable causes, 30% is going
to marketing. So they replaced him with
someone who is far more frugal and raised way less and raised
way less. Yes, yes, 97% was now going to
charitable causes, but the the overall about was about a 10.
Would you rather have 70? Would you rather have 50% of a
billion or 70% of 100 million? Yeah, that's exactly Yeah, yeah.
And and yeah, he got fired like it's a very, very.
Famous. It's a famous case, isn't it?
Yeah. Yeah, he has got.
Fire fired effectively for being successful in an expensive way,
yeah, rather than failing in an efficient way.
He has a really interesting explanation of why that is.
And he said if you think about the origin of charity, it
actually started with the Puritans.
The Puritans came to the US and it turns out they were
incredibly good capitalists. They're really good business.
People because they're stingy bastards actually, but they
always think of America as like we had Australia for people who
stole a sheep and if you're a whack job puritan, you went
West. Thank you.
But they but their but their religion said you can't do
anything in yourself interest essentially.
So they created the concept of charity to essentially say, OK,
we want to keep making this money, but we also want to go to
heaven. And so they created the concept
of charity to say, this is how we're going to pay off what
we're doing over here, right. So we're going to give 10%.
And so then so then you could never have charity and business
intersect because the charity was the thing that made you to
go to heaven because what you did in business, you know what I
mean? And that's like where it
permeated through our culture. And now we have this culture
where like we, we are totally fine paying people to do bad,
yes. We.
Don't care at all. Someone like can make 70 million
a year in a bank that plunges. Us into the great self-interest
side, yeah. We're like, no, it's fine,
they're in their self-interest. But if someone wants to make
500,000 running UNICEF, which is a 10 billion organization, we're
like no, no, no, no, no, no. Why?
Why do we? Is it like, is it because that's
threatening if someone's doing good and also making money,
their status is higher? Or like, why do?
Why do we hate that so much? I.
Actually think that one of the things that will be most
interesting in the field of economics would be a
redefinition of poverty. And in particular, the problem
we have in society at the moment, which is it's not that
there isn't enough money, it's back end weighted in terms of
people's lives. Now I, I've got a vague theory
that you could transform the British economy and eliminate
large amounts of poverty if you said you have your student loan,
but you don't have to spend it on education.
In other words, so my, you know that famous phrase which is they
asked someone how did you get poor twice?
They said first slowly and then quickly.
In a way, if you asked me how I got rich, it's the other way
around. It's first quickly, then slowly.
So there were certain decisive moments where suddenly you got
£4000 in the bank. So now you can buy a car and
make yourself more effective because you know that if
something goes right wrong with the car, it's not going to ruin
your entire life. So I had this very interesting
experience. I, I, I've got to be careful,
I'm not giving away anything. But in two cases, my wife had an
old car which we replaced with an electric car.
We should sell it and maybe we should sell it and give the
money to charity. But in two cases we knew
somebody who didn't own a car and had to walk to work who was
actually quite useful to some relatives of ours.
And we knew someone who was very, very helpful to my own
father and we wanted to give them the car, just give it to
them. And in both cases, they turned
it down because they couldn't afford the running costs.
And I suddenly realized, OK, we've got, in other words, if
you went to people at the beginning of their life and you
gave them a one off lump sum, Roger L Martin believes that
you, the tax system should work. Not that the first £10,000 you
earn every year is tax free, but that the first I think was he
was Canadian. So the first 250,000 Canadian
dollars you earn in your life, that's free of income tax.
So effectively, if you front weight people's wealth so they
have a better cushion and they don't have to get into debt,
right, I think you could actually transform all sorts of
things like happiness, you know, actually people.
So poverty in a sense is the lack of freedom to take evasive
action from being poor in a funny kind of way.
And if you give people constant Chinese water torture, drip,
drip. So oddly, the people who
proposed this were actually quite right wing people in the
US who wanted welfare to be a lump sum system.
And the narrative is always that if you give a lot of these
people a lump sum, they'll do silly things with it.
And all the empirical evidence in kind of effective alcoholism
suggests that to a remarkable extent, people don't.
You know, I'd go even further and say that to some extent, if
you've got very little money, drinking and smoking a lot is
actually quite rational because they're quite considerable
pleasures which don't mess with your cash.
Sure. Yeah, right.
You know, I mean, there was a famous John Reed who is the
health secretary here, who famously was a smoker while
being secretary. You have to keep it fairly
secret, but the, the I, I think if you, the way to re the way to
rethink welfare is to understand the path dependency of life.
And so in a sense, you know these, you know, these games of
chance where if you have a chance of having a lump sum at
30, that you know, 5000 lbs at 30.
I mean, bluntly put, you know, my entire life changed once
because I inherited this sounds absolutely trivial. 1000 lbs
from an aunt. And I had that then and I kept
it and I knew it was there, which changed my attitude to
money significantly. And then I inherited from
another aunt. I inherited 20, by the way, just
a bit of total, total irrelevance.
But the thousand fans I inherited from an aunt came from
the fact that she married the son of a man called Roberts who
invented the Caterpillar track and sold the Caterpillar tract
to, I think the California Tractor Company.
He sold the patent in the before the First World War, I seem to
remember actually. And I thought, well, nevermind,
you know, the company then went on to rebrand as Caterpillar.
So this 1000 lbs. I got was a tidy residue from
this effectively her husband's father being the inventor of the
Caterpillar tract back in about 19, I think it's 1910.
And by the way, just sorry, it's a detail.
What's quite famous about the invention by this company in in
Lincolnshire that invented the Caterpillar track is they made
the first ever corporate video in history.
Sorry, this is a weird connection, but they actually
made a film of the Caterpillar track and they showed it in
cinemas. It's a silent film.
It only survives with German subtitles, rather rather
weirdly, but you can see it on YouTube and it's the first
commercial film ever made that was totally irrelevant.
I'm sorry about that, but I thought I thought I'd share it,
Yeah. But guys, this has been an
exciting episode. Literally every single second of
that from the start, going from your emotional story to Rory
taking us to a completely different space.
It's been exciting. But but Matt, you've been an
amazing, it's been incredible. It's been incredible.
We'll sure we'll have you back again to see all the good work
and talk about all the impact that you guys have been been
generating. So thank you.
Thank you, Alfred. Thank you, Rory.
That was a lot of fun.