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I have a two part question. But the first part is can you really describe that? Because everybody knows the scarcy model. You just you put less product out right, drive up to demand. But I think there's some more,
there's other elements that actually make that. It's not like you can just make ten water bottles and say I only have ten water bottle, I'm a charge one hundred dollars for them, right, Like, from your understanding and working inside of it, what made the scarcity model work when you guys were doing.
It, Yeah, it was specifically when Nintendo, or just in general.
Just in general, but Inintendo, let's talk about that since you were in it.
Yeah, so we were in experiential marketing. We travel from city to city putting up like these literally bringing the video game to life, like that was my job, right, and we were doing that, but the supply in the store, the product wasn't available. So like the hype gets built up of like where can I find this thing? The value gets built up of, like where I will pay above what it's asking for to get this thing because I've experienced it.
And so so you.
Were promoting a product with no product available. Correct, The promotion was done with no even release date.
No, the product was out, you just couldn't find it. But we like our teams, and this was one of many teams all across the United States. We were out every single day literally creating the portions of the video game that you could walk into. That is very commonly known now, ten fifteen years ago, it was unheard of. This is also like social media was just becoming like a business utility, but it was like, how do I
create my product and turn it into an experience? If people have an immersive experience as opposed to just being in the isle of best buy and trying the product. It's a completely different compelling moment that also makes you have a buying decision more expensive than you would usually have. Right games were like maybe forty to fifty dollars. At the time that we fit board, I believe it was about three hundred dollars, So it was a different gap
in the buying decision. What I'm telling you now is I didn't realize what was happening until I read the book The Psychology of Influence. And so we were traveling all across the country setting up these activations, and no one could buy it in this door. And so by the time Christmas comes around, it's like, hey, hey, fever, like, everyone's trying to find this product no matter where, they'll find it, and they'll ever they'll pay triple and double
for the product. We see the same thing happening in the sneaker industry, right like, people will pay way above the fifty or one hundred dollars because they cannot find it anywhere else. And so what I learned in the Psychology of Influence is the first time that they saw that happen was with the Elmo doll. Elmo took on me Elmo, and they the marketing industry and product industries were kind of conspiring to do this because they realized they could get parents to buy two products as opposed
to one. So if I'm a kid and I want this we Fit or I want this Elmo doll the entire year Christmas comes, as a parent, you have promised them that you get to the store, you can't find it anywhere, So you know what, you buy them the next best thing. And then what those companies were doing is is right after Christmas, it's flood. Almos were flooded on the shelf. You can find it any and everywhere, and so as a parent, you also buy them the
Elmo doll. And so they literally increase the lifetime value of that customer by not having the product that everybody wanted the most available when they needed.
It the most.
You're gonna buy something to just wrap and put under the shelves, and you're gonna buy that thing when it becomes available, and you literally doubled the lifetime value of that customer. What I learned when I read that book is that's exactly what was happening with that product. At that time that we were promoting it is parents went and bought anything that they could possibly buy from an
electronic standpoint for Christmas. Right after Christmas and right after the holidays, that board was flooded and any and everywhere, And I just didn't realize that. I only understood the experiential component of bringing people in so that they can experience it and so that they would buy the product when it was available. So it was a weird time that we were in that I had that realization once I read that.
So the whole idea is like to have it not in demand when you need it the most, and then overflow of demand after peak season is over.
Yeah, So to not have it available when you need it the most, when you need it the most, you'll buy something else.
I'm going to buy Mario tennis.
Yeah.
It's like if you you have a significant other and she wants this very specific diamonds, you can't. You've promised the diamonds because you know how important it is. It's the only thing that she's asked for. So you get to the jewelry store. The diamonds are nowhere to be found. You've gone to numerous stores, you cannot find it. You're not going back home without something that's done by design
and intention. So you're going to buy that thing. And now when that thing becomes available that she really wanted, well, that want doesn't go away just because you got you buy the thing again.
The stinker thing is perfect. It's like every Christmas Join is going to release eleven, right. If the kid doesn't get the eleven, they'll probably buy the kid pair of KDS. Nike sees that, Oh, restock and now everybody gets to have the shoe, and now you have the customer more than more than one purchase.
Yeah, it's it.
And I think one of the things about reading that book and understanding is that at first it pisses you off, like, man, I felt for all these.
Traps as you was saying it, and I'm like, I think I felt it.
But then I think as an entrepreneur, you can use that and turn that around, right. And so the difference between the two is, I think on the advertising industry it's there's a little bit of manipulation, and from an entrepreneurship standpoint, you can use that in your favor of thinking like, well, how do I market a product to this person? Where they if I don't have it available, then there's something else that's equally or close to what they want, but they still keep them around long enough
that they also buy the thing that they want. There's one way to look at it, right. The other way to look at it is intention. Is your intention to manipulate people into buying two things? Or is your intention to increase the lifetime value of the customer in a meaningful way that increases their affinity to who you are and what you're building.
I think there's another way to look at that, right.
And then when I think of like black businesses, and I see this happen in the food business more than anything. You'll go to a restaurant they don't have like nine things on the menu.
You're like, man, I'm never gonna come to this restaurant again.
And then I've seen other other menus and other companies who will say, well, first come first, sir, right like if we run out, we run out, And you start getting to that early because they've set a different kind of expectation around the scarcity and limited availability.
It's how you communicate it.
In one instance, I see black businesses being demonized for that they never got what they say they gonna have. They never open when they say they're supposed to open, they close in early. And then I've seen it manage the expectation, manage around that. In other south By Southwest, the barbecue place there is a prime example. You know that if you don't get there at six o'clock in the morning, you may not get that barbecue because they
once they run out, they run out. You're not saying, like, man, they don't have anything together. You know what, You wake up the next morning at six o'clock because you really want that barbecue. Everyone's spoken so highly about it, and you know that it's now a very kind of sacred experience that you have that you wouldn't have anywhere else because you get to try something that other people may
not try because they've a lot. It's about how we manage expectations in business, and then how we communicate the value of what we're doing. In one end, you never going to go back there because they don't never have anything together. Is literally no difference. The supply is gone. You get there first, You get there first, one instances coveted, and then the other instance is demonized. And that's not fair, but it's a business lesson that people have to learn.
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