Moats, Marathons, and the 7 Digital Superpowers: Jeffrey Towson on Building Competitive Strength in a Disrupted World

[00:00:00] Ronen Mense: Well, we’re back again for the Epicenter Podcast, episode 35. My God, [00:00:15] it’s, uh, slowly creeping up there. Um, on this podcast we feature industry influencers and. Business leaders who are actually helping shape today’s digital economy. And well, I have a, a super interesting [00:00:30] guest who I, uh, discovered during COVID, uh, when I was trying to learn.

[00:00:34] And, uh, Jeffrey Toson, welcome to Epicenter. Thank you. Appreciate it. This is great. Welcome. Uh, super excited to have you here. I know we, we connected about what, three years ago? Couple years ago? [00:00:45] Cov Yeah. COVID time. Yeah. I discovered your content and I was like, let me get a hold of this guy. Um, let me see what he is up to.

[00:00:52] And, uh, the topic of today’s, uh, podcast is moats and Marathons, building and Measuring a Competitive, [00:01:00] competitive Advantages for Digital Businesses. Stolen Right from Jeff’s own book. I’m so unique. Jeff, tell us about yourself. Give us the background, you know, like, uh, [00:01:15] where you come from, how you came to, uh, you know, becoming such a, uh, a Penn Smith and, uh, podcaster and everything in between.

[00:01:24] Yeah. I mean, it’s, it’s

[00:01:25] Jeffrey Towson: kind of been a strange cool, but strange trip, I suppose, uh, these [00:01:30] days. I live in Asia, although I’m, I’m spending a decent amount of time in Europe and I basically do digital strategy. Which is software data technology. Increasingly it’s ai. Mm-hmm. Which [00:01:45] is fantastic, and that tends to be Asia focused, but really it’s global at this point.

[00:01:50] So you, you work with companies who often not totally sure what to do. You can write books, you can teach professor, you can do podcasts. I [00:02:00] mean, if you have your subject in life these days, and it’s kind of a. Complicated, evolving subject, which I have. There’s a lot of avenues now. You can invest, you can consult, you can do po.

[00:02:11] So that’s kind of what I do. I sit in my little spot. Mm-hmm. [00:02:15] Um, and it, it also helps that China is one of the epicenters. Yes. So I’m kind of, I mean, I, my joke is I’m at the intersection of two like really cool things, like digital’s super [00:02:30] fun and it’s cool and the rise of China and Asia. It’s super cool and it’s super fun.

[00:02:35] Like, and I kind of get, you know, let’s go talk to Alibaba, you know, let’s go talk to 10. This is great. Let’s go to Singapore and meet Lada, CEO. I’m like, that’s [00:02:45] fucking awesome. Can I swear on your podcast? Oh, absolutely. Yeah. I’m like, I’m like, this is awesome. Let’s do this again. Like, so, um, yeah, it’s kind of just a lot of fun stuff that sits in my wheelhouse these days.

[00:02:57] Um. Yeah,

[00:02:58] Ronen Mense: having a lot of fun. And, [00:03:00] but, so, but you, you, you’ve been a, a university lecturer, professor, um, you’ve written a few books. What, I mean, how did you get from there to, you know, from where you were to, to where you are right now?

[00:03:12] Jeffrey Towson: Uh, I mean, I’m, I’m just an analyst. Okay. That’s all [00:03:15] I do is I. I, like, I sit at a desk and I take things apart.

[00:03:19] Mm-hmm. And I try and figure out the answer. Mm-hmm. What’s next? Good advice? Uh, you know, so came out of a consulting background. Okay. Which is pretty much what you do. Right. Uh, advised a [00:03:30] Saudi billionaire for a while on his businesses. Worked out of Saudi for a while, came to Asia, but. You know, it’s all kind of the same thing.

[00:03:39] Mm-hmm. Right. So now you’re looking at digital companies or you’re looking at companies going digital, which is kind of [00:03:45] all of them. Yes. Not all of most of them. Um, so it’s just analytical work. But these days, if you’re an, in the past, if you were an analyst, let’s say 15 years ago, what do you do with that?

[00:03:56] Well, you can invest, you can consult, you can be a [00:04:00] professor, you can write books. That’s kind of it. Yeah. But now there’s, there’s ultimate channels. You can podcast, you can do videos, you can do blogging, you can, I mean, now there’s so many channels.

[00:04:13] Ep-35-Jeffery: Mm-hmm.

[00:04:13] Jeffrey Towson: And of those [00:04:15] books and being a professor are kind of the least interesting.

[00:04:21] Like, but they do have heavy clout. Right? I don’t think they have clout really. It used to be being an author, professor had some clout, but mm-hmm. [00:04:30] You know, there’s a million professors in this world. Every town has a university with a professor teaching accounting. Nobody knows ’em. Right. In Asian culture, it gets a lot of respect Now.

[00:04:40] That’s true. Yes. If you’re a professor, I was a professor at Peaking University in Beijing. Wow. [00:04:45] That was a big deal. Yes. Like you would go to. Secondary cities at a restaurant and people, you, maybe the waiter asked you, what do you do? I say, oh, I’m a beta jho. And they would stop and they’d be like, oh my, okay.

[00:04:59] That [00:05:00] doesn’t happen anywhere else. If you’re, you know, if you’re a professor in New York City with your buddies. Maybe trying to get a date. Uh, that’s not the job title that gets hedge fund manager gets the date right. Professor doesn’t get [00:05:15] you the date next in Midtown Manhattan on a Friday night. So yeah, China’s a little bit funny in that regard, but, um, these days.

[00:05:24] No, uh, there’s reasons to do those things and I do do those things. I think writing books [00:05:30] and is one of the few ways to develop real depth of thinking. Mm-hmm. You can’t get there with blogs. Um, so I think there’s value in that. But in terms of reach, no. Professors very limited. Mm-hmm. [00:05:45] Uh, books are pretty limited.

[00:05:47] Uh, podcasts are fairly powerful. A global reach. Right. So there’s still reasons to do all of these activities. Mm-hmm. But it’s all a manifestation of the same thing, which is I sit at a desk and [00:06:00] I take things apart and I try and sort of ex, you know, figure out what to do with this. Mm-hmm. What do you do as a supermarket in Brazil with, um, generative ai?

[00:06:14] What do you do? [00:06:15] And the answer to that is don’t worry about it my friend. Now, what do you do with MA apps and mobile and delivery? Oh yeah. You better get moving. Yes, because there are a lot of really smart companies coming up on your six, and they are very good at [00:06:30] disrupting people who have these big legacy assets.

[00:06:33] Okay, generative ai. Don’t worry about it. On demand delivery. For, let’s say beverages and alcohol. Mm-hmm. Yeah. You better move. Um, so that, that sort [00:06:45] of, you build all these, you analyze it, and then you sort of maybe you give advice on what to do. That’s, I actually did that with the supermarket in Brazil.

[00:06:53] Ronen Mense: Can you unpack that a little bit more? Like what’s the process that, um, you know, ’cause we have a lot of listeners, [00:07:00] uh, of this podcast who are actually in a tech company or in a company that is involved in digital transformation of some shape or form. Yeah. What, how do you, how do you kick that off, like.

[00:07:12] How do you rip it apart? How do you give [00:07:15] actionable like plan and, and then make sure that it gets implemented properly?

[00:07:18] Jeffrey Towson: Yeah, I mean, I’ve written literally seven books on this one question. Okay. Right. Like, let’s see if we can cover it in the next 40,

[00:07:26] Ronen Mense: 50 minutes,

[00:07:26] Jeffrey Towson: eight years of research. Seven books [00:07:30] on one question.

[00:07:31] Mm-hmm. Which is how do you build. And create and maintain competitive strength under digital change. Mm-hmm. Which is kind of what everyone’s dealing with now. [00:07:45] Some businesses are not, if you’re Starbucks. The digital tools don’t make that much of a difference to you. If you’re in retail, if you’re in auto, if you’re in media, yeah.

[00:07:56] It is just, you’re getting hit. Um, and you gotta [00:08:00] know what to do and what not to do. ’cause the truth is, most CEOs, you can’t do 20 digital initiatives. Mm-hmm. Uh, although the vendors will come to you every week and say, we’ve got a new tool, my friend, and you’ve gotta buy this, because if you don’t, you’re, you’re in trouble.[00:08:15]

[00:08:16] Right? No. So that’s where the, the strategy bit comes in. Look, look, and I will do this with companies, uh, in Asia, China, Germany, France, Brazil. Here’s what winning looks like in two years. Let’s, [00:08:30] let’s describe it. Oh, and by the way, here’s what losing looks like in two years. Based on that, you have to, you’re gonna do a lot of things, but there’s two or three that matter. Mm-hmm. You can play with generative ai, you wanna do some [00:08:45] NFTs. Everyone was doing NFTs last year, have some fun, but there’s two or three activities. You’re gonna have to invest serious mind money resources because if you don’t do these two or three world is either gonna be a lot better or a lot worse for you [00:09:00] in two years.

[00:09:01] That’s the strategy judgment question. Um, and um, a lot of that is, you can read the books. We do consulting engagements. A lot of it’s just talking on the phone. Mm-hmm. CEOs will call, can [00:09:15] we talk about, I’m like, yeah, it’s fine. Don’t worry about it. You’re good. Really? Yeah, yeah, yeah. But you’re pretty good.

[00:09:19] So a lot of it’s kind of relationship. They often don’t know who to call ’cause there’s nobody on their team that has real depth in this. Mm-hmm. And the stakes of winning [00:09:30] versus losing are getting more extreme. Yes. If you win, you can win bigger. And faster than ever. If you lose, it’s pretty brutal. And it happens, like the stakes are going up for getting it right and getting it [00:09:45] wrong.

[00:09:46] Um, so a lot of it is just sort of becoming a little bit of a quasi team member for them to call. Uh, now if you’re GE or you’re Anheuser-Busch or whatever, okay? You have a digital team and maybe you just want a [00:10:00] second opinion. Mm-hmm. But if you’re a medium-sized supermarket in Sao Paulo, you don’t have a digital team.

[00:10:06] You have people who know how to stock the shelves and order and build stores. And even if you try and build the digital team uh, [00:10:15] those people have all the options in the world these days, right? Mm-hmm. So it’s usually somebody like me who’s sort of a bit of an advisor, plus that’s usually how you get there.

[00:10:25] Um, retailers in Sao Paulo, um [00:10:30] media companies, newspapers in Singapore, uh, depending what sector you’re in, this is a minor problem or a major problem. The auto people are freaking out. Mm-hmm. CPG companies, e-commerce, retail, [00:10:45] media, communications, they’re all freaking out and they should, mm-hmm. You know, podcasters.

[00:10:51] If you’re in the content creation business, I do content. You do content? Uh oh dude. The world keeps getting turned upside down. Yeah. It’s [00:11:00] like,

[00:11:00] Ronen Mense: so, uh,

[00:11:01] Jeffrey Towson: other won’t be

[00:11:02] Ronen Mense: us sitting here. Right. It’ll just be, uh,

[00:11:04] Jeffrey Towson: other sectors are getting hit transformed. Mm-hmm. But it’s happening slower. Mm-hmm. Industrial healthcare is happening, but it’s kind of slow.

[00:11:14] Financial [00:11:15] services. Banks, yes, but slow. Some people are on the frontier. Um, and things are a little quicker. Mm-hmm. Other companies are like, eh, we

[00:11:24] Ronen Mense: don’t

[00:11:24] Jeffrey Towson: worry about

[00:11:24] Ronen Mense: this

[00:11:24] Jeffrey Towson: stuff.

[00:11:25] Ronen Mense: So like a Starbucks basically. Coming with [00:11:30] a ordering system via mobile app, that’s not a digital strategy. That’s just table stakes, right?

[00:11:39] It’s an upgrade. It’s an upgrade to your

[00:11:41] Jeffrey Towson: existing. Most businesses have to upgrade with [00:11:45] technology over time. It’s very normal. That’s very different than something that’s transformative, that creates new business models we’ve never seen before. That changes the customer experience so much. That you become obsolete if [00:12:00] you

[00:12:00] Ronen Mense: can’t match what they do.

[00:12:01] So what, what, what are some examples of of companies that have changed the customer experience so much from, from your perspective or companies that you’ve worked with?

[00:12:11] Jeffrey Towson: Yeah, I have a little cheat sheet I use. I mean, there’s a bunch of books, but really [00:12:15] who’s gonna read seven books? Certain people do, but most.

[00:12:17] And then I have a couple little cheat sheets and one, let’s, let’s see. The cheat sheet one is, I just call it the digital superpowers. Mm-hmm. And there’s seven of them. If you see this emerging in your industry? [00:12:30] This is like you’re fighting someone in your business year after year and suddenly they get a superpower.

[00:12:35] Mm-hmm. If you see this emerge. Yeah. You gotta hit the panic button. Mm-hmm. And one of them is like, is there a 10 x improvement in the user [00:12:45] experience? Mm-hmm. If there is, you know, that’s a big, big deal that is YouTube emerging and suddenly the cable companies. Hit the panic button. Mm-hmm. Because it’s like, wait, they [00:13:00] offer millions of VI videos for free.

[00:13:03] That’s a real problem if you’re a cable channel. Mm-hmm. Right. When WhatsApp emerged. You know, mobile companies used to charge you for text messages. Yep. Kids pay [00:13:15] attention to that and it’s like, Ooh, that’s a big, when Steve Jobs came along and said like, you don’t have to buy CDs anymore with 10 songs, nine of which you don’t want.

[00:13:25] You can buy one track you want for 99 cents. Mm-hmm. And you can listen to [00:13:30] it anywhere. That was a 10 x improvement and that’s, so we see that sort of 10 x improvement. Um, supermarket’s going digital. Mm-hmm. Which is mostly a China story, but actually Brazil’s pretty good at this, which is [00:13:45] surprising. Um, that’s a game changer.

[00:13:48] 10 x improvement, um, beauty and fashion, which is merging with media.

[00:13:55] Ep-35-Jeffery: Mm-hmm.

[00:13:55] Jeffrey Towson: And it used to be you would go down to Sephora Sephora’s a good. People are [00:14:00] buying makeup and cosmetics on TikTok shop, right? They’re watching 90 minutes of videos every single day and then clicking over to buy lipstick, right?

[00:14:11] If you’re Sephora, how do you compete with that? Oh, and [00:14:15] by the way, people love it because it turns out beauty products. Okay. Yeah. It’s, it’s a lot about the retail experience. Walk into the store, have a good selection at a good, but it’s a lot about. Entertainment and [00:14:30] psychology. Mm-hmm. And media and staring at a screen for 90 minutes a day.

[00:14:34] Watching your favorite influencer. Talk about the newest brands they found in Milan. Mm-hmm. Okay. There’s a lot more to the user experience than just retail. It’s emotional, it’s [00:14:45] entertainment, it’s educational, so when the user experience has a lot of dimensions to it. Mm-hmm. There’s more that you can do with digital tools.

[00:14:57] Now, this is why Starbucks doesn’t have a much of a problem [00:15:00] because there’s not really much to the user experience of buying a cup of coffee. Not really. You can order it on your phone and you can have it delivered. Okay, that’s fine. But people aren’t watching 90 minutes of coffee videos, right? Unless [00:15:15] you wanna become a barista, right?

[00:15:16] Yeah. And maybe you go down and sit with your friends in the nice store, and that’s part of the experience. But there aren’t actually. Too many dimensions to the experience of buying a cup of coffee. Mm-hmm. Uh, and the, the dimensions you do [00:15:30] have are mostly in person. Get the cup of coffee, sit with your friends.

[00:15:34] Yeah. So, yeah, like what should I do with digital? Eh, you’re pretty good. Have an app offer delivery. You’re probably gonna have to have some automatic robot [00:15:45] baristas at a certain point. But yeah, I wouldn’t worry about it. I think you’re in pretty good shape.

[00:15:49] Ep-35-Jeffery: Mm-hmm.

[00:15:50] Jeffrey Towson: Um, other businesses, it’s like, no, no, no.

[00:15:52] You, you’re a supermarket down the street from the new Alibaba Fresh Hippo. Yeah. Hit the panic button. ’cause they’re [00:16:00] changing the entire nature of this game. Um, so. So that would be one user experience, but then you can go through the others. Does it create network effects? Does it create a powerful competitive advantage?

[00:16:13] Um, does it create a platform [00:16:15] business model? Um, this is all digital strategy stuff. Mm-hmm. Um, is there a viral mechanism that gets you users? Um. Th Then there’s the other, but that’s kind of more in the strategy weeds. Um, [00:16:30] yeah, if you see one of those emerge, if you’re a regular retailer in Amazon or Taobao, Alibaba, show up with a marketplace platform business model, that’s just a more powerful business model.

[00:16:42] And they pretty much rolled over everybody. [00:16:45] Um, you know, toys R Us in Trouble, a lot of these retailers, big box retail in trouble. Um, and then others responded to that, like, let’s say Best Buy, everyone thought Best Buy was in deep trouble. [00:17:00] Turns out they came up with a pretty great business model by offering their Geek Squad and becoming your retail plus a service business.

[00:17:07] Mm-hmm. Where my mom, whenever she buys a tv, she brings the Best Buy people out to help her. ’cause it’s too, so there’s [00:17:15] counter strategies too,

[00:17:16] Ronen Mense: right? So the, the, the plus, uh, plus effect, right? So I mean, uh, it’s like you can sell something or you can sell something with service, or you can sell something with service and after service.

[00:17:29] And [00:17:30]

[00:17:30] Jeffrey Towson: you know, if you’re a content business, yes, content is pretty brutal business if you’re a content plus service business. That’s McKinsey. That’s a nice model. Yeah. Consulting plus deep strategy content. [00:17:45] That’s a really good business model. Um, so there’s, there’s counter strategies to these things. So, um, if you know what you’re doing, usually things can usually work out.

[00:17:56] Where, where does one find this, uh, this framework? [00:18:00] Uh, you can go over to my webpage, jeff towsen.com. Um. There’s endless, there’s a podcast. The Tech strategy podcast was my podcast. There’s seven books. I mean, I, I have content. Coming outta my years, uh, literally like 700 [00:18:15] articles. Mm-hmm. You know, 192 hours of podcasts.

[00:18:18] Like, it’s crazy. Um, every now and then I meet some crazy dude. He’s like, I listen to all your podcasts, like, really? 192 of ’em. He’s like, yeah. I’m like, I’m like, dude, [00:18:30] you’re like me. Like, we should hang out. Like we’re both like so deep into for most people. No, I read the, one of the books is called The One Hour Moats and Marathons book.

[00:18:39] We distilled all of it down to a one hour book mm-hmm. That you can read in an hour that’s co-published by [00:18:45] me and McKinsey. Uh, that’s for most people, right? Like, you know, if you wanna go down the rabbit hole, I got you covered. Like, that’s where I live.

[00:18:54] Ronen Mense: I live in the rabbit hole. Like you come on down. Th this framework that you talked about, is it similar to the moats and [00:19:00] marathons, or is, is it a new concept?

[00:19:02] Jeffrey Towson: Uh, it’s all together. It’s all digital strategy and digital transformation. Okay. That’s, that’s the, the one question. And if there’s a book which literally just came out a couple weeks ago called One Hour Moats and [00:19:15] Marathons. Okay. Tell us a little bit more about, and that’s just a distillation of everything to look, you’re a busy executive, you can read this one in an hour.

[00:19:24] Mm-hmm. You know, that’s it. And it, it pulls the key points and it’s very [00:19:30] usable and sort of much more user friendly than now. Investors tend to go down the rabbit hole. Mm-hmm. Because they love frameworks. Most CEOs can’t do that. They’re executive, they’re too busy. Right. Um, so that’s, that one is probably [00:19:45] pretty helpful.

[00:19:46] Uh, and we did that on purpose.

[00:19:49] Ronen Mense: Well, I, I, I definitely look forward to reading that because I was trying to find it the other day. Uh,

[00:19:53] Jeffrey Towson: it’s up on Amazon now, uh, one hour Moats and marathons. Um, there’s a digital [00:20:00] version and a paperback version.

[00:20:02] Ronen Mense: So how, how, like you, you, you talk about this book Marathons, um, how to build.

[00:20:12] And measure this Competitive [00:20:15] advantage. Yeah. Competitive strength versus what, so what, what are, what are some of the, like you, you recently, uh, um, talked about, uh, BYD in one of your recent podcasts. Yeah, I think it’s, uh, it’s really [00:20:30] interesting because you know them as a company there. Basically looking at market share right now, just how many growth and market share, how many, like profitability is not the, is not the top of their agenda.

[00:20:44] Um, [00:20:45] they’re out to get as many cars as possible into the market. Um, they’ve been in the car industry, what, like 20 years, something like that.

[00:20:52] Jeffrey Towson: Yeah. Batteries 27 years. Uh, cars 20 years, probably 20 years, but [00:21:00] slow start, I mean, they’ve really only, you know, Elon Musk used to make fun of their cars 10 years ago.

[00:21:05] Mm-hmm. Really only the last seven years they’ve popped up and you know, now their cars are everywhere. Well, doesn’t Tesla use BYD battery now?

[00:21:13] Ep-35-Jeffery: Yeah,

[00:21:14] Jeffrey Towson: yeah. [00:21:15] They were a battery manufacturer. Okay. Like, uh, this is. You know, BYD, I’ve been writing about them forever. They used to be a battery manufacturer founded by a guy named, you know, Wong Fu, who is mm-hmm.

[00:21:28] You know, [00:21:30] Charlie Munger called him the, the Thomas Edison of China. Mm-hmm. He’s, you know, Elon Musk is a technologist. Right? Right. Jeff Bezos isn’t, that’s why when they both make rockets, one guy can land and the others can’t because one of you is a physicist [00:21:45] and one of you is not. Mm-hmm. Uh, Wong Wan Fu is the real deal.

[00:21:48] He’s a sign, he’s a seriously trained metallurgist. Mm-hmm. And you know, chemistry dude. Who has been in the bid business of making batteries since 1995. Mm-hmm. And [00:22:00] he went from, Hey, I’ve got a startup idea to 50% of all the world’s batteries. In smartphones and laptops within seven years. And he took out all the Japanese competitors, right?

[00:22:13] Mm-hmm. I mean, he was the real [00:22:15] deal. And then he went into cars early on, uh, in a very bold move. Very much like Elon, like he was way ahead of the curve. Mm-hmm. Like, I’m gonna build cars. And everyone’s like, you’re crazy. And for 10 years he was crazy. And then it worked. And now [00:22:30] he’s arguably the number depends how you measure it.

[00:22:34] Uh, I’m not an auto guy at heart, but it’s him or Tesla. Mm-hmm. Right. Like these are the people that are out front now. Toyota’s pretty good, Hyundai’s for, there’s others, but he’s [00:22:45] number one in China, which is the world’s largest EV market. And Tesla’s everywhere in the US so this is like the battle of the Champions coming online.

[00:22:54] It’s gonna be great. Well,

[00:22:56] Ronen Mense: you like myself, spend a lot of time in China and every time I go there I see a [00:23:00] new brand of EV on the road. They’re everywhere. One BY D’s, everywhere. But there’s all these brands like Neo and there’s Xmi just launched a car. And aren’t they all built off of. The BYD battery [00:23:15] technology.

[00:23:15] Yeah.

[00:23:16] Jeffrey Towson: I mean there’s two bus, there’s three businesses here. There’s like, there’s battery production, which is not just production, but it’s innovation. Mm-hmm. You know, you have to think up new ways to make batteries. So BYD is pushing the [00:23:30] frontier of battery technology and manufacturing scale. Mm-hmm. So is uh, CATL and a couple others.

[00:23:37] Mm-hmm. Then you get to, okay, let’s talk car companies. Okay. Everyone’s making EVs. Mm-hmm. And you know, most of them are [00:23:45] buying their batteries from someone at some scale or to some degree. Mm-hmm. Including Tesla. Right. And then you go further and you think, okay, that’s car companies, EVs, there’s a lot of those.

[00:23:56] But then there’s really AI robotics companies, [00:24:00] and that’s what Tesla is now. Mm-hmm. It’s not a car company. It is. An AI robotics company and their first product was a car. Mm-hmm. But their second product was a robot that can twirl a pencil. Mm-hmm. Right. [00:24:15] So what business are you really in? Mm-hmm. By YD is in the, we’re a battery giant and an ev.

[00:24:21] Company. Mm-hmm. Tesla’s going the other direction. We’re a AI company that’s moved backwards into manufacturing cars. Mm-hmm. [00:24:30] And they struggled at that. Right, right. And now he’s not really in the battery business kind of. Right. A lot of the Chinese companies are in that middle ground. They are EV manufacturers buying parts and you know, they maybe have a little foot in [00:24:45] ai or they’re working with a company like Huawe or something, and then maybe they have a foot in batteries, but most don’t.

[00:24:52] Ronen Mense: It. Why There’s a lot of ’em out there. Why is Tesla worth, like, I don’t know, a hundred x of what BYD

[00:24:58] Jeffrey Towson: is? I don’t know. That’s [00:25:00] stock market stuff. Like I, I understand businesses. I don’t necessarily understand why the markets are valuing companies as they are, um, you know, the animal spirits and all of that.

[00:25:11] Mm-hmm. Um, I look at it in terms of business strength. [00:25:15] That’s, I, I analyze companies. Right. Right. And then competitive strength, technolo, that’s what I look at. Um, BYD is very strong. Mm-hmm. Tesla’s very strong. Um, Toyota’s interesting. There’s some, I, I’m ultimately, I’m not a car analyst. Right. So [00:25:30] I, when it moves into more of a digital question mm-hmm.

[00:25:33] Then I get smarter. When we stop talking about cars and we start talking about computers that move. Mm-hmm. Oh, that’s my, that’s my area software, so, but do I know [00:25:45] Toyota factories versus B? No.

[00:25:48] Ronen Mense: Auto analysts do that stuff. That’s not me. Well, well, I mean, we could say that Tesla. Is differentiated from the car industry in that it manufactures its own chips.

[00:25:59] Has its own chip [00:26:00] technology has its own software. Right. So

[00:26:03] Jeffrey Towson: does BYD

[00:26:03] Ronen Mense: and they’re making their own chips. Okay, so what,

[00:26:08] Jeffrey Towson: what’s the difference? One is a robot company. No, this is where you, the [00:26:15] businesses, at a certain point, it’s about competitive strength. Mm-hmm. Look who’s stronger. Coke, Pepsi. Right, right. Um, who’s got the competitive strength that’s gonna beat the other?

[00:26:25] That’s usually phase two. Mm-hmm. Phase one, when an [00:26:30] entirely new business emerges, it’s just who’s fastest on their feet and who can execute. Mm-hmm. And who can, that’s what we’re seeing, like BYD’s very fast on their feet. They’re innovating like crazy. So is Tesla. It’s a race. Right. [00:26:45] But a lot of what they’re doing is gonna end up becoming commodities that everybody has.

[00:26:50] Mm-hmm. So when the dust settles, who’s stronger and who’s not? Um, and we don’t know yet. Well, I’m, I’m starting to [00:27:00] take it apart, but I don’t know yet. So right now, a lot of what Tesla’s doing, everyone’s gonna be able to do in two years. Mm-hmm. And same with BYD. Uh, so we’re in the early sort of crazy land rush phases of this business and [00:27:15] who has durable competitive advantages is not gonna play out for a while.

[00:27:20] Um, and we’ll see, but you know, over the next couple years we’re all gonna get subsidized electric cars. If you wanna buy an electric car in the next couple years, you’ll get a good deal. ’cause [00:27:30] they’ve all gotta get market share. Mm-hmm. And then most of them will die and there’ll be a handful of survivors.

[00:27:37] And then we’ll see. You know, who was the Microsoft and who was Skype, right? [00:27:45] Skype used to be the big leader. Yes, but they ain’t a digital giant. Who’s Yahoo? And who’s Google, right? Yahoo was a leader, but turns out the business model’s not that powerful. At the end of the day, Google search, they were [00:28:00] the leader.

[00:28:00] And oh, by the way, your business model, nobody can touch it 20 years later.

[00:28:07] Ronen Mense: Can you imagine like, I mean, and, and I’m sure this is gonna happen with all these car companies, ev companies out there, [00:28:15] they’re gonna start collapsing, right?

[00:28:16] Jeffrey Towson: Yeah. We’re in the early days of the China, you know, this is very common in China.

[00:28:22] Yeah. Like when, when a new sector opens up. You know, ride sharing, you know, bike sharing companies? Yes. Yeah. There [00:28:30] were 30 or 40 of them eight years ago, like they were everywhere. Now most of them are dead and there’s a couple left, and it turns out their business models aren’t awesome. Mm-hmm. But they’re fine.

[00:28:42] But you know, now everyone’s moved on to the next, so, [00:28:45] and China does that a lot, so,

[00:28:47] Ronen Mense: but like, okay, so with bikes, you know, I, I, I remember seeing bike graveyards, right? Yeah. Bikes piled on top of, you know, like, looked like landfill. They had good visuals. Yeah. That was a lot

[00:28:57] Jeffrey Towson: of the reason

[00:28:57] Ronen Mense: they had really good visuals.

[00:28:59] The, the [00:29:00] graveyards were cool. And now thinking about. The car industry. Right. And, and, okay, so it’s in China, but they’re exporting like crazy, right? Yep. And at some point, one of these companies is going to die, right? Most of them are [00:29:15] gonna, most of them are gonna die. So you’re gonna have these cars that are no longer

[00:29:18] Jeffrey Towson: serviceable, not just the new ones all There’s a ton of startups.

[00:29:22] Yeah. From legacy companies. Now they won’t pass off. They won’t die off as quickly. Right. ’cause it’s not like everyone’s [00:29:30] driving EVs. They’ll still be combustion engines. Yeah. But a lot of the market’s shifting from combustion to ev, so we’re gonna see that market decrease. Um. So, yeah, that’ll be interesting.

[00:29:44] But right now we’re [00:29:45] in the, the crazy phase and, uh, everyone’s going for market share everywhere. Mm-hmm. So we’re seeing like Chinese EVs everywhere. You go to Mexico, you’re gonna see BYD now.

[00:29:56] Ep-35-Jeffery: Mm-hmm.

[00:29:57] Jeffrey Towson: Um, you know, Thailand, Southeast [00:30:00] Asia, ex punk, Neo, there’s, there are, I can’t even keep their

[00:30:03] Ronen Mense: logos straight.

[00:30:05] I love the, uh, the new neo concept as a differentiator. You can swap your battery out. You know, I was in my friend’s car and, uh, battery swapping. That’s kind of, [00:30:15] okay. That’s an interesting idea. You, you go to, uh, you go to a station and basically it takes the battery from under your car. It swaps it out, puts a new battery in, takes around five minutes, and off you go.

[00:30:27] You have a full charge battery. Um, [00:30:30] you know, so no, no need to wait for, but is that, is that, is that a sustainable advantage? Right. Is that really an advantage, or if that’s just a, a no’s just a feature, right? No, I mean, we’re.

[00:30:42] Jeffrey Towson: This phase, it’s like venture capitalists [00:30:45] are very good this stage. Yeah. Of ana, of analyzing things there.

[00:30:47] I was a great, I was in business school. There was a great case study I saw that looked at like the first couple years of the PC industry mm-hmm. In the late seventies. Right. And there were all these companies making personal [00:31:00] computers. Oh yeah. And I, I saw a list. I remember this. It was, it was kind of crazy.

[00:31:03] It was like 1977 or something like that. Here’s the 10, you know, biggest personal. Computer companies, um, and here’s what they’re [00:31:15] offering. And it was like, I’m making, I, I’m fuzzy on the deals. It was like IBM, personal computers are gonna be high-end devices for scientists and business people and engineers.

[00:31:26] The average price is gonna be $3,000 and you’re gonna [00:31:30] compete on performance. And then it was Toshi, blah, blah, blah, blah. And then there was all these companies I never even heard of. And then like number six on the list was Apple. Mm-hmm. And it was like, this is gonna be a personal device that’s gonna cost about a thousand dollars and people are going to use [00:31:45] it for photos, storing documents, and other things.

[00:31:49] And a year later, all of ’em were gone. ’cause they all released their computers. None of them sold except for Apple. And what he, what they had said was gonna happen was [00:32:00] exactly what the PC ended up being. And you look at 1978 and all the oth, all the companies are gone except for Apple, right? Mm-hmm. And you know, who knows how it’s gonna shake out, but certain companies will get it right and they’ll nail it and uh, [00:32:15] others won’t, and they’ll just.

[00:32:16] You know, you die pretty quick if you, if you release your big PC and you’re wrong about what customers want, there’s no next year you’re okay. Yeah. But it was pretty amazing to see how one guy [00:32:30] nailed what this technology was gonna be. Mm. And everyone else got it wrong. Well, a co, most people topa did pretty well, but compact.

[00:32:38] But it’ll be the same for EVs, like,

[00:32:41] Ronen Mense: you know. So what, like with all these, you [00:32:45] know, companies thinking of digital strategy and, and you know, like there’s how many uh, uh, uh, companies out there that are producing content, streaming content? You know, you just look at, um, the US market. You have, [00:33:00] uh, peacock and HBO.

[00:33:01] Yeah. And, and uh, Netflix. There’s something you talk about, which is irrational competition. Yeah. What is irrational competition and when, when does an industry become irrational?

[00:33:14] Jeffrey Towson: Like question [00:33:15] one is always, what do customers want? Mm-hmm. Who has product market fit now? Until you get that solved, all the strategy stuff doesn’t matter.

[00:33:25] Ep-35-Jeffery: Mm-hmm.

[00:33:26] Jeffrey Towson: Look, if nobody’s buying your app, who cares? If you have [00:33:30] competitive in, you got no traction. Right? Okay. Once you get question one, you move to question two, which is what is your competitive strength? Can you fight off the competitors? Mm-hmm. Um, and then question three is, does this make you any money?[00:33:45]

[00:33:45] You can have a dominant business against a proven need and still not make any money. Mm-hmm. You know, um, or maybe not a lot of money. Uh, bike sharing. I like bike sharing. These bikes [00:34:00] you can rent on the streets of Beijing. There’s a proven need actually. People like to rent them. Oh yeah. It’s a good business.

[00:34:06] I hop on, I scan it, I write a couple blocks, I click off. The competitive dynamics are clear. Couple companies have won. [00:34:15] DD bikes, uh, mobike became maan bikes. Mm-hmm. Uh, OO is a whole story. Yes. Okay. And then at the end of the day, what are the unit economics? Um, not awesome. You don’t make a lot of money.

[00:34:29] It’s closer [00:34:30] to a vending machine business than a digital giant. Uh, it’s very easy to dominate a not very good business. So you want to kind of get an answer to all three. And sometimes the stars all align and you get all three. Hmm. Facebook, [00:34:45] everybody loves, they don’t love it. They all use it. Mm-hmm. One company dominates globally 3 billion users and it throws off cash.

[00:34:53] Like it’s stunning how much cash that thing. So sometimes the stars align and you win the whole world. [00:35:00] Other time that’s not, that’s not how it usually works. Most businesses that do well are medium to small businesses, and you can make a lot of money as a small business. So you kind of gotta separate the questions.

[00:35:12] Mm-hmm. And people get a little too dazzled by [00:35:15] the giants. You can have a very good, small low, not small, a very good regional business in only one city. If you own half the gas stations in Omaha

[00:35:28] Ep-35-Jeffery: mm-hmm.

[00:35:29] Jeffrey Towson: You’re making a [00:35:30] ton of money. If you have the biggest furniture retail business in Omaha, you make good money.

[00:35:37] And Warren Buffett owns that, by the way. Like, so, you know, you don’t have to be a giant, but it, um, and actually in fact, it’s [00:35:45] far more like what is the likelihood that you are gonna dominate an industry for a whole country, let alone the world. Very unlikely. Can I dominate the hospital business of Reno, Nevada.[00:36:00]

[00:36:00] Maybe that’s doable. It’s, it’s far easier to dominate a smaller market, whether the market’s geographic or whether it’s a type of customer, can I dominate what moms want, new moms [00:36:15] want in Thailand? Mm-hmm. Yeah. If you built a very customized app that was very specific to what they wanted and you understood that base, you’re far more likely to dominate a customer niche or a geography or a.

[00:36:28] Point in the value chain, [00:36:30] than you are that like, I’m gonna dominate China. No, no, no. It’s too hard. Uh, small services businesses make a lot of money. Mm-hmm. It’s a good business niche to, like I had a business professor used to tell me, you want to make a lot of money [00:36:45] in this world, go after a local services business.

[00:36:49] Because by definition, if it’s service in person, you’ve just eliminated all your competitors that aren’t in your town. Mm-hmm. You don’t care what people are doing in [00:37:00] another country. Now if they’re making cups and shipping them, they’re a competitor. Lo services are by definition local, so it’s far easier to win.

[00:37:10] Um, now there’s other ways to win. But anyways, I took us off track. What was [00:37:15] your question? I went off

[00:37:15] Ronen Mense: on a tangent there. Well, we were talking about irrational competition and, and, and. I mean, I think you covered, uh, some of the key points there. Um, you know, and, and probably a side effect, I guess, of irrational competition is [00:37:30] exits right or right.

[00:37:31] The

[00:37:31] Jeffrey Towson: barriers to exits everything I just said, presupposes management, that is acting rationally. Uhhuh management doesn’t always act rationally, or at least not in the short term. So you [00:37:45] can, you know, if, if you are a. I dunno. Let’s say a media guy in Hollywood working at a medium sized studio, and you see streaming services coming up on your left and you see Amazon and [00:38:00] YouTube and generative AI where people can make animated movies on their laptop.

[00:38:05] You’re getting disrupted from everywhere and you realize you can’t compete. Mm-hmm. Sometimes the answer is, look, we can’t compete. Well, what are you gonna do? You gonna [00:38:15] close down? You’re a middle-aged man who spent his whole life trying to become senior vice president of this company. There is no next step you gonna retire.

[00:38:27] So people will stay in businesses or [00:38:30] stay in a field, um, for re Now you could say that’s not irrational. Let’s say that’s. It’s rational at the personal level. Mm-hmm. But it’s not rational at the company level. When the right move at the company level might be, we need to exit this business and [00:38:45] go into something else.

[00:38:47] But the management may not want to do that. Mm. Um, there’s a company in Singapore, Singapore Press Holdings, which was a very interesting business, um, 20, 30 years ago [00:39:00] because they sort of dominated newspapers. Mm-hmm. Print news, print newspapers used to be one of the most powerful business models on the planet.

[00:39:08] Right. They were local monopolies. Mm-hmm. There was the New York Times, there was the Boston Herald. Like every company, every [00:39:15] city had one monopoly and whoever owned that newspaper was like the richest person in town. Everyone knew who owned, you know, the Washington Post or the LA Times. Well then Digital Chems along and it turns [00:39:30] out print newspapers is not where you want to be.

[00:39:31] Well, Singapore Press Holdings had, you know, very good, um, position in Singapore. And then it was also associated with the government ’cause Right. For various reasons. Along the way, when they were throwing off a lot of cash in the good [00:39:45] years, they ended up buying a bunch of healthcare businesses. I think there were nursing homes they bought.

[00:39:50] Mm-hmm. And now, um, of course, so that they can fill them with newspaper. Well ’cause they had all this cash and you gotta do something with it. Right. Okay. So, you know, Forbes in [00:40:00] the US magazines used to be good too. Time. Newsweek, Forbes, you know, he had a bunch of real estate in New York. He had, you know, he owned an island and some other, well, Singapore, they, they bought a bunch of healthcare companies.

[00:40:12] Okay. Fast forward 20 years, it turns out [00:40:15] newspapers hard to make money in e print and even digital. Very hard to make money in that business. Mm-hmm. Most people don’t, haven’t figured out how to do it. Warren Buffet told me this at a, at a a lunch, he said there was 1200, [00:40:30] that’s exact, not exactly right, but around 1200 daily newspapers in the United States.

[00:40:36] Only two of them that he knew of had developed viable digital business models. Mm-hmm. New York Times. Uh, I think Wall Street Journal was the other one. [00:40:45] Most of them don’t know what to do. It may be that there isn’t one. You can survive, but difficult business to be in as a daily digital newspaper. The Contra Costa Times in the Bay Area.

[00:40:57] Mm-hmm. Hard business. It was [00:41:00] a beautiful business. Now it’s a hard business. Singapore breast. It’s like my, you guys should just do healthcare, like healthcare in Singapore. There’s a lot of good businesses there. Very local operationally [00:41:15] intensive service business. You’ve been in it for 20 years. Let’s do that and use that business to, if you wanna stay in the news business, fine.

[00:41:24] There’s the reasons to do that, fund that. Mm-hmm. Um, and they just bought tech in Asia. [00:41:30] I think they just merged up or something in the last month. Oh yeah. Mm. Uh, so there’s ways to make this work. Um. But you kind of gotta know where you’re gonna live, and I actually think that’s a good business. I actually think if you wanted to do, I think, I mean, I’m a [00:41:45] professor, colleges are a bad business model.

[00:41:49] Everybody knows you can’t survive as a college. Without an endowment. Mm-hmm. Nobody’s trying to survive as a for-profit college that lives and pays all the professors based on [00:42:00] tuition. That model doesn’t work. Mm Uh so everyone has an endowment. That was a good solution to the profit. Now business schools actually are kind of profitable, but most colleges are not.

[00:42:08] Executive MBAs pretty profitable. Okay. It’s kind of the same for newspapers. The rational solution is let’s build a [00:42:15] separate business or an endowment or a foundation. Mm-hmm. And put this on top. Mm-hmm. But trying to stay as a profit based entity. Okay. You might make it work. New York Times did. Most people don’t know how to make that work.[00:42:30]

[00:42:30] Um, I like the healthcare business of Singapore. Like that’s a good solution to the problem. So you get into this sort of, these difficult discussions when, uh, digital technology changes the nature of business, which it’s [00:42:45] doing faster and faster now, and the idea that you’re gonna avoid digital change. I think we’re all getting hit eventually.

[00:42:53] Mm-hmm. And you just gotta sort of understand that’s gonna happen and be a little more flexible. Okay. We [00:43:00] know what we’ll do. I think Forbes should have been in the real estate business. They had a bunch of great properties in, um, New York, and they sold them to fund their media business, which kept basically declining.

[00:43:12] Hmm. Um, I mean, they still exist. I [00:43:15] think a bunch of Hong Kong investors ended up sort of quasi buying them eventually. Um, it, it’s just. It’s the nature of the world we all live in now, like as businesses and professionally. Mm-hmm. Right. [00:43:30] Radiologists. That was a good job. Turns out generative AI is really good at reading x-rays and MRIs.

[00:43:37] Mm-hmm. What are you gonna do about that? Right?

[00:43:43] Ronen Mense: Professors are getting disrupted. Use [00:43:45] it to make better decisions. Yeah. Well, someone’s still gotta deliver the news, right? Yeah. But do

[00:43:50] Jeffrey Towson: you need 20 radiologists or you need one radiologist that’s, uh, um, professors are gonna get disrupted. Yeah. Um, [00:44:00] digital strategy consultants we’re actually pretty well placed.

[00:44:02] Mm-hmm. Because, but uh, yeah, we’re, everyone’s gonna get a turn and, uh, probably most businesses are gonna get, disrupted is the wrong word. Mm-hmm. The word McKinsey uses [00:44:15] is we have to rewire things. Mm-hmm. You have to rewire for a digital world, um, as opposed the disruption scares people. But I would say transformation rewiring is the right way to think about it.

[00:44:29] And that’s at the [00:44:30] business level and probably at the personal level, professional level.

[00:44:35] Ronen Mense: I, I think you, you’ve probably seen a huge amount of, uh, digital transformation disruption happening just in the past couple years, right? And [00:44:45] probably you as a, as a professional in this space. I mean, yeah. Lecturing, educating, consulting.

[00:44:52] Um, you’ve touched so many companies, right? And, and, you know, you’ve also been sitting in front of Warren Buffet and, and, uh, the, the [00:45:00] chairman of, uh, BYD and, and I don’t

[00:45:02] Jeffrey Towson: know the chairman of BYD or

[00:45:03] Ronen Mense: countless others. I don’t, I’ve never met him. Um, countless others and, you know, really, um, I, I wanna say like helping shape.

[00:45:14] You [00:45:15] know, the digital economy of the future and, and what, you know, eh, you know, not shape. I think you’re, you’re underestimating the impact that you, you, that, that is the goal. Actually, that

[00:45:27] Jeffrey Towson: is like, that is my own [00:45:30] little. Personal professional goal is to create a body of thinking and frameworks mm-hmm.

[00:45:37] That lets people understand what’s happening. Mm-hmm. Because if, if, I mean, I have a lot of frameworks. I’ve been looking if, if you’re a [00:45:45] dent, my brother’s a dentist. Mm-hmm. If you’re a dentist, all of this stuff is bewildering. Like, the world is changing so fast and they don’t know what to make of this.

[00:45:55] Mm-hmm. Well, if, if there’s a, a series of books or [00:46:00] frameworks or body of thinking to sort of take the support, okay. Yeah. That is like, that would be a good legacy and I’d like to have that. That’s kind of what I’m trying to do.

[00:46:08] Ep-35-Jeffery: Mm-hmm.

[00:46:09] Jeffrey Towson: Um, ’cause you know, the number of people that, this is bewildering, it’s, [00:46:15] it’s 95% of people don’t know what to make of this.

[00:46:17] Mm-hmm. They’re busy doing their jobs.

[00:46:19] Ep-35-Jeffery: Yeah.

[00:46:20] Jeffrey Towson: You know, they’re running their media company in la they don’t have time to, to think about this stuff and that’s not their background. They got. They got TV shows to make and then [00:46:30] they gotta go home and see their kids and like, you know, and it, this is like a her, you know, sort of the storm on the horizon, uh, which can create a lot of anxiety.

[00:46:39] Um, so yeah, I, I would like that, that would actually be something I’d like to do in my life is [00:46:45] that’s kind of what I have been trying to do. Mm-hmm. Um, so, you know, it’s funny that like, I don’t know Buffett at all. Like, I mean, well, okay. I can email him and he’ll reply, but no, I just, as a couple dinner lunches with him.

[00:46:57] Along with like, you know, over the years, 30,000 [00:47:00] other people. Right?

[00:47:01] Ronen Mense: Like, so like many of us would be envious of

[00:47:03] Jeffrey Towson: that worry. Yeah. That was just a bit of a luck as being a professor. That was a little bit of a gift. But, um, so being a professor did have its benefits. That’s actually how it happened. Oh. Like if you wanted to have lunch with Buffet, it’s almost [00:47:15] impossible.

[00:47:15] Mm. The only exception he would make is for professors, and that’s how I showed up with a bunch of students from China, and that’s how I ended up hanging out with him for a couple hours, a couple times. There was a fluke. Right. Mm-hmm. But hey, a lot of, a lot of good stuff in life is a fluke [00:47:30] right place, right time, right career.

[00:47:32] Yeah. But I mean, if you look at him and Charlie Munger and his mentor, Ben Graham. Mm-hmm. Their biggest legacy will not be as investors and rich dudes. Their biggest legacy [00:47:45] will be as teachers. Right. Nobody knows. Ben Graham’s investment anymore, but people still read his books a hundred years later.

[00:47:54] Charlie Munger, his biggest legacy now that he’s passed will be as a teacher. Mm-hmm. So it’s, [00:48:00] it’s, you know, that’s not a small thing. Uh, and Buffett for sure, I mean, he’s taught how many. Millions of people how to think about business and life. Mm-hmm. So, yeah, that’s, it’s kind of the strange thing is these people who, you know, spend all [00:48:15] their life, um, making money and it turns out their real legacy is as a teacher, there’s something kind of nice about that.

[00:48:24] Um. So, but he never taught, technically he did it by letters [00:48:30] and talking as opposed, which is I think, the right way to do it. Yes. He was never, and I actually, he, he kind of makes fun of business professors at business schools a lot. So did Charlie Munger. Um, so.

[00:48:42] Ronen Mense: Well, I, I feel, uh, I feel [00:48:45] very, uh, honored and, and, uh, humbled actually to have you here speaking to the audience today.

[00:48:51] Right. Because I think it’s, you know, you’re, you’re, I want to say you’re probably in, uh, the early part of your, uh, teaching career. [00:49:00] Right. With all the knowledge that you’re acquiring and, and resharing and, and, uh, I’m sure that following this, you’re probably gonna have some, uh, new followers and, uh, people that you are gonna make a lasting impact on.

[00:49:13] Jeffrey Towson: Yeah, it is kind of, I, I get a lot of [00:49:15] satisfaction out of that actually. Like, um, I’ve been teaching at business schools for about 10 years. I’m not doing it right now. I’m not sure if I’m gonna do it anymore actually. Mm-hmm. Um, but, you know, I will go and have like a meetings that, um. Iowa, Singapore or [00:49:30] wherever, and, and people will start arguing about businesses, right?

[00:49:33] Oh, this business is, and they’ll start using my language. And they may be right. I’m like, yeah, you’re wrong. Like Jeff, you don’t know what you’re talking about. Your, your framework for BYD is not right because they’re gonna get a data [00:49:45] network effect based on mileage, and they’ll start using my own frameworks to argue with me.

[00:49:50] Mm-hmm. And it’ll quietly kind of make me happy. I’m like, that’s my language. I thought that up and I, I that phrase you, I thought that up in a Starbucks. Mm-hmm. In, in Rio, like, and I [00:50:00] get a lot of side effects when everyone starts arguing with my terms. I’m like, okay, that’s all right. And maybe they’re probably right.

[00:50:06] They’re like, yeah, you don’t understand auto. I’m like, it’s true. So, yeah, I,

[00:50:10] Ronen Mense: I do notice that from time to time, which is kind of pleasant. Well, like you’ve proven, you don’t need to [00:50:15] understand the auto industry to understand the disruption that is happening.

[00:50:19] Jeffrey Towson: I think once you, once you look at something with the right framework mm-hmm.

[00:50:23] Um. Suddenly the whole, I actually enjoy this a lot mm-hmm. Is, is working with companies and we will, [00:50:30] we will do frameworks and lectures and then I will sort of step back and the whole management team, let’s say of the supermarket, they will start arguing about what to do in their business. And they’re all using the same vocabulary for the first time.

[00:50:40] Mm-hmm. And they’re starting to talk about, and then it, then they really [00:50:45] start to move. And you can see their expertise, like mm-hmm. Like coming through, it’s like, wow, you know a lot about supermarkets, right? Yeah. But it, without the right sort of language for the digital component. The, the, the discussions [00:51:00] tend, it’s like everyone’s paddling in different directions.

[00:51:02] I do see that a lot actually. Um, and that’s actually pretty cool, uh, when you, when you start to combine digital frameworks, a certain amount of [00:51:15] expertise with real industry experience that you would only get by working in a field for 30 years. Mm-hmm. That’s really impressive. Right. Then you see, ooh, it’s, yeah, they’re really good at this stuff.

[00:51:25] Ep-35-Jeffery: Mm-hmm.

[00:51:26] Jeffrey Towson: Uh, but usually it’s that digital piece that’s missing or, yeah. [00:51:30] One person has it, the CEO might have it, the CTO have, but you need the whole team to have it so that people aren’t sitting quiet because they don’t quite understand what we’re talking about. You want everybody, everyone on the same boat, right?

[00:51:43] And then, then the team [00:51:45] really starts to move. Uh, that’s actually fun to watch.

[00:51:47] Ronen Mense: I enjoy that a lot. So, dude, I love this. And um, I think that if people wanna get in touch with you, Jeffrey Thompson. TO you

[00:51:56] Jeffrey Towson: go jeff touson.com. You’ll see there’s blogs or [00:52:00] we’ll put, you can go over to Tech Strategy, the podcast, or Amazon.

[00:52:04] Just type my name and it’ll, we’ll put that

[00:52:05] Ronen Mense: in the show notes, pop up in Spotify or Amazon or wherever. So I wanna do a quick fire round before we wrap. Cool. Are you down? Yeah. I, I, I was rambling [00:52:15] on there. I’ll do, I’ll be succinct. No. Well, this is the succinct session. Um, must read book for anyone looking to do business in China.

[00:52:25] Uh, the trick with

[00:52:26] Jeffrey Towson: China is think about [00:52:30] industries. Don’t think about China. It’s too big, it’s too complicated. Uh, so industry. Financial services. There’s a very book, good book called Red Capitalism. Mm-hmm. Which is just a deep dive in financial services and banks of China. Mm-hmm. And [00:52:45] that will give you a one, it’s a great book.

[00:52:46] And two, it will give you an understanding of how politics works. Um, industry specific books are the way to think about China. Otherwise it’s too daunting and people

[00:52:57] Ronen Mense: get all political. It’s weird. [00:53:00] McDonald’s Burger King or Shake Shack. I like Shake Shack

[00:53:04] Jeffrey Towson: better. Ooh. But I do go to McDonald’s more often. I used to work at Burger King when I was in high school.

[00:53:10] Uhhuh, I can’t eat at, I still can’t eat at Burger King. Wow. If you’ve made tens of [00:53:15] thousands of burger, I still can’t eat at Burger King. Um, so just Shake Shack. ’cause I’ve, if there was

[00:53:19] Ronen Mense: one close I’d go all the time. What’s harder to accomplish to define the right business strategy? Solve differential equations or [00:53:30] pass the gross.

[00:53:31] Anatomy in medical school. Um, anatomy

[00:53:37] Jeffrey Towson: is actually. Difficult. Mm-hmm. Not difficult. It’s a pain because it’s just memorization. [00:53:45] Hmm. Differential equations is a game. Right. Um, business is frameworks. Uh, but to learn all the parts of the human body, you literally just have to memorize. Here’s the vagus nerve.

[00:53:58] It runs from your brain all the way down your [00:54:00] spine. It has branches that break off. There are, I don’t even remember, 57 different branches. You have to remember the names and the order of the branches. So it’s just memorizing like crazy. You know how doctors do it? Well, at least how we did it is, [00:54:15] um. We used to have dirty limericks.

[00:54:17] Like if you have to remember all the branches of a nerve, you come up with a dirty saying in your mind. ’cause dirty sayings are really easy to remember. Yeah. And then each word is one of the branches. [00:54:30] So I used to have this list of really horrendously. Obscene little statements that would help me remember anatomy and this doctors, they share these, like it’s a thing, it’s a good trick for memorizing.

[00:54:42] If I tell you an obscene statement that’s 12 [00:54:45] words long and I ask you a week from now, you’ll probably remember it.

[00:54:48] Ronen Mense: I’m, I’m, I’m sure it does, it

[00:54:51] Jeffrey Towson: does

[00:54:51] Ronen Mense: work. Do you think, do you think men or women. Re remember the, those obscene statements. It doesn’t have

[00:54:58] Jeffrey Towson: to be like, it’d just be swear words [00:55:00] like that, blah, blah, blah is blah, blah, blah, and I blah, blah, blah.

[00:55:02] You know? And it, it does stick in the brain.

[00:55:06] Ronen Mense: Yeah. Physics, medicine, business, biophysics. If these were ice cream [00:55:15] flavors, which would be your favorite and why?

[00:55:19] Jeffrey Towson: Uh, I love physics. I think it’s, it’s my favorite thing in the world. And if I live my life again, if I had a second life, I’d be a physicist. That’s where I started.

[00:55:28] The problem I have [00:55:30] with it is the questions are so difficult mm-hmm. That you can spend your whole life very easily in physics and end up with nothing. Business problems, human problems, software problems are difficult, but [00:55:45] very solvable. Um. So that’s kind of where I like to sit. That’s where, that’s where Buffet sits, that’s where Bill Gates sits.

[00:55:52] That’s where Jeff Bezo sits. That’s mostly where Elon Musk. Mm-hmm. These are very smart men who are targeting [00:56:00] problems that are difficult, but doable. Mm-hmm. Physics problems are like most physicists, you’re gonna end up, it’s like, did you figure anything out? It’s like, Nope.

[00:56:11] Ronen Mense: You go into a rabbit

[00:56:12] Jeffrey Towson: hole. It’s like, it’s very hard to figure out.[00:56:15]

[00:56:15] The nature of the universe. It’s not that hard to figure out which e e-commerce company’s gonna do better in Singapore next year, like, but physics would, yeah, I would

[00:56:25] Ronen Mense: love to do physics like still my favorite thing. [00:56:30] Most inspiring person to you. Um,

[00:56:37] Jeffrey Towson: it’s kinda weird that one. Uh, I like physicists so. James Clerk Maxwell. Mm-hmm. Like that guy’s. That was a [00:56:45] God. Like I, I like, I always, whenever I go travel, I always go see what the physicists are. Right. Those are my, those are my heroes in life. You know, I’d put statues of scientists everywhere if they, someone gave me the authority.

[00:56:57] Uh, but in terms of daily [00:57:00] inspiration, um, um, I like Richard Feinman. Mm-hmm. A lot like one. He was awesome. You know, he did, but also he had like a lot of fun. Mm-hmm. Like he was a quirky, strange dude [00:57:15] who would like, he won the Nobel Prize and he used the money to buy a beach house. Like, everyone’s like, when are you gonna donate the money?

[00:57:21] He is like, I bought a beach house in Malibu and he would be in Pasadena and he used to do his physics proof down at the strip club. Mm-hmm. Like that’s where he would [00:57:30] sit in the back and do physics problems. Ah. And he would fly around the world and like go to these weird village. He was just a quirky dude who like, seemed to have like, like there’s two things I like about him.

[00:57:41] I’ll give you a real answer. Like one, he was quirky and [00:57:45] funny. Mm-hmm. And strange. And then two. He just liked to sit and figure out things all day. That’s all he did. Like he called it, I think he called it the joy of figuring things out.

[00:57:57] Ep-35-Jeffery: Mm-hmm.

[00:57:57] Jeffrey Towson: Where he would just sit with a pad of paper [00:58:00] and figure stuff out all day long.

[00:58:01] Like even when he was dying, he was figuring out like spring problems on a piece of paper. Like, and I, I kind of, I, as I get older, identify with that a lot. Like, I don’t need to have all the thrills I used to have when I was younger. [00:58:15] Ooh, we’re on a private jet for the first time. That was a, I’m happier just sitting with a pad of paper and a cup of coffee and taking apart, there’s a quiet contentment in that.

[00:58:26] I think when you get older and you know all the thrills of like, [00:58:30] you’ve done everything right. In no cities. I haven’t, I haven’t been everywhere. Like now it’s, I get a lot of contentment out of that and I sort of, I think about him a lot more than I used to. Mm-hmm. Just, you know, I got up at six this morning and I, I spent four hours, [00:58:45] um, going through Facebook’s numbers with a big cup of coffee.

[00:58:50] Wow. And it was great. And it felt great. I was, it was like a really, a good day.

[00:58:55] Ronen Mense: Right. That’s awesome. And uh, [00:59:00] that’s Jeff Towson for you guys. Thank you. I appreciate it. This was a lot of fun. Thank you so much for being on Epicenter. And, uh, we gotta get you back here because I feel like we still have so much more to unpack.

[00:59:12] All right, thanks. That wraps up another episode. [00:59:15] Check it. Oh, I totally forgot about the camera. Hey.

[00:59:17] Ep-35-Jeffery: Hi there. Yep.[00:00:00] Galit: Here we are. Welcome again to another episode of Epicenter where we feature, [00:00:15] we have in-depth conversations with business leaders and industry shapers who are. Basically defining today’s digital economy. Gri, welcome to Epicenter.