Learning how to craft compelling hypotheses
By Tracey Wallace
I was talking through the art of persuasion and storytelling formats with one of my direct reports, when she asked me a very good question:
“So, do you just wake up everyday excited about what is happening in ecommerce and email and SMS marketing?”
LOL, I absolutely do not, but I understand where she’s coming from. I am passionate about business––that’s for sure. But it isn’t because I find ecommerce or any particular marketing exercise of discipline uniquely fascinating.
No, I am passionate about business because I see it as a modicum of something much, much larger than myself.
Here is what I said back to Emily, who is probably one of the best question-askers I’ve ever met, though to be fair, I’m pretty sure she asked them out of at least a little bit of frustration:
“Absolutely not. Ecommerce nor email marketing nor SMS marketing are particularly interesting to me on their own. What is interesting to me, though, is that ecommerce is a subset of retail, and retail is one of the top 10 industries in the United States by GDP, contributing roughly 6% of the total. Moreover, the United States has the largest GDP in the world.
Why is any of that interesting? Because when something happens in the ecommerce industry––say, like Apple’s privacy updates––it can affect not just our industry, but the entire world and global economy.
And economies are fascinating things, because money is an idea. Money exists on the belief of people that it exists, not because it inherently does. For proof, remember that recessions don’t happen because data says they will or won’t. Recessions happens because a large group of people think they will happen, and change their spending habits as a result, and now––we’re in a recession.
What we think we are is what we are––and that is especially true when it comes to money. Psychology is arguably the biggest impacting factor when it comes to economics.
Let’s take Apple’s privacy updates as an example again. When Apple launched those updates, Apple marketed it as, and media heralded it as, a winning moment for consumer privacy. And many people believed that. A lot of people believed that. And they believed it because it was the story told to us again, and again.
Plus, no one really cared much if Facebook suffered—which it clearly was. Facebook had built a reputation for itself that made it easy to dislike. The media had picked it apart. Over the year, they had become the villain in the collective story.
Suddenly it was Apple v. Facebook––and Apple was winning. In a culture obsessed with founders and those who can pull themselves up by their bootstraps, this might as well have been a showcase of Steve JObs and Mark Zuckerberg themselves.
It made for a great story, and for great distraction because what Apple was really doing was much more capitalistic than they were leading on. They were building their walled garden, and altering the advertising ecosystem for millions around the world.
On the frontlines, DTC brands were suffering. Or, a better way to put it, small businesses were suffering.
What Facebook launched with its advertising suite and targeting capabilities back near 2010 was unprecedented. It gave individuals and small businesses the same power that only large conglomerates could afford for decades.
The rise of DTC wasn’t because their marketing got better, or even because their products were better. The rise of DTC happened because small businesses could finally afford to get in front of a large audience in a cost-effective way.
It helped that they could also build websites in a cost effective way, too. But with small businesses, you are always facing a catch-22: You need money to get customers and grow, but you need customers to get that money.
This catch-22 boxed small businesses, or at least small businesses without loans or venture investment, out for a long time. Facebook changed that—but they didn’t do a very good job telling that story to Americans, a group of people who love people and companies that support “The American Dream.”
Now, Apple’s privacy update was reversing the clock––giving power back to the larger conglomerates, and reducing a small business’ ability to compete on the same level. It’s not a story you hear often about that update, but its the true one and you see it across the industry now.
First, it was the ecommerce boom of 2020, and then––the iOS updates started to hit. By 2022, as DTC businesses shuttered, laid off, or were bought out, folks said they overhired, they underpriced, their business models were never that stable.
All of that might be true, but had Apple’s privacy updates not come through, it’s hard to say if that ecommerce pandemic bubble could have continued. Better targeted advertising seems to suggest yes.
As a result of DTC losses, we’ve seen Facebook’s stock plunge, and Shopify’s. Those aren’t the only things making folks think 2023 will be a recession year, but they certainly don’t help.
Now, all of that is just at a macro-economic level.
On a micro-economic level, I personally love being part of an industry in which anyone who wants to start a business can.
The United States is one of the easier places in the world to start a company––and the ecommerce industry has really lowered the barrier for doing so, even if customer acquisition is harder today than it was a few years ago. Tools like Shopify, Klaviyo, Shipbob, and countless others provide individuals with relatively inexpensive ways to get something up and running, and build a business that can put food on their table, fulfill a sense of purpose and agency, and change not only their lives but the lives of their family and employees.
Moreover, I think it’s incredible to work for a company that makes a product that can build a career for someone. What I mean by that is that folks who use Klaviyo can learn the tool, no college degree required, and make incredible amounts of money selling their knowledge and service of that tool for the entirety of their lives.
Klaviyo isn’t the only one. Hubspot, Salesforce, Shopify, there’s a ton that fall into this category. But that’s cool to me, that I get to work somewhere that actually impacts people’s lives, gives them agency, gives them opportunity, and gives them choices.
I don’t care much about ecommerce on its own, or email marketing or SMS marketing. I care about people. And I care about how they think, and what motivates them, and how all of us are so much more connected and similar than we ever imagine––and how how I can produce content that tells that story in a way that makes people feel something, even if its couched in topics of ecommerce, email marketing or SMS marketing.”
Emily’s next question was how she could start to think like this, too, and connect dots across seemingly unconnected things.
My best advice was to read––a lot.
- Sapiens does a fantastic job at this kind of dot connecting.
- Freakonomics does, too.
- Malcolm Gladwell books are great at this––and entertaining.
- 2PM and Stratechery do this, too.
Read everything you can, and question it all, too.
- Is this accurate?
- Is it true?
- Is there another way to see it?
And start asking yourself, “What if,” and then make those “What ifs” a hypothesis––and start interviewing people to find out if they hold water.