The Power of Mystery in Business: How Surprise Drives Success

The Value of Mystery in Business

In today's hyper-connected world, it may seem counterintuitive that obscuring information could lead to business success. However, many thriving companies have found that cultivating an air of mystery around their products and processes can drive higher margins and more engaged customers. This article explores how surprise and the unknown create value across various aspects of business.

Mystery Creates Margin

One of the key insights shared in the discussion is that "without mystery, there is no margin." This speaks to the idea that when everything about a product or service is completely transparent and commoditized, it becomes much harder to charge premium prices. Some ways mystery manifests in business include:

• Proprietary "black box" algorithms or processes
• Limited edition or "drop" style product releases
• Exclusive access or insider knowledge
• Cultivating an air of intrigue around a brand

By maintaining some level of opacity, businesses can create perceived scarcity or uniqueness that justifies higher prices. The unknown becomes part of the value proposition.

The Power of Surprise in Product Design

When it comes to product design and user experience, conventional wisdom often pushes for removing all friction and making things as simple as possible. However, the discussion highlights how some level of challenge or surprise can actually enhance engagement:

"If the purpose of the product is just to deliver you some result then it's like yeah that approach can work fine, but if the real purpose of the product is kind of to change you as the user - for you to feel that you are learning a skill or developing a certain aptitude or developing a certain characteristic of yourself - that's like no no no, learning how to play the game is actually like the entire product and you overcoming the friction and you doing everything is like that that's where all the joy is."

This insight applies to various product categories:

• Video games that are challenging but rewarding to master
• Social media platforms with novel interaction models
• Creative tools that have a learning curve but unlock new capabilities
• Educational products that make the learning process itself engaging

By incorporating elements of surprise and discovery, products can create more meaningful and sticky experiences for users.

Mystery in Marketing and Sales

The concept of mystery also plays a key role in marketing and sales strategies. Some examples discussed include:

The Paradox of Sales

A quote attributed to Peter Thiel outlines an interesting paradox in sales:

"If you're trying to sell something you need to do two things simultaneously better in opposition to each other: on the one hand you need the prospect to think this guy is just like me because that's how you build trust, but on the other hand you need him to think this guy is completely different from me because that's how you get him to think that you have something he doesn't."

This speaks to the delicate balance of building rapport while also maintaining an air of expertise or insider knowledge. The most effective salespeople and marketers are able to cultivate both familiarity and mystique.

Creating Intrigue Through Limited Information

Another tactic discussed is intentionally withholding or obscuring certain information to pique curiosity:

"If I can really surprise you about something it's like I'm most of the way to selling you something... it's like the mystery that makes the sales process worthwhile."

This could manifest as:

• Teaser marketing campaigns that don't reveal full product details
• Exclusive "insider" previews or early access
• Cultivating an air of secrecy around a brand or founder

By leaving some blanks for customers to fill in with their imagination, it can actually increase engagement and perceived value.

The Role of Mystery in Finance and Investing

The finance and investing world provides some interesting case studies in how mystery and obscurity can drive value:

Hedge Funds and Private Equity

Many of the most successful and high-profile investment firms maintain an air of secrecy around their strategies and holdings. This mystique allows them to charge higher fees and attract capital even without full transparency into their methods.

Cryptocurrency and Web3

The article notes how the early days of cryptocurrency and Web3 products actually benefited from being somewhat difficult and obtuse to use:

"Early web3 right where it's like oh using this thing was awful right it was like just like you like the web the the UI of just connecting your wallet and like claiming a token or whatever this is the most miserable thing but also people are like relentlessly addicted to it and they love it because it's a challenge that they've learned how to do."

The complexity created a sense of insider knowledge that early adopters found compelling.

Custom Financial Products

The discussion touches on how creating customized or novel financial products can be a way to maintain margins in an increasingly commoditized industry:

"If you can invest or invent an asset class or what seems to be an asset class... you can do super super well if you execute right."

By offering something unique that requires specialized knowledge to understand or access, firms can justify premium pricing.

Balancing Transparency and Mystery

While mystery clearly has power in business, it's important to strike the right balance. Too much opacity can erode trust, while too much transparency can commoditize an offering. Some key considerations:

Know Your Audience

Different customer segments will have different tolerances for ambiguity. The article notes how in financial services, high net worth individuals often prefer having an advisor even if a robo-advisor would be cheaper and potentially just as effective. The human element and perceived expertise provides comfort.

Evolve Over Time

What works in the early days of a product or company may need to change as you scale. Early adopters may embrace complexity, while mainstream users require more hand-holding.

Build Trust

Mystery should be used to create intrigue, not to mislead. It's important to deliver on the promises implied by any cultivated mystique.

Focus on Value Creation

Ultimately, sustainable businesses need to create real value. Mystery and surprise should enhance the core offering, not substitute for it.

Conclusion

In a world of information overload, cultivating some level of mystery can be a powerful differentiator for businesses. From product design to marketing to finance, strategic use of surprise and the unknown can drive higher margins and more engaged customers. However, it's a delicate balance - too much opacity can backfire, while too much transparency can commoditize. The most successful companies find ways to maintain an air of intrigue while still delivering tangible value. By understanding the power of mystery, businesses can create more compelling offerings that stand out in crowded markets.

Article created from: https://www.youtube.com/watch?v=LYsyqDP62Q8