Sunday Snapshots (26th January, 2020)
Thomas Jefferson, Hermès lipstick, Ignorance and Manipulation, and puppies!
Hey everyone,
Happy Sunday to you and I hope that the dampness in most of the US hasn’t dampened your mood too much this weekend. I’ve been a bit under the weather so the last couple of days have all been about hydration, hot chocolate, and hygge.
Before we dig into this week’s issue, I want to tell you about two things:
My friend Tom White just started his newsletter, White Noise. If you want to read stuff from someone much smarter (and with a much better beard), subscribe to his work.
I’m going to be in NYC from 31st January to 3rd February. If you’re around, I’d love to say hi! Just reply to this email to let me know what’s a good time to meet.
With that out of the way, let’s get started with this week’s Snapshots, I want to explore:
Thomas Jefferson: The Art of Power by Jon Meacham
The futility of the Hermes lipstick
Why we willingly open ourselves up to manipulation
And more!
Book of the week
I like to think that I have a decent understanding of modern US history. But I often find that the principles that this country was built on had two critical moments – the Declaration of Independence and the Civil War. In 2020, I intend to learn more about both and I’m starting chronologically. And since I love biographies, I thought it was a smart idea to start with Pulitzer Prize winning author Jon Meacham’s Thomas Jefferson: The Art of Power. Jefferson was the first Secretary of State, the second Vice President, and the third President of the United States. And as you go down his resume, you find that the author of notable peer-reviewed pieces like the Declaration of Independence. There is obviously much to be learned from his early life, so let’s dig into it.
Bending it faster: It is said that “the arc of justice is long, but it bends towards justice.” The founding fathers were trying to make it bend faster. It reminds me of Peter Thiel’s comments in Zero to One about how progress and a better future is not inevitable, it takes very smart people working very hard to get us there. It also raises some important questions – how do we create the conditions for the arc to bend faster? How do we foster personal growth so that more of us are involved in the bending of the arc?
To be nobility or not to be: Something that struck me as interesting when I was reading about Jefferson’s early life was how similar he was to the people he was against – the British nobility. In The Last Lion: Visions of Glory – a Churchill biography – William Manchester observes that “so vast an Empire, so vigorous a society, could have been neither built nor held without staunch ideological support, a complex web of powerful beliefs, powerfully held.” The society that Thomas Jefferson grew up in also had “powerful beliefs, powerfully held” and the most important one was that he was expected to lead others as the natural course of events.
The center of things: Jefferson went to college at William and Mary which would come to have alumni like like the future first President George Washington, the future first Chief Justice John Marshall, future Vice President James Monroe, and of course, Jefferson himself. Here, he was in the center of things. Every age has it. Today, most would argue that the center of things is in San Francisco or New York. A hundred years ago, people would have said London. If you asked someone in the 1750s, they would have told you that the place to be was Williamsburg, Virginia.
Accelerate your career: Brianne Kimmel recently tweeted her advice on how to accelerate your career. One of her suggestions was to “ask the most senior people in your network to forward invites to dinners.” It seems Kimmel has tapped into a timeless principle here. Jefferson was regularly invited to the house of royal governor of the colony of Virginia by his college professor. Here, he developed friendships and discuss ideas that would form his understanding of right and wrong. He was always guided by experience and example – the latter was provided by the group that he formed during those dinners at the governor’s house.
I’m only about ~100 pages into the book so more lessons to come in the next few weeks. The book is incredibly readable so I hope you grab a copy.
Business move of the week
The futility of the Hermès lipstick
Before I tell you all about this, I’d like to thank all my girl friends that I reached out to for help on this piece. I couldn’t have written this piece without them!
For me, Hermès is the luxury brand.
Kanye West agrees:
Luxury rap, the Hermès of verses
Sophisticated ignorance, write my curses in cursive
It is also a very disciplined company. For years, it’s strategy has also been clear – build a core catalogue of evergreen products (Birkin bags and A l’Affiche ties) and complement them with a series of limited-edition artist collaborations (Pierre Charpin and Gwon Osang).
So when it releases a product in a new category, it leading to turned eyes like one of its ties.
This past week, it announced that it will launch a new lipstick.
At first look, it’s not entirely clear why. Brands like Hermès are oriented towards signaling for the 1% and aspirational products for the rest of us. But the 1% already faces a crowded space when it comes to luxury lipsticks:
Lipstick quality is tough to measure and doesn’t matter as much as skincare – it’s difficult to mess up the chemical composition for lipstick. The differentiating factors for the product are color and a choice of stick versus gloss. That means that it is tough to differentiate on the basis of quality like for the Birkin bag. The market for the product is rich females above the age of 40. To quote one of my friends, “You can bet that no one under the age of 40 will be buying it because designer brands are pretty much universally considered old lady makeup.”
For the 99%, it is true that Hermès is an aspirational product and this offers a low entry price point into the brand. But that thesis falls apart if you consider the fact that unlike a Birkin bag or the classic red Hermès tie, you cannot tell which brand of lipstick you are wearing. Most millennials and Gen-Z customers are also oriented towards what Venkatesh Rao calls Premium mediocre brands. (Warning: it’ll be really difficult for you to not view everything through this lens after you read this). For lipsticks, this is Glossier and Maybelline.
That leaves us nowhere.
One of my favorite exercises is thinking about why do companies make move that don’t make clear sense to outsiders. What was discussed in the meetings before this move? What are the smart people at Hermès trying to do with this move?
The answer is that Hermès wants to invade the cosmetics industry. And this is their Normandy.
As a part of the launch of the lipstick, they’ll have to forge relationships with new retailers and build their distribution network. Even for a luxury mammoth like Hermès, this takes work and negotiating all the fine details. This allows them to launch more cosmetics in the future which higher differentiating potential such as blushes or a foundation. A foundation is a product where quality truly matters because it covers your entire face. Therefore, Hermès can make a more compelling argument about paying more for premium ingredients. And while it is difficult to show that you’re wearing a Hermès lipstick, you can show the stick that it came in. Christian Louboutin did exactly that for nail polish. One of the biggest reasons behind the success of the product was its Stiletto shape.
Hermès will continue to attract the customer that has everything and will buy anything from the company. For these customers, it gives them a marginal increase in the customer’s lifetime value (LTV) through a new product line. Chanel, one of Hermès’ key competitors, has been successful in the cosmetics space recently. So introducing this new product could also help the company chip away at Chanel’s LTV.
For the 99%, the aspirational signaling also exists if you squint a little. First, it is an amazing gifting product. It has a sub-$100 price. If you’re a young guy and can’t afford to buy your wife an Hermès Birkin bag, you can certainly afford to buy her the lipstick. And while others won’t know that the lipstick is Hermès, she certainly will. There is also something to be said for building an audience for the future. By introducing itself as a cosmetics brand, it is priming HENRYs (High Earning, Not Rich Yet) for when they do become rich.
So maybe the Hermès lipstick won’t be so futile after all.
Quote of the week
The ignorance of how things really work is depressing to me. Because it opens us up to manipulation. It closes us off from opportunities to produce fruitful change and advance our own goals. It is time to grow up.
Ryan Holiday is one of my favorite authors – I’ve read all his books and I’ve been reading his blog since middle school. To say that he has been a major figure in shaping me as a person is not an overstatement.
This quote from his book Conspiracy underlines how Ryan thinks. The rest of us look at the top of the chessboard, while he’s plugged into the mechanisms of how and why the pieces move the way they do.
This quote was also one of the inspirations behind my upcoming book, Lessons from LBJ where I talk about that how Lyndon Johnson used the principles that govern networks, organizations, and people to go from being born to the poorest family in Hill Country Texas to the President of the United States.
Random corner of the week
You’re welcome 😊
Meal of the week
As I mentioned in the beginning of this issue, I’ve been a bit sick this week. So I stayed at home most of the weekend and made some pasta to feel better. It came out pretty good!
That wraps up this week’s Sunday Snapshots. If you want to discuss any of the ideas mentioned above or have any books/papers/links you think would be interesting to share on a future edition of Sunday Snapshots, please reach out to me by replying to this email or sending me a direct message on Twitter at @sidharthajha.
Until next Sunday,
Sid
