420. Boosting Local Economies with Behavioral Science (Refreshed Episode)

Welcome to episode 420 of the Brainy Business, Understanding the psychology of why people buy. Today's episode is all about using behavioral science to build thriving cities.

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You are listening to the Brainy Business podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here's your host, Melina Palmer.

Hello.

Hello, everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business podcast. Today's episode is all about applying behavioral economics to cities in a way that will help them to thrive. And in today's conversation, which originally aired In August of 2020, I'm going to introduce you to a company called Colu, which is using behavioral economics to encourage people to engage in their communities in fascinating ways that bolster ent cities. They have some case studies from around the world, and because this episode was recorded in the early days of the pandemic, we talk about some of their ways to think about encouraging people to change their behavior, to do things like wear a mask. The flip of the script you will hear about in the episode is fantastic and a great opportunity to think about.

How you could incorporate concepts like herding.

And social proof and the love of the lottery into your own business. I've chosen to refresh this episode today because it's showcasing applied work on a global scale. Just like my guest on this upcoming Friday's episode, Beatriz Vallejo, who is joining me from Colombia and sharing about how she and her team have applied behavioral economics to reduce the spread of misinformation there. These two episodes are showing how behavioral economics can be applied in very different ways, showing both diversity in application background and location.

And I love that.

Now don't forget, there are links for everything, including my top related past episodes and books waiting for you in the show notes for this episode, which are found within the app you're listening to and at the brainy business.com 420.

All.

Right, let's talk about building thriving cities with behavioral science. Colu team, welcome to the Brainy Business podcast.

Thanks, Melina. Happy to be here.

Yeah, so excited to have you guys. So tell us a little bit about Colu. You know, what is it? How was it? How did it come about?

Yeah. So Colu is a company that's been around for close to five years, and right now what we do is we work with cities in the US and we help reward resident behaviors that meet the city's strategic goals. So we work with cities all over the US and offer them a platform to use that really uses the core fundamentals of gamification and behavioral economics to really change resident behavior and to ultimately help these cities do things that otherwise they would not have been able to do in such a way where the impact is made through the rewards.

Awesome. And so you talk about behavioral economics as part of IT and gamification, and I think. So you brought in some experts that you've worked with on that, or are you. Who's the expert and how did that kind of get factored into building out the company?

Yeah, I mean, I think I would say that the company is very mission driven and for some reason, I would say almost everyone in the company has some affinity towards behavioral economics in general. I will say that in the core, the founder and CEO, Amos Mehiri, is a big proponent of favorable economics. We did have Dan Ariely, who was on this podcast in the past, and as mine Elad's idol, to many extents, he was a big part of also constructing the foundations of the concept of what we're doing. So we really kind of always have that and have had experts from Stanford and TAP universities really advise us in different ways. Dana Heller did it as well, and she's from Stanford, and she really helped kind of develop a lot of these processes and ways we really can kind of talk. Good. Convert the idea into the implementation in a city through technology. Right. That's the challenge. Right. There's so many ideas, research going on, all this, but how do you take that, convert it to technology and then on top of that, apply it or implement it in cities so that it really affects people. That's the challenge. It's the execution of it. So a lot of amazing people in the company that are doing that every day.

Awesome. And definitely we'll have a link back to the episode with Dan. I think he's one of all of our personal heroes. Right. So really love being able to share projects that he has worked on and supported that are outside of the things we hear all the time. That was where, you know, talking about Shape, talking about Colu, I really love being able to shed some light on those projects that are really amazing and making a difference in people's lives. And it's just great to showcase all those other, you know, sort of side projects and whatnot as well. So talk a little bit about, you know, you're talking about cities and helping them to overcome some of their challenges. But what's the type of a problem that someone would be bringing to Colu, what's the like? Oh, we're so excited to work on something like this.

Well, I would say really right now we're in these kind of uncharted territory with COVID And the way we help cities has had to evolve based on the unique pain points that they have today that they probably didn't have four or five months ago and nobody would have ever expected them to have. So right now a lot of our focus is on how can we use these concepts of behavioral economic schemification to help support small businesses. That's kind of across the board. We meet with three, four cities a day. We really see every city. How can they get people to shop at these small businesses instead of on Amazon? Nothing bad against Amazon, but really you see these small businesses are suffering and people, again, behavioral sense do things that are convenient, simple and accessible. And we want to make sure that same way, you know, you can go on Amazon and get anything. You also are aware of what you can do in your city in terms of accessing small businesses and the services that they can offer. So it's really creating that behavioral change to know that you'll be able to shop locally and in a way that's like in line with the experience you have with Amazon. And one more thing is diversity, right? How do you promote minority? How do you help Citi promote black owned businesses, women owned businesses, LGBTQ businesses, and use the rewards also to highlight them and to create that emotional connection with the business owners too. That's the awareness component.

And I'll add to that that just before COVID kind of hit the world, we were involved with basically endless number of initiatives around mobility. For example in Tel Aviv, how to encourage residents to park out of city center and use public transportation or alternative methods of transportation, usually more, I would say cleaner ones. Also few initiative around reporting to 311 call centers. As cities understand that having the residents alert and reporting really help the city to operate well. And also many different initiatives around sustainability, recycling and so on. We had more examples from the world of public health and really many more. So each city has its own unique challenges, unique behaviors that it wants to promote. And actually a very, I would say rare one in terms of our global experience came from the uk where a lot of the initiative or the problems cities are trying to tackle are around mental health, like depression and people being alone. That was a big issue for them and they looked for ways just keep people out going to drink a beer. Many more. But as Michael said, now we're in a different World, I would say. And we mostly hear things around economic development and encouraging residents to shop locally.

Well, and I would love, if we can, a lot. If you can talk about the Jerusalem Boulevard project, I think that is just amazing what was able to be accomplished there and is such a wonderful case study. So walk us through the project and of course Michael can jump in. But I know being kind of on the ground in Israel for that one, if you can tell a little bit about that project, that would be, I think, really helpful to understand what you do, you know, from the beginning, from the problem that occurred, all that.

Yeah, absolutely. So you said on the ground, and literally it was for us, on the ground, because the Jerusalem Boulevard, which is a main street in a borough called Jaffa, is actually also the home of the football stadium for the two clubs that plays in Tel Aviv. So it is a very central place. And Melina, I don't know if you had a chance to visit Israel, did you?

Nope, still on the list, haven't been there yet.

Right. So take my word when I tell you that probably on your first night in Tel Aviv, your tour guide will take you, your husband, everyone in the group, and it will tell you something like, yeah, I'm taking you now to a super romantic place on a hill. It's an entrance port city. Actually, Tel Aviv grew up from it. And as Tel Aviv grew up, it just became just a borough in the southern side of the city. And on November 2019, which right now looks like 10 years ago.

Right.

So the Tel Aviv municipality and actually the Israeli Minister of Transportation, started constructions very heavily, one to put a light trail in the southern part of Tel Aviv, the Red Line, this is how it's called. And what happened is the day they started the warwicks, more than 200 businesses were cut off traffic dramatically just in one day. And all the small businesses on the Jerusalem Boulevard, which are mostly, I would say, classic moms and pops, small stores, many times belong to families. And like a few generations go back, few generations just found themselves with no clients and there was no way to get there by car or even by a bus. And it took around two weeks till businesses started to collapse and close their doors, like happening right now with COVID 19. And that was the point in time when the Tel Aviv municipality approached us and ask how we can use our platform that was already implemented in Tel Aviv to support the local businesses. And what we did back then was to use the app, the mobile app, which is one side of the platform, and we started to tell the story of the small businesses to the residents of Tel Aviv, especially the one who live in the Sen City, the northern neighborhoods of the city. And the whole idea was take one day. That was kind of the story we tried to tell people. Here is Moshe, right? He owns a burger place on the Jerusalem Boulevard. Take one day off your week and go visit him because he's a real Telvivian come to visit. And we also offered a 30% cash back with the Tel Aviv coin on the app. So if I'll take you back Melina to Jaffa, you. You go there and you buy a burger and a pair of shoes, whatever he has in his store, and you'll spend 100 shekels, the currency in Israel. And what you get back to the app is 30 Tel Aviv coins that later you can go and spend only at small businesses all around the city. But you won't be able to convert them back to dollars or shekels in the case of Israel. And you won't be able to use them on another city. For example, in Jerusalem. You cannot use them in Jerusalem. You can use them only at one of these businesses in Tel Aviv area. And what happened is we started this campaign on the app and we had also billboards all around the city. And in few days time we saw thousands of residents that started to go to this area that was very, very, I would say dead. You know, there were no ones there. Basically we had a tour of the company and we saw two guys and a dog basically in three hours. And then, right, and then there were thousands of people coming there, usually on the weekends or in the morning. And we were able to see patterns of people that usually shop in the center area of Tel Aviv having kind of a weekly day of shopping along the boulevard. And in terms of numbers, just to give you kind of the notion of what happened, the businesses owners over there experienced a growth of more than 700% in just the first 45 days of this initiative. We're talking about more than 20,000 transactions. And I think that the two things which are not the numbers, but still, you know, they have like the strongest impact is one, we were really able to rebuild the trust between the locals and the local God, the municipality of Tel Aviv. And the other thing, which is my favorite part here is what happened on the next 45 days, right when we had no more coins because the Tel Aviv municipality gave us a reward budget. So we distributed all the coins and we were like, what's going to happen now? And we remember what Dan Ariel used to say, that it's about the story. It's about the emotional connection. The incentives are just like engine, the spark. It's not what really create the long lasting behavioral change. And that's what happened in the next 45 days. We still had thousands of residents that came to this area, but this time not for the incentive, but for the story, because of the emotional connection that was established. So that's what happened back in 2019 and obviously it was a big success. And the city decided to give funding for this initiative also for 2020 and 2021. And we're going on with the city of Tel Aviv and now we're leading the economic recovery plan in the city of Tel Aviv with the Tel Aviv Municipality and the City Residents Club. And I think that we have a very bright future in the city of Tel Aviv.

That's awesome. I love everything about it, which is why, you know, when we connected on LinkedIn and we're, you know, having our conversation back and forth and you shared some of this story and just basically said, yeah, we need to talk about it, we need to put it on the show. It's such a cool thing. And I love the coin piece, which I know we've talked about that. Some of my own research that I've done has built on some research that Dan has done using coins that I use refrigerator magnets. But I really like this piece about it being more about the cash back quote unquote that you're getting, but that you can only use it in a select space and having the this electronic version that's able to be done with the app. I recently did an interview with Tim Houlihan and we were talking about incentives. Interestingly enough, he also did some work with Dan Ariely, so. So it's all kind of coming up together, making sense. But that piece about incentivizing and the money matters, that's part of it. But I love that the story is what drives people to want to help those around them. It has a little bit of that good in people. And I think there's some social proof. I was taking lots of notes about episodes that I'll be putting into the show. Notes as well for everybody who's listening. You can go check out some of these other things as well.

And also, Melina, you were writing about can behavioral economics increase saving and also increase loyalty? And I think that that's what happened because on the resonance perspective, it's like stretching your dollar, right? Because you get back these coins and you can spend them. But then also the fact that there's so many elements of behavioral economics also, like the network. And in Tel Aviv, it became really trendy. In Tel Aviv, we have 160,000 residents out of 400,000 who live in the city. So it is very trendy to use the cold app. It's always supporting social cause, and it's like becoming a real Tel Aviv. The cold T shirts we send to people has the motto, I'm a local hero. Right. So it's also really using these elements to create this loyalty between the residents and their local businesses. Because we do understand. And now during COVID we understand, I think we never understand it so well how important are the small businesses, not only in terms of creating jobs, but also in terms of giving us our identity, our city. And I think, like, you know, I read this piece that you wrote back then, and I see a lot of points of like, you know, where it really supports the theory behind product.

Yeah, yeah, definitely. And I can see a lot of the social proof that's part of that as well. So seeing other people and feeling like they're having success, we want to have success. You know, you want to look, you look. There's something that's about looking good yourself, which is fine, but also about helping other people, which I think is really fantastic. So we have this piece from Israel, you know, so the work in Tel Aviv. And then you were saying you also got some stuff in the States. And as we're doing our recording and conversation now, and I know you're doing stuff around coronavirus and that as of recording, you had just pretty recently launched some stuff in Akron, Ohio. So let's. Let's talk about what that project is and, you know, what your. If there are any initial findings, you know, but just to share a little bit about diversity and the types of projects that you guys are working on.

Yeah. So we decided to really focus on the US Market about nine months ago. And, you know, obviously it took time to get to the first city with COVID 19 as it hit, obviously things changed. And so Akron actually became our first US City that we're launching in. The soft launch is actually starting next week, so next Monday.

Well, all right then.

Yeah. And we're expecting the official launch to be August 10th with the city. The app is actually available. It's called Akronite. So that's something. But the way it worked is really, believe it or not, the city of Akron had reached out to us. But behind the scenes, I'll say is when we saw. And I'll talk a little bit more about Acumen in a second. But when we saw that COVID 19 was starting to hit right, this is early March, we had to, as a company really figure out how can we change our solutions to be relevant during COVID Meaning how can we stay compatible during those difficult times? And we had brainstorming sessions and a lot of different things came up of what will cities need help with? And how can we preemptively address some of these problems that even may have not yet existed? But we kind of saw them happening as we were actually in Israel. Things even started a bit before they started in the US So we kind of had like a sneak preview, for better or worse, about what was happening. So how could we prepare? And one of the things we did is we posted along blog posts with different ways that the application that we have, which has, you know, behavioral economics, incentives and rewards, can help change resident behavior to benefit cities during COVID So it could be getting kits that are compatible for quarantine, could be measures to help the city disseminate information, reward people for reading or confirming that they read. It could be for obviously small businesses, which became the highlight, and how to support small businesses and so much more. But we had to head of time do that. So we created a whole blog post. We created a whole new kind of coronavirus response team that really was a task force that was devoted to doing really research all the time, figuring out how we can best help cities and what our cities going through. We really believe in the research because otherwise we're just kind of doing things right. Things are very dynamic. So Akron actually reached out to us. They had read about us in a specific article, I believe, one of the Smart Cities newsletters. And they were saying like, hey, we really need help right now. We have a lot of issues. We had a lot of issues before with small business shopping because they had like a big Main street project, which is actually very similar to what Elad was speaking about in Jerusalem Boulevard. And I've been there in Akron a bunch, and it literally is a very similar problem. And the city wanted to think about outside the box ways to implement solutions. And James Hardy, who is the individual from the city, is the deputy mayor of Integrated development within the city of Akron. He reached out to us and he kind of was like, okay, this sounds really cool. I know you guys haven't done it yet. Speaking about social proof in the US you guys haven't done it locally. You guys seem legit because of your past history and the work you've done in Israel and in Europe. But let's give it a shot. I'm willing to be the first. And when that happened, we really kind of said we would implement and as we implement, really learn because again, it's hard to foresee what's going to happen during COVID also with the dynamic aspect of things. So we kind of very quickly had to develop our program and our initiatives that are in line with what their needs are as we ran. So again, we started the program and did a lot of preliminary research and really got to the point where right now we had to onboard merchants, we had to work on how are we best going to utilize any dollar that is put into the app in the form of rewards to generate the most economic impact in the city when it comes to, number one, as we decided, small businesses and small business consumption, and number two, promoting specifically minority owned businesses, also giver highlighting and so forth. We focused a lot on that and we focused a lot on creating these plans, working with data, working also on looking at the equilibrium between the incentive and the economic activity. Meaning if you have $100,000 and it is translated into 10% cash back. So let's say you shop at a restaurant and you spend $10, you get $1 back. That $1 back rate is coming from that pool of $100,000. And the economic impact in that case will be a million dollars. Right. For $100,000, 10% cash back. But then you can look at, okay, what if we gave 20% cash back? How would that affect really the economic impact of this whole type of mechanism and really finding that equilibrium there. So that's a lot of the work that we're doing, looking at the average price per transaction based on businesses, looking really at the way people consume, the way people shop by segment and all that. And that was a really important part. And one last thing about Akron is really that as all these social issues were arising and the Black Lives Matter movement really came into light as we were planning, the city decided that they wanted to allocate a portion of the budget to specifically black owned businesses in Akron. And what that meant is we created an additional rewards program that give an additional 10% cash back for people that shop at black owned businesses. And that creates that full awareness aspect as well.

Yeah, that's awesome. And so with the piece in Akron, and so this, while we're recording, before that launch begins and Akronite is fully live and you know, bustling, I suppose the episode will probably come out after the fact. So we'll make sure to do some updates and things when get share on sharing on social and things like that. The piece with Akron, where now it's having to do with coronavirus and all these other things happening in the US like you said with Black Lives Matter and these other pieces. So the incentive is then, is it all for online type of purchases or are they for shopping in person? And you know, how's that working with their, with their program and does it differ at all from what was done in Tel Aviv?

Yeah, so I'll start with Ecuador. Naj, we're going to fill in about Tel Aviv. It's an interesting question because it's tough because right now, on one hand, cities want to encourage people to shop local, but on the other hand, you also don't want to promote necessarily going in person. So there's that fine balancing act. With that said, cities still do want to promote people coming out to an extent, within reason, as long as they maintain social distancing measures. Right. So in Akron, you can get rewarded for shopping at a local business, whether it's online or in person, as you can earn points because you don't have to really do anything. You just add your credit card to, to the app and we automatically know that you shopped at a local business. And at that specific local business, you get rewarded automatically only once you want to redeem your local coins. You have to go in person. That's for the kind of transaction app. And there also is some sort of aspect of meeting the first meeting in person and getting people to physically see the store. So you can only redeem at local businesses in person, but you can earn the rewards online. And one more thing is that we also want to help cities direct traffic to businesses organic websites. So, for example, you know, a lot of times the delivery apps are taking a big portion of the revenue for the small businesses and for the restaurants specifically. So we can help the cities by directing residents to shop through the business's app or through the business website so that they don't have to pay such a big amount. So that's a way that we're also helping and kind of helping out with the specific measures of getting people to shop go physically there.

Nice.

And just to add on what Michael said, and you know, obviously what's happening right now in Akron is really interesting because a part of what we do is to see how residents really behave and change the app and change the reward program to really, you know, correspond and be responsive with what happens. We know. And it's also a part of what we do in behavioral economics. There is how we expect people to behave. And then you have how people really behave right in the real life. So one of the nicest thing on this platform that it really lets the city to change a program as the program runs. So it is very adjustable. But just to add on this, what we did in Tel Aviv just really on the first two weeks of restrictions, I think was mid marriage also we launched a new campaign that aggregated all the types of businesses that historically never shipped deliveries. So it was like, and I'm a parent to two kids, so and I became like many of us, I became the teacher of my kids. And then I really, you know, I needed stuff from the arts and crafts store, like papers, lords, whatever, scissors, like, you know, to be a really good teacher. And then I was like, all right, I'm not going there. It was like, you know, the beginning of, of the pandemic. And I use the app also to find out where I can order this kind of products also. And I'm talking about hardware stores and many more, right? So that was one thing. And then another thing that I want to point out is a different method of gamification we tried. So Michael spoke about the cash back mechanism. But another thing we're doing as part of the app is the challenge concept, right? So the challenge in Tel Aviv was shop in four small businesses, right, in the sequence of two weeks and get a reward, 35 Tel Aviv coins. So it's not really shopping one time. We're kind of educating the people to start to develop kind of a new habit. So you need to go and shop there four times in order to get your reward. And what happened in Tel Aviv is that Tel Aviv municipality, just by using a reward budget of US$3,000, they were able to generate around US$150,000. So think in terms of cities, you know, we have to speak about ROI. So think about the ROI, just using US$3,000 and generating a very significant effect. And again, from talking to our business owners, and this is a community, you know, it's a community of sellers for us. We got the data that 30% out of the economic activity that happened in Tel Aviv came from the users of koru. So for a person that have a little store, one of three people that coming in is coming with, you know, this like kind of game. And it's like, yeah, I just made my second purchase. I have to find two more opportunities just in the next few days, right? So. And we have obviously we have a lot of people that start the challenge and obviously are not able to finish it for various reasons. But that helps the city on this perspective.

Yeah, no, that's awesome. I love all of that and being able to really leverage the dollars that are being put into play. To say, like you said, turning $3,000 into $150,000 is big deal. You know, it makes a big difference in for the city and for those small business owners and just it' I love finding those win, win, win, win, win, win. Where it's just good for everybody. And I definitely see a lot of that in Colu. So I think that's great. I would love to talk a little bit now. You know, we've definitely talked about small business and where that matters. And I know there are now where you're doing a lot of things within pandemic space and helping with cities. And so I will say a couple of things that I know where businesses in the cities are having difficulty and something that a lot of other behavioral scientists that I know we've been having a lot of conversation about. And so I'm going to put this out into the world and you can say we don't know about that. Melina, shush. But this encouraging people to wear masks is something that is very difficult and that a lot of people are struggling with as we're having these conversations and also adhering to social distancing protocols and just following the recommendations from, you know, around the world. And so I believe you mentioned that there's some suggestions and things that you all are doing in that vein of the world. So because I know that's such a big problem and concern point for people right now, if you do have details on even just what your thoughts are in that space, would love to talk about it.

So Michael, I don't know if you want to go, but in Israel, one of the things that are happening right now is that and you need to understand the way the state of Israel work because you know, we have a government and the government is the state and then we have the local government. We don't have like what you have is the state in between. Right. So the government of Israel started this concept of the purple certificate, or the purple badge, if you will. And as a business, you need to comply with several condition in order to be able to open your store for service or have customers. Now there is a question who is responsible to really make sure that residents do wear masks in a store. Right. For example. And the answer is really the local gut, although the government up there decides and what cities are now trying to do because they understand that it's very hard to make sure that people are wearing masks. As probably everyone knows, when someone tell you what to do, you don't want to do it. Right. So cities started to take the approach of giving carrots to businesses instead of, you know, being like the bad policeman that tells you what to do and whatnot. And what we do is we try to help and support businesses. So, for example, think of one of these stories that Michael mentioned as reward program for businesses that are keeping the rules and the conditions of the purple patch. So if I'm buying somewhere like this, I will get additional 2% of cash back. Right. So then the business owner has a very strong incentive to make sure that shoppers, people that get in the store, they will wear masks. And obviously if the owner will tell you, hey, Melina, can you please just put a mask just for one second, probably you will, because, you know, someone asked it from you very nicely. So this is kind of shifting around the responsibility for stuff like this. And this is something we're trying out right now with few of our new cities in Israel.

Awesome. And just as you were talking a little bit there about carrots and sticks, of which Daniel Pink talks about in his book Drive and I'm sure in a lot of other areas. So we'll definitely link to that book in the show notes. For anyone who hasn't read it or isn't familiar with his work, it's really amazing of the what it is that motivates us and getting into all of those pieces. So he talks about carrots being more effective often than sticks. Even though we feel like we need to be using sticks, they don't work as well as those carrots do. Michael, did you have anything that you wanted to add and that piece?

Yeah, I mean, I think that, you know, when you talk about, like a lot mentioned how people we see don't want to do things because they're told what to do by the government. And it's always very interesting, even meeting people who explicitly tell me that they don't want to put on masks because they don't want to be told what to do. So I think that, and I was reading articles about this also, really it's. How do you show people that this is something that even if you don't want to do it for yourself, but you can do for others? And the way that we can think about it is, yes, can we do it through a proxy? Right. Can a business owner be the one actually that is helping it to actually saying, wait, maybe I'm doing this because I care about the business owner. But how do you really get that to happen in masses? Right. How do you promote it? Is it like doing the Hawthorne effect where you think that people are watching you? So basically saying, like, if you know that at any random time, if someone sees you and they can always look at you and see that you're going to mention get fine. But that's a negative thing. Right. So then how can you take it from a positive angle and maybe go do, like, if you randomly get caught, quote unquote, with a mask, then you can get rewarded. So I was like, no. Oh, wow. I can maybe make 20 bucks for just walking down the street with a mask. So it's all these different things that maybe will subconsciously have you be more aware of the aspect of, you know, I want to wear my mask, I need to. But also maybe personalizing it is what I think really showing people, like, the story behind, like, okay, if you don't wear a mask, you can affect these people that are your neighbors, relatives, family, whatever. But. And I hope that this will get better. Obviously, in my mind, that's kind of a key part of getting back to informal after this recovery.

Yeah.

And that actually reminds me one of the things that Dana Rielli mentioned when he spoke about Shapa. And we're also doing it in the Colo app, and this is to really highlight these celebrations, like, find even nothing bad happens. Right. So, for example, in the app, once you redeem coins, you get this text message a lot. Thank you for supporting the small businesses of Tel Aviv. Right. So you want to be very acknowledged and recognition when someone's doing a good thing to himself, but also to the community. And I think that also relates here because fighting Covid is you need everyone on board. Right. You need everyone needs to do a little thing, and then we'll all be protected. So I think that this is something that also kind of connects to the theory that we're trying to promote here.

My brain is spinning in a good way and a little bit from what you were talking about, Michael, and something that I didn't fully think about as I've been kind of contemplating how this all could be working and with the mask piece and I don't know how familiar either of you are with some initiatives that Volkswagen had actually done several years ago. So they have their. What they called the fund theory. And so through the fun theory, and you may have seen the video, and I will share it in the show notes for anyone who hasn't Seen it, but where they were trying to get people to take the stairs instead of the escalator in going to take the train and whatnot. And so when you're just telling people it's more, it's better for you if you take the stairs, because blah, blah, blah, okay, fine. Right, but I'm busy. I'm gonna take the escalator. But then they converted all the stairs into working piano keys. And when you step on them, it's like playing music. And so it's something like 66% of people, or 66% more people took the stairs than we're riding on the escalator. And you could actually see the video of that. So that's one of the most popular ones that was part of that campaign essentially that they had done. But they also did some that were if you run a red light, you know, so if you make a simple traffic violation, typically these days, you know, you just are kind of, it's you against the government and are they going to catch me? Sort of a thing. But they set it up that if you stop properly and you don't run the light and there's no ticket, then you get a chance to win the money from everyone who does have to pay for the tickets from running the light. And so when you, you can't win if you make the bad choice, but if you do the good thing, then you might win something. And so this idea of if you wear the masks, then potentially, you know, it'll randomly be, you know, you might win, is such a different idea of trying to get incentivizing them in a different way to do something impactful. And while it would be really great if just saying, hey, it's really good for everybody, you know, you're helping people, isn't that enough to just put this on for a minute? It would be great if that just worked for everyone, but we're seeing it's not. So I think this different type, you know, taking the incentive from somewhere else, very similar to what the literary is doing, which I, you know, I've interviewed and talked with them on the podcast as well, I think is a really cool idea to be able to put that together. So thank you for sharing those ideas. I think that's great. Anything else that you guys are doing in helping or ideas you've had about what you would love to be a project that you wish, you know, if there's a city that's listening or, you know, people that are working in various areas that what's the project that you really wish you could be working on as well.

Yeah, I mean for us it's really interesting from, from a few sides it's saying, I mean, we obviously want to help as many cities as possible in terms of supporting what their key pain points are, which again are supporting small businesses and diversity. What we always see now is that there's a lot of funding coming in from the CARES act and it's going into cities. And if you look at a lot of cities and you look at what they're discussing now is how to allocate or appropriate the CARES act amongst the different departments. So typically the city has less than 500,000 residents. CARES act funds are distributed usually through the state and then to the county, and then the county distributes them to the city. So when cities get their allotment of funds, they have to decide how are they going to distribute it. And what we're trying to show them is that by distributing them, great, you give them to small business in the form of a grant or loan, $10,000 grant, great, that'll help the business survive for another few months. But that amount will not get people to shop at the business. Right. That doesn't encourage consumption by the residents. So what we're helping cities do is saying, hey, let's take newer CARES X fund and let's appropriate them into the form of incentives that create or generate consumption at local business that will last far beyond the incentive on its own, meaning how to create a long term impact from a one time boost. And that's where we're really seeing the value here. It's looking at how we can make the most impact really from these things. And I think we're getting a very good response. But it's a big challenge because there's so many competing different departments. I mean, how it's such a difficult decision from a city's perspective. How do you allocate budgets? So we have to show really that, you know, these behavioral changes can ultimately do so much more for a local economy and ultimately then help promote, you know, get more local jobs, help these local business owners survive. I mean, I just got my hair cut too good of a job yesterday and the barber was telling me this in New York City, right? Like he 30 years he's been in business, he has never in his life encountered such difficult times. People are not coming. And he's saying, like, I don't know what I'll do. I have to let go of employees, I can't survive. And I see these stories, I see others, we listen, we Talk. We met with 40 business owners in two and a half days in Akron. And you see the pain that they have, you know, the physical and emotional pain from this. So it's really our mission to just see how we can do anything we can to think, tell people, think outside the box and think differently in a way that will help create this change. And that's where we see, you know, the biggest desire to help with. And there's so many opportunities, and we have so many hours in a day, although you could argue that we are basically Aladdin I together. Give me 24 hours. There's so much we can do. So it's really about seeing how we can help as quickly as possible and working through the bureaucracy that exists in government, because that bureaucracy ultimately should not be such a hindrance. And I can say if we look at the way Akron moves as a case study, that's the way government can be. That's a way to show the truth. Yes, it is possible. But again, that's really what I hope we can do in the upcoming months and in years to come.

Right.

Well, and as for leveraging those funds like you were talking about a little bit, whether it's CARES act or from something else, if I remember the numbers Properly, it was $150,000 that started for the Tel Aviv project that was put in, and it resulted in over $700,000 worth that was spent on the AV through that project. Right. So to take your 150 and turn it into 700 is a really impressive thing that can definitely help out the city and the residents and shop owners. Just everybody across the board, really valuable there. Elad, I think you were going to say something. Maybe it was what I said. Maybe I just snatched up what you were going to say.

No, you're bringing us so many ideas. This is why we really like the Brady business. And we always like to hear it and then to say, right, we're doing also this. This is another element of behavioral economics. Let's put it on the next slide. Right. Sliding. So just for me, you know, when I'm looking at the future, I'm waiting. And this is something we discussed many times. I want to see how we could have, like, a cross, very vertical kind of story. So it would be, you take a bus to the center city, shopping, local, I don't know, walking around 10,000 steps. And if you do these three different actions, this is when you get the coins. So we're really getting to all of the aspects, because think of cities, what cities really became for Us, it's not just a place to live. Right. It's like an ecosystem of cultures and art and innovation. So many things. And we want to make sure that really to help cities unlock their true potential. And it's great to just be on board when things are happening and where impact is being made. And as Michael said, I think we have a bright future.

I have to.

Yeah, absolutely. And I love your point there of helping to maybe unlock and uncover some of those hidden gems. You know, if you go find this other thing and take a picture of it and post it or you do this other, you know, such and such, go to visit the museum, do some of these other things that it can help you to get that incentive and share the real beauty of the cities that we're all living in and have a little bit of that personal touch to everything and knowing that this is, you know, I love that you have solutions for now during COVID you know, when people aren't out, but that you're also thinking about what can be done after the pandemic. So for anyone who wants to get in contact with Colu, if you want to do a project or just ask some questions, if people want to find out what, what's the best way to get in contact with you? And we will put links in the show notes for whatever you're wanting for that as well.

So what.

What's the best way to get in contact with Colu and to learn more about what you're doing?

I think our website is probably the best resource. So colu c o l e.com and look this up. You can really see really everything and then reach out to us. I'm sure you'll add our contact info as well.

Yes, absolutely. And if for whatever reason anything gets lost, anybody could reach out to me to reach out to you all and put in the connection point there. Always happy to help. So that sounds wonderful. We'll have links to Colu in the show notes. And just thank you both, Michael and Elad, so much for joining me today to talk about the amazing things that you're doing to help cities and local businesses. Just love all of it. Thank you.

Thanks for having us, Melinda. It was great.

Thank you so much, Melina, really. Pleasure.

So what got your brain buzzing as you learned about applying behavioral economics to help cities to think thrive today? For me, I love the multifaceted benefits that Colu was able to achieve here and that they were able to see it in different countries with different areas of focus by targeting the behavioral concepts to achieve specific lift. They were able to exceed goals and see lasting value for communities, leveraging grant funds and other programs to multiply their effects. It's really cool to see how thoughtful applications applications can help increase effectiveness without having to increase the budget. My favorite thing what stuck out to you after listening? What will you apply to your business? Whether you're in the for profit sector, non profits, public policy or anything else.

I'd love to hear about it.

Come share it with me on social media.

You'll find me as the brainy biz.

Pretty much everywhere and as Melina Palmer on LinkedIn. There are of course links in the show notes to connect with me and Colu, as well as to my top related past episodes, books and more. It's all waiting for you in the app you're listening to and@the brainybusiness.com 420 and just like that, episode 420 with Colu is done. Join me Friday for a brand new episode with Beatriz by aeho.

It's going to be a lot of fun.

You don't want to miss it. Until then, thanks again for listening and learning with me. And remember to be thoughtful.

Thank you for listening to the Brainy Business podcast. Molina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly from. For more free resources, visit thebrainybusiness.com.