Conversational Capital: I’m totally not wearing any pants

On a recommendation from Michael Tiemann, I got the book Conversational Capital: How to Create Stuff People Love to Talk About by the folks at Sid Lee, who have done work for brands like Cirque du Soleil, Adidas, and Red Bull.

conversationalcapitalMichael had sent a note at Red Hat a few months back where he said this book helped him understand the “x-factors” that had allowed Red Hat to create a strong brand position at such a small, young company. Thought I should check it out.

In case you were wondering, that headline above is an example of Relevant Sensory Oddity, one of the topics they cover in the book. I thought I’d try it and see if it works:) I actually am wearing pants. Today.

The main thesis of Conversational Capital is that there is a more powerful way to get consumers engaged with your brand by “making your story part of their story,” creating stories or experiences that are meaningful to them. The authors turn their noses up at “buzz marketing,” equating it to style over substance, with no depth or continuity, all sizzle and no steak.

To create true “conversation capital” you need to learn to make great use of what they refer to as the eight engines: rituals, exclusive product offering, myths, relevant sensory oddity, icons, tribalism, endorsement, and continuity. Of these, the most interesting to me are myths and tribalism, because I believe they have fueled some of the successes of the Red Hat brand. First, myths:

Myths are foundation stories; the meta-narratives that shape and inform our culture. These stories encapsulate who we are, where we came from, and what we aspire to… That’s why, in our view, myth is one of the most important engines of Conversation Capital. If a consumer experience is permeated by myth, it is likely informed by a powerful, coherent story. Stories create resonance and salience and are the basic currency of identity formation. Myths are stories that tell us who we are.

Red Hat was built from the very beginning on top of myths. A few years ago we caught up with Red Hat co-founder Bob Young in Toronto and filmed him talking about our first myth– how Red Hat got it’s name. I love this particular story because it is actually three stories– and you can choose which one you believe. Over the years, people have asked me many times which story is the correct one, and I always repeat Bob Young’s words… “There are three official versions, and you can pick!” Why ruin the myth?

Over the years, Red Hat has obviously been able to play the role of David in David v. Golliath, but I wouldn’t say that is a strategic decision, more of a caricature created in the media. Our interpretation of the Red Hat myth is probably best articulated in the short film Truth Happens, which I covered in a previous post. But over the years, we’ve attempted to tell other stories as well in films like We Are Here, Birdsong, Choice, and Inevitable. Almost all of these have lives of their own on YouTube,, and elsewhere, and many are still watched hundreds or even thousands of times each month.

Do these myths drive leads and sales of Red Hat Enterprise Linux? Hard to say. It is dark matter after all.

Do they drive brand and shareholder value for Red Hat? I think so. A recent quote from a Piper Jaffray analyst named Mark Murphy (emphasis mine):

We expect Red Hat’s growth opportunity to demonstrate sustainability because of the underlying value proposition of open source offerings, it’s superior brand recognition, large referenceable customer base, the reinforcing ‘network’ effects of a platform leadership position, broad array of ISV and IHV certifications, unique vision and culture, and ability to hire superior employee talent.

I’d like to think our stories and myths had a tiny bit to do with this, but I’m not sure we’ll ever know for sure.

Tribalism is another interesting topic covered in the book. Red Hat has tried to be a good citizen of the open source tribe over the years, giving back to the open source community in many ways, from hiring people to work on important open source projects, to taking strong stands on intellectual property issues and on behalf of open standards, even acquiring companies and open sourcing their technology so anyone can use it.

Part of being a good member of a tribe is creating a “symbiotic relationship” where value is created by and shared between all members, and everyone is on a “quest for mutual discovery” together.

I hope that the open source community continues to view Red Hat as a valued member of their tribe. That’s where I part ways a bit with this book… I don’t believe Red Hat has ever been part of this tribe in order to create “conversation capital.”

We are a member of the open source tribe because we believe.

About Chris Grams

Chris Grams is Head of Marketing at Tidelift. He is also the author of The Ad-Free Brand: Secrets to Successful Brand Positioning in a Digital World.


4 thoughts on “Conversational Capital: I’m totally not wearing any pants

  1. Chris, I’m glad you liked the book. I would like to clarify one thing: one can amass great power through belief (just look at the Kung Fu Panda), but that does not mean that we cannot also observe specific teachable disciplines that contribute (just look at the “Secrets of the Furious Five”–the DVD bonus feature).

    Red Hat achieves greatness through powerful beliefs and actions. But those powerful beliefs and actions can be studied, measured, and understood using the framework of conversation capital.

    Jack Welch recently said that trying to maximize shareholder value is “the dumbest thing in the world”, which is to say that if a company takes care of its customers, its employees, and its partners, the stock price will take care of itself. In the same way, if Red Hat focuses on being Red Hat, the conversations about our authentic and awesome authenticity will just happen. And be measurable.

    Posted by Michael Tiemann | March 16, 2009, 12:42 pm
  2. Ah, but the “three stories” business is something Bob made up fairly late in the game. Probably even post-IPO. The “real” story is one of those three, and I won’t give it away here. But the “real” story was printed in the first “Halloween” manual and I believe the 2.0 and 2.1 manuals. After that, we removed it. I know, because I did it. I was told to, as the manual was needing to get bigger thanks to more and more features during the install but we needed to keep page count in check (because each page costs money), so we took it out.

    I believe at a meeting somewhere someone asked Bob “what if someone asks?” We decided right there that we’d just stop telling the story altogether. We would just say “it was in the manual for our very early products and we’re leaving the story to those who supported us early on” or something similar. We even posted that on our mailing lists and such when people asked, and it seemed to make our early adopters beam with pride and not WANT to tell. Which made those who wanted to know want to know EVEN worse. So that tactic worked, too, as a marketing tool.

    I don’t even remember the official line changing to the three stories, so it probably happened after 2000.

    Posted by Donnie Barnes | March 21, 2009, 12:36 pm


  1. Pingback: Summer reading list for Dark Matter Matters « Dark Matter Matters - July 4, 2009

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