How to Build Habit-Forming Products - Nir Eyal

I'm really much excited to introduce the next speaker NIR Eyal is amazing as many of you know some of the best practices strategies for entrepreneurship comes from experienced entrepreneurs who've been through the grind and the hustle just like you knew Arielle is no foreigner to this experience he has built and scaled companies one that has been ventured back one that has been acquired and has since transitioned to helping other entrepreneurs like all of you in the room succeed when his top-selling book called hubs how to build and scale productive products that make people love you so please join me in a resounding welcome get up on your feet and introduce near-ir thank you thank you thank you thanks very much everybody thank you so much it's a pleasure to be here and I just want you to know by the way that there is an army of people back here that is making this conference happen they're all over the place so can we just take a quick minute to thank those folks that have put in so much work to making this conference thank you very much so today I want to talk about for just a few minutes about how to make your product habit-forming you know when we think about the technologies that we're carrying around with us every day these these amazing devices in our pockets these products have had a profound impact on our day to day lives and so what I want to answer today is this question around how do they do it how do companies like Facebook and Twitter and Instagram and whatsapp and slack and snapchat how do they bring people back time and time again not just in the consumer space but also in the enterprise space these products that form consumer habits so I have just a few minutes with you this morning but what we're going to do right after my talk actually 10 o'clock is going to be a Q&A session where we I would love to take your questions come ready that's my favorite part is kind of this open-ended questions and answers to try and figure out any kind of engagement challenges you have because a lot of people today VOC focus on growth and growth hacking and that's super important but remember that's only a piece of the puzzle but if you can't users if you can't keep them coming back you've got nothing so I would argue that engagement is as important if not more important than growth so what we want to try and do today is to try and understand what is it about these companies that keeps people coming back and through my research I would argue that all of these world-changing companies who are touching the lives of hundreds of millions if not billions of users and making hundreds of millions if not billions of dollars all have embedded within their products what I call a hook now a hook is a four-step process it's it's built into the user experience I describe a lot more of it in my book but what I want to do today is to kind of walk you through the four steps of a hook to kind of give you a 30,000 foot view of this basic pattern that we see repeated again and again and again in all sorts of products that keep us coming back on our own hooks have these four basic parts every hook starts with a trigger triggers are these things that tell us what to do next now there are two types of triggers we have external triggers and we have internal triggers external triggers are things in our environment that tell us what to do next with some piece of information in the trigger itself click here by now play this these are things in our environments right that we see that tell us what to do they give us the information for what to do next right we as product designers we know all about these external triggers we see them every single day but what product people don't think about enough and what turns out to be absolutely critical to forming these long-term habits is creating an association with what's called an internal trigger internal triggers are things that tell the user what to do next but the information for what to do is stored as a memory inside the users head now these internal triggers are most frequently emotions but not just any emotion they are specifically negative emotions negative emotions are these most oftenly occurring internal triggers so what we do when we're feeling bored or lonesome or dissatisfied or fatigued or uncertain what we do when we experience these negative emotions prompt us to action prompts us to turn to these apps to these devices with little or no conscious thought in fact there was a study a few years ago that found that people suffering from depression from clinical depression check email more often actually just saw like three people put away their phones not just anyway what the study found was that people suffering from depression experienced what psychologists call negative valence states they feel down more often than the rest of the population and what are they doing to boost their mood to get out of those negative valence states they were turning to their devices they were going online they were checking email more often than the rest of the population and if we're honest with ourselves we all do this right we all do this let me tell you folks there is only one reason that people use your product there's only one reason that people use any product and that one reason is to modulate our mood to make us feel something different let me ask you what dumb what website or app do we go to when we're feeling the emotion of loneliness where do we go Facebook right somebody said tinder also also true different kind of lonely is also what what about when we're feeling uncertain before we scan our brain to see if we know the answer what are we doing we Google it of course and what about when we're bored you know between 2 and 4 o'clock in the afternoon you have that big project you don't feel like working on right now where you go you check YouTube you check reddit you check stock prices you see what's happening in the news right all of these products cater to this painful internal trigger of boredom we don't like that sensation and we turn to these products and services with little or no conscious thought before we even understand why we're using these products we're already online so what does that mean for you how can we help people improve their lives how can we help them live richer lives by knowing about the importance of these internal triggers if you want to build a healthy habit in your customers life you have got to be able to tell me what is your internal trigger it's amazing when I work in my consulting practice and I'm I talked to folks product teams they bring me in for these big expensive design reviews and they tell me all the amazing technological features of their product and when I ask the team ok that's terrific but what's the internal trigger what's the frequently occurring itch that your project is addressing they haven't a clue so you've got to be able to tell me what that internal trigger is and does it occur with sufficient frequency to form a habit let me talk about this word frequency it's incredibly important when it comes to these habit-forming products the data shows us that if your behavior if the habit that you want to create in your users day-to-day life if that does not occur within a week's time or less you have a problem it is almost impossible to change consumers habits if the behavior does not occur within a week's time or less now more is always better when you think about products like Facebook and slack and Instagram and whatsapp and snapchat how often are these products use how often more than daily these are intraday ly behaviors the stats are showing us that people check their home screens a hundred and fifty times a day so these products have a very very I have informing potential because they're used so frequently so the minimum bar has to be for your habit to take hold that that key behavior opening the app scrolling a feed checking something that has to occur within a week's time or less okay and you have to be able to tell me what is that internal trigger that prompts them to action that it's that emotional that the negative valence state that prompts them to action the second step of the hook is the action phase the action phase is defined as the simplest behavior done in anticipation of a reward the simplest thing the user can do to scratch that itch to get relief it says something as simple as scrolling on Pinterest or a quick search on Google or what could be simpler than just pushing the play button on YouTube these incredibly simple actions done anticipation of an immediate reward now there's a great formula that I like to share with folks that comes from a researcher at Stanford by the name of BJ Fogg and Fogg tells us that for any singular behavior any singular behavior we just need three things at the same time for any behavior to occur and you click any action anything you want the user to do they have to have sufficient motivation motivation is the energy for action how much we want to do a particular behavior they have to have sufficient ability ability is the capacity to do the behavior how easy it is to do and the trigger must be present right we just talked all about triggers now we know the trigger has to be there that's a precondition let's talk about motivation and ability nine times out of 10 when I work with product teams they're trying to figure out how to motivate people to do the behavior right let's show them a video let's give them testimonials let's talk at them let's prove to them why they should be more motivated to do this thing we want them to do 90 percent at a time that's the wrong approach the better approach the better ROI for your time money and brain brain cycles is to worry about ability that it turns out that the heart or something is to do less likely people are to do it so there are six factors of ability six factors of ability six things that you can do to make the behavior you want done more likely to occur you can decrease how much time something takes how much money something costs how much physical effort is required brain cycles brain cycles are very important when it comes to technology products because the heart or something is to understand the less likely that behavior is to occur social deviance is number five social deviance has to do with the fact that people are less likely of like are more likely to do something when they see other people like them doing it and finally non-routine is number six non-routine says that we become more likely to do something simply for the fact that we have done it before in the past and this is why habits are so important because the more we do a particular behavior the easier it becomes and the more likely we are to do it in the future what do we call that that's called practice the more we do it the easier becomes the more likely we are to do in the future so habits have this repeater effect the more we do something the easier it becomes and we become more likely to do it now we've talked about internal triggers talk about external triggers we're talking about making the action as easy as possible to do now it comes a time to give users what they came for to give them the reward to scratch their itch and that's the third step of the hook the reward phase I argue that it's not good enough to just give people what they want it's not good enough just to give people what they want what all of the products all the companies that I mentioned earlier all do they give people what they want they scratch the itch but they leave them wanting more and here's how they do it they all use a variable reward a variable reward comes from the work of BF Skinner BF Skinner with the father of operant conditioning if you took psych 101 back in college you'll know the name Skinner did these very famous experiments where he took pigeons and he put him in a little box and he gave them a disk to peck at and at first every time the pigeon would peck at the disk they would receive a reward they would get a little food pellet they were all hungry pigeons by the way they had to have the internal trigger of hunger to begin with for this experiment to work so basically take it the disk get a food pellet terrific that's called operant conditioning he could train these pigeons to know to peck as a disc whenever they wanted the food tell it but then Skinner did something a little bit different Skinner introduced a variable reward so sometimes the pigeon would peck at the disc and no food pellet no reward would come out the next time the pigeon would peck at the disc they would receive a reward and what Skinner observed was at the rate of response a number of times these pigeons pecked at the disc increased when the reward was given on a variable schedule of reinforcement why does this happen because variability spikes this reward system in our brain it creates this wanting this desirous response and so in all sorts of products that you find most engaging most habit-forming the things that capture your attention and won't let go by the way both offline and online you will find these variable rewards there are three types of variable rewards let me describe these for you briefly three types of variable rewards rewards of the tribe rewards of the hunt and rewards of the self and when you start looking for these you will see them in everything that holds on to your attention rewards of the tribe are things that feel good that have this element of variability is a bit of uncertainty and come from other people cooperation competition romance empathetic joy feeling good because someone else feels good all are things that feel good come from other people and have this bit of mystery this bit of uncertainty around what might happen next of course the best example online is social media right when you think about when you open up your Facebook newsfeed you're never quite sure where you're going to see right what videos that people post or photos or what if the comments say how many likes does something get high degree of variability when it comes to using a social media product next is rewards of the hunt rewards of the Hutt's have to do with our primal need for food and other material possessions and in modern society we buy these things with money right so when you think about slot machines for example right when I play a slot machine what's fun exciting what's interesting about playing a slot machine is the variability the uncertainty around what I might win when I play these games of chance consider for a moment the feed right what is it about the feed that makes it so effective thing about how everything today on your mobile device seems to have a feed take LinkedIn for example this is acquired recently by Microsoft you opened up LinkedIn it's no longer the company it used to be LinkedIn is no longer about finding jobs and resumes that's not what LinkedIn is about LinkedIn is a Content company so when you open up your your feed on LinkedIn and you start scrolling through that feed you'll see one story that's not that interesting but the next story might be interesting and to find more of that interesting content what do you have to do what date to keep doing keep scrolling and that's scrolling and scrolling and scrolling use the exact same psychology as pulling on a slot machine searching and searching and never done searching for that next interesting piece of information the rewards of the hunt finally the third type of variable rewards is rewards of the self rewards the self are things that feel good that have this element of variability but don't come from other people and aren't about the search for material or information rewards these are things that feel good in and of themselves are intrinsically pleasurable the search for mastery competency consistency control best example online is game play when you think about Angry Birds or Pokemon go or the Kardashian game what makes these experiences Gamze so engaging is getting to the next level the next complete and completing the next accomplishment right even if there's no material rewards you're not really playing with other people there's something exciting about finishing that next accomplishment now I know we're very serious business people here none of us play games right but I bet if you're anything like me you play this game of checking email all the time right I think email is probably the mother of habit-forming technology that mechanic of finishing those unread messages clearing them finishing your to-do list or the thing that always gets me is that one notification that I have on my home screen I'll have to open to clear it away these are all examples of variable rewards of the self searching for mastery consistency competency and control now we've talked about triggers we've talked about action we've talked about rewards there's one more step there's one more step and this is probably the most overlooked of the four steps of the hook the last step of the hook is called the investment phase the investment phase is where the user puts something into the product in anticipation of a future benefit it's not about immediate gratification that a future benefit investments the the purpose of the investment phase is to increase the likelihood of the next pass through the hook and investments do this in two ways the first way that investments increase the likelihood of the next pass to the hook is by loading the next trigger loading the next rigor so for example when you use whatsapp or slack or any number of other messaging services when you send that message there's no immediate reward you don't get points you don't get badges there's no leader but you'll get anything when you send that message but what you're doing is you are loading the next trigger because you will eventually if the person replies you will get an external trigger when you get that reply and that external trigger prompts you through the hook once again start the cycle over again the second way that investments increase the likelihood of the next path is by storing value now storing value is a really big deal storing value is why I love working in the technology industry as opposed to physical goods if you think about things made out of atoms right they depreciate with wear and tear things in the physical world your clothing these chairs everything in the physical world loses value with use habit-forming products do the opposite habit-forming products appreciate with youth they get better and better the more we engage with them by putting data into a product by putting content by uploading content into a product by accruing followers and finally through reputation all of these things make the product better and better to use they customize the product for us and they make it harder to leave here's the message I want to leave you with when these habit-forming products get us to invest in them it doesn't matter if a better product or service comes along this is a really important point why because it shatters the myth that the best product wins that is a lie the best product there's no promise that was ever made there's no 11th commandment that says the best product win Silicon Valley graveyards are full of companies that had the best technology it's not the best product that wins it's the product that captures the monopoly of the mind the thing that we turn to first with little or no conscious thought that's what captures a market so if you're building a product that requires unprompted engagement requires people to come back on their own you have to be able to answer these five fundamental questions of number one what's the internal trigger what's the itch that your product is addressing and does it occur with sufficient frequency number two what's the external trigger that prompts your user to action what's the simplest behavior the user can do in anticipation of a reward is the reward fulfilling and yet leaves the user wanting more and then finally what's the bit of work done to increase the likelihood of the next pass through the hook now I know this was a quick talk I only had about 20 minutes what I want to do is give you an entire slide presentation with lots and lots of examples so here's what I'd like you to do can everybody hold up their phones for me for a second hold your phone's up for me this is for queue reasons hold up your phones hi hi hi number one I want to get a picture for my Instagram page of you love you there's a great crowd too I just made the action member the action fade I've just made that behavior easier to do the phones in your hand all you have to do is to go to this URL w pinyin to s very short survey take you 30 seconds just five questions would love to know what you thought of the presentation if you have any feedback I'm constantly tweaking it based on your your feedback as soon as you click Submit you will be taken to a link to my SlideShare page where you can have a much more detailed explanation of all the concepts I just discussed now reminder at 10 o'clock I'm going to be doing a QA would love to start addressing some of your questions and with that I hope you will use these habits for good thank you very much

Channel: Startup Grind

Views: 91,535

Rating: 4.9112167 out of 5

Keywords: startup grind, entrepreneur, stock trading, stocks, how to, how to be an entrepreneur, how to start a business, startup company, startup company tips, startup company ideas, how to be successful, how to be successful in life, startup tips, startup business tips, silicon valley startups, success, success story, startup advice, nir eyal, hooked, how to build habit forming products, book, addicting, facebook, instagram, growth hacking, habits, internet addiction, digital detox, nir, eyal

Id: -jXM4NymIcA

Length: 22min 51sec (1371 seconds)

Published: Fri Mar 10 2017