[Book Notes] 20 insights: Hooked

Nir Eyal’s book “Hooked” is a deep dive into the habit forming techniques that are used by technology companies to build highly engaged products. This book reminded me of Atomic Habits (notes from that book can be found here), which focused on habit forming techniques for individuals. My notes from Hooked are as follows:


#1:

Buffett and his partner, Charlie Munger, realized that as customers form routines around a product, they come to depend upon it and become less sensitive to price.

For example, in the free-to-play video game business, it is standard practice for game developers to delay asking users to pay money until they have played consistently and habitually. Once the compulsion to play is in place and the desire to progress in the game increases, converting users into paying customers is much easier.

 

#2:

David Skok, tech entrepreneur turned venture capitalist, points out, “The most important factor to increasing growth is . . . Viral Cycle Time.” Viral Cycle Time is the amount of time it takes a user to invite another user, and it can have a massive impact. “For example, after 20 days with a cycle time of two days, you will have 20,470 users,” Skok writes. “But if you halved that cycle time to one day, you would have over 20 million users! It is logical that it would be better to have more cycles occur, but it is less obvious just how much better.”

 

#3:

Many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new. – John Gourville

Gourville claims that for new entrants to stand a chance, they can’t just be better, they must be nine times better. Why such a high bar? Because old habits die hard and new products or services need to offer dramatic improvements to shake users out of old routines. Gourville writes that products that require a high degree of behavior change are doomed to fail even if the benefits of using the new product are clear and substantial.


The technology I am using to write this book is inferior to existing alternatives in many ways. I’m referring to the QWERTY keyboard which was first developed in the 1870s for the now-ancient typewriter. QWERTY was designed with commonly used characters spaced far apart. This layout prevented typists from jamming the metal type bars of early machines. This physical limitation is an anachronism in the digital age, yet QWERTY keyboards remain the standard despite the invention of far better layouts. QWERTY survives due to the high costs of changing user behavior. When first introduced to the keyboard, we use the hunt-and-peck method. After months of practice, we instinctively learn to activate all our fingers in response to our thoughts with little-to-no conscious effort, and the words begin to flow effortlessly from mind to screen. But switching to an unfamiliar keyboard—even if more efficient—would force us to relearn how to type. Fat chance!

 

#4:

Users also increase their dependency on habit-forming products by storing value in them—further reducing the likelihood of switching to an alternative.

For example, every e-mail sent and received using Google’s Gmail is stored indefinitely, providing users with a lasting repository of past conversations.

 

#5:

Behaviors are LIFO—“last in, first out.” In other words, the habits you’ve most recently acquired are also the ones most likely to go soonest

New behaviors have a short half-life, as our minds tend to revert to our old ways of thinking and doing. Experiments show that lab animals habituated to new behaviors tend to regress to their first learned behaviors over time. For new behaviors to really take hold, they must occur often. In a recent study at the University College London, researchers followed participants as they attempted to form a habit of flossing their teeth. As one of its findings, the study concluded that the more frequently the new behavior occurred, the stronger the habit became. Like flossing, frequent engagement with a product—especially over a short period of time—increases the likelihood of forming new routines.


 

#6:

A company can begin to determine its product’s habit-forming potential by plotting two factors: frequency (how often the behavior occurs) and perceived utility (how useful and rewarding the behavior is in the user’s mind over alternative solutions).



Some behaviors never become habits because they do not occur frequently enough. No matter how much utility is involved, infrequent behaviors remain conscious actions and never create the automatic response that is characteristic of habits. On the other axis, however, even a behavior that provides minimal perceived benefit can become a habit simply because it occurs frequently.

 

#7:

“Are you building a vitamin or painkiller?” is a common, almost clichéd question many investors ask founders eager to cash their first venture capital check. The correct answer, from the perspective of most investors, is the latter: a painkiller

Painkillers solve an obvious need, relieving a specific pain, and often have quantifiable markets. Think Tylenol, the brand-name version of acetaminophen, and the product’s promise of reliable relief. It’s the kind of ready-made solution for which people are happy to pay. Vitamins, by contrast, do not necessarily solve an obvious pain point. Instead they appeal to users’ emotional rather than functional needs.


Unlike a painkiller, without which we cannot function, missing a few days of vitamin popping, say while on vacation, is no big deal.

My answer to the vitamin versus painkiller question: Habit-forming technologies are both. These services seem at first to be offering nice-to-have vitamins, but once the habit is established, they provide an ongoing pain remedy.

 

#8:

Habits are like pearls. Oysters create natural pearls by accumulating layer upon layer of a nacre called mother-of-pearl, eventually forming the smooth treasure over several years. But what causes the nacre to begin forming a pearl? The arrival of a tiny irritant, such as a piece of grit or an unwelcome parasite, triggers the oyster’s system to begin blanketing the invader with layers of shimmery coating.


A trigger is the actuator of behavior—the grit in the oyster that precipitates the pearl. Whether we are cognizant of them or not, triggers move us to take action.

 

#9:

Companies can utilize four types of external triggers to move users to complete desired actions:

  1. Paid Triggers

  2. Earned Triggers: Earned triggers are free in that they cannot be bought directly, but they often require investment in the form of time spent on public and media relations. Favorable press mentions, hot viral videos, and featured app store placements are all effective ways to gain attention.

  3. Relationship Triggers One person telling others about a product or service can be a highly effective external trigger for action. Whether through an electronic invitation, a Facebook “like,” or old fashioned word of mouth, product referrals from friends and family are often a key component of technology diffusion. Unfortunately, some companies utilize viral loops and relationship triggers in unethical ways: by deploying so-called dark patterns. When designers intentionally trick users into inviting friends or blasting a message to their social networks, they may see some initial growth, but it comes at the expense of users’ goodwill and trust.

  4. Owned Triggers: Owned triggers consume a piece of real estate in the user’s environment. They consistently show up in daily life and it is ultimately up to the user to opt in to allowing these triggers to appear. For example, an app icon on the user’s phone screen, an e-mail newsletter to which the user subscribes, or an app update notification only appears if the user wants it there.

 

#10:


Internal triggers manifest automatically in your mind. Connecting internal triggers with a product is the brass ring of habit-forming technology.


In the case of internal triggers, the information about what to do next is encoded as a learned association in the user’s memory.


One method is to try asking the question “Why?” as many times as it takes to get to an emotion. Usually, this will happen by the fifth why. This is a technique adapted from the Toyota Production System, described by Taiichi Ohno as the “5 Whys Method.” Ohno wrote that it was “the basis of Toyota’s scientific approach . . . by repeating ‘why?’ five times, the nature of the problem as well as its solution becomes clear.”


External triggers tell the user what to do next by placing information within the user’s environment. Internal triggers tell the user what to do next through associations stored in the user’s memory.

 

#11:

Evan Williams: “Take a human desire, preferably one that has been around for a really long time . . . Identify that desire and use modern technology to take out steps.”

In his book Something Really New: Three Simple Steps to Creating Truly Innovative Products, author Denis J. Hauptly deconstructs the process of innovation into its most fundamental steps. First, Hauptly states, understand the reason people use a product or service. Next, lay out the steps the customer must take to get the job done. Finally, once the series of tasks from intention to outcome is understood, simply start removing steps until you reach the simplest possible process.


 

#12:


Fogg Behavior Model: Behavior = function of Motivation, action and trigger

Fogg posits that there are three ingredients required to initiate any and all behaviors:

  1. the user must have sufficient motivation

  2. the user must have the ability to complete the desired action; and

  3. a trigger must be present to activate the behavior.

The Fogg Behavior Model is represented in the formula B = MAT, which represents that a given behavior will occur when motivation, ability, and a trigger are present at the same time and in sufficient degrees. If any component of this formula is missing or inadequate, the user will not cross the “Action Line” and the behavior will not occur.


Dr. Edward Deci, Professor of Psychology at the University of Rochester and a leading researcher on the self-determination theory, defines motivation as “the energy for action.” Fogg states that all humans are motivated to seek pleasure and avoid pain; to seek hope and avoid fear; and finally, to seek social acceptance and avoid rejection.


According to the Fogg Behavior Model, ability is the capacity to do a particular behavior. Fogg describes six “elements of simplicity”—the factors that influence a task’s difficulty. These are:

  1. Time—how long it takes to complete an action

  2. Money—the fiscal cost of taking an action

  3. Physical effort—the amount of labor involved in taking the action

  4. Brain cycles—the level of mental effort and focus required to take an action

  5. Social deviance—how accepted the behavior is by others

  6. Non-routine—according to Fogg, “How much the action matches or disrupts existing routines.”

But which should you invest in first, motivation or ability? Where is your time and money better spent? The answer is always to start with ability.


Increasing motivation is expensive and time consuming. Web site visitors tend to ignore instructional text; they are often multitasking and have little patience for explanations about why or how they should do something. Influencing behavior by reducing the effort required to perform an action is more effective than increasing someone’s desire to do it. Make your product so simple that users already know how to use it, and you’ve got a winner.

 

#13:


A product can decrease in perceived value if it starts off as scarce and becomes abundant; Endowed progress effect: phenomenon that increases motivation as people believe they are nearing a goal

There are many counterintuitive and surprising ways companies can boost users’ motivation or increase their ability by understanding heuristics—the mental shortcuts we take to make decisions and form opinions.


For e.g. a study showed that a product can decrease in perceived value if it starts off as scarce and becomes abundant. A 2007 study attempted to measure if price had any influence on the taste of wine. The researchers had study participants sample wine while in a functional magnetic resonance imaging (fMRI) machine.


The sample started with a $5 wine and progressed to a $90 bottle. Interestingly, as the price of the wine increased, so did the participants’ enjoyment of the wine. Not only did they say they enjoyed the wine more but their brain corroborated their feelings, showing higher spikes in the regions associated with pleasure. Little did the study participants realize that they were tasting the same wine each time.


Two groups of customers were given punch cards awarding a free car wash once the cards were fully punched. One group was given a blank punch card with eight squares; the other was given a punch card with ten squares that came with two free punches. Both groups still had to purchase eight car washes to receive a free wash; however, the second group of customers—those that were given two free punches—had a staggering 82 percent higher completion rate. The study demonstrates the endowed progress effect, a phenomenon that increases motivation as people believe they are nearing a goal.

 

#14:


Every behavior is driven by one of three Core Motivators:

  1. seeking pleasure and avoiding pain;

  2. seeking hope and avoiding fear;

  3. seeking social acceptance while avoiding social rejection.

Ability is influenced by the six factors of time, money, physical effort, brain cycles, social deviance, and non-routineness. Ability is dependent on users and their context at that moment.

 

#15: 


Variable rewards can be found in all sorts of products and experiences that hold our attention. They fuel our drive to check e-mail, browse the web, or bargain-shop. I propose that variable rewards come in three types: the tribe, the hunt, and the self. Habit-forming products utilize one or more of these variable reward types.

Rewards of the Tribe: Sites that leverage tribal rewards benefit from what psychologist Albert Bandura called “social learning theory.” Bandura studied the power of modeling and ascribed special powers to our ability to learn from others. In particular Bandura determined that people who observe someone being rewarded for a particular behavior are more likely to alter their own beliefs and subsequent actions. Notably, Bandura also demonstrated that this technique works particularly well when people observe the behavior of people most like themselves or who are slightly more experienced (and therefore, role models). This is exactly the kind of targeted demographic and interest-level segmentation that social media companies such as Facebook and industry-specific sites such as Stack Overflow selectively apply.


Stack Overflow devotees write responses in anticipation of rewards of the tribe. Each time a user submits an answer, other members have the opportunity to vote the response up or down. The best responses percolate upward, accumulating points for their authors. When they reach certain point levels, members earn badges, which confer special status and privileges.


Reward of the Hunt: According to Harvard evolutionary biologist Daniel Lieberman, we chased down our dinner. Early humans killed animals using a technique known as “persistence hunting,” a practice still common among today’s few remaining pre-agrarian societies.


Yet persistence hunting was not only made possible because of our bodies; changes in our brains also played a significant role. The need to acquire physical objects, such as food and other supplies that aid our survival, is part of our brain’s operating system. Pinterest users never know what they will find on the site. To keep them searching and scrolling, the company employs an unusual design. As the user scrolls to the bottom of the page, some images appear to be cut off. Images often appear out of view below the browser fold. However, these images offer a glimpse of what’s ahead, even if just barely visible. To relieve their curiosity, all users have to do is scroll to reveal the full picture. As more images load on the page, the endless search for variable rewards of the hunt continues.


Rewards of the Self: Finally, there are the variable rewards we seek for a more personal form of gratification. We are driven to conquer obstacles, even if just for the satisfaction of doing


For example, watching someone investing countless hours into completing a tabletop puzzle can reveal frustrated face contortions and even sounds of muttered profanity. Although puzzles offer no prize other than the satisfaction of completion, for some the painstaking search for the right pieces can be a wonderfully mesmerizing struggle. The humble e-mail system provides an example of how the search for mastery, completion, and competence moves users to habitual and sometimes mindless actions. Have you ever caught yourself checking your e-mail for no particular reason? Perhaps you unconsciously decided to open it to see what messages might be waiting for you. For many, the number of unread messages represents a sort of goal to be completed.

 

#16:

First, people who submitted a question offered a bounty in the form of a virtual currency, “Mahalo Dollars.” Next, other users contributed answers to the question; the best response received the bounty, which could be exchanged for real money. By providing a monetary reward, the Mahalo founders believed they could drive user engagement and form new online user habits.


Ultimately, the company found that people did not want to use a Q&A site to make money. If the trigger was a desire for monetary rewards, users were better off spending their time earning an hourly wage. And if the payouts were meant to take the form of a game, like a slot machine, then the rewards came far too infrequently and were too small to matter.

 

#17:

When a request is coupled with an affirmation of the right to choose, reactance is kept at bay.

As part of a French study, researchers wanted to know if they could influence how much money people handed to a total stranger asking for bus fare by using just a few specially encoded words. They discovered a technique so simple and effective it doubled the amount people gave.


The magic words the researchers discovered? The phrase “But you are free to accept or refuse.”


The researchers believe the phrase “But you are free” disarms our instinctive rejection of being told what to do. If you have ever grumbled at your mother when she tells you to put on a coat or felt your blood pressure rise when your boss micromanages you, you have experienced what psychologists term reactance, the hair-trigger response to threats to your autonomy.

 

#18:

Experiences with finite variability become less engaging because they eventually become predictable

Online games like FarmVille suffer from what I term finite variability—an experience that becomes predictable after use. While Breaking Bad built suspense over time as the audience wondered how the series would end, eventually interest in the show waned when it finally concluded. The series enthralled viewers with each new episode, but now that it is all over, how many people who saw it once will watch it again? With the plot lines known and the central mysteries revealed, the show just won’t seem as interesting the second time around.


This is in contrast with companies making products exhibiting infinite variability—experiences that maintain user interest by sustaining variability with use. For example, games played to completion offer finite variability, while those played with other people have higher degrees of infinite variability because the players themselves alter the gameplay throughout. World of Warcraft, the world’s most popular massively multiplayer online role-playing game, still captures the attention of more than 10 million active users eight years after its release. FarmVille is played mostly in solitude, but World of Warcraft is frequently played with teams; it is the hard-to-predict behavior of other people that keeps the game interesting.


While some products, like the ones we’ve just discussed, add variability to the user experience, others operate in conditions that are already variable. For example, Google wouldn’t want to add variability to its search results page because searching on the web is inherently variable. Uber wouldn’t want to add variability to your ride because the experience of getting to where you’re going is already plagued with uncertainty—“Will I get to where I’m going on time?”


Variability is only engaging when the user maintains a sense of autonomy. People will stand in line for hours to ride the twists and turns of a roller coaster but are panic stricken when they experience a bit of turbulence on an airline flight. Therefore, the job of companies operating in conditions of inherent variability is to give users what they desperately crave in conditions of low control—a sense of agency.

 

#19:


IKEA effect: The more users invest time and effort into a product or service, the more they value it

In a study, researchers found that those who made their own origami animals valued their creation five times higher than the second group’s valuation, and nearly as high as the expert-made origami values. In other words, those who invested labor associated greater value with their paper creations simply because they had worked on them. Ariely calls this the IKEA effect.


The more effort we put into something, the more likely we are to value it; we are more likely to be consistent with our past behaviors; and finally, we change our preferences to avoid cognitive dissonance. These tendencies of ours lead to a mental process known as rationalization, in which we change our attitudes and beliefs to adapt psychologically.

 

#20:


The Manipulation Matrix does not try to answer which businesses are moral or which will succeed, nor does it describe what can and cannot become a habit-forming technology. The matrix seeks to help you answer not “Can I hook my users?” but instead “Should I attempt to?” To use the Manipulation Matrix, the maker needs to ask two questions. First, “Would I use the product myself?” and second, “Will the product help users materially improve their lives?” Remember, this framework is for creating habit-forming products, not one-time-use goods.



The Facilitator: When you create something that you would use, that you believe makes the user’s life better, you are facilitating a healthy habit. It is important to note that only you can decide if you would actually use the product or service, and what “materially improving the life of the user” really means in light of what you are creating.


The Entertainer: Sometimes makers of products just want to have fun. If creators of a potentially addictive technology make something that they use but can’t in good conscience claim improves users’ lives, they’re making entertainment.


The Dealer: Creating a product that the designer does not believe improves users’ lives and that he himself would not use is called exploitation.


Facilitators use their own product and believe it can materially improve people’s lives. They have the highest chance of success because they most closely understand the needs of their users. Peddlers believe their product can materially improve people’s lives but do not use it themselves. They must beware of the hubris and inauthenticity that comes from building solutions for people they do not understand firsthand. Entertainers use their product but do not believe it can improve people’s lives. They can be successful, but without making the lives of others better in some way, the entertainer’s products often lack staying power. Dealers neither use the product nor believe it can improve people’s lives. They have the lowest chance of finding long-term success and often find themselves in morally precarious positions.

 

Others:


Many habit-forming technologies begin as vitamins—nice-to-have products that, over time, become must-have painkillers by relieving an itch or pain. Looking for nascent behaviors among early adopters can often uncover valuable new business opportunities.

 

Mint.com is an online personal finance tool used by millions of Americans. The service aggregates all of the user’s accounts in one place, providing a complete picture of their financial life—but only if they invest their time and data in the service. Mint provides multiple opportunities for users to customize the site and make it more valuable with use. For example, the act of linking accounts, categorizing transactions, or creating a budget are all forms of investment. The more data collected, the more the service’s stored value increases

 

Chris Nodder, author of the book Evil by Design, writes, “It’s OK to deceive people if it’s in their best interests, or if they’ve given implicit consent to be deceived as part of a persuasive strategy.”