Hey guys, welcome to Episode 14 of Missions and Marketplace Podcast with your host Priest Willis. I had the opportunity to sit down with Nir Eyal who is a businessman and author of the book Hooked: How to Build Habit-forming Products. Nir and I discussed the psychological understanding of consumers and merchants as products are developed and `Qbuilt and how we get involved with tWhose products. You know how some people get up and they can’t help but to log in to their Facebook accounts, to their Instagram accounts.
Nir begins to go through in this book the four different triggers of that action. So there’s a trigger at the beginning, there’s an action, there’s an investment, and there’s a variable reward. And he begins to talk about how those things are tied together. What is the reward? What is the investment that he put into these products as consumers? How can someone who has a product and they want to get it out to the consumer, how to take those things into consideration as you pick your product?
This is a great discussion because this was an extremely popular book in Silicon Valley and all over the place. This really does dig into the psyche of the consumer. It really does dig into the psyche of a merchant, of a retailer, to really understand how our products formed and how do we get so attached to them. It’s more than you think it is. So you have to get the book certainly, but I want you to start with this podcast. Without further ado here is Nir Eyal.
Welcome to Missions and Marketplace Podcast. Join us as we talk to business and thought leaders to discuss their passion in and outside of business and how it drives them to give and be citizens of goodwill. Let’s get started.
PW: Hi Nir, welcome to the program.
NE: Hi, great to be here. Thank you so much for having me.
PW: Yeah, it’s exciting having you here. So why don’t you tell the listeners a little bit about yourself?
NE: Sure! My name is Nir Eyal and I wrote a book called Hooked: How to Build Habit-forming Products. My background is that I’ve started a couple tech companies, the last of which was in the advertising and gaming space. And I learned the whole lot of techniques that people will use in the marketing and gaming industries to change your behavior. And so what I did when I learned those techniques, after my last company’s acquired, I wanted to bring these techniques out to everybody else so that it’s not just the advertisers selling us things and the game developers getting us to play their games that are using these techniques, but so that everyone building all sorts of products can learn how to make their products and services more engaging and how to build healthy habits.
PW: So it’s important for us to know about having products from a consumer’s standpoint and a merchant’s standpoint, right? I mean in one sense how does it help the costumer? What kind of makes them be a better consumer essentially?
NE: Yeah, if you think about it habits are really who we are. That it make a tremendous amount of difference in terms of what we do every day is done— about 40% is done out of pure habit. And so when you can change habits for good, when you can get a consumer to change their day-to-day behaviors they can change their lives. And so what I want to do is to help people build these products and services that enhanced people’s lives, that bring people closer together, that helped them live healthier, happier lives, more connected lives by using these techniques to build habit-forming products.
I mean if you think about the general state of technology out there, when you think about the products and services that you use when you interact with the government or when your interact with your local business or all sorts of products and services that we use, these products, by and large, are pretty awful.
PW: Right, true.
NE: It’s terrible [laughs]. The products we have to use to interact with so many people in our lives, it really suck.
NE: So what I want to do is to learn from the best. How can we learn from companies like Facebook and Twitter, and Instagram and WhatsApp, and Snapchat. How are these companies so quickly change user’s behaviors? And so I want to take those lessons out so that all of us can learn from them and apply those same patterns and design to our own products and services.
PW: That’s really good because I think you’re bringing up a good point. I think there was a time when people were building products and services that we didn’t really consider the consumer and the consumer just bought it because there were really no options.
PW: But I think I read it from you or there’s a blog somewhere where you talked about this, of course, where it talks about, you know, Larry Page, for example, at Google where he’s actually going to his different developers and stuff and he has what he calls a “Toothbrush Test.”
NE: Right. I love that toothbrush test. It’s so critical. I mean this idea that Larry Page and Google look for new product innovations that pass this toothbrush test because what they realize – and what I devoted a whole chapter in my book writing about – is the importance of frequency; that if a behavior is not done often enough, there is almost no chance of it becoming a habit. And it’s not frankly going to be all that important to user’s lives. I mean if you think about what’s happened over the past several years when it comes to the technology industry, our interfaces have shrunk, right? We went from desktops to laptops to now mobile and now wearable devices like the Apple and the Google glass; all these wearable devices that are coming online here. So the interfaces shrunk.
The real stake that we have to trigger people to take action to use our products and services has just gotten smaller. It’s also gotten more portable, but it’s gotten much, much smaller, which means that if you’re not top of mind you just are ignored. You’re not used. If you’re not that up on the home screen or if you don’t own a place on the user’s mind, you’re just not going to be very relevant for the user. So that’s why it’s so critical to create these habits where people don’t need external trigger. They don’t need any kind of external prompting; they use the product on their own.
PW: So, Nir, have we always been as consumers creatures of being drawn in by our habits or have Steve Jobs or the world, whether it’s Apple or Facebook and all these other brands, have they taught us to be that way?
NE: I think the world is becoming a potential and more addictive place, certainly a more habit-forming place because there’s just more opportunity to send people through what I call hooks. And we can talk about those hooks in just a minute. But just the fact that you can engage with these products and services more often that’s the big tectonic shift that we’ve seen is that, you know, as the interface shrunk down we can carry with us more, which means we can be triggered at all times and places as we carry around these devices with us.
So the fact that it’s just more accessible makes it more habit-forming along with the fact that there is more data being transferred about us to these companies, and, of course, back to us in the form of these apps. So these apps take the data that they gain from our usage and they make themselves better for us, and then they shoot them back right down to us that we keep using them. And then speed. By the fact that this data is being transferred so quickly is unprecedented. So the trinity of data, access, and speed is why the world is becoming a more habit-forming place.
PW: You’re alluding to a lot these stuff here, so we’ll just chop it up a little bit. Before you wrote this book you were blogging about psychology and kind of analyzing about, you know, highly engaged products, and then, eventually, you went into this book. But you kind of four key parts from it that trigger the action, the reward, and the investment, which is kind of what you were diving into before you were saying, “Hey, we’re giving them Instagram. We’re giving them our photo, but we’re less likely to lead because now we’re invested.” But let’s try to cover some of these. So, first, explain what is the habit zone?
NE: Sure! So I talked about this hook in the book which this four-step process that’s basically outline of the book. This four-step process that we find endemic to all sorts of habit-forming products, both offline and online, mind you, but the examples that I talk about are really all online. The hook has these four basic parts starting with a trigger. A trigger comes in two types. We have these external triggers and internal triggers. I’ll get to the internal triggers in a minute. But the external triggers are things that tell the user what to do next with some piece of information: click here or play this.
PW: Buy now.
NE: Exactly! Buy now, these things that tell you what to do next. Then the action. The next step of the hook is defined as the simplest behavior done in anticipation of a reward. It’s something as simple as a scroll on Pinterest or hitting the play button on YouTube or searching on Google; these incredibly simple actions that give us an immediate reward.
Then the third step of the hook is the reward itself, and it’s typically a variable reward. So this comes from the work of B.F. Skinner, the father of operant conditioning, who found that when he gave his pigeons— he took these little pigeons. He give them a food pellet every time they would click on a little disk. And at first he gave them the food pellet on a predictable schedule, so click on the little disk, receive a food pellet. And so, basically, he could train these pigeons to click on this disk whenever they were hungry.
But then what Skinner observed was that when he introduced some variability— so, for example, one time the pigeon would click on the disk and nothing would happen. The next time they would tap at the disk they wouldn’t receive a reward. And what Skinner observed was that the rate of response, the number of times these pigeons pecked at the disk, increased. It was observed to occur more often when the reward was given on a variable schedule of reinforcement.
So that’s a really key component of the hook and it’s a key component of all sorts of products that we find most engaging, most habit-forming; the things that kind of capture our attention both offline and online. We find this element of mystery, this bit of variability in all sorts of products and services.
Online, the best example of that is when we’re scrolling on Facebook or Pinterest or Twitter, that news feed that was so popular and everything that we do online today. That news feed is very similar to a slot machine, right? We keep scrolling and scrolling and searching and searching for that next variable reward. We see it as the basis of what makes email so habit-forming.
Offline, when you think of spectator sports, you know, what is spectator sports other than a ball, you know, bouncing randomly across a field? That’s also a variable reward. There’s all kinds of variable rewards and products that we find most engaging. So it makes slot machines so intoxicating, if not addictive.
PW: Although it’s interesting with the email though because it— that’s when from in exciting moment I remember when I was on Internet when Jesus was on the internet. You know at one point there was Mindspring Internet and then all of a sudden you got email and you were excited to get it. And now email is just atrocious to get for a lot of people.
NE: Right. It’s just too much.
PW: Yeah, it’s just— it’s too much complica…
NE: And yet we can’t stop [laughs].
PW: True [laughs].
NE: If you’re anything like me you still have problems with the email. That’s the mother of I think habit-forming technology. It has a perfect hook to keep us coming back.
PW: If you didn’t…
NE: Well, the final step that I didn’t get to within the hook,
PW: Oh, yeah.
NE: Just to finish the four steps is the investment phase, and the investment phase is probably the most overlooked of the four steps of the hook. The investment phase is where the user puts something into the product in anticipation of a future benefit. It’s not about immediate reward; that’s what the action phase is for. The investment phase is something the user does to bring themselves back, okay, by either loading the next trigger.
So, for example, when I send that email message, I’m loading the next trigger even though I don’t get an immediate reward when I send the message. That I’m loading the next trigger because I’m likely to get a reply, and that reply prompts me to the hook once again. We see it on WhatsApp. We see it in Slack. We see it in— what makes SMS so popular. That’s that loading the next trigger.
And then the second thing that investments do is that they store value. They get better and better and better. And they do this because of the data they collect, the followers we accrue, the reputation we accrue, or the content we put into these products and services. And the more of this investment that we put in the more valuable the product becomes, the more it appreciates in value, and the more likely we are to use it in the future.
PW: Is it fair to say that there are some companies that just don’t have any of these features or don’t need any necessarily, right? I mean one you’ve alluded to was at one point you talked about companies like insurance companies. No one has woken up saying, “I just have to call my insurance guy.”
NE: So there’s two questions there: who needs it and who doesn’t have it? So who doesn’t need it? Anybody who doesn’t need a habit. So it all starts with a business model. Some business models don’t need habits, right? If you can bring people back to your place of business with advertising, with search engine optimization, with word or mouth, with a physical store from or you can have a restaurant on the corner. That doesn’t have to become a habit to be a profitable business that serves its customers very well. It’s only if your business requires unprompted engagement.
So if you think about Facebook and Twitter and Instagram and WhatsApp and Snapchat, all of these companies would die, they would go out of business if they had to pay to bring people back with ads, right? They necessitate a habit or they’re dead. So those are the kind of companies, both offline and online, that have to have a habit at their core or they’re just not going to survive.
So that’s the first question: who needs the hook? It’s not that every business needs to form a habit; it’s that every business that needs to form a habit has to have a hook. So then your second question, well, who doesn’t have it? I would say most companies don’t have it. Even the ones that need to built that before a product. I mean when you look at the App Store and you think about the thousands, the tens of thousands, maybe it’s hundreds of thousands of apps today that nobody uses because nobody built a habit around them. They fail to have a good piece of hook.
PW: So let me ask something here. So I was going to bring this up, but you are one of the thousand apps within the App Store. What is it I have to do— I know it depends on what you’re doing, flappy burger or something along those lines, but what do I have to do to start developing a hook or what do I have to do to build that into my process? What is that gem that Facebook has done and Instagram and all these other companies that you just— you have to get up and get on it?
NE: Well, the first thing you have to do is open up your laptop. You type in amazon.com and then you type in Hooked: How to Build Habit-forming Products and you buy my book.
PW: That’s right.
NE: Not because I want the $3 I make for book. I can do without that. I wrote this book not to make money. Nobody gets rich on books other than, you know, Malcolm Gladwell and people of that strata. I wrote this book because I was banging my head against the wall for years trying to figure out how to get people to use what I was building. I’ve been there. I’ve developed these products. I’ve made crappy apps and watched nobody use them, and I want to figure out what was the secret.
And so it wasn’t until I did my research and I spent years not only with the developers of the companies that I just talked about, Facebook and Twitter and Instagram, and I’ve now since worked with those companies very closely, but I also spent a lot of time in the library. I talked with research, with psychologists, with people who— with academics who understand what make people tick so that I could apply those lessons to help explain the deeper psychology behind why these products and services are so successful. And so I really distilled down these years of research into a pretty quick read so that I could finally create the book that I was looking for when I was building a product.
PW: No, I have to admit it is a very good book so I have it on Audible. I have the hard cover book and I even got the workbook.
NE: [Laughs] Nice.
PW: No kidding. And so, you know, I would highly suggest for those listening to this podcast absolutely go on Amazon. Go to his website, nirandfar.com, right?
NE: That’s right. Nir is spelled like my name N-I-R.
PW: Which is a great play on words, by the way – nirandfar.com.
NE: Thank you [laughs].
PW: And purchase this book because I promise you if you’re an entrepreneur or someone developing an app or designing some kind of system software of some sort this will really start to dig in to the answers. And Nir, what I like most about this book is it doesn’t just kind of cobble words together. You really do have it laid out just as you pointed out with the four different triggers here. You know you’ve kind of laid out for us, you know, how to attack this between the trigger, the action, the reward, the investment. And I promise you up to this point in terms of how I engage with games online whether it’s Candy Crush or apps like Facebook and Instagram, I never thought of it this way. I mean it really— it’s so easy that it was deep. You know it’s…
NE: I appreciate it. That means a lot to me. The wisdom is knowing what to exclude. It’s kind of my philosophy and so I did a ton of research and I left out probably thirty times more information that’s actually in the book. But I wanted to make it very simple. I wanted to make it something that a busy entrepreneur— I know busy entrepreneurs don’t have time for fluffy stories and, you know, nice narratives. I just wanted to cut to the chase of, okay, what do I do? How do I make my product or service that I know can help people? How do I give you and actually use it? And that’s the fundamental question that the book answers.
PW: I think it’s worth being said that we talked about this offline. There are companies out there that you don’t have to think about it just from the software perspective. I mean think about Red Bull and Go Pro. I mean those are two items that have really made people feel attracted to the brand, that there’s an investment involved in it. There’s a trigger, of course, at the beginning. So there’s all these pieces that Nir is talking about that I think is critical.
You know, Nir. I know we’re wrapping up here, but let me ask you a question. What are two items, digitally speaking, you can’t live without, and what are two items more traditional that you can’t live without that we could maybe highlight as examples for the listeners?
NE: Well, I think there’s…
PW: You could say Facebook and email if you want. That’s fine.
NE: Yeah, I love those products and services. You know my challenge— I’ll let you know a little secret before I’ll tell you the answer to those questions.
NE: There’s a little secret here and that the reason I wrote the book is two-fold. Number one, as a product maker, I know how difficult it is to make products and services that people actually use, and so I wanted to save the time and effort that people would have to spend failing and not getting it, kind of distill down those reasons so that those makers out there can build healthy habits. That’s really what I want people to do with this book is to help people live better lives by making better products.
But there’s another reason I wrote this book and that is that I do believe the world is becoming a more habit-forming, if not all-out addictive, place. And so what I want this book to do is to also help people understand why they are being hooked because if you’re anything like me, you struggle with maybe overusing some technologies, right? Sometimes I find it difficult to disconnect.
PW: I’m on a Facebook ban right now as we speak.
NE: Right [laughs].
PW: I’m not kidding.
NE: Facebook ban, yeah, great! Great!
PW: That’s self-imposed ban, yup.
NE: And I’m guessing that after you read the book now you understand how they do it to you, right? And so that’s actually a big motivation of why I wrote this book is that I want people to understand how these hooks work so that they can intentionally break them. So I’m always looking for ways to become more efficient and not, you know, mindless around my technology use.
Now I love these products. I love Facebook. I love Twitter. I don’t want these technologies to go away, but I would like new ways to put them in their place, right, new ways to be mindful about how I use them. So, for example, one product that I really love – to answer your earlier question – is a product called Pocket. Now Pocket is an app. It used to be called I think Read It Later, and, basically, I have this rule that when I’m online and I see an interesting article I never read it on my desktop.
NE: What I do— and why don’t I do that? Because what is the article? When you think about the four steps of the hook model, the article, the content itself that you’re reading online is the reward, right? And it’s, of course, a variable reward. There’s this catchy headline. What’s the mystery behind it? What’s the answer to the question that the article raises? What happened in the news? The reason we’re so hooked to the news is because there’s something new every day. It’s exciting. It’s interesting. It’s unknown.
And so what I do is I break the hook by every time I see an article online I save it to Pocket so that I don’t read it online right then, because what used to happen to me is, you know, I start reading one article and another article and another article and thirty minutes later I’ve just wasted all this time. Instead I just save it to Pocket. It’s a little Chrome extension. I save it to Pocket and inside Pocket, this app on my phone, there’s these articles that are scrubbed out of all the ads so it’s just the text of the article, and then I do this technique called “temptation bundling,” which is when you take something that you don’t want to do and you couple it with something that you do want to do.
So what I don’t want to do is waste my time reading online, right? So instead I read when I’m at the gym. I couple those two together. The only time I can do this reading of all these interesting articles is when I’m in the gym working out. But then you say, “Well, how do you read while you work out?” Well, the app will actually read the articles out loud to you in like a Siri voice. And so that’s how I do that. So I break the hook intentionally and now I’m actually hooked into this healthy habit of Pocket. Pocket also has a great hook. Now every time I’m in the car, every time I’m working out, every time I’m running I’m listening to my Pocket articles. So that would be, I think, an example of a healthy habit.
PW: Wow! You just got me on something else now. I want to dig in to that when we wrap up. What about a non-traditional? I mean you could say, “I keep walking back to the fridge over and over hoping that there’s something different in there.”
PW: So that’s the hook. I don’t know. What would…
NE: Well, I think this is maybe a little cheesy, but I think friends. When you think about what makes friendships exciting they also have hooks inside them. It’s easy for us to break those hooks unfortunately. I know my life I’ve unfortunately kind of, you know, I’ve moved a lot my life where I grew up in Orlando and I went to school in Atlanta and then New York, then I was in Silicon Valley. Now I’m in San Francisco. All of that movement makes it easy to disconnect from friends. But I think over the past couple years I really invested more in creating a habit with my friends.
So we have this little group. Every two weeks we get together. It’s on the calendar forever and ever. Every two weeks it’s always there. We don’t have to schedule. We know it’s going to happen. So that’s the trigger. The action is that we meet together and it’s very easy to meet. Everybody just packs their own food and we have a little picnic or a little gathering. And then the variable reward is the reward of the tribe, right, the reinforcement that we get from communication. This is actually, if you back into the real reason, why so many of these tech products are so engaging is that they mimic what we really want in the real world, right?
PW: That’s true, very true.
NE: Like Facebook is— the reward, the variable reward on Facebook is what I call rewards of the tribe, this social reinforcement that we get from other people. Well, it’s even more powerful in the real world, right? So that’s what my friends give me in the real world. And then, of course, the investment is hearing from our friends, and, you know, disclosing stuff that’s happening in our life. It’s a form of giving data, if you will, about what’s happening in your life. And so that’s how these friendships are made and kept, and I think it’s actually— you know there’s been lots of data now that shows that it’s a huge factor not only in our happiness also in our sense of well-being and actually extends our life span, this close relationship.
PW: It’s true. That’s been scientifically proven. That’s not cheesy at all. That’s really good.
PW: Hey, Nir, if somebody wants to get in touch with you how can they reach out? How can they read some of these articles? I know we talked about the blog earlier. What are some places you want to send them to?
NE: Yeah, sure. So the book is Hooked: How to Build Habit-forming Products and it’s available wherever books are sold, and the blog is nir, spelled N-I-R andfar, nirandfar.com.
PW: Nir, thank you so much for your time. We really appreciate it.
NE: My pleasure. Thank you so much. It was really fun.
PW: Thank you.
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