September 25th, 2014 Hooked: How to Build Habit Forming Products with Nir Eyal

On Thursday September 25th, 2014 Office Lease Center attended NextSpace’s event where Nir Eyal spoke about how to build habit forming products.

When you’re building a new product and want to add a new feature is it a vitamin or pain killer?

Pain killers address a burning need, these are the types of products VCs want to invest in. While vitamins are what we call “nice to have,” Nir Eyal said.

If you can create pleasure seeking behaviors this becomes a pain-alleviating behavior. The user comes back to your app to seek pleasure. The product soons becomes part of their daily life.

What do we mean by ‘pain’ when we talk about it from a business point of view? It’s not physical pain, but in a pain point we have in our daily lives.

The solution to our discomfort is found in the products use. They make things and our lives easier.

There is a balance between habit forming and addiction. You don’t want to create an addictive product or addiction habits. The same neural pathways can help you do something good for your users – habits.

Some habits can be good or bad. Habit is a behavior done with little or no conscious effort. Habits can be used for good, and companies are doing that, Helping people be more productive and healthy.

Criteria of habits:

1)  Frequency

2)  Attitude change

Harnessing habits can be very good for business.

Habits increase CLTV (customer lifetime value), they give you better pricing flexibility (if you form a habit around a product a minor price changes won’t matter). It can supercharge growth [virality] when one person infects another person. Habits can also increase defensibility (it becomes harder to steal customers away).

“Forming new habits is HARD WORK and exceptionally rare,” Eyal said.

A design pattern to help form better product hypothesis: Lean startup method, build, measure learn.

Building is expensive. If you can build the right thing sooner you spend less time failing.

HOOK is an experience designed to connect the users design.

 A Trigger: something that queues the user to action

a)  External: things that prompt the next action where the info is in the trigger: buy now, tweet this, a friend says download this.

b)  Internal: the info for what to do next is informed through an association in the user’s memory. Places, people , emotions, routines, situations.

Negative emotions are powerful internal triggers. People with clinical depression check email more, they feel down more than the general population. They are turning to tech to reach a connection. We don’t like this feeling of boredom, so we turn to something out of habit.

6 basic levers of motivations

-       Seeking pleasure

-       Avoiding pain

-       Seeking hope

-       Avoiding fear

-       Seeking acceptance

-       Avoiding rejection

Reward: it all starts with the nucleus accumbens (NA) studied by Olds & Milner. All sorts of things activate this portion of the brain. It was believed this was to activate pleasure. It turns out, the role of the NA was to activate the stress of desire. The NA becomes excited in the anticipation of reward, when the rewards comes a different part of the brain is triggered.

There is a way to supercharge the stress of desire. The unknown is fascinating to us. Variability causes us to focus on engagement and increases behavior.

3 types of variable rewards

1)   Tribe: social rewards, feel good and come from other people. Feeling good because someone else feels good. Social media

2)   Hunt: search for resources. These things are bought with money. Material rewards.  Scrolling takes the place of the pulling of a slot machine

3)   Self: intrinsic motivators. Leveling up on some game. The search of the next achievement/level. To-dos, clearing the inbox.

Investment: when the user puts something of value of anticipation of a future reward. Investments increase the likelihood of the next pass of the hook cycle.

Storing value, improving the product with use. Physical items tend to depreciate with time and wear down. Technology should increase with value the more we use it. The more songs you put into iTunes the more likely you’ll be back to use it.