Nir Eyal on the Psychology of Habit-forming Products

I have looked forward to bringing this interview by Nir Eyal since I first spoke to him a few months back. Nir is the author of “Hooked: How to Build Habit-Forming Products” – a book described as the “essential crib sheet for any startup looking to understand user psychology” by Dave McClure of 500 Startups – and the blog NirAndFar.com. He also teaches and consults about using consumer psychology to build better products.

Stefan: Let’s start with your writings, where you mention a lot of examples – both in the book and on your blog. Which products have impressed you that most—which are the products where you would say, “this one was just a brilliant, innovative or new way of building the ‘hook’”?

Nir: Facebook is still the master of designing for habits. They do an amazing job of changing user behavior and I think it has become very clear that Mark Zuckerberg knows very well what he is doing. He understands the importance of habits. He knows how to build user habits and when someone threatens his habits, he buys that company as we saw demonstrated from the 22 billion dollar acquisition of WhatsApp and the billion dollar acquisition of Instagram. I think Facebook is still the market leader when it comes to applying these principles of habit design.

The large social media in general, and Facebook in particular, are very good at creating these habits. How about companies outside of the social media space, can they form habits too?

Sometimes people criticize my work, because they do not understand what it’s for. They think that I am helping to build all these distracting products that suck our attention like Facebook, Twitter and Instagram.

Remember that the original habit-forming product are things like spectator sports or watching television. The average American watches five hours of television a night. Why? Because they are habituated. They are hooked to their television screens. Spectator sports are very habit-forming products. Think about it – we cheer for people we do not even know and who aren’t from where we are from, simply because they wear colors affiliated with an institution that we buy into. When those people changed the color of their jersey then we don’t like them anymore, they are traitors to our brand and our team. We watched this little ball bouncing around the field at random just like a slot machine or just like a roulette wheel and it sucks us in. It sucks us in for the exact same reasons that Facebook, Twitter and Instagram do.

Not all businesses need to be habit-forming. There are plenty of companies that do not require habits to be successful. Some companies are about one-time transactions or the transaction and engagement is infrequent in which case you just do not need to form a habit and that is totally fine. You can still build a great business that way.

Habits aren’t an online phenomenon, there are companies outside the consumer web and certainly outside even technology itself that are still habit-forming. We have all kinds of addictive products out there. In the enterprise space there is companies like Slack and Salesforce that are not consumer-facing, but are still habit-forming.

In e-commerce, I would consider Amazon to be very habit-forming. Now, it has been habituated for people with the Amazon app on their phones, including in my house, to not even write down our shopping list anymore. It has become a habit and it’s even easier to just buy the product straight away than to write it down on the list. That is an e-commerce company that I think is very habit-forming.

Interesting example. I don’t think many draw the parallel to sports. Going back to the online space, you have looked at many products in relations to your book and blog. What are some lessons that you have learned?

The one hard lesson I’ve learned is that there is a science to user behavior. The fact that we see products such as Facebook, Twitter and Instagram that are engaging and successfully change user behavior is not a mistake, it is not an accident –it’s by design. Many people think that these companies just got lucky somehow, but that is not the case.What I learned over time is that there are principles underlying consumer behavior that drive why we use the products we use. That is why I wrote this book –it’s why I dug down and did a lot of research to figure out how these products are built to be so engaging.

I saw companies and different campaigns come and go. Some would work and some would not. It was very frustrating to not know why. Many people in business copy their competitors or they will just do what worked in the past, but they do not understand the deeper psychology and the drivers of why these things worked in the first place. To me, it was very important to understand really what was happening in the brain of the consumer more than just what resulted from the transaction itself.

Let’s take a step from what is now, to what will be in the future. What are some of trends you see for the next six to 18 months in creating and designing habit-forming products?

Everytime there is a change in interface – the way we access and provide data –then the habit deck gets reshuffled. There is a new opportunity to create habits every time the interface changes. Even before computers we had all these habits of behavior that then shifted on to digital interface. Then they changed from desktop to laptop and then from laptop to mobile phone and now mobile phone to wearables. Every time that shift happens the habits have to get reestablished for that new interface.

Typically, it is not the incumbents that are able to make the switch and that is where destructive innovation often occurs. The incumbent often cannot make the transitions, for business or cultural reasons, and that is what we see now at the mobile interface and we will see it again with the wearable interfaces. I am very excited to see what the Apple Watch does to both consumer and enterprise web. I think we are going to see all kinds of new habits ported over to this interface.

With a new interface, the channels can change and of course the content changes. But one thing that does not change is our brain. The brain of our species stopped evolving a long time ago and it is still the same brains our species has always had. We have new skills now and we can do new things that we could not do before, but in terms of our fundamental hardware, we have not done an upgrading of our brains for quite a long time. The basic principles that guide user behavior are ever great –that is why I focused on this field.

One of the key topics in your book is the variable incentive. What are some recent examples of good application of these principle?

Meerkat is a brilliant example. It is funny because the day Meerkat launched, I got an email from Ben Rubin the CEO that said, “Hey, I just want to let you know, we are launching this product today and it was inspired by your book Hooked. We pasted up images of the hooked model all over office and build the product using the model.”

Within a month, Meerkat exploded and was on the tip of everyone’s tongue, particularly at SXSW. One of the things they did incredibly well was that they sent messages through Twitter whenever you started a live stream. This way your Twitter following would see that message. Interestingly, the initial reason they designed that function was not just a way to grow the user base, they designed it because they wanted to give immediate variable rewards to the broadcaster! When you start broadcasting on Meerkat, you immediately see faces popping up watching you and that of course provides immediate reward.

Another topic you write about in your book is the investment. Many companies may not have business model where building up the investment is straight forward. People might for many reasons not be as emotionally involved in the product as they may be for, say, Facebook or other social media. Have you seen any good examples outside of these company where people really invest in the media as well?

Many products are built today to get costumers to check them or the company out. Everything is built to be quick and slick and get people out the doors as quickly as possible but that can sometimes be a mistake. We do not just want products to be slick, we want them to be sticky and we do not just want people to check us out, we want them to check in and we want them to engage. The end result of engagement is eventually monetization.

I will give you an example, I was recently invited to give a workshop at a convention for 700 real estate agents. They wanted to turn buying and selling a home into a habit and of course when I got there I said, “Forget it, you are never going to turn buying and selling a home into a habit” Buying a home requires a ton of thinking and it is done very infrequently which is opposite of habits, which are behaviors done with a little or no conscious thoughts. There is no way to build a habit around buying or selling a home but I did my job, I gave the workshop. At the end of the workshop, several real estate agents came up to me and said: “I know exactly what I am going to do!”

One lady referred to what I describe as internal triggers in my book: these small pain points or itches that occur frequently. She wanted to form habits among people in her community by focusing on the feeling of anxiety around money. She wanted that every time they were concerned about money, they should come to her, as most of them didn’t have financial planners to help them. These kinds of concerns occurs much more often than buying or selling a house, and it would make her the place to go when they one day wanted to buy or sell their home.

You do see products that are catering towards these more infrequent habits by finding the more frequent opportunities to engage people with less.

Interesting. Do you have any general tips to fix something many product teams get wrong in the product design?

The biggest mistake is that they do not consider what is happening. They do not consider that it is not just giving the costumer what they want, it is about also designing this experience to bring them back. The biggest mistake is not knowing about the hooked model in the first place. You can save a lot of time and effort by not building the wrong thing and instead spending time and effort building what is likely to work for your costumer.

I imagine that getting this model implemented in organizations is difficult for any individual in an organization. Have you found any process that has enabled organizations to implement this thinking effectively?

It is very difficult to do this as a lone wolf or as an individual designer or advocate –even an individual CEO cannot do this. It takes the entire team understanding the framework and understanding these principles of consumer psychology.

It is a bit like how Lean Startup is now kind of gospel. Everybody knows about Lean Startup today and we know it is a much better process. Agile development is a much better process than the way we used to design software but a lone engineer cannot implement Agile on his own. He cannot do Lean processes or costumer development on his own. It needs to be part of the organization.

Does this mean you have found an effective process for implementing this?

That is really a good question. I think it is still in its infancy. Companies are realizing that the old way of doing things by building products based on what the highest paid officers says we should build, what the investor says we should build or even what the loudest costumer says we should build, that is not enough. We have to go deeper than that. We have to understand the needs of the consumer that they may not be able to articulate. We have to understand that and that has to start penetrating the organization.

Most companies have a specific user in mind and hopefully they have a solution in mind –often times even if it just in their head or in a paper napkins sketch or something. The idea is really that before you start building anything, you want to take up the model and run your user interaction’s key habit through this framework. You want to see if this is really something that make sense as a potential habit-forming product. The way you test that is to ask yourselves these five fundamental questions that I prompt in the hooked model.

I have not really seen the best techniques to implement the model yet. Hopefully they will be developed and hopefully I will have a part in making those happen. I would love to see them happen but it is still such a nascent way of doing things that we have not seen them quite yet to be honest.

So would you say that we need to get away from MVPs and design what we think the user doesn’t yet know that they want?

It is interesting, people often criticize Eric Ries with this example of Apple: “Apple did not do any MVPs,” or “Apple does not do user testing.” But that is just not true! They do all that stuff –they just do it internally. Steve Jobs would take the same product and give it to several different teams and watched them all iterate like crazy and then after the product was at a stage where he could see the differences between the different varieties, he’d picked the best one out of the batch. So they did test –they just did it with people inside the massive company.

The teams that understand the fundamentals of consumer psychology will succeed –think about Instagram, the Instagram founders where symbolic systems majors at Stanford. Symbolic systems is a major that it is 50% psychology and 50% computer science and I think that you can see that in the product.

Brilliant! Thank you so much for that, sort of like the last question is more about sort of like things to you. What are some good advice you got earlier on your career that have made a difference to you?

That is a good question. I can tell you advice that I wish I knew back then: There is something really powerful about doing what I call “following your energy” and it sounds very hippie, but it is not. If you know there is some things that we want to do that we are drawn to, that we can feel in our gut that we should be doing. Things we enjoy. It would be something that we would do even if nobody was paying us. For too long in my career I thought that if I felt that way then it cannot be work, right? I cannot be really working because it feels too good. And then after I sold two companies, I said screw this, I am going to do what I want to do and, for the first time, what feels good. That actually became a successful business.

For the first time and because of the power of the web, doing what you like to do and what brings you energy is possible. I do not think this works for everybody in the world but I think that if you can consistently harness that energy, consistently do the things that make you feel good that are productive in your mind that make you follow your energy then there is a lot more opportunities than I think people might realize.

Definitely, I think that is a good advice for anyone in any career I guess. Beside from your own book, what are two to three books that would you recommend people new to the field to read?

Let us start with books around habits. There is a book by Steven Anderson called Seductive Interaction Design, I think that is a really good one. There is a book by Kelly McGonigal called the Will Power Instinct which I think is a really good one, Drive by Dan Pink is a good one of course there is Influence by Robert Cialdini that is a very good one, Charles Duhigg’s book Power of Habit is very good and then a great one that I really recommended is Addiction by Design just by Natasha Dow Schull, and there is also Timothy Wilson, he wrote the book called Redirect. Then there is a book What Technology Wants that is by Kevin Kelly right I think. I really love Hackers and Painters [edit: By Paul Graham] that was another great book.

For a very different kind of book, I really like Clay Christensen and read his book How Will You Measure Your Life that I thought was pretty good, that one just comes to mind.

There is definitely a few classics in between and plenty of stuff to read for people to get started.  How, aside from books, do you keep yourself up-to-date and inspired?

It is interesting, I actually trying to consume less content and I know you do not like this because you and I both create content too.

Information is kind of becoming a problem. It used to be that information was scarce and if you had the information you could profit from it.  When I applied to colleges they would send me this brochures with “Come to our college we have 50 thousand books” or “no, come to this college we have 60 thousand books.” Now that of course is totally irrelevant. Who cares? What is scarce today is not information. What is scarce is attention and so I would worry much less about information and much more about focus because without focus it does not matter what you know. If you do not have focus you cannot do anything with that information. You cannot create anything without focus.

How do you apply that in a tangible way to make sure that you move to as far in the right direction as possible with your knowledge and skillset?

Here is the dirty secret: the dirty secret is that when you go to most conferences or you read most industry news sites and you see these glaring insights that people write about or talk about –not all of them but most of them, maybe even the vast majority of them – if you just sat and thought about it for a while, an educated person would likely come with the same conclusions! That is number one.

Number two: to create really something new, you have to have these burning questions that drive you to learn more. But the only way to get these burning questions and to get these burning questions answered is to have the focused to ask the right questions and seek the right answers. We are drowning in information. Information is no longer the problem. There is very little that is really secret anymore. The secrets and the mysteries that are to be revealed can only be revealed through deep concentration. Everything else is just recycled and regurgitated noise. I know that is controversial, maybe you do not want to write all that.

No, I think it is brilliant, because that is exactly the point, right? You have tons of sites out there who writes almost brainless content.

Right and let me be very clear, the irony is not wasted on me here, the techniques I am teaching about building habit-forming products are used to make this junk –I realize that. But here is why I wrote this book: I wrote the book, number one, to help the people who want to build healthy habits, I want to give them the psychology and the practicalities that makes building healthy habits possible.

It is not fair that it’s just the gaming companies, gambling industries, the Facebooks and Buzzfeeds of the world that knows this stuff. We all should know this stuff so that we can build products to help other people. These companies do not talk about this stuff. They have behavioral psychologists on staff but they do not talk about these techniques like I am talking about them. The second reason I wrote the book is that if we are going to do something about this, if we are going to manage our attention, we have to understand how these products work. We have no hope of fighting these things, if we do not understand that it is not our fault and that these products are designed to engage us –to be habit-forming. Awareness and understanding is the first step to control.

To be a bit controversial, let’s say two years from now you decide to write a book called “Unhooked” to help users get unhooked from the addictive junk they find online, what concepts would you describe, if it is at all possible way to unhook from these addictive habit-forming products?

That’s actually the book I am working on!

(Laughs) Brilliant! What are the concepts you have come up with so far then?

I think there absolutely are ways to get unhooked. The first step is understanding what is going on and then the next step is breaking the hooks that we do not want in our lives. I write as much about how to build hooks and habit-forming products as I write about how to break hooks because I think that is absolutely something we should do in our lives. We need to break the hooks that are not serving us.

Essentially, we take the hooked framework and we figure out how we break the hook, how do we make it so that the trigger does not get to the action? How do we ensure the action does not go to the reward, the reward does not go to the investment, and so on? I think part of the solution is awareness. It is mindfulness. It is bringing some awareness to this. Look at my article on my blog called Strange Sex habits of Silicon Valley, which talks about how to break some bad habits in the sexual part of your life and replace it with healthy habits like an active sexual life and using toys from sites as bboutique.co for good sexual practices as well. Part of the solution too is new technology that fixes the problem of old technologies –that is coming. We are seeing a lot of products that do exactly that; helping us to regain our attention and focus.

What are some products that helped you in becoming more resourceful in this way that you recommend to other people?

One product that I use every day when I write is called Freedom. It’s a very simple app. All it does is that you tell it how long you want freedom for, meaning Freedom from internet, and it shuts off the web for that period of time. You cannot use the internet, it’s turned off and the only way to restart the web is to reboot your machine. That is a great product that I love. In fact Jonathan Franzen, the man Time Magazine called the greatest American novelist, does something very similar. He has a laptop that he works on that he only does writing on, no internet, no browsing, nothing, it’s only for writing and I think there is something there. To get anything worthwhile done, we have to focus. We have to unplug.

These things are wonderful –I love these products. I do not want to go back to an age before Facebook, Twitter and email and all these products –they are great, but there is a time and a place for them! If we do not understand how to control them, they’ll control us.

Yes. Don’t lose control! What a great closing remark. Thank you so much for your time!

###

Have you implemented the hook model or applied a similar mindset to your product? How has it worked out for you?