Design Habits, Not Apps

Nir Eyal , Author and Entrepreneur

Habit-forming products are critically important and misunderstood, said author and entrepreneur Nir Eyal. He talked about behaviors that manipulate and motivate users in our recent Soapbox.

Nir said as an entrepreneur, he was frustrated when users didn't follow the prescribed paths his designs laid out. He decided to explore the common design patterns that made social games successful. The prior research he discovered lacked practical application — no way to apply the psychology behind users' behavior patterns. This inspired his book, Hooked, about how to build habit-forming products.

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Behaviors Come Into Focus

Nir's interest in habits was first piqued at his last company, which did business at the intersection of gaming and advertising. At the time, neither industry had terminology to describe habit-forming practices. They used certain techniques because they worked, but no one had definite ideas as to why.

I came to the hypothesis that technologies that would change user behavior in the future would really be built around habits. As the interface shrinks from desktops to laptops to mobile devices, and now to wearables, that habits would become more important. … We would start to rely on products that require little or no conscious thought.

We used to define habits, Nir said, based on what the "Hippo" — Highest Paid Officer, HPO — wanted. But over time the need to listen to customers became apparent. Still, customers had trouble articulating what they wanted. They didn't know what they needed, just that they needed … something. Our Design Triggers, Nir said, named those heuristics that influence behavior people were trying to describe. 

Nobody 11 years ago was saying, 'oh my God, I wish I had something to update my status!' … Facebook and products like it have changed our habits so that today, when we're without our technologies we feel a little stressed, lost, or hopeless.

Vitamins vs. Painkillers

So what is it that Facebook and others do to instill and reinforce the need to update our statuses? 

Two years ago Nir began asking a question that he'd often heard from investors: Is your product a vitamin or a painkiller? How does it help people?

Painkillers are what customers tell us they need, Nir said. But when we look at habit-forming technologies, most begin as vitamins — nice-to-have services like Twitter, Facebook, Snapchat and Instagram. None were strictly necessary, and that, Nir said, was the first pattern. Customers started using them as pleasurable behaviors, and through repetitive use he describes as the "hook" model, we begin to use so-called vitamin products to alleviate pain we didn't have before.

A habit is when not doing something causes a bit of pain.

To relieve the bit of stress caused by not acting on a habit, customers simply act on the habit. He said the hook pattern has four steps:

  1. Trigger: Something that cues a behavior
    1. External — Trigger that themselves inform people what they should do, such as calls to action or word of mouth from a friend.
    2. Internal — Associations in users' minds that such as daily routines, certain places, and negative emotions (pain points or, technically, "negative valence states"). Internal itches, as Nir called them.
  2. Action: The simplest behavior in anticipation of reward. Scrolling in Pinterest, for example, or pushing "play" on a YouTube video.
  3. Reward: Bits of intermittent reinforcement with a sense of mystery. Variable rewards are those that users anticipate, but don't know when they will occur.
  4. Investment: The action that customers themselves take to stay engaged. Nir said this is the area that we need to improve the most when building products.

He also said that many companies focus on getting users to use a product and move on when they should focus on making frequent opportunities for users to "check in" and use the product.

Small bits of effort users do that put something of value into a site which increases their likelihood of the next pass. Adding content to a site, for example, or accruing followers or a public reputation, increase the odds that users will return to a product in the future.

Break Down Barriers to Hook Customers

Companies often put barriers between recognized need and the reward for users. 

The history of innovation is about shortening the distance between the trigger — the recognized need — and the reward.

Anything that gets between triggers and rewards, Nir said, causes friction. He added that many companies put the investment phase of the hook model too early in the process of creating habits. Twitter's home page in 2009, for example, had lots of friction. Videos, a long description, many buttons to pages describing how great Twitter was, prevented people from actually posting tweets. When they simplified the page, removing anything that distracted from using Twitter itself, they saw incredible growth — pushing investment such as earning social capital until after the reward of posting tweets, Nir said.

It's not about what you ask the user to do, but when. Trigger, action, reward — then investment.

Pinterest, Nir said, was another example. At first glance, there's very little investment in using the site. Maybe users arrive by word of mouth or following links on Twitter — external triggers. The simplest action is to simply start scrolling. "You have to start scrolling because of the variable reward that scrolling offers," Nir explained, such as the occasional photo that piques users' interest. 

"You know what we call Pinterest without variable rewards? Google image search," Nir said. He elaborated: Searching for "teddy bear" will show 50 images of brown plush toys. It's built to be accurate. But searching Pinterest for "teddy bear" will show images of teddy bear tattoos, teddy bear paintings, teddy bears made from jelly beans — all random images.

The investment that follows the reward is an invitation to join Pinterest. Although the invitation is always present, it's discrete. Users don't have to pay attention until the actions have them hooked.

Once Formed, Habits Are Hard to Break Into

Nir was careful to point out that not every business needs habits, which are incredibly hard to form. If marketing compels people to use products, for example, then habits may not be worth the effort to create. 

But other companies require habits to drive business. Stack Overflow, GitHub, Sales Force and Yammer, for example, use the hook model to keep users engaged. Nir related an anecdote where Bank of America emailed GitHub, claiming that so many of their team used GitHub's service that the bank felt compelled to send them a check. 

Mobile games are another example: Nir said that game makers only need about 4% of their customers to pay in-app purchases to keep the business going.

Once built, habits create barriers to entry for competitors. Nir asked the audience how many people used Google Image Search in the last 24 hours. So many hands raised it was hard to see who hadn't raised theirs. Then he asked, "how many of you have used Bing?" No hands. "So Google must be better, right? Well, turns out if you strip away the branding … people can't tell the difference" between Google and Bing. People continue to use Google because we use it with no conscious thought. It's become a habit.

I give you Bing tomorrow, you'd say 'eh, it looks a little weird … it just doesn't work right' — even though the results are the same.

Nir said that Google is so ingrained in people's behavior that they don't even consider there might be an alternative search engine. To make people switch, a competitor must be much, much better than the one that formed the habit. It's hard, but it's been done. Facebook, for example, took users away from Friendster and MySpace — and no one looked back.

Three Pillars Create Successful Products

Monetization, engagement and growth are three things a business needs to have a successful habit-based product. Amazing products without growth or a strategy to earn money will not succeed. "What did Facebook actually replace?" Nir asked. "In the early days, Facebook replaced the face book." In college, he added, everyone had a literal book of faces and names of friends with which to hang out. Facebook, the web service, replaced that — and then became a communications medium and a photo service. Facebook gave a new interface to existing habits. 

Whenever we see a shift in interface … that's when new habit-forming technology has potential.

Nir said we're seeing the shift now, as wearable technologies replace mobile devices. This will bring forth many new habits, and is a great chance for new players to enter the market. 

Habits Are Not Addictions

"Addictions are always bad," Nir said. "They're always self-defeating." Nir said his book also covers how to prevent the abuse of habit-forming technology. As technology improves and people learn to engage customers with habits, we need to understand how to break those habits. Habits, like super powers, can be used for "evil." 

If there was an 'aha' moment for me, it was … when, on a Saturday, I was using my phone as opposed to spending time with my daughter."

We're still trying to figure out, Nir said, how new technologies affect us, positively and negatively. And while benefits outweigh detriments, we shouldn't ignore the bad sides of technology and their potentially addictive natures. 

Our discussion with Nir continued as he took questions from the audience. We'd like to thank Nir for sitting down with us and to those who attended the event.

Don't Miss Out on Our Next Soapbox

Soapbox transcript

Ryan: Good afternoon everyone. How's everyone doing today?

Sweet. Well will thank you for coming to, yet again another ZURBsoapbox. We all want to hook our customers on our products. We all want to puppeteer the cognitive strengths that advertisers have been leveraging for decades. We want to pull the triggers and get them addicted to our products.

Our guest, Nir Eyal, has spent a career studying the behaviors that manipulate and motivate users. In fact, he's even written a book on it called "Hook: How to Build Habit-Forming Products." He's going to tell us how to do just that. But please first give a warm welcome to our guest, Nir Eyal.

How's it going, Nir?

Nir: Great. Thanks for having me. Thanks everyone for being here today. You made it sound a little bit sinister, by the way. It's not quite so . . .

Ryan: Well, you know I need to go for the more sense . . .

Nir: [inaudible 00:01:02] 30 right now.

Ryan: Manipulate and puppeteer, right?

Nir: Addiction, that's the worst one of all. It's not . . .

Ryan: Well, you know, you have to go for the sensationalism. Just to punch it up. And we also have a hashtag if you want to live tweet this as well. Before we get started, I want to get into the secret origin of Nir. I like do with a lot of guests. You immigrated here in the '80s, you started two startups, you got an MBA from Stanford, you sold one of your startups in 2011, and then you started studying ferociously how technology drives people.

How did those different experiences lead you here today and what were some of those observations that lead you to say, "There's something here about how habits inform how we build product"?

Nir: Yeah. So at my last company, it was at the intersection of gaming and advertising. These are two businesses that are really dependent on mind control to a large degree about shaping user behavior.

Ryan: Now who's using the sinister words, right?

Nir: So at the intersection of those two industries, I saw a lot of experiments. I saw a lot of companies come and go. Some of them successfully changed user behavior and some of them didn't. So I just started to collect these patterns and it was really fascinating, to me, to see what made some of these companies so successful and some not so much. What I found was that in these two industries, these tools were used. There were practices around what changed user behavior effectively, but there weren't really names for all these things. Companies would just use these techniques because they worked. So after that company sold, I decided to figure what I wanted to do next.

I started digging into academia looking for what can the Ivory Tower tell us about these consumer behaviors and I came up with this hypothesis that the technologies that would change user behavior in the future would really be built around habits; that as the interface shrinks, as we go from desktop to laptops to mobile devices and now to wearables that have habits become more important because we just don't have the real estate to give people cues to action that triggers that we once did and we start to rely on products with little or no conscious thought. So I wanted to explore what it was about habits that we can build into products.

Ryan: Right. What was the exact kind of spark there where you said, "Wait a minute. There is something here." Was it that you noticed a particular product or technology? What was that ah-ha moment?

Nir: It wasn't so much on ah-ha as it was a frustration. As an entrepreneur myself, I had this common experience on banging my head into the wall trying to figure out, "Why aren't users doing the thing I designed for them?" and after that last company sold, I wanted to figure out. "What are the patterns here?" This was the first company because it was at the intersection of gaming and advertising, we did a lot of work with social games back when the Facebook platform first opened up. There were thousands of games being made in everyone's basement and I wanted to figure them out. Why were people collecting cows on Farmville and at the time throwing sheep at each other? They seemed to be compelled to do these behaviors that were kind of ridiculous. Moderator: Why were they doing that?

Nir: Reasonable. He'll tell you all about it. I wanted to see if there was a common design pattern. So when I looked to, I started to explore behavioral economics and found some fantastic research, but I found that it lacked practical application. Right? I'd love this pop psychology but how can I actually put it to work? So I wanted to write a book for designers, for entrepreneurs that could actually give them some tools for applying this psychology.

Ryan: Cool. And in terms of applying that psychology, we were very interested to hear at ZURB about your new book because we do also have a section that we just came out with called "Design Triggers" where we do talk about behaviors that actually motivate users, or that designers can leverage to motivate users. You argue about designing habits in your book and why habits? And what are the triggers, or just at least some of your favorite triggers that create those habits?

Nir: Yeah. So it used to be that we built products based on what the HiPPO wanted. Does everybody know who the HIPPO is? The highest paid officer?

It used to be that "Hey what should we build?", "What's the feature we should make?", "Okay, what does he or she say we should build?" and that's what we should build. Then Silicon Valley evolved into customer development. Right now, we have to listen to our customers and that's great. Our products are so much better for it once they actually get out the building like Steven Blank tells us to do and we start talking to people.

But it turns out that there's all these things that customers are unable to articulate because they don't know that they need this particular product in their life. So it turns out that in many of the things that are on the ZURB trigger site, these are things people aren't able to articulate. There are all these effects, all these heuristics that influence our behavior just as reliably and yet people aren't able to articulate them. So that's a large part of what I write about in the book in particularly these patterns around user psychology that help us form habits.

Nobody 11 years ago was saying, "Oh my god. I wish I had something to update my status," before Facebook. Nobody knew they had that need and yet by going through this steps that I outlined, Facebook and products like Facebook have changed our habits so that today when we are without our technologies, we kind of feel a little stressed and lost and hopeless for a minute there when we don't have these technologies available to us.

Ryan: Can you take us, you mentioned Facebook, but can you take us through a step of how Facebook has created this habit in us? What is it that they've been doing right to create that ongoing habit? That need for us to, and I'm sure of you in the audience are already doing it, updating our Facebook status? Or even Twitter? You know we are live tweeting or communicating in that manner. It's become this almost natural function of our daily lives.

Nir: Yeah. So I started my exploration of habit forming technology about two and a half years ago by asking myself a question that investors are always asking me when I was out raising money and that was, "Is your product a vitamin or a painkiller?' You probably heard this question before; it's kind of a cliche now. And even if it's not from external investors, it's a lot of times, company stakeholders when they say, "Hey I want to build this feature into our product." Okay, but is it a vitamin or painkiller? Because people want to build painkillers; these are things that our customers tell us they need. "Stop my pain, build this thing for me."

But it turns out when we look at these habit forming technologies, they actually don't start as painkillers. They start as vitamins. They start as nice to haves. Even though when you go out on Sand Hill Road and an investor will tell you, "Nah, we're going to pass, because it kind of seems like a vitamin." Well, all these products started as vitamins --Twitter and Facebook and Snapchat and Instagram. All of these things were toys. And that's kind of the design pattern we see repeated time and again.

We start using these things out of a pleasure-seeking behavior, but through repetitive use, by going through this four steps of the Hook Model, we begin to use them out of the alleviation of pain because part of the definition of habit, these behaviors that we do with little or no conscious thought, is that a habit is when not doing something causes a bit of pain. It causes a bit of psychological stress and our relief for that stress is the behavior is that action.

And that's done through these four steps of the Hook Model which are a trigger, an action, a reward and an investment. That's the basic pattern that we see repeated time and time again.

Ryan: Now is that a full circle thing, or is that a continuous thing? Can you just take us through a little bit more and breakdown the Hook Model, which you do in the book? Can you just break it down for the audience really quick, so that we can understand what those four quadrants are?

Nir: Yeah. So real quick, this is a three-week class that I teach at the graduate School of Business at Stanford and the Design School but I will give you a very, very short synopsis.

Ryan: The Cliff Notes version, right?

Nir: The super Cliff Notes. A trigger is basically something that cues a behavior and we have these two types of triggers. We have the external triggers and internal triggers. External triggers are things in our environment where the information for what to do next is in the trigger itself. So you're all familiar with these things right? A call to action, or an authority figure, somebody telling your where to go, word of mouth from a friend of yours; all of these things are external triggers. Right? The things that tells you what to do next because the information is in the trigger.

But what designers don't think about enough, I think, are the internal triggers. Now, internal triggers are things that cue action but the information for what to do next is informed through an association in the users' head. And it turns out these things can just as reliably cue our next action. So things like situations, routines, certain people or places, and most importantly, emotions and not just emotions, negative emotions. So what we do when we feel lonesome or bored or fearful or lost, these behaviors don't feel good.

They're pain points and psychologists call them negative valence states. We seek to escape these negative valence states and the relief, the solution for that pain point is, often times, our technologies. So identifying your users' internal trigger is paramount. We have to understand what the users' itch is even if they are not able to articulate it.

After the trigger, comes the action. The action is defined as the simplest behavior in anticipation of reward. So the act of scrolling on Pinterest would be an example of an action. Pushing the "Play" button on YouTube is an example of an action. The simplest behavior in anticipation of a reward. So after the action, comes the reward itself. Right? We have to scratch the users' itch.

Rewards, we typically find in habit-forming products. The ones that are able to create new habits are typically variable rewards and variable rewards, if you took Psych 101, you may remember from the work of B.F. Skinner, is all about having a bit of mystery, a bit of intermittent reinforcement, as Skinner called it. So that bit of mystery, that unknown, turns out to be highly habit-forming and actually can increase the intended behavior.

Then finally is the investment phase. After the reward, comes the investment. This is, I think, the area that we have the greatest room for improvement when it comes to building habits-forming technologies that a lot of companies are really focused about getting users "checked-out." Right? Use my product, get it to do what it needs to do, and they're gone. It turns out that we should focus if we're looking to build habits, we should focus on how to get users to check-in.

Not to build our sites to be super slicky, but how do we make it stickier, how do we make frequent opportunities to check-in. The investment phase is really defined by these small bits of work. Small bits of effort that users do to put something of value into the site, which increases their likelihood of the next pass. Something they put into the site to increase the likelihood of the next pass. So putting data into the site, content, accruing followers or reputation--all of these things increase our likelihood to come back to the site in the future.

Ryan: And then that's when it becomes a habit?

Nir: Exactly. Through successive steps, through these four phases of the Hook Model, we begin to create these associations. We begin to associate bored, solution becomes YouTube, for example. All right? Whatever that might be.

Ryan: Cat videos.

Nir: Exactly.

Ryan: Lots of cat videos. Right, Gita [SP]? That kind of brings us back to you when you're using the term vitamin and painkillers. Can you kind of touch up on this in order to get that habit into that Hook Model? You talked a little bit about freemium. Can you just kind of go into how . . . We had a couple of soapboxes where people always ask, "Well should I provide my product for free and then have them pay later?" But you say that's actually a good thing because then you create this habit. Now if you can just briefly discuss how that happens?

Nir: So I think a common mistake that I see is that companies put barriers between the recognized need and the reward. And if you think about the nature of technology, I don't care if it's the cotton gin or the iPhone. The history of innovation is about shortening the distance between the trigger, the recognized need, and the reward. So anything that's in the way is friction.

It turns out that, I think, a lot of companies put the investment way too early. So if you look at Twitter's history, Twitter in 2009, when I did the research for the book, I talked to a lot of the folks who helped design the Twitter homepage, there used to be a lot of friction to figuring out what you should do with Twitter. They put a video on the side and a long description, all these buttons that took you to different webpages tell you how great Twitter was, and then the decided, you know what, we are just going to get people using the product.

Get them to their reward as quickly as possible and that's really when they started seeing that hockey stick growth in late 2009 and early 2010. It was when they simplified the page as much as possible and made the investment come later and whether that investment is money or social capital, or effort, having the investment come after the reward, after the users start scratching that itch, is critical. So it's not about what you ask the user to do, it's when. It's got to be in that order of the trigger, action, reward and then the investment.

Ryan: Can you give us a couple of more examples of how that actually works?

Nir: Sure. Pinterest. Anybody here use Pinterest? Okay, there are a lot of folks. So on Pinterest, the first time you come to Pinterest, there's very little investment you have to make. The trigger is if you haven't used the site before, it'll be somebody telling you about the page, through word of mouth, or maybe you've seen a picture someone posted onto Facebook or Twitter. The action, the simplest action before a reward is just to start scrolling. It is so hard not to scroll at least once. You get to Pinterest, you got to scroll at least once. Why? Because there is this variable reward around all these interesting objects. So this is very similar to this on the slot machine if you think about it.

It's variable rewards of information. By the way, you know what we call Pinterest without variable rewards? Google Search. Google Images, I should say, because Google Image Search, if you type in "Teddy Bear", you will get 50 images of brown plush toys because it is built to be accurate, not an entertainment medium.

Whereas on Pinterest if you type "Teddy Bears", you will see people with teddy bear tattoos on an attractive person, you will see a teddy bear made out of jelly beans, you will see a painting of a teddy, you'll see all these highly variable images.

So the reward comes first. Then, the investment is, "Would you like to join Pinterest?", "Would you like to join this site?" That's an investment. There's also the "Pin it" button, when you make the investment of putting that "Pin it" button on you Chrome, that's also an investment. Every time you pin, re-pin, follow or comment, those are also forms of investment. All of these things you do make it more likely for you to return in the future.

Ryan: And when you get to that point where you are likely to return, you have that habit, when is that moment when products can be moved from free to paid? What's that kind of cycle there? How did we get that because I'm sure that's, a lot of people were thinking from the back of the brain, "Okay great. Habit, now how do I get money from that, or how do I convert them?"

Nir: Yeah, by the way, not every business, I should state as a disclaimer, not every business needs habits. Habits are really hard to form. Let's be clear. This habit forming technology and the methods that I talked about are not magic pixie dust that you could just sprinkle on any business and you probably shouldn't attempt to because if you can drive customers to use your product without habits, so if you are using marketing or search engine optimization, or word of mouth, do that. That's great.

But there are some business models that require what I call unprompted user engagement. So if you think about WhatsApp and Twitter and Facebook and Pinterest, these companies couldn't survive if they had to pay some kind of marketing budget to get you to come back every time. They require habits for their business models to survive.

So those are the kinds of businesses that need to form habits and where it comes into different SaaS products that use habits, what we're saying is that it's not just consumer web that's forming habits; we're seeing all kinds of enterprise products that depend of habit formation.

So if you think about GitHub or Salesforce or Stack Overflow or Yammer, these products were used at the user level first, and then when they gained critical mass . . . There was this famous story of Marc Andreessen told about GitHub, where I think it was the Bank of America or some big bank, sent them an email and said, "Where do I pay you?" Half of my organization is using your product. Where am I supposed to send the check? So it turns out that when products become habitual parts of users' day to day lives, whether it's in the enterprise or the consumer, it becomes much easier to start charging. We have much more elasticity in our pricing structure.

Ryan: It seems like games, mobile games, can have you cornered, right? They can get you hooked and now you're paying in-app purchases to continue playing the game.

Nir: For some people, it turns out that it only about takes 4% of your user-base. If you look at Candy Crush's data they just released, they're about to go IPO. It actually turns out that only 4% of their players that actually pay, but yeah, those people really pay.

Ryan: Yeah, that's a very lucrative 4%.

Nir: Yeah, that's right.

Ryan: And speaking of the habits, you kind of also touched upon this in your book, where you relate how you one day just changed your daily run from the morning to the evening and it just kind of screwed you up during the run and habits are very . . . once they're ingrained, they're very hard to break. But how do you kind of break those habits. You used the example of Google and Bing in the book, but how do you get people to move from Coke to Pepsi? Because once people have those habits, they're very tenacious with them; they're very hard to break.

Nir: That's right and that's one of the benefits of building a habit forming business is that it erects barriers to entry. How many of you in the past 24 hours searched with Google? We should take a quick poll. Now how many of you searched in the past 24 hours with Bing?

So Google must be way better, right? Because you're all using it because Google is so much better? Well, it turns out if you strip away the branding, and you give people a head to head comparison when they don't know which search engine they're using, they can't tell the difference. Google has lots of fancy wonderful algorithms, they're geniuses, but you know what? Bing is almost the same. It's about the 50-50 choice preference and they've done the study over and over again.

Why are we still using Google? I use it every day as well. Because it's a behavior we do with little or no conscious thought. It's become a habit. If I gave you Bing tomorrow, to use, you'd just say it looks a little weird and I don't like the way, and it just doesn't work right, even though the results are just as good. It's because you've formed a mental habit around the way this product is supposed to work.

So you don't even consider, could there be a better search engine, you're fine with what you got, you're fine with your habit. And so this is a great example of how there's this huge barrier to a competitor taking your customer away once you've formed a habit. It's very, very difficult to do. In fact, your product can't be a little bit better; your product has to be way better and there have been some hypotheses that it has to be 9x better to get people to switch their habits.

Ryan: Is there an example of something that has been able to do that where the product is invariably better than something that is very similar to it? Has the 9x and has been able to switch users? I think I can think of one of them off my head, but I'll let your answer the question.

Nir: What comes to the mind I'm curious?

Ryan: I think Facebook, right?

Nir: Yeah.

Ryan: You had competitors. You had Myspace, you had Friendster, but yet for some reason, Facebook was the one that got us to break away from those things and I'm showing my age, I had a Myspace page, and I kind of refused to use Facebook for a while then I ended up using Facebook. Are there any other examples?

Nir: Yeah, I think there a lot of these products. I would go back and say that what Facebook replaced, drawing a comparison to see why did Myspace versus Friendster versus Facebook win. That's almost outside the scope of pure engagement because let's be clear, engagement and all the stuff I teach in my book, in my workshop, that's one piece of the puzzle. Right?

Let's be clear about that. Engagement is one pillar. You also need monetization and you also need growth. You need these three pillars of monetization, engagement and growth to have a successful business. So you can have a super successful engaging product, but if it's not growing and if you have no strategy to ever monetize it, you got a problem. So each one of those is necessary but not sufficient. There's a lot around the history of why Facebook won versus Myspace that has to do with growth, there was all kinds of things that they did well for that.

But I think if you go back a step further what Facebook replaced. What did Facebook actually replace? The first? Like the early days? It replaced The Facebook. When I went to college, everybody got this little piece of paper book that had everybody's picture and it was part of our routine that every other night of the week--where are the cute girls and who do I need to meet and who do I know and who are my friends? That's how we used the Facebook, when we had it, I think most colleges had this.

So that was the behavior that they started to replace to bring that existing habit online. Then of course, it became much more than that. It became about photos; it became a communication medium. But if you think about it, all of these things are existing behaviors. They're existing habits. What changed was the interface opportunity. So whenever we see a shift in interface, whenever the way we work with technology changes radically, that's where new habit-forming technology have their potential.

That's a dedicated chapter in the book for where do you search for habit-forming opportunity and that's a big opportunity whenever there's a shift. We're seeing that shift now as we're going from mobile devices to biometrics and wearable technologies. There's going to be a new reshuffling of the deck that's going to enable us to do all kinds of new habits and behaviors that are enabled by this interface change.

Ryan: And what is your prognostication on what some of those changes are going to be?

Nir: I write what I do for two reasons. So if you look at my writing, there's kind of a 50-50. It looks a little schizophrenic actually. Half of it is about how to build habit-forming technologies. That's what I want to teach people how to build these technologies that we can live happier, healthier, more connected lives. I really think we can use technology to live better and I think biometrics are a great example of that. There are all kinds of opportunities that are going to make that distance between the need and the reward much, much shorter by telling us how we can eat better, how we can spend better, how we can communicate better, and all kinds of new opportunities are going to open up.

The other half of the puzzle, the other side of the coin is that I think the world, as Paul Graham said, is becoming a potentially more addictive place and you use that word "addiction" before and I think it's worth commenting on it that addiction has a very different definition from habits because addictions are always bad.

Addictions are always self-defeating, whereas habit, we can have good habits and we can have bad habits. But I think as consumers, and users, and the other half of all my writing, is not only how to build habit-forming technologies, but how to prevent unwanted manipulation from habit-forming technologies.

I think the ability to focus, the ability to concentrate, in this world of really good products like, things are better than ever. If you think about, this comes to mind, Netflix, had that new episode of The House of Cards, and everybody's binge watching now because these shows have got really good overtime. It figures out how to keep as super engaged and the same with the products we use.

These products are getting better and better. The world is becoming a more addictive place. So I think we have to understand how these products hook us in order to be able to break those hooks just as much as we want to build the hooks to help people, we need to be able to control these hooks in our own lives so that we can regain our focus.

Ryan: It's like what you say in the book, their habits are superpowers, and if used for evil, they can really be used for evil.

Nir: Yeah, if there wasn't that ah-ha moment for me, it was when I couldn't stop. It was on a Saturday using my phone as opposed to being with my daughter. What's going on? Why is that happening? I'm guessing I'm not the only one. This is a struggle for a lot of people in the Silicon Valley around how do we stop? How do we create that space so that we can regain perhaps what we've lost? Now, I'm not a Luddite, I love technology, I think it provides way more good than bad, but we're the guinea pigs. Let's be clear here. Just like how our great grandparents' generation was the guinea pig for cigarettes. Ronald Reagan used to dress up like a doctor and tell you that cigarettes were healthy for you. That's happening to us.

It's really idealistic to think we can understand the bad of a technology so we shouldn't build it. That's not the way it works. First you build it, society adopts it, and then we adjust and figure out what the bads are along with the goods and that's the phase we are going through right now. We're still trying to figure out how these technologies affect us and perhaps how they negatively affect us.

Ryan: Right, especially with wearable technology and all that and we're definitely the guinea pigs.

Nir: Just to be clear, I think there's way more goods than bads but we do have to be conscious of the bads.

Ryan: I think it's a societal change, right? I remember reading something, or having a conversation with someone about Google Glass and how it's an interesting idea. Not sure if society is caught up to where that would be something socially acceptable. So what you're talking about, I think, also is having the societal cultural shift to play into all of that as well, kind of like with cigarettes.

Nir: Yeah, that's right.

Ryan: Everywhere now, they're dwindling.

Nir: Yeah, that's right. It's less than 10% of the population that smokes today which is incredible because it was the overwhelming majority of people who used to smoke.

Ryan: I remember working at a building that had cigarette holders along the walls. Yeah, that's how old I am.

Shut up all of you that work with me.

But the other thing I actually do want to touch upon is that you had a recent article in TechCrunch, "Why Fads Fade: The Inevitable Death of Flappy Bird." I think this is also something important in the minds of people who are designing products is, "Okay great, I got them hooked." It's a habit, but habits change over time and the rewards aren't the same. You used the metaphor in the book of Breaking Bad or even like House of Cards. I finished House of Cards and I'm likely to re-watch it and get the same thrill as the first go through. So how do we keep changing along with our audience or users and those habits? What do we do to keep a product going and not simply fading away like Flappy Bird? Well, he ended it before its time.

Nir: Choose a different game. Super Mario Brothers.

Ryan: Yeah, Super Mario Brothers or Angry Birds or whatever the new hotness is.

Nir: Yeah. That's a great question. So I talk about variable rewards and how important those are in changing user habits. Then a lot of people will think, well look, if variable rewards are so great, that element of mystery, that unknown is so enticing, why are we all playing these same video games? What happened to Super Mario Brothers and Pacman and FarmVille?

Remember FarmVille? Man everybody was playing FarmVille in 2008. It was the fastest growing game in history at that time. Let's think about FarmVille for a minute. So Zynga releases FarmVille at a time they were at one point valued as a $10 billion company. They release FarmVille, fastest growing game in history at that point, and then after FarmVille, what came next? What was the next game? CityVille, I think? And then ChefVille? And then FrontierVille? And then FarmVille 2? And then The Ville?

And users started figuring it out. Wait a minute. This is the same damn game. It's the same frames again and again. It's the same mechanics. So what was once variable became predictable and that is a demonstration of what I call, finite variability.

So an experience that decreases in variability, the more you engage with it, is finite variability. So for example, when it comes to media, you read a book, you watch a movie, how many of them do you actually engage with more than once? Once we know that happy ending, once we know how things wrap up, how the mystery is resolved, very few shows or very few movies or books do we actually engage with again, or do we read again or do we watch again. Very, very few.

As opposed to things that are infinitely variable, so think about social media. Things that engage our friends; think about a product like WhatsApp--just got bought for $19 billion. Why do these things engage us for longer periods of time? Well, because they engage our friends and our friends are always changing. In a product like Facebook or Twitter or WhatsApp, our friends are going on trips, they're having babies, they're taking pictures of their puppies, there are folks posting jokes.

There is a much higher degree of variability and so they keep us engaged for longer. So that's the difference between finite variability and infinite variability. It's not a judgment call that products with finite variability are bad businesses, not at all. You can build great businesses with finite variability but you have to set up your business accordingly. You can't just be a company with one hit. If you have a finite variable product, you have to set up a studio model, just like how Hollywood does where you are constantly cranking out new content even though each specific piece of content has finite variability; you are constantly inventing them anew.

Ryan: Which is what the gaming industry has capitalized?

Nir: Some companies, there is big question right now with Candy Crush whether is it just Candy Crush or whether they can start cranking out more and more games and some companies can and some don't.

Ryan: And some become Zynga. Just kidding. But I do want to thank you for answering all of my questions. We have time here and I want to make sure that we open it up to audience questions and we got a large audience here so I want to get that process going so who has the first question for Nir Eyal? Gary?

Gary: You mentioned WhatsApp that amount of money was extremely high. Did Facebook did that because they realized the habit has moved now to a different place for that kind of activity and they want to capture that opportunity and [inaudible 00:34:00]. $19 billion dollars is going to go out . . .

Nir: Yeah, I mean if you want a demonstration of habits that work, you want the demonstration of the value of habits what better example than WhatsApp. That's the reason that company was worth $19 billion. 74% of people who installed WhatsApp use it every day. That's all you need to know. And that there are 500 million of them. That's enough to be worth, to justify something like that price.

Ryan: Yes, in the back.

Man: My question is around what [inaudible 00:34:41] and also with the triggers [inaudible 00:34:59]. Also with the trigger, media [inaudible 00:34:57] use that as a trigger. So in terms of variable rewards, what are your, any suggestions on how do I design something for myself? I know what the reward is going to be, but how do you create that [inaudible 00:35:16] . . .

Nir: So by the way, I'm kind of a disciple of BJs. I love his work and actually the action phase of the hook is straight out of his research. It's really all about B equals MAT and how do you make experiences simpler to encourage the behavior. So we're absolutely aligned. Now what Fogg focuses on is individual actions. When it comes to habits, when it comes to these behaviors with little or no conscious thought, you need that "Umph", you need something to get you to want to open an app because you are not quite sure what's going to be there and so that's when it comes to product design, and a lot of folks will focus on personal habits and that's not really my area of expertise. I really focus on technology habits and how products can form habits.

And it turns out that we find time and time again, the product that form these habits all have this element of mystery time and time again. For example: Stack Overflow. How many of you use Stack Overflow? Or are familiar with it? For those of you who don't use it, it's the world's largest technical question and answer site--5,000 questions every single day get answered.

If you stop somebody on the street and say, "Hey I'm going to start this business where people are going to answer, basically technical documentation questions." What do you think? You think people will do it for free? They'll think you are nuts. Why the hell would I do that? It's work.

And yet when I talk to Jeff Atwood, one of the founders of Stack Overflow, and I asked him to tell me about this site and I did my research, they have to actually put in breakers into the site that if you use Stack Overflow over a certain amount of hours per week, you can't accrue any more points. That's how much people use the site. I mean they've had to like reduce the amount of time people use it, you know put disincentives to not overuse the site.

Why is that?

Ryan: They have to use negative triggers.

Nir: Exactly. So why do they do that? What makes Stack Overflow so engaging folks? When you post something to Stack Overflow, what happens to your answer? It's voted up and down, exactly. You can up vote and down vote and there is mystery there. There is variability around are people going to vote - up vote my answer or down vote my answer. What's the commentary going to be? There's a lot of variability.

Not only that, what happens when I get an up vote? I get points and from those points, I get badges. But these aren't badges that pip my profile; it's not what they're about. These badges confer status from the people whose opinions I care about, my tribe. People whose opinions I care about. These aren't just made up badges; they literally confer tribal status, if you will. That's what I call that type of reward--a tribal reward. So that has a huge element of variability to it and it's a huge driver of why people continue to engage.

Ryan: Yes?

Man: You started talking about fears. But just now what I heard was you switched around to a desire-driven instead. How's that [inaudible 00:38:10] . . .

Nir: So what we see in this journey from vitamins to painkillers is products started out as pleasure-seeking behaviors. We are enticed by the pleasure-seeking behavior. As we invest in these products, they become pain alleviators. They become obligations, they become things we have to do and that's the kind of journey I described in this book. The things that we form habits around, we start because they're fun, they're engaging, but the more we go through these four steps of the Hook Model, we invest more effort into them, and it becomes something we come obligated almost to do.

Man: Thank you.

Nir: Yeah, just to finish the point, the ultimate goal, we don't start with the internal trigger. We have to understand which internal trigger we are going for, but it's about creating that association, the successful completion of a habit, a forming habit, is when we can associate our solution with the users' problem. Every time I feel bored, every time I feel lost, lonesome, whatever it might be, the solution is this product. That's kind of the ultimate goal and that again, I think we can use that for good.

Ryan: Not for addiction.

Nir: Definitely not for addiction. There's a lot about addiction in the psychographic profile who gets addicted. It turns out it's actually not that big of a problem as we might think even though it's very hard to stop. It turns out that there is a very small proportion of the population that literally gets addicted. Not that we shouldn't do something about it, I think companies have a new responsibility to do something about it, but for the majority of people, it can be a healthy habit so that I'm doing things that help me when I'm feeling these feelings as opposed to that are just time wasters, for example.

Ryan: We've got a question here in the front row.

Nir: Yeah.

Man: So you're sort of talking about users as a blanket group in terms of how you target them and build habits with them, but there are differences in people's building of habits, how of money they are going to end up making you, so is there some more refining you could do in terms of building habits for a specific use [inaudible 00:40:22] they're the ones who are making you the most money?

Nir: Yeah, so I look at it in this process called habit testing, which was really informed by the research I did with looking at Twitter and few other companies and talking to some other people who help build those experiences. That what these companies did looked something like this, which is the process of the habit testing that I described in the book, is around these three steps of identify, codify, and modify.

What you want to find is who are the people who are currently most engaged with your product and there is a whole process to get there, but let's say you have a product and let's say we're looking at meeting this, what Fred Wilson calls a 5% bar of people who are using the product habitually. So whatever habitually it means to you. If your product is something people use every day, once you're getting to that 5% level, it seems to be a tipping point, what we want to do is identify those people, codify the steps they took in using the product, what was the path that those users took, and then we modify the experience to reshape the path.

So what Twitter found out, is that the people who were using the product habitually, using it every day those five percenters, were people who immediately followed other people. That's what they saw was in the habit path was if you followed folks, you are much more likely to become a habitual user.

Well, guess what happens when we sign up to Twitter today? The first thing they have you do is follow somebody, you're going to follow one of the top people in Twitter, you're going to follow Oprah, you're going to follow one of the celebrities, just follow somebody because it turns out that's one of the behaviors that they found that helps turn people into a habitual users. So identify those users, codify that habit path and modify the experience so that others can follow that same path.

Man: I'm interested you brought up enterprise and I know as you mentioned not every business is going to make sense or products is going to make sense to apply this to, and a lot of examples you brought up product where enterprise software that kind of builds from someone that the user that's ultimately using that piece creates a habit and forces the purchaser to invest in purchase. Do you think it can be applied where the enterprise software where the purchaser invests ahead of time and that person is being forced to use that product, and what kind of habits do you think you can pull ultimately this person has to drive back to purchaser to reinvest.

Nir: Yeah, it's a great question. Generally no, and the reason I say no is because think about the way decisions are made top-down. It is the antithesis of a habit. A habit is defined as a behavior that is done with a little or no conscious thought. Well, committees that buy stuff are all about over thinking things to death.

So these are things that aren't done by the habit, there are done with a lot of conscious thought, and so you don't require a habit to sell into a committee, into the IT department or HR whoever you're selling your technology into, you just don't need habits. You need other things. You need other ways to get them to make the purchase.

However, if that product needs to become a habit someday to the end user, then this is important. Maybe not for the sales process, but if whether the people use the product or not is actually important, not always, right. If you buy some hardware equipment you might not need direct user engagement with that product, but if your product does eventually does need to turn into a habit then this is just as important as it is for the consumer side.

Man: It's a Facebook related question. The Facebook mobile app is just addictive, it's got variability, it's powerful, and it seems to follow everything [inaudible 00:44:06] pretty well and then couple of weeks ago, Facebook releases the Paper app which probably has some cannibalization of the mobile app. What's Facebook trying to do there?

Nir: I can't speak on their behalf for sure. I don't know what they're trying to do.

Man: Is it another [inaudible 00:44:21]

Nir: Wow. I think this might be above my ability to predict. I would take a guess, that they are trying to appeal to wider audience of people who . . . let me backup. I think Facebook sees they have a problem around their variable rewards and that problem has to do with the signal to noise ratio. Facebook is becoming increasingly cluttered with stuff people don't care about, and so when that happens and it turns out, the study shows us it's about 3 to 1. You need one thing to be interesting, for every 3 things that are "meh," and that seems to create this ratio of this excitement around searching and searching, and ever done searching looking for the next reward.

But when that ratio gets too low, when there's too much clutter, it's not rewarding anymore, it's junk, it's crap and so people become less engaged and so my guess is they're trying to figure out how can we create a product for people who find news which is man, news is all about variable rewards right. If you think about it, like the functionality of news, what you're trying to get out of news, if we're really honest with ourselves, it's entertainment. It's to alleviate boredom. That's kind of what news is about.

Does it really affect your day to day life? It's really about a boredom alleviator for a few minutes, just like it is for people to track sport scores and the stock market, it's this variability of what's going to happen today. And so I think they see this opportunity in knowing that news can be a great element for certain portions of the population to insert more relevant variable rewards. That would be my guess from a distance.

Ryan: Cool. We have time. Ah, right yes there you go.

Man: I wanted to ask about as Ryan [SP] mentioned about freemium with [inaudible 00:46:16] the freemium model to understand and with the free trial 30 day or 60 day. Is that kind of good enough to create a habit or [inaudible 00:46:28]

Nir: So you know you probably all heard this common knowledge around it takes around 60 days to form a habit, 90 days to form a habit, 33 days to form a habit, like there is a magic number, turns out it's totally not true.

There's no magic number for how long it takes to form a habit. It turns out it's based in large part to how salient the reward is, so there's no magic number I can give you for when people will form a habit. The science just doesn't show there is that kind of magic number. It's very contextually specific to the experience you're building.

What we do know, what the science does show us that frequent is better. The more frequent the behavior, the more likely it is that you'll form a habit around it. We see this and many studies have shown that, for example, there's a great study last year in Oxford that tried to get people to form the habit of flossing their teeth and across the board, the folks who flossed more often were the ones who kept their behavior to six, twelve, eighteen months into the future and not only that, it turned out that if the behavior occurred in a span of time longer than one week, it became almost impossible to form the habit. So that's a big takeaway.

If you're building a product, if you're building experience that does not have the user engaged within the span of a week's time or less, you'll have a difficult time forming a habit, not impossible, but very difficult to change user behavior if they're not engaging within a week's time or less. Of course, think of the products that you use every day, right? The products that have formed habits? How often are Twitter and Facebook and Instagram, how often are these things used by habitual users? Every day, right? Intraday, multiple times per day, and so that's the best rule of thumb I can give you is that the more frequently someone uses the product, the more likely they are to actually form a habit and the more likely you are someday actually to be able to extract revenue.

Ryan: Our last question.

Woman: I have a question about some other rewards I would assume are based on the actions of others, right? So you have someone "like" something, on G+ you have to "+1" something. So how do you control that environment? For instance, lately I've been starting to use G+ a little more. So if I get a +1, that makes me happy actually and I'll go back. If I get nothing, I probably won't use it for a long time because then it's just like I'm broadcasting. And same with Twitter, you post something and you get a bunch of followers. There's sort of this narcissism that's fed of someone liking something or what have you. So how do you control that setup when you're trying to form these habits?

Nir: Yeah, So I talked about these three types of variable rewards. Rewards of the tribe, rewards of the hunt, and rewards of the self. What you'll see across the board, the products that you find the most habit-forming, that most engage us, have one or more of these variable rewards types: tribe, hunt and self. We don't have too much time to go into each one, but big picture; rewards of the tribe are around things that feel are good from other people; rewards of the hunt are about material rewards or information rewards; and then rewards of the hunt are about the search for mastery, consistency, competency, things that have a variable component, but are intrinsically motivated. So finishing your last email or clearing your to-do list or getting to the next level in the game, these are the examples of rewards of the self.

Tribe, hunt and self. So what we find is when products don't have this critical mass and don't have enough people to give people frequent feedback from a social rewards, from a reward of the tribe, they have to have some kind of other reward. So you might use rewards of the hunt to have search for information and to use the site, or you might have rewards of the self with some kind of completion mechanic to start using the site until you build up that critical mass.

Now there's this other problem around network effects which is where you see when nobody's at the party, then nobody want to be at the party. So as opposed to when everybody's at the party, then more people want to join the party. So this network effect problem--there's always a chicken or the egg problem. In my experience, I've only seen two ways to fix the chicken or the egg problem when it comes to network effects. One, is to see the community.

So what Twitter did was to get Robert Scoble and Michael Arrington, a bunch of technoraties [SP] using the site pushing out content, and they didn't really care who else was using it because their little community was using it. Their little community of influencers. So they seeded the community and then other people wanted to join in. So it just started from a small base. That's one way. You see the community.

The other way is to make the experience satisfying in single player mode. So that even if no one else is at the party, I'm having fun on my own. But then if other people join in, it's better. So that's where you would use one of the other rewards, one of the other variable rewards types like rewards of the hunt or rewards of the self to make it useful in single player mode. Okay?

Woman: Thank you.

Nir: And should I tell them about the . . . ?

Ryan: We have, okay, one more question and that's our last one. She's getting out of the wire there; kind of sheepishly raising her hand.

Woman: Yes. With the reward, is there an intersection between the tribe and the self or both? [inaudible 00:51:55] brain where it's a selfish lobe so do you see an intersection? Can there be an overlapping between the two?

Nir: If you look at email, for example, which I think is actually is one of the mothers of habit-forming technology. It's very hard to stop using and by the way, we talked about pain-alleviating versus pleasure-seeking? Remember when email was fun? Does anyone remember that?

Maybe some of you might be too young for this like, "Oh my god. America Online and Prodigy was so cool." It's amazing.

When was the last time you thought email was fun? I use email but I don't know about you all. It's a pain-alleviator, right? I got to use it so I can get alleviate the obligation of why I use this product?

Interview: The satisfaction of zero inbox.

Nir: Oh you get that. Wow. That's amazing. This mythical place of inbox zero. But we use it out of obligation, right? It's become something you have to do. And think about the variable rewards around email. Tribe: It is people whose opinions we care about. Hunt: It's the search for information and it's always variable--what's going to be in the next message. And self: It's the clearing mechanic of "Did I finish here?", "Did I get to inbox zero?" I'm just happy if I can check my messages, let alone answer them.

So there are all three of these: tribe, hunt and self, so the more of those variable reward types that a product has, the better. That's very rare though. Usually a product will be lucky if they can get one or two variable rewards types working properly.

Ryan: Cool. Well, thank you everyone. Nir, I know you brought some books.

Nir: I did bring some books, happy to sign books if anybody's interested and I'll be right over here and I'll be happy to answer other questions.

Ryan: Yes. Thank you very much, Nir. I appreciate you for coming.

Nir: Thanks. Thanks.

Ryan: Thank you everyone for coming by.