Episodes

Nir Eyal

Nir Eyal 1

Nir Eyal writes, consults, and teaches about the intersection of psychology, technology, and business. Nir previously taught as a Lecturer in Marketing at the Stanford Graduate School of Business and the Hasso Plattner Institute of Design at Stanford.

Understanding user behavior is essential to running a successful startup. In this episode Nir teaches us his four step method for building product hooks that engage people.

TOPIC NIR COVERS

  • His four-step method for building product hooks that engage people
  • He helps entrepreneurs launch and develop their new businesses
  • Understanding user behavior is essential to running a successful startup
  • What are some of the signs that a startup is falling at the engagement stage
  • His best advice for any startup that’s trying to grow
  • When he uses the phrase user behavior
  • Why does he focus so much on user behavior
  • And a whole lot more

LINKS & RESOURCES

WATCH THE INTERVIEW

READ THE TRANSCRIPTION

Bronson: Welcome to another episode of Growth After TV and Roberts and Taylor. And today I have near AOL with us near. Thank you so much for coming on the show.

Nir: Oh, my pleasure. Thanks so much.

Bronson: Yeah, absolutely. Now, here you are, an author, speaker, mentor, a consultant. And you really just help entrepreneurs launch and develop their new businesses. Does that all sound about right?

Nir: That’s about right. Yeah.

Bronson: Like most people in this show you, you’re involved with a lot.

Nir: That’s right.

Bronson: Now you’re thinking, as far as I can tell, it seems to be really centered around the idea of user behavior. Is that a fair assessment that really what you do is about user behavior?

Nir: That’s right. That’s right. I mean, I think, you know, growth is so important and we know how how vital it is for a startup. But I think there’s kind of three buckets to make a successful venture, and that’s growth, engagement and monetization. And I think, you know, where I kind of see my role is in this engagement bucket.

Bronson: Gotcha. So when you use the phrase user behavior, are you referring to that engagement bucket? Is that what you mean?

Nir: That’s right. That’s right. So I focus around what are the principles of psychology that we can use to better understand how to drive user engagement? How can we build products that serve customers needs better by understanding and of how their deeper mind works more than they can just tell us on surface.

Bronson: And those three buckets. That’s the second time this week that those ideas have come up for me. Both engagement and revenue. There’s a blog article that I think is pretty popular, but I’m just now coming across it and I came over his name, but he’s a venture capitalist and he talks about that at the monthly staff meetings. Those are the three buckets of metrics that he wants to see. You might be familiar with it. I don’t know. Hmm.

Nir: I haven’t seen it. Yeah.

Bronson: It’s almost exact words and Zach phrases he uses, and then he says within those three categories, here’s the metrics I want to see. And the month over month growth in each one. Yeah. So it’s helping me like. All right, maybe there’s something really to that three kind of framework there. That’s good.

Nir: Yeah. No, please, I. Please share it. I’m sure you’re going to see it.

Bronson: I’d like to see it. Yeah, yeah. No, I’d say I’ve been reading it over and over, just kind of letting it sink in.

Nir: Okay.

Bronson: Let me ask you this. Why do you focus so much on user behavior out of those three buckets or out of all the possible buckets? Why is that the one that kind of gets your attention?

Nir: Yeah, because I think they’re all necessary, but not sufficient. So, you know, I did one of the first things I did when I started analyzing the space and trying to figure out how I could be helpful to entrepreneurs. And frankly, you know, I started writing about this stuff because I wanted to figure out what I wanted to do next. I started a couple of companies and both were acquired, and so I wanted to figure out, okay, how can I figure out what I want to do next with with my human capital, so to speak? You know, as entrepreneurs only get to make one bet at a time, we’re not like VCs who can just deploy a lot of a lot of bets in a lot of places. So we have to pick well. So, you know, I looked at all kinds of different businesses out there and I put them on a grid of high virality on one axis and high engagement on the other. And what I kind of came to the conclusion of is that virality without engagement is nothing that’s a leaky bucket. So even if you have, you know, super high virality, you’ve hacked all the growth you can. That’s great. But without engagement, it’s users in and users out. However, with engagement, that’s not the case. Like, there are plenty of businesses that are not viral at all. Like Evernote is not a viral business. Amazon is not a viral business. There’s lots of businesses that don’t have any kind of viral growth to them and they get big, slow, and that can be perfectly fine. Why? Because they’re really good at making user habits. And so that that was kind of a revelation for me. Now, the best, of course, the Rocketship businesses, the once a decade companies, the ones that do both the Facebooks that Pinterest, the PayPal’s, the guys who can do both virality and engagement, that’s the best. But but I think, you know, what I want to really focus on was the science around engagement. Number two, the second reason I really want to focus on engagement is that, you know, a lot of times growth hacks are easily discoverable. There aren’t too many secrets. Right. For a while there will be right. There will be experts who really figure out a particular technique. They’ll figure out a new channel, but then pretty soon everybody jumps on it. And of course, what happens with the channel channels that it closes up because the person who owns that channel, be it a Facebook or Twitter or you know what? Take it. Take your pick. Figure out ways to clamp down on that on that growth strategy. And so it becomes a commodity. It’s not it’s not a differentiable asset. Now, it’s super important, but it’s just not something that that lasts for very long as there’s a small window of time. Whereas engagement is a different story. You know, it’s there are behavioral secrets that you can understand as a startup that your competition won’t get, that your competition can copy you, that can make a product that looks just like yours. It won’t work like yours because they don’t understand what you understand about your user.

Bronson: Yeah. In your assessment, as you look kind the landscape, do you feel like there’s too much emphasis on the virality and not enough emphasis on the engagement when startups go about doing what they do?

Nir: You know, I think it was the pendulum felt like it was going too much in one direction, that it was all about virality for a while. And I think that’s changed. You know, I think we see that because, you know, VCs across the board, you know, a lot of them throw up their hands when it comes to games because, you know, even if they might have great growth, games have been a real tricky, tricky market to to to to predict engagement for. And so a lot of investors kind of shy away from it, even when the growth looks good now. So I think it’s I think it’s a it’s both right. You both are necessary, but not sufficient.

Bronson: Yeah. No, that’s great. Now, one of the things I like about the stuff you publish online and the things you teach in your classes, you have a lot of YouTube videos is you actually go into the science kind of behind user behavior. You’re trying to expose the psychology, the science, what’s going into it. And there’s a few concepts that I’ve seen come up kind of over and over and some of the things you do. And I want you to walk us through each of those a little bit. One of the things when it comes to the science behind this behavior is you talk about vitamins and painkillers. What’s the difference? And is one the goal or are they both okay?

Nir: Yeah. So I used to hear this a lot when I was going up and down Sandhill Road asking investors to put money in my company. I would get this question of, you know, is this product that you had is a vitamin or a painkiller? And at the time, if your answer was a vitamin, then you got dinged. Right? That was not a good thing. Everybody wants to invest in it. A painkiller. Painkillers have, you know, clear need stop the pain. They have quantifiable markets. Their customers are begging for the product. And, you know, the whole lean start a methodology around customer development is around finding painkillers. I mean, when when when you read Steven Planck’s book, it’s really about asking customers and interviewing customers to figure out what the painkiller is. And so people love investing in those kind of businesses. And that’s that’s great. I’m not saying that’s a bad thing to do. Of course, what I’m saying is that if you look at the pattern of companies that have fundamentally changed user behavior in surprising ways, the companies that match this description of all being toys when they first came out, they were nice to have features sometimes of other products and the first time you saw them, you kind of okay, they’re cute. And then within a few years time, somehow they’re touching hundreds of millions of users and some of them making hundreds of millions of dollars. So we’re talking about the Pinterest, we’re talking about Facebook, we’re talking about Twitter, we’re talking about Instagram. None of these products where, oh, my God, that’s going to be, you know, a multibillion dollar company. When they first started, they were toys. But as I started exploring the history of of these type of technologies, it turns out Kodak was a toy. The Kodak camera in the early 1900s was called the Kodak Brownie, and it was marketed as a toy for kids. Yeah, but what ended up happening is that people were having fun with this toy. It was. It was a vitamin, right? It was something people use because of, you know, an emotional need, not because of a pain need, not because they were desperate. Nobody said, oh, my God, give me Facebook. I can’t go on with my life. Nobody said, like, you know, if only Pinterest existed, I could you know, I could survive another day. Mm hmm. These products were all toys. And so that’s what’s endemic to habit forming technology, is that these technologies are often dismissed as, you know, nice to haves as vitamins, but they’re habit forming potential over time. Makes them painkillers.

Bronson: Yeah.

Nir: They become products that become indispensable when they form habits because a habit that one of the definitions of a habit is when not doing the behavior causes a bit of pain. Mm hmm. And so we see this endemic in these habit forming technologies time and time again. They move from from vitamins to becoming painkillers.

Bronson: Gotcha. So they may not be a habit on day one because it’s a new thing. It’s a toy, and it’s not something you feel a pain because you’re not engaging with it. But over time, it actually becomes painful not to engage with it. Is that what you’re saying?

Nir: Correct. Correct. And if you think about all the technologies that you use today, particularly the ones that are hard to resist, you know, it starts as a fun novelty. Right? And then oftentimes we hate them. I don’t know about you. I don’t like email. Like email sucks. It’s not fun. I don’t use it because it’s it’s a rewarding experience. I have to use it societally. It’s a it’s become a societal habit, maybe even a societal addiction, even though at first it was, you know, so much fun and, you know, people it stops. Yeah, exactly. And I think that’s, you know, for many people, Facebook becomes that and Twitter becomes that. And our SMS message has become that. Yeah, it becomes an obligation. And so that’s that’s interesting and scary at the same time.

Bronson: Yeah, it’s interesting that you mean. And Steve Blank because he recently had a blog post about how to build $1,000,000,000 business. And he puts all the logos on there and it’s all the logos of the companies you just mentioned is the Twitters and the Facebooks and those kind of things. And one of the points he makes is you have to take something we’re doing offline that’s already a user behavior and bring it online. So why does Snapchat work? Because we chat in real life and we don’t want everything to be recorded all the time. Why does Facebook work? Because we’re doing it in real life, but we’re bringing it online. And yet, like you said, that doesn’t feel like a painkiller when you first bring it online. And that’s I think that’s a big insight because that’s not what I hear or what I tell people, usually, to be quite honest. And so to hear you say it, though, it makes so much sense. Do you think one of the reasons people are afraid of vitamins is because they’re the kinds of markets where one person is the winner. Like only one person gets to become the habit forming company and not ten.

Nir: That would make me more excited to enter that market. I mean, I want a market where there is one big winner. I don’t want to fight tooth and nail against a bunch of competitors. Actually, in business school there was a great another two. I love to buy too, so that’s my thing. Who doesn’t? There’s another two by two. I think this one was actually made by Peter Thiel, but I’m sorry if that’s inaccurate. One of our professors showed it to us at Stanford, but basically it had these two these two axes. One access. One axes was whether you are your prediction of the future is correct and whether it’s consensus. So imagine consensus, not consensus on one side and then correct it, incorrect on the other side. So the point of the chart was that if you have a consensus opinion about the future. Right, and then you’re you’re screwed because so does everybody else. What you need to have is a non consensus, correct opinion about the future. So you need to you know, you want to be snapshot when everybody thinks it’s a stupid idea and it turns out to be a great idea. Yeah.

Bronson: And you want to avoid being the nonconformist and wrong because that’s going to take.

Nir: Right.

Bronson: Now. It’s good that.

Nir: There’s a thin line. But that’s I mean, I think that, you know, I would I look for companies to invest in and advise and maybe even join that have that kind of viewpoint of if we can enter this market and if we can form a user habit, then it naturally becomes a winner take up market. That’s I mean, that’s it’s one of the most beautiful things about network effect businesses, right?

Bronson: Yeah. And that’s one of the things, too, is, you know, a theme that I kind of see is people that come on the show and talk about bootstrap businesses, talk about painkillers because you don’t have to have money to go in and dominate the market quickly before everybody else catches up. It’s hard to build Facebook on a shoestring budget, so you kind of need VC money. You need a big vision. You need to be in a certain environment to kind of do what you’re doing. So it’s just helpful to know, like, what resources you have to play with and then how you’re going to, you know, how that’s going to affect what markets you go into. Now, a bigger thing you talk about is hooks and the hook. You kind of break it down to four sections and we’ll get into each of those sections because there’s a lot of meat to talk about in each one. But what is a hook kind of big picture? How would you describe it to somebody?

Nir: Yeah. So a hook is a design pattern. The the reason I worked on this and researched how habit forming technology works is because, you know, we follow it. And my last company, we followed lean startup methodologies. And what I found was, is that we had a penchant for building first. And I think most startups feel this way too. It’s build, measure, learn, right? Like everybody calls it build, measure, learn. That’s the cycle, build, measure, learn. Well, why is build the first part? Why do we start with build? You know, isn’t building the most expensive part of the three? But if Lean Startup is all about reducing waste, we should probably start with learning. Mm hmm. Right. We should start with understanding our customers. And so what I want to do is to say, look, before we start building stuff, we want to deeply understand our customer, of course, but we also want to understand the things that they can’t tell us. And when I looked for patterns among habit forming companies, I wanted to see what the commonalities were. Was there a framework for how habits get formed? And it turns out that there is that there’s there’s this four step process called the hook, which is an experience designed to connect your solution to the user’s problem with enough frequency to form a habit. Mm hmm. That’s all it is. It’s not for every product. If your product doesn’t require habits, you don’t need the hook. Lots of products are one time use products, right? You come in, you buy healthy or you buy, you know, life insurance. That’s it. Life insurance doesn’t have to be a happy family product. Yeah, exactly. Buy a car. That’s it. You don’t need to keep buying the car. But there’s other products. You know, the ones that we mentioned before, the Facebook and Twitter is and there are many products on on our mobile devices that cannot survive without user habits, without users taking out their phones, taking out their devices, and using the product. Doing what I call unprompted user engagement. So that’s what I specialized. And so it turns out that these four steps of a trigger, an action, a reward and an investment define the flow of these products. And these products all have one or more of these hooks in series, taking users from states of low engagement to high engagement forming habits.

Bronson: Yeah. And we’ll talk to each one. But I want to go back to something you said there. Real quickly, you said you’re trying to learn before you build. So it’s kind of learn, build, learn, measure. You know, you kind of put it before. But also you said you’re trying to learn from your customers what they can’t tell you. Mm hmm. And that’s interesting because, again, that’s kind of shows me another way that you deviate from the Steve Blank customer development and lean startup model of doing things is you’re kind of looking to learn something they couldn’t tell you, even if you were looking in the whites of their eyes at Starbucks asking specific questions about your product. They can’t tell you certain things about their own psychology. Is that right?

Nir: Yeah. No, I’m not saying that that Steve Blank and Eric Reese’s methodologies are wrong. They’re I think they’re part of a toolkit. I just think you can’t count on that alone. I mean, people are notorious for telling us one thing and doing something else. I mean, I just this is top of mind. But I was doing some research on being on why being has had such a tough time tackling Google, right? Like Google. Google is by far the most dominant search engine. It turns out that when people try Bing and Google head to head, people prefer Bing. Now, you might not believe me, but that’s what the data shows. Just like people, when they have a head to head comparison of Coke versus Pepsi and you hide labels, people prefer Pepsi. It’s called the Pepsi Paradox. When you show them the Pepsi brand, they prefer Coke because they have associations with that brand. So people might tell you they do think X, Y and Z. But it turns out that many times there’s all kinds of hidden things that they can’t even articulate. They’re not lying to you. They just can’t articulate what they will actually do in those situations. And so that’s why we have to combine a toolkit of, you know, not only do we have to talk to customers, not only do we have to watch them and see how they use different products. I think that great test that Stephen Plank points out is what are they doing offline? Because that’s so important. It authenticate that that behavior is actually occurring. You know, if you’re building a product that you can’t figure out the offline analog for, it may not be a problem.

Bronson: Mm hmm. Most customer development at scale, the whole world’s already doing it. Yeah.

Nir: Yeah. I mean, you have to figure out what that offline analog is so that you can figure out how to do it better. Or perhaps there is an existing customer, a company doing it online that you think you can do it better than.

Bronson: Yeah. So help us understand the hook because we want to build a pull the psychology of the situation, not just what they tell us. They tell us that they coke. We know they like Pepsi. So the first part is the trigger. So what is the trigger?

Nir: So the trigger comes in two forms. It’s the the thing that we build our behaviors on top of. It’s the thing that happens right before the action. So triggers come in two forms. There’s external triggers, which are things in our environment that tell us what to do next. So, for example, a call to action button that says Click here. The information for what to do next is in the trigger itself. And growth hacking is really about figuring out how to optimize all these external triggers. And that’s we need that. Right. That’s that’s the first step of this whole process. Mm hmm. Then from the external trigger, there’s an action phase. There’s. There’s the variable reward phase. There’s the investment phase. We’ll get to those in a minute. But what I want to emphasize is that when this is all said and done, when the user has. Gone through these four faces, we end up creating an association with an intern trigger. That’s that’s that’s where a habit is formed. When an internal trigger is something that cues action just as reliably as an inter, as an external trigger. But the context for what to do next is not in the trigger itself. It’s in the user’s head.

Bronson: Which is why they can unprompted do the thing again, which is what you said earlier, because the external trigger is always about prompting them the internal triggers. They wake up and check the email.

Nir: Exactly. Exactly. So. So a big part of figuring out how do I form a habit forming product is to figure out what internal trigger you’re attaching to. So it’s typically an emotion, a routine, a situation, a place, a person, something that triggers the user to do a particular behavior. Without instruction, the instructions are already in association in the user’s mind. So a great example is this of this is emotion. Emotion turns out to be a very frequent internal trigger and more particularly a negative emotion. And this goes back to the painkillers that we talked about before. We don’t like feeling bad. And I think actually as a as a diversion point, I think our culture is freakishly scared of feeling that like we I think we get more points. I agree that that’s a whole nother that’s a whole nother conversation. But it turns out the habit forming products latch on to these bad feelings. So what we do when we feel depressed, when we feel lonely, when we feel. You name it. Bored. Boredom is a huge, painful emotion. We don’t like those feelings. So there’s a few different ways to cope with that feeling. And it turns out that this little guy is a really convenient way to cope with those feelings. And so we turn to the different options on our on our devices, to our technologies to alleviate those those pain points. So when we’re lonesome, we turn on Facebook. When we’re bored, we hop on the ESPN or Pinterest or glam or news when, you know, when we’re lost, even if we might be able to figure out how to get from point A to point B if we just thought about it, go ahead and use our chips. When we’re uncertain about something, I might as well just Google it. Even if we thought about it for a minute, we could actually figure out the answer ourselves. So we turn to these these technologies because they’re just so convenient and easy to use, which has to do with the action phase.

Bronson: Now, can you rely on an internal trigger from the very beginning, or do you have to educate and show them that eventually through this process, the internal trigger will be met because of your product? Or can you just show up and say, This alleviates that, come do this?

Nir: So this is exactly why we can’t ask users about everything they’ll do, because a user can’t tell me, Hey, why do I use Facebook? I’m alone so.

Bronson: The.

Nir: User can tell me that. Why do I use Twitter? I seek social connection and influence. You know, they can’t they can’t tell us that. However, we need to know that as a designer, we need to know what what pain point we’re solving for. By the way, I’m a firm believer in authentic entrepreneurs and how they have a better chance of success because they feel their own pain. Right? Like they want the product for themselves, they need it. And they can ask themselves why this product should exist. And if it’s just to make money, then, you know, we know where that tends to turn out. Typically, that the entrepreneurs that succeed have, you know, they’re scratching their own itch.

Bronson: Yeah.

Nir: So we need to know what that internal trigger is so that we can make a narrative, right? So I’m a subscriber to Clayton Christiansen’s job to be done philosophy of, you know, I have a particular need. He I think I go even deeper than what Clayton Christiansen goes to. I think we need to look for what’s the deeper emotional need, what’s the trigger that creates an itch that we can scratch you.

Bronson: Gotcha. And then you use external triggers to prompt them to begin taking action, which is the next part. Right. So talk us through action a little bit. How does that play in?

Nir: Sure. So the definition of a habit is a behavior done with little or no conscious thought. And so the action phase facilitates that by making behaviors as easy as possible to do to create that singular behavior. What we want to do is to go through the hook as many times as we can, as quickly as we can, so the user creates an association with that internal trigger, but that requires actually getting to the four steps. So from the trigger, we need to go to the action phase. And the action phase is all about the simplest behavior in anticipation of reward, the simplest behavior. So whatever is in the user’s way, we have to figure out a way to remove. So as examples of the simplest behavior in anticipation of reward, things like a simple login on Facebook, scrolling on Pinterest, pushing the play button on YouTube or in a or an online game. Really, really simple actions to get to the reward. The simpler, the better. I mean, I’m a big fan, actually. There was a great article a little while ago around not making people sign up, you know, first get them into the reward. Pinterest does this really well, right? You start using Pinterest, you immediately see what’s going on, even if you don’t have an account that helps get users through the hook faster.

Bronson: Gotcha. So you’re getting them involved in an action that gives them a reward. And then then the reward is the next part and you call it a variable reward. So what do you mean by very variable?

Nir: Sure. So this phase comes out of a lot of research. That’s very old research, actually. You may remember from your psych one on one class done by b.F. Skinner that Skinner showed that intermittent rewards, that rewards that were not predictable increased response rates. And if we look around at our day to day life, it’s actually, you know, Skinner did these experiments with pigeons where he gave them a pigeon and said, you know, let them click once and then they would receive a pellet and then click again and receive a pellet. That was that was a regular schedule, right? That was a predictable schedule. But when he changed it up, when the pigeon. Click on the lever, a pellet would come out. Click on the lever again and nothing would come out. When there was a bit of mystery to it, when there was an intermittent aspect to the reward. They clicked much more frequently. So the response rates increase and it turns out that that’s a behavior that we see in humans as well, that when there’s mystery to something, when there’s an element of the unknown, it increases our engagement and focus and it can be habit forming. And so when we look at the world around us, pretty much anything that is engaging has this form of variable. It’s not it’s not actually correct to say it’s just a reward. I would call it variable outcome, but I prefer it as.

Bronson: Something you want.

Nir: Yeah, but even something you don’t want actually can increase engagement. Turns out. Okay, there’s variable punishment too, but I call it variable outcome. Just a bit of mystery about what’s going to happen. Mm hmm.

Bronson: And then from there, there’s the investment. Is that just kind of the payoff of getting the thing, or is that something different?

Nir: No, it’s a little different. So the the reward phase is where the itches scratch. So that’s why it’s so important to understand what the user wants and to identify their internal triggers, because you can’t build the back scratcher unless you know that the itch is on the back, right? Mm hmm. So the reward has to alleviate what the user can for that internal trigger after their itches. Scratch leaving a little bit of mystery, right? Something to entice the user to come back to some some a bit of mystery or unpredictable ness. Mm hmm. The investment phase is where the user invests or the user puts in something of value into the system. And this is the most frequently missed phase of the hook. People kind of get, you know, trigger and an action and a reward they kind of get that looks like a feedback loop. Mm hmm. And that’s fine for immediate behaviors, right? So, like, you’re driving by a radar, you know, those radar detector signs, you immediately see the feedback of, hey, you’re going too fast and you slow down, right? So that’s an immediate reward, but that’s not habit forming. Mm hmm. In order for something to form a habit with a technology, we have to invest in it. We have to put something of value into the technology that increases the likelihood of us returning.

Bronson: So something like data time you’re sharing, so now you’re putting the responsibility on the line or you’re, you know. So is that what you’re talking about?

Nir: Yeah. Something of something that improves with use. So one of the reasons I love working in technology so much as opposed to, you know, the physical stuff in the physical world, is that all the stuff that we have in our physical world depreciates over time. Right. Our computers, our chairs, our furniture, everything depreciates over time. Habit forming technology should appreciate in value. It should get better with use. And so the way it does that is by customizing and improving based on user’s investment. So the more followers I have on fate, on Twitter, the more valuable Twitter is for me, the higher my reputation score on Airbnb or TaskRabbit, the more value that product brings to me. I can literally take that value to the bank, right? I can charge more for my services data. Right. So the more information I put inside Evernote, the more investment I make in terms of, you know, making that product my external brain, the more value it brings to me. Yeah. And then finally, content. So the more pictures I take with Instagram, the more becomes my my online photo album. So these things customize and improve and increase my likelihood to return based on my investment.

Bronson: The barrier to exit just gets higher and higher every day.

Nir: Exactly. So that, you know, if I if an Evernote competitor came along. But you’ve got all your notes already saved, you never know because you’ve invested all that time. Mm hmm. It’s a really high bar for you to switch now. Yeah.

Bronson: Now, pack all this up for us. Right? So we’ve got the hub. We’ve got the four things the trigger, the action, the reward, and the investment. Like, can you point to a startup and say, okay, here’s how startup X does these four? Or Here’s how startup why does these four? Can you give us a narrative? Because you’ve been thinking about this probably for years and you see it everywhere, where if you’re just hearing this, it’s like, okay, there’s a lot of aha moments, but I may not see the whole picture yet, you know what I mean?

Nir: Sure. So. So one thing. Feel free to hop on to my blog. It’s a near and far icon and there’s a lot more explanation of all this. But if we could, we could do one company, for example. Yeah, I think one company that has did a really good job forming habits. There’s some rumbling that they may have difficulty continuing to grow, but that’s a whole nother story. Like I said, there’s three buckets of growth, engagement and monetization. Let’s focus on engagement. But I think Pinterest is a great example of this. The first time you come to the site, the external trigger might be word of mouth. Maybe you heard from from a friend. Maybe you you saw it on Facebook that somebody posted something from Pinterest on a Facebook and you click on the link. The simplest action before reward is to just scroll right, just scroll on the page, and immediately you get a reward. And that reward is that you’ve got all these objects of desire, right? That’s what Pinterest is all about, all these interesting objects and the variable reward mechanism. Is this infinite scroll, right? You’re searching and searching and scrolling, looking for interesting art. The investment phase becomes to sign up. You don’t have to sign up to get the reward. The investment phase is the sign up process. So you sign up, you authenticate with Facebook, you just went through the consumer hook line and you can you can form a habit around just consuming. If you don’t if you don’t if you don’t want to sign up, for example, but when you do sign up, you get an email. So one of the things that the investment phase does that’s so powerful is that it loads the next trigger, the investment phase slows the next trigger, which increases the likelihood of user returning. So what happens? You signed up with Facebook. You’re you receive a message that says, hey, your friend Jenny just posted something to Pinterest. Well, now that becomes the new external trigger so that external triggers in email the simplest action before the reward is to log in. Right. You’ve already signed up, so just log in. Now the reward is different. It’s not just about this hunt for interesting objects, it’s about communication. Right? So what’s what’s my friend doing? There’s a lot of variability to what they might have posted. So it becomes a communication medium. And my investment is the ability to pin rippin, like comment. All of those things are forms of investment which will literally change my experience. They’ll customize my experience with that product just for me. Mm hmm. So that’s that’s the curator hook. So there’s two hooks inside Pinterest, the consumer hook and then the curator hook Yeah.

Bronson: And then over time, the internal trigger just takes over. Over time, I wake up and I want to be on Pinterest. And it’s not because I was prompted. It’s not because of external email. It’s because I actually desire it. Given enough time with the other hooks.

Nir: Exactly. You feel I need to communicate with people who have the same interests. You’re bored. There’s lots of different emotional triggers to go on to Pinterest.

Bronson: Now, like you said. And thank you so much for walking us through that. And you actually have a book coming out on the hook, is that right?

Nir: I do. I do. It’s going to be a free e-book or PDF. I’m still working on it now. Yeah, I’m am hoping to get it out by the end of the year.

Bronson: I signed up on the list yesterday so I’ll be waiting with bated breath.

Nir: Awesome. Everybody who’s a subscriber will get. We’ll get a copy for free. Yeah.

Bronson: And the name of your blog in near and far. Is that right.

Nir: That’s right. Near R and I are.

Bronson: Yeah. There you go. So thank you so much for walking us through that. There’s a ton of valuable information there. Like you said, you really focus on that middle bucket, the engagement. So let me ask you this. What are some of the signs that a startup is failing at the engagement stage? Is there one metric or is that just too simplified? Is there any telltale signs really like, all right, if this is happening, you need to rethink the whole thing. You need to rethink your engagement.

Nir: Yeah. Yeah. You know, I think it’s it’s it’s not that complicated, actually. I don’t know if there’s one metric, but it’s it’s a pretty simple formulation. It’s basically when you design your product, how often would you expect users to come back? Right. So you you designed Twitter. Well, Twitter should be a product that people use multiple times a day. Mm hmm. What percentage of your new signups continue to come back multiple times a day? So you set the bar for how often you think people should come back. It’s okay if it’s a once a day product or even a once a week product, what percentage of your new users are sticking around? And that’s how you’ll be able to measure if if you’re actually forming habits.

Bronson: Gotcha. I like that because it’s really focused on what is your product. We’re all not Facebook, we’re all not Pinterest. You may have an app that needs to only be used once a week to get maximum value and everybody’s happy. And that’s what’s really comparing apples to apples. That’s that’s great.

Nir: That’s right. That’s right. Because some price doesn’t make sense to use multiple times a day. Now, I will tell you, the products that are used more frequently have an easier time forming habits.

Bronson: Yeah.

Nir: So if your product is a multiple times per day kind of product, you’re going to have a much easier time than if your product is used once a week. And if you’re probably just use less than once a week, don’t even try. Yeah, it’s very hard to form a habit with a product that’s used less than once a week.

Bronson: Is it because the more you run through that hook cycle, just the more the hook cycle is an actual hook.

Nir: That’s right. So frequency. So so there was a great study done this year in the UK around getting people to form a habit around flossing and they found that there were really only two factors around who formed and maintained this habit of flossing. It was frequency, right? So the people who did it, the most frequently maintained a habit the longest, and then the people who changed their attitude about flossing maintained it the longest. So this is kind of common sense, but if you think about it for your product, how do you do that? Like, how do you engineer that? Well, the first one is is pretty difficult. It’s kind of like virality. Either your product is a is a used frequently product or. Right. So it’s designed into the product whether it’s to be used frequently. But that’s something to be aware of. If your probably is not going to be used frequently, maybe you need to use other triggers and not rely solely on habits. The second part about changing attitude that’s the Hook’s job. The hook literally changes user perception of the product by getting them through those four steps of trigger action reward investment. We literally change the perception of the product.

Bronson: Gotcha. Now that’s great. Now you would. A lot of startups. And so I want to ask you a couple of high level questions. One, you know, you talked about Pinterest already. Are there any startups you can just name without walking through how they do it that maybe are lesser known? They’re doing a good job just understanding the psychological stuff. So maybe go check out their side, poke around a little, doing any anything that’s come to mind there.

Nir: So I’ve been advising a company called Refresh, which is is still in beta. They’re on it. They’re in the App Store, but they’re kind of keeping it a little quiet for a little while longer. But, you know, I’d love anybody to go check it out and give me and them feedback. I’ve been working with them for about a year and a half, forming their hook, so I think they’re a pretty good example. We’ll see where they haven’t they haven’t formally launched yet, but.

Bronson: Now that’s great. So when we check it out, we can see your handiwork at work right there. That’s awesome. So last question. This has been an awesome interview there. What’s the best advice you have for any startup that’s trying to grow? I can probably guess what it is, but go ahead.

Nir: Yeah, go ahead. You want to answer that one for me?

Bronson: Create a hook.

Nir: There you go. Yeah. Or at least figure out whether your product needs to be habit forming. I mean, let me be honest with you. I am not standing up here to tell everybody this is the this is the one size fits all solution for every product problem you may ever have. You know, as Andrew Chen once told me, the answer to many questions and this is what entrepreneurs don’t like to hear is it depends. But if your product requires habits, you need to be honest with yourself, whether it does or not. And if it actually does, then I think it would behoove you to understand the pattern that we’ve seen time and time again in other products that have formed user habits.

Bronson: Yeah, well, that’s great advice to end. All right there. Nir, thank you so much for coming on Growth Hacker TV.

Nir: Thank you. My pleasure.

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