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SUMMARY of HOOKED: How to Build Habit-Forming Products

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Abstract.............................................................................................................. 2!
Trigger ............................................................................................................ 2!
Action ............................................................................................................. 2!
Variable Reward .............................................................................................. 2!
Investment ...................................................................................................... 2!
The How and Why of Habits ............................................................................... 3!
Competitive Advantages of Habit Forming Products ....................................... 3!
Trigger ................................................................................................................ 4!
External triggers .............................................................................................. 4!
Internal Triggers .............................................................................................. 4!
Building for Triggers ........................................................................................ 5!
Action ................................................................................................................. 5!
BJ Foggs six elements of simplicity ............................................................. 6!
Variable Reward ................................................................................................. 7!
Understanding Variability ................................................................................. 7!
The 3 Types of Reward: Tribe, Hunt, Self ........................................................ 7!
Investment .......................................................................................................... 9!
Changing attitudes .......................................................................................... 9!
Sidenotes Interesting Stuff ............................................................................. 10!
Key Take-Aways ............................................................................................... 11!
Application and Questions to Ask ..................................................................... 13
Sketchnotes, Mindmap ..................................................................................... 15

Summary by Markus Strasser

Summary of Hooked

Hooked
How to Build Habit-Forming Products

Abstract
Habits are automatic behaviors triggered by situational cues. Habits form when the
product of frequency and perceived utility is high.
Habit Design helps if people already want to do something, but, for lack of a
solution, dont do. If a solution doesnt solve the problem, design will not make it
sustainable.
The proposed Hook model has 4 main stages of habit-forming products:

TRIGGER
Situational clues (external triggers) should be intended and create successive hooks
so that the user forms associations with internal cues (triggers). For example:
people associate Facebook with their need for social connection.

ACTION
Action is done in anticipation of reward. If the action is performed depends on
a) the ease of the action
b) the psychological motivation.

VARIABLE REWARD
Predictable feedback loops dont create desire or craving. Dopamine surges when
we expect a reward. Introducing variability multiplies that effect, creating a rewardfocused state, which suppresses the areas of the brain associated with judgment
and reason while activating parts associated with wanting and desire (e. g. slot
machines, lottery)
Pinterests mix of relevant and irrelevant bits rewards usage in variable
intervals (also part of its stickyness: collecting, curating, curiosity).

INVESTMENT
The user has to put something in (do work) time, data, social capital, money, or
effort. This is not artificially, but to IMPROVE the service the next time around:
inviting friends, building assets, learning to use new features, stating preferences
are all investments to improve their future experiences.

Summary of Hooked

The How and Why of Habits


Habits enable us to focus our attention on other things, storing automated
responses in the basal ganglia (associated with involuntary actions). Habit-forming
products (HFB) require ongoing, unprompted user engagement and therefore need
to build user habits.
A habit is when not doing an action causes pain (or an itch). The action provides a
small relief. HFP start as nice to haves and become must-haves.
Forming habits can take from weeks to up to 5 months, depending also on how
important the habit is and how complex the behavior.

COMPETITIVE ADVANTAGES OF HABIT FORMING PRODUCTS


1. Increase Customer Lifetime Value (CLV)
2. Give Pricing Flexibility: Once a compulsion to play is in place and the desire to
PROGRESS increases, converting users into paying customers is much easier.
Most free online games get their revenue from selling virtual items, extra lives,
and special powers. With app usage increases customer willingness to pay.
a. Evernote: after 1 month, 0.5% paid for Pro Version. After 33months,
11% and after 42months, 26%.
You can determine the strength of a business over time by the amount of
agony they go through in raising prices Warren Buffet
3. Supercharging growth: The most important factor to increase growth is Viral
Cycle Time (VCT) the time it takes a user to invite another user. After 20
days a VCT of 2 days gives you 20470 users, if you halved VCT it would be
20million users1.
4. Sharpening competitive edge:
Many innovations fail because consumers irrationally overvalue the old while
companies irrationally overvalue the new John Gourville
According to Gourville, new entrants have to be 9 times better to get adapted
(old habits die hard). We store non-transferable value in services.
5. Building a mind monopoly: New behaviors have short half-life time, as our mind
reverts back to old ways of thinking. We regress to first learned behavior over
time. Behaviors are LIFO last in, first out.
Amazon makes money from ads it runs from competing businesses, but it also
utilizes other companies marketing dollars to form a habit in the shoppers
mind: It becomes the solution to a frequent pain point finding the product you
want. By addressing price concerns, Amazon earns loyalty, even without
making the sale. Preferences for retailers increase if they offer competitive price
information, increasing Amazons perceived utility.

1
2

http://www.forentrepreneurs.com/lessons-learnt-viral-marketing/
Depression = experiencing negative emotions more frequently than the general population and seek relief

Summary of Hooked

For some businesses habit-forming products are critical success, but not every
business requires habitual user engagement

Trigger
Habits are not created they are built upon. Technologies start changing behavior
by first cueing users with a call to action. External triggers are embedded with
information that tells the user what to do next. Some graphics are already accepted
as part of interface design (buttons, fields).

EXTERNAL TRIGGERS
1. Paid triggers: Since paying for re-engagement is unsustainable for most
models, companies generally use paid triggers to acquire new users and
then leverage other triggers to bring them back.
2. Earned Triggers: Keeping the product in spotlight: difficult and unpredictable
3. Relationship Triggers: One person telling another. Word of Mouth
4. Owned Triggers: Real estate in the users environment: email newsletter,
phone screen estate. As long as the user agrees, the company owns a
share in his attention. Paid, earned and relationship triggers drive acquisition,
owned triggers drive engagement.

External triggers tell the user what to do next by placing stuff in the environment.
Internal triggers do it through learned association. All triggers should propel users
through the hook model

INTERNAL TRIGGERS
Internal triggers give the brain information about what to do next it is learned
association inside the memory. When a product becomes coupled with an emotion,
routine or thought, it leverages an internal trigger. Emotions, particularly negative
ones (prospect theory), are powerful internal triggers. Boredom, loneliness,
frustration, confusion and indecisiveness often instigate a slight pain or irritation and
prompt an almost instantaneous and often mindless action to lessen the negative
sensation. (Instagram combats the fear of losing a special moment).
Our life is filled with tiny stressors and we are usually unaware of our habitual
reactions and nagging issues. The desire to be entertained can be a need to satiate
boredom. A need to share good news can also be thought of as an attempt to find
and maintain social connections. Accordingly, there are several features of Internet
usage that correlate with depression2 (very high email usage, high video usage,
gaming, chatting).

Depression = experiencing negative emotions more frequently than the general population and seek relief
by turning to technology to lift their mood.
Summary of Hooked

BUILDING FOR TRIGGERS


Goal: To solve the users pain and being associated as a source of relief
We often think the Internet enables you to do new things.but people just want to
do the same things theyve always done Ev Williams [Twitter Founder]
Talking to users is sometimes ineffective, because their declared preferences are
different from their revealed preferences. Some ways to identify preferences:
usability studies, empathy maps, customer development, progressive WHYs (Louis
CK)

Action
BJ Foggs formula for behavior occurrence: B=MAT

Behavior = Motivation, Ability, Trigger


All humans are motivated to seek pleasure and avoid pain, to seek hope and
avoid fear and finally to seek social acceptance and avoid rejection.
In the B=MAT formula it seems that for Technology solutions, increasing ability
(ease of use) is more sufficient than motivation. Increasing motivation is expensive,
time-consuming and is influenced by many external factors.
Denis J. Hauptly on increasing ABILITY to use a product:
1. Understand why people use it
2. Lay out the steps the customer must take to get the job done
3. Once the task from intention to outcome are understood, start removing
steps until you reach the simplest possible process
Take a human desire, preferably one that has been around for a long timeIdentify
it and use modern technology to take out steps Ev Williams
Through technology and creative constraints, the once niche behavior of content
publishing became a mainstream habit through Pinterest, Instagram, Twitter and
Vine.

Summary of Hooked

BJ FOGGS SIX ELEMENTS OF SIMPLICITY


A starting point to decrease task difficulty:
1. Time How long to complete action
2. Money
3. Physical Effort Labor involved in taking action
4. Brain Cycles Level of Mental Effort and Focus required to take an action
5. Social Deviance How accepted the behavior is by others
6. Non-Routine How much the action matches or disrupts existing routines
Fogg instructs designers to focus on simplicity as a function of the users scarcest
resource at that moment. Identify what the user is missing. What is making
accomplishing the desired action difficult? What is missing to proceed to the next
step?
Twitter created a website plugin for 3rd parties after they saw that 25% of their
tweets included links.
Apple made the IPhone Camera app launchable without unlocking the screen
(capturing moments)
Platforms using Facebooks Login API save the user time and effort, but the
login API also triggers anxiety (brain cycles) about the trustworthiness of FB.

Summary of Hooked

Variable Reward
Most pleasure is NOT gained when we receive a reward, but rather in the
anticipation of it3. The anticipation-state releases dopamine and drives our search
for reward. We then act to alleviate the craving (or anxiety), not to get the reward.

UNDERSTANDING VARIABILITY
Laughter is a release valve when we experience the discomfort and excitement of
uncertainty, but without fear of harm
When something breaks the cause-effect pattern weve come to expect, we
suddenly become aware of it again. Novelty sparks interest. Adding variability
increases the frequency of intended actions.

THE 3 TYPES OF REWARD: TRIBE, HUNT, SELF


TRIBE
Social rewards on a variable schedule are powerful. Users anticipate social
validation. Sites that leverage tribal rewards benefit from social learning theory
(Albert Bandura). Seeing someone being rewarded makes people more likely to
alter their behavior, especially when the person is like them or a role model (social
contagion).

At Stack Overflow users submit answers that can be up-voted. The user gets
points and with that levels, badges, status and privileges. There is also a
satisfaction in contributing to a community they care about.
To combat trolls in League of Legends, there is an Honor Points reward
system. Other users can award points for sportsmanlike conduct.

HUNT
Consuming Animal Protein was a significant milestone to better nutrition and led to
bigger brains. Evidence shows that weapons were only invented 500.000 years
ago, whereas weve been eating meat for over 2 million years. So the first 75% of
our existence we hunted with a technique thats called Persistence Hunting: The
hunter would slowly follow his prey until it collapsed from exhaustion. The ability to
maintain steady pursuit gave us the capacity to hunt large animals.
We are driven by the pursuit itself the need to acquire physical objects, such as
food and other supplies that directly or indirectly aid our survival are part of our
brains OS. Information translates into money and money into food Information is
now indirectly seen as an object of survival.
3

Shown by activity in the nucleus accumbens, which is part of the basal ganglia and has an
important role in pleasure, including laughter, reward, reinforcement learning, as well as fear,
aggression, impulsivity, addiction and the placebo effect.
Summary of Hooked

Pinterest, Twitter, Slot Machines keep people hunting for jackpots4 the action
is easy and some give a glimpse of what is coming (Pinterest, Slot Machines).

SELF
We are driven to conquer obstacles, even if just for the satisfaction of doing so.
Pursuing a task to completion can influence people to continue all sorts of
behavior. Puzzles are a perfect example. Self-determination theory espouses that
people desire to gain a sense of competency.
Video Games: Leveling up, unlocking special powers, weaponry, uncharted
lands, scores etc. fulfills desires by showing progress, completion and giving
feedback. All that can transform a difficult path in an engaging challenge.

Variable Rewards are not a Free Pass


For example, if the trigger of social forums to contribute were a variable monetary
reward, people could use their time better by earning an hourly wage. Social
rewards (Quora) and the variable reinforcement of recognition can be more efficient
as long as alternative social rewards are harder to get.
Maintain a Sense of Autonomy
Make old routines easier, instead of learning new unfamiliar actions. Users must feel
in control. A meta-analysis of 42 studies involving over 22.000 participants
concluded that some key words are highly effective to gain compliance:
but you are free to accept or refuse
We are more likely to be persuaded when our ability to choose is reaffirmed. But
you are free disarms the instinctive rejection of being told what to do.

Fitocracy (a fitness app) enables people to share encouragement, exchange


advice and receive praise. A recent study found social factors were the most
important reasons people used the service and recommended it to others.

Too many companies build products betting users will do what they make them do
instead of letting them do what the want to do
Beware of Finite Variability
Games played to completion (single player) offer finite variability while games played with
other people offer infinite variability. TV shows are finite, user-generated content is
infinite.

We also tend to overestimate small probabilities (Prospect Theory)

Summary of Hooked

Example: Email
Email uses all three types of rewards. There is a lot of uncertainty about who could
send us a mail. There is a social obligation to respond (rewards of the tribe),
curiosity about information, opportunities, threads (hunt) and the need to act,
complete and control our inbox (self).

Investment
CHANGING ATTITUDES
Studies show that frequency (ability) is the leading factor for forming new habits and
change in attitude about the habit. Attitude changes increases perceived utility
(motivation) and we enter the Habit Zone. Small investments change our perception
(Labor leads to love). The more we invest in a product, the more we value it has5.
Also, we seek to be consistent in our behavior. We avoid cognitive dissonance.
In Aesops fable a hungry fox encounters grapes he desires. After failing to reach
them he decides that the grapes must be sour and that therefore he would not
want them.

Example Beer: Our bodies were designed to reject beer and spicy food, but
seeing so many other people enjoying it (cognitive dissonance), makes us
repeat it (consistence) and that changes our perception (rationalization), which
then propels repetition.

Effort=Value. Consistent with past=Good. Cognitive dissonance=Bad


Unlike the action phase of the hook model, investments are about anticipating longterm rewards, not gaining immediate gratification. But it comes after users received
variable rewards, not before (that would be reciprocity). The Investment Phase
leverages the users understanding that the app will get better with use same as a
good friendship. By storing value and aggregating content, the software learns (a
garage could not do that). A garage, for example, gets personalized with goods, a
software through and with them.
Examples for stored value:
Reputation: ebay, taskrabbit, yelp, Airbnb, traity etc.
Data: iTunes
Followers: Twitter
Skill: Photoshop learning is investing in a product, especially if the learned is
not fluid.
5

See: IKEA effect and studies done on people selling their own origami frogs

Summary of Hooked

Habit-Forming Products leverage the users past behavior to initiate an external


trigger in the future.

Any.do connects with the calendar, notifies people and urges people to do a
follow-up task. Snapchat messages contain an implicit prompt to respond.

A mobile analytics study showed that 26% of mobile apps were downloaded and
used only once. Data suggest that people use more apps, but engage with them
less frequently. Also having daily checklists (or streak counts) and sharing them, is a
reward. Portraying oneself in a positive light is intrinsically rewarding (humblebrag6).
People forgo money to disclose about themselves.

Sidenotes Interesting Stuff

79% of smartphone owners check their phones within 15 minutes of wakening


1/3 of them would rather give up sex than lose their cell phones. A 2011 study
suggests 34 smartphone uses a day, although industry experts estimate it to be
around 150.

Habit forming technologies may be the cigarette of the 21st century. Our moral
compasses have not caught up with technological advances (revolution is faster
than evolution) and our systems have not developed antibodies to addictive new
things.

Why are zombies suddenly so fascinating? Maybe technologies unstoppable


progress ever more pervasive and persuasive has grabbed us in a fearful
malaise at the thought of being involuntarily controlled (Choice architecture).

Experience-taking shows that people who read a story about a character


actually feel what the character is feeling. We experience his or her emotion. The
same things that drive us drive them.

Gamification the use of game-like elements in non-gaming environments has


been used with varying success. Points, badges, and leaderboards can prove
effective, but only if they scratch the itch. When the companys solution doesnt
solve the real problem, gamification doesnt help.

Disclosing information about the self is intrinsically rewarding Harvard Meta Analysis

Summary of Hooked

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Key Take-Aways
GENERAL
The convergence of access, data and speed is making the world a more habitforming place.
Businesses that create customer habits gain a significant competitive
advantage.
Economic value becomes more and more reliant on the habits companies
create.
Habit-forming Products link their service to the users daily routines and
emotions and are used before rational thought occurs a first-to-mind solution.
Habit-Forming Products often form as nice-to-haves, but after the habit is
formed become must-haves.
TRIGGERS
Triggers cue the user to take action and are the first step in the Hook Model
Triggers have two types: external and internal
External triggers tell the user what to do next by placing information within the
users environment
Internal triggers tell the user what to do next through associations stored in
memory
Negative emotions frequently serve as internal triggers
ACTION
Behavior = Motivation, Ability, Trigger
Ensure a clear trigger is present, then increase ability by making the action
easier, and finally align with the right motivator
Every behavior is driven by on of 3 core motivators: seeking pleasure and
avoiding pain, seeking hope and avoiding fear, seeking social acceptance and
avoiding rejection.
Ability is influenced by the six factors: time, money, physical effort, brain cycles,
social deviance, and non-routineness. Ability depends on users and their
context at the moment.
Heuristics are cognitive shortcuts we take to make quick decisions. Product
Makers can user many of the hundreds of heuristics to improve their product.
VARIABLE REWARDS
Rewards of the TRIBE are social rewards fueled by connectedness with, or
gratification of, other people
Rewards of the HUNT are resources linked to survival.
Rewards of the SELF are intrinsic rewards of mastery, competence, completion,
and consistency.

Summary of Hooked

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When our autonomy is threatened, we feel constrained by our lack of choices


and often rebel against doing a new behavior [reactance]. Maintaining a sense of
user autonomy is a requirement for repeat engagement.
Finite Variability becomes predictable with use and loses appeal.
Variable rewards must satisfy users needs, while leaving them wanting to reengage

INVESTMENT
Unlike the action phase, which delivers immediate gratification, the Investment
Phase is about anticipation of rewards in the future.
Investments in a product create preference because of our tendency to
overvalue our work, be consistent with past behaviors, and avoid cognitive
dissonance.
Investment comes after the Variable Reward Phase when users are primed to
reciprocate
Investments enable accrual of stored value in the form of content, data,
followers, reputation or skill.
Investments increase the likelihood of users passing through the Hook again by
loading the next trigger to start the cycle all over again.
The best triggers are those who refer to past investments

Summary of Hooked

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Application and Questions to Ask


GENERAL
What habits does your business model require?
What problem are users turning to your product to solve?
How do users currently solve that problem and why does it need a solution?
How frequently do you expect users to engage with your product?
What user behavior do you want to make into a habit?
ESSENTIAL
What do users really want? What pain is your product relieving? (Internal Trigger)
What brings users to your service (External Trigger)?
What is the simplest action that users can take in anticipation of reward, and
how can you simplify your product to make this action easier?
Are users fulfilled by the reward, yet left wanting more?
What bit of work do users invest in your product? Does it load the next trigger
and store value to improve the product with use?
What problem do I wish someone else would solve for me?
TRIGGER
Who is your products user?
What is the user doing right before your intended habit?
Which internal trigger your user experience most frequently?
Finish the narrative: Every time user [internal trigger]. He [first action of the
intended habit]
What might be places and times to send an external trigger?
How can you couple an external trigger as closely as possible to when the
users internal trigger fires?
Imagine crazy, or currently impossible, ideas for ways to trigger your user
(wearable computers, biometric sensors, carrier pigeons, etc.)
ACTION
Walk through the path you user would take to use your product or service,
beginning from the time they feel their internal trigger to the point where they
receive their expected outcome.
o How many steps does it take before users obtain the reward they came
for?
o How does this process compare with the simplicity of alternative
products that deliver similar rewards (competitors)?
Which resources are limiting your users ability to perform the action?
How would you apply heuristics and biases to improve your product?

Summary of Hooked

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VARIABLE REWARD
Are there any moments of delight or surprise in your product?
Is there anything users find particularly satisfying about using the product?
What outcome (reward) alleviates the users pain?
INVESTMENT
Review your flow. What bit of work are your users doing to increase their
likelihood of returning?
How long does it take for triggers to re-engage your users? How can you
reduce the delay to shorten CYCLE-TIME through the hook?
How can you reduce Viral Cycle Time?

Summary of Hooked

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Sketchnotes from Meetup [Dante Guintu]

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