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  1. Hello, I'm with Nir Eyal,
  2. the author of Hooked,
    How to Build Habit Forming Products.
  3. Thank you for joining us.
  4. >> My pleasure.
    Good to be here.
  5. >> So,
    tell me a little bit about the book.
  6. >> Sure.
  7. So, my book is really about
    how do products engage users?
  8. How do we build products and
  9. services To keep people coming back, not
    every business needs to form a habit.
  10. But every business that forms a habit
    needs a hook, and so that's what
  11. the book is really about, it's about
    this pattern that I call the hook model.
  12. This four step process of trigger,
    action, reward, investment
  13. that keeps people coming back and using
    these various products and services.
  14. And my hope here is that we
    can use the psychology of
  15. what makes products engaging to help
    people live happier, healthier,
  16. more productive, more connected
    lives by using habits for good.
  17. >> And now,
    I as an entrepreneur use this model?
  18. >> Right.
  19. if you're building a product
    that requires a habit, so
  20. if you think about products.
  21. Some of the most successful companies
    over the past several years.
  22. Companies like Facebook, and Google, and
    Instagram, and WhatsApp and Snapchat,
  23. and Slack these companies have
    all formed habits in users.
  24. Now that's not a requirement lot's of
    businesses can do just fine without
  25. forming a habit, but if you're the type
    of company who's business model relies
  26. upon a habit just like those companies
    I just mentioned they would go out of
  27. business if they had to send advertising
    every time just to bring people back.
  28. So if you're that kind of company,
  29. if you're an entrepreneur building
    a product that requires people to
  30. come back on their own, you can use this
    framework to figure out, hey do I have
  31. the fundamental elements that I need to
    form, to build a habit-forming product?
  32. >> Is this only for consumer products?
  33. >> No.
    So whether it's enterprise products or
  34. consumer products, doesn't matter.
  35. What matters is,
    is the product something that people use
  36. throughout their day with little or
    no conscious thought?
  37. So if you're building an enterprise
    application that, you know,
  38. might be some piece of software that's
    put into some server farm somewhere and
  39. nobody actually uses that piece
    of software, that's fine.
  40. That's a great business, you know,
    you should keep doing that,
  41. but you just don't need to have it for
    that, because that's not used regularly.
  42. On the other hand if you're building an
    enterprise product like a communication
  43. tool, like Slack, or GitHub, or
    Stack Overflow, or Sales force.
  44. All of these are enterprise facing
    products that necessitate habits.
  45. They require people to
    come back on their own.
  46. And for those types of products,
    you need a hook.
  47. So these hooks, this four step process,
  48. starts with a trigger to an action and
    a reward and then an investment.
  49. So every hook starts with a trigger.
  50. A trigger prompts the habit and
    we have these two types of triggers,
  51. an external trigger or
    an internal trigger.
  52. External triggers are things in
    our environment that tell us
  53. what to do next.
  54. They give us some piece of information.
  55. Click here.
  56. Buy now.
    A friend telling you about this great
  57. new app through word of mouth.
  58. All examples of external triggers.
  59. These external triggers
    prompt us to action.
  60. That's the habit itself.
  61. Open an app, scroll through pinterest,
    search on google,
  62. push the play button on YouTube.
  63. These are these actions
    that we do with little or
  64. no conscious thought that
    are these very simple behaviors
  65. these very small behaviors
    that we do seeking a reward.
  66. Which brings me to the third step
    of the hook the reward stage.
  67. Is where the user's itch is scratched,
    where they get what they came for.
  68. And yet there's a bit of mystery
    around what they might find
  69. next time they engage with the product.
  70. So it's not just a reward.
  71. It turns out that habit-forming
    technologies integrate what's called
  72. a variable reward.
  73. So this comes from
    the classic work of B.F.
  74. Skinner, the father of
    operant conditioning.
  75. Skinner found that when he gave
    rewards to his pigeons and
  76. these little boxes on a variable basis.
  77. So, sometimes the pigeons
    would peck at the disk,
  78. they wouldn't receive a reward.
  79. The next time,
    they would receive a reward.
  80. What Skinner observed was,
    at the rate of response,
  81. the number of times his pigeons
    peck at the disk, increased
  82. when the reward was given on an
    intermittent schedule of reinforcement.
  83. And so in all sorts of products
    that we find most habit-forming,
  84. most engaging, we find this bit of
    mystery, this bit of variability.
  85. So searching, and scrolling and
    scrolling on a newsfeed, or what makes
  86. sports fun to watch is the uncertainty
    of will our team win the game.
  87. Or what makes for
    a great TV show or a movie?
  88. The uncertainty about how the happy
    ending is going to unwind.
  89. All these are examples
    of variable rewards.
  90. And finally, the investment phase,
    the last step of the hook.
  91. The investment phase is where the user
    is prompted to put something into
  92. the product, to invest in the product
    In anticipation of a future benefit.
  93. So, the purpose of investments
    is to increase the likelihood fo
  94. the next pass.
  95. That's what the investment phase is for,
    and it does this in two ways.
  96. The investments load the next trigger.
  97. So, loading the next trigger, an example
    of that would be, when I send someone
  98. a message on WhatsApp I don't
    get any immediate rewards.
  99. Right?
    There's no leader boards,
  100. there's not badges, there's no points,
    nothing really happens.
  101. What I'm doing is I'm loading the next
    trigger because I'm likely to
  102. get a reply.
  103. >> Right.
    >> And that reply comes coupled with
  104. an external trigger.
  105. Hey, here's a message from your friend
    which prompts me to use the hook
  106. once again.
  107. The second way that investments
    increase the likelihood of an x-pass
  108. is by storing value,
    and this is a big deal.
  109. Storing value is when the product
    gets better and better with use,
  110. it appreciates in value.
  111. And it does this by storing data,
  112. reputation, content
    >> Photos.
  113. >> Right.
    Anything that I'm putting into the app
  114. that gets better and better over time.
  115. And so it's through successive cycles,
  116. through these hooks trigger
    action reward investment
  117. that now an association has built
    with that second type of trigger.
  118. Remember I told you there was two types
    of triggers: external triggers and
  119. internal triggers.
  120. The internal trigger
    are these things in our life
  121. that prompt us to action like a place, a
    situation, a routine, a certain person.
  122. And most frequently, emotions that
    prompt us to do this next action,
  123. this next habit with little or
  124. no conscious thought, but
    without any explicit information.
  125. So over time,
  126. through successive cycles through
    these hooks, now we use the product.
  127. Not with a message that tells us,
    hey click here, but
  128. >> With a need.
  129. >> With a need, exactly.
  130. We internally trigger ourselves.
  131. We have these associations, so,
    I'm lonely, I check Facebook.
  132. I'm uncertain, I Google.
  133. I'm bored and
    I'm on YouTube or Reddit or
  134. checking stock prices or
    sports scores, right?
  135. We do these things instantaneously
    because of the successive cycles
  136. through these hooks.